OCTOBER 2011
Commentary
The third quarter was challenging for the US economy. We faced the continuing European sovereign debt crisis, our own debt-ceiling debate and Standard & Poor's downgrade of the government's credit rating. This is on top of persistently high unemployment, rising food and commodity prices, and a bitter political environment. Although the economy continues to show signs of modest improvement and companies keep reporting better than expected earnings, last quarter’s events added to an already uncertain economic and business environment. What will break this trend?
Companies need confidence that they are running in an environment where their actions will be rewarded appropriately. If they expend more on marketing, sales will improve. If they modernize a production process, operating costs will fall. Instead, during this expansion, companies have been compelled to moderate their hiring and investment plans in order to defend against a second downturn. The muddled message from Washington has justified this course.
At some point, confidence will build as the Europeans support and restructure their weaker members and a measured approach to improving the US budget deficit emerges in the coming months. Meanwhile, other pieces will fall into place, and companies will do what they always do -- pursue growth agendas that maximize shareholders’ value. In the end, this will boost employment and drive more revenue into the US Treasury.
After a deep recession and glacial recovery, it is hard for many to support this optimistic view, but steady, albeit slow, progress will eventually reap measurable benefits.
Manufacturing Can Fire Up U.S. Resurgence
Source: The Plain Dealer (Opinion) - September 3, 2011
So how do we resolve the current crisis and kick-start our economy? According to Thomas Gibson, it starts with job creation. He claims that the manufacturing sector has served as the engine of growth in the past, and it has the power to create urgently needed jobs today. Gibson is president and CEO of the American Iron and Steel Institute in Washington, D.C., whose member companies make more than 80 percent of the steel produced in the United States.
Hoechner named President and CEO of Rogers Corporation
Source: BusinessWire press release - September 21, 2011
Rogers Corporation announced that its Board of Directors has elected a new President and Chief Executive Officer, Mr. Bruce D. Hoechner, effective October 3, 2011, at which time he will also become a member of the Company's Board of Directors. Hoechner has many years of broad leadership experience across numerous geographies, businesses and functions in the specialty chemicals industry with particularly strong international business expertise. For the past five years, Hoechner was based in Shanghai, China, first with Rohm and Haas Company, for whom he worked for 28 years, and then moving to Dow Chemical upon its acquisition of Rohm and Haas in 2009.
Automakers push ahead on carbon fiber composites
Source: Chemical & Engineering News - September 26, 2011
Automakers are increasingly looking to combine emission-limiting propulsion technologies with stiff, lightweight carbon composite frames. Their hope is that the new components will replace steel and aluminum in the assembly of energy-efficient hybrid and all-electric vehicles. Several automakers are pushing ahead with plans to make carbon fiber composites an integral part of a new generation of electric cars intended mostly for inner-city use. They will be going beyond fiberglass composite body panels, already found in some cars, to create structural composite components that are now the province of metal.
Renewal of ASM International Headquarters
Source: The Plain Dealer - August 21, 2011
ASM International celebrated the stunning renewal of its world headquarters. Designed by the late Cleveland architect John Terence Kelly and built in 1959, the site is set amid 44 acres of rolling lawns and pine trees in Northeast Ohio. The complex consists of a low, glassy, crescent-shaped office pavilion designed by Kelly, surmounted by a cloudlike geodesic dome designed by R. Buckminster Fuller's Synergetics. Inc. of Raleigh, North Carolina.
Six reasons why America can't create jobs
Source: The Christian Science Monitor - September 2, 2011
Here are six reasons that help explain why job creation has been so frustratingly slow coming out of the Great Recession – and why those forces may not last forever.
Posted by Allen Wass | Sat 10/1/2011
Send comment to aswass@sanfordrose.com
SEPTEMBER 2011
Commentary
Earlier this summer, I finished reading the epic novel War and Peace by Leo Tolstoy. For those who are not familiar with the story, the book delineates in graphic detail events leading up to the French invasion of Russia and the impact of the Napoleonic era on Tsarist society. Ultimately, the commander of the Russian military made one of the hardest but wisest decisions in military history: Moscow would be abandoned and left to the French.
In his ruminations prior to the decision, one terrible question absorbed the commander: “Can it be that I have let Napoleon get to Moscow, and when did I do it? When did it happen? Was it yesterday, when I ordered Platov to retreat, or the evening before when I had a nap and told Bennigsen to issue instructions? Or was it earlier still? … When, when was this terrible affair decided?”
The insight of Tolstoy is that big results are rarely caused by only singular decisions, but are the consequence of many sequential events. This is something we often forget whenever we try to explain outcomes. It is evident today within our current economic environment. It was not one poor choice that led to the credit tightening and financial crisis that caused the latest recession. Similarly, Steve Jobs and his management team undertook a string of activities that led to the resurgence of Apple.
Results are influenced by our actions and there is rarely a shortcut to success. Tolstoy was masterful at expressing the human condition in all its complexity and demonstrating that achievements require commitment, perseverance, and an ability to continually reassess the situation.
In the end, the commander would be credited with saving Russia from Napoleon’s invasion because the Russian army would survive and the French soldiers would lose the will to continue the fight. Of course, we all know that there were many prior and subsequent events that led to history’s final verdict. To find out more, I recommend reading the book.
Chasing Rare Earths, Foreign Companies Expand in China
Source: The New York Times - August 24, 2011
China has long used access to its giant customer base and cheap labor as bargaining chips to persuade foreign companies to open factories within its borders. Now, corporate executives say, it is using its near monopoly on certain minerals — in particular, scarce metals vital to products like hybrid cars, cellphones and energy-efficient light bulbs — to make it difficult for foreign manufacturers of high-tech materials to build or expand factories anywhere except China. Companies that continue making their products outside the country must contend with tighter supplies and much higher prices for the materials because of steep taxes and other export controls imposed by China over the last two years.
Cabot to Divest Its Supermetals Business for $400 Million
Source: BusinessWire press release - August 25, 2011
Cabot Corporation has entered into an agreement to sell its Supermetals business to Global Advanced Metals ("GAM") for a minimum of $400 million in total cash consideration. The transaction is subject to regulatory approval and is expected to close by the end of the calendar year. GAM is a global leader in the supply of tantalum ore, a raw material used by the Supermetals business in the manufacture of high-end products to the electronics, aerospace, chemical manufacturing and other industries.
Small business owners frustrated by shortage of good job applicants
Source: The Plain Dealer - August 25, 2011
Small business owners say they have job openings but can't find workers with the skills, or the interest, to fill them. The Council of Smaller Enterprises, Northeast Ohio's largest chamber of commerce, cited a disconnect between what small business owners look for and what job seekers want.
SRA Update: Interviewing Tips for Employers
September/October 2011
Candidate interviews can be a time consuming and expensive process for companies and are often a critical part of the hiring process. This issue provides some basic, but helpful, tips to employers to improve their interview process. To view a PDF version of this article, click HERE.
Chemical engineering ranks as No. 2 best-paying degree in 2011
Degrees requiring advanced math dominate PayScale's list of the 20 college degrees that lead to the highest-paying jobs. Chemical engineering, with a median midcareer salary of $109,000, trailed only petroleum engineering, according to the survey.
Posted by Allen Wass | Thu 9/1/2011
Send comment to aswass@sanfordrose.com
AUGUST 2011
Commentary
Currently, we are in an atypical environment where profits and unemployment are both high. As a whole, companies continue to accumulate unprecedented amounts of cash and their net incomes have never been greater. Meanwhile, the unemployment rate is hovering around 9 percent, the highest level since 1983. The reasons that are cited for the stubbornly high unemployment include too much uncertainty about future economic stability (cyclical unemployment) and a mismatch between available and required skills (structural unemployment). The cyclical unemployment argument is hard to explain because companies continue to report good results, while the structural unemployment claim is not completely true either because we would expect to see the wages of much sought-after types of workers rising sharply, which is not the case.
Nonetheless, because of their good performance, I am happy to report that companies are hiring, albeit at a more cautious rate then would be expected at this stage of a recovery. As I have mentioned previously, they continue to be extremely selective and are looking for candidates with specific backgrounds and knowledge.
In particular, there are two types of people that many companies in the Chemical and Specialty Materials industry seek:
1. Technical experts with advanced degrees who know how to develop relationships and transform customers’ needs into appropriate products for specific applications.
2. Sales and marketing leaders with engineering degrees and a specific technical background who can drive the advancement of the product portfolio.
In other words, these companies want a Ph.D. educated engineer who could help with business development and a product manager who has a technical background and understanding of how to develop their products. In the long run, this is good news for the demand for engineers and other technically trained people, but in the short-term, some companies are facing a difficult time finding the appropriate person for highly specialized roles.
There is no magic potion on jobs, says GE Chairman Jeffrey Immelt
Source: Associated Press - July 13, 2011
General Electric Co. Chairman and CEO Jeffrey Immelt, chairman of President Barack Obama's jobs and competitiveness council, said there is no magic potion to jobs creation, but the panel is devising pragmatic plans to put people back to work. Immelt said his four months on the Obama advisory panel has taught him that even his company can be held accountable for where it creates jobs. He said the panel is working on devising a hundred different business plans for every sector of the economy, with practical steps to help create jobs. "It's very unlikely the jobs council's going to find something that will be a magic potion to create jobs," he said. But he noted there are things that can be done. For example, he said, America suffers from a shortage of engineers.
Chemical producers show surprisingly good profits
Source: Chemical & Engineering News - July 25, 2011
In the U.S. and Europe, the economic recovery has been slow and fragile. Monthly job reports show persistently high unemployment and anemic job creation. Economists fret over whether the Chinese government will be able to cool down economic expansion to a sustainable level without causing a crisis that slows growth everywhere. And the sovereign debt crisis in Greece has been inviting comparisons to the U.S. subprime mortgage meltdown of a few years ago.
Foreboding trends, but economists would be hard-pressed to find clues to them by looking at the data contained in C&EN’s survey of the Global Top 50 chemical companies. The statistics, based on 2010 company results, show that the chemical industry has made a strong recovery from 2009. In fact, the industry is performing better than it has in more than a decade.
OM Group to buy German technology company for $1 billion
Source: The Plain Dealer - July 5, 2011
Specialty chemicals company OM Group is buying a German company for $1 billion, bolstering the Cleveland firm's position in high-tech automotive and transportation industries. OM Group expects to complete its purchase of Vacuumschmelze GmbH & Co. KG -- or VAC -- in the next several months. VAC, founded in 1923, is world leader in the design and development of engineered materials for electronics and electrical equipment. The company manufactures permanent magnets used in wind turbines and makes electronic equipment crucial to solar development -- technologies that are growing rapidly in China and India. VAC also designs and makes a number of highly engineered parts for aerospace, transportation and automotive industries.
The Help-Wanted Sign Comes With a Frustrating Asterisk
Source: The New York Times - July 26, 2011
The unemployed need not apply. That is the message being broadcast by many of the nation’s employers, making it even more difficult for 14 million jobless Americans to get back to work. A recent review of job vacancy postings on popular sites like Monster, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.
Posted by Allen Wass | Mon 8/1/2011
Send comment to aswass@sanfordrose.com
JULY 2011
Commentary
I finally decided to migrate to the iPhone 4 this month. I know plenty of people who are thrilled with this particular smartphone, and my 12-year old daughter has an iTouch, so I was already familiar with the technology. Most surprisingly, it was amazing how quickly I got used to the new device. Within the first week, it became second nature for me to use the calendar, mail, and various apps to become more efficient, which is something I truly value. Meanwhile, I am happy that I have not become slave to it and do not find myself “checking it” every five minutes. Now, if I could just get it to paint the house.
Profits up as companies show earnings on fast track
Source: Bloomberg News - June 13, 2011
Profits at American companies continue to be one of the bright spots in the U.S. Earnings will climb an average 10 percent a year through 2013, more than three times quicker than the economy, after what has already been the fastest rebound since the late 1940s, JPMorgan Chase & Co. projects. As an example of mounting signs of confidence, DuPont plans to invest more than $500 million to boost production.
The Manufacturing Predicament
Source: Chem.Info
Financial pundits, business leaders, and government officials — past and current — assert manufacturing represents this country’s economic engine and serves as the catalyst for prosperity. Yet, many are not ready to predict that a vibrant U.S. industrial environment is on the horizon. The reason? Manufacturers simply cannot find the skilled labor needed today to handle the sophisticated production processes and tasks required on the manufacturing shop floor.
Sherwin-Williams wins green award from U.S. EPA
Source: The Plain Dealer - June 21, 2011
Oil and water don't usually mix well -- unless a chemist creates a technology to marry them. Sherwin-Williams scientists working in downtown Cleveland have done just that: invented a water-based oil paint. The $7 billion company began marketing the technology in several paint lines last year in Ohio and several other states. And the U.S. Environmental Protection Agency recognized the company's accomplishment, awarding Sherwin-Williams its Green Chemistry Challenge Award -- one of only five EPA challenge awards given out this year, the 16th year of the program.
Will they stay or will they go? (Your employees, that is)
Source: Grow SmartBiz - June 8, 2011
Are your employees going to stay with your business as the economy improves and more job opportunities arise? This is a crucial consideration for small businesses, who can ill afford the time it takes to lose the knowledge of key employees, or to find and train new workers to replace them.
SRA Update: What really motivates employees?
July/August 2011
This issue examines lack of employee engagement, the effects it can have on an organization, the reasons behind it, and the tangible benefits an organization can enjoy from improving employee engagement. To view a PDF version of this article, click HERE.
Posted by Allen Wass | Fri 7/1/2011
Send comment to aswass@sanfordrose.com
JUNE 2011
Commentary
During May I attended my niece’s graduation from Miami University in Oxford, Ohio where Indra Nooyi, Chairman and CEO of PepsiCo, delivered a speech on “the world according to an optimist” to 3,900 graduates at the spring commencement ceremony. She expounded on four main points: 1) whatever it is you do, do it well; 2) do something you love; 3) constantly want to learn, to understand, and to grow intellectually; and 4) believe in yourself. She added that “no one achieves really great things single-handedly.”
Her conclusion: “Optimism isn’t a life plan, but it is a great tailwind to have at your back. And if you take advantage of that tailwind by doing what you love, striving for perfection, constantly learning, believing in yourself as well as believing in others, you are bound to conquer the world.”
Read Indra Nooyi’s speech on “the world according to an optimist.”
Chemicals Industry Outlook & Review - May 2011
Source: Zacks Equity Research - May 12, 2011
With the economic turnaround, this report claims that the global chemical industry is recovering from the recession-hit lows and output is expected to grow moderately in all regions in 2011 and continue to improve through 2012. Combined with the restructuring and cost saving programs that many chemical companies implemented last year, output growth is driving high earnings across the sector, to the extent that many companies are confident of out-performing full year forecasts.
North American powder metallurgy (PM) industry begins to show growth
Source: International Powder Metallurgy Directory - June 1, 2011
The North American powder metallurgy industry regained its growth momentum in 2010 after five years of declining demand. At PowderMet2011, the International Conference on Powder Metallurgy & Particulate Materials held in San Francisco this year, Michael E. Lutheran, president of the Metal Powder Industries Federation (MPIF), reported the latest figures for the North American industry.
University of Akron is awarded contract to combat corrosion
Source: The Akron Beacon Journal - May 12, 2011
The U.S. Department of Defense is giving the University of Akron another $11 million to do two things: build the nation's first bachelor's degree program in corrosion engineering and develop a research program to stem rust on bridges, pipelines, aqueducts and similar structures.
Unemployed landing new jobs faster
Source: Dayton Daily News - May 31, 2011
Jobless workers in Ohio and across the nation, especially those willing to relocate or apply their skills in different industries, are beginning to find new jobs at a slightly faster pace. That’s according to government data and worker surveys that indicate employers have opened their doors a little wider to new hires. While the job market remains tight, those employers who are adding workers appear less reluctant to fill positions, based on the results of a widely watched Harris poll.
Making LinkedIn Work for You
Source: The Wall Street Journal - May 18, 2011
LinkedIn passed 100 million users in March and continues to grow by about one million members a week. Its successful public offering in May is drawing even more attention. Non-users of LinkedIn may wonder, why bother? Posting a profile, keeping it updated, building and maintaining your network of connections, and responding to messages takes time.
Posted by Allen Wass | Wed 6/1/2011
Send comment to aswass@sanfordrose.com
MAY 2011
Commentary
The U.S. economy grew less than forecast in the first quarter as government spending declined significantly and household purchases cooled. Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the final three months of 2010. Another report showed rising gasoline prices depressed consumer confidence.
To spur the economy, Federal Reserve Chairman Ben S. Bernanke said that the central bank would maintain record monetary stimulus after ending large-scale bond purchases in June. Job growth and income gains suggest consumers will keep spending in the face of higher fuel costs. “I would say roughly most of the slowdown in the first quarter is viewed by most on the committee as transitory,” Bernanke said at a news conference in Washington following the central bank’s latest policy meeting.
Stocks continue to rise, sending the Standard & Poor’s 500 Index to the highest levels since 2008, as better-than-estimated corporate earnings tempered concern over slowing growth. In fact, as of the end of April, over 70% of S&P 500 companies have reported positive first quarter earnings surprises.
Despite the conflicting data, companies will continue to do what is in their best interest – figure out ways to grow. While the economy could fall off a cliff again, the immediate likelihood is miniscule. In our lifetimes and over the past five recessions, we have had a five to eight year window of increasing revenues after each of these downturns. Last year was probably the first year of an uptrend, meaning, conservatively we have another four years of growth.
Pricing Boosts Chemical Earnings
Source: Chemical & Engineering News - April 29, 2011
Chemical companies are beginning 2011 with strong earnings, and many are beating positive analyst expectations by a wide margin. In addition, demand continues to strengthen across most product categories, allowing firms to raise prices while also enjoying volume growth.
Distilling the Wisdom of C.E.O.’s
Source: The New York Times - April 16, 2011
This article was adapted from “The Corner Office: Indispensable and Unexpected Lessons From CEOs on How to Lead and Succeed,” by Adam Bryant, author of the weekly “Corner Office” column in The New York Times. The book, published by Times Books, analyzes the broader lessons that emerge from his interviews with more than 70 leaders.
Lincoln Electric plans to erect one of the largest wind turbines in North America
Source: The Plain Dealer - April 25, 2011
The largest wind turbine in Ohio and one of the largest in North America will soon spin high above Lincoln Electric's headquarters in Euclid. Lincoln will fabricate the 14-foot diameter steel tower at its headquarters plant, using a giant robotic welding machine that Lincoln sells all over the world. Lincoln ordered the monster turbine last fall in a show of support for the Great Lakes Energy Development Task Force's campaign to persuade a turbine maker to build turbines here.
Aleris International prepares to go public
Source: The Plain Dealer - April 27, 2011
Aleris International, the Beachwood aluminum producer and recycling company, plans to recycle itself again. The company said it plans to become a public company again. In the last seven years, Aleris also has gone through mergers, buyouts from private equity firms, bankruptcy and restructuring.
SRA Update: What really motivates employees?
April/May 2011
This issue focuses on several nonmonetary factors that can be primary motivators for employees considering career changes.
Posted by Allen Wass | Mon 5/2/2011
Send comment to aswass@sanfordrose.com
APRIL 2011
Commentary
Spring is finally here. For me, this time of year is epitomized by the start of the baseball season. Last year's statistics are wiped away. Everyone starts with a clean slate.
Unfortunately, in today's world of ever increasing demands, with 24/7 news cycles and connectivity, it becomes harder for the rest of us to have a fresh start. On the other hand, we are able to take the relatively smaller actions to move us toward achieving our goals. Regina Brett, a columnist for the Cleveland Plain Dealer, calls this, "Taking the next right step."
In her words, "If you want to lose 40 pounds, you order salad instead of fries. If you want to be a better friend, you take the phone call instead of screening it. If you want to write a novel, you sit down and write a single paragraph."
Although we are expected to deliver more than ever before - more sales, more cost savings, more profit - we want to avoid making the wrong decisions. This requires careful planning and prioritizing and defining what needs to be done. But focusing on the all-encompassing end goal may paralyze us from taking any action. Instead, we need to simply "do the next right thing," and eventually, achievement of the objective will be closer at hand.
As Regina Brett says, "What's your next right step? Whatever it is, take it."
CEOs Becoming More Willing to Hire
Source: Reuters - March 30, 2011
U.S. chief executives' view of the economy brightened in the first quarter, with more than half now ready to add jobs -- a critical step if the economy's recovery is to gain steam. The Business Roundtable's quarterly CEO Economic Outlook survey found that 52 percent of CEOs plan to add staff in the United States over the next six months -- the highest reading since the group began doing the survey in late 2002. The CEO outlook index also hit a record high.
Lubrizol sold to Warren Buffett's Berkshire Hathaway
Source: The Cleveland Plain Dealer - March 14, 2011
Billionaire investor Warren Buffett has agreed to buy lubricant company Lubrizol for $9.7 billion, a deal that analysts say should not cost any jobs at the company's headquarters near Cleveland, Ohio.
Why "Plan B" Often Works Out Badly
Source: The Red Tape Chronicles - March 21, 2011
Engineers used to talk about guarding against the “single point of failure” when designing critical systems like aircraft control systems or nuclear power plants. But rarely does one mistake or event cause a catastrophe. As we’ve seen in Japan, disaster is usually a function of multiple mistakes and a string of bad luck, often called an “event cascade” or “propagating failures.”
Google’s Quest to Build a Better Boss
Source: The New York Times - March 12, 2011
In early 2009, statisticians inside the Googleplex here embarked on a plan code-named Project Oxygen. Their mission was to devise something far more important to the future of Google Inc. than its next search algorithm or app. They wanted to build better bosses.
Harry Coover, Super Glue Inventor, Dies at 94
Source: The Washington Post - March 28, 2011
Harry Coover, 94, who as a young chemist in the 1940s and ’50s discovered a powerful adhesive compound known today as Super Glue and Instant Krazy Glue, died March 26 at his home in Kingsport, Tennessee.
Posted by Allen Wass | Fri 4/1/2011
Send comment to aswass@sanfordrose.com
MARCH 2011
Commentary
As the first quarter draws to a close, it is important to review our objectives for this year, finalize them, and make sure that we are making progress toward reaching our targets.
Personally, I am very goal-oriented. Several years ago, my love of history led me on a quest to read a biography about each and every U.S. President. A seemingly insurmountable task, I took small initial steps: first, researching online recommendations for the best biographies, then simply diving into the first book. (George Washington, of course!)
My reading marathon -- from Abe Lincoln to Teddy Roosevelt, FDR to JFK -- was an exercise in both intellectual curiosity and endurance. While I learned a great deal about how the lives of famous people came to be and how events developed as they did, I discovered even more about my own determination. It takes perseverance to forge ahead, to choose reading over television, surfing the net, or other potentially time-wasting activities. But five years later, I have completed the literary journey. Over 40 biographies in five years! That’s a feat that I’m proud to claim as my own.
One thing that history teaches us is that although life is neither straightforward nor predetermined, it is not completely beyond our control. That is why we have to continue to set goals, take daily steps forward and never give up.
Five years from now, where will you be? Set realistic business and personal goals, but always aim high. You never know what you may achieve.
Corporations begin spending cash stashed during recession
Source: Bloomberg - February 16, 2011
In the first decline since mid-2009, Standard & Poor’s 500 companies reduced cash and short-term investments to $2.4 trillion from a record $2.46 trillion, according to data Bloomberg compiled from their most recent quarterly reports. Budgets are rising for new plants, distribution centers and stores from S&P bellwethers Cisco Systems Inc., General Electric Co. and Coca-Cola Co. While some of the money is being spent abroad, company officials say they are opening the purse strings at home now too. A rebound in economic demand, President Barack Obama’s efforts this year to court business leaders, and Republican gains in Congress have helped build confidence to invest and start adding jobs, executives and investors said.
Cleveland attracts national interest after Barack Obama's small-business forum
Source: The Cleveland Plain Dealer - February 27, 2011
President Obama and several of his cabinet members visited Northeast Ohio on Tuesday, February 22, 2001 as part of the administration’s Winning the Future Forum on Small Business. The discussion included five breakout sessions in which regional entrepreneurs, philanthropy, investors, and entrepreneurial support organizations discussed obstacles and opportunities around entrepreneurship, access to capital, workforce development, exports, and clean energy.
Missing Micrograms Set a Standard on Edge
Source: The New York Times - February 12, 2011
No one knows exactly why the international prototype of the kilogram, as pampered a hunk of platinum and iridium as ever existed, appears to weigh less than it did when it was manufactured in the late 19th century. The change, discovered when the prototype was compared with its official copies, amounts only to some 50 micrograms, equal to the mass of a smallish grain of sand. But it shows that the prototype has fallen down on its primary job, to be a beacon of stability in a world of uncertainty. The kilogram is the last base unit of measurement to be expressed in terms of a manufactured artifact.
Scientists Call for New Sources of Critical Elements
Source: The New York Times - February 18, 2011
Technologies for green or renewable-energy devices like batteries, solar cells and advanced electric motors are dependent on critical metals and other elements that are threatened by major shortages. In a recent report, two influential American scientific groups called for the United States government to research and develop new sources for a broad range of critical materials and to more closely monitor the supply of and demand for them.
Allegheny Technologies names new chairman and CEO
Source: The Plain Dealer - January 18, 2011
Specialty metals maker Allegheny Technologies Inc. said that Chairman and CEO L. Patrick Hassey has decided to retire on May 1. He'll be replaced by Richard Harshman, 54, who was named president and chief operating officer in August as part of the company's succession plan. The 32-year company veteran previously served as an executive vice president and chief financial officer. "ATI is well-positioned for continued profitable growth as our key global markets expand in the coming years. Now is the right time for a change in leadership," Hassey said in a statement. Hassey has been in the metals business for more than 40 years, and has been with ATI since 2003.
SRA Update: "Always Available, 24/7 Connectivity"
March 2011
The March/April 2011 issue of SRA Update, "Always Available, 24/7 Connectivity" explores the benefits and potential negative effects of the prevalent use of smartphones, PDAs, laptops, tablet computers, and other wireless computers on productivity and work-life balance.
Posted by Allen Wass | Tue 3/1/2011
Send comment to aswass@sanfordrose.com
FEBRUARY 2011
Commentary
The Gross Domestic Product, a broad measure of the goods and services produced in the United States, grew at an annual rate of 3.2 percent in the fourth quarter, up from 2.6 percent in the previous period, according to the Commerce Department. Because of this slightly speedier expansion, the nation's overall economic output has matched its peak before the recession.
Companies increased their spending on equipment as the year concluded, though not quite at the double-digit growth rates shown earlier in the year. The hope is that that these types of investments - and a replenishing of inventories, which ran low at the end of the last quarter - will soon be matched by investments in new workers as well. Sales and higher profits are making firms optimistic enough to consider adding staff. The percentage of businesses expecting to increase payrolls in the next six months exceeded the share projecting more firings by 35 points, the most since the question was first asked in 1998, according to a survey by the National Association for Business Economics.
The US Treasury secretary, Tim Geithner, speaking in an interview at the World Economic Forum in Davos, Switzerland, said that he had growing confidence that the United States economy would continue to expand.
International Year of Chemistry Launches
Source: Chemical & Engineering News - January 27, 2011
Some 1,000 delegates from more than 60 countries convened in Paris on January 27 to launch the 2011 International Year of Chemistry (IYC), which was decreed by the United Nations Educational Scientific & Cultural Organization (UNESCO).
The yearlong celebration of molecular science coincides with the 100th anniversary of Marie Curie's receipt of the 1911 Nobel Prize in Chemistry as well as the 100th anniversary of the founding of the International Union of Pure & Applied Chemistry (IUPAC).
For more information about how you can participate, see the official IYC website.
Obama goal: "Putting the economy into overdrive"
Source: The Associated Press - January 22, 2011
Marking the halfway point in his four-year term, President Barack Obama used a visit to Schenectady, birthplace of the General Electric Company, to declare that his job is "putting our economy into overdrive" and to announce a restructured presidential advisory board stressing increased employment and greater business opportunities abroad. Obama's New York visit was the first of many treks during the second half of his term that the president is expected to take to put a more hopeful countenance on the economy amid stubbornly high unemployment. Yet, while the White House was eager to highlight economic successes such as General Electric, Obama took pains not to oversell an optimistic view to a skeptical public. Displaying stepped-up outreach, Obama named GE's chief executive, Jeffrey Immelt, as the head of a Council on Jobs and Competitiveness.
Raw & Manufactured Materials: 2011 Overview
Source: ceramicindustry.com - January 1, 2011
This insightful report provides forecasts for U.S. and global demand for a wide array of materials from abrasives to zirconium.
Davos ends on note of cautious optimism and call for growth
Source: The Los Angeles Times - January 30, 2011
The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. This year's five-day World Economic Forum, held in Davos, Switzerland through Sunday, January 30, was themed "Shared Norms for the New Reality," reflecting the fact that we live in a world that is becoming increasingly complex and interconnected but also experiencing an erosion of common values and principles. When more than 2,500 of the best and brightest in business, government, academia and civic life met, there was broad agreement that things are looking up from 2010 but also concerns about obstacles on the road to recovery.
Have you heard about Graphene?
Source: Nature - January 6, 2011
Graphene is a one carbon-atom-thick two-dimensioned planar sheet / chunk (not 3- dimensional) of bonded carbon atoms that are densely packed into a honeycomb crystal lattice resembling a chicken wire structure. The carbon atoms are located in the corners of the hexagonal structure bonded via three connections to their neighboring carbon atoms.
The symmetry with which carbon atoms are arranged on the hexagonal lattice also allows this form of nano-carbon to conduct electricity far more easily than the silicon used in computer chips. This means that they have much lower electrical resistance and generate much less heat -- an increasingly useful property as chip manufacturers try to pack features ever more densely onto circuits.
Brush Engineered Materials changing its name to Materion
Source: The Plain Dealer - January 18, 2011
Nearly 80 years after it was formed, Brush Engineered Materials Inc. plans to change its name to Materion Corporation. Brush Chairman, President and Chief Executive Officer Richard Hipple said the company has a proud heritage but the Brush name doesn't reflect who they have become as they have developed new technologies. Starting in March, he said the Materion name should help inform customers about the diverse products and services the company can offer.
Posted by Allen Wass | Tue 2/1/2011
Send comment to aswass@sanfordrose.com
JANUARY 2011
Commentary
As 2011 begins, the United States is poised for its strongest year of economic growth since the recession began three years ago.
Companies continue to outperform expectations. Extrapolating the government's latest quarterly GDP numbers to estimate where we are today reveals that the U.S. economy is back to where it stood at its peak prior to the start of the recession.
Organizations have accomplished this performance without significantly adding to their payrolls. This is destined to change as firms seek further growth. Underscoring the emerging labor market strength, new claims for jobless aid have been steadily declining and recently hit their lowest level since early July 2008. Meanwhile, the financial system seems to be stabilizing, with banks no longer tightening the availability of credit, which should mean that businesses that depend on bank loans will be better able to expand and hire in 2011.
Additionally, the U.S. government continues to provide stimulus. The Federal Reserve has implemented a $600 billion program of debt purchases, and the government recently extended the Bush-era tax cuts, cut payroll taxes and extended expanded jobless benefits. These actions can do nothing but further accelerate economic activity, and the U.S. stock market will likely have the momentum to surpass current levels.
Even though the economy is now back to pre-recession levels, the major stock market averages are not even close. Both the Dow Jones Industrial Average and the S&P 500 have recovered just two-thirds of their bear market losses.
This year is primed to be an exciting one - companies are performing well, hiring is picking up, consumers will have higher disposable incomes, and the stock market is set to rise. Happy New Year!
U.S. CEOs more optimistic on economy
Source: Reuters - December 14, 2010
Chief executive officers of large U.S. companies are much more optimistic about the economy than a few months ago, although their expectations for growth remain modest, according to a quarterly survey by the Business Roundtable.
On a separate but related note, the Grant Thornton Business Optimism Index is a confidence measure of U.S. business leaders. It is derived from the responses to a set of three questions posed to business leaders on a quarterly basis.
Read the press release on the November 2010 survey findings.
Read the press release on the November 2010 manufacturing industry findings from the survey.
Rare Earths -- the continuing saga
Source: Bloomberg News - December 28, 2010
China cut its export quotas for rare earths by 35 percent in the first round of permits for 2011, threatening to extend a global shortage of the minerals needed for smartphones, hybrid cars and guided missiles.
Meanwhile, Molycorp, Inc., the Western Hemisphere's only producer of rare earths, announced that it has secured the last of several environmental permits necessary to begin construction of its new, state-of-the-art rare earth manufacturing facility at Mountain Pass, California. Securing the permits is a major milestone in Molycorp’s $531 million project to construct a complete rare earth mine-to-magnets manufacturing supply chain in the U.S. See the press release.
GE offering consumers $50 LED light bulb that will last 25,000 hours
Source: The Plain Dealer - December 8, 2010
The future has arrived. And it's expensive. For now.
For $50, General Electric will sell you a light bulb designed to save you at least $85 over the next couple of decades. The GE "Energy Smart" LED uses just 9 watts of power but gives off the same diffused, soft white glow of a standard 40 watt incandescent bulb.
The Disappearing Spoon
By Sam Kean
The Disappearing Spoon: And Other True Tales of Madness, Love, and the History of the World from the Periodic Table of the Elements by Sam Kean is quite possibly the most interesting book about chemistry and the periodic elements.
As a chemical engineer, this is a must read. Along with Chemists and Materials Scientists, we are probably the only ones who would be interested.
SRA Update: Due Diligence or Discrimination?
January 2011
The January/February 2011 issue of SRA Update, "Due Diligence or Discrimination?" examines the use of criminal and credit background checks in the hiring process and focuses on recent actions by the EEOC, state and local legislatures, and Congress.
Posted by Allen Wass | Tue 1/4/2011
Send comment to aswass@sanfordrose.com
DECEMBER 2010
Commentary
I am an optimist - a person with a positive outlook on life. I have always been this way and think it is a genetic predisposition. This is not blind trust; it is a can-do attitude. Likewise, I have a strong belief that you need to be in charge of your own happiness and not let others squelch your dreams.
Shel Silverstein captured it aptly in his poem, Listen to the Mustn'ts:
"Listen to the mustn'ts, child. Listen to the don'ts. Listen to the shouldn'ts, the impossibles, the won'ts. Listen to the never haves, then listen close to me... Anything can happen, child. Anything can be."
The events of the past two years have tested us - the economic stress has jeopardized families, careers and retirements. Many would say that is just the way things are; not much we can do about it. What can we do about the pervasive apathy that characterizes so much of life today? The antidote is that we need dreamers - people who can see a better world no matter what the facts may say.
Throughout the last century, we have seen these visionaries in political leaders - Winston Churchill, JFK and Ronald Reagan quickly come to mind. There are also historic business leaders, such as Henry Ford, Thomas Edison, and Sam Walton, who created empires from virtually nothing. More recently, we have witnessed Warren Buffett, Bill Gates and the meteoric rise of Mark Zuckerberg of Facebook.
These are the wildly successful, but there are legions of people who are planning, implementing, and evaluating, making adjustments until they reach their goals. This is human nature, and it is what drives us and our society to better places. If we don't have a goal or a dream, we are not apt to accomplish very much. The quotable Yogi Berra once put it this way: "If you don't know where you are going, you'll end up somewhere else."
View a video message from Allen on ooVoo
Economic data reveal a hint of consumer merriness
Source: Associated Press - November 24, 2010
Americans are earning and spending more, companies are shedding fewer workers and hopes are rising for the economy as the holiday shopping season starts. Still, with businesses spending less on manufactured goods and new-home sales near their lowest level in 47 years, consumers alone might not be able to invigorate the economy and drive down unemployment. All told, government data released the day before Thanksgiving suggest an improving economic picture. But it is increasingly dependent on the consumer, even with U.S. companies having reported record profits in the July-September quarter.
My eleven-year-old daughter's take on Rare Earths
Source: Emily Wass - November 11, 2010
Last month, I presented some information about Rare Earths and the stranglehold that China has on these valuable minerals. In November, my eleven-year-old daughter - Emily - had to present a current events article related to rocks and minerals for her sixth grade science class. She reviewed a piece in the Science section of the November 8, 2010 issue of The New York Times: Mining the Seafloor for Rare-Earth Minerals. Here is what Emily wrote:
"People have been trying to mine rocks called manganese nodules from the sea floor. The rocks are filled with elements called rare-earth minerals. They want these for money and also because many of them are very useful. But it is hard! Miners need a way to get the nodules. Recently, they have been thinking of vacuuming them up. Is this finally the perfect solution? This is related to what we've learned about mining in caves. But I haven't heard of mining in the sea!"
The New York Times has another excellent article on the situation with Rare Earths. The "Room for Debate" section on their website tackles the question: Can the U.S. Compete on Rare Earths?
Study: No Shortage of U.S. Engineers
Source: BusinessWeek - October 28, 2010
U.S. colleges and universities are graduating as many scientists and engineers as ever, according to a study released by a group of academics. But that finding comes with a big caveat: Many of the highest-performing students are choosing careers in other fields. The study by professors at Rutgers and Georgetown suggests that since the late 1990s, many of the top students have been lured to careers in finance and consulting.
Posted by Allen Wass | Wed 12/1/2010
Send comment to aswass@sanfordrose.com
NOVEMBER 2010
Commentary
My last boss at General Electric used to say that we needed to "finish the year with honor." The culture was to push until the last moments of December 31st to meet our commitments. I have learned that this dedication is not universal; many organizations have waning productivity starting in November - absenteeism is higher due to cold and flu season and vacation days. Meanwhile, the holidays are full of special events, and people may not be as focused as usual.
The vast majority of companies have seen performance exceed expectations through the first three quarters of 2010, so a letdown at the end of this year is understandable. Nevertheless, it would be disappointing to have come so far, only to give up hard-won gains at the eleventh hour. Manufacturers need to maintain equipment uptime and product quality, avoid taking on unnecessary inventory and costs, deliver customer orders, protect the environment and stay safe.
Efforts to achieve this year's goals will set up next year also. Overall, my old boss promoted that it is important to sustain a sense of responsibility to deliver commitments. In that spirit, let's finish the year with honor!
Here Comes a Turnover Storm
Source: The New York Times - October 16, 2010
Layoffs, cutbacks and stress inflicted on employees in the economic downturn have left many of them discontented and disengaged. As this pent-up frustration is released, the impact on businesses, their work forces and their customers will be pronounced. A turnover storm is looming, and most businesses are ill prepared for it.
Even in normal times, turnover is an insidious force that weighs on a company’s performance. Many costs, both direct and indirect, are tied to each employee’s departure and each replacement’s hiring, including those for separation tasks, recruiting, interviewing, testing and training. In addition, overtime and temporary workers are often needed to make up for the impaired productivity and quality problems that turnover spawns.
China's lock on market for rare earth elements: Why it matters
Source: The Christian Science Monitor - October 20, 2010
China said it will 'continue to provide rare earths to the world,' as it abruptly ended its unannounced export embargo to the United States, Europe and Japan. Here's a Q&A on what all the fuss is about.
The so-called "rare earths" are neither rare nor does China have a lock on them. Although China produces 97 percent of the world's rare earths, it contains only 30 percent of the world's supply. The United States, Russia, and Australia all have significant reserves of the 17 elements essential in semiconductors, lasers, and other high-tech gadgets.
Frito-Lay to pull most noisy SunChips bags
Source: Associated Press - October 5, 2010
Frito-Lay hopes to quiet complaints about its noisy SunChips bags by switching out the biodegradable bags for the old packaging on most flavors.
The company is switching back to original packaging, which is made of a type of plastic, for five of the six varieties of the chips. It will keep the biodegradable and recyclable bags for its sixth variety, its original plain flavor. That's its second best-selling, after Harvest Cheddar.
GE inks $4.6 billion in deals in big return to M&A
Source: Reuters - October 6, 2010
General Electric Company marked its return to the takeover track with its first major deals since the start of the financial crisis. The largest U.S. conglomerate reached a $3 billion deal for Dresser Inc., which makes gas engines used in oil production and mining, and bought a $1.6 billion portfolio of retail credit cards from Citigroup Inc., in moves intended to boost its energy and GE Capital businesses.
It was the latest sign that corporate America, which is sitting on huge cash reserves, is growing more willing to spend money on takeover deals, even as it remains reluctant to hire more workers.
SRA Update: Talking About the Baby Boomer Generation
November 2010
The November/December 2010 issue of SRA Update examines the possible labor shortage and "knowledge drain" that could occur in the United States and much of Western Europe as a result of the retirement of the Baby Boomer generation and the lack of qualified replacements in the generations that follow, Generation X and Generation Y.
Posted by Allen Wass | Mon 11/1/2010
Send comment to aswass@sanfordrose.com
OCTOBER 2010
Commentary
By now you have heard that the recession ended — in June 2009. This is determined by the National Bureau of Economic Research (NBER) and is based on examination of data, including gross domestic product, employment and personal income. In June 2009, I had predicted that the recession was over in May, so I was certainly close.
Of course, this is all academic. The key point is that starting in the middle of last year economic conditions were getting better instead of growing worse. This does not mean that we returned to peak performance but that we were beginning to recover from the precipitous decline. The NBER acknowledged in its announcement that the end of the recession doesn't signify a healthy economy, only that the period of declining economic activity, measured by indicators such as economic output and incomes, has come to an end. The predicament is that everyone wants an immediate rebound of company revenues, stock valuations, employment levels, and personal wages. In reality, the recovery has not been instantaneous, but there is an encouraging trend that continues today.
The strongest upbeat signal is that companies have notched strong earnings in recent quarters and are expected to do so again when they start reporting third-quarter results. This begs the question: when are firms going to crank up hiring? The evidence suggests that most businesses are growing as fast as they can without taking undue chances, and the leading undue chance seems to be hiring workers. This behavior has marked the last two recessions (1990-1991 and 2001), whereas unemployment rates actually went up after each recession's official end date. In the current situation, unemployment was at 9.4% in July 2009 and rates subsequently exceeded 10% before drifting to our current level. Despite this sobering data, we are closer to better times — recent history shows that after peaking, unemployment rates shrink at a steady pace. This occurs because firms gain confidence that they can achieve targeted growth rates with additional employees. Today, the vast majority of corporate leaders claim that their businesses are in the midst of a good year, and accordingly, they are planning for additional growth in 2011. Consequently, we can expect continued improvement in the employment situation.
Buffett, Ballmer and Immelt predict bright economic future
Source: Associated Press - September 13, 2010
Some of the biggest names in business said that they see a bright future for the economy, with famed investor Warren Buffett declaring that the country and world will not fall back into the grips of the recession. The likes of Buffett, Microsoft CEO Steve Ballmer and General Electric Chairman Jeff Immelt told the nearly 2,000 business leaders, government officials, aspiring entrepreneurs and others at the Montana Economic Development Summit that things are getting better.
DuPont PV revenue reaches $1B one year ahead of schedule
Source: ceramics.org - September 24, 2010
A new announcement from DuPont gives some indication of just how rapidly the solar energy industry has grown in a relatively short period of time. According to the company, it expects to report $1 billion in revenue from photovoltaic sales in 2010 alone — a goal that will be reached one year ahead of schedule. A substantial portion of this growth was said to come from innovations improving the efficiency of solar modules.
A123 opens new battery factory in Detroit suburb
Source: Associated Press - September 13, 2010
Battery maker A123 Systems Inc. opened a large lithium-ion battery factory in the Detroit suburb of Livonia, Michigan. The plant now employs about 300 people. According to A123, the 291,000-square-foot factory is the largest lithium-ion battery plant in North America.
GE closes last domestic light bulb factory
Source: The Washington Post - September 8, 2010
As a former employee at GE Lighting, I felt nostalgic when I saw that the last major GE factory making ordinary incandescent light bulbs in the United States is on the verge of closing. What made the plant in Winchester, Virginia vulnerable is, in part, a 2007 energy conservation measure passed by Congress that set standards essentially banning ordinary incandescents by 2014. The law will force millions of American households to switch to more efficient bulbs.
Unfortunately, Washington Post journalist Peter Whoriskey overlooked the overall benefit to society of more energy efficient lighting and the growth of other domestic manufacturers of lighting products, such as Cree in Durham, North Carolina. See the on-line rebuttal that pointed out that we have actually traded these domestic jobs for US-based ones in LED: blog entry.
Seven Careers in a Lifetime? Think Twice, Researchers Say
Source: The Wall Street Journal - September 4, 2010
Dozens of articles in the last two decades have emphasized growing job instability and increased autonomy of workers by reporting that the average American — or Australian, or Canadian, or New Zealander — will go through many careers in a lifetime. The number is usually seven, though at times it is as low as three, and sometimes as high as 10. But seven careers appear to be too many, and no one knows what the right number is. Meanwhile, Carl Bialik tells the story behind the stats on his blog.
Posted by Allen Wass | Fri 10/1/2010
Send comment to aswass@sanfordrose.com
SEPTEMBER 2010
Commentary
The good news is that Americans' confidence in the economy improved slightly in August. The bad news is that the mood is at best ambiguous amid job worries. This reflection is based on the fact that the Conference Board's Consumer Confidence Index improved slightly to 53.5, up from a revised 51.0 in July. Economists surveyed by Thomson Reuters had expected 50.5. The improvement comes after two straight months of declines.
Economists watch confidence closely because consumer spending accounts for about 70 percent of U.S. economic activity and is critical to a strong rebound. But worries are rising that the economy is growing too slowly to support sustained job growth, and some are concerned it could fall back into a recession.
On the other hand, most companies are doing better than expected. According to the Institute for Supply Management, the ISM Index, a measure of economic activity in the manufacturing sector, expanded in August for the 13th consecutive month. Meanwhile, it is reasonable, given the events that we have gone through, to expect a modest recovery and not a dramatic improvement. Good news and bad news will always come and has to be balanced out to determine trends. Too much uncertainty is uncomfortable but companies continue to do the best that they can to grow and deliver shareholder value. Since nobody has ever been able to predict the economy, confidence in this type of rational behavior is what will ultimately drive our economy to unprecedented levels.
Grant Thornton Business Optimism Index
Source: Grant Thornton LLP - August 2010
The Grant Thornton Business Optimism Index is a confidence measure of U.S. business leaders. It is derived from the responses to a set of three questions posed to business leaders on a quarterly basis.
• U.S. economy: Do you feel the U.S. economy will improve/remain the same/get worse in the next six months?
• Business growth: How optimistic are you about the growth of your own business over the next six months – very/somewhat optimistic/pessimistic?
• Employment: Do you expect the number of people you employ will increase/remain the same/decrease in the next six months?
Bumps in the road
Source: Fidelity Viewpoints - August 20, 2010
With the economy in the doldrums and the stock market jittery, worries have mounted about a renewed recession or even the prospect of deflation. While acknowledging those risks, Lisa Emsbo-Mattingly, Fidelity's director of economic analysis, thinks the evidence is still pointing toward economic expansion, albeit at a slower pace. She thinks the dramatic comeback in corporate earnings has put stocks at attractive valuations relative to Treasuries, which may amount to an opportunity for investors with a long-term view.
A. Schulman Inc.'s 'whole wheat plastic'
Source: The Plain Dealer - August 24, 2010
Plastic rarely seems like an environmentally friendly material choice. It's a petroleum product, and it's often harder to recycle than glass, steel or aluminum.
With more of its customers asking for products that use renewable resources, Fairlawn plastics and additives company A. Schulman Inc. saw an opportunity. Its AgriPlas engineered plastic is made with wheat straw, which takes the place of much of the petroleum used in plastics.
SRA Update -- Doesn’t Anyone Just Relocate Anymore?
September 2010
The September/October 2010 issue of SRA Update, "Extreme Commuters, Virtual CEO's, and Other Mobile Executives" summarizes the reasons behind the reluctance of many executives to relocate and examines relocation solutions offered by companies in the current market, including alternative arrangements such as "extreme commuting" and working remotely.
Want a job that's recession proof?
Go join the circus
Source: Cox Newspapers - August 22, 2010
In these tough economic times, the idea of being shot 90 feet out of a cannon sounds like a viable career choice. Let's face it: The circus isn't that far from the business world. In both, workers can expect to walk tightropes, juggle and occasionally pull a rabbit out of a hat. Circus jobs come with vacations, medical insurance and 401(k) plans. So why not run off and join the circus?
Posted by Allen Wass | Wed 9/1/2010
Send comment to aswass@sanfordrose.com
AUGUST 2010
Commentary
As we hit the midpoint of the summer, companies are looking for opportunities to grow and have been able to repeatedly report better-than-expected quarterly profits. In fact, despite the endless parade of muddled (and often revised - both up and down) economic reports, many organizations are in the midst of adding targeted positions.
Unfortunately, this slow and steady approach on the heels of the steep decline which characterizes this recession makes it difficult for many to "feel" the improvement. A better way to look at the situation is to ask: "Is the business environment better today than a year ago?"
Meanwhile, companies have to continue to review their current status and revise their course accordingly to not only hit short term targets but achieve long-term goals. Since the freefall ended in March 2009, my observation is that organizations are no longer making knee-jerk cuts but are making rational decisions to deliver top and bottom line results.
DuPont boosts 2010 forecast
Source: Reuters - July 27, 2010
The third-largest U.S. chemical maker said its second-quarter profit nearly tripled, offering a positive read on global economic health as many companies have been reporting better-than-expected quarterly profits. DuPont said the new 2010 profit forecast reflects its confidence after the second-quarter results.
Chief Executive Officer Ellen Kullman, though, said she expects the economic recovery to be "more moderate" in the second half of 2010. "We continue to hit our productivity and cost-control targets, and remain highly disciplined in creating operating leverage to further grow the company," Kullman said.
GrafTech rides smart-phone wave to profitability and expansion
Source: The Plain Dealer - July 18, 2010
There is a little piece of Cleveland technology in the smart phone in your pocket, in the big flat-screen TV on your living room wall and in the high-end laptop you have been coveting. It's a piece of graphite engineered to a high-tech thinness that makes it as flexible as paper without affecting one of its hallmarks -- the uncanny ability to sop up and dissipate heat better than any metal. Without it, the gee-whiz gadgets would burn up from the heat they generate.
Craig Shular has been the chief executive officer of GrafTech International since 2003 and has built a team credited with taking the company from the brink of bankruptcy to profitability and growth. With 11 state-of-the-art factories on four continents, GrafTech manufactures graphite industrial products -- everything from multi-ton electrodes for steel making to fuel cell components to paper-thin heat dissipaters for smart phones. It has not only engineered its way to salvation with new products for new markets, but it is also remaking itself -- engineering its workplace culture by embracing the Lean Manufacturing principles made famous by Toyota and now widely followed by global manufacturers. For additional excerpts from an interview with Shula go here.
Factory Jobs Return, but Employers Find Skills Shortage
Source: The New York Times - July 1, 2010
Factory owners have been adding jobs slowly but steadily since the beginning of the year, giving a lift to the fragile economic recovery. Because they laid off so many workers -- more than two million since the end of 2007 -- manufacturers now have a vast pool of people to choose from. Yet some of these employers complain that they cannot fill their openings. Although plenty of people are applying for the jobs, the problem is a mismatch between the kind of skilled workers needed and the ranks of the unemployed.
How the expiring Bush tax cuts affect you
Source: SmartMoney - July 7, 2010
The so-called Bush tax cuts are scheduled to expire at the end of the year. Although some of the cuts retain bipartisan support in Congress and may yet be extended, as of now, Washington has some severe changes in store for you and your family.
A hot way to motivate employees ... not
Source: Reuters - July 6, 2010
A "motivation day" organized by one of Italy's biggest real estate agencies ended in tears and scars when nine staff members had to be treated at the hospital after walking barefoot on hot coals.
SRA Update -- A Rising Tide?
July 2010
More employees are beginning to take a course of action that was unthinkable a few months ago. They are quitting their jobs. As reported by many media outlets, according to the Bureau of Labor Statistics the number of workers who voluntarily left (quit) their jobs outnumbered those who were laid off in February, March, and April. Prior to February, the number of layoffs exceeded the number of “quits” for 15 consecutive months. CEO turnover has also increased during 2010 after falling to record lows in 2009. According to a report by Challenger, Gray and Christmas, Inc (a global outplacement firm), there was an almost 30% increase in the number of CEO’s leaving their positions in April 2010 versus April 2009, and year-to-date there has been a 14% increase in CEO turnover compared to the same period last year. To download a copy of this article in PDF format, click here.
Posted by Allen Wass | Fri 7/30/2010
Send comment to aswass@sanfordrose.com
JULY 2010
Commentary
Welcome to the second half of the year. The beginning of the third quarter is always a good time for reflection about what has been accomplished and how much farther there is to go. We entered the year cautiously, and now, though we are busier, there is still plenty of anxiety.
Of course, it is going to take time for most companies to get back to where they were, but how does anyone know when it's time for the organization to expand? Even if customers are beating a path to a company's door, an organization must make an active choice to hire employees, add locations, and/or extend product lines. What makes the decision more difficult is that growth rarely occurs in a straight line.
Usually a company will begin to get the itch to grow when it:
1. Has more work than it can handle
2. Needs to add products, services or locations to retain the current customer base
3. Wants to take the business in new directions without ending any current activities
4. Sees a significant opportunity in the market
5. Wants to substantially increase the bottom line
Some level of caution is wise, but the successful companies are also opportunistic and differentiate themselves from their competition. They achieve their goals because they have a plan that is adjusted periodically to reflect the reality of the current situation. As the second half of the year unfolds, there will be setbacks, but the trend should be what guides decisions for the long-term.
Hiring plans of U.S. CEOs at 3-year high
Source: Associated Press - June 23, 2010
The number of CEOs planning to ramp up hiring is at the highest level since mid-2007, according to a survey that suggests big U.S. companies are growing more confident about the economic recovery. The Business Roundtable, an association of CEOs of big U.S. companies, said its survey shows 39 percent of chief executives expect to boost their payrolls in the second half of 2010. Only 17 percent say jobs will drop, while 43 percent expect no change in their current work force. The proportion of those planning to hire is at the highest level since the second quarter of 2007, when it was at 42 percent.
English Muffin-maker guards 'nooks and crannies'
Source: Associated Press - June 14, 2010
Chris Botticella knows the secret to those "nooks and crannies" in Thomas' English Muffins -- the way they cradle butter and jam, and after a good toasting, produce just the right crunch. He is one of only seven executives who know all three parts of its winning formula for making the muffins -- including how much dough to use, the right amount of moisture and the proper way to bake them. Because it is a secret that the muffins' makers have gone to great lengths to protect over 75 years, the company became alarmed and sued in January when Botticella decided to bolt and join rival Hostess, maker of Wonder Bread and Twinkies. They want to uphold a confidentiality agreement that he signed.
BASF buys Cognis -- Seeking a stable formula
Source: The Economist - June 24, 2010
Here is the latest example of a company that is striving to reduce its dependence on commodity chemicals. BASF wants to move into more specialised products with higher margins and steadier demand and has decided that buying Cognis will help achieve this goal.
FMC's new chief looks to expansion
Source: Philadelphia Inquirer - June 7, 2010
Having built his reputation by growing Rohm & Haas' electronic-materials division, Pierre Brondeau plans to enlarge the profile of fly-below-the-radar FMC. He said that the company could double its revenue to $5 billion to $6 billion by 2015 through internal growth and targeted acquisitions.
The Little BIG Things: 163 Ways to Pursue Excellence
By Tom Peters
I saw Tom Peters present the Olin Lecture during Reunion at Cornell (he graduated in 1964). In 1982, Peters co-authored "In Search of Excellence," the best-seller that immediately launched him as a foremost business management guru. The lecture was preceded by a book-signing of Peters' most recent book, The Little Big Things: 163 Ways to Pursue Excellence (2010). He posed the essence of his new book as an equation: K=R=P, or "kindness equals repeat business equals profit." "You never make money on the first transaction," he said. "You make it on the seventh and the eighth and the ninth. ... Decency, kindness and thoughtfulness are what bring people back."
Posted by Allen Wass | Wed 6/30/2010
Send comment to aswass@sanfordrose.com
JUNE 2010
Commentary
If you have read my writings over the past year, you know that I tend to have a positive outlook. Accordingly, I continue to see that the economic trends are going in the right direction and feel that we are in the early stages of an expansion -- similar to ones that have characterized every post-recession period in our lifetime.
The Commerce Department reported that gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.0 percent in the first quarter of 2010. The economy expanded at a 5.6 percent pace in the fourth quarter and has now grown for three straight quarters.
Executive recruiters' confidence in the executive employment market reached a 22-month high in April, with 64 percent of 186 search firm respondents expecting more senior-management hiring over the next six months, according to the results of ExecuNet's Recruiter Confidence Index (RCI).
This combination of sustained positive economic performance and recruiter optimism is a good sign for the labor market as well as for companies, consumers and investors.
Chemicals Industry Outlook & Review - May 2010
Source: Zacks Equity Research - May 26, 2010
This report concludes that North American chemical production is expected to experience above-average growth in 2010, with domestic demand improving from the key customer industries. Unfortunately, it also points out that the chemical industry as a whole remains heavily exposed to economic cycles.
Celanese CEO Looks to Shake Up Product Line
Source: Reuters - May 11, 2010
Celanese Corp has traditionally been one of the more staid members of the chemicals industry, but lately Chief Executive David Weidman has been shaking things up by trying to make the company less reliant on economic cycles and more of a technology leader. He has been slowly pushing Celanese to become, as he calls it, a "technology and specialty materials company."
More Workers Start to Quit
By Joe Light, The Wall Street Journal - May 26, 2010
As the job market begins to loosen up, human-resource managers might increasingly be surprised by an announcement from employees they haven't heard in a while: "I quit."
In February, the number of employees voluntarily quitting surpassed the number being fired or discharged for the first time since October 2008, according to the Bureau of Labor Statistics. Before February, the BLS had recorded more layoffs than resignations for 15 straight months, the first such streak since the bureau started tracking the data a decade ago.
BASF creates new crack-resistant concrete
By Janet Cho, The Plain Dealer - May 28, 2010
BASF Construction Chemicals has invented a new kind of concrete that it says will transform the $20 billion repair construction industry, because once it sets, it's virtually crack-proof.
BASF says its "ZERO-C" (zero-cracking) line of concrete is a stronger and more durable alternative to the mortars that usually repair - and re-repair - crumbling historic buildings and other older structures.
The Power of Half
By Kevin Salwen and Hannah Salwen
If you are looking for a quick, yet remarkable book to read on an airplane flight or at the beach, I suggest that you pick up The Power of Half. The story is thought-provoking and inspirational, especially in unsettling times.
It all started when 14-year old Hannah Salwen, idealistic but troubled by a growing sense of injustice in the world, had a eureka moment when a homeless man in her neighborhood was juxtaposed against a glistening Mercedes coupe. "You know, Dad," she said, pointing, "If that man had a less nice car, that man there could have a meal."
This glaring disparity led the Salwen family of four, caught up like so many other Americans in this age of consumption and waste, to follow Hannah's urge to do something, to finally just do something. And so they embarked on an incredible journey together from which there would be no turning back. They decided to sell their Atlanta mansion, downsize to a house half its size, and give half of their profits to a worthy charity.
Posted by Allen Wass | Tue 6/1/2010 1:13 PM
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MAY 2010
I hope that you enjoy the new format of our monthly update targeted at people who are interested in the Chemicals and Specialty Materials markets. You will continue to see some of my commentary, but now, additional content will be accessible via a simple mouse click. There should be something for everyone.
Commentary
Spring is here and the green shoots that Federal Reserve chairman Ben Bernanke talked about a year ago are continuing to grow. At the time, he predicted that America's worst recession in decades would end in 2009 and that the recovery would gather steam in 2010. Well, signs of recovery are mounting. Consumer confidence is at the highest level since September 2008 - just before the financial crisis intensified with the collapse of Lehman Brothers, sending confidence into freefall the following month.
Looking ahead, continued job growth will be the key to sustaining positive momentum. With companies beating financial expectations, there is a new anxiety that demands hiring: fear of missing out on the profits of fresh growth. In the search industry, this angst is becoming evident because more and more organizations are beginning to demonstrate urgency to fill their open positions. This is a trend that should not let up anytime soon.
In the meantime, please enjoy these other interesting selections:
The Comeback Country by Daniel Gross
How America pulled itself back from the brink—and why it's destined to stay on top
Newsweek — 04/19/10 issue
Daniel Gross provides an upbeat assessment of where the United States is headed based on past trends and current metrics.
Emerging nations fuel materials stocks
Fidelity Viewpoints — 04/09/10
Although this is really an analysis for potential investors, Tobia Welo, portfolio manager of Fidelity Select Materials Portfolio provides an evaluation of the chemicals and specialty materials sector. He focuses on effects of global demand and other key drivers.
Personality tests and other psychometric tests are being used more frequently by companies in the employment process. The May/June 2010 issue of SRA Update, "Corporate Matchmaking" explores issues and considerations that should be taken into account when contemplating integrating psychometric testing into a company's hiring process. Please enjoy this month’s SRA Update at SRA Update or to download a copy of this article in PDF format, click here.
Spark by Frank Koller
How Old-Fashioned Values Drive a Twenty-First Century Corporation: Lessons from Lincoln Electric’s Unique Guaranteed Employment Program
As someone who worked down the street from Lincoln Electric in Euclid, Ohio, this title piqued my interest. Koller does a great job of leveraging his contacts at Lincoln to describe the systems that are in place at the company - an open-door policy with an Advisory Board, the use of piecework, a merit-based bonus system, and a promise of guaranteed employment. To avoid confusion, Koller explains that "guaranteed employment...is not about jobs for life. It is a contract that describes in quite precise detail the obligations of workers and management on a day-do-day basis and the penalties that ensue when the obligations aren't met." In the end, Koller concedes that the policies at Lincoln Electric would be difficult for an established company to employ, but he laments that it is rarely considered as anything other than an anomaly.
humor Wanted: Employee with ridiculously high qualifications by Joe Keohane — Boston Globe — 04/21/10
Although Sanford Rose Associates tackles some difficult search assignments, even this one may be just beyond our capabilities.
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Posted by Allen Wass | Fri 4/30/2010 12:10 PM
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Mojo - How's yours?
The first quarter is over, and I hope that you are feeling better about your business, your career and your life. We all know that last year was a tough one. I saw many people – friends and neighbors, clients and candidates, fellow recruiters and consultants – lose traction. All of the sudden there was a sharp decline in demand for their company’s products and services, and by extension their self worth and net worth took major hits. The lingering effects of the recession have caused some people to lose their ability to achieve both happiness and meaning – not only in business, but in life.
In this setting, it is timely that executive coach Marshall Goldman released his latest book: Mojo: How to Get It, How to Keep It, How to Get It Back if You Lose It. Goldman opens the book by painting the scene of a girls’ high school basketball team changing the tone of their game to turn a seventeen point halftime deficit into a victory. There was a moment when the team was firing on all cylinders and everyone in the gym sensed it. This is the essence of what Goldman terms “Mojo.”
We have all been there. Goldman says that Mojo is at its peak when we are experiencing both happiness and meaning in what we are doing and communicating this experience to the world around us. He claims that there are four key factors that impact our professional and personal Mojo: identity (Who do you think you are?), achievement (What have you done lately?), reputation (Who do other people think you are?), and acceptance (What can you change – and when do you need to just let it go?).
When I was a manufacturing leader with General Electric, I would perform the annual reviews of my direct reports at this time of year. Within GE’s system this would require me to rate some people in the bottom 10%. I would counsel them that they had two choices: either they could improve their performance to meet expectations or they should find another opportunity where they could be successful. It was important that they felt empowered to improve their situation and not leave it to me or GE to decide. In Goldman’s terms, they had to manage their Mojo.
As a recruiter and search consultant, my advice is eerily similar. People are in control of their life and destiny, and they have the unique power to create significant positive change. By most measurements, business conditions continue to improve, and we all need to recognize this development and take advantage of it. With the right approach, we should be moving forward, making progress, achieving goals, clearing hurdles, passing the competition — and doing so with increasing ease.
If you have a chance to read Goldman’s book, let me know your thoughts. I’d love to hear what you think.
Posted by Allen Wass | Thu 4/1/2010 7:10 AM
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Business as Usual – Time to Focus on Talent Management
“Business as usual.” This is one of my favorite phrases. To me, it means that planned actions will lead to predictable results. A more official definition would be “a situation that has returned to its usual state after an unpleasant or surprising event.” This seems to be an apt characterization of where we’re headed, and although I can’t guarantee that we are there yet, it is clear that we are moving in the right direction:
– The stock market as measured by the DJIA has been reliably around 10,000 for several months.
– Manufacturing output expanded in February for a seventh straight month.
– Executive recruiter confidence is at the highest level in almost 2 years.
The key is that the worst is over and that this is a broad-based recovery. As the first quarter has unfolded, spending and headcount freezes have continued to thaw, and companies have expected AND delivered better results. Now, organizations will focus more on attracting high caliber talent to fill open and newly created positions. Appropriately, the March/April 2010 issue of SRA Update, “Time to Focus on Talent Management,” provides an overview of strategies, concepts, and considerations to utilize in developing a talent management plan. Please enjoy this month’s SRA Update at SRA Update or to download a copy of this article in PDF format, click here.
As always, I welcome your comments about the newsletter, along with your suggestions for future topics. If you enjoyed this month’s topic, please feel free to share the article with others. Meanwhile, Sanford Rose Associates stands ready to assist you with all of your personnel needs.
Posted by Allen Wass | Mon 3/1/2010 2:58 PM
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Growth Strategies in Turbulent Times
Everyone wants to know about today’s hot segments within the chemical and materials markets. Analysts talk about nanotechnology, alternative energy, and anything green, but the reality is that the successful companies are the ones that manage the transformation from being high volume/low margin commodity suppliers to being specialty product producers. These companies serve as problem solvers and solution providers for their customers. They have survived the downturn and are prepared for growth. Surprisingly, they are not necessarily start-up, entrepreneurial enterprises.
As a newly minted chemical engineer from Cornell, I started my professional career at General Electric in 1990 and participated in the last half of the Jack Welch era – a period that changed GE from a staid, commodity-oriented conglomerate into an organization that focused more on services. In a 1981 speech, entitled “Growing Fast in a Slow-Growth Economy,” Welch outlined his beliefs in selling underperforming businesses and aggressively cutting costs in order to deliver consistent profit rises that would outstrip global economic growth. Initially, many felt that Welch was ruining an institution, but over time GE saw unprecedented expansion under his leadership. Through streamlining operations, acquiring new businesses, and ensuring that each business under the GE umbrella was one of the best in its field, the company was able to expand dramatically and consistently over a twenty year period. Although it worked at the time, people mistakenly try to apply the cost-cutting portion of Welch’s paradigm today without comparable success.
The current model to emulate may be Dow Chemical. Chief Executive Andrew Liveris has undertaken an ambitious transformation of the 112-year-old chemical company’s product line into more specialized materials. What will make this a more exhilarating story is that the efforts were nearly derailed during 2009. Vacationing in the Caribbean in December 2008, Liveris learned that Kuwaiti officials were scrapping a joint-venture petrochemical deal. He was planning to use the proceeds to help buy rival Rohm & Haas Company, the centerpiece of his strategy to move Dow away from basic commodities and into higher-margin specialty chemicals. Dow delayed the close, and Rohm & Haas sued. Ultimately Dow issued preferred stock and secured short-term loans to finance the purchase. Meanwhile, Dow cut jobs and its once sacred dividend. Now, Liveris is quoted as saying that this next period is about execution on his growth agenda. His strategy is for Dow to anticipate customers' needs better by partnering with their marketing and R&D organizations. In the quest to become a reliable earnings growth company, Dow will be hiring a slew of scientists and engineers in Midland, Michigan to drive this initiative.
Unfortunately, radical change is rarely painless. In the midst of GE’s evolution, people lost familiar environments and sometimes their jobs. Since the Jack Welch era the successful company has coupled a long-term outlook with near-term execution to establish a sustainable enterprise. In addition, it should not be overlooked that making things – real things – still matters despite the collective rush to develop and create service sectors – like the financial and retail and entertainment industries. Under Liveris, Dow intends to build one of the largest advanced materials companies by investing heavily in R&D while continuing to execute relentlessly on short-term objectives. The key will be to stay the course on strategy yet remain nimble and agile enough to change tactics as challenges and opportunities arise.
Dow Chemical, like General Electric before it, just happens to be the visible example of change. Chemical and materials companies of all shapes and sizes are moving to be more market-driven where product portfolios have a primarily specialties and downstream emphasis and where operating margins are greater and more predictable. This is not a short-term tactic, but a long-term commitment to meeting customer needs through innovation and focused technology development.
Posted by Allen Wass | Mon 2/1/2010 8:11 AM
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What to expect in 2010 and the importance of annual planning
What to expect in 2010
Sanford Rose Associates is pleased to present the January/February issue of SRA Update, "The Recovery Has Begun -- What to expect in 2010." This edition highlights recent positive news regarding the economy and looks ahead at hiring trends that will likely result from the recovery in 2010. As I have mentioned previously, the demand for top executive talent will be high, and companies will need to make strategic hires and retain key personnel in order to assemble the right management team to lead them through this period.
You can view this month’s SRA Update at SRA Update or to download a copy of this article in PDF format, click HERE
The importance of annual planning
As I prepared my annual goals for 2010, I completely reviewed my 2006 business plan. It had a category titled, “Where do you see your business in 3 years?” One of the key bullet points was “well positioned for likely economic downturn.” Wow!
I have to admit that despite my intuition, I did not expect that any recession would seem as sudden and deep as this one. Nonetheless, I was able to weather the storm. Yes, in 2009 my business’ net income was lower than I would have liked, and yes, the value of my personal investment portfolio is below my preferred level. The key is that appropriate preparation allowed me to have the wherewithal to manage through even a violent gyration in the business cycle. This is a testimony to the importance of annual planning and thinking about contingencies.
The result is that my business continues to offer full-service custom recruiting based on considerable technical expertise, state-of-the-art technology, commitment to clients and the use of the Sanford Rose Associates' proprietary Dimensional Search® process.
In fact, during 2009, I was able to significantly broaden my network of industry contacts, improve my technology and incorporate process enhancements. Since I remain committed to long term success, my updated business plan now has a bullet point which reads “well positioned for growth.”
Happy New Year!
Posted by Allen Wass | Mon 1/4/2010 7:20 PM
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Hiring in 2010 – a renewed sense of urgency
This year has been a tough one for hiring. We started 2009 with companies looking for ways to cut costs which included reducing headcount. Then, many businesses took a “wait and see” approach for the balance of the year.
When an organization did want to fill a strategic role, they often had a misconception that finding the exact, right candidate for their position would now be easy – they had heard about the vast quantities of unemployed people. The rub was that individuals with the company’s specific requirements were not readily available. Meanwhile, the hiring manager did not always want someone else’s castoff. Many candidates were considered to be “overqualified” and desperate; therefore, the person would lack commitment and would be looking for better opportunities when the hiring environment inevitably improves. This logic – even when flawed – is often tough to refute.
At the end of the day, organizations were frequently unable to move forward quickly with their searches. Some were still extremely cost conscious and concerned about committing financially to a new employee. Others felt compelled to continue looking for the absolute “perfect candidate” – they were apprehensive about making the wrong decision and were ultimately not ready to hire yet. This lack of urgency was also apparent when members of the interview team were too busy with other objectives to meet with candidates in a timely manner. In the meantime, some companies faced the reality that they could not provide the necessary financial incentives (salary, bonus, relocation assistance, etc.) to attract the person they wanted. Moreover, many firms limited their options because they lacked an appropriate recruitment strategy.
Adding to the difficulties is that hiring organizations faced cautious candidates – people who were wary of changing from a known situation. This included a tentativeness to relocate; a situation exacerbated by the housing crisis that left many with significantly less equity in their homes.
What does this mean for 2010?
The fact is that there is a limited pool of talent for key positions, especially executives with specific technical and/or industry expertise. Nevertheless, the recent stability in the economy will lead more of these people to explore new career opportunities. They will be looking for positions that fit with their skills and interests and allow them to be engaged and rewarded in a successful venture. Of course, everyone wants more total cash compensation, but it is the longer term prospects that motivate people to change jobs.
In 2010, companies will need to be more aggressive at filling roles. Organizations will not tolerate having open positions for long periods of time when additional goals have to be met. Moreover, expecting more from current staff is not a winning long-term strategy. The watchword will be urgency. Once businesses feel an urgency to deliver on growth objectives, the urgency to recruit and hire will follow. This is already happening at some firms and will continue to spread in the first quarter of the new year.
Posted by Allen Wass | Tue 12/1/2009 7:35 AM
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The Increased Importance of Finding Global Talent
Sanford Rose Associates is pleased to present the November/December issue of SRA Update, “The Increased Importance of Finding Global Talent.” This edition observes that, despite the global economic crisis, the globalization of operations and worldwide movement of human capital will continue. Whether companies are seeking to expand into emerging markets or looking to enhance their core competencies in existing regions, they must have the resources necessary to find and recruit top-tier talent to fill critical positions.
You can view this month’s SRA Update at SRA Update or to download a copy of this article in PDF format, click HERE
Recently, we sent out the announcement that Sanford Rose Associates is now a proud member of the International Executive Search Federation (IESF), the world's largest retained search organization with offices in more than 40 countries and 160 cities worldwide. This global reach is increasingly critical as foreign companies continue to invest in the United States and American firms expand worldwide. As an example, Toyota's total direct investment in the U.S. has now grown to more than $17 billion. Meanwhile, numerous businesses have leveraged their presence in China and other developing countries to deliver positive results during this recession – a wise approach that mitigated additional corporate job losses, considering that China’s third quarter GDP growth was reported to be 8.9%.
Overall, the concerted efforts of the Group of Twenty (G-20) Finance Ministers and Central Bank Governors has unleashed the global recovery with the U.S. third quarter GDP growth of 3.5% as a testament. The result provides fodder for the claim that we will have a V-shaped recovery, defined as a severe downturn in the economy followed by a strong upturn in economic activity. Although several recent reports on employment and manufacturing were disappointing, it does appear that we are in the beginnings of the up-stroke of a recovery. If the growth from the last three months is sustained over the next nine months, there will be a more complete V-shape.
Accordingly, this environment will lead to more capital investment and hiring, and will ultimately cause U.S. unemployment rates to begin to subside in early 2010. Then, we will all realize again that specific specialized talent remains in short supply. During this transition period, successful organizations will pursue a renewed growth strategy while being vigilant in sticking to their strategic plans and being forward thinking and opportunistic in their hiring decisions.
Posted by Allen Wass | Sun 11/1/2009 8:17 AM
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Finally, the 4th quarter is here!
From the beginning of 2009, I have been biding my time, eager for this year to quickly pass. I foresaw that this would be a tough period requiring greater effort to yield lower returns. Now, as we enter the last quarter, business activity is starting to pick up, and I am not in such a hurry for the year to end.
I talk to many industry leaders who are cautiously optimistic and expect companies to beat their third quarter earnings estimates. The great news is that sales are going to be an even bigger shocker than profits. During the first half of the year, sales have been slow to recover as consumer spending has remained subdued and companies have been holding up profits by cutting costs. Now, as the recession shows signs of ending, sales have stabilized and shown a bit of an uptick. Although revenues will be down from last year, the exact level will pleasantly surprise the analysts. And the earnings picture is all but guaranteed to improve further in the fourth quarter since last year's final quarter was so bad.
Nonetheless, many experts remain skeptical about the likelihood of a strong and sustainable economic recovery. They claim that we will lose some momentum in the final three months of the year as rising unemployment and still hard-to-get credit weigh on consumers. These experts are like the weather forecaster who only predicts blizzards after a record snowfall. Just like it can’t storm forever, there is some sustainable amount of business activity that can be realistically anticipated, and it will be more than last quarter’s level.
In support of this argument, Dirk Hofschire, Vice President of Market Analysis at Fidelity Investments, claims that “if past historical patterns are any guide, it is possible that current expectations for the early stages of the U.S. economic recovery may be too low.” He points out that “in the post-WWII period, there have been four severe recessions during which the U.S. economy contracted by 2.5% or more. In each case, the subsequent pace of growth during the first two quarters of recovery was robust, averaging more than 6% on an annualized basis.”
What does this mean for hiring? Despite the rising unemployment numbers, firms have been hiring throughout this recession. The tough part is that the amount of people who have been let go has exceeded the number who have been added. This will soon change. Because their sales and earnings are better than they anticipated, some firms will decide to finally fill a gap in the organization before the end of the year. Realistically, most companies will simply talk about filling the role or half-heartedly try to find the right person. The broader hiring will occur during the first and second quarters when managers, and by extension their organizations, feel the pain of goals not being achieved because a key person is not in place.
Returning to our premise, we don’t want to simply rush through the last quarter of the year and miss opportunities for growth. During the next several months, winners and losers will be determined by which companies have the right resources readily available.
Posted by Allen Wass | Thu 10/1/2009 1:35 PM
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SRA Update—Managing the Web 2.0
The September / October issue of SRA Update, “Managing the Web 2.0,” discusses the issues that confront companies today as a result of their employees’ use of blogs and social networking sites and the importance of developing an intelligent and reasoned approach to addressing those issues. Prior to reading the article, you may want a quick primer on the relevant terms: Please enjoy this month’s SRA Update at SRA Update or to download a copy of this article in PDF format, click here.
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"Web 2.0" refers to web development and web design that facilitates interactive information sharing and collaboration on the World Wide Web. Examples of Web 2.0 include social-networking sites, video-sharing sites, and blogs. A Web 2.0 site allows its users to interact with other users or to change website content, in contrast to non-interactive websites where users are limited to the passive viewing of information that is provided to them. Although the term suggests a new version of the World Wide Web, it does not refer to an update to any technical specifications, but rather to cumulative changes in the ways software developers and end-users use the Web.
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A blog is a type of website, usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in reverse-chronological order. "Blog" can also be used as a verb, meaning to maintain or add content to a blog.
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Twitter (www.twitter.com) is a social networking service for friends, family, and co–workers to communicate and stay connected through the exchange of quick, frequent messages. People write short updates, often called "tweets" of 140 characters or fewer. These messages are posted to your profile or your blog, sent to your followers, and are searchable on Twitter search.
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Facebook (www.facebook.com) is a social networking website where users can add friends and send them messages, and update their personal profiles to notify friends about themselves. Additionally, users can join networks organized by city, workplace, school, and region. You can update your status, add photos, videos and other application content to your own profile while you are able to see real-time posts from your friends.
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LinkedIn (www.linkedin.com) is a business-oriented social networking site which allows registered users to maintain a list of contact details of people they know and trust in business. The people in the list are called Connections.
If we are not already connected on LinkedIn:
Click here to connect: LinkedIn - Allen Wass enter aswass@sanfordrose.com and click Send Invitation.
Stay connected!
Posted by Allen Wass | Tue 9/1/2009 4:37 PM
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How’s your business doing?
What are you hearing out there? How’s your business doing? Are you seeing any improvement?
These are common questions that I am asked during my daily discussions with my wide network of contacts.
My answer, which summarizes numerous opinions and experiences, begins with the obvious. Like the industries that I serve, my business is down from last year. Nevertheless, the searches that companies have undertaken with me tend to be strategic roles that represent succession planning or a deliberate effort to improve a functional area for the long-term success of the organization. These have been well-thought out positions with full company support. This is good news to many who wonder whether the economy is operating at all, let alone with any level of rationality.
Moreover, managers continue to express that their business has already bottomed out. Depending on their product, this cautious confidence is justified by a couple of weeks of increased sales activity or a noticeable uptick in requests for quotes, which historically lead to more sales. It will take a quarter or two of additional experience for companies to appreciate where they stand, but the trends are promising.
The fact remains that many corporations saw their sales drop from 30 to 50% or more year-over-year. It is hard to accept that this is the new demand level, but companies have reduced costs to meet this reality. Now, consider a very reasonable scenario: an increase of 10% over current sales volumes would still leave a company down 45% from the peak if their sales had dropped 50% originally. Nonetheless, wouldn’t we all welcome a 10% increase to the top line? Just think about how much confidence industry would have if sales increased 10%. Just think about how much new flexibility a company would have to pursue investment objectives or other long-term organizational goals. Just think about how Wall Street would react, let alone the pundits on cable television.
Executives have told me that plans to hire needed staff or spend investment dollars have been delayed as they wait and see how this recession plays out. All the same, companies and managers are going to continue to compete, and they will use the current depressed sales numbers as their basis. They will plan for some level of growth, albeit probably less than will really happen. These plans will assume that sales will come off of their troughs and will include appropriate actions and tactics to achieve short- and long-term goals. This normal behavior will truly demonstrate that we are at the end of this recession.
Posted by Allen Wass | Thu 7/30/2009 5:13 PM
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SRA Update July/August 2009
In a conference call with investors, Mark Hurd, CEO of Hewlett-Packard said that "great companies excel in tough times, and in tough times customers turn to great companies."
With this in mind, we need to view the current economic environment as an opportunity to further solidify our strong presence and reputation, to reaffirm and recommit to our successful strategies, and to increase market share. Well-respected companies use these times as an opportunity to build momentum and best position themselves for the inevitable economic recovery.
From personal experience, my clients are looking to fill strategic positions that will offer short-term benefit and moreover, will definitely contribute to the organization's long-term success.
Hurd said that "the measure of great companies in this kind of environment is how you do, relatively speaking, within it, and how do you emerge stronger, relatively speaking, at the end of it?"
Throughout this downturn, businesses have tried to conserve cash in every way possible, but in some situations penny-wise can mean pound foolish. As the July / August issue of SRA Update points out, there are few shortcuts to finding good people - while the costs of hiring less than the best remain as significant as ever.
You can view the latest issue at SRA Update or to download a copy of this article in PDF format, click here.
Posted by Allen Wass | Tue 6/30/2009 11:18 AM
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Get ready for the turnaround
The recession is over. Indicators point to an end date: May 2009.
New claims for unemployment insurance are probably the very best single indicator of the end of a recession. The monthly average for claims normally peaks one or two months before the economy bottoms, and it appears to have peaked in March. Unfortunately, the end of the recession does not mean that we will immediately see lower unemployment rates; employment is always a lagging indicator.
Meanwhile, more than 90 percent of economists in a recent survey concurred that the recession is drawing to a close. And consumer confidence continues to increase. And the stock market has experienced its third consecutive monthly gain. These signals must be viewed as a wake-up call for manufacturers and suppliers: Get ready for the turnaround.
Companies large and small faced up to the business downturn by quickly cutting payrolls, reducing plant capacity and forgoing new spending. As a result, they significantly lowered industrial output and finished goods inventories.
When the logjam breaks, a flood of new orders will flow to factories. Manufacturers will have to be able to gear up quickly or lose out. Now – while customer orders remain soft – is when companies need to fine-tune their operations to prepare for the recovery.
Readying to meet future demand when business is slow is no easy task, but manufacturing companies that started preparing for the future during the downturn will have a huge advantage. On the other hand, those that remain in survival mode have significantly more work to do.
During my conversations with industry leaders, I hear rising optimism as business stabilizes and orders cautiously pick up. Meanwhile, recruiting this year has focused on filling strategic roles for my client companies so that they will be better positioned for the long-term. As the second quarter comes to a close, more hiring managers and human resource professionals have been contacting me to discuss these types of assignments in their organizations. Again, this clearly points toward growing optimism and an impending upturn, so we better all get ready.
Posted by Allen Wass | Fri 6/1/2009 7:31 AM
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SRA Update—May/June 2009
For the past couple of months, I have been beating the drum that this recession will ease as confidence builds.
The data is out there that this process has started. The Reuters/University of Michigan index of consumer sentiment rose to 65.1 in April, the second straight monthly gain.
Meanwhile, the expectations gauge—which more closely predicts the direction of consumer spending—rose to 63.1, the highest level since last September.
Furthermore, during the first quarter consumers came back to life, boosting their spending after two straight quarters of reductions. The 2.2 percent growth rate was the strongest in two years.
Nevertheless, companies continue to tightly manage their costs. The economy shrank at a worse-than-expected 6.1 percent pace during the first quarter of this year as sharp cutbacks by businesses overwhelmed the rebound in consumer spending.
These divergent numbers are not unexpected. Companies are going to react to changes in consumer habits. Therefore, prior decreases in consumer spending resulted in cuts by businesses. Now, the increase in consumer spending should yield a positive change in business behavior.
As proof, consecutive months of stock market gains cannot be ignored but must be considered a harbinger of better corporate performance.
The consensus is that the most severe phase of the recession is behind us and that companies will begin to realize that sales have stabilized and will increase. At this point, many firms have already aligned costs to match a depressed revenue level. By the fourth quarter, organizations will be able to properly plan for 2010. This year was all about how to quickly remove cost to manage the steep decrease in revenue. As annual plans are created for next year, the focus will be back to defining key growth objectives for the coming year and re-establishing the longer-term plan.
As one vice-president of a precision metal parts manufacturer recently told me, the challenge is keeping people motivated through these stressful times. This is especially true as the tide turns and employers want employees to remain loyal and project a positive image of the company.
As the May / June issue of SRA Update observes, employers – like the products they market – have a distinct brand image for better or for worse. With the exponential spread of Internet blogs and other online commentary, companies need to be especially attuned to employee opinion and how it may affect future job acceptances.
You can view the latest issue at SRA Update or to download a copy of this article in PDF format, please click here.
Posted by Allen Wass | Fri 5/1/2009 8:31 AM
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Don’t miss the recovery
“Everything will be all right. We do have the greatest economic machine that man has ever created, I believe. We started with four million people back in 1790 and look where we've come and it wasn't because we were smarter than other people, it wasn't because our land was more fertile or we had more minerals or our climate was more favorable. We had a system that worked. It unleashed the human potential. Didn't work every year, we had six panics in the 19th century, in the 20th century we had the Great Depression and World Wars, all kinds of things. But we have a system, largely free market, rule of law, equality of opportunity, all of those things that cause the potential of humans to get unleashed, and we're far from done. So I think your kids will live better than mine, your grandchildren will live better than your kids. There's no question about that. But the machine gets gummed up from time to time and it's – if you take the bulk of those centuries, probably 15 years were bad years, but we go forward.”
~Warren Buffet on CNBC ~ Monday, March 9, 2009, the day the stock market hit a 12-year low
“Don’t miss the recovery.” That was my mantra coming out of the last recession. Now, after 3 weeks of stock market gains, I am singing that tune again.
Last month, I stated that “confidence will build as markets start to function normally again.” Currently, we must be alert that this normality has started to emerge, and the stock market is reflecting that fact. In other words, we are beginning to see the light at the end of the tunnel.
In what may become the definitive line about our current economic crisis, Warren Buffet said on CNBC that the United States economy has “fallen off a cliff.” Even so, on that same segment, he affirmed the last line of his company’s annual report: “America's best days lie ahead.”
Many economists believe that gross domestic product (GDP) will keep contracting until the second half of this year. Nonetheless, the consensus is that the recession, which began in December 2007, will ease by the end of this year and economic indicators will improve, signaling the end of the worst economic downturn since the Great Depression.
Recent data supports this sentiment …
The Commerce Department reported that consumer spending edged up 0.2 percent in February, in line with expectations. That followed a huge 1 percent jump in January that was even better than the 0.6 percent rise originally reported.
Orders to US factories for big-ticket manufactured goods unexpectedly rose in February after a record six straight declines.
Sales of previously owned US homes rose at their fastest pace in nearly six years in February.
Sales of new homes rose for a second straight month in February.
Consumer confidence held steady in March, with a slight blip upward, halting three months of declines.
Early in a recession businesses try to position themselves to survive the downturn. Then, once the bottom is in sight, firms who foresee recovery try to position themselves for that as well. Meanwhile, this time, the fundamentals are in place for a v-shaped recovery. The argument is that this downturn came abruptly, so companies turned things off quickly. Manufacturers have cut back production more than current demand dictates, so inventories are low and getting lower. As a result, pent up demand combined with depleted inventories will produce a sudden recovery.
The challenge for companies will be in stimulating a stagnant supply chain and ramping up idled production. Meanwhile, the marketing and sales forces have to be aligned to take advantage of this demand spurt.
The primary key to sustainable success for any business is hiring the right people to run it. We may be in the midst of a recession with increasing unemployment and fewer jobs, but that is not likely to have much long-term impact on the shortage of talent. We have all read about the aging of the population and other demographic factors. The likely effect of these dynamics on the availability of skilled people has been extensively covered by the media.
Business leaders are painfully aware of the consequences of being on the wrong side of the talent equation – of the instability and disruption it causes internally and with customers. A CEO may have a brilliant strategy for making the numbers better every year, but over time, people will make it happen. Company leaders can put together aggressive marketing, sales, production and business development plans, but their enterprise cannot win in the marketplace if they don’t have the right people to implement them.
Although many companies may not yet be willing to fill open positions or take on new initiatives that need to happen to achieve growth, now is the time to plan for these anticipated events. Every organization ought to define the missions and roles so that people can be identified who combine the right skills and experience with a personality and communication style that match the corporate culture.
Recognizing the overwhelming importance of talent recruitment and retention in today’s marketplace is only the beginning. The key is to determining when to turn awareness into action and avoid missing these vital early stages of recovery.
Posted by Allen Wass | Wed 4/1/2009 12:27 PM
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SRA Update—March/April 2009
We are truly in unprecedented times. Consumer confidence has hit a historic low and the issue of lost confidence – and how to revive it – is playing a more pivotal role in this recession than in others. The reason is that today's problems are centered on the markets for credit, which is really just another word for trust.
Already, some signs suggest that steps taken by the Federal Reserve, and the Bush and Obama administrations, have been helping. The market for commercial paper – short-term loans to businesses – has improved markedly in the past few months, for example. Meanwhile, fewer small businesses have reported being affected by tightening credit and fear of going out of business has receded since October. In fact, Federal Reserve chief Ben Bernanke raised the prospect of better times ahead during his recent report to Congress. He said that the Fed anticipates a "gradual resumption of growth" in the second half of this year and a "moderate expansion" next year.
Confidence will build as markets start to function normally again...or maybe it should be stated the other way around...markets will start to function normally again as confidence builds. Either way, companies are challenged to operate in the current environment of uncertainty, while they need to position themselves for the anticipated growth and expansion that is part of recovery.
As the March/April issue of SRA Update observes, the downsizings and restructurings that have accompanied every recession in the past three decades provide two important reminders: 1) Done wrong , they can wreak havoc with an organization's strength and stability; and 2) Done right, they can pave the way for future growth and competitive advantage.
You can view the latest issue at SRA Update.
Posted by Allen Wass | Sun 3/1/2009 1:41 PM
Send comment to aswass@sanfordrose.com