Profits at what price? Pfizer had two choices when it discovered that each vial of its vaccine held six rather than five doses. One was to push the FDA to declare a vial contains six doses. With this decision, Pfizer would make more money. Because it gets paid for each dose, each vial could now be priced twenty-percent above the agreed-to purchase price. The premium would all drop to Pfizer’s bottom line. The alternative was to remember the original price met or beat Pfizer’s expected return rate, which would be huge given the quantity of vaccinations involved. Producing a vaccine for an unpredicted global pandemic is a once-in-a-lifetime opportunity for a pharma company. The extra dose could be a contribution, helping nations vaccinate more people than they had planned. Pfizer’s leadership team decided on the FDA route, choosing higher profits over societal benefits….
Be careful in deciding what to incentivize
Ohio State football coach Ryan Day earned a $250,000 bonus when his team beat Clemson in the Sugar Bowl. His quarterback, Justin Fields (who received no compensation), was unfortunately injured during that game. If you were Coach Day, would you have asked Fields to play in the upcoming national championship game against Alabama? A similar situation confronted Fields’ high school coach, who kept Fields out of his final game as a high school senior. The coach did not want a broken finger to damage his star player’s long-term career prospects. The high school coach placed player well-being over other measures, as coaches should. But was this true for Ohio State? I doubt it, owing to this indicator: Coach Day would earn another $350,000 bonus should Ohio State beat Alabama. But the bonus he receives for coaching his players to maintain 3.0-grade averages is…
Grading The Lincoln Project
The Lincoln Project (TLP) is a tribe of GOP political consultants created in advance of the November 2020 election. Its immediate objective was to convince right-leaning-independent and GOP voters in the swing states to vote for Biden and Democratic Senate candidates. Its broader aim, one that continues after this election, is to protect American democracy. Democracy for TLP is one that contains strong democratic institutions (e.g., voting by all, a Justice Department independent of politics) and fulfills the promise of our nation. Steve Bannon (Trump’s 2016 election advisor) said that if TLP could turn 4% of GOP voters to Biden, Trump would lose in 2020. So, 4% became TLP’s key performance indicator. I would suggest a higher benchmark as 4% of GOP voters voted for Hillary in 2016, according to Pew Center research. Did TLP get more than 4% of the GOP…
The economic issues facing our nation require political cooperation, not divisivenesss.
Biden is our President-elect and one thing is certain: Whatever the ultimate balance of power in the US Senate, we do not need four more years of a stalemate. The major economic issues facing our country require a US Congress that can listen, learn, debate, and collaborate with the President to find solutions that advance the well-being of our nation. What are our major economic issues? The pandemic. The exponential growth rate in COVID virus cases (and with it, ICU bed usage and deaths) is slowing down our economic growth while at the same time increasing the deficit, food shortages, evictions, anxiety, and business bankruptcies, small and large. Our excess death date and virus incidence proved we are not managing the pandemic effectively. We need the President and Congress to act on Federal powers to drive manufacturing to support Covid-fighting efforts so that…
You cannot manage your way out of a paradox
I’ve been thinking lately about how to balance two opposing goals. One is keeping our economy open so that we avoid a deep recession. The second is containing the COVID-19 Pandemic. Companies have these kinds of seemingly opposing conflicts. A decade ago, British Petroleum was balancing the need to increase oil production (through drilling at sea) with the need to protect water and workers. More recently, Boeing was balancing the need to get the 737Max to market at an attractive overall cost against the safety needs of travelers. In the early 2000s, the Boards of Directors of US banks wanted higher stock prices through growth in assets without depleting capital. We all know these balancing acts went awry because leaders pushed one goal at the expense of another, leading to major crises. Further, the solutions to these imbalances were all costly. Pushing up…
We need leadership, not more hubris.
We have many words for leadership, a trait desperately needed to surface solutions to today’s multiple crises: the pandemic, climate change, economic recession, inequality, and social unrest. We also need leadership to rally people around whatever solutions eventually arise. The opposite of leadership, to me, is hubris, and we are observing way too much of it during today’s crises. Hubris is an arrogance, a bold audacity, an overblown impression of one’s own importance. Hubris is also the opposite of respectfulness, which is at the heart of effective leadership. Respectfulness-in-action is challenging another’s behaviors but not making assumptions about the underlying motives. So is seeing the value in every human, from janitor to Board Chair, from the asylum seeker to the esteemed citizen, and acting in support of each person’s worth. Successful leaders tell the truth, as the respect of others demands we are…
Am I a good citizen?
I have always felt that my life rests on strong shoulders. Two of my grandparents, as well as two great grandparents, emigrated from Europe for a better life. When I met distant cousins in Lithuania and Ireland in 2001, it helped me understand that while my days are no more filled with love, they are far easier than theirs. Born in 1951, I was the start of a wave of women in non-traditional roles. Teachers who believed in my intelligence and ambition offered still other shoulders. So did a dad who wanted his daughters to have a degree to fall back on should we get divorced or widowed. Perhaps the strongest shoulders, however, are those of the people who forged our nation into the imperfect but evolving union it is today. What do I owe these people and my fellow citizens? What is…
What if you made market and customer understanding as important as your organization’s financial information?
Financial information infuses company activities. From budgeting to closing the monthly books, from measuring progress to managing cash flows, numbers are to business what the ABC’s are to our reading. It’s no wonder then that companies large and small have invested heavily in their financial system, teams, and processes to generate financial information. Let’s call this entirety the Financial Information System. Numerical data is collected, processed, and stored in data warehouses, where it is then used to develop insight and inform decisions. While the Chief Financial Officer is in charge of this system, all employees play a role, whether they fill out expense forms, develop budgets, or make investment decisions. And all decision-makers are encouraged to use the processes’ information (e.g., making a presentation as a product manager about your category). A stellar CFO is like a great coach in winning the game…
Change is never linear. Don’t be fooled by obstacles to change or a reversal in a trend.
Liberal media sites often highlight the positive trend of solar and wind power. In contrast, Mr. Jenkins, a Wall Street Journal opinion columnist, concentrates his energy-related columns on the well-known flaw of solar and wind energy not being as reliable as fossil fuels. He suggests wind and solar will be niche energy sources. Jenkins is wrong. He has fallen into a trap called mistaken (and sometimes hidden) assumptions. Jenkins assumes the intermittency flaw is a constant. But battery technology is continually improving, and its use in power storage to solve the intermittency problem is spreading in many countries. Battery technology is advancing so quickly and effectively for automobiles that one can now reliably predict when petroleum-powered cars will become more costly to produce and run. No wonder Tesla is worth more than Toyota. There are always naysayers to change. The Kodak Board was…
Strategies for the Connection Economy Crisis
Who knew? It’s not the technology economy or the service economy that drives our nation’s Gross Domestic Product. It’s the connection economy, a sector that the COVID-19 virus has sadly brought into a swift and costly downfall, and likely business-altering event. The connection economy consists of activities where people convene proactively for fun, commerce, or learning activities. Sports. Education. Restaurants and bars. Movies. Sightseeing activities. Office, plant, and location work. In-store retail. Canceling an event has significant multiplier effects on industries that are part of the process. Consider the cancelation of the Final Four NCAA tournament. Plane fares, gasoline, restaurants, hotels, Lyft/Uber drivers, t-shirt companies, arena fees, and contract work all disappear. The cancelation of South by Southwest will cost Austin $355 million, and that does not include all the ad agencies and performance artists whose work disappeared. And these examples are merely…