The Haiku of Finance for 11/27/15

Mean and angry boss
Stealing stuff and blaming you
Quit for sanity

The Haiku of Finance for 10/29/15

Personality
Fast-rising leaders have it
Successful schmoozing

The Haiku of Finance for 09/16/15

When in charge, take charge
Improvising leadership
No need for a cue

Hip-Pocket Ruminations For Crisis Management Teams

I participated in a crisis management tabletop exercise today courtesy of the San Francisco Bay Area InfraGard Chapter.  The local chapter of the Business Recovery Managers Association (BRMA) joined the fun.  I was familiar with the structure of facilitated scenario-based role playing from many years of US Army Reserve staff training.  The injects kept us thinking about how unpredictable a crisis gets for an enterprise.  My genius ruminations are below.

Knowing how critical business processes will cross functional silos is a key to assembling the crisis management team (CMT).  Prioritizing the processes that the enterprise must immediately sustain helps determine the resources the team will allocate in its earliest decisions.  Having a single senior person designated as the communications manager ensures that all messaging themes are centrally routed before release and that all senior executives stay on message.

Outsourcing some of the response effort in public relations (PR), third party logistics (3PL), or business intelligence (BI) means the enterprise gains a surge capacity to meet an existential threat.  One outsourcing risk is friction if the hired partners' IT systems are incompatible with the enterprise's systems, but the risk is worth taking.

The rehearsed crisis management plan should have escalation triggers in place so the CMT knows when decisions are beyond its authority.  Sending the big decisions to the C-suite keeps the enterprise's strategy in mind.  The business process recovery (BPR) team activates after the CMT has begun its work.  The CMT minimizes damage from ongoing problems, and the BPR team fixes what is broken as the crisis passes.

Crisis managers have plenty of resources for planning and training.  ISO standard 22301 governs business continuity.  Several competing organizations offer certifications in business continuity planning, so the choice may come down to which one adheres most to the ISO standards and is the least costly.  Having some members of a CMT get a couple of affordable certifications would not hurt.  Joining the US government's public-private partnerships like InfraGard, the Domestic Security Alliance Council (DSAC), US-CERT, and the National Council of ISACs (NCI) allows access to open-source threat intelligence.  Searching Google for case studies of the 1982 Tylenol crisis provides managers with the gold standard response.

Preserving an enterprise from a surprise threat is what boards pay executives to do.  Protecting employee lives and shareholder investments means designated crisis managers must write plans and run drills for multiple scenarios.  I no longer work for large enterprises but this InfraGard/BRMA joint exercise reminded me of how teams should work together.  The Alfidi Capital crisis management plan is to be as brilliant as possible while Armageddon rages all around.

The Haiku of Finance for 08/18/15

Mentor wants meeting
Advises lying for fun
No longer mentor

(based on several true stories)

The Haiku of Finance for 08/08/15

Some office blowhard
Mouthing off without data
Never gets called out

The Haiku of Finance for 08/07/15

Stupid manager
Cannot comprehend finance
Just find a new job

The Haiku of Finance for 10/27/14

Backstabbing mentor
Steals clients from protege
Typical office

Alfidi Capital at KPMG Technology Innovation Executive Summit 2014

KPMG held its periodic Technology Innovation Executive Summit this week in Silicon Valley.  I scored an invitation because, hey, let's face it, I'm all about innovation and I'm totally executive material.  The photo I took of my badge came out looking lame, so forget about seeing proof.  My genius is all the proof anyone needs.  I'll share my own observations instead of blindly recapping the summit.  

The firm's newest Global Survey on emerging tech trends is due out very soon and we got a preview of the results.  I won't repeat any specifics here, so read the full report when it's available.  I didn't see any consensus on which tech would drive consumer spending.  I got the impression that big enterprise clients in non-tech sectors are not super-savvy on spotting tech trends.  I did not see any real consensus on challenges facing enterprise IT integration.  The diversity of sectors canvassed in these types of surveys means different sized corporate clients have different IT needs.  

Any enterprises that thinks digital currencies (aka Bitcoin and others) will significantly disrupt banking and payment systems needs to wake up.  US-based enterprises have seen the most media exposure to Bitcoin and are aware of the IRS' regulatory response.  Other countries are clueless about Bitcoin's uselessness as a currency.  Maybe the rest of the world anticipates something better coming down the pike after Bitcoin, or maybe they're just ignorant.  

I do not expect serious IoT monetization to come from verticals closest to the consumer.  The next financial crisis will destroy consumer spending for years.  That places me at odds with some enterprise thought leaders.  They should look for IoT driving security and surveillance spending instead.  

The KPMG panelists following the survey results were definitely thought leaders in mobile, cloud, and enterprise IT.  The power budget limitations in IoT are obvious, which brings me back to my point above about IoT's limitations in an era where the consumer can't drive spending.  I look forward to IoT devices that scavenge energy from their ambient environment.  

Converging DevOps and the cloud drives a continuous process where every developer's code upload triggers a deployment of new enterprise tech.  Security still gets lip service but no one is making the connection with this DevOps capability.  CIOs must make it a continuous deployment priority.

I need to revisit Bitcoin enthusiasts in light of the panel's mention of cloud and document sharing.  There is zero analogy between digitally signed documents and cryptocurrencies.  The docs aren't governed by a blockchain that multiplies the computing resources needed for processing every time a new document is created.  It is crucial that IT professionals make this distinction before they look like fools by claiming block ledgers add transparency or security.  

I'll close with a quote from one panelist that really stood out:  "Computer science students don't learn coding anymore; they just move objects around."  There's a wake-up notification for all of the fad-chasers jumping on the coding literacy bandwagon.  Moving objects around means symbolic logic and systems analysis take educational precedence over programming languages.  Future CIOs should take note.  I have no intention of restarting an entire educational cycle just to learn code.  I'd rather keep coming to these thought leader summits, where I learn more anyway.  

The Haiku of Finance for 08/23/14

Motivating staff
Threaten to terminate them
That will make them work

ACA Problems Call For Corporate Crisis Management

The ACA debacle keeps getting worse.  Backtracking on promises makes the optics even worse.  California operates its own exchange but still denies plans that don't meet federal standards.  Some hospitals are opting out of other state exchange plans.  Sticker shock is spreading to older demographics that were supposed to benefit from better coverage.  Doctors are increasingly alarmed at the financial disincentives they'll face in providing care to more patients.  The federal ACA exchange and its supporting mandates for state plans are the equivalent of a private corporation's major product rollout.  This product is not delivering affordable value and its entire supply chain among care providers is gradually shutting down.

A corporate CEO facing multiple problems from a single product roll-out would have a crisis management plan in motion.  The best crisis management case in corporate history was Johnson & Johnson's response to the Tylenol poisonings of 1982.  The company issued a nationwide recall of its entire product line for that brand and went public with messaging not to consume its product.  That decisive action saved the brand in the minds of consumers.

Business theory doesn't match government reality.  I don't get the sense that the federal government is treating the ACA's national exchange rollout as a product crisis to be solved.  Contractors are working hard on fixes to the website but the messaging has reverted to clarifying past promises.  The messaging on how the product fix is progressing is overwhelmed by noise on who promised what way back when.  No amount of messaging can overcome a poorly performing product.  A malfunctioning exchange website that does not deliver service, process payment, or protect against fraud will harm the consumers it was meant to help.  

The Haiku of Finance for 08/02/13

Never mentor fools
They cannot learn anything
Abandon losers

Voice and Gestures Enable World Domination

I've often wondered how successful people make it as far as they do on so little obvious talent or integrity.  I read tons of anecdotes about how leaders have learned from failures, sought mentors, etc.  That just doesn't cut it.  The missing ingredient is the ability to manipulate stupid people into thinking you're successful before you've accomplished something.  Steve Jobs had this magic with his "reality distortion field" propensity, and by golly you can have it too if you want to join the top 1% of our society.  Manipulating people through public speaking is one way to pull this off.

I've assembled some speaking tips from some local sources who seem to know what they're doing.  They practiced what they preached when I observed them live.  Here ya go.

Speak using solid tonal support.  This seems to involve using muscles in the lower abdominal region and lower back area, primarily the diaphragm.  Tenors carry farther in public than baritones by using these muscles.  I'm not a singer but I do enjoy yelling at stupid people, so I'll tighten my abdomen the next time I yell at a moron to ensure other people hanging around hear every insult I hurl at my hapless target.

Raising your pitch from 100 cycles/second to to 200 cycles/second makes public speaking more effective.  Serious public speakers probably use a spectrum analyzer (aka frequency analyzer) to measure their cycles.  I don't need no stinkin' analyzer.

Use your "outdoor voice" to raise your vocal intensity and pressure.  This may seem like common sense, but I look at politicians for confirmation.  The winners of elections do well in televised debates because they use their outdoor voices even while inside with microphones.

Keep your head up and face available so the audience can match your words to your facial expressions, and talk to the people in the back of the room so everyone can hear you.  That's probably good advice for candidates stumping for votes who have to speak unamplified in high school gymnasiums and hotel conference rooms.

Shorter points are better, probably because most people are too dumb to follow complicated arguments.  This isn't ancient Greece or Rome where educated people came to public forums just to hear philosophers expound on their pet theories for hours.  This is America, where the calorie-addicted lumpen proletariat has been trained to think in sound bites that expire before their sugar rush wears off.

Simple repetition is memorable and effective.  Keep hammering away at your main idea until even the dullest people can remember it and are ready to join your movement.  Beethoven's Fifth Symphony repeated four notes in seven minutes.  Martin Luther King Jr.'s "I Have a Dream" speech repeated four words nine times in seven minutes.  I think 4x7 is some kind of gold standard in making humans pay attention.  I'll try that by repeating four words, "you are totally stupid," seven times to the next person I meet at a high-end cocktail party.  BTW, MLK also sprinkled that speech with visual references that cued his listeners to imagine inspiration scenes.  Human beings are visual and need to be handed pretty pictures to help them understand things.

Those voice lessons are important but I don't think they're the total package.  Illusionists are known to distract audiences with sleight-of-hand while pretending to pull rabbits out of hats.  Successful leaders can use gestures and posture just as effectively.  The discipline known as neuro-linguistic programming (NLP) is one approach to defining and codifying non-verbal cues that alter behavior.  I've tried various hand gestures and body stances from NLP and other sources with varying degrees of effect.  I discovered years ago that posturing techniques such as mirroring have no effect on sociopaths because they are incapable of feeling empathy.  NLP probably works best in front of large crowds or on broadcast media because lots of empathetic suckers will be watching.

I will continue to broaden my knowledge of speech, gesture, and posture because I love impressing people with my genius.  My success in employing these techniques may very well determine the course of human history.  You people will be glad when you put me in charge.  I promise that world domination under the Alfidi regime will be benevolent.  Just listen to my vocal intonation and watch my thumb and forefinger to know that you can trust what I say.  

Schwab's LIBOR Lawsuit Aims At TBTF Banks

I like Charles Schwab (SCHW), both the man and his brokerage.  He persevered against all odds and built a major brokerage from nothing.  The established Wall Street firms opposed his ambitions at every turn.  Now his brokerage is once again taking on the big players.  SCHW is suing U.S. banks for their manipulation of the LIBOR lending benchmark.  Banks that are too big to fail think they are too big to be sued for antitrust violations because regulators have ignored their transgressions.  Think again, big shots. 

Charles Schwab hasn't forgotten what it's like to be a small investor.  That's probably why SCHW hardly faced any regulatory trouble or lawsuits in the aftermath of the credit crunch.  The MBA preppies in TBTF land never knew what it means to be accountable for one's actions.  This lawsuit is a rare example of a moral good in the financial services wilderness.  Go Chuck! 

Full disclosure:  No positions in SCHW or any other financial stock at this time.  I do use SCHW as my brokerage.

No Federal Shutdown After All

Well, how do you like them apples?  The mandarins of Versailles-on-the-Potomac took a tiny step toward fiscal sanity today:

Perilously close to a government shutdown, President Barack Obama and congressional leaders reached a historic agreement late Friday night to cut about $38 billion in spending and avert the first federal closure in 15 years.

The heavy lifting can wait for another day.  Let's face it, when you've been binging on junk food (deficit spending) for three decades and you're 400 pounds overweight (unfunded middle class entitlements), the first time you refuse to overeat can take the wind right out of you.  That $38B is about 2.3% of the $1.65T deficit for FY2011, so at this rate of cutting we'll have the deficit zeroed out in 43 years or so.  The wave of Baby Boomer retirees will crest long before then, so this overweight patient's heart attack (from a bond market meltdown) is still a foreseeable near-term event. 

Organized Crime Permeates Longshoremen

Union members need to pay especially close attention to this news.  The leaders you trust to run your union may be trying to rip you off and sell you down the river.  That is the lesson of the federal government's crackdown on Mafia influence in the International Longshoremen's Association:

Several current and former International Longshoremen's Association officials were among 18 waterfront figures charged as part of a federal crackdown that U.S. Attorney General Eric Holder labeled "one of the largest single-day operations against the Mafia in the FBI's history."

I guess some union leaders are too busy shaking down their members for money and running illegal gambling parlors to fulfill their responsibilities.  I won't be taking bets (no pun intended) on how long it will take to nail down corruption in other unions but this is a great start.  I will give the ILA credit for trying to police up its own ranks by removing a questionable leader from his post, but the corruption vexing the union is so deep and longstanding that they were probably overwhelmed and needed help from law enforcement. 

Union corruption probably amounts to a hefty hidden tax on commerce.  It should go without saying that an organized crime presence in America's major ports is a national security threat. 

Business As Usual In The New Versailles And Elsewhere

Everything old is new again. 

Immediately after taking power, self-styled reformers abandon their promises to solve fiscal problems.  What could have been a significant move is now merely tokenism. 

The same reformers line up to collect business cards in return for promises of future aid.  Say hello to the new boss . . . same as the old boss.

Leaders may have missed a few things while they were busy learning the ropes.  They might have seen the World Bank issuing its first yuan-based bonds.  The bank can probably see who its future largest shareholder will be. 

Leaders may have seen this prediction of Chinese leadership in the IPO market.  Or they may have missed it, if their Wall Street masters told them to look the other way. 

I try to see things other people might miss.  It's the only way I know to prepare for a future in which the country of my birth will not be the world's hegemon.

U.S. Yawns At Chinese Supercomputer

China takes another step toward reclaiming the technological lead it lost centuries ago by unveiling the world's fastest supercomputer:

A newly built supercomputer in China appears poised to take the world performance lead, another sign of the country's growing technological prowess that is likely to set off alarms about U.S. competitiveness and national security.

America's dwindling scientific elite, represented by the Oak Ridge Lab expert quoted in the article, is reacting with appropriate concern.  The response from America's political class will tell the world whether our country is fit to remain a world power.  There wasn't any money for supercomputer development in the federal stimulus because the tech industry isn't unionized and doesn't contribute heavily to political campaigns. 

The rest of America simply couldn't care less.  The relative decline in American students' scientific aptitude is well-documented and even accelerating.  This will continue if reactionaries on school boards succeed in replacing evolution with "intelligent design" in textbooks.  The good news is that Uncle Sam put up this cute website to tell anyone in America who's still literate that someone in the government might know something about science and education. 

Americans can't be bothered to study for degrees in computer engineering when there's another reality TV show to watch.  Our leaders can't be bothered to help the industry because they reflect our changed national character.  The Soviet launch of Sputnik 1 shocked the U.S. into massively increasing funding for scientific education and research, which assured that the first human on the Moon would be an American.  We're just not the same country anymore.  At the rate things are going, the first human on Mars will probably not be an American. 

Nota bene:  Long FXI with covered calls.