Tuesday, February 27, 2007

The Fallout of Corporate Greed in America

US severe poverty reached 32-year high: 16 million people

The gap between the “haves” and “have-nots” in United States keeps widening and the percentage of US citizens who are living in deep or severe poverty has reached a 32-year high, 16 million, according to a report from McClatchy Newspapers.

A McClatchy Newspapers analysis of the 2005 census figures, the latest available, reached that conclusion, defining a family of four with two children and an annual income of less than 9.903 US dollars, half the US federal poverty line, as severely poor in 2005. So were individuals who made less than 5.080 US dollars a year.The McClatchy analysis found that the number of severely poor Americans grew by 26% from 2000 to 2005 which is 56% faster than the overall poverty population grew in the same period.

McClatchy’s review found statistically significant increases in the percentage of the population in severe poverty in 65 of 215 large U.S. counties, and similar increases in 28 states. The review also suggested that the rise in severely poor residents isn’t confined to large urban counties but extends to suburban and rural areas.The plight of the severely poor is a distressing sidebar to an unusual economic expansion.

US worker productivity has increased dramatically since the brief recession of 2001, but wages and job growth have lagged behind. At the same time, the share of national income going to corporate profits has dwarfed the amount going to wages and salaries. That helps explain why the median household income for working-age families, adjusted for inflation, has fallen for five straight years.These and other factors have helped push 43% of the nation’s 37 million poor people into deep poverty, the highest rate since at least 1975.

The share of poor Americans in deep poverty has climbed slowly but steadily over the last three decades. But since 2000, the number of severely poor has grown “more than any other segment of the population,” according to a recent study in the American Journal of Preventive Medicine.“That was the exact opposite of what we anticipated when we began” said Dr. Steven Woolf of Virginia Commonwealth University, who co-authored the study. “We’re not seeing as much moderate poverty as a proportion of the population. What we’re seeing is a dramatic growth of severe poverty.”

The growth, which leveled off in 2005, in part reflects how hard it is for low-skilled workers to earn their way out of poverty in an unstable job market that favors skilled and educated workers. It also suggests that social programs aren’t as effective as they once were at catching those who fall into economic despair.According to census data, nearly two of three people in severe poverty are white (10.3 million) and 6.9 million are non-Hispanic whites. Severely poor blacks (4.3 million) are more than three times as likely as non-Hispanic whites to be in deep poverty, while extremely poor Hispanics of any race (3.7 million) are over twice as likely.

The McClatchy Newspapers underlines that severe poverty is most pronounced near the Mexican border and in some areas of the South, where 6.5 million severely poor residents are struggling to find work as manufacturing jobs in the textile, apparel and furniture-making industries disappear. The Midwestern Rust Belt and areas of the Northeast also have been hard hit as economic restructuring and foreign competition has forced numerous plant closings

Wednesday, February 14, 2007

I No Longer Want to Work for Money

An open letter from the Founder of Whole Foods

(From Fast Company Magazine, Feb, 2007)

Dear Team;

I want to announce a couple of significant changes regarding compensation at Whole Foods Market (NASDAQ:WFMI).

First, as you know, we have a salary-cap policy, which limits the total cash compensation that can be paid to any team member. The board of directors has voted to raise the salary cap from 14 times the average pay to 19 times the average pay, effective immediately.... We are raising the salary cap for one reason only--to make the compensation to our executives more competitive in the marketplace.... Everyone on the Whole Foods leadership team (except for me) has been approached multiple times by "headhunters" with job offers to leave Whole Foods and go to work for our competitors. Raising the salary cap has become necessary to help ensure the retention of our key leadership.... This increase to 19 times the average pay remains far, far below what the typical Fortune 500 company pays its executives.... The average CEO received 431 times as much as their average employee received in 2004, while Whole Foods' CEO (me) received only 14 times the average employee pay in cash compensation.

Most large companies also pay their executives large amounts of stock options in addition to large salaries and cash bonuses. The average corporation in the United States distributes 75% of their total stock options to only 5 top executives.... At Whole Foods, the exact opposite is true: The top 16 executives have received 7% of all the options granted while the other 93% of the options have been distributed throughout the entire company.

The second part of today's announcement has to do with my own compensation.... The tremendous success of Whole Foods Market has provided me with far more money than I ever dreamed I'd have and far more than is necessary for either my financial security or personal happiness.... I am now 53 years old and I have reached a place in my life where I no longer want to work for money, but simply for the joy of the work itself and to better answer the call to service that I feel so clearly in my own heart. Beginning on January 1, 2007, my salary will be reduced to $1, and I will no longer take any other cash compensation.... The intention of the board of directors is for Whole Foods Market to donate all of the future stock options I would be eligible to receive to our two company foundations.

One other important item to communicate to you is, in light of my decision to forego any future [pay], our board of directors has decided that Whole Foods Market will contribute $100,000 annually to a new Global Team Member Emergency Fund. This money will be distributed to team members throughout the company based on need.... The first $100,000 will be deposited on January 1, 2007, and requests will be considered after that date.

With much love,

John Mackey

Monday, February 12, 2007

The Boss Who Breaks All the Rules

by Dominique Haijtema

This article appeared in Ode Magazine issue: 40

Ricardo Semler’s employees set their hours, determine their salaries and choose their bosses. Meet the Brazilian businessman who does everything differently.

His favourite questions start with “why.” Why should employees feel compelled to read their emails on Sunday evening, but can’t go to the movies on Monday afternoon? Why should they take work home, but can’t bring their kids to the office? Why should they have to sit for hours in traffic getting to the head office? Brazilian businessman Ricardo Semler loves to question everything. His guiding principle? If you want creative employees, don’t smother them with ridiculous rules.

For 25 years, Semler has been putting into practise what increasing numbers of modern management gurus are now preaching. He heads a democratic company, Semco, where employees set their hours, determine their salaries and choose their bosses. Managers don’t have secretaries, reserved parking spaces or even desks. There is minimal bureaucracy. No IT or human-resources departments. No mission statement, no five-year plan. Meetings are voluntary and every employee has a say in everything.

Once, when Semler organized a meeting to discuss developing a speedier dishwasher for the consumer market, no one showed up. And the idea was shelved.Semco was a traditionally managed engineering company when the young Ricardo Semler took over from his father. He was just 22 and had brought philosophical conflicts with his father to a climax: The son demanded that Semco steer away from its activities as a shipbuilding supplier and abandon autocratic management in favour of decentralization. He threatened to leave the company, so his father gave him a free hand. On his first day as director, Ricardo Semler fired 60 percent of senior management and began laying the foundation for a democratic organization. Semco has long since abandoned its engineering activities. The company now develops software, is building a hotel and ecological resort and is involved with hospital and airport projects. Semler himself can’t even list all his company’s activities; he leaves that to his employees.

Semco now has 3,000 staffers (with very little turnover) and is growing 20 to 30 percent a year, with annual sales of $212 million U.S. [190 million euros] in 2003. Semco’s radical policies do have a downside. Demand from outsiders wanting to visit its offices is so heavy that employees have complained of feeling like exotic attractions at a zoo. But that seems a small price to pay for such runaway success.

Semler has written two international bestsellers about his unusual management method and has taught at renowned business schools, including Massachusetts Institute of Technology and Harvard in the U.S. And he spends two months a year doing whatever he feels like doing. Last March, while vacationing with his family in Switzerland, he agreed to meet me in a hotel bar before hitting the slopes, to discuss his groundbreaking management ideas. For a corporate executive, he seemed unusually cheerful and relaxed. Semler told me he had all the time in the world—confessing that he hadn’t worn a watch in years, and that suited him just fine.
Why are so few companies in the world run like Semco?Ricardo Semler: “Because managers are afraid to lose power and control.”

What can managers do differently?“In order to do things differently, you have to relearn how to think and have the courage to let go. Managers can learn to have more faith in their employees. That’s difficult in an environment where nearly everything is based on mistrust and control. But it’s not human nature to question who you should send which email to and whose permission you should ask. Absurd! If people behave like animals in a cage, I don’t think it’s because of the people but the cage. This faulty conditioning starts at school. That’s the foundation of conformity and submission to silly rules. Small start-ups often begin in an atmosphere of excitement in someone’s garage, but as soon as they grow, all the pleasure disappears with organization. Anyone with a little talent who can think won’t work for that kind of company, right?”

Doesn’t a major corporation with thousands of employees require a different style of management than a company with 10 staff members? “Why? We were a small company and now we have 3,000 employees. Nothing has changed in the way we work. “I often hear that my management style only works in small unlisted companies and probably only in Brazil. That’s a typical argument to rationalize not changing yourself. And it’s not easy. A democratic organization isn’t something you decide on and arrange from one day to the next. We’ve been doing this for a quarter century and are still learning every day. It’s a lengthy process because people’s conditioning is very strong.”

How can an organization become more democratic?“By questioning all kinds of things. For example, we examined how much time our employees spend sitting in traffic. We figured out that they spend a million hours a year getting to and from work. We wanted to cut that down, which means you have to take drastic measures. We decided to close down our head office and start working in small units. In the 21st century, it makes no sense to get people to come to your head office from all over the country—because even if they physically all get together, they’ll still send an email to a colleague sitting two metres away. “Added to this, if you wake up in a bad mood on Monday morning, you don’t have to come to work. We don’t even want you to come because you simply don’t feel like it and will therefore not make a contribution. We want employees who are ready and willing to work. If that means they only come twice a week, that’s okay. It’s about results.”

It’s striking that your books never mention the word “leader.”“Leadership is way overrated. In fact I don’t call the courses I teach at the Massachusetts Institute of Technology “leadership courses.” I think the idea is outdated that leadership is only relegated to a few and that it can be planned, structured and developed.”

What’s wrong with cultivating leaders?“The whole idea of leaders implies that only a few are capable of pointing us in the right direction. I’m more interested in the structures or the architecture of organizations that enable the company to survive in the future, independent of the leaders.“An important facet of leadership is succession. Succession of managers is often arranged in a dramatic and hectic way.

Take Louis Gerstner, who was taken on as an outsider at IBM, where there are thousands of people with management or business-economics degrees. Was there truly no one in the company capable of taking the lead? That’s pretty weak.”

But an outsider could have a more objective view of the company?“Maybe. But in saying that you’re actually implying that a company can’t innovate or change without hiring outsiders. That’s a scary thought. I would consider it disappointing if an organization can’t produce any leadership talent capable of looking at the company objectively. Take [former General Electric CEO] Jack Welch. When someone puts such a strong mark on a company, as Welch did, it’s often difficult for his successor. Many strong leaders have left weak organizations in their wake. There’s a good reason why many companies—including General Electric—need major reorganizations right after those strong leaders leave.”

Have you arranged your own succession?“Oh, I’ve been working on it for some 15 years. Sixty percent of the business is now comprised of initiatives I have absolutely nothing to do with. The company is doing very well without me. That was also the case when I had a car accident last year and spent a couple of months in intensive care. And a couple of weeks each year I’m travelling and not reachable. Everything runs smoothly.”

How do you develop managers at Semco? Do you send them to business schools?“We never send anyone anywhere. Everyone is responsible for their own career and training. All the employees have a budget to do with as they see fit. We don’t say a word about the choice of courses. We’ve never had a shortage of people interested in taking on management duties, coordinating or guiding others. In our system, managers are anonymously evaluated every six months by their subordinates. If they don’t measure up, they’re no longer allowed to fulfill a leadership role. It’s as simple as that. At our company, you’re a manager as long as your staff approves.”

Do you see it as your mission to inspire entrepreneurs and managers?“Not at all. I don’t see my methods as a gift to humanity. I don’t do it to teach others; I do it for myself. I simply wanted to create an organization where I wanted to work myself. It’s actually quite egotistical.”

Taken with kind permission from the Dutch book De essentie van leiderschap (“The essence of leadership”) by Dominique Haijtema (Business-Contact, ISBN 9047001826), a collection of interviews with Madeleine Albright, Deepak Chopra, Jack Welch and Muhammad Yunus, among others. Most of the interviews were previously published in the Dutch business magazine Management Team. Haijtema is a journalist with the Dutch business daily Het Financieele Dagblad Entrepreneur of the year Ricardo Semler, born in 1959 in São Paulo, became the director of Semco—his father’s company—in 1982. He helped take it from an ailing industrial enterprise with annual sales of $4 million U.S. [2.3 million euros] to a dynamic, fast-growing company active in numerous sectors, from air coolers to consultancy, with annual sales of $212 million U.S. [190 million euros] in 2003. Moreover, Semco is enjoys a reputation worldwide as the example of a “democratic organization” (http://www.semco.com.br/). In 1990 and 1992, Semler was named Brazilian businessman of the year. His first book, published in 1993, was Maverick: The Success Story Behind the World’s Most Unusual Workplace; ten years later, he published The Seven Day Weekend: Changing the Way Work Works. In 2003, he founded Lumiar, a democratic school in São Paulo, where children between the ages of 2 and 10 are encouraged to learn whatever they consider interesting (www.lumiar.org.br).

Ricardo Semler’s tips for democratic management• Do away with bureaucracy, which creates a sense of false security.• Let employees determine everything themselves: their salaries, their working hours, their managers. • Let go of control to stimulate creativity. • Strip away special treatment for managers—no parking space or secretary, not even their own desk. • Continually question whether what appears to be self-evident is actually good for the company. • Regularly take a break from work when you are unreachable for a period of time. • Read classic literature instead of management books. • Remember that leadership has nothing to do with hierarchy, because everyone can develop leadership skills.

Sunday, February 11, 2007

Obama & Oprah- What a Ticket!

Obama & Oprah what a ticket--Entertainment Tonight would love it!

As an American living in a Canadian body, I have a slightly different perspective on the issues surrounding the election of a President in 2008, especially the election of Obama. I think he is the great "Black" hope America is looking for. Particularly the majority of Blacks who represent the 30 million US citizens who make a minimal wage of $5.15 an hour, America's working poor.

The "system" has and always will be controlled by white elitists who only recognize the achievement of blacks through sports and entertainment. White basketball and football owners are pre-disposed to dump millions of dollars on black pro athletes for the entertainment of wealthy whites who can afford seasons tickets. Oprah has been "playing white" since her show was launched. Look at her audience...primarily white middle class. Oprah loves Obama, not because he will save America, but because he is an attractive, charismatic man whom she can identify with that has the look and feel of a celebrity.

America has and always will be totally pre-occupied with celebrities as heroes. If you lose the Super Bowl by one point nobody calls the next day and asks you to be on their late night TV show. This pre-occupation with winning is resulting in the innocent death of young soldiers and civilians alike in Iraq. George W. Bush, the troubled young son of a demanding father and controlling Mother, is possessed with "winning" the war in Iraq even if he takes another 22,000 troops into certain death. "I'll show Dad I can win at something". This is not the rhetoric of a rational human being , this is a "madman'. It is always said you generally hate the people who remind you most of yourself...hence Curious George and his father's hatred of Saddam Hussein.

There is a major crises in America, that goes beyond Barack Obama as the "hope". Democrats and Republicans are cut from the same cloth. Wall Street owns the White House and the way the American system is set up, you have Hillary raising $15 million dollars to buy votes, so she can have the same corporate sector, the Republicans have been beholding to if and when she gets elected. Over 98% of the money raised in the U.S. for political campaigns comes from the corporate sector. This is insane. We have a system in Canada that does not permit a politician to raise more than $1,000 for her or his campaign. We have a fundamental three party system, but with plenty of room for independants. We have a free and democratic society that allows for the free will of the people to speak with their votes.

I have studied and lived in the U.S. and I can tell you that the prevailing attitude of Americans I knew was that America has the most democratic and free society in the world. The envy of the free world. Not any more, the U.S., with homeland security, fear, paranoia , illegal wars and occupation of countries, corrupt corporate leaders ,and a "liar" in the White House, no longer is the envy of the free world, and in fact in many countries it has become the most hated. Electing a black Kennedy is not going to solve anything. And even Kennedy with all his charisma, that Americans so cherish, had his own connections with the Mafia, and sinister corporate magnets.

Until America shifts away from a culture that associates money with power and power with success, you will continue to elect public officials who honestly believe that most Americans are "stupid". "They need us...that without our governance and protection, the U.S. would be invaded by everybody from aliens to Celine Dion."The American Dream has become it's worst nightmare. Wake up, or just like global warming , it will be too late to do anything except build an arc and pray for Gore. If I had a vote that's where I'd put my X.

Your thoughts are welcome...please comment.

Wednesday, February 07, 2007



This is the ultimate resource center for 50 plus boomers who want to start their own business. In the weeks to come you can read about my own personal journey in meeting the challenges of continuing to grow and enrich my life at the age of 65 and beyond. As I enter the autumn of my life I feel the need to keep on expanding my horizons. I hope you will share your comments as well. In an effort to expand our mutual knowledge I will attempt to bring empowering stories to your attention that help you grow your business ethically and create profits with integrity. Till the next time, I remain ..

Your humble Biz Boomer

War Games

Today I opened my newspaper to find an awards ceremony taking place that I had never heard of before; "The Interactive Achievement Awards", administered by the Academy of Interactive Arts and Sciences, a non-profit group made up of some 9,000 members of the entertainment software industry. Take a look at the titles and descriptions of some of the nominees; Gears of War, a dark futuristic action-horror video game. Gears is the brainchild of creative director Cliff Bleszinski, but the Epic team from Cary, North Carolina, had plenty of Canadian content. Epic VP Mark Rein is from Toronto and four other Canadians worked on the project. How wonderful, a hands across the border project totally consumed with violence and war.

Then there's Scarface, a violent mobster interactive game from Radical Entertainment in Vancouver, Bully from Rockstar Games also from Vancouver, sending another message of violent retribution. Relic , the video game company from Canada contributing the most to world peace with titles like; Impossible Creatures, Warhammer 40,000, and Dawn of War released this statement; "So far we've been nominated for over 60 awards that I'm aware of,: producer John Johnson said proudly from Vancouver, "We've pulled in (won) over 40 of those". Johnson said Relic knew the Second World War field was getting a little stale, but was confident it could take the genre forward to the next step. "Key features included creating a "living battlefield," where gamers could interact with their environment. "For me that's the biggest feature, because the game play suddenly becomes different every time you play it," said Johnson. Wow what a concept, how to kill people in different ways, based on your "killing mood".,and what a genius creative business mind to recognize that this "second world war" stuff was getting stale. A final footnote, the awards take place at the HardRock Casino and Club in Las Vegas (Sin City), how appropriate.

It's been surmised that none of the above companies have been nominated for a Corporate Ethics, Sustainabliity, or "Zentrepreneur of the Year Award.

Okay here goes my rant and disbelief at the same time. The fact that we have reached a point in our society that we are permitting legalized war games to infiltrate the very people that we will be entrusting our world to, the younger generation, is beyond belief. Have we become so immune to the world outside that the very mention of war to someone today is treated much like the daily weather forecast. You want to hear about it , but you are powerless to change it. Where is the fine line between madness and civility.

Zentrepreneurism is about creating purpose and profits with integrity. The inconvenient truth about global warming has finally reached the ears of government and now the general public. It took Al Gore years to get peoples attention. What will it take to get the business world to "wake up" to it's own Inconvenient Truth.

Whether its pollution of the atmosphere or pollution of the mind., the two are equal culprits and each has it's own responsibility to act in a way that strenghtens our moral and ethical fibre. The cigarette companies are now targetting the most vulnerable of our ciitzens, our youth, becasue they know that they are the ones most confused and feeling disenfranchised. Too young to make clear descisions on what's good or bad and too old to be turned away at the corner grocery store. These same vulnerable, disenfranchised, and misguided youth are walking into Best Buy and laying down their last few dollars to have an opportunity to "play war". Killing people off is no big deal, heck you can watch CNN every night and get your dose of war and casualty counts much like to the ticker tape from Wall Street.

These same kids are in a fog, they have become immune to the graphics and they do not place a high value on themselves or the world around them. The next step is the local gun store and then it's off to the nearest high school or college to blow away people who looked funny at them, ignored them, bullied them, or talked about them. And then you can "waste yourself", the ulitmate suicide, no "guts no glory". You see the pattern here. It's a pattern repeated thousands of times a day in virtually every city in North America. At one point does business and the corporate world step up to the plate and say ENOUGH IS ENOUGH. We will no longer sacrifice integrity for profits. We will do the right thing to stop glorifying violence and war.

We will make a commitment to promote peace and wellness in our community. And if this inconvenient truth is too much for them to handle and they refuse to act responsibly, then you have no other choice, just say "Hell No we won't Buy" . The quiet revolution of the conscious consumer has already begun with the oil companies, the cigarette companies, the drug companies, the anti-war movement and now it's time for us to meet head on the irresponsible antics of the video game industry. War ,poverty, pollution, hunger and polluted profits have no place in a peaceful compassionate world. It may not appear in your daily newspaper, but the people have spoken, even if they are under ground.