How to identify the focus of your strategy
July 8, 2008
Wouldn’t it be nice if you could see at a glance how your strategy explanation is going to come across?
Wordle is a clever tool which displays words from a piece of text in different sizes depending on their frequency in an image. Just for fun, I’ve run the text that summarises the strategies of BP and Shell on their respective websites through this tool, and come up with the following images …
Although they are quite attractive images in their own right, this does let us see quite clearly the differences between the two.
The most important words in the Shell image are:
Shell, new, billion, resources, capacity, increase, year
The most important in the BP image are:
performance, people, operate, restoring, close, gap
Without even needing to read the text, we can see that there is a difference in focus between these two companies. For Shell, it is all about increases in capacity; for BP it is all about people and performance.
Note that although the biggest single word for Shell is ‘Shell’, and for BP, their name is one of the smallest words in the image, this is probably due to the way that they have phrased their text. I stripped out people’s names, but not the names of the companies. And I’m not claiming that this is a piece of detailed analytic work - but I do think that it reveals what the main messages of your text are, based on the words used.
If you ran your strategy statement through the same tool, what would the main focus look like? And is it what you intended?
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Rating The Corporate Governance Raters
July 8, 2008
Corporate governance attracts much public attention since it purportedly involves the economic-financial health of corporations and society in general. However, corporate governance is poorly defined because it typically is composed of differing mix of policies, procedures, internal practices all surrounded by laws and regulations.
Simply put -
…the overall purpose of corporate governance, which is to align as nearly as possible the interests of individuals, corporations and society.
Theories of Corporate Governance Edited by Thomas Clarke
OK maybe that’s too simple. Here is a definition from Investopidia –
“Good corporate governance is a situation in which a company complies with all of its governance policies and applicable government regulations (such as the Sarbanes-Oxley Act of 2002) in order to look out for the interests of the company’s investors and other stakeholders.
The corporate need to be in compliance with corporate governance has shaped an industry of advisers, rating firms and other services with an estimated 2008 sales of $52 billion (corp-integrity.com). Perhaps the most influential of these companies are the rating agencies. These firms - which include the Corporate Library and RiskMetrics Group’s ISS Governance Services and S&P - analyze companies against their own criteria and rate whether a company is well governed or not.
These ratings may influence a company’s cost of capital, equity share price and shareowner relations. As such, the companies that compile these ratings have achieved a significant presence in world financial markets. But, there are some problems — extensive studies indicate these ratings bear little relation to actual corporate performance. A recent Fortune article summarized a Stanford University study widely different ratings for individual companies.
The Stanford researchers summarized their findings–
We examine these claims for the commercial corporate governance ratings produced
for 2005 by Audit Integrity, RiskMetrics (previously Institutional Shareholder Services),
GovernanceMetrics International, and The Corporate Library. Our results indicate that the level of predictive validity for these ratings are well below the threshold necessary to support the bold claims made for them by these commercial firms.(Emphasis added) Moreover, we find no relation between the governance ratings provided by RiskMetrics with either their voting recommendations or the actual votes by shareholders on proxy proposals.
Rating the Ratings: How Good Are Commercial Governance Ratings? Rock Center for Corporate Governance Stanford University
A summary of this report is available. The Stanford study is one of a number of other similar studies that question the value of these ratings agencies. Some common themes in these studies include –
- Over reliance on quantitative accounting/financial criteria
- “You can’t legislate compliance”
- More emphasis needed on observable qualitative criteria, such as corporate culture, drivers of employee behavior and corporate integrity practices.
This post only touches the surface of this important subject. Future posts will cover additional aspects of Corporate Governance ratings and related topics. In the meantime, here is a Canadian company that just might be a model of effective Corporate Governance practices –
Note the focus on Integrity, the public display of an “Integrity Hotline” and a clear display of compliance documents. Criteria the rating agencies miss.
The United Nations Global Compact Gets Tough
July 7, 2008
“And what’s this?” asks a bemused Olympics commentator as the middle distance race enters its final lap. “I don’t believe it … I really don’t believe it!” and the slightest trace of a giggle enters her voice.
For round the track, overtaking all the runners, comes an athletic, well-muscled figure dressed in a baggy red suit with white fur trimmed collar and cuffs and holding a curvy bottle of a bestselling sugar-based fizzy drink.
“Yes indeed,” concludes the commentator, “Santa really has been working out! No more fat and flabby; no more shaggy beard. He’s fit and lean and ready to take on the World!”
When it comes to previously slow and cumbersome figures starting to show a little zing in their activities, the United Nations being tough with miscreants isn’t too far off the fantasy of a fit and active Santa.
Read more
Twitter: Intel takes on a new recruitment agency
July 4, 2008
How about this for a great new way of seeking a new hire?
Yesterday Intel put their first job up on their Twitter account JobsatIntel. If you were looking for someone with an interest in the web, whether technical or design, or someone interested in social networking, or even just someone who is likely to be au fait with the latest tools and feeds, you couldn’t do better than to post a mini-ad on Twitter.
Once here, it is likely to be picked up and passed around to people working in, or with an interest in, this area. This job is for a Graphics Validation Engineer. I don’t know what the job entails, but this may be the quickest way of getting the job description under the nose of someone suitable.
That is because it is quick and free, it capitalises on people’s willingness to do a favour for a friend (especially at no cost) and pass this on to them if they think it relevant, and it puts the job ad where the target market is - on the web, and well-connected.
I notice that Intel’s Twitter account has 22 people signed up to receive their Tweets, even though it has only been there a day. That is 22 people already who may act as recruiting agents on Intel’s behalf, at no cost.
You’ve got to love Intel’s ability to use the web to their advantage.
Mozilla Firefox Sets Guinness World Record
July 4, 2008
On June 2nd, I published a post called Mozilla’s Firefox as a Relationship Brand where I discussed how Firefox has become a perfect example of a brand whose success relies heavily on its relationship with loyal customers. I also mentioned that Mozilla was leveraging that relationship with its customers with Firefox 3 Download Day where the company asked customers to help set a Guinness World Record for the most downloads of a software program within 24 hours. The official results are in and a new world record was, in fact, set.
Can you guess how many downloads of Firefox 3 occured between 18:16 UTC on June 17, 2008 to 18:16 UTC on June 18, 2008? Read more