The Leap

Pikes Peak Challenge 2009

Once a year I take a group of people from the office to Pikes Peak. This year I took my son and some friends from YPO along with office personnel. Everyone had a great time and once again we had 100% success...everyone made it to the summit! More importantly, everyone walked away with a greater appreciation for the mountain, incredible experiences, and some life long friendships were formed. I hope you enjoy the video!

Silicon Valley Survivor by Michael S. Malone

I love this artile that was in the WSJ opinion section (July 25-26, 2009 page A11). John Chambers, Cisco CEO, has a great attitude and the key points he shares about what he has learned and to help Cisco be successful I think are important for all companies to understand and follow. It is amazing how much you can learn and grow during a crisis or economic downturn. I was very impressed that he was using this as an opportunity to reorganize and make his company more profitable and take risks and sieze opportunities in new markets. The article says "Cisco's growth plan has combined audacity in acquistions and attacking new markets with strict, even ruthless, control over cost." I wish GM had done with a decade ago. There is a lot in the article. What points to do find most interesting and useful to you and your business?

Should We Adopt Failed State Policies For The Nation?

Shikha Dalmia writes an insightful op-ed piece in the Wall Street Journal weekend edition from July 11-12, 2009 titled The "Free Choice" Act and Binding Arbitration that everyone should read. The article highlights how disastrous this has been for states that have adopted it in the past and how the lawmakers who once supported it are now saying it was a mistake. However, the unions and President Obama's administration is pushing forward with policy on a national scale. Here are some highlights.

"In 1969, the Wolverine State embraced a form of compulsory arbitration nearly identical to the one proposed by the EFCA (Employee Free Choice Act) to resolve disputes with its police and firefighters. Years later Detroit mayor Coleman Young who authored the original law as state senator - rued what he had done. "We now know that compulsory arbitration has been a failure," he lamented to the National Journal in 1981. "Slowly, inexorably, compulsory interest arbitration has destroyed sensible fiscal management and has caused more damage to the public service than the strikes it was designed to prevent."

Wow! That is a compelling argument from someone who wrote the law, implemented the law, and got to see and experience the after effects of this policy for years as a state lawmaker and later mayor of Detroit. One would think his opinion and insight on this issue along with others who have similar experience should be listened to. The article goes on to state that in a state wide vote in Michigan years later that 54% of state employees turned down compulsory arbitration and nearly every newspaper in the state was against it as well. Why? They saw how this policy drove many cities in Michigan into bankruptcy which led to massive layoffs where everyone lost.

"A 2006 task force convened by Gov. Jennifer Granholm, who supports compulsory arbitration, found that local government costs in arbitration states are 3-5% higher compared to non-arbitration states...Given the fact that local governments in Michigan alone spend over 23 billion annually, this works out to over a billion in extra spending for them."

So this policy costs Michigan over a billion a year in extra spending. What will this cost us if we implement this policy nation wide? If you want to learn more about the unions read this article.

More Bad News For LA

My last two posts deal with the growing problem in California and how state lawmakers are trying to balance the budget and change tax law to deal with a busted state budget and a bankrupt state. Rick Newcombe writes an op-ed piece in the Wall Street Journal titled "Why We'll Leave L.A." that ran Friday, July 10, 2009. Once again, poor tax law and a anti-business climate is chasing out business owners due to the mismanagement of state government officials who can change the law at will, reclassify businesses to gain more tax revenue, and outright abuse business owners. The end result is these people are leaving and taking their jobs and tax revenues to states that are more "business friendly." The sad thing is President Obama's administration is trying to copy some of California's policies on a national scale. Why? Have we not seen what the end result will be? California is a mess and begging for Federal support to keep it alive and Washington thinks implementing those policies across the nation is a good idea? We should find states that have a pro business climate and follow their lead. Policies that help small businesses grow produce local jobs and increased tax revenue for the local and state economy which everyone benefits from. Taxing the hell out of business owners is as bad as sending all the jobs overseas.

California Democrats Support A Flat Tax?

This article came out of the Wall Street Journal a few days ago. Apparently, with the state of California bankrupt, government officials are looking at all their failed policies and trying to figure out what to do. At the top of the list seems to be a flat or at least more fair tax code to keep the wealthy business owners from leaving the state and to increase the tax base and make it more stable. Henry S. Rowen reports in a WSJ op-ed piece in the July 8th issue that "The state's tax system desperately needs reform. Revenues in 2009 are down 27% from a year earlier largely because 1% of taxpayers pay 50% of income tax and their capital gains have evaporated. These taxpayers have a clear incentive to leave the state - and they are." No wonder officials are looking for a better tax system.

Labor Leaders Push Obama for Second Stimulus Package - Political Punch

Labor Leaders Push Obama for Second Stimulus Package - Political Punch

This is just what we need, more federal stimulus spending! These failed policies are not working.  One amazing piece of news comes from California where Democrats are looking at a bankrupt state and trying to figure out how to balance the budget.  They have come up with a novel idea...a flat tax.  No kidding, this is gaining traction.  Apparently, it was noticed that relying on taxing the "few rich" is a bad policy.  They are leaving the state in mass and taking their businesses with them. Many of the ones that have stayed their tax revenues they generate have been affected by the economy.  People are now noticing it is better to tax a larger base that is stable.  It will be interesting to see how this plays out and if it passes.  If I can find the article in the Wall Street Journal I will post it above.  It was very interesting.

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Risk vs Reward

This is a great post by Seth Godin. We are taught at an early age of the risk/reward equation. Some people have no concept of the risk and fly by the seat of their pants in everything they do daring fate to punish them. Others are so risk adverse they aren't willing to push the limit on anything. I think finding a healthy middle ground like everything in life is important. Yes, the greater the risk the greater the reward.

In Jr. High if you ask the most popular girl out you run the risk of getting rejected and being laughed at or you could end up being the coolest kid in school because you had the guts to do what no other guy would do. On Wall Street the biggest risk investments are the ones that if they go right have the biggest rewards. There isn't a big risk in T-Bills (back in the day) and therefore the gains were next to nothing. It was the safe bet with little risk and little reward. Everything in life in some way has a risk/reward equation. The key is to make sure you have some good advisors to help you weigh the cost, understand the risk, and even coach you through.

For example, there is high risk if I try to climb Mt. Rainier by myself but if I hire the best guide service in the world (IMG) run by the best climbers in the world then the risk is greatly reduced. The reward is the same but by being smart and surronding myself with the right people I can manage and reduce the risk. Nothing in life worth doing is without risks. The challenge is to fully understand the risk, manage the risk, and don't blindly walk of the edge becuase you didn't have all the right information.