Published CommPro.biz 2014.01.28

Surprise Surprise

The Great Place to Work® Institute has been creating Fortune magazine’s 100 Best Places to Work list for nearly twenty years. The new list is just out and it’s interesting to note that the 100 companies that make the list share another trait: they make more money than most other companies. Having happy, engaged workers propelled these 100 companies into a growth rate close to five times that of businesses in general over the last two years. Those are the Federal Bureau of Labor Statistics figures. The companies that make their revenue figures public jumped more than 20% in the last two years. 

That may come as a surprise to some; it’s no surprise to us. Happy workers are those who are treated better than their peers in similar jobs. Workers who feel valued are more productive. They stay in their jobs long term. Cut turnover and you build an experienced workforce. It’s a pillar of the ethical business model that marks the firms that stand out even further, firms focused on all the stakeholders that can make or break a company. 

Firms focused on their workers, their customers, their vendors, their community, and on the environment, generate the profits to keep their lenders and investors happy. In their 2007 book, Firms of Endearment, the authors identified a group of companies that met those standards. They earned eight times the S&P Average over the ten years leading up to the research. The levels of growth and revenues gained by the Fortune 100 Best Places companies is impressive, but not close to the earnings of those that made the Firms of Endearment list. It’s no coincidence that companies demonstrating good behavior make more money than their peers. 

However, the ethical business model is not a guarantee. You can treat your workers well, you can follow to the letter the ethical business model and still fail. Any successful enterprise has to have a bit of luck in addition to a lot of hard work and doing the right thing. What we can guarantee is that all things being equal, you are more likely to succeed or to succeed on a larger scale than those who follow a less savory business approach. It’s too bad the bad guys make all the headlines. It’s too bad that sometimes the minority -those bad guys- are seen as the norm.

So it’s no surprise that firms on Fortune magazine’s 100 Best Places to Work list are doing well. As it happens so are most all of the companies on all the lists that document some aspect of good behavior. Surprising to us are the companies that continue to follow the low road in business. While they are a minority, they still are a massive cancer on our economy. Here’s a surprise for those greed centered Wall Street Bankers and corporate executives. They would do better by doing the right thing for all their stakeholders. 

"Am I wrong?"--"Am I crazy?"

"What do you think?"--"Do you agree?"

Published in CommPRO.biz 2014.01.24

 

Big Pharma Has Congress 

by the Jugular

Andrew Witty, Glaxo Smith Kline CEO, announced last month (December 16) that Glaxo will stop paying doctors to promote their products and stop paying their sales representatives based on the number of prescriptions doctors write. It would be nice to think that this action results from an epiphany on Glaxo’s part. It’s more likely a duck-and-cover move triggered by a nasty bribery mess in China and an upcoming Affordable Care Act disclosure requirement.

It is, however, welcome. This, we hope, will trigger moves (don’t hold your breath) by other Pharma Monsters to fall in line. Pay-to-prescribe -along with Pharma advertising- make up two of the more egregious practices Pharma uses that drive healthcare costs sky high in the United States. The biggie by far is the hold they have on our Congress. Their “K” Street lobbyists lay bucks by the bushel on members of the Congress. In return, those sworn to work in our interest instead work for the drug companies.

By manipulating patent laws and exempting Pharma from anti-trust laws, drug companies have driven costs for their products beyond belief. A drug that costs a few hundred dollars to make, costs a desperate cancer patient close to a hundred grand for each dose. The patient goes bankrupt and the taxpayers pick up the tab. There is no other drug. The doctor says take it or die.

Pharma would have us believe that these drugs cost over a billion dollars to bring to market. A cruel and blatant lie; a study published in the British Medical Journal shows that the average $1.3 billion dollars the drug companies claim it costs, is actually about $90 thousand dollars. The rest is part BS and mostly marketing expenditures. Worse, most of their research funds go to tweaking existing drugs in an effort to stretch out patents on their best sellers.

We keep hearing about how much cheaper it is to buy drugs in places like Canada. Why is that? Because they have a single payer healthcare system that negotiates lower prices. In America, our Congress has forbidden Medicare to do anything like that. So a nation with fewer people than live in California can muscle the drug companies and we can’t. To make it worse the Congress has so limited fraud investigative funds that Medicare catches only a fraction of the bad guys. Like one doc in California who games the system by prescribing name-brand drugs to thousands of low income patients. Drugs’ costing as much as 30 times equally effective generic versions. There are thousands of these docs milking Medicare for Big Pharma and costing the taxpayers billions.

Big Pharma’s pill bill is killing us. Government controlled healthcare serves over half of Americans. With that kind of clout we can negotiate lower costs. Lower costs in drugs, lower costs in every aspect of our out-of-control healthcare sector. We spend more per-capita than any other nation on earth and yet our outcomes don’t even rank in the top 25%. We need to clean out the Congressional medicine chest.

"Am I wrong?"--"Am I Nuts?"--"What do you think?"--"Do you agree?"

Published in CommPRO.biz 2014.01.16

The Earnings Culture

Public companies are driven by the need to show earnings. The path they follow to that end determines their corporate culture. Horace Greeley, the dominant editor and publisher of the 19^th century, commented, “The darkest hour in any man's life is when he sits down to plan how to get money without earning it.” Problem is, some corporate leaders see any action to increase “earnings” as fully justified. Too many CEOs seek “earnings” by any means. They look at the fines and legal penalties incurred as -“oops”- no more than the cost of doing business.

Investors too often are not concerned how “earnings” are achieved. While the ethical business model is the proven best source of high earnings, some see the concern for employees, communities, vendors, and the environment that model requires as taking money out of their pocket. Some even see a focus on treating customers fair and square as a missed opportunity to increase profits.

We saw this in the run up to the current recession. The monster banks pushed the pipeline to produce more and more mortgages, ignore the details, don’t fret about income verification. Once in hand they threw together these shaky mortgages (“Crap” was the term they used), put a few good ones on top of the pile and sent them off to the rating agencies. The bankers were not hesitant to point out that as paying clients, the rating better be AAA.

These bundles of sure-to-fail “crap” were sold as if the triple A ratings were real. Adding insult to injury these banks placed bets that the “crap” they created and sold would fail. They bet against their own customers. They made money coming and going; money they called “earnings.” The shareholders loved it. J.P. Morgan Chase, Goldman Sachs and a handful of monster banks deliberately created financial products designed to fail.

When they were caught off guard by the collapse of their whole scheme, they turned to the taxpayers for help. While necessary, the bailout was designed by Bush Secretary of the Treasury, Hank Paulson, former CEO of a monster bank. He gave his mates the needed money but failed to attach any conditions. We the taxpayers continue to provide interest free funds to these banks believing that they will lend it to small businesses and create jobs.

Wrong! They are back to gambling with our money, this time boosting prices on basic commodities that folks strapped for cash have enough trouble paying for. As long as the banks’ “earnings” look good, the stock market booms. We are hard pressed to see these “earnings” passing the standard Horace Greeley set. The bank CEOs’ plans are obviously designed to get money without earning it. They set the culture and drove it down through the ranks. The people paid mightily these last five years for the sins of these arrogant banksters. They, however, are above the law. At least the Attorney General of the United States says they are.

Published CommPRO.biz 2014.01.06

Who Cares What You Think?

We like to kick off the New Year responding to the remark we have heard so often over the decades that we have been writing opinion pieces: “Who cares what you think?” Good question. Our response is always the same: “Hopefully, no one.” 

A friend owned the only newspaper and radio station in a small town. He ran editorials in the paper and personally voiced them on his station. His newspaper would take one side of an issue and he would dispense the opposite on the radio; he wrote both. He believed a good opinion writer should be able to see both sides of an issue, or they shouldn’t be writing opinion. 

While we make every effort to look at both sides, we are not sure we can follow that ideal in every issue we address. We do not write to convince anyone to take up our position. We do the research; often we will have as many as fifty pages of research for a five-hundred-word OP-ED. Ethics rarely has two acceptable sides. On the other hand, it isn’t always a simple matter of right and wrong either. Like it or not, Situational Ethics are called for at times; the situation can change the ethical call. There are times when one has to think about the impact of hard-line adherence to what seems the right thing at the moment. Or as our friend Saul Alinsky once defined truth, “You don’t have to cross the street to tell someone how ugly they are.”  

So if we don’t write to change your mind, or help you make up your mind, and if we don’t expect people to care what we think, why do we write? We write because the ethical issues we raise seem important to us and we hope you will think about them. We want you to sort through the facts. We want you to search the internet, to read and find a position. If you toss a brick at your computer every time one of our OP-EDs turns up, that’s OK. At least you are thinking about the issues. 

Beware those who dispense opinion for other reasons.  Beware the manipulators.