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August 31, 2004

Logo A-Go-Go

If you've got an internal initiative that you think needs some identity work behind it -- or if you're an independent wanting to better brand your offerings -- FernGullyGraphics can help. They pledge to design a logo for you for only $15. That's right: $15.

Are they undervaluing their design services? Or using the low barrier to business as a way to lay inroads to their other services? Methinks the latter. What product or service could your organization offer for $15 as a way to encourage the upsell?

[via Salesprocessdiva]

Posted by Heath Row at 4:13 PM | 7 Comments

Fast Company... on the Air!

Fast Company's managing editor Lynn Moloney will appear on ABC World News This Morning to discuss "Finding Your 'Best-Stress Zone'" tomorrow, Wednesday, Sept. 1, at 4:40 a.m. ET. If you're up and at 'em, I hope you'll check out the segment!

Posted by Heath Row at 3:33 PM | Add Comment

A Tale of Two Squares

This week, in New York City, there's a tale of two squares -- one is Times Square, and the other -- seven blocks south -- Penn Plaza.

The GOP national convention has turned Penn Plaza, which encompasses Penn Station and Madison Square Garden, into an outdoor ad mecca, AdAge reports. However, as opposed to the commercially charged Times Square, Penn Plaza features politically themed signs and billboards -- not traditional consumer advertisements.

Continue reading "A Tale of Two Squares"

Posted by at 10:30 AM | Add Comment

August 30, 2004

Pen Source

The Fast Company staff is relatively expert when it comes to writing instruments. Pens and paper are crucial tools for journalists. In the past, Cheryl Dahle lavished praise on the Pilot G-2, which remains a favorite. And the Uni-Ball Gel Impact from Sanford is another recent pen in high demand.

So it came as some surprise that Sanford, to celebrate its 40th anniversary, has introduced a new innovation: the retractable Sharpie.

Wait a minute: A retractable marker? While I've yet to use one, I'm curious. Does this seem like a bad idea because I feel like Sanford is messing around with the tried and true Sharpie, an iconic writing device? Or does the idea of a retractable marker just go against what I've known before, so I'm not embracing it? Is this an innovation that needed to happen?

Posted by Heath Row at 2:50 PM | 6 Comments

Summer of My Career Development

Earlier this summer, Shasha Dai offered some advice for recent MBA grads who didn't score an internship or job right after claiming their sheepskin. This weekend in Parade magazine, several teenagers share stories about their summer jobs. (The article won't actually be available online until early next month.)

The quick bits intrigued me, however. What was your best summer job when you were younger? What did you learn? If you have children or know teenagers who recently experienced a good summer job, feel free to email their lessons and insights -- or just add a comment below. We'll feature the best and brightest online.

For me, I really only mowed lawns and shoveled snow before I went to college. The one lesson that really sticks with me is twofold: People will try to take advantage of you if you let them, and it's OK to say no and turn down work if you can't take it on.

Two experiences in particular bolster the first lesson. One woman I mowed for kept expanding the parts of her yard I was supposed to mow -- without increasing my pay equally. And one man I shoveled for refused to let me wait for a heavy, wet snow to stop before I started shoveling his driveway. It continued to snow as I shoveled the heavy, wet, near-slush, and I basically shoveled his driveway three times that afternoon in order to keep up with the snowfall.

What have you and your children learned?

Posted by Heath Row at 2:34 PM | 2 Comments

Ticket to Fly

Fodder for a Transit Authority article, perhaps, but I just came across a useful online tool that could help shave quite a bit off of your T&E's.

Currently in beta, Mobissimo is an airfare search engine that scours 60 airlines and carriers to help business travelers -- and others, natch -- find the least expensive fare possible.

Doing a quick check for roundtrip fares from New York to San Francisco, the results reflect a range of $2,000. Each result indicates where the tickets come from (services such as Orbitz or direct from the airline), what airline is offering the fare, and how to book a ticket. Very useful!

Posted by Heath Row at 1:49 PM | Add Comment

Change from the Bottom Up

You are frustrated with the progress of your project. You want more attention from your manager, hoping he can help your team, but he is overextended, working on several projects. He's just not accessible. What to do?

Johanna Rothman suggests that you start right where you are. While initiative from the top down may not work, technical leaders should strive to implement improvements locally.

Here are some of her tips:

Continue reading "Change from the Bottom Up"

Posted by at 10:10 AM | 1 Comment

August 27, 2004

They've Got (Less) Mail

I'd love to be a fly on the wall at Veritas Software today. According to the Wall Street Journal, Friday is no-email day in the marketing department. If an employee hits the Send key by accident, he or she forks over $1 per email. The first offender had to wear a scarlet 'E' on his chest.

One day a week without email (departmental email anyway) was marketing veep Jeremy Burton's idea. Ordinarily, he gets about 400 messages a day. On Fridays, it's half that many. Now his employees talk face to face. Or they pick up the phone. They're more productive on days like today because there's less miscommunication and less time spent crafting notes just so.

In her story about Intel's email overload, Alison Overholt listed ten useful email commandments. How do you and your colleagues harness the convenience of email without drowning in it? Is a one-day ban the answer? What does the ideal In Box look like?

Registration is required to access Wall Street Journal articles on the Web.

Posted by Chuck Salter at 6:28 PM | 4 Comments

The More, the Better?

To diversify your business activities or not. It's a tough decision. Carly Fiorina faced an uphill battle defending her controversial decision to acquire Compaq in 2002, after Hewlett-Packard announced an operating loss of $208 million for the third quarter, which mostly came from the troubled business server and storage unit.

Now the Chinese-based Lenovo -- previously known as Legend -- Asia's largest computer maker, says it has decided to retreat from new areas and focus on its core PC business.

Continue reading "The More, the Better?"

Posted by at 10:51 AM | 3 Comments

Trump and Circumstance

CNN reports today that Donald Trump has applied for a trademark on the name "Trump University," indicating that the school would offer university-level sales and marketing, management, entrepreneurship, and real estate courses -- online and offline.

Now, even though Trump did graduate from Wharton, I'm not sure how I feel about this idea. I'm sure he has stories to tell and lessons to teach, but, really, the man lost money running a casino. The patent application is available online.

Posted by Heath Row at 10:20 AM | 1 Comment

August 26, 2004

News You Can't Use

Did you know that

• Every Visa card starts with the number 4
• Every Mastercard starts with the number 5
• Every American Express starts with the number 3

???

I just learned that -- and I'm not quite sure what to do with the information. I'm also not sure why I'm just now learning this bit of finance trivia; a colleague says she first learned this 15 years ago. Any other credit card arcana?

Posted by Heath Row at 3:02 PM | 6 Comments

Sleep Less, Do More

Anita Sharpe makes an interesting connection between leaders who don't sleep a lot and business success. One IBM exec sleeps five hours a night. Martha Stewart sleeps four hours a night (although I wonder how much of that lost sleep is because of, well, legal concerns and worrying about adjusting to prison life). Lifeway Foods' CEO sleeps four hours a night.

In the past, we've written about power-napping centers and hotel chain design strategies. But perhaps we're on the wrong track.

Do we need to sleep more? Or less?

Posted by Heath Row at 1:44 PM | 18 Comments

Guilt by Disassociation?

Rob raises a fascinating question in his blog today. A man who had applied for a job with Rob's company several months ago was arrested for robbing his second gas station. Rob learned this on the morning news.

He had no relevant skills, and we weren't hiring at the time, but it was obvious that he needed something badly. Now I feel guilty in some strange way, even though I know that this was not my fault.

Sounds like one for the Corporate Shrink! What do you think? Are employers socially responsible to hire people? How would you feel if someone you'd not given a job to committed a crime out of desperation?

Posted by Heath Row at 1:03 PM | 7 Comments

August 25, 2004

Buying More, Renting More

Are people who buy more DVDs to blame for the decline in video rentals? No, if a recent report by Lyra Research is on the money.

Continue reading "Buying More, Renting More"

Posted by at 6:03 PM | 3 Comments

Who Says America Doesn't Produce Anything Anymore?

According to this report today from security firm Sophos, the United States is the worst spam offender in the world, generating 42.5% of all the world's junk e-mail. "The problem is that there is so much money to be made with spam, and it is very easy to set up a spam operation," according to Graham Cluley, senior technology consultant for Sophos.

A couple of things here. I know it's very cheap to set up a spam operation, but are there really still people out there that dumb to be buying anything from a spammer? I guess so. Who knew there was such a market for obviously counterfeit software, illegally recycled printer cartridges, spurious pharmaceuticals, and easy mortgages? Maybe these are the hidden growth businesses of our age. Or maybe P.T. Barnum was all too right.

Continue reading "Who Says America Doesn't Produce Anything Anymore?"

Posted by David Lidsky at 4:19 PM | 3 Comments

It's in the Cards

To help celebrate Advertising Week in New York City next month, the organizers have developed a digital trading card collection featuring icons such as Ronald McDonald, Mr. Clean, and McGruff the Crime Dog.

Not only can you play an online trivia game to earn points to "buy" additional cards, the site offers a trading tool by which you can exchange duplicate cards with other participants around the world. I'm usually not one to linger long on sites, but this is addictive stuff: I already have 11 cards, and I can't earn any more points for two hours. Drat!

Between the collaborative, competitive elements, the site also excels in its design and content -- you can learn quite a bit about the history of advertising mascots and what makes a solid brand icon just by visiting.

[via Adrants]

Posted by Heath Row at 1:38 PM | Add Comment

Soupy Sales

Len Foley recently contributed an interesting article to the Sales Training Institute's Web site entitled "The Top Five (Most Idiotic) Sales Techniques." Interesting because the word "idiotic" is rarely used in business writing, and interesting because of the tips and techniques Foley covers -- actions most of us have probably experienced, and behaviors Foley suggests people avoid.

They top five most idiotic sales techniques include:

• The Porcupine Close Answering a question with a "leading question" that forces the client into the direction you want him or her to go. Example: "Does this dress come in blue?" "Would you like the dress in blue?"
• Leading Questions You're asking the client a question that you know they already know the answer to. Who's gonna say they want products that are of poor quality or dishonest suppliers with poor reputations?
• Matching and Mirroring the Client Mirroring is a process whereby the salesperson mimics the clients body movements, breathing patterns, and voice tonality, pitch, tempo, etc. in an attempt to gain rapport and make the client feel as though he's talking with someone "just like himself."
• The Tie-Down Technique Nothing more than a tag-along-line the salesperson throws in whenever the client says something he or she agrees with. Isn't it? Don't you? Couldn't you? Wouldn't you?
• The Erroneous Conclusion Technique An intentional blunder on the part of the salesperson that gets the client to reveal information he or she may not have otherwise shared.

What else have you seen that salespeople need to be more aware of -- and not do?

Posted by Heath Row at 11:01 AM | 2 Comments

August 24, 2004

Cooking up Creativity

Turkish Company of Friends member Tayfun Demiroz emailed the creativity and innovation group this morning about a recent creativity training course he'd designed. He based the workshop on the premise that creativity is based on three elements:

• flexibility
• imagination
• association of ideas

What do you think? Is that enough of a recipe for creativity? What traits and skills do you think are needed?

Posted by Heath Row at 11:23 AM | 9 Comments

August 23, 2004

Pull, Don't Push

Stever Robbins contributes an interesting piece to HBS Working Knowledge today about what he terms pull leadership. In a self-proclaimed "manifesto," Robins holds up what he sees as the qualities of successful leaders -- leaders who pull people toward them rather than push people away:

• Pull leaders don't give orders; they create social systems that inspire people to join
• Pull leaders take responsibility for the success of their organization and their people
• Pull leaders work to become attractive to others
• Pull leaders align and inspire with values
• Pull leaders are stewards of their organizations and employees
• Pull leaders architect their social and organizational space

While the piece is light on examples -- some case studies would have been welcome -- there's a lot of good insight here. By creating a space in which people can work well, giving them the tools they need, and inspiring them to work alongside you, you can accomplish a lot.

Who do you consider a pull leader?

Posted by Heath Row at 5:47 PM | 8 Comments

Whose Economy Is It Anyway?

"Everyone has a general notion of what The Economy is," writes Joel Achenbach in today's Washington Post.

"It's American business. It's the gross national product. Wages. The unemployment rate. Housing starts. Durable goods. Not-so-durable goods. It's all these things and many more, mixed together, a seething, frothing brew of human activity, somehow reduced, through the miracle of modern partisanship, into a political issue."

How do you put your finger on something so amorphous? How do you get your arms around something so vast? If you're Achenbach, you hit the street with two economists -- one conservative, one liberal -- and translate everyday life into basic economics. Like a car accident, where a little misery, it turns out, is good for the GDP.

How you see the economy, of course, depends on where you fall on the food chain. What are your personal economic indicators?

Posted by Chuck Salter at 12:59 PM | 2 Comments

Turkish Starbucks

Starbucks is thinking outside the cup -- and on other continents.

Starbucks Coffee has opened two shops in Ankara, Turkey, making the total number of such stores in the country to 14, Business Wire reports.

They are truly Turkish Starbucks. "In recognition of the long-standing coffee drinking culture in Turkey, Starbucks will offer Turkish style coffee in Ankara, as it does in Istanbul," Starbucks' Turkish licensee, Isik Kececi Asur, was quoted as saying.

When I was in Beijing three years ago, KFC was selling steamed rice with sauteed mushrooms, a great hit among Chinese people who prefer rice to bread. Globalization has made country borders less meaningful, but in host nations, companies find it hard to ignore local cultures and often turn to localization. When in Rome, do as the Romans do - and think outside the box -- but inside the borders you're doing business inside.

Posted by at 10:41 AM | 2 Comments

August 20, 2004

Systems Thinking: The Product

Building on my previous entry...

In some cases, companies are such good systems thinkers that what they offer up to their customers is, in fact, a beautfully constructed system -- their product is the system they've built.

eBay is one such compelling example -- with more than 70 million registered community members around the world, eBay is a complex system that is virtually self-sustaining.

I read a graduation speech that founder Pierre Omidyar delivered at Tufts a few years back. It really captures the essence of how a system-thinking approach yields profound results.

Enjoy.

Posted by Keith Yamashita at 10:41 AM | 21 Comments

Piece Parts, Systems, the Right Lens

In my practice, we have gotten to work with some pretty amazing leaders in some rather large companies -- our smallest client has about 8,000 employees around the world, and our largest about 280,000. These massive entities are amazing teaching grounds for how to lead in complex systems. They teach valuable lessons for leaders of any size organization.

I find that most successful leaders at the helm of these companies are systems-thinkers. That is, they have the emotional intelligence, the mental acuity, and the imagination to see not just the parts of their organizations -- but the complex web of connections that hold together, nurture, and bind these piece parts together. To strike a metaphor: They understand the roots, trunk, branches, and leaves of their organization -- and what each element needs to thrive, and also how each element is related to others.

While there are literallly hundreds of thousands of moving parts to these large-scale organizations, I find that leaders, over time, develop a kind of mental model they use in visualizing those elements -- they are constantly checking for the health of each element in that model. In my book Unstuck, we use one such model that we learned from a CEO we work with. When you start seeing that a healthy company comes from a system that has in balance purpose, strategy, structure & process, metrics & rewards, people & interactions, culture...you start to be much more comprehensive in your actions.

In your work today, as you make decisions, see if you can try to think through your actions will affect the greater system of your team. If you're making a decision about a new strategy, how might it affect the people and interactions on your team? If you are changing how you evaluate people, how will that affect your culture? If you are taking changing the structure (who reports to whom) or processes (how you actually get the work done), how might that align with (or be in conflict with) your purpose as an organization?

In thinking through all elements of your system, especially in the every day acts of leadership (the ones that seem more mundane than bold), you'll constantly be building a team that's more capable. Try it, let me know what your results are.

Posted by Keith Yamashita at 10:23 AM | 2 Comments

August 19, 2004

Amazon Forays Into China

Amazon.com says it will buy Joyo.com Limited, a British Virgin Islands Company, which operates the largest online retailers of books, music and videos in China. With a price tag of $75 million, the deal is Amazon's ticket into the world's largest and most complex market, which has 80 million online shoppers. But Amazon says it doesn't expect the deal to have any immediate affect on this year's earnings.

Continue reading "Amazon Forays Into China"

Posted by at 6:20 PM | 1 Comment

Display(ful)

Ryan Underwood recently examined how GE is reinventing the lightbulb. An innovation that struck me as similar in scope is underway at Visa. Imagine, if you will, a credit card or debit card with a built-in LCD. You could check your balance. You could revisit your spending history. And credit cards of the future may be bigger in size to accommodate larger information displays. Clearly, there are security concerns, but it's interesting to consider what kind of information management such cards would, well, afford.

[via FutureFile]

Posted by Heath Row at 1:39 PM | Add Comment

We've Got to Start Meeting Like This

Meeting Tomorrow is a one-stop shop for meeting presentation technology and other tools. Offering projectors and flat-panel displays, the service also offers notepads, name tags, pens -- even a laser pointer. If you need to outfit a meeting -- and you need to do so now -- you can order your gear online or by phone. Meeting Tomorrow guarantees delivery in time for your meeting and makes it easy for you to return the equipment when you're done. While some of the prices seem somewhat high and they don't clearly indicate quantities, the service seems to have promise. Has anyone used it before?

[via bBlog]

Posted by Heath Row at 12:53 PM | 2 Comments

Freedom from Email?

IBM's Remail -- reinventing email -- project is addressing the increasing challenges business people face while managing their workplace communications. Among the issues they're exploring:

• Employees feel pressure to respond quickly
• They lose track of e-mail
• They suffer from overload from the sheer volume of messages

We've approached how to better manage email previously. What other challenges do you face? How do you manage your email?

[via Online Business Networks]

Posted by Heath Row at 12:41 PM | 2 Comments

The Power of Religion Events

I was recently at an event at a client -- a type of event my team has nicknamed a "religion event" in that it had some of the stopping power of religion -- and a very interesting thing happened.

It was an event to celebrate a major anniversary in the life of this company. But rather than get up and talk endlessly about the history of this 35-year-old institution, the company's president started his remarks by instead posing a question: Where were you in 1969? (The year of the company's founding.)

Rather than a long and boring PowerPoint, he instead brought up a picture of himself in that year -- at age ten. And proceeded to tell a story of what he was like at that age -- his passions, his obsessions, his interests. And as the story unwove it was absolutely clear why he today holds the post he does -- it is the sum total of his life's passions.

In my book Unstuck, I offer up advice about such events. This one was such a great example. We assume in business that adding more and more rationale to our case is what moves people to action -- it comes from a prove-it-and-they'll-do-it approach to leadership (pour on more facts, more detail, more plans, more steps, more instructions, and you'll lift the performance of your team). When in fact, what business needs more of is purpose -- talk about why you do what you do, and you unlock true human potential because you've captured people's /desire/ to perform, not just their man-hours.

In this particular case, by talking about his own passions, this leader at this event was able to get his team to think about their own. The response was amazing.

What are ways you've used such approaches to lead? What advice, insight, methods have motivated your teams to do their best work?

Posted by Keith Yamashita at 9:35 AM | 5 Comments

Self Versus Others

As part of my consulting work with companies such as HP, Nike, Gap Inc., IBM, Mercedes-Benz, and others, one of the things my team does is examine how to improve the performance of teams -- how they make decisions, how they innovate, how they take ideas from inspiration to money-makers. A lot of our work with teams is getting them to understand how to work together better. Trained in the theory of organizational behavior, I've always been a big believer that improving group dynamics is the key to getting organizations to perform better.

Recently, faced by new challenges in my own company, I hired a consultant to help me personally become a better leader. I chuckled a bit at the time: It's a classic cobbler's children syndrome...my team and I are so busy helping our clients, we fail to help ourselves. So I decided to hire someone to help us help ourselves.

My coach Ken Davidson has spent virtually all his time talking about 100% accountability -- the notion that if you truly want to be powerful in your ability to get results, you have to be 100% accountable for everything in your life. On the surface it seems like a somewhat counter-intuitive concept in a world where we're supposed to delegate tasks to others, lead change, and blah, blah, blah (you know the mantras). But when you dig deeper, the implications are profound: To be great at what you do, you have to be 100% accountable.

Some scenarios:

• You say something, your team doesn't understand. Who is accountable?
• Your team isn't getting results. Who is accountable?
• A new leader you've hired doesn't perform as well as you thought she would, based on the strength of her resume. Who is accountable?
• A competitor makes a bold move in the market and it throws off the effectiveness of your plan. Who is accountable?

In most of these cases, when you pose these questions, leaders (including myself!) divide the accountability between two parties -- you and your team, your new leader and yourself, the team that created the strategy and yourself. Ken retorts: All the accountability resides 100% with you.

When you start looking at the world through that lens, it profoundly changes your actions. You start to see the world as a place where you can have deep and lasting impact on many more fronts.

As you go through your day today, put on that lens, tell me what you see differently.

Posted by Keith Yamashita at 9:23 AM | 4 Comments

August 18, 2004

Announcing: Change This

I've held off on commenting on Seth Godin's most recent project until it's live -- and it's a live wire! -- but I think its debut two days ago is worth noting -- especially given Keith's guest hosting this week and our discussions about change.

ChangeThis experiments with the publishing model to explore how we can make more ideas spread further more quickly. Featuring material from Guy Kawasaki, Jackie Huba and Ben McConnell, and Amnesty International, it's a banner beginning. Check it out!

Posted by Heath Row at 3:15 PM | 2 Comments

Take Your College to Work Day?

The New York Times reported today that many companies are beginning to offer college counseling to children of employees. That was sort of around when I was looking at schools - it was called nepotism and networking - see who your parents know and if they're big enough donors, have them write you a recommendation. Sure, these companies are bringing in outside consultants to run the programs, but come on. This is happening at places like IBM, AIG, and Goldman Sachs - the execs there make enormous contributions to their alma maters on a regular basis.

Despite my concerns with its inevitable bias (will IBM college counselors recommend tech-based schools?), I do think the programs will have their merits. Working parents can't always make it to college counseling appointments and now they get to be more involved in the college process with their children.

Work-life balance is always a big issue for anyone with children, and as kids get ready to move away from home, you'll want to spend more and more time with them. Since work can't be pushed aside just for life, we've come to the point where life has to squeeze itself into the work sphere.

What has your company done to ease school conflicts? When you have school events or meetings to go to, for college or parent conferences, how do you make time? Can you always make time?

Posted by Melissa Korn at 1:27 PM | 3 Comments

Light Ways to Get Unstuck

Reading Keith Yamashita's book Unstuck is an active, engaging experience. You don't really read the book, you use it. To be true, the book has been written -- and designed -- as a tool, one that includes plenty of Choose Your Own Adventure-like page turning, room to write, and thought-provoking questions. So the read is somewhat slow going, as you need to savor it. To read strategically.

Thinking about that on the train this morning, led me to ask why change can be so challenging. Yes, many are resistant to change. Yes, we're creatures of habit. But maybe it's because we aim too high right from the get go?

Continue reading "Light Ways to Get Unstuck"

Posted by Heath Row at 1:23 PM | 2 Comments

It's Okay to Be Smaller

Fast Company senior writer Linda Tischler writes that the Michael Graves-Target partnership is the very model of a successful designer-retailer collaboration. Now, a new book, Simply Better, reveals what makes Target great -- and why the company has surpassed Kmart and become the No. 2 behind you-know-who.

According to an excerpt of the book, Target's success is due to two key factors: the right kind of differentiation and distinctive marketing communications. Target associates its name with a younger, hipper, edgier, and more fun image than its competitors. It's even pronounced in French as "Tar-zhay" to give it a culturally sensitive if not ironic or sarcastic -- twist. This differentiation has enabled Target to coexist profitably with Wal-Mart.

Now, can you help fix Kmart? Is there anything it can learn from Target? How should it spin itself? After all, it's okay to be smaller -- but you've got to be smarter.

Posted by at 12:26 PM | 1 Comment

Forget Coffee Breaks, Try Reading a Novel

The Wall Street Journal has an amusing article this morning about companies getting creative with their proverbial coffee breaks. One logistics company forms a daily conga line and at a New York PR firm, the boss had employees team up to paint a kitchen mural of a monkey sipping a pina colada on the beach. But nothing tops a packaging company, where employees are free to lounge on an outdoor deck and read a novel for hours at a time. Here's the owner's justification: "Our philosophy is, we're hiring adults. I don't question why they're not working." Of course, he admits later in the article that some employees, who "weren't able to find a healthy balance between, say, video golf and finishing assignments," had to be let go.

Posted by Ryan Underwood at 9:31 AM | 4 Comments

August 17, 2004

RealNetworks Touts Cheaper Songs

Forty-nine cents a song! Check out RealNetworks's Web site for its latest deal. The media firm has just started a marketing campaign, and it's targeting archrival Apple Computer. RealNetworks even sports a Web site that touts "Freedom of Music Choice!"

Continue reading "RealNetworks Touts Cheaper Songs"

Posted by at 4:42 PM | 4 Comments

Hubris v. Excess: Eliot Spitzer and the NYSE Square off Against Richard Grasso

In one of the more interesting earnings reports you'll see, the New York Stock Exchange yesterday said that its net income fell 54% in the second quarter -- with the primary culprit being costs stemming from ongoing litigation with ousted former chairman Richard Grasso.

The exchange reported that it spent more than $20 million on legal fees through the first two quarters of 2004, or $14 million more than it typically spends in an entire year. Most of this has been incurred since current NYSE Chairman John Reed enlisted New York State Attorney General Eliot Spitzer to pressure Grasso into returning over $100 million of his now infamous $188 million pay package. Grasso has said he'll fork over $48 million if the NYSE board apologizes for defaming him. Barring that, he has filed a countersuit claiming that the exchange still owes him another $50 million. All parties seem to be digging in for a long battle.

Which doesn't seem to be a good thing for the NYSE. When the scandal broke last year, the board's housecleaning plan was to show Grasso the door. Now it is trying to use Spitzer to mop up. But by continuing its efforts to make a public example of Grasso, the NYSE has embarked on a protracted legal war whose costs may soon exceed the amount the Big Board is seeking in return, and it might never see a dime.

Continue reading "Hubris v. Excess: Eliot Spitzer and the NYSE Square off Against Richard Grasso"

Posted by Anjani at 4:30 PM | 2 Comments