dollar is getting stronger

Monday's WSJ reports the effects of the stronger dollar on earnings. Even big companies with the resources to manage their currency risk took big hits because of the sudden change in the exchange rate. It should not have been a surprise. The surprise was how long the euro remained strong in the face of the problems in the euro zone. There was a lot of commentary about how the PIIGS needed to be able to devalue their currencies to stay competitive, but couldn't because they used the euro. Well, the euro is getting weaker which accomplishes the same thing (although probably not as much as if they were doing it on their own with their old currencies). The down side from the U.S. point of view is that economies like Germany, which were already competitive, are even stronger. As I emphasize in my book, if you don't manage your currency risk, you are speculating.

Libor Scandal

I mention ethics in the book, and the Libor scandal is a perfect example of what happens when everyone is expected to be a team player. If those involved had been Rotarians, one hopes they would have applied the first of the Four Way Tests and asked, "Is it the truth?" On 15 July, the Boston Globe Magazine had an article entitled, "When we use glorification of the group as an excuse for bad behavior." Were the Libor guys trying to be 'team players?' We also have to know how to judge when the team is engaging in unethical behavior and get out. The Four Way Test is a good place to start (in fact, it may be all one needs).

TV interview

I recently had a TV interview about my book. This blog got a plug along with several other organizations. The link is: http://westfordcat.pegcentral.com/player.php?video=6415d294888aaa180e568a5cdd1c0c84

Lenovo staying in-house

Lenovo is keeping much of their production in-house instead of outsourcing to cheaper venues (of course, they are already in China). As a result, they have greater flexibility--the ability to change rapidly both the volume and product mix of their output. When flooding in Thailand created a shortage of hard drives, they shifted their production mix to models for which drives were available. Maybe we can learn a lesson from them.