Helsingin Sanomat reports of US electronics retailer Circuit City and their novel layoff strategy. The corporation laid off 8% of their higher/highest paid workers in March, telling them that they could reapply for their old jobs at a lower wage.

"This strategy strikes me as being quite cold," said Bernard Baumohl, executive director of The Economic Outlook Group. "I don't think it's in the best interest of Circuit City as a whole." (Yahoo! News, March 28, 2007)

More Moore

Michael Moore and Blogger's Confessions (Usher Style)

Michael Moore's new movie "Sicko" about the American healthcare industry premieres in Europe in the fall. If you're traveling to the US this summer, you could to catch it as early as June 29.

Here's another story about Moore you might not have heard.

Now...

"These are my confessions
Just when I thought I said all I could say
My resume shows I got to get /
one more thing out of the way


Even though this blog may occasionally make me as a blogger sound green, social justice oriented etc., that's really not the whole picture. My history includes a stint in a New York investment banking team that did deals with managed care organizations, the same firms and CEOs that Moore attacks in "Sicko." Honestly, I have to be the one of the only Net Impact members in the universe that gets totally worked up while reading about Darfur or watching a movie about Edith Piaf who's also worked for a company providing military avionics and another that pitches managed care mergers. Talk about a split personality. There are no other major skeletons in the closet, though.

Okay, fine. There were those board memberships at Talisman Energy, Halliburton, and TJ Group.

In a sense, the reason these issues get me so fired up is having been there and seen some of this stuff up close. Many guys did not leave the office on 9/11 even despite bomb alerts at Grand Central because "defense companies are going to be on fire, man." (...? - Honey, look at me. I have ovaries. And a womb. And I'm wearing a skirt. I know that's rare here unless you're a secretary, but do I look like a man?)

Senior managers talked passionately about raw material prices, life insurance trends and yield curves without mentioning the dead in the city. There was callousness on a level I'd never seen before. It changed my life. As far as managed care goes, even not having seen more than a trailer for "Sicko", it's pretty clear to me Moore is doing the right thing and chosen to raise awareness about an urgent issue. Mr Moore may get a lot of criticism, but looking at it from both sides of the fence, I absolutely know which side I'm on and strongly believe Mr Moore is on the side of the people for whom the healthcare industry exists in the first place: patients, not shareholders.

This was one of the deals done by the group that employed me. (It's old news now in fast-changing managed care. Trigon was bought by WellPoint.) Now, I could say I had no idea what I was getting into (that would be true), I could claim I was assigned to that group (sort of not true, I had befriended a colleague who I still keep in touch with), I could say that I had no choice (yeah, right), but I guess I can't. For a time, I wanted to see Wall Street. Also, I'm from Finland. Most Finns have no idea what American healthcare insurers do or how the system works. "Keeping administrative costs down and keeping health plans competitive" sounded good to me. Besides, my employer's health insurer wasn't hurting me in any way, so there were no negative personal experiences whatsoever. In fact, the bank even paid for everyone's Lasik surgery, worth (if memory serves correctly) about $12,000 each. (When the market melted, they stopped this practice though.) Anyway, at the time the bank had probably the best combination of healthcare plans any company anywhere could ever have. I, for one, am still thankful. Thanks to the bank's private health plan, I have 20/20 vision again.

The job was no picnic, though, but that's a subject of a whole different confession (Usher didn't do Pt. 3, I just might.) I left New York and soon after befriended a New York ER doctor on my travels. We kept in touch. He told stories about people whose only healthcare providers were the emergency medicine doctors and nurses. It was interesting to start reading up on things. We talked about medical malpractice insurance (I had participated in a pitch for a nearly bankrupt med-mal business) and how a lot of doctors could no longer afford to practise because their insurance costs against potential lawsuits were prohibitively high - in the hundreds of thousands of dollars a year. There were over 40 million uninsured Americans. Doctors were being squeezed and bullied by insurers and outrageous litigation. Patients were being denied payments by insurance companies. It was quite incredible; as a Scandinavian, you easily take universal healthcare for granted. I began to realize that for the little while that I had spent as part of the American workforce, I had been part of an exclusive group of elite workers and as such, I had received elite benefits. Had I continued, I never would've seen anything different (of course assuming I would've kept ploughing ahead on that same road.) I would've thought everything was just fine.

And then it hit me: why did the financiers orchestrating healthcare mergers never talk about doctors, nurses or patients? Not once. It was as if we operated in a wholly separate universe.

The only answer that seemed in any way credible was that it really didn't matter to us. Nobody even pretended to care. Managed care corporate finance was a business where deals were done one step removed from the CEO who talks to lower level executives who talk to the claims experts who talk to doctors and patients and maximize corporate profit by denying treatments and reimbursements.

Now, there are certainly many things I want to do in life - besides getting a dog. For much of it, money is necessary. Heck, I wouldn't mind vacationing on Mustique one day. But if I don't, I don't really care. And my bottom line is that I sure as hell am not willing to get there by profiting from humanitarians or other people's suffering.

Of course, my former colleagues might laugh at this. I will never forget going to work one mid-week morning from the church. Now, I'm not religious, but sometime in my second year I started volunteering at a Park Avenue church homeless breakfast on my way to work. I didn't tell anyone at the office, I just went. So I got to work that one morning, and my colleagues were just hanging out, laughing. One joked to another, "Buddy, go feed the homeless or something."

I'd like to say this was the turning point that made me resign and change course. Not really. I left the city I love most in the world, but I still went back into finance for a while, unsure of what I wanted to do. Instead of Che Guevara badges and hemp clothing, I still wore heels and the damn pantyhose. I did a bunch of other things. But then I started working at a hospital.

And come to think of it, Che was a med student :) ...

Can't wait to see this movie.

Trailer:

Clip from the film:

Interview:

Who Owns Yoga?

Indians have begun a process of copyrighting traditional medicines and physical exercise in an effort to curb corporate efforts to claim title to yoga postures and other Indian traditions. Who owns yoga?

One of the owners mentioned in this article: Bikram Choudhury Yoga, Inc. More on Bikram and its legal battles here.

What about churches? According to this article, nearly all of American churches have incorporated as state (tax-exempt) corporations.

Faith and corporations make for a strange mix.

Earth Day

Google looks like this today. ->

Clicking on the image on www.google.com brings you here.

Pretty powerful, considering how many people will see that...

Risto Pennanen writes about perception management and corporate responsibility in Taloussanomat today (Finnish only.) He argues that a corporation's day-to-day reality and its public image must correspond, lest the company experience brain drain and difficulties recruiting young talent.

Loyalty vs. Layoffs

I already have an offer for a summer job, but it entails getting up early and riding the metro to work. After the recent rape cases in and around the city, I'm really concerned about being outside alone at 6 am. So at the bank yesterday, I was quite happy when the teller began to recruit me on the spot. She was a lovely person, and she noticed from my information that I have some experience in the financial services sector.

Today I received a call from the HR manager at the bank.

"That's an interesting combination", she said about my study and work experience, "Perhaps it could lead you to X direction."

"Interesting" was most likely code for "I'm confused, where is this leading to?" But does it matter? You guys have a labor shortage, I can sell you hours, I'm not half bad, so it might just work.

When she asked me about my future plans, I candidly said there is no five-year plan (I stopped making them about five and half years ago when I literally saw with my own eyes how life can change in an instant.) It doesn't mean I'm not focused, it just means I'm less stressed out and much happier (that I didn't say.)

I also implied that ten years ago I used to have five-year plans, and I followed through meticulously. And let's say I do have some plans -- would I share something so personal with a human resources manager I have never actually sat down with? My five-year plan includes more than just work. (Hint: one of these days I swear I will get that dog!)

Presumably, it sounded as if she hoped to hear that I was really interested in building a career with this company and very excited about the opportunity. What I'm saying is, in my book that would sort of be akin to meeting someone on the subway and on the following day telling him I'm in love (and that, my friends, would make me a bit kooky -- and not just a little bit.)

Anyhow, when I hung up, it occurred to me that more often than not, it seems a candidate is expected to show an insincere degree of interest and loyalty from the get go ("I don't know who I'll be working with or what I'll be working on or where, but YES, I would LOVE to work for you!"), while knowing that many profitable businesses return neither their loyalty nor their affection, but lay people off without so much as an explanation.

No wonder many people are feeling sick of it. Geez, it's just work!

I swear, if they ask me where I see myself in five years, I will thank them for their time and go outside into the sunshine. And take that metro ride in the a.m.

Entertainment Industry 101: From Humps and Lumps to Greater Meaning

It's too bad we can't draw flowcharts on Blogger, but try to picture this.

Universal Studios, like Universal Music, was until recently a subsidiary of Vivendi. We recall Vivendi/Universal Music/A&M were behind the masterful My Humps.

To service some debt a few years ago, Vivendi had to sell a majority stake of Universal Studios to GE. (You with me?) All three are looking for new blockbusters.

Now GE+Vivendi/Universal Studios have picked up a new movie called "The Peaceful Warrior." The trailer is below. The storyline is: a chance encounter with a stranger changes the life of a college gymnast ("Movies aid search for "greater meaning"" from Yahoo! news.)

It is nice if a particularly moving filming gets people thinking, and it's good entertainment, too. The business model here, though, is spelled out below by one of the companies' representatives: creating a market in transformational films.

There are a few question marks. General Electric, the owner of the company that distributes Peaceful Warrior used to produce nuclear weapons. Vivendi reaped gains from My Humps.

Additionally, although General Electric is no longer involved in producing nuclear weapons, the company owns GE-Aviation / Smiths Aerospace ("We Bring Technology To Life", a twist on GE's motto "We Bring Good Things To Life.") Although it's not clear how much of Smiths Aerospace's business comes from the defense market, much of their avionics no doubt go to the military. I once worked for a similar firm (oh, yes, I did and it's a looooooong story) and it was mostly manned by ex-military selling to the military.

Any one of us could read the Bible online, or perhaps the Dhammapada, available for free. But it wouldn't generate revenue. Quoting Reuters,

"Despite the marketing challenge, Fogelson sees further opportunity in the growing audience for such transformational films. "I think there is absolutely a viable and powerful business model in making and distributing films for this audience," he said. "I think it starts with knowing there is a large enough and very passionate audience that can be found and spoken to and served. Whether it can expand beyond that I think is entirely a function of what kind of product is created.""

An Inconvenient Truth wins two Oscars; Conscious capitalism the next megatrend; Citigroup publishes climate report

"An Inconvenient Truth," the big-screen adaptation of former U.S. Vice President Al Gore's slide-show lecture about the perils of global warming, won Academy Awards on Sunday for documentary feature and best song. Great job, Al Gore - What's next? I think that Hollywood will wote democratic this year.

Patricia Aberdene is considered one of the leadind mega-trend predicters in the world. In the year 1982 she predicted the transformation intoa new information age, and in the 1990 she wrote about jumping further into a technology based and web- based reality. In her latest "Megatrend" book, in 2002, she predicts the step towards a conscious capitalism. According to Aberdene traditional capitalism " business as usual", has proven to be destructive to humanity, environment and society at large. She points out that the next megatrend in business is competitive advantage based on corporate responsibility, where social and environmental performance will define the winners and loosers. Get her book on Amazon on http://www.amazon.com/Megatrends-2010-Rise-Conscious-Capitalism/dp/1571744568
If Aberdene's predictions once again prove to be true, ethically consciouss consumers will be mainstream, and businesses will compete to be the most responsible company.

Citigroup has published a massive climate report. It is filled with physics, climate science and graps, but one section provides extremely interesting information: The behavioral implications of climate change on corporations. the section is split into four parts: how climate change affects consumers; litigants; investors; and corporations. Here are some best shots:


Consumer behavior

• Consumers in the two countries responsible for the most emissions of GHGs (USA & China) care least about the issue
• On average European consumers would only pay up to 5% premium price on a climate friendly product
• Historically, consumers have anyway had great power in pushing through more environmentally sound solutions: Remember CFCs (used in aerosol sprays) and the Tuna Boycotts? Consequently, consumer products businesses are starting to adapt their products for clime-conscious consumers.

Litigant behavior

• If corporations do anyway not care about what consumers think, then they might care of the actions of litigants. There are at least two very interesting trials coming up in the U.S. this year: First, the supreme Court is set to rule on the federal regulation of GHG emissions (the question is whether GHGs are pollution, and whether Environmental Protection Agency EPA should have the mandate to regulate them). Second, the Alliance of automobile Manufacturers against the California Air Resources Board and its efforts to reduce GHG emissions from passenger vehicles in California.

Investor behavior

• Carbon disclosure Project, a coalition of institutional investors representing more than $US 31 trillion in assets, has, for the past several years, been requesting information perfaining to GHG emissions from large multinational companies. 72% of the global FT500 companies responded to the request in 2006 (up from 47% in 2003).
• Climate-related shareholder resolutions that were filed with U.S. companies tripled in 2004-2005 the number of 2000-2001
• SRI (Socially Responsible Investing) funds in the U.S. rose in 2005 to 2,29 $ trillion, so that nearly one out of ten dollars under professional management was involved in SRI.

Corporate behavior

• Consumers, litigants, and investors all affect corporate behavior
• From corporate perspective, climate-friendly policies have five distinct advantages: They may lower costs trough energy-efficiency; They enhance corporate reputation and brand; They may yield a 'first-mover' advantage; they may lead to expanded market potential for new products; they institutionalize a climate-friendly mentality and keep management alert to climate related opportunities and risks.
• In 2006 McKinsey survey, 28% of executives in 116 countries cited environmental issues, including climate change, as one of the issues likely to have the most impact on shareholder value over the next five years.

Gold Mining on Papua New Guinea - a destructive business at the cost of local environment and an ancient culture















The report by CorpWatch about gold mining on Papua New Guinea is just devastating. It is in every way the stereotype of how everything goes wrong in extractives business. It grasps in a single article what it means for a pacific island with one of the richest eco-systems in the world, with inhabitants living in ancient culture and without cash economy, to be envaded by a western mining giant that only wants the gold. The result is total destruction of the ecosystem that is home to hundreds of unique species, a total clash of local people with the mining company resulting in deaths and armed forces, destruction of the ancient culture and a jump within one generation from stone-age to cash economy.

I just keep asking myself - how can this happen? The worst thing is perhaps that the gold mining company, Canadian Barrick Gold, tried to approach the project with good stakeholder dialogue and fair compensation to local people and landowners. However, in the end, they dramatically failed to treat the island in a fair way as greed for more gold took over the project.

Can it be that no matter how great CSR programs, stakeholder inclusion and dialogue, and fair compensations plans, an extractives industry where a foreign company is extracting natural resources from somebody else's land is incrementally doomed to failure? Why is it that even if environmental damage and lost of land area is accounted for in modern extractives projects, nobody still takes into account the cultural loss and the inevitable conflict that arises from the confrontation of a Western company with ancient cultures living without cash in traditional ways?

Check out the full report on http://corpwatch.org/article.php?id=14381

One

Bank of America celebrated its merger with credit card company MBNA in Manhattan late last year. To enjoy a video from what is presumably their closing event, click on the arrow below.

Before watching the clip, you might want to check out "The ONE Campaign" at one.org, led by U2's frontman Bono and named after the original song. The ONE Campaign is actually a charity effort to fight AIDS, starvation and extreme poverty.



ps. Bono is also involved in the corporate world through a stake in Elevation Partners, a venture capital business. I don't know how that is connected to this, but it just came to mind. In the name of fairness, transparency, and shades of gray.

"Most Sustainable Companies" List

In Davos, a niche consulting firm launched the first annual 100 most sustainable corporations of the world ranking (they call it the "G100.") A copy can be found right here. The list includes two Finnish companies, Kesko and Nokia.

Companies "were evaluated according to how effectively they manage environmental, social and governance risks and opportunities, relative to their industry peers."

Scabies on a Viking Line Cruise Boat

Aftonbladet reports of the scabies on Viking Cinderella cruise boat, where twenty crew members have been infected with the small parasite. Scabies spreads readily, causes great discomfort and itching in patients, and requires medical attention. Incubation period for the bug can be several weeks, so it is not possible as yet to determine how widely the parasite has spread.

Viking Line is a listed company whose margins have been shrinking in recent years. Intense competition between the various ferry lines crisscrossing the Baltic has made headlines several times over the past few years.

Not sure, but this begs the question, is scabies spreading because the boats are being improperly cleaned due to cost cutting?

Generally speaking, the trouble is that as margins tighten, cruise lines must cut their costs somehow, and cleaning services are often the first that get cut and squeezed, presumably not least because maintenance isn't revenue-producing and the obvious effects of reducing resources in maintenance do not show in the short term. It's easy to cut something that doesn't add to your bottom line. But as always, sweeping a problem under the rug and pretending it doesn't exist won't work for long.

The maintenance industry illustrates many other potentially problematic issues. Labor rights are relatively weak for part-time janitors, and the work is seen as low prestige. Oftentimes the jobs are held by minorities, creating a complex mix of issues around a low-status job becoming associated with a certain economic or social group or class. Turnover is high, training is seldom thorough, employee commitment to the job tends to be low, and workers may become demoralized due to their status, low pay, and the pressure of having to get the job done in the shortest possible length of time. Major problems that are brewing may be obvious to insiders, but only surface in the media when the symptoms become too obvious to cover up.

The only problem is, this industry is far from insignificant. Keeping places like cruise boats clean is obviously essential for ensuring passenger safety and eradicating health risks, considering the total number of passengers residing in the same quarters month after month. As black and white as it may sound, it seems on some level to be about trade-offs between financial results (for investors who may not use cruise ships anyway) and the conditions provided for the people who actually work and travel on these boats and sleep in the bunks.

I'm just wondering: now that privatization and outsourcing are popular, what will happen if hospitals, schools, nursing homes and daycare centers start outsourcing maintenance services? Will patient, elderly, student or child health be at risk?

Viking Line outsourced its cleaning services to SOL Siivouspalvelut, a local cleaning services provider, several years ago. The only real news available on the internet was a broken link to a SOL press release, but the employees who do the cleaning on Viking Line ferries are employees of SOL -- many of them students, immigrants and (other) part-time workers.

What seems wholly unacceptable is the lack of transparency. According to Helsingin Sanomat, it took the Viking Line ferry company a month to report of the situation.

Scabies isn't life threatening, but it's an extreme annoyance. Whoever catches scabies needs to do a complete floor-to-ceiling clean-up in their primary residence and use a topical agent for several weeks to kill the infection in their body. Garments and all bedding must be washed thoroughly, lest one wants to keep getting reinfected.

In a healthcare setting, nurses protect themselves with disposable clothing from head to toe when working with patients who have scabies. I just wonder what kind of protective equipment the cleaning staff on Viking Cinderella are wearing, and how Viking reimburses its employees for the discomfort and hassle of being infected.