Sunday, December 21, 2008

Save your company or save the planet?

When running a company (like a household or a country), it’s important to distinguish between must-haves and nice-to-haves. The latter includes a lot of charitable activities, work in the community, parties, little morale-building perks, as well as many other things that help a firm with its image in the community or to attract good people.

When times gets tight for a company, or for an industry (think dot-com crash), or even the whole economy (i.e., now), a lot of nice-to-haves necessarily go out the window. So when one of my students who works at Cisco told me Friday that they cut out Red Bull to save money — complete with a memo explaining the cost-benefit analysis — we both agreed it made a lot of sense.

Certainly if times are supposed to be tight at a company, but instead it’s business as usual on spending, then employees will justifiably wonder how serious management is about tightening up and focusing on the job at hand.

This came to mind when reading this morning’s Merc:

Sun executives argue engineers must help larger society, not just business
By Brandon Bailey
Mercury News

Engineering isn't just engineering anymore. In the 21st century, according to an upcoming book by two senior engineers at Sun Microsystems, members of their profession must confront issues of environmental sustainability, intellectual property, economics and their own responsibilities as citizens of a global community.

"Citizen Engineer" was co-written by Greg Papadopoulos and David Douglas, both electrical engineers and computer scientists who are, respectively, chief technology officer and chief sustainability officer for Sun. Papadopoulos is responsible for Sun's research and development efforts, while Douglas coordinates environmental programs and heads the company's cloud computing and developer platforms division.

The book is part primer and part argument. The authors say they wrote it for engineering students, professors and working engineers who, in Papadopolous' words, "have that idea that maybe they need to think more about what they're doing."
I realize that the book would have been written months or even a year or more ago, but still it suggests an utter lack of urgency for a company that’s in serious trouble and has been struggling for years.

I don’t blame the executives for wanting to pursue their pet projects — nor am I passing judgment on the merits of the new book — but I question the management that allowed (if not encouraged) this effort when the company is in a life-or-death crisis. If every employee, from top to bottom, does not have a single-minded focus on growing revenues, cutting costs and finding a way back to sustained profitability, then the company needs new leadership.

Sun just got two new directors nominated by angry investors, but Therese Poletti of MarketWatch argues that the company that brought us Java® needs a more drastic solution:
SAN FRANCISCO -- It's time for the board of directors at Sun Microsystems Inc. to wake up and smell the coffee.

Instead of adding two new independent directors to deal with the apparent downward spiral of the company's business, the board should look at replacing Sun's chief executive, Jonathan Schwartz, who got them into much of the mess in the first place.


Wall Street has put pressure on the company to cut costs more drastically and investors are impatient. Since Schwartz took over, the board authorized a 1-to-4 reverse stock split in November 2007. Its shares closed at $5.14 before the split took effect. After the split, its shares traded at $20.51. On Wednesday, its shares closed at $3.89, down more than 80%.

Sun announced another big round of 5,000 to 6,000 jobs last month, but some investors think they should do more. The company also took a big impairment charge for its $4.1 billion acquisition in 2005 of StorageTek, meaning the company is no longer worth what Sun paid.

"At this point the graveyard watch should be more aligned on how long Jonathan Schwartz keeps his job and how long Sun stays independent," added [analyst Charles] King.

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