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Corner Office | Joseph Jimenez: Joseph Jimenez of Novartis, on Finding the Core of a Problem

October 8, 2011 by Leave a Comment

 

Q. What are the most important leadership lessons you’ve learned?

A. One occurred when I was a division president of another company. I was sent in to turn the division around after four years of underperformance.  It was a declining business.  And when I got there, I completely misdiagnosed the problem.  I said: “Look.  We’re missing our forecast every month.  What’s wrong?”  I brought in a consulting firm, and we looked at what was wrong.  And the answer was that we had a bad sales and operations planning process, where salespeople, marketing people and operations people were supposed to come together and plan out the next 18 months and then forecast off of that.  So I said: “O.K.  We’re going to fix this.  We’re going to have the consulting team come in and help us make that a better, more robust process, with more analytics.”

And it turned out it wasn’t at all about analytics.  Because once we did that, and we put that new process in place, we still continued to miss forecasts.  So I thought, “Something’s really wrong here.”  I brought in a behavioral psychologist, and I said: “Look, either I’m misdiagnosing the problem or something’s fundamentally wrong in this organization.  Come and help me figure it out.”  She came in with her team and about four weeks later came back and said: “This isn’t about skills or about process.  You have a fundamental behavioral issue in the organization.  People aren’t telling the truth. So at all levels of the organization, they’ll come together, and they’ll say, ‘Here’s our forecast for the month.’  And they won’t believe it.  They know they’re not going to hit it when they’re saying it.” The thing she taught me — and this sounds obvious — is that behavior is a function of consequence.  We had to change the behavior in the organization so that people felt safe to bring bad news. And I looked in the mirror, and I realized I was part of the problem.  I didn’t want to hear the bad news, either. So I had to change how I behaved, and start to thank people for bringing me bad news.

Q. That doesn’t mean letting them off the hook, though. 

A. Right. It’s more a chance to say: “Hey, thank you for bringing me that news.  Because you know what?  There are nine months left in the year.  Now we have time to do something about it.  Let’s roll up our sleeves, and let’s figure out how we’re going to make it.”  It was a total shift from where we had been previously.  So after that experience, I always ask all of my people, and I always think to myself: “Are we really fixing the root cause of this problem, if there’s any problem?  Or are we fixing the symptoms?”

Q. What else?

A. An important leadership lesson came in my early years.  When I was at Stanford, I was a swimmer, and I was a captain in my senior year. The first thing I learned when I was captain is that you have a lot of people on a team who have different agendas, different objectives. We had to get everyone aligned around a common goal, and the one we set for ourselves was to break into the top five at the N.C.A.A.’s.  In my freshman year, we were No. 20 in the U.S. By our senior year, we ended up third.

Q. And how do you apply that lesson in your current job?

A. When I first became C.E.O. of Novartis, I said: We have 120,000 people. That’s a lot of people to try to align. The first thing I have to do is to have people understand where I’m going to take the company. And it has to be crystal clear. And not only does it have to be crystal clear, but everybody in the organization has to understand it, they have to have line of sight to that goal, and they have to understand how what they’re doing is going to help us move into the future.

Q. How did you learn the importance of that?

A. Throughout my career, all my performance reviews had one thing in common, whether the results were good or the results were bad. They all said that I have the ability to look at very complex situations and make them simple. And I personally believe that if you can’t hold something in your head, then you’re not going to be able to internalize it and act on it. At Novartis, our business is very complicated. But you have to distill the strategy down to its essence for how we’re going to win, and what we’re really going to go after, so that people can hold it in their heads — so that the guy on the plant floor, who’s actually making the medicine, understands the three priorities that we have as a company.

Q. How has your leadership and management style evolved?

Article source: http://feeds.nytimes.com/click.phdo?i=4d1652f110ea2b28e55ebe60114b33c3

Filed Under: Business News Tagged With: , ,

Economix Blog: ‘Made in China,’ but Still Profiting Americans

August 16, 2011 by Leave a Comment

4:40 p.m. | Updated to correct the name of the organization that released the study.

DESCRIPTIONMichael Mandiberg (Creative Commons)

Over the years I’ve heard many Americans fret about buying goods that are “Made in China,” since they want their cash to go to American companies instead of Chinese ones. A new study, however, finds that a majority of the price consumers pay for goods labeled “Made in China” actually does go to American businesses, not Chinese ones.

The study, from the Federal Reserve Bank of San Fransisco, estimates that of every dollar consumers spend on a product labeled “Made in China,” about 45 cents goes to China for the cost of the original import.

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

On the other hand, about 55 cents of that dollar pays for services produced in the United States, such as the transportation for the product, rent for the store where the product is sold, the salaries of the salespeople at the store, the cost of marketing the product, the profits for shareholders of the retailer selling the product and so on.

What’s more, the fraction of a retail product’s price going to American services is higher for Chinese-made products than for products made in other foreign countries. For retail prices on overall imported goods, only 36 percent — or 36 cents on the dollar, instead of 55 cents on the dollar for made-in-China goods only — goes to American companies and their workers.

That difference is largely caused by the types of products American import from China versus other countries.

“The fact that the U.S. content of Chinese goods is much higher than for imports as a whole is mainly due to higher retail and wholesale margins on consumer electronics and clothing than on most other goods and services,” write Galina Hale and Bart Hobijn, the authors of the study.

Bear in mind that there are other ways that American consumer spending gets channeled to China, among other countries. That is, many American-made products or services use imported goods as inputs. These types of imports, which are used as parts and not sold directly to consumers, are called “intermediate goods,” as opposed to “final goods.”

Given this, the San Francisco Fed’s study also looked into what share of total personal consumption expenditures in the United States goes to imported final goods (again, consumer products) and intermediate goods (parts).

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The authors found that about 13.9 percent of all United States consumer spending goes to imports, including both final and intermediate goods. Chinese imports alone — including both final goods and intermediate goods from China — accounts for just 1.9 percent of total consumer spending.

This post has been revised to reflect the following correction:

Correction: August 15, 2011

An earlier version of this post incorrectly identified the Federal Reserve Bank that issued the paper. It was the Federal Reserve Bank of San Francisco, not the New York Fed.

Article source: http://feeds.nytimes.com/click.phdo?i=bcd47c86e42009b55e6cf70443c5bde9

Filed Under: Economy News Tagged With: , ,

Bucks: Bill Paying Made Easier, but for a Fee

May 11, 2011 by Leave a Comment

Courtesy ChargeSmart

Lots of people like to pay big bills with their credit or debit cards so they can rack up reward points or manage their cash flow when money is tight. But it’s sometimes hard to do that with certain big bills, like those from your mortgage servicer or your electricity provider. Many of those companies still refuse to accept plastic — or accept only certain brands.

That’s where the online payment provider ChargeSmart fills a niche. The company acts as a middleman, accepting payment from your credit or debit card and then arranging a funds transfer to pay your bill. But it charges a fee of as much as $9.95, in the case of a car payment.

The rationale for doing this puzzled me. Why would you pay a fee to pay a bill, when you could just write a check — or, even easier, pay it online from your checking account?

Tim Brinkman, ChargeSmart’s chief executive, said in a telephone interview that most of its 300,000 or so users do, in fact, have checking accounts. Most use debit cards, which are tied to checking accounts. But only about 15 percent of checking account holders, he said, actually set up electronic bill payments. They may see it as too time-consuming to enter the necessary information, or they may balk at the so-called negative float that can occur when funds are quickly withdrawn to pay a bill, but the recipient doesn’t actually get the funds for as much as five days.

Or, if they’re using a credit card, they gain time to pay a big bill — useful for people who get income in spurts, like salespeople or real estate agents who work on commission, or for someone on a tight budget who gets hit with, say, a big car repair bill and is juggling payments. They can pay their mortgage on time and avoid hurting their credit score, he said, but know they won’t have to cover it with cash until the next billing cycle. “It gives some breathing room,” he said.

Mainly, though, Mr. Brinkman said, people use ChargeSmart because of its “ease of use.” People can find their utility company, mortgage servicer or student loan company from a pull-down menu and make the payment quickly, without having to register on the Web site. Payments post within two to three days. “They like the fact that it shows up on their statement, and there are rewards associated with it,” he said. Some credit cards, he noted, offer cash back, which can reduce the impact of the fee.

The fee can vary, depending on the size of the payment and the company being paid. In some cases, it’s a flat fee, while in others, it’s a percentage of the bill, or some combination of the two. (The Web site offers payments to hundreds of utilities across the country. In a test run, a $200 payment to Alaska Electric Light and Power cost $9.53, while the same payment to Southern California Gas Company cost $4.95, according to the Web site). Even if you’re getting 2 percent back on your credit card ($4, on a $200 charge), you’re still paying something for a service that you could get free — or, at least for the cost of a stamp. “We don’t say it’s the right option for everyone all the time,” Mr. Brinkman said. “But it’s a great option for people to have.”

In some cases, depending on the card used, ChargeSmart doesn’t make money on the transaction, because of the high “interchange” fee it has to pay, Mr. Brinkman said. But ChargeSmart may benefit from a proposed federal cap on such fees, which merchants pay banks to process credit and debit card purchases. (Or, Mr. Brinkman said, maybe not. Banks may de-emphasize the use of the cards in response to the proposed cap or tighten standards for getting the cards. “There’s always unintended consequences,” he said.)

Meantime, he said, the site is offering incentives to continue to attract new users. This summer, for instance, Discover will pay all ChargeSmart user fees for its cardholders for a fixed period of time, as part of a promotion.

Have you used ChargeSmart? Do you think the convenience is worth the fee?

Article source: http://feeds.nytimes.com/click.phdo?i=53b408c6dfe714484892d9b078c36cd4

Filed Under: Your Money Tagged With: , ,

Bucks: Selling Your Car? Try Making a Video

April 13, 2011 by Leave a Comment

Thinking about selling your car yourself, instead of trading it in for credit toward a new one? Some amateur video recording and smart use of the Web may bring you more offers and a better price, advises the automobile site Edmunds.com.

In a recent post, Philip Reed, the site’s senior consumer advice editor, suggests making a video of your car and posting it on YouTube, which attracts millions of visitors daily. Most digital cameras and many phones now have video capability, so it’s easy to shoot a virtual “walk around” that mimics what salespeople do at dealerships to show off cars to prospective buyers.

A video ad, he notes, gives shoppers “the sense that they are standing beside your car, listening to you describe the key features and options while they enjoy total anonymity and no risk.” After you post the video, you can create an ad on a classified ad site, like Craigslist, and include a link to the video.

His main tips for making an effective video car advertisement:

  • Park your car in an attractive location free of noise or traffic.
  • Briefly rehearse what you want to show and say in the video.
  • Start your walk around facing the front left headlight and move clockwise around the vehicle.
  • Provide basic information, including the vehicle’s year, make, model, mileage and any special features or damage.
  • Keep it under 2 minutes.
  • Don’t mention price in the video; you may want to change that later without having to reshoot.

    • There are some caveats to do-it-yourself sales. Using the Web and meeting potential buyers in person raises safety issues, which Mr. Reed recently addressed in a separate post. Some highlights for playing it safe:

  • Vet callers on the phone by asking questions. If anything seems suspicious, hang up.
  • Don’t go alone to a meeting.
  • Meet in a public place, like a mall parking lot.
  • Tell the prospect you want to see a driver’s license before a test drive. If you’re uncomfortable negotiating with strangers, he adds, you may want to sell the car through a dealer. You may get less money, but you’ll have peace of mind.

    • Article source: http://feeds.nytimes.com/click.phdo?i=8c91320822cc1316932cc6b9dcdfd166

    Filed Under: Your Money Tagged With: , ,