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Brenden’s Booklist

April 27th, 2011 Comments off

Students don’t often have time to read a lot during the semester for obvious reasons.  As a result, I have had a number of people ask for me to make a list of the books I mention in class and that I find helpful/interesting so that they can reference the list at a later date (since course website access is blocked after the semester).  Here are some more books that I have found to be good reads of late (someone asked me how I read so much and I have to say that buying a Kindle has made me want to read so much more than when I bought regular books).  These are presented in no particular order other than as I remember them.

  1. The Big Short: Inside the Doomsday Machine by Michael Lewis.  This is perhaps the best book I’ve read in the last year on the economic meltdown.  It is great both in terms of readability and level of detail/understanding.  The author did a great job researching this book and presents it in a way that is easy to understand.  At focus here is how the incentives on Wall Street encouraged risk-taking behavior that ultimately collapsed when the housing market didn’t keep rising (many assumptions and models were based on housing prices never declining and some were based on prices never even leveling off for any period of time).
  2. Enchantment: The Art of Changing Hearts, Minds, and Actions by Guy Kawasaki. I first heard about this book (and its author) on a Minnesota Public Radio program. Kawasaki proved to be as strong at authoring as he was on the radio and this was a truly enjoyable and interesting read.  If you are tasked with finding/keeping/serving customers or members you will get a lot out of this book.  In particular, I really enjoyed the sections devoted to using online social media tools such as blogs, Facebook, Twitter, and LinkedIn.  The use of these tools to actually engage customers rather than just to serve as an electronic brochure is something that will separate great companies from good ones in the near future and the use of these tools (and new ones that aren’t even around yet) is sure to grow.
  3. No One Would Listen: A True Financial Thriller by Harry Markopolos is another great read.  I didn’t like it as much as The Big Short because Markopolos comes off as a bit egotistical (even moreso in person — I saw him speack at the MNCPA MBAC conference last June).  Markopolos is the guy that busted Bernie Madoff and his Ponzi scheme.  Actually, he tried for years to get the SEC to investigate Madoff with little success and only once Madoff admitted to his crimes did Markopolos gain notoriety.  Prior to that he lived a life of fear for some time (he felt his life and the lives of his family members were in danger, in fact).  I have friends that thought this book was way bettter than The Big Short so it may just appeal to a different sort of person.  It was still worth reading to me, but just didn’t flow like The Big Short did.
  4. A Whole New Mind: Why Right-Brainers Will Rule the Future by Dan Pink.  This was an eye-opening book to someone that works in a field that is decidedly left-brain-based.  Pink’s point is that the left-brain functions so common to a field like accounting can often be replaced by technology/computers and a lot of what is left can be easily outsourced to developing nations. Pink has a new book out on motivation and he did a great TED Talk on it as well.
  5. Thank God It’s Monday: How to Create a Workplace You and Your Customers Love by Roxanne Emmerich.  This book is by a local woman and I first became aware of it last fall when it was featured on KARE-11 News.  She later wrote a short article for the MNCPA Footnote newsletter.  Building a workplace that employees love will automatically translate into a workplace that customers love.  The Balanced Scorecard tells us that and we can all identifiy places we have done business where we dreaded shopping and those where we loved shopping, simply because we could tell whether or not the employees were happy.  Emmerich does a great job of explaining how to set up a culture that accomplishes the goal of a happy workplace and a great place to do business.
  6. All the Devils Are Here: The Hidden History of the Financial Crisis by Joe Nocera.  I’m reading this one right now.  I still think The Big Short is a more engaging story (better written) but the details in this book are well researched and it is interesting in its own right.  I did find it to be more interesting in the last half of the book so if you find it discouraging early on, you should find that things pick up after that.  If you have to choose to read one book about the financial crisis, though, my money is on The Big Short.
  7. Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek.  We watched Sinek’s TED Talk on this same topic in class and the book is just as engaging while covering the same ground in more depth.  I have shared this book and video with others in my company and they have all provided great feedback and thanked me for doing so.  In hindsight, the ideas seem simple but they are obviously difficult to execute given how few companies have had success linking with their customers on the “why” of their products/services.
  8. The Back of the Napkin: Solving Problems and Selling Ideas with Pictures by Dan Roam.  Like A Whole New Mind, mentioned above, this book takes the approach that we need to appeal to the right-brain when making decisions and in marketing our ideas.  You’ve all heard the saying that “a picture is worth a thousand words” and even those that think they can’t draw (like most accountants) can learn to use quick sketches to communicate and to make faster/better decisions.  Roam is a keynote speaker at the MNCPA Management & Business Advisors Conference in June. He has asked that audience members be provided whiteboards and markers to gain practice with the techniques he champions in his book (and a follow-up book) as he speaks.  It should be interesting. Note, that this book was TERRIBLE on the Kindle because the drawings were too small or jumbled up.  Get the paper edition if you buy this one.
  9. Dethroning the King: The Hostile Takeover of Anheuser-Busch, an American Icon by Julie MacIntosh. Is there any symbol of American marketing might bigger than Budweiser?  How is it that this company based in the heartland came to be swallowed up by InBev, a Belgian/Brazillan brewer? I loved this book and found it to be very engaging. Even with the outcome known, I found myself shaking my head at the missteps taken by the St. Louis-based brewer as globalization hit the industry.  The characters of the Busch family are exposed in great detail — they acted like Anheuser-Busch was a family company even though they had long ago become just minority shareholders incapable of stopping a takeover no matter how hard they tried.  In a story that is likely to be repeated in other industries the business world is changing and executives need to be aware of what happens outside company walls if they want to maintain power as other markets become as strong or even stronger than those dominated by American firms.
  10. The Omnivore’s Dilemma: A Natural History of Four Meals by Michael Pollan.  A LinkedIn contact recommended this book.  It was a great read and may well change how you shop for food and what you choose to consume.  I know that I am more conscious of what I put into my body after reading this.
  11. Why We Get Fat: And What to Do About It by Gary Taubes. I didn’t realize how impacted the science of food had been by politics until I read this book.  Lots of things that were known to German scientists some 70+ years ago were discounted after World War II because of political reasons and an unwillingness to trust anything German rather than for outright scientific reasons.  Taubes offers specific advice about what to eat (protein and complex carbohydrates) and what not to each (sugar, refinef flours, carbohydrates) if the goal is to lose fat and reduce weight.  Much of this advice contradicts what Americans have been told for 50+ years, even while as a nation we get fatter and fatter. There are scientific footnotes in this text, but Taubes wrote this more for laypeople becuase an earlier book was criticized for reading like a scientific journal.
  12. Man’s Search for Meaning by Viktor Frankl details his life as a prisoner in a concentration camp during World War II.  In that environment, life takes on a very basic form and it is this experience that sets the stage for the prism through with Frankl sees life as a psychotherapist after the war.  We get a glimpse into human behavior that likely only exists in scenarios such as those of the concentration camps and I learned a lot about life and was forced to realize that all my complaints are ridiculously minor in comparison. I stumbled on this book because I was involved in a conversation on LinkedIn about “the best book I’ve ever read.”  I didn’t even contribute to the topic because I find it difficult to elevate any one book to “the best” one ever, but someone posted this gem and I’m quite glad I read it.
  13. Empowered: Unleash Your Employees, Energize Your Customers, and Transform Your Business by Josh Bernoff and Ted Schadler. Somehow I got a free copy of this book on my Kindle last September before it was even released.  It’s like Amazon knew I’d find it interesting and that I’d share my experience with lots of people. It highlights this same phenomenon of information sharing and decentralized structures that the authors predict will be the wave of the future.  They argue that since customers are more empowered (consider the information consumers have now about nearly any product as compared to 20 years ago) that companies need to be as well.  For example, Best Buy is featured extensively in the book for their Twelpforce concept that has turned customer service into a proactive task and customer difficulty into an opportunity instead of a curse.  I loved reading this book but I’m guessing the challenge will be to get buy-in from the people that need to make the biggest changes: those entrenched in the IT department.  In my experience, IT policies can be terribly restrictive and I’m not sure how to get the ideas presented in Empowered into the hands of the people that need to change direction since, in a way, doing so is a threat to their existence.

How the CPA Exam Is Scored

April 27th, 2011 Comments off

Those of you sitting for the CPA Exam in the near future will find it interesting to read how the CPA Exam is scored.  In this Journal of Accountancy article, you’ll learn more than you ever thought possible.  I know I did!

Read more at: How the CPA Exam Is Scored.

Categories: CPA Exam, Journal of Accountancy Tags:

Is Apple the new Nokia?

April 25th, 2011 Comments off

Given the rapid pace of change in the mobile phone industry, we have data from a couple decades that incorporates the rise and fall of several companies.  It seems that the top-dog never remains so for very long because they lose focus, intensity, etc. and rival firms knock them off their perch (only to be knocked off themselves in a matter of years).  Therefore, it is worth pondering if Apple will be the next firm to get knocked down.

Not so long ago, Nokia was the disrupter. In 1994, the dominant global provider of mobile handsets was Motorola: its shares were trading at an all-time high and it was seen as an outstanding innovator and even described by a senior consultant at A. T. Kearney as “the best-managed company in the world” — not so different from Apple today.

Read more: Why Nokia’s Collapse Should Scare Apple – Patrick Barwise and Seán Meehan – The Conversation – Harvard Business Review.

Categories: Harvard Business Review Tags: ,

Boston Scientific & Zero-Based Budgeting

April 13th, 2011 Comments off

Boston Scientific announced layoffs today and the news articles mentioned in passing that they had recently adopted zero-based budgeting, a concept we discuss in class.  I dug a little further and found the transcript from their latest quarterly conference call.  While it doesn’t really dive into what ZBB is, it does show that some companies are using this idea to better match their capabilities and resources with the market demand when big changes are needed.

Hot topic number two is our zero-based budgeting program or ZBB. We have instilled a great deal of discipline in headcount expense management, and over the past few years have done an excellent job of controlling our operating expenses while aiming to drive down product cost by above 5% each year. However, with rapidly changing market conditions that will put more pressure on margins, we know that we must do more. We need to examine our expense base from scratch as if we are building the required infrastructure to support our size and our expected growth as we know it today. We also need to examine the various business and sales models we use in each of the markets we serve and ask ourselves difficult questions about how to serve our customers profitably. So we’ve embarked on zero-based budgeting program to deeply examine our large functions and determine what activities we’re performing and what expenses we’re occurring for activities that are no longer necessary to support and grow our business profitably.

via Boston Scientific’s CEO Discusses Q4 2010 Results – Earnings Call Transcript – Seeking Alpha.

Wal-Mart sharpens low-price focus

April 11th, 2011 Comments off

Here is a piece that looks at Walmart’s efforts to move back the clock to a time when they were more closely aligned with Sam Walton’s vision.

Powerful snow blowers seem like a key item to keep in stock in Minneapolis, where residents need to uncover their driveways and sidewalks from about 50 inches of snow each winter.

But a couple of years ago, Wal-Mart decided to take some snow blowers, ice-fishing gear and other goods out of its Minneapolis-area stores.

Eliminating that merchandise was part of an effort the world’s largest retailer kicked off in late 2008 to get rid of items nationwide that were not top sellers and promote deep discounts on other more popular goods.

 

Wal-Mart sharpens low-price focus | Reuters.

Target Costing

April 6th, 2011 Comments off

Ron Baker at VeraSage has a great book review of a Target Costing text.  Despite our minor coverage in class of target costing, it is not a widely used concept in the United States, but we should be prepared for that to change.  As I’ve said before, I think that students in the future will take a separate course that focuses on pricing and includes more in-depth target costing coverage than we see today.

Read more at: Book Review: Target Cost Management at Verasage Institute.

Categories: Blocher Ch 13, Blogs Tags:

Coke’s Eagan operation: A new energy-efficiency model

March 1st, 2011 Comments off

Don Shelby of WCCO fame has landed at MinnPost and offers a look at local sustainability success at Coca-Cola.  As with nearly every business decision, the benefits have to outweigh the costs for any long-term efforts to take root.  As with other environmental initiatives elsewhere, the opportunity to save money, increase profits, and become more marketable to green-conscious consumers are all drivers of decisions to push environmental practices.  I expect this snowball to continue to grow.

Has Coca-Cola become a great steward of the earth? In many ways it has, but that alone won’t carry the day with businesses out to make money for investors. Coca-Cola gets the attention of the industrial world when it announces that all of these efficiencies have made, or will make in the future, higher profits for the company. Coca-Cola says the economic, environmental and social implications of business are more important than ever. “We understand that sustainability is core to our business,” the company says in a statement. Coke’s new in-house motto is “Live Positively.”

 

Mark Blaiser, executive director of the Chamber’s “Waste Wise” program, said: “Sustainability is smart business. Saving energy is smart business. Environmental sustainability is not going away, it is not a fad. There are great economic opportunities for businesses that adopt a sustainability model. Those are the businesses that will lead the way to the future.”

via MinnPost – Don Shelby: Coke’s Eagan operation: A new energy-efficiency model.

Communication Nation: The connected company

February 21st, 2011 Comments off

Here is an interesting blog post that looks at how companies behave and argues that they work more like living organisms than machines.  Few companies survive long-term, so understanding why they collapse is important if one wants to advance companies as going concerns.  Check it out at the link below:

Communication Nation: The connected company.

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Unintended Consequences of Tax Laws

February 21st, 2011 Comments off

Unintended consequences. Photo credit: David King on Flickr

Unintended consequences have probably plagued every tax law since the beginning of time.  As described previously with regard to import tariffs on Ford vans, wily taxpayers can and will find ways to pay lower taxes by exploiting loopholes unwittingly created by legislators when they are crafting the laws and trying to pander to lobbyists and constituencies along the way.  In Saturday’s Wall Street Journal (which I happened to have time to actually read — something that is in short supply these days) there were two pieces in the same section that highlighted the nature of unintended consequences.

The first of these is a piece on US companies that are flush with cash on paper, resorting to borrowing funds to avoid repatriating income back into the United States that was earned elsewhere.  So instead of being able to create jobs and innovations at home, the unintended consequence is that the money is being reserved to spend (now or later) overseas.

Politicians have been carping about the more than $2 trillion in cash sitting idle in corporate coffers even as unemployment remains high. But much of that cash isn’t in the U.S.; it is abroad. And it isn’t likely to come back home unless U.S. tax laws change.

U.S. companies are taxed at up to 35% when they bring home the earnings generated through the operations of their overseas subsidiaries. They get a credit for any taxes paid to foreign governments—but, since the corporate-tax rate in the U.S. is one of the world’s highest, most companies are in no rush to bring the money back onshore. By keeping those earnings abroad, U.S. companies can indefinitely defer their day of reckoning with the IRS.

That can put firms in the peculiar position of having tons of cash offshore that they might need but can’t use at home without taking a tax hit.

The U.S. is the only major country that taxes foreign earnings of its own companies this way. American investors may not come out ahead either. In a 2007 survey of executives at more than 400 companies, Massachusetts Institute of Technology economist Michelle Hanlon found that the desire to avoid the repatriation tax led to a variety of distortions, most of which end up making companies less efficient.

Particularly noteworthy is that the United States is the only major country with these kinds of regulations.  That creates an unequal playing field and may result in more jobs being off-shored in the future.  Read more at:

The Intelligent Investor: Why Investors Can’t Get More Cash Out of U.S. Companies. Jason Zweig. Wall Street Journal. (Eastern edition). New York, N.Y.: Feb 19, 2011. pg. B.1

The second article is a unique take on the “marriage penalty” that hits joint filers with higher income taxes than if they had remained single.  This one focuses on same-sex couples that have a recognized union according to state law but that is not recognized (because no same-sex union is) at the state level.

U.S. tax and property laws are so complex that unintended consequences are common. Here is one: Thanks to a 1996 federal law aimed at preserving traditional marriage, thousands of same-sex couples in California, Nevada, and Washington state could get big tax bonuses on their federal returns starting this year.

The bonuses are off-limits to heterosexual married couples—a sharp reminder of the “marriage penalty” that often dings two-earner couples.

The three states also now apply community-property laws to registered domestic partners. So the Internal Revenue Service—which must follow state property laws—has ruled that these couples should figure their total community income and split it down the middle, starting in 2010.

That is where the benefit comes in. Although domestic partners must divide their income equally, the federal Defense of Marriage Act prevents the IRS from treating these couples as married joint filers. So for 2010 and after, each partner will claim half the community income but still file as single or head of household.

The result, in many cases, is a federal tax savings because a couple will avoid the marriage penalty that often raises taxes for two-earner heterosexual married couples.

“We’re speaking in hushed tones about this benefit, trying not to call attention to it,” says Chris Kollaja, a CPA with A.L. Nella & Co. in San Francisco.

WEEKEND INVESTOR — Wealth Manager — Tax Report: Same-Sex Couples And The Marriage Penalty. Laura Saunders. Wall Street Journal. (Eastern edition). New York, N.Y.: Feb 19, 2011. pg. B.9

More on CPA exam changes

February 8th, 2011 Comments off

The February/March issue of the MNCPA magazine, Footnote, contains a brief article about the CPA Exam changes that started in January.  We aren’t quite to the point of getting people as whipped up as when calculators were first allowed, but it sure seems like we might be heading in that direction.  The bottom line remains that this exam is very challenging (some might say grueling) but anything worth having generally is.

Read more at this link: Staff and managers: Beware of significant CPA exam changes.

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