Tag: Management

Deliberate Sabotage

Trumps new appointed Postaster General has rearranged and decimated senior management in a part of the ongoing attempts of the Trump administration to undermine the viability of vote by mail.

It’s been called a “Friday night massacre.”

Trump is going to be dragged out of the White House kicking and screaming in January if Joe Biden and his Democratic Party establishment (There is no Democratic Party establishment) incompetents manage not to completely screw up the campaign:

Postmaster General Louis DeJoy unveiled a sweeping overhaul of the nation’s mail service, displacing the two top executives overseeing day-to-day operations, according to a reorganization memo released Friday. The shake-up came as congressional Democrats called for an investigation of DeJoy and the cost-cutting measures that have slowed mail delivery and ensnared ballots in recent primary elections.

Twenty-three postal executives were reassigned or displaced, the new organizational chart shows. Analysts say the structure centralizes power around DeJoy, a former logistics executive and major ally of President Trump, and de-emphasizes decades of institutional postal knowledge. All told, 33 staffers included in the old postal hierarchy either kept their jobs or were reassigned in the restructuring, with five more staffers joining the leadership from other roles.

The reshuffling threatens to heighten tensions between postal officials and lawmakers, who are troubled by delivery delays — the Postal Service banned employees from working overtime and making extra trips to deliver mail — and wary of the Trump administration’s influence on the Postal Service as the coronavirus pandemic rages and November’s election draws near.


Rep. Gerald E. Connolly (D-Va.), chair of the House subcommittee responsible for postal oversight, called the reorganization “a deliberate sabotage” to the nation’s mail service and a “Trojan Horse.”


The structure displaces postal executives with decades of experience, moving some to new positions and others out of leadership roles entirely, including McAdams, Williams and chief commerce and business solutions officer Jacqueline Krage Strako, who previously held the title of executive vice president and chief customer and marketing officer.


Earlier Friday, congressional Democrats demanded an investigation of DeJoy’s cost-cutting initiatives, which postal workers blame for delivery slowdowns.

A letter signed by Sen. Elizabeth Warren (D-Mass.), House Oversight Committee Chair Carolyn B. Maloney (D-N.Y.) and seven other Democrats, including Connolly, urged Postal Service Inspector General Tammy L. Whitcomb to examine how DeJoy came to implement policies that prohibit postal workers from taking overtime or making extra trips to deliver mail on time, and how such delays specifically affect election mail.

This is a toxic mix election tampering and Trump’s vendetta against Amazon.

Powerful Bank CEOs Lead to Money Laundering

A study shows that the more unchecked authority that bank CEOs have, the more likely that the banks will be involved in money laundering and other criminality.

Obviously, correlation does not prove causation, but ultra-powerful CEOs tend to be indistinguishable from sociopaths, so criminality logically follows their imperative to hit “the numbers”.

We have seen again and again how rock-star CEOs lead to unbalanced people running companies for their own personal benefit and twisted egos:

Banks with powerful CEO’s and smaller, less independent, boards are more likely to take risks and be susceptible to money laundering, according to new research led by the University of East Anglia (UEA).

The study tested for a link between bank risk and enforcements issued by US regulators for money laundering in a sample of 960 publicly listed US banks during the period 2004-2015.

The results, published in the International Journal of Finance and Economics, show that money laundering enforcements are associated with an increase in bank risk on several measures of risk. In addition, the impact of money laundering is heightened by the presence of powerful CEOs and only partly mitigated by large and independent executive boards.

It’s not just banks that need to abolish the Cult of the CEO.

Stock Options Don’t Exercise Themselves

Despite profits cratering like a Boeing 737 MAX with an Indonesian pilot, the captains of industry in the United States are continuing their stock buy-backs unabated.

This is not about preserving shareholder value, this is about keeping those executives stock options above water.  It is corrupt, and arguably fraud:

Corporate America is finding it hard to kick the share buyback habit, even after the US slipped into its worst recession in decades.

Total buybacks are expected to drop this year as the downturn caused by coronavirus saps corporate profits, prompting many US blue-chips to suspend or cut back share repurchases. Yet companies in the S&P 500 that have reported second-quarter earnings so far have reduced the number of their outstanding shares by an average of 0.3 per cent from the previous quarter, according to calculations from Credit Suisse.

Updates showed that some of the largest US multinationals continued to buy back their own stock or even accelerated stock repurchases.


David Lebovitz, global market strategist for JPMorgan Asset Management, noted that the buybacks were “not happening everywhere”, but were “driven by specific sectors and stocks”. He added that financial and materials companies were potentially more willing to engage in buybacks through the downturn, because their stocks have not advanced as much as companies in other sectors since the lows in March.

Mr. Lebovitz is lying, and he knows it.

This is about executives boosting their own bottom line, not the company’s.

A Good Primer on McKinsey & Company

I have criticized the consulting company McKinsey & Company on a number of occasions.

I have accused them of laundering their (undeserved) reputation for probity to place a gloss on destructive self-dealing by politicians and senior managers.

Essentially, if you want to sell off the company in pieces, and lay of thousands, while issuing obscene bonuses, you hire McKinsey to give you the rubber stamp.

Slate has a very good survey of how their racket operates:

What exactly do management consultants do? Well, consultants help solve problems for people who run companies and other organizations. The client defines the problem, and the consultant helps find a solution. But there are consultants … and then there’s McKinsey & Company.

The idea that McKinsey hires the best of the best is central to the story that the firm tells about itself. It tackles the hardest problems for the biggest clients—and the fees it charges those clients reflect all this. They’re the bluest-chip management consultants around. And that’s why, over the course of nearly 100 years in business, McKinsey has been able to adapt to changing market conditions and skate through crises with little harm to its bottom line. Most companies see periodic dips in demand for their products and services, but there’s rarely been a down market for what McKinsey has to offer—because McKinsey sells solutions to other companies’ problems. What sorts of problems? Whatever you got.


The guy who had that idea, back in the 1920s, was an accounting professor named James McKinsey. At the time, accounting basically meant one thing: keeping track of the money that came in and the money that went out. You spend a dollar, you wrote it down. You earned $5, you wrote it down. At the end of the month, you added it all up and reconciled the past with the present. But what James McKinsey realized was that a smart company could use those same techniques to see the future. You could look at those numbers—numbers that represented costs and revenues—and use them as the basis for next year’s budget, or to chart a long-term corporate strategy. Maybe that seems sort of obvious? Well, it wasn’t obvious in 1926. And while a few people had similar insights right around that time, James McKinsey was the only one to build a massive consulting company around it.


Under Marvin Bower, McKinsey would respect the numbers, but it would refuse to be bound by them. Instead, the firm would offer advice and counsel of all sorts. If James McKinsey had turned accountants into consultants, then Bower turned consultants into professionals. To Bower, a professional was discreet; a professional talked and dressed like those top executives. McKinsey consultants were even required to wear hats right up until the 1960s, when John F. Kennedy changed the world by appearing in public with a bare head. But most importantly, Bower thought a professional should give clients the good advice they might not get internally and tell them the hard truths they might not want to hear. A professional, in Bower’s estimation, would do what was best for the client, not what was most lucrative for the adviser. “He basically said to their clients, ‘We will put your interests ahead of ours always,’ ” says McDonald. “And that is the foundation upon which McKinsey’s entire reputation and business was built.”


So, OK, consultants work for management. They’re trained to identify with management. And when there’s a conflict between what’s good for people who run the companies and what’s good for everyone else, which side would you expect the consultants to be on?

In 1951, a McKinsey consultant published a study in Harvard Business Review showing that ordinary worker wages were rising roughly three times as fast as executive wages. “This study made the rounds among elite American executives,” says Daniel Markovits, a Yale law professor and author of The Meritocracy Trap. “The elite executives took the view that they would like their compensation to grow more quickly.”

So the executives started bringing new problems to the consultants: foreign competition, increasing costs, declining profits. And what the McKinsey consultants started telling them was, broadly, “Do you really need all those middle managers?” Of course, most executives don’t enjoy putting people out of work, and they certainly don’t like being seen as heartless. Fortunately, that’s another problem McKinsey can help them with. Once a company has decided to fire a bunch of people, McDonald says, “it’s a lot easier to say to your employees … the ones who will still be showing up to work, that ‘I didn’t want to do this, but we went and asked McKinsey, and this is their advice.’ McKinsey will willingly be the scapegoat for that story.”


Over the course of its history, McKinsey has advised downsizing for so many different companies that, according to Duff McDonald, the firm may well be “the single greatest legitimizer of mass layoffs [of] anyone, anywhere, at any time in modern history.” The wave of layoffs that tore through the economy from the ’70s through the ’90s changed the shape of the American corporation. Afterward, there were fewer employees in that middle tier coordinating between the production line and the executive suite. Corporate jobs were increasingly divided between replaceable cogs at the bottom and stressed-out captains of industry at the top.


Of course, losing all those white-collar workers in the middle saved companies a lot of money. Some of that money went to profits. Some of it went to the consulting firms they brought in to help them. And some of it went to the salaries of those increasingly important top executives. According to Markovits, this is exactly how the meritocracy looks after its own interests. “It’s not part of my argument that places like McKinsey or Boston Consulting Group or Bain or any of these other elite consulting shops are snake oil salespeople,” he says. “They are providing real skill and expertise. It’s just that when companies manage themselves using skill and expertise delivered in this way, what ends up happening is that they increase the wages of really elite managers and graduates of fancy universities and decrease everybody else’s wages.”


But at the same time, according to New York magazine, McKinsey is also working for the Trump administration. The firm has contracts with the Department of Health and Human Services and the Department of Veterans Affairs, and was at one point even involved in Jared Kushner’s coronavirus task force. And it’s not just for public health, either. According to ProPublica and the New York Times, when the Trump administration in 2017 directed U.S. Immigration and Customs Enforcement to ramp up detentions, McKinsey consultants allegedly suggested that the agency save money by cutting spending on food and medical care for detainees. These recommendations were a bridge too far even for ICE, according to ProPublica and the Times, and the agency did not pursue them.

Their prescriptions were too inhumane for la Migra.  Think about that for a second.