Year in Review 2008: Top Business Headlines

As 2008 draws to a close, it’s natural to want to look back at the biggest business stories of the year. Usually, we can look back at the biggest public offerings or the best this and that. This year, however, calls for a more somber assessment. Things didn’t go well–for many industries, sectors, companies and people. The word recession even reared its ugly head.

What makes a leader?

Communicator Visionary Motivational Integrity Strategic Change agent Personable Passionate Decisive Approachable Confident
Mentor Collaborative Experience Respect Accountability Charismatic Intelligence Results Listener Flexibility Humble

Executive Bonuses Shrink in 2008

As scrutiny of executive pay packages reaches unprecedented levels in response to taxpayer bailouts for troubled companies, a recent survey conducted by ExecuNet a leading executive business and career network, reveals C-level executives, vice presidents, and their direct reports are expecting smaller bonus checks this year.

According to the survey of 113 senior executives, 61 percent are anticipating a year-end bonus in 2008. However, this year’s bonus checks – which account for 19 percent of total annual compensation – are expected to be 10 percent smaller than those received in 2007.

“While much of the public’s focus has remained on Wall Street’s pay packages, companies across all industries are cutting bonuses,” says Mark Anderson, president of ExecuNet. “Heading into 2009, executive compensation packages could continue to contract until the outlook for corporate profit growth rebounds.”

Corporate performance was identified as the most important variable in determining year-end bonuses by more than half (51 percent) of all executives, followed by individual performance (24 percent), department/team performance (23 percent), and tenure (2 percent).

The survey also revealed that if given the choice, 75 percent of corporate executives would rather receive a year-end bonus than more time off from work.

My “Don’t” list in 2009

I will not invest in company having no strong management team, having PE >7, having D/E > 0.5

I will not set unrealistic or unfair expectations of myself. Say, “yes” to everything without first assessing the emotional, professional, personal, ROI.

I will not neglect to quickly give credit to the team.

I will not solely focus on short-term benefits unless it is a pathway to accomplishing long-term goals.

I will not get complacent.

I will not count on anything before it is a reality.

I will not forget to network because it often benefits someone other than myself.

I will not stop critically thinking, but refrain from always shooting holes in others’ ideas.

I will not lose sight of the fact that I can replace my job but not my family.

I will not complain my boss, my wife, my children

Creative destruction and the financial crisis: An interview with Richard Foster

Richard Foster, a McKinsey director from 1982 to 2004, is a coauthor of Creative Destruction: Why Companies That Are Built to Last Underperform the Market-and How to Successfully Transform Them. In that book, he and Sarah Kaplan argue that to endure, companies must embrace what economist Joseph Schumpeter called “creative destruction” and change at the pace and scale of the capital markets, without losing control over current operations. In a recent interview with the Quarterly, Foster offered his view of how the current financial crisis might change the business world and the capitalist system.

Integrating purchasing in M&A: An interview with Lenovo's chief procurement officer

The Chinese computer maker Lenovo’s 2005 acquisition of IBM’s personal-computer division heralded the birth of a global technology giant. Behind the scenes, however, the deal created a giant operational challenge for Qiao Song, Lenovo’s senior vice president and chief procurement officer. Qiao Song, who has worked at the company since 1991, was asked to manage the rapid integration of two purchasing groups with different processes, management systems, and cultures. Moreover, three months before the deal was to close, Lenovo’s board gave him an aggressive target: save the merged companies more than $150 million in direct-spending costs within 18 months.

Integrating purchasing in M&A: An interview with Lenovo's chief procurement officer

The Chinese computer maker Lenovo’s 2005 acquisition of IBM’s personal-computer division heralded the birth of a global technology giant. Behind the scenes, however, the deal created a giant operational challenge for Qiao Song, Lenovo’s senior vice president and chief procurement officer. Qiao Song, who has worked at the company since 1991, was asked to manage the rapid integration of two purchasing groups with different processes, management systems, and cultures. Moreover, three months before the deal was to close, Lenovo’s board gave him an aggressive target: save the merged companies more than $150 million in direct-spending costs within 18 months.

Selling China’s cars to the world: An interview with Chery’s CEO

Few people took Chery Automobile seriously when it was established, a little more than a decade ago, in the city of Wuhu, in Anhui Province, China. Chery was a newcomer in a small area that had little tradition of manufacturing and was far from the country’s traditional centers of auto production, in Beijing, Changchun, Shanghai, and Wuhan. When the start-up failed to find buyers for a motor engine it had developed, there was little choice but to manufacture a car of its own so that the engine could find a home. After this first car had been built, bureaucratic obstacles prevented the company from selling it. As chairman and chief executive officer Yin Tongyao puts it, “Chery kept hitting the wall over the past decade. Every time we hit a wall, we just reoriented and moved on.”

Selling China's cars to the world: An interview with Chery's CEO

Few people took Chery Automobile seriously when it was established, a little more than a decade ago, in the city of Wuhu, in Anhui Province, China. Chery was a newcomer in a small area that had little tradition of manufacturing and was far from the country’s traditional centers of auto production, in Beijing, Changchun, Shanghai, and Wuhan. When the start-up failed to find buyers for a motor engine it had developed, there was little choice but to manufacture a car of its own so that the engine could find a home. After this first car had been built, bureaucratic obstacles prevented the company from selling it. As chairman and chief executive officer Yin Tongyao puts it, “Chery kept hitting the wall over the past decade. Every time we hit a wall, we just reoriented and moved on.”

Integrating steel giants: An interview with the ArcelorMittal postmerger managers

Few industrial mergers in recent years have captured the business world’s imagination quite like the combination of giants Arcelor and Mittal Steel. The two were brought together in June 2006 to form the world’s biggest steel company, ArcelorMittal. It now has 320,000 employees in more than 60 countries and is a global leader in all its major customer markets, including automotive, construction, household appliances, and packaging. In 2007, the company earned revenues of more than $105 billion, while its steel production accounts for roughly 10 percent of the world’s output.