Triple Threat

#1.  It’s been 10 years – Allen Iverson’s infamous “practice” press conference.

Allen Iverson:  “….. we’re sitting here talking about practice, not a game…but we’re talking about practice….How silly is that?…How in the hell can I make my teammates better by practicing?”  It was hard to believe that he really said that.  Watch Press Conference here.

Translation to corporate life – Day to-day, eh…not important.  I’ll just show up for big meetings and shine.  Like many, you may remember Mr. Iverson as “The Answer”.  In this case, he unfortunately had the wrong one.  Teamwork is a is a clear-cut winner while talented but solitary stars will come and go…and eventually fade.

#2.  Hedging Big Bets – JP Morgan Chase’s “Trading Mistake”

There has been quite a bit in the news lately about JP Morgan Chase’s $2 billion “trading mistake”.  So far, it is estimated that the bank’s hedging operation blunder has zapped single-digit multiples of  this amount in market cap.  While Ina Drew has exited, CEO Jamie Dimon’s support may be strengthening because the Bank  needs his strong leadership now more than ever.  Think about that one for a minute.

Dimon and Drew graduated from two pretty good schools but may have missed a class.  For as long as ivy has been growing on campus walls, professors have lectured that hedging can be an effective way to reduce risk but should not become a profit center.  While a way to offset short-term risk, hedging is hardly the stuff upon which sustainable competitive advantage is built.  Unfortunately, it would appear that this may be a pretty naive view.  Read full story here.

#3.  Best Buy Founder’s Exit is a Dunn Deal

As if Best Buy didn’t have enough problems already, its founder and chairman Richard Schulze has resigned after an investigation revealed his apparent failure to bring an allegedly improper relationship between former CEO Brian Dunn and a female subordinate to HR and Board attention.  Schulze says that he confronted Dunn on the matter, but also stated that he accepts the findings of the investigation.  Read story here.

Is timing everything here?  Under the leadership of Schulze and Dunn, Best Buy recently reported a $1.7 billion loss, while at the same time, announcing plans to close stores and reduce costs.   So, was Dunn’s dalliance simply just the perfect opportunity for Best Buy’s board to kill two birds with one stone?  If the allegations are true, the board’s action may be justified.  However, how often have we seen people keep quiet in very similar situations when it suits their own best interests?  Governance can be a tricky thing.

Photo Credits:   Iverson – Arthur Mouratidis,  Gambling Chips – Jamie Adams ,  Shush Statue – Elham24

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About Thomas W. Smith
Bizsinc - Bringing Business to Life

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