Now social networking sites may shape your career

Beware. Those of you who have posted personal information online might be under surveillance. Job candidates who maintain profiles on social networking sites, may want to reconsider its content. Employers are now increasingly using social networks to assess job applicants, verify CVs or even find ideal candidates based on online profile. As is true with any other domain, recruiting is forced to acknowledge the area, which has the highest footfalls or coming together of professionals outside their normal work spheres. The trend that started a few years back in the tech industry is fast spreading.

To understand this concept, recruiters say, one has to start by understanding the psychology of job seekers. Recruiters broadly classify candidates into two types - active and passive job seekers. At any given time, only a small percentage of the workforce is actively looking for a job. That is, they are posting their resume on job sites, or actively checking jobs boards. However, a larger and potentially better pool of candidates are those people who are gainfully employed at the moment, and maybe not actively looking , but who would be open to relevant offers.

"Experience has shown that the active job seeker is not the right person to target, specifically for middle and senior level positions. This is because the right candidate who will fit the job does not even apply or has his bio-data in a job site or even thinks of applying. How do we reach such passive candidates, or potential candidates is a million dollar question which is always haunting Executive Recruiters around the globe?," says Kris Lakshmikanth, founder CEO and MD, Headhunters India. "We call these "passive candidates" and it's hard to find them outside of sites like LinkedIn," says Elizabeth O'Donnell , director international , LinkedIn.

With the emergence of the concept of blogs and social networks such as MySpace, Orkut, Facebook, Linkedin, a growing number of people are leaving significant online footprints. "As the clichéd 'war for talent' hots up talent managers are being forced to resort to taking unconventional and 'out of the box' measures to cope with this shortage. An online social networking site provides an unbiased , unmotivated and easily accessible source of checking out a potential employee without compromising his or her privacy," says Shiv Agrawal, ABC Consultant's CEO.

A major plus in the case of such sites is that people often share their personal details such as mobile numbers, addresses and designations on such sites. This becomes an invaluable source for talent hunters to track down otherwise elusive top managers.

India is not very far behind in catching up with the trend that started in the West. Social networking websites are the hottest additions to the Indian 'web-space'. India is catching up very far, very fast with this trend. "For LinkedIn, India is our fastest-growing country in terms of membership and it's also one of our largest markets.

Since Indian professionals are very well versed in technology, in general, technology-based trends can take off very fast. And when it comes to employment issues, culturally speaking, India is more similar to the US mentality of job m o b i l i t y, rather than a country like Japan or even some European countries, where there is still the concept of having a single employer for life," says O'Donnell .

These networking sites have changed everything as recruiters can access entire personal networks, before interviewing a candidate in person. A survey conducted by Viadeo, an online business social network , found that one in five employers have searched web for for personal information on candidates and 59% said this information influenced their decision.

So if your online profile is increasing your visibility among the headhunter community, it might also jeopardize your chances of getting the job. "Perception is more important than reality. I have seen reference checks working badly against a person and he being rejected, because somebody knew him 10 years back. In such cases, we bring it to the knowledge of the client and provide him alternatives – people with whom the candidate has worked in the last 5 to 7 years to check with," says Lakshmikanth.

Recruiters are increasing indulging in the practice, often referred to as 'informal reference checking.' Generally recruiters and potential employers call references after a final face-to-face interview. The names of the referees that are provided by the job seekers are most likely to provide a positive recommendation. Because online contact lists are typically accessible to all, hiring managers can quickly identify relevant contacts and confidentially message these people through the networking site.

Recruiting experts say that job seekers should be careful about choosing people to connect with on networking sites. An old adage says 'A man (or woman) is known by the company he (or she) keeps' . Comments and recommendations on these sites are a big plus for employers and recruiters.

Informal reference checks are a new trend in India. Recruiters have been using networking sites for informal checks and now the companies have joined them. "From the company's point of view, it saves time. At no point of time, they mention to the person with whom they are talking that they are considering the candidate for their company . The real reference checks are made once the offer is finalised," says Lakshmikanth.

But isn't it wrong to enquire about someone without his knowledge? In the year 2007, however, it looks like a fair game. Though people might question this practice, it is always better both for the company and the candidate to belong to the same cultural setup.

"In India, a formal reference check is often an exercise in futility as we as Indians are typically reluctant to give any sort of serious negative feedback on someone who we know. I personally see no harm in doing an informal reference check as long as the candidate is not harmed ( e.g. we speak to his existing employer and put him at risk)," says Agrawal.

People, however, question this based on ethical grounds. How far is it right to judge someone based on opinions and information gathered online? "Everyone's got a bias, so the trick is to either gather enough opinions, or figure out whose opinion would most likely correspond to your own, in order to form a proper judgement," says O'Donnell Online profiles have now become both a caution and an empowerment for a job seeker.

"Social networking sites such as LinkedIn are more than just a tool to get a job; it can be a great tool for advancing in your current job. People use LinkedIn to identify sales & business development leads, to find suppliers, to ask questions, to find job candidates, to source expertise, to make introductions, perform reference checks, research people, and many more tasks," says Liz.

"Its more like an insurance," says Lakshmikanth. "Tomorrow you may really want a job. You are in the radar of a headhunter if your profile summary is available on the net. You never know when you need to cash your insurance ," he adds.

Remember, anything you put up is potentially public information . Be mindful of the privacy settings on the site. Keep your network of high quality - your network is a reflection of you, so make sure you know it well.

History Repeats: Investors fail to learn much from past mistakes

KOLKATA: It was Mark Twain who said it first, "A man who tries to carry a cat home by its tail will learn a lesson that can be learned in no other way". "If Twain were around now, he might try winding up a derivatives business. After a few days, he would opt for cats," was what Warren Buffet told shareholders of Berkshire Hathaway almost a century later, while recounting the problems experienced in exiting major re-insurance businesses like General Re.

In India right now, investors wish they would rather have Twain's cat to carry home by the tail rather than the stupendous losses from the market for which, global meltdowns and subprimes apart, they blame the rampant open F&O (futures & options) positions in the derivatives segment.

"Just take a look at the scene and you will find any number of scrips crowding in the F&O space. Compare the futures volume with the options volume where if you keep the top 10 scrips aside, it would perhaps be heavily skewed," said S Dadheech, an investment analyst in Mumbai.

Many like Bunty Dalmia, a director of Dalmia Securities, thought that derivatives expiring on cash basis must be allowed to be converted into delivery basis to stop the rampant manipulations currently going on in the market. Ajit Day, a former president of Calcutta Stock Exchange, wondered how all caution could have been thrown to the winds when the 'B' group stocks started accelerating.

"Historically, that is one of the surest signs that the market is heading for a saturation somewhere down the road. It had happened during the time of Harshad Mehta and it had happened so many times subsequently. But nobody seemed to care," he rued.

The Indian stock market has been a study in repetition. There is also no dearth of blames or no crisis of critics either. But let's put a few things straight. Initial and follow-on public offers — known as IPOs and FPOs — have raised a record Rs 45,000 crore in 2007. This was nearly 83% higher than the Rs 23,600-crore mop-up in 2006. In 2007, there have been a total of 101 IPOs that mobilised in excess of Rs 34,000 crore.

This was followed by the Reliance Power IPO in January 2008, an issue that attracted Rs 44,000 crore from 50 lakh retail applications. Historically, secondary markets have been known to fall in times of huge primary market mobilisations, specially in a firm market where profits get booked.

Some market players believe this could just be another of those phases. According to this section, correct handling of the situation could see a recovery later this week itself.

The Indian psyche vis-a-vis stock markets is essentially bull-driven. One just loves to see the market rising. So when the Sensex touched 21,077.53 points on January 8, there was already a talk of the 25k level. "Between July 6, 2007, and January 8, 2008, the Sensex had gone up all of 6,000 points from 15k to 21k. We had gained 4,000 points from 10k to 14k between February 6 to December 5, 2006, and then a drift for seven months till July, 2007, from where in six months, the Sensex had shot up 5,000 points to 20K on December 11, 2007.

The index added another 1,000 points early this year. So what's the fuss about if instead of a customary one-third technical correction, it has retraced almost a full-way back?" asked one of the biggest bulls based in Mumbai. According to him, the correction augers well for the market if there are no more bad news from the US.

It is a pity that the stock market is now bereft of an entire community, a clan that traditionally used to come in handy at times of free falls such as these — the bears. Classical bears like Manubhai Maneklal or Debu Bhalotia don't come by the dozen and yesteryear players like Giridhari Kejriwal, who could play both bull and bear with the same elan, are also limited in number.

It's largely a one-way street these days, although one of Mumbai most talked-about bulls has recently been known to have turned short from around a level of 17-18k and may have paid the penalty for the experiment.

But while marketmen hope the fall is arrested as quickly as possible, they also think it is necessary to have some checks and balances in place to avoid the retail investors from getting mauled.

Think before you swipe credit card for cash

What's the worst thing to do with your credit card? Use it to withdraw cash from the ATM, says a financial expert. In your monthly credit card statement, there is a mention of cash limit. That is the extent to which one could withdraw cash using a credit card. But the googly is the interest rates. It's actually a very expensive proposition to withdraw cash as the interest rates on such withdrawals fall in the range of 40% on an annual basis.

Usually, the credit card company mentions the interest rate as a percentage per month which typically varies from 2.7-2.85% per month. And since this interest is compounded monthly, the effective annual rate of interest tends to be anywhere from 38 to 40% per annum.

Essentially, credit card companies charge the same interest rates for cash withdrawals made through credit cards and for rolling over credit card balances. But if one pays the entire amount on due date, one gets around 30-45 days of interest free credit. But what is important to know is that rule doesn't apply in case of cash withdrawals; the credit card company levies the interest rate the moment you withdraw the cash.

http://economictimes.indiatimes.com/articleshow/2856169.cms

Rich beware! Vatican updates Seven Deadly Sins

London: If you live an extravagant life thanks to your unending wealth, the chances are high that you will spend eternity in Hell, for the Vatican has come up with an updated version of the Seven Deadly Sins which include — being obscenely wealthy and causing social injustice.

Monsignor Gianfranco Girotti, a close ally of the Pope and the head of the Apostolic Penitentiary, one of the Roman Curia's main court has announced the sins, which include — polluting the environment, failing to recycle plastic bags, being obscenely wealthy, taking or dealing drugs.

The 'sins of yesteryear' — sloth, envy, gluttony, greed, lust, wrath and pride — have a 'rather individualistic dimension', Girotti said.

The new seven deadly, or mortal, sins are designed to make worshippers realise that their vices have an effect on others as well.

Mgr Girotti said genetic modification, carrying out experiments on humans, polluting the environment, causing social injustice, causing poverty, becoming obscenely wealthy and taking drugs were all mortal sins.

12 things your CV should NOT have

 

 

Your CV is your marketing brochure through which you try to sell a commodity, ie your skills to the potential buyer ie the prospective employer. The sole purpose of your CV is to fetch you an interview call. Nothing more, nothing less.

However, creating a CV isn't as simple as just using flowery language and pretty fonts. There are certain things that put recruiters off and if you want to make a good impression, make sure you do not commit these mistakes in what is arguably the most valuable document of your job hunt.

While the rules listed are well-founded, they are not carved in stone. At times you will need to break the rules. If you want to add these things knowingly and purposefully to your CV we advise you to do that.

The points mentioned here are not listed in the order of priority; instead they are listed in the sequence in which they usually appear on a CV.

~ Colorful or glossy paper and flashy fonts

Your CV is a formal, official document. Keep it simple.

~ Resume or CV at the top

Many people tend to add headings to their CV. The usual are CV, Curriculum Vitae and Resume. Do not do this.

~ Photographs until asked

Do not add your photo to the CV until you have been asked for it. Photographs are required only for certain types of positions like models, actors etc.

~ Usage of 'I', 'My', 'He', 'She'

Do not use these in your CV. Many candidates write, 'I worked as Team Leader for XYZ Company' or 'He was awarded Best Employee for the year 2007'. Instead use bullet points to list out your qualifications/ experience like: Team leader for XYZ Company from 2006-2007.

~ Spelling mistakes and grammatical errors

Proofread your CV until you are confident that it doesn't have any spelling mistakes or grammatical errors. These are big put-offs for the recruiters. Moreover, sometimes these mistakes might land you in an embarrassing situation.

A candidate who submitted his CV without proofreading it committed the mistake of wrongly spelling 'ask' as 'ass'. Now you can imagine the type of embarrassment he must have faced during the interview, when the interviewer pointed it out. These mistakes tend to convey a lazy and careless attitude to the interviewer.

~ Lies about your candidature

Do not lie about your past jobs or qualifications or anything which might have an impact on the job. You may be able to secure a job with these lies today but tomorrow you may lose it as well.

~ Abbreviations or jargon that is difficult to understand

People screening your resume usually belong to the HR department. If they do not understand what the abbreviations and jargon mean, they will simply dump your CV in the trash can. Avoid over-using such terms as far as possible.

~ Reasons for leaving last job

Leave these reasons to be discussed during the personal interview. For example, some candidates write: Reason for leaving the last job: Made redundant. Avoid making such statements in your CV, they add no value. Besides, if you do get an interview call, chances are the interviewer will address the issue.

~ Past failures or health problems

Mentioning these immediately slash your chances of getting an interview call.

For instance, you have a gap in your employment because you started your own business which did not do well. Some candidates might write -- Reason for gap in employment: Started own business which failed. Do not do this type of injustice with your job hunt at this stage of writing the CV.

~ Current or expected salary

Leave it to be discussed while negotiating the salary.

~ Irrelevant details

Leave out the details like marital status, sex, passport number, number of kids, age of kids. These are usually irrelevant for most interviewers but at times could be used as a basis for discrimination.

~ References

Do not include them until asked. In fact, it is not even required to mention the line 'Reference available on request'. If the recruiter requires a reference, he/she will ask you to bring it along for the interview.

Now that you have run through the list, take a fresh look at your CV and prune away unnecessary details and unaffordable blunders that could have cost you your dream job.

The author is a contributor to www.CareerRide.com, a website that addresses technical and personal aspects of an IT interview.

'The best sex lasts 7 to 13 minutes'

'The best sex lasts 7 to 13 minutes' 

The best sexual intercourse lasts between seven and 13 minutes, according to a new survey by US experts.

According to the research, led by Dr Eric Corty, from the Behrend College in Erie, Pennsylvania, three-minute sex is 'adequate'.

The study is the first to review what the experts believe is the ideal length of time to have penetrative sex, with the random sample of Americans and Canadians labeling seven to 13 minutes most 'desirable'.

The study concluded that intercourse lasting between three and seven minutes was 'adequate', but anything less was 'too short' and beyond 13 minutes was 'too long'.

The extraordinary research is designed to help calm couples' unrealistic beliefs that healthy sex should last a long time.

Corty said that this was a situation "ripe for disappointment and dissatisfaction".

"In the fantasy model of male sexuality, men have large penises, rock-hard erections, and can sustain sexual activity all night long," News.com.au quoted Corty, as saying.

"It appears that many men and women hold this fantasy. The results from the present study, by providing a realistic not a fantasy model of sexuality, are useful both in treating people with sexual concerns and dysfunctions, and with wider circulation, in preventing the onset of sexual dysfunctions," he added.

Reacting to the research, Australian sex therapists commented that most Aussie men wanted sex to last considerably longer while most women were 'not bothered' if it was over with fast.

Dr Jane Howard, a Brisbane-based medical sex therapist, said there was a dearth of data on Australians' expectation of sex.

Anecdotal evidence suggested most Australian women would be happy with the therapists' "adequate" time of three to seven minutes, while men would not.

 

The study is published in the international Journal of Sexual Medicine.

Yahoo's Castle Becoming A Cage?

Company's delays invite disaster

n the olden days, armies often didn't attack castles so much as sit around them; weeks or months later, the defenders would run out of food and their leaders would have few options other than to surrender.  Yahoo may be placing itself in a similar situation in its fight against Microsoft.

Yahoo has stalled, stalled, and then stalled some more.  From its initial 57-word acknowledgement of Microsoft's offer to changed bylaws concerning the board of directors, the company has moved slowly and pushed back deadlines at every turn.

Now, the end of the first quarter is in sight.  If Yahoo's finances aren't in great shape, Henry Blodget anticipated the following scenario: "Microsoft . . . just after Yahoo reports a horrendous first quarter, pulls its offer for the company.  Yahoo's stock collapses, costing shareholders 40% overnight.  Jerry & Co. are pummeled with shareholder complaints and lawsuits, and Yahoo's employee and shareholder morale hit all-time low."

Blodget continued, "Then, just when all hope seems lost, Microsoft comes charging back and saves the day with a $25 bid, and Yahoo owners flatten Jerry & Co. in a stampede to tender their shares."

Saves the day, or, as it were, takes over the castle, with whoever's left inside happy to see someone who will feed them.

We know this isn't a perfect analogy; people inside besieged castles, whether they were soldiers or civilians, frequently wound up getting killed.  But Jerry Yang had better hope Yahoo has a good first quarter, because the castles' lords were almost always executed.

Source- WPN

New York Times Company Could Sell Assets

Executives at the New York Times Company aren't yet stocking up on "For Sale" signs.  Still, for the right price, it's starting to seem like they're willing to part with any property other than the similarly named newspaper.

What's that list of properties include?  The Boston Globe, the International Herald Tribune, About.com, and (surprise!) a stake in the Boston Red Sox, for starters.  "We are not married to any one asset, other than the New York Times newspaper," admitted CFO James Follo, according to Reuters.

Newspapers of every size are having a tough time, of course, so an asset sale could help keep the New York Times Company profitable (and/or afloat).  Follo did continue, however, "We're not going to do a deal until the valuation is right."

CEO Janet Robinson also appeared less than enthusiastic about the prospect of any transactions.  She even pointed out that now isn't a great time to unload assets; money doesn't flow too freely in our current economy.

We'll see what happens, then.  But, even if raising cash wasn't a concern, we believe the New York Times Company would make a lot of people happy by separating itself from the Boston Red Sox.

 

The Online Mistakes Of The Music Business

Bad decisions lead to lost revenues

In the April issue of Blender, they take a look at the "20 biggest record company screw-ups of all time."

Topping the list is the major record labels and the Recording Industry Association of America (RIAA) for rejecting a billion dollar settlement from Napster and not finding a way to make money off file sharing services.

The report says, "The labels' campaign to stop their music from being acquired for free across the Internet has been like trying to cork a hurricane-upward of a billion files are swapped every month on peer-to-peer networks. Since Napster closed, 'there's been no decline in the rate of online piracy,' says Eric Garland of media analysts BigChampagne.

The much-loathed RIAA appears again at number five for suing single mother of two Jammie Thomas for using the P2P service Kazaa to illegally share MP3 files of 24 songs. Last October she was found guilty and ordered to pay $222,000 in fines which equals $9,250 per song. Thomas is planning to appeal.

Coming in at the number nine spot is Sony BMG for putting copy-protection software on CDs, which installed a "rootkit" on users computers along with not allowing people to make more than three copies of legally purchased CDs and making them vulnerable to viruses.

The Department of Homeland Security issued an advisory and Sony recalled 4 million CDs. The label was accused of spying on its customer's listening habits and ordered to pay several million dollars to settle class-action lawsuits that alleged violations of spyware laws.

Landing at number 19 is the recording industry's decision to abandon the single format and force people to buy entire albums. "Greed to force consumers to buy an album [resulted] in the loss of an entire generation of record consumers," says Billboard charts expert Joel Whitburn.

"People who could only afford to buy their favorite hit of the week were told it wasn't available as a single. Instead, they stopped going to record shops and turned their attention to illegally downloading songs."

IIM-C student gets a $340,000 global job

The highest international offer of $3,40,000 (Rs 1.36 crore) during final placements on the Indian Institute of Management, Calcutta campus this year has come from an international investment bank. The highest domestic salary has been in the range of Rs 65 to Rs 70 lakh per annum.

IIM Calcutta (IIM-C) had beaten IIM Ahmedabad (IIM-A) last year in terms of the highest international offer made. IIM-C bagged an offer of $2,50,000, whereas IIM-A got an offer of $2,25,000. But this year, IIM-A leads the pack with an offer of $3,60,000 (Rs 1.44 crore) made to one of its students by a financial conglomerate.

At IIM-C, the average domestic salary was Rs 16.4 lakh per annum. A total of 243 offers were made to the students before the beginning of final placements.

This included 153 offers made during the laterals process and 90 pre-placement offers (PPOs) that were awarded for excellent performance during the summer internship.

While India still remained a preferred destination for a majority of the students, some students also accepted assignments in the UK, US and the Asia Pacific region.

Around 34 per cent of the batch members opted for jobs in the financial sector. Some of the companies which hired students included Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS, ING, JP Morgan and Barclays. Slot Zero investment banks made 32 i-bank offers to the students.

A total of 26 per cent of the students preferred consulting companies. As many as 42 offers were made by the Slot Zero consulting firms on campus. Major consulting groups such as Mckinsey, Bain, BCG, AT Kearney and AD Little hired in good numbers.

Around 22 new companies came to campus this year. These included O3 Capital, Dawnaday, Ocean Oil, Lodha Group, Anand Rathi and Opera Solutions.

The campus also saw the participation of marketing giants such as P&G and HUL. Other marketing companies, including Nokia, ITC, Nestle and Asian Paints, hired in good numbers.

The class of 2008 at IIM-C will be the first to send students to companies such as Goldman Sachs, Morgan Stanley and AD Little. BIG DEAL

# The highest domestic salary has been in the range of Rs 65 to Rs 70 lakh per annum

# A total of 243 offers were made to the students before the beginning of final placements

# A total of 26 per cent of the students preferred consulting companies          

Source- Business Standard

10 Amazingly Simple Tricks To Turn Your Brain Into A Powerful Thinking Machine

There are two basic principles to keep your brain healthy and sharp as you age: variety and curiosity. When anything you do becomes second nature, you need to make a change. If you can do the crossword puzzle in your sleep, it's time for you to move on to a

new challenge in order to get the best workout for your brain. Curiosity about the world around you, how it works and how you can understand it will keep your brain working fast and efficiently. Use the ideas below to help attain your quest for mental fitness.

1. Read a Book

Pick a book on an entirely new subject. Read a novel set in Egypt. Learn about economics. There are many excellent popular non-fiction books that do a great job entertaining you while teaching about a subject. Become an expert in something new each week. Branch out from familiar reading topics. If you usually read history books, try

a contemporary novel. Read foreign authors, the classics and random books. Not only will your brain get a workout by imagining different time periods, cultures and peoples, you will also have interesting stories to tell about your reading, what it makes you think of and the connections you draw between modem life and the words.

2. Play Games

Games are a wonderful way to tease and challenge your brain. Suduko, crosswords and electronic games can all improve your brain's speed and memory. These games rely on logic, word skills, math and more. These games are also fun. You'll get benefit more by doing these games a little bit every day-spend 15 minutes or so, not hours.

3. Use Your Opposite Hand

Spend the day doing things with your non-dominant hand. If you are left-handed, open doors with your right hand. If you are right- handed, try using your keys with your left. This simple task will cause your brain to lay down some new pathways and rethink daily tasks. Wear your watch on the opposite hand to remind you to switch.

4. Learn Phone Numbers

Our modem phones remember every number that calls them. No one memorizes phone numbers anymore, but it is a great memory Skill. Learn a new phone number everyday.

5. Eat for Your Brain

Your brain needs you to eat healthy fats. Focus on fish oils from wild salmon, nuts such as walnuts, seeds such as flax seed and olive oil. Eat more of these foods and less saturated fats. Eliminate transfats completely from your diet.

6. Break the Routine

We love our routines. We have hobbies and pastimes that we could do for hours on end. But the more something is second nature, the less our brains have to work to do it. To really help your brain stay young, challenge it. Change routes to the grocery store, use your opposite hand to open doors and eat dessert first. All this will force your brain to wake up from habits and pay attention again.

7. Go a Different way

Drive or walk a different way to wherever you go. This little change in routine helps the brain practice special memory and directions. Try different side streets go through stores in a different order anything to change your route.

8. Learn a New Skill

Learning a new skill works multiple areas of the brain. Your memory comes into play, you learn new movements and you associate things differently. Reading Shakespeare, learning to cook and building an airplane out of tooth picks all will challenge your brain and give you something to think about.

9. Make Lists

Lists are wonderful. Making lists helps us to associate items with one another. Make a list of all the places you have traveled. Make a list of the tastiest foods you have eaten. Make a list of the best presents you have been given. Make one list every day to jog your memory and make new connections. But don't become too reliant on them. Make your grocery list, but then try to shop without it. Use the list once you have put every item you can think of in your cart. Do the same with your "to do" lists.

10. Choose a new skill

Find something that captivates you that you can do easily in your home and doesn't cost too much. Photography with a digital camera, learning to draw, learning a musical instrument learning new cooking styles, or writing are all great choices. with 50-50

 Source- Group Email

Dollar Falls to Lowest Since '95 Versus Yen; Bush Cites Decline

Dollar Falls to Lowest Since '95 Versus Yen; Bush Cites Decline

March 13 (Bloomberg) -- The dollar fell to the lowest since 1995 against the yen after U.S. President George W. Bush said the dollar is ``adjusting.''

The U.S. currency also slid to a record low against the euro as Bush said its decline was not ``good tidings'' for proponents of a strong dollar. It traded near an all-time low versus the Swiss franc before a government report today that may show U.S. consumer spending slowed as record high oil prices sap purchasing power.

``Bush's comments were about as lukewarm as you can get,'' said Brian Dolan, research director at Forex.com, a unit of currency trading firm Gain Capital in Bedminster, New Jersey. ``Some may have interpreted his `adjusting' comment as tacit acceptance that we're in a broad-based dollar devaluation.''

The dollar traded at $1.5535 per euro at 8:27 a.m. in Tokyo from $1.5551 in late New York yesterday. It touched $1.5573 per euro, the weakest level since the European currency's 1999 debut. The U.S. currency traded at 101.49 yen after reaching 101.10, the lowest since December 1995. Full Story-

Concern - U.S. Unexpectedly Lost 63,000 Jobs in February- Is this the beginning of RECESSION?

The U.S. unexpectedly lost jobs in February for the second consecutive month, adding to evidence the economy is in a recession.

Payrolls fell by 63,000, the biggest drop since March 2003, after a decline of 22,000 in January that was larger than initially estimated, the Labor Department said today in Washington. The jobless rate declined to 4.8 percent, reflecting a shrinking labor force as some people gave up looking for work.

A weakening job market, combined with lower home values, higher fuel bills and stricter lending rules, raises the odds consumer spending will keep slowing. Falling employment is one reason Federal Reserve Chairman Ben S. Bernanke has signaled central bankers are prepared to lower interest rates again.

``All the lights are flashing red,'' said Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts, in an interview with Bloomberg Television. ``We're in a recession. I don't think there is any doubt about it at this point.''

Minutes before the figures were released, the Fed said it will expand two short-term auctions this month to $100 billion, from $60 billion, to address ``heightened liquidity pressures'' in markets. Treasury notes surged and the dollar weakened after the employment figures.

Worse Than Anticipated

Economists had projected payrolls would rise by 23,000 following a previously reported 17,000 drop in January, according to the median of 76 forecasts in a Bloomberg News survey. Estimates ranged from a decline of 110,000 to a gain of 70,000.

The jobless rate was forecast to rise to 5 percent from January's 4.9 percent, with projections ranging from 4.8 percent to 5.2 percent.

Revisions reduced by half the 82,000 increase in payrolls previously reported for December.

Service industries, which include banks, insurance companies, restaurants and retailers, added 26,000 workers last month. Retail payrolls fell by 34,100, the biggest drop in more than five years.

Payrolls at builders fell 39,000, the eighth consecutive month of cutbacks.

Homebuilders are trimming staff as the biggest housing slump in a quarter century deepens. To make matters worse, commercial construction projects are now also on the decline, indicating firings at non-residential builders are likely to increase.

Housing Meltdown

The real estate recession and meltdown in financial markets have led to growing dismissals at banks, mortgage, and management companies.

``There's significant weakness in the job market because of construction declines,'' said David Berson, chief economist at Walnut Creek, California-based PMI Group Inc., the second- largest U.S. mortgage insurer. ``For the next six months or so, we may get small negative numbers on payrolls.''

Manufacturing payrolls dropped by 52,000, the biggest decline since July 2003, after falling 31,000 a month earlier. Economists had forecast a drop of 25,000.

Government payrolls increased by 38,000. That means the total decline in private payrolls for the month was 101,000, the biggest drop since March 2003.

Working Week

The average work week was unchanged at 33.7 hours. The average factory work week and overtime hours were unchanged. Average weekly earnings rose $1.68 to $599.86.

Workers' average hourly wages rose 5 cents, or 0.3 percent, to $17.80, in line with forecasts. Hourly earnings were up 3.7 percent from February 2007. Economists surveyed by Bloomberg had forecast a 3.6 percent gain for the 12-month period.

Americans, whose spending accounts for more than two-thirds of the economy, are less upbeat about finding work, a Conference Board report showed last week. The share of consumers who said jobs are plentiful fell and the proportion who said jobs are hard to get jumped, pushing consumer confidence down to a five- year low in February.

``The economic situation has become distinctly less favorable,'' Bernanke said in testimony to Congress last week.

The Fed chairman referred to ``downside'' risks for the economy four times, including ``the possibilities that the housing market or the labor market may deteriorate more than is currently anticipated and that credit conditions may tighten substantially further.''

Investors project the Fed will lower the benchmark interest rate by at least half a point between now and its next meeting on March 18, futures prices show.

Fed Outlook

The central bank's regional economic survey this week said ``the hiring pace slowed in various sectors and labor markets loosened somewhat in many districts,'' as economic growth cooled in eight of 12 regions since the start of 2008.

Adecco SA, the world's biggest temporary-employment company, said this week that fourth-quarter profit declined as hiring slowed in the U.S. The Swiss company also said it may miss its long-term goal of sales growth of 7 percent to 9 percent.

``We've been seeing a weak U.S. market for more than a year now,'' Chief Executive Officer Dieter Scheiff said in a March 4 interview.

 

To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net Source- Bloomberg

 

Why Is Prostitution Illegal?

The oldest question about the oldest profession.

When he was attorney general, Eliot Spitzer had no trouble going after a "sophisticated prostitution ring." As governor, he apparently had no trouble patronizing one. The hypocrisy speaks for itself. But what about the oldest question about the oldest profession: Why, exactly, is prostitution illegal?

The case for making it against the law to buy sex begins with the premise that it's base and exploitative and demeaning to sex workers. Legalizing prostitution expands it, the argument goes, and also helps pimps, fails to protect women, and leads to more back-alley violence, not less. This fight over legalization has been waged in the last few years over international human-trafficking laws and proposals to make prostitution legal in countries like Bulgaria, a movement that the U.S. government helped defeat. In 2004, the federal government expressed its position: "The United States government takes a firm stance against proposals to legalize prostitution because prostitution directly contributes to the modern-day slave trade and is inherently demeaning." The government also claims that legalizing or tolerating prostitution creates "greater demand for human trafficking victims." And yet, prostitution is legal in parts of Nevada, a companion to other cherished vices.

You don't have to be a moralist or a prude to buy the argument for banning prostitution. But if you're so inclined, it's an easy one to take apart. Martha Nussbaum, a law and philosophy professor at the University of Chicago, argues that lots of work involves the sale of bodily services and that lots of the work that poor women do involves bad working conditions. For her, it's all about context—there's a big difference between a street worker controlled by a pimp and a high-end call girl who picks her own clients, and the real question is how to increase poor women's access to decent and safe work in general. Legalizing prostitution "is likely to make things a little better for women who have too few options to begin with," Nussbaum writes.

The extremely pricey outfit Spitzer apparently used looks like an example of the high-end trade Nussbaum would distinguish from low-rent street work. The further defense of such escort services is that prostitution is inevitable and that conditions will be better for everyone all around if it's regulated (more condoms, fewer beatings). This parallels the argument against Prohibition or in favor of drug legalization: Illegality puts the bad guys and their guns in control. Women who fear prosecution can't go to the police for help. Better to give women more recourse to head off abuse and even inspect brothels for health-code violations.

Would legalizing prostitution increase trafficking? Not necessarily. "By this logic, the state of Nevada should be awash in foreign sex slaves, leading one to wonder what steps the Justice Department is taking to free them," writer David Feingold noted dryly in Foreign Policy in 2005. Countries in which prostitution is legal—Australia, Germany, the Netherlands—aren't cesspools. On the other hand, they haven't seen the demand for prostitution drop off, either, and sometimes it rises.

That's a disappointment for advocates of legalization, and lately there's another favorite model. In 1999, Sweden made it legal to sell sex but illegal to buy it—only the johns and the traffickers can be prosecuted. This is the only approach to prostitution that's based on "sex equality," argues University of Michigan law professor Catharine MacKinnon. It treats prostitution as a social evil but views the women who do it as the victims of sexual exploitation who "should not be victimized again by the state by being made into criminals," as MacKinnon put it to me in an e-mail. It's the men who use the women, she continued, who are "sexual predators" and should be punished as such.

According to this Web site (http://www.justicewomen.com/cj_sweden.html) for the Women's Justice Center, Sweden's way of doing things is a big success. "In the capital city of Stockholm the number of women in street prostitution has been reduced by two thirds, and the number of johns has been reduced by 80%." Trafficking is reportedly down to 200 to 400 girls and women a year, compared with 15,000 to 17,000 in nearby Finland. Max Waltman, a doctoral candidate in Stockholm who is studying the country's prostitution laws, says that those stats hold up. He also said the police are actually going after the johns as ordered: In 2006, more than 150 were convicted and fined. (That might not sound like many, but then Sweden has a population of only 9 million.)

For feminists like MacKinnon (with whom Waltman works), this sure looks like the solution: Go after the men! Take down Eliot Spitzer and leave the call girls alone! On the other hand, the group SANS, for Sex Workers and Allies Network in Sweden, doesn't like the 1999 law. The network says it has brought more dangerous clients and more unsafe sex, rather than the other way around. Waltman says that there's a lot of debate in Sweden because some people inside and outside the industry still want straight-out legalization but that no systematic studies have shown that the law has made sex work worse or riskier.

In the end, this seems like the most salient question: Forget Eliot Spitzer. Shouldn't prostitution laws come down to working conditions—and the laws that would lead to better ones for sex workers? According to a recent working paper (PDF) by economist Steven Levitt and sociologist Sudhir Venkatesh*, despite all the fighting and all the preaching, we apparently don't know that much about the specifics of the structure of the sex market—how much prostitutes make on average, how many tricks they turn a year, how frequently they and their pimps and johns actually get arrested.

Source- http://www.slate.com

US Economy Report

GDP Report

Look for growth of gross domestic product to slow this year to around 1.5% as housing and credit woes and high energy prices weigh on consumers and businesses. The first quarter likely will show GDP in minus territory on the heels of a 0.6% increase in the fourth quarter of 2007. More strength will come during the second half as the impact of the Federal Reserve's rate cuts and the fiscal stimulus package being shaped by Congress take effect. They will help offset housing, which won't stabilize until late 2008 at best. The outlook for the credit markets remains murky, raising questions about whether companies will be able to raise the cash they need for day-to-day transactions and longer-term investments. Barring a full-on credit freeze, or a huge spike in oil prices, business spending should be a shade under 2007's 4.8% advance. Meanwhile, growth in consumer spending is likely to ease to 2% from 2.9% in 2007. Dept. of Commerce: GDP Data

INTEREST RATES

It's likely that the Fed will deliver more rate cuts following its surprising three-quarter point reduction Jan. 22 which came between official policy meetings and another half point cut at the Jan. 30 Federal Open Market Committee's scheduled meeting. Officials are closely watching the economy, where job growth turned negative in January, and financial markets where lending conditions are tight. Though Fed officials fret about inflation stirring down the road, they say that the immediate challenge is to try to revive sagging economic growth and avoid a recession. As for long-term interest rates, we see the benchmark 10-year Treasury yielding around 4% by mid-2008 as the economy shows prospects of improvement. The 30-year fixed-rate mortgage, which is around a four-year low of about 5.7%, is likely to increase slightly later this year. Federal Reserve Open Market Committee

 

EMPLOYMENT

The weak economy especially in housing and manufacturing will hurt overall job growth this year. The economy will generate about 600,000 jobs on a net basis (total jobs added minus the total eliminated) in 2008 after a gain of 1.13 million in 2007. Job totals will shrink for several months as managers remain wary of hiring in a very weak economy. As growth picks up this summer and fall, some hiring should take place but at very modest amounts. More on Employment
Dept. of Labor: Employment Data

INFLATION

Price surges in food and energy likely won't be so great this year, bringing a measure of relief to consumers. After fueling the Consumer Price Index to a 4.1% gain from December 2006 to December 2007, the rate will slow to about 3% this year. Meanwhile, the core CPI, which excludes food and energy prices is likely to increase around 2% this year following an increase last year or 2.4%. Dept. of Labor: Inflation Data

 

HOUSING

The near-total freeze on mortgages for less creditworthy borrowers plus rising delinquencies will be a drag on housing demand this year that will fuel further declines in both sales and home building. The stimulus plan signed by President Bush will provide some help for high-priced markets on both coasts by raising the ceiling on jumbo loans from $417,000 to about $725,000 for mortgages held or guaranteed by Fannie Mae and Freddie Mac. But it will take several weeks to set a new ceiling for each metro market in the U.S. Meanwhile, the housing slump will continue through this year with the average house price declining about 5%. Sales of new and existing homes combined will fall about 10% in 2008. Dept. of Commerce: New Home Sales NAR: Existing Home Sales Dept. of Commerce: Housing Starts

ENERGY

Oil supplies are fundamentally tight, and the multitude of supply risks around the world will prevent prices form going into a tailspin. But slowing economic growth or declines in most industrialized nations will likely limit growth in global demand for crude to just under 1% in 2008, a tad less than last year, while supplies will expand at slightly more than 1%. We see oil averaging about $85 a barrel in 2008, up nearly $13 from the average of 2007. But prices will see-saw. Crude oil may well hover near $100 a barrel during the first quarter of this year, with spurts to $110 possible. As consumers and businesses cut back on motoring in response to deteriorating economic performance, oil prices should slide to about $75 a barrel by mid-year, before rising mildly in the second half.

Gasoline should average around $2.85 per gallon in 2008, up about a nickel from last year. The surge in gas pump prices during February should ease off along with oil prices by mid-year, when motorists will be paying $2.85 or so a gallon. Barring major refinery mishaps, gasoline shouldn't touch the $3 level this summer. For diesel, expect to pay an average $2.95 per gallon, up a dime. Heating oil will increase about 10¢ to $2.90 per gallon, while natural gas will average around $7.25 per million British thermal units, up 65¢. Propane prices should average $2.40 a gallon or so, up 35c. Dept. of Energy: Price Statistics

TRADE

The trade deficit will shrink to roughly $652 billion and 4.6% of U.S. gross domestic product (GDP) in 2008. It will mark the second straight year of declines -- last year, the deficit totaled $708.5 billion and 5.1% of GDP, down from record highs of $758.5 billion and 5.7% of GDP in 2006. Further, 2008 will see the smallest trade gap relative to GDP since 2003. Export growth will remain robust at 8.5%, down from a scorching 12.2% in 2007. Import growth will slow to around 3.5% from 5.9% last year. Global GDP is likely to grow 2.9%, slowing from 2007's 3.6% but sustaining foreign demand for U.S. goods. The ongoing descent of the dollar will also help exporters by making U.S. goods more affordable and more competitive on world markets. Dept. of Commerce: Trade Data

 

RETAIL

Retail sales are slowing to a 2% increase in 2008 after a 4% gain in 2007. Wal-Mart, the nation's largest retailer, will slog through another modest year with a sales increase of around 2%. Target's sales will climb around 4%. Middle-market department stores will ring up 2% to 3% higher sales. Luxury merchants are poised for a 6% or so sales boost, although a protracted slump in the stock market will prompt some high-incomers to curtail their discretionary purchases.

Sales via the Web will continue their torrid increases, climbing 15% in 2008 to around $300 billion and capturing 10% of total retail sales, up from about 9% in 2007. Consumers are increasingly comfortable with buying products online, while many retailers are upgrading their Web sites to attract more buyers. Dept. of Commerce: Retail Data

Data compiled from different sites and is not created by the writers on assumptions. We are not responsible for its accuracy. Please verify the data with authorized resources.

National Social Security and the Dollar

National Security and the Dollar

National Intelligence Director Michael McConnell provided his annual risk assessment recently to the Senate Intelligence Committee. In addition to the usual threats of terrorism, nuclear proliferation and the like, McConnell expressed concern about the U.S. dollar. Such strategic concerns are misplaced and suggest that the Bush administration continues to have difficulty in defining U.S. national interests.

Far be it from a currency strategist to disagree with U.S. intelligence agencies over the threats to the U.S., but of all the potential threats to U.S. security, the dollar is simply not one of them. Contrary to all the hand-wringing in the press about the dollar, the Federal Reserve Board's broad trade-weighted index and the Atlanta Fed's measure (includes 15 major countries) makes clear that the greenback's depreciation in recent years is simply an unwinding of its gain in the second half of the 1990s.

McConnell voiced concern about the impact of a weaker dollar, noting that some global oil suppliers, like Syria, Iran and Libya, have asked to be paid in other currencies beside the U.S. dollar and that some others, like Kuwait, no longer peg their currency to the dollar. "Continued concerns about the dollar's depreciation could tempt other producers to follow suit," McConnell argued. Since McConnell's testimony, Russia's Putin indicated that he would like the ruble to be used more in energy trading.

Syria, Iran, Libya and Russia's decision have little to do with the U.S. dollar weakness. And the cover the dollar's weakness does provide for such action is an obviously facile excuse. Is there really much of a doubt at the higher echelons of the U.S. government that those countries' actions are driven nearly exclusively by political considerations?

McConnell gives us a warmed over domino theory as if Syria, Iran and Libya have abandoned the dollar and others will follow suit. Hardly. Such an assessment seems to exaggerate the role of these countries. They are not leaders or path setters among oil producers. Indeed, these still seem like pariah states. The other oil producers and most notably Saudi Arabia have indicated no desire to shift the benchmark for oil away from the dollar.

It is true that Kuwait, which had pegged the dinar to the dollar, switched last May to a basket regime. It ostensibly did this to allow its currency to appreciate faster to help combat inflation. The currency has appreciated by about 6% since then, though it has been flat over the past couple of months. Inflation still appears to be rising, and the Kuwait central bank has cut rates in response to the Fed rate cuts this year as have other Gulf Cooperation Council members that still peg their currencies to the dollar.

Judging from U.S. official comments, it had been at least previously recognized that more flexible currency regimes were in the U.S. national interest. And various G7 statements suggest it is in the interest of the world economy that countries allow their currencies to help address the global imbalances. How can this really be a threat to U.S. security that it can be cited in the same breath as terrorism and nuclear proliferation? Please.

Perhaps the thinking behind the director's claim was more fully articulated by Judy Shelton, an economist and author, in a recent op-ed piece in the Wall Street Journal (Feb. 15). She asserted that "the dollar's primary role in the world financial system is the most vital non-military instrument of our national power." This seems to reflect a confused understanding of the nature of power in general and U.S. power in particular. An international monetary regime of floating currencies is not a threat to U.S. power and influence in the world. Insofar as a more flexible currency regime would help ease concerns about global imbalances without resorting to protectionism might very well be a world in which the U.S. finds that it is even more competitive rather than less. In addition, Shelton's assessment seems to denigrate other important aspects of U.S. soft power.

In the more than three decades since the breakup of Bretton Woods, when nearly all countries had pegged their currencies to the dollar, the U.S. did not see its influence in the world diminish. To the extent it has diminished in recent years, as some might argue, the disregard for the opinion of our allies and the resort to increasing unilateral action seems to provide a more compelling explanation than the decline in the U.S. dollar or Syria, Iran and Libya's desire to limit their dollar transactions.

McConnell also noted that U.S. intelligence agencies have "concerns about the financial capabilities of Russia, China, OPEC countries {sic} and the potential use of their market access to exert financial leverage to political ends." This concern is shared by many Americans. A Public Strategies Inc. poll found that an overwhelming majority of Americans are wary of foreign governments, especially China and the Middle East, buying stakes in U.S. companies. By a 2-1 margin, Americans opined that sovereign wealth funds have a negative effect on the U.S. economy, and nearly 80% thought it was negative for national security. Particularly notable, Saudi Arabia, not Russia or China, had the highest negatives, with the greatest number of respondents opposing any purchase of a U.S. company by that nation.

American policymakers are fond of making a distinction between economic or commercial goals on one hand and political objectives on the other. Yet, the distinction is not that robust. Recall that Adam Smith, David Riccardo, Alfred Marshall, all giants in economic theory, thought they were doing political economy. McConnell noted that Russia was positioning itself to control energy supply and transportation from Europe to Asia. He wants to say this is political and no doubt there is an element, but surely it is also commercial. He claims that China's global engagement is driven by the need to access markets and resources. Fair enough, but that sounds commercial in nature and similar to why the U.S. also began engaging the world at the end of the 19th century.

It is more helpful to think that other sovereigns have levers of power and influence. Some are economic. Some are political. Some are cultural. As other parts of the world grow and develop, they will have greater financial capabilities. This is wholly desirable. President Bush noted in the 2002 national security strategy that the main threat to the U.S. and its allies was emanating from weak countries, not strong ones, as had previously been the case.

Realpolitik considerations dictate that the U.S. be concerned about all the levers of power that both its friends and adversaries possess. However, it needs to embrace the interdependency of the world and recognize that it is not zero sum. The increasing wealth of China, Russia and developing countries in general does not make the U.S. poorer. And if McConnell does not want to make an oxymoron out of National Intelligence, he should rethink the extent to which the dollar's decline is threatening national security.  Source- www.kiplinger.com

Concern : Is the Falling Dollar a Threat to U.S. Security?

Is the Falling Dollar a Threat to U.S. Security?

The falling dollar is alarming, but is it a threat to national stability? National Intelligence Director Michael McConnell recently included the falling dollar as a weakness that could be exploited by U.S. rivals, especially energy rich ones.

But Mark Chandler, the top currency strategist at the investment banking firm Brown Bros. Harriman, says the dollar's woes may be worrisome, but they hardly rank with terrorism, the threat of cyberattacks and danger posed by various foreign hot spots. "Far be it from a currency strategist to disagree with U.S. intelligence agencies over the threats to the U.S., but of all the potential threats to U.S. security, the dollar is simply not one of them," he writes. "... The greenback's depreciation in recent years is simply an unwinding of its gain in the second half of the 1990s."

Security worries appear to stem from the decision by some oil producing countries, notably Syria, Iran, Libya and Russia, to be paid in currency other than the dollar. "McConnell gives us a warmed over domino theory as if Syria, Iran and Libya have abandoned the dollar and others will follow suit. Hardly. Such an assessment seems to exaggerate the role of these countries. ... The other oil producers and most notably Saudi Arabia have indicated no desire to shift the benchmark for oil away from the dollar," Chandler writes. Source- www.kiplinger.com

'Girls Gone Wild' Founder Is a Free Man

MIAMI (March 12) - "Girls Gone Wild" adult video founder Joe Francis Wednesday pleaded no contest to filming underage girls for his DVDs and was sentenced to time already served in jail and set free.

Multimillionaire Francis built his fortune selling videos of young women -- usually drunk -- baring their breasts. He had been charged with filming two 17-year-old girls in Panama City, Florida, in 2003 for one of his videos, which sell millions of copies a year.

The only reason I pleaded no contest was to get out of jail," Francis told Reuters by telephone from Panama City, insisting he was "100 percent innocent."

The girls signed forms consenting to be taped and falsely claiming they were 18 years old, which would make them of legal age. But Francis and "Girls Gone Wild" were still responsible for knowing the girls' real age, his attorney, Roy Black, said.

On his Web site, Francis claimed officials in Panama City were intent on making an example of him and wrongfully pursued him with a vengeance.

Black said there were "various matters" that caused "both sides to compromise." But he declined to provide further information, citing an agreement by both sides not to disclose details of the plea bargain.

Francis said he would return to Los Angeles and resume running his company, and added that he had not made any changes to the way he would do business.

"I'm not making any changes whatsoever, even in this case, our (filming) releases were perfect," he said.

Francis had been in jail for the last 11 months in Nevada, where he was indicted for tax evasion. Those federal tax charges remain in place and Francis said he would continue fighting them.

Research - Starting up as CFO : McKinsey

Starting up as CFO

There are a few critical tasks that all finance chiefs must tackle in their first hundred days. - McKinsey

Bertil E. Chappuis, Aimee Kim, and Paul J. Roche

 

March 2008

In recent years, CFOs have assumed increasingly complex, strategic roles focused on driving the creation of value across the entire business. Growing shareholder expectations and activism, more intense M&A, mounting regulatory scrutiny over corporate conduct and compliance, and evolving expectations for the finance function have put CFOs in the middle of many corporate decisions—and made them more directly accountable for the performance of companies.

Not only is the job more complicated, but a lot of CFOs are new at it—turnover in 2006 for Fortune 500 companies was estimated at 13 percent.1 Compounding the pressures, companies are also more likely to reach outside the organization to recruit new CFOs, who may therefore have to learn a new industry as well as a new role.

To show how it is changing—and how to work through the evolving expectations—we surveyed 164 CFOs of many different tenures2 and interviewed 20 of them. From these sources, as well as our years of experience working with experienced CFOs, we have distilled lessons that shed light on what it takes to succeed. We emphasize the initial transition period: the first three to six months.

Early priorities

Newly appointed CFOs are invariably interested, often anxiously, in making their mark. Where they should focus varies from company to company. In some, enterprise-wide strategic and transformational initiatives (such as value-based management, corporate-center strategy, or portfolio optimization) require considerable CFO involvement. In others, day-to-day business needs can be more demanding and time sensitive—especially in the Sarbanes–Oxley environment—creating significant distractions unless they are carefully managed. When CFOs inherit an organization under stress, they may have no choice but to lead a turnaround, which requires large amounts of time to cut costs and reassure investors.

Yet some activities should make almost every CFO's short list of priorities. Getting them defined in a company-specific way is a critical step in balancing efforts to achieve technical excellence in the finance function with strategic initiatives to create value.

Conduct a value creation audit

The most critical activity during a CFO's first hundred days, according to more than 55 percent of our survey respondents, is understanding what drives their company's business. These drivers include the way a company makes money, its margin advantage, its returns on invested capital (ROIC), and the reasons for them. At the same time, the CFO must also consider potential ways to improve these drivers, such as sources of growth, operational improvements, and changes in the business model, as well as and how much the company might gain from all of them. To develop that understanding, several CFOs we interviewed conducted a strategy and value audit soon after assuming the position. They evaluated their companies from an investor's perspective to understand how the capital markets would value the relative impact of revenue versus higher margins or capital efficiency and assessed whether efforts to adjust prices, cut costs, and the like would create value, and if so how much.

Although this kind of effort would clearly be a priority for external hires, it can also be useful for internal ones. As a CFO promoted internally at one high-tech company explained, "When I was the CFO of a business unit, I never worried about corporate taxation. I never thought about portfolio-level risk exposure in terms of products and geographies. When I became corporate CFO, I had to learn about business drivers that are less important to individual business unit performance."

The choice of information sources for getting up to speed on business drivers can vary. As CFOs conducted their value audit, they typically started by mastering existing information, usually by meeting with business unit heads, who not only shared the specifics of product lines or markets but are also important because they use the finance function's services. Indeed, a majority of CFOs in our survey, and particularly those in private companies, wished that they had spent even more time with this group (Exhibit 1). Such meetings allow CFOs to start building relationships with these key stakeholders of the finance function and to understand their needs. Other CFOs look for external perspectives on their companies and on the marketplace by talking to customers, investors, or professional service providers. The CFO at one pharma company reported spending his first month on the job "riding around with a sales rep and meeting up with our key customers. It's amazing how much I actually learned from these discussions. This was information that no one inside the company could have told me."

Lead the leaders

Experienced CFOs not only understand and try to drive the CEO's agenda, but also know they must help to shape it. CFOs often begin aligning themselves with the CEO and board members well before taking office. During the recruiting process, most CFOs we interviewed received very explicit guidance from them about the issues they considered important, as well as where the CFO would have to assume a leadership role. Similarly, nearly four-fifths of the CFOs in our survey reported that the CEO explained what was expected from them—particularly that they serve as active members of the senior-management team, contribute to the company's performance, and make the finance organization efficient (Exhibit 2). When one new CFO asked the CEO what he expected at the one-year mark, the response was, "When you're able to finish my sentences, you'll know you're on the right track."

Building that kind of alignment is a challenge for CFOs, who must have a certain ultimate independence as the voice of the shareholder. That means they must immediately begin to shape the CEO's agenda around their own focus on value creation. Among the CFOs we interviewed, those who had conducted a value audit could immediately pitch their insights to the CEO and the board—thus gaining credibility and starting to shape the dialogue. In some cases, facts that surfaced during the process enabled CFOs to challenge business unit orthodoxies. What's more, the CFO is in a unique position to put numbers against a company's strategic options in a way that lends a sharp edge to decision making. The CFO at a high-tech company, for example, created a plan that identified several key issues for the long-term health of the business, including how large enterprises could use its product more efficiently. This CFO then prodded sales and service to develop a new strategy and team to drive the product's adoption.

To play these roles, a CFO must establish trust with the board and the CEO, avoiding any appearance of conflict with them while challenging their decisions and the company's direction if necessary. Maintaining the right balance is an art, not a science. As the CFO at a leading software company told us, "It's important to be always aligned with the CEO and also to be able to factually call the balls and strikes as you see them. When you cannot balance the two, you need to find a new role."

Strengthen the core

To gain the time for agenda-shaping priorities, CFOs must have a well-functioning finance function behind them; otherwise, they won't have the credibility and hard data to make the difficult arguments. Many new CFOs find that disparate IT systems, highly manual processes, an unskilled finance staff, or unwieldy organizational structures hamper their ability to do anything beyond closing the quarter on time. In order to strengthen the core team, during the first hundred days about three-quarters of the new CFOs we surveyed initiated (or developed a plan to initiate) fundamental changes in the function's core activities

Several of our CFOs launched a rigorous look at the finance organization and operations they had just taken over, and many experienced CFOs said they wished they had done so. In these reviews, the CFOs assessed the reporting structure, evaluated the fit and capabilities of the finance executives they had inherited, validated the finance organization's cost benchmarks, and identified any gaps in the effectiveness or efficiency of key systems, processes, and reports. The results of such a review can help CFOs gauge how much energy they will need to invest in the finance organization during their initial 6 to 12 months in office—and to fix any problems they find.

Transitions offer a rare opportunity: the organization is usually open to change. More than half of our respondents made at least moderate alterations in the core finance team early in their tenure. As one CFO of a global software company put it, "If there is a burning platform, then you need to find it and tackle it. If you know you will need to make people changes, make them as fast as you can. Waiting only gets you into more trouble."

Manage performance actively

CFOs can play a critical role in enhancing the performance dialogue of the corporate center, the business units, and corporate functions. They have a number of tools at their disposal, including dashboards, performance targets, enhanced planning processes, the corporate review calendar, and even their own relationships with the leaders of business units and functions.

Among the CFOs we interviewed, some use these tools, as well as facts and insights derived from the CFO's unique access to information about the business, to challenge other executives. A number of interviewees take a different approach, however, exploiting what they call the "rhythm of the business" by using the corporate-planning calendar to shape the performance dialogue through discussions, their own agendas, and metrics. Still other CFOs, we have observed, exert influence through their personal credibility at performance reviews.

While no consensus emerged from our discussions, the more experienced CFOs stressed the importance of learning about a company's current performance dialogues early on, understanding where its performance must be improved, and developing a long-term strategy to influence efforts to do so. Such a strategy might use the CFO's ability to engage with other senior executives, as well as changed systems and processes that could spur performance and create accountability.

First steps

Given the magnitude of what CFOs may be required to do, it is no surprise that the first 100 to 200 days can be taxing. Yet those who have passed through this transition suggest several useful tactics. Some would be applicable to any major corporate leadership role but are nevertheless highly relevant for new CFOs—in particular, those who come from functional roles.

Get a mentor

Although a majority of the CFOs we interviewed said that their early days on the job were satisfactory, the transition wasn't without specific challenges. A common complaint we hear is about the lack of mentors—an issue that also came up in our recent survey results, which showed that 32 percent of the responding CFOs didn't have one. Forty-six percent of the respondents said that the CEO had mentored them, but the relationship appeared to be quite different from the traditional mentorship model, because many CFOs felt uncomfortable telling the boss everything about the challenges they faced. As one CFO put it during an interview, "being a CFO is probably one of the loneliest jobs out there." Many of the CFOs we spoke with mentioned the value of having one or two mentors outside the company to serve as a sounding board. We also know CFOs who have joined high-value roundtables and other such forums to build networks and share ideas.

Listen first . . . then act

Given the declining average tenure in office of corporate leaders, and the high turnover among CFOs in particular, finance executives often feel pressure to make their mark sooner rather than later. This pressure creates a potentially unhealthy bias toward acting with incomplete—or, worse, inaccurate—information. While we believe strongly that CFOs should be aggressive and action oriented, they must use their energy and enthusiasm effectively. As one CFO reflected in hindsight, "I would have spent even more time listening and less time doing. People do anticipate change from a new CFO, but they also respect you more if you take the time to listen and learn and get it right when you act."

Make a few themes your priority—consistently

Supplement your day-to-day activities with no more than three to four major change initiatives and focus on them consistently. To make change happen, you will have to repeat your message over and over—internally, to the finance staff, and externally, to other stakeholders. Communicate your changes by stressing broad themes that, over time, could encompass newly identified issues and actions. One element of your agenda, for example, might be the broad theme of improving the efficiency of financial operations rather than just the narrow one of offshoring.

Invest time up front to gain credibility

Gaining credibility early on is a common challenge—particularly, according to our survey, for a CFO hired from outside a company. In some cases, it's sufficient to invest enough time to know the numbers cold, as well as the company's products, markets, and plans. In other cases, gaining credibility may force you to adjust your mind-set fundamentally.

The CFOs we interviewed told us that it's hard to win support and respect from other corporate officers without making a conscious effort to think like a CFO. Clearly, one with the mentality of a lead controller, focused on compliance and control, isn't likely to make the kind of risky but thoughtful decisions needed to help a company grow. Challenging a business plan and a strategy isn't always about reducing investments and squeezing incremental margins. The CFO has an opportunity to apply a finance lens to management's approach and to ensure that a company thoroughly examines all possible ways of accelerating and maximizing the capture of value.

As an increasing number of executives become new CFOs, their ability to gain an understanding of where value is created and to develop a strategy for influencing both executives and ongoing performance management will shape their future legacies. While day-to-day operations can quickly absorb the time of any new CFO, continued focus on these issues and the underlying quality of the finance operation defines world class CFOs.