Kauffman Foundation, Fortune 500, Toby Elwin, blog

Cited and noted: What Does Fortune 500 Turnover Mean?

Since 1955, the Fortune 500 list represents the 500 largest US corporations by gross revenue.  Making the Fortune 500 is a mark of prestige for the company. But what got you there does not necessarily keep you there. In 10 short years almost 40% to 50% of the Fortune 500 club are no longer found on the list and in The cost of culture, a 50% turnover of the Fortune 500 I took 10-year window to note the role organization culture has to get and keep a company fit. Points I made within the post became cited in the Kauffman Foundation report What Does Fortune 500 Turnover Mean?  I chose to look at culture as a siren call for failure and a reason these former market-leading companies fail to maintain excellence. Where I looked at the list through 10-year increments, the authors, Dane Stangler and Samuel Arbesman, note year-over-year turnover. Fortune 500: Diver …

Influence of The Modern Firm

Organizations design success promotes relations:  relations of people within the firm, relations of strategic chioces within environmental features.  The modern firm serves to coordinate the actions of people and motivate groups of people to carry out activities. An individual’s self-interest presents on-going motivation challenges that compete against what an organization wants. Quick example:  someone with a fixed salary who works extra hard provides the firm with their gain from increased output generated.  The gains accrue to the firm, not the worker, whose salary does not change. Personal view competes with organization view and in that case, what happens? In, The Modern Firm: Organizational Design for Performance and Growth, by John Roberts, the design goal is to shape the organization to align interests of its members to increase efficiency of choices for the total organization value. Brief:  The most fundamental responsibility of a general manager is to craft strategy …

human capital, risk assessment, weight, tangible, intangible, Toby Elwin, risk

Evaluating risk: financial models versus competency models, part 1

We make models to get an idea, on a small-scale, of what might happen on a large-scale.  Models help identify risk and attempt to predict outcomes.  Many use models to then run scenarios or alternatives to identify what could or should be.  Models then become a map for many management discussions as models provide options and a business without options is on borrowed time. No model is, or ever will be, 100% accurate or predictive.  Even with 100% of the information available, models can not predict the future, models can only guide business discussions and inform. I like to advocate that models move our discussions from a personal (emotional) case to a business (rational) case. One of the simplest reasons, other than the human condition called error, that models are not and will never be 100% accurate is time.  Time is the most …