01 February 2023

The Future of EVs? A Long and Winding Road

"Each day we go to our work in the hope of discovering."

--Nikola Tesla

A friend, Norm Warner, took me for a ride in his silver Tesla X, my first in a battery electric car (BEV). The Model X is a mid-size luxury crossover SUV introduced by Tesla in 2015. This vehicle was developed from the full-size sedan platform of the Tesla Model S. 

Tesla X is notable for its falcon-wing passenger doors and panoramic windshield. But, as we soon experienced, the car has power and quick acceleration. 

Are this plug-in design and government-subsidized business model (low-interest loans and tax credits) what Stellantis CEO, Carlos Taveras, calls a "technology chosen by politicians" the future of the automobile industry? Selling electric vehicles with rechargeable batteries as a way to significantly reduce CO2 emissions? 

Although 100% EVs are not a zero carbon solution. The electricity used to charge most electric and hybrid cars often come from non-renewable resources.

(C) Greentech Media

With visually appealing designs and the latest software, EVs continue a 137-year-old industry that began in Germany when Karl Benz received a patent for the first automobile powered by an internal combustion engine (ICE). The U.S. auto industry got its start ten years later, in 1896.

Electric vehicle sales were around 10% globally in 2022, led by Europe and China. EV sales in the U.S. were 6% last year, with a goal of 50% by 2030. 

What are the critical factors for success in manufacturing and marketing a vehicle without a tailpipe? 

Batteries

Everything anyone needs to know about EVs and their profitability can be found in battery technology. "EVs that make efficient use of battery supplies should be more profitable to manufacture--all else being equal." (The Wall Street Journal)   

The advantage goes to those who can "squeeze" the most juice from their batteries located at the bottom center of the car. But, for the longer term, battery costs have to come down. A next-generation battery, known as LFP, will make it possible to build affordable electric cars. Unfortunately, the downsides are cold weather charging and less driving range. (Recurrent)

The Eagle Mine near Marquette in Michigan's Upper Peninsula is the only place in the U.S. where nickel--the mineral in lithium-ion batteries boosting electric car range on a single charge--is produced. (MLive.com) Meanwhile, 75 percent of lithium is mined in South America, specifically in Chile, Bolivia, and Argentina. (Green Cars)

Currently, Chinese companies make up 56% of the EV battery market, followed by Korean companies (26%) and Japanese manufacturers (10%). The leading battery supplier, CATL, expanded its market share from 32% in 2021 to 34% in 2022. One-third of the world's EV batteries come from that Chinese company. (Oil Price)

Announced investments in battery and battery recycling plants in the U.S. totaled $40 billion in 2022. (Electrek) Georgia, Kentucky, and Michigan are likely to dominate battery plant production. With Kansas, North and South Carolina, Ohio, and Tennessee, among other key sites. (U.S. Department of Transportation)

Charging

About 80% of EV charging happens at home. This works for those who live in single-family dwellings but not multi-family units, which make up nearly 32% of all U.S. housing.

At the end of 2022, about 140,000 public charging units were up and running in the U.S., according to government reports. Plans call for a 500,000-station national network over the remainder of this decade, a ninety billion-dollar investment, most of which is expected to come from the private sector. 

In the U.S., Tesla has more than 1,400 Supercharger stations (40,000+ globally) and 7,000 charger stations. Superchargers take 15 minutes to recharge up to 322 miles. (U.S. News and World Report, Tesla.com) 

The U.S. Transportation Department approved electric vehicle charging station plans for all 50 states, Washington, D.C., and Puerto Rico, covering roughly 75,000 miles of highways. Early last year, the Biden administration allocated $5 billion to states to fund EV chargers over five years along the interstate highway system. (CNBC) 

Yet many U.S. public charging stations fail to work when electric-vehicle drivers need them, according to a new J.D. Power report that underscores the Biden administration's challenge in building out a network of stations nationwideIn a survey of more than 11,550 drivers, the firm found that one in five didn't manage to charge their vehicle during a visit to a station. Of those that didn't get their cars set up, 72% blamed faulty equipment. (Bloomberg)

Affordability

The EV market is dominated by luxury cars, with Tesla controlling 65% of the U.S. market. Regrettably, the cost of these cars is still well beyond the reach of many Americans. (Forbes)

According to the U.S. Census, the median household income was $70,784 in 2021, the most recent year for which data is available. The average price for an electric vehicle in July of 2022 was over $66,000. (Kelly Blue Book) Non-EV cars averaged $45,596. (Edmunds) Average monthly car payments for new vehicle loans reached $691 at the end of 2022. (Center for Auto Research)
"Car buyers love EVs but not the prices." 
--Reporting from the Washington D.C. Auto Show, Jeanne Whalen, The Washington Post  
28 January 2023
The cheapest electric car in 2022 was the Nissan Leaf, which retails for $27,400, with Chevrolet's Bolt at $31,000. More lower-priced EVs are on the drawing board than in dealer showrooms. The problem is that EV prices continue rising, with batteries costing more.

With solid demand among higher-income groups, there's little incentive to reduce the cost of upper-end EVs. Although Tesla recently dropped prices by 6% to 20% on a range of vehicles in response to slowing demand for some of its products. Tesla's move to cut prices on its Model 3 and the Model Y SUV is igniting a potential price war that rival Ford Motor Co. is joining.

EV purchase profiles in major publications such as The New York Times point out that affluent households retain at least one internal combustion vehicle for long-distance travel.

New Internal Revenue Service income limits for the federal $7,500 electric-vehicle tax credit kicked in on 1 January this year. Those with an adjusted gross income of $150,000 for individuals and $300,000 for joint filers can no longer claim the tax credit.

Availability

Brand loyalty for cars, SUVs, and trucks could be a casualty of EV competition. Especially when it comes to availability. As more EVs enter the market, car makers realize that customers are willing to consider new brands, even turning away from dealers they've frequented for decades. A recent report in The Wall Street Journal says that has to do with EV scarcity. 

According to data from J.D. Power, there are currently 53 electric vehicles on the market or soon to be rolled out, compared with 625 car models sold in the United States

Safety

Cautions were raised recently by National Transportation Safety Board Chairwoman Jennifer Homendy about the weight and size of EVs. "I'm concerned about the increased risk of severe injury and death for all road users from heavier curb weights and increasing size, power, and performance of vehicles on our roads, including electric vehicles," Homendy said in remarks delivered Wednesday in Washington, D.C.  

Electric vehicle batteries are heavy and expensive, and automakers can charge more for larger cars. Homendy called out General Motors Co.'s GMC Hummer EV as a particularly egregious example of the trend toward more oversized, heavier vehicles, noting it tips the scales at more than 9,000 pounds.

"The battery pack alone weighs over 2,900 pounds — about the weight of a Honda Civic," she said. "That has a significant impact on safety for all road users."

The transport safety regulator also mentioned that Ford's F-150 Lightning pickup is as much as 3,000 pounds heavier than a non-electric version of the same truck and that Ford's Mustang Mach-E and Volvo's XC40 EV weigh about 33% more than gas-powered equivalents. (Bloomberg)   

Politics

Follow the money.

The White House has invested about $135 billion in electric vehicle development and creation and will now make available $350 billion in federal loans and loan guarantees for energy and automotive projects. In addition, tax credits included in the recently passed Inflation Reduction Act provide incentives for consumers to buy EVs. 

Manufacturers require financial help as they transition to an indeterminate future with no guarantee of success. Federal and state regulations get baked into any assistance, including which vehicles qualify for tax credits. 

General Motors, which announced a plan to sell only zero-emission cars and trucks by 2035, spent $9.1 million on federal lobbying in 2022; Toyota $6 million; Ford $4.2 million; Stellantis $3.9 million; Honda $2 million; and Telsa $400,000.

According to GM's public statements, government subsidies may be the only way the company can make decent margins on electric vehicles over the next three years. (Heard on the Street) 

Margins rather than volume are driving the General Motors business plan, with vehicles like the GMC Hummer EV2 ($80,000), Cadillac Lyriq SUV ($60,000), and Chevy Silverado ($50,000 work truck version with higher-end prices for personal use), leading the way. Some refer to GM as "Elite Motors," with many of its current customers unable to purchase high-end products, ICE or EV. 

Chevy Silverado EV (C) Electrive.com 

From 2016 to 2022, half of the foregone revenue associated with the plug-in EV tax credit went to corporations claiming the credit. Nearly 80% of individual tax credits were claimed by filers with adjusted gross incomes (AGI) of $100,000 or more. About 7% of credits claimed were on returns where the AGI exceeded $1 million. (Joint Center on Taxation, U.S. Congress)  The handouts aren't free, as the cost of government largesse ultimately falls on U.S. taxpayers.

S Curve

One way to understand EV innovation and adoption is to see these proposed changes through the S Curve lens:

Everett Rogers’ work is important because it emphasizes that the innovation itself is not the only determinant of its ‘success’. There must also be communication channels, time and a social system in place to enable the innovation to be used and adopted more and more widely. Rogers also identifies the different categories of adopters: innovators, early adopters, majority (further subdivided into early and late) and laggards. (Boston University).

A spirit of ingenuity has yet to be fully tapped. As a result, more time is needed to see how technology and innovation contribute to reducing mobility costs. 

Disappointingly, what the government sets in motion often fails to achieve its aims. Only 23% of power generation projects in the U.S. seeking grid connection from 2000 to 2016 were built. Wind completion was 20%, and solar was 16%. (Lawrence Berkeley National Laboratory)

While momentum builds toward electrification, numerous S Curve constraints are waiting around the bend:
  • Customer Acceptance
  • Charging infrastructure
  • Chip shortage
  • Battery shortage
  • ICE job losses
  • Reliance on rare-earth materials
  • The strain on the electric grid

Fluid

Toyota Motor Corp. President Akio Toyoda says he is among the silent majority questioning whether electric vehicles should be pursued exclusively. Hybrids now account for 30% of the standard passenger vehicles sold in Japan. 

Toyoda, who is stepping down as CEO on 1 April of this year to become board chair, notes the world's largest car manufacturers are underwriting commitments to electric vehicles with profits from combustion engine sales. 

How risky is a once-in-a-century vehicle transformation with a single EV option? 

Mark Twain, one of Nikola Tesla's best friends, offers this advice--

"What gets us into trouble is not what we don't know. It's what we know for sure that just ain't so." 


Strategist.com

© Bredholt & Co. 








 





01 January 2023

Restoring Magic to the Kingdom

"I only hope we don't lose sight of one thing--that it was all started by a mouse."

--Walt Disney

What kind of Hollywood ending might a script writer have in mind for a remake of the 2020 CEO decision at Walt Disney Co.?

Of the pressing items on returning CEO Bob Iger's "to-do" list (reversing reorganization, streaming, the decline of broadcast and cable tv—according to one observer), perhaps nothing is more critical than correcting his one big failure—naming Bob Chapek as his successor. 

(C) Walt Disney Co.

Backstory

Reuters reported that Bob Iger is returning to Walt Disney Co. as chief executive, less than a year after he retired, "to boost investor confidence." The stock sunk more than 40% last year, lagging the nearly 7% year-to-date drop in the broader Dow Jones Industrial Average. It lost almost a third of its value while Chapek was at the helm.

Iger, 71, agreed to serve as chief executive officer for two more years, Disney said in a statement. He replaces his chosen successor, Bob Chapek, who took over as Disney CEO in February 2020 just as the COVID-19 pandemic led to park closures and visitor restrictions. 

"The Board has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely situated to lead the Company through this pivotal period," Chairwoman Susan Arnold said in the statement.

An uncertain process

Why is CEO succession at Walt Disney Co. like the Magic Kingdom's Space Mountain--a roller coaster ride in the dark? It may result from inadequate board planning. Not sorting CEO and COO responsibilities. Neglecting leadership transitions. And a culture of limited power sharing.    

Disney's unsteady history of managing executive suite transitions at its Burbank, Calif. headquarters—sometimes referred to as the Seven Dwarfs building—should have been a cautionary reminder for Iger and the board. But instead, succession failures were behind the curtain as the newly appointed chief executive appeared live from Walt Disney Studios on Monday, November 28, 2022, hosting a 40-minute company-wide Town Hall meeting of in-person and virtual employees.

A pattern of behavior

When Disney president and chief operating officer Frank Wells, considered a legend at the company, died in a helicopter crash in April 1994, chairman and chief executive Michael Eisner decided not to promote Jeffrey Katzenberg, chair of Walt Disney Studios, to fill Well's position as No. 2. Eisner said he wanted to run Disney by himself. So, after 19 years with the company, Katzenberg resigned.

However, Michael Eisner then hired Michael Ovitz, a founder of Creative Artist Agency, as president in October 1995, only to terminate him 16 months later with a court-approved $130 million severance package. 

Eisner, who had successful emergency quadruple heart bypass surgery in July 1994, served as CEO for 21 years and never wanted to leave. "I would expect to stay there forever," he said in 1997. But, as it turned out, that presumption was not to be.

Eisner's tenure ended in 2005 with a shareholder revolt led by Roy Disney, nephew of the founder, Walt Disney. In a newspaper commentary in the Financial Times, Roy Disney and his advisor, Stanley Gold, accused the Disney executive officer of refusing to "brook criticism, nurture talent, or groom a successor."

With Michael Eisner's dismissal, Disney's then-president, Bob Iger, was appointed CEO.

Tom Skaggs, former chief operating officer at Disney, was widely expected to succeed Iger in 2018. Skaggs had financial experience as CFO and later served as Disney Parks, Experiences, and Products chairman. Then the company announced that Skaggs would leave in May 2016. Bob Iger would run Disney alone and extend his contract four times before finally stepping down as CEO in February 2020 while remaining board chair until the end of 2021.

A final act?

There's a need for Bob Iger to work his magic one more time to repair Disney's businesses, morale, and especially its CEO succession process. Working closely with the board to find the right person and put them in the right place as the entertainment industry is transformed.

Could this "boomerang" moment have a Hollywood ending? Well, it may happen differently than planned. To quote Heraclitus, "No man ever steps in the same river twice, for it's not the same river, and he's not the same man."

Nevertheless, this extended performance is Robert Allen Iger's ultimate legacy and maybe Walt Disney Co.'s future.


Note: A version of the January Post appeared in the Orlando Sentinel.


 Strategist.com

© Bredholt & Co.


 

01 December 2022

A Path to Corporate Well-Being

 "The greatest wealth is health."

--Virgil

One of the more significant life changes in the past 36 months is how people think about work. 

"The pandemic changed a lot of things--probably permanently--about the relationship between people and the way they view work. This intimately ties into the job stress--mental health link," says Chester Spell. Ph.D., professor of management at Rutgers University.

Dr. Spell's observation is certainly accurate for workers under 40. 

Gallup's State of the Global Workplace report underscores the negative impact from 2020 now carried over into subsequent years. 

"Younger employees (those under 40) have more stress and anger, lower employee engagement, and lower well-being than older employees," writes Ryan Pendell. "Leaders, particularly those who come from older generations, need to recognize that well-being support looks different for different stages of life," he adds.

(C) PMHC
To examine well-being, we turn to a comprehensive study conducted by Deloitte and Workplace Intelligence. The research extended to four countries: the United States (57% of respondents), United Kingdom (14%), Canada (14%), and Australia (14%). Fielded in February 2022, the survey targeted executives and employees between 18 and 76 years of age, working full-time.

There were 2,100 respondents, 1,050 C-suite, and 1,050 employees.

The results of the Deloitte survey reflect a younger global workforce, 63% under 45 by 2025, and pick up on attitudes found in the Gallup study.  

Key findings

Well-being is high on the list of corporate priorities. 

"While the pandemic brought worker safety in the spotlight, there's also been an increased focus on the overall poor state of workforce well-being and the role that organizations play in determining the quality of life for employees and their families," the report concludes.

It may be stating the obvious, but the authors note that work often works against well-being. 

How can C-suite leaders improve their employees and their well-being, something millennials and Gen Z desperately want from employers? 

And how would any company-sponsored wellness programs include remote or hybrid workers? 

Is a new direction possible?

Rethinking and executing a new organizational wellness initiative will take time--and hard work. Unfortunately, there are few practices to measure against as this period is filled with new behaviors.

The Deloitte study confirms that employees and the C-suite struggle to prioritize their well-being. But, again, the data show work is primarily to blame. The problems include outdated work schedules, having to be "always on," substandard wages and benefits, and the idea of sacrificing health and personal lives for their job. 

Closed offices and work-from-home situations were not highlighted. 

"The pandemic has worsened everyone's health, but executives don't realize how much their employees are struggling," the report states.


Deloitte says, "Fatigue and mental health issues show up among employees and executives. Well-being, or the lack of it, doesn't discriminate among rank."


Optimism is a character trait in higher positions. For example, eight of 10 global executives believe their people are thriving in all aspects of their well-being. Yet, the four-country study shows that while 57% of employees consider quitting for a more supported job, nearly seven out of 10 executives think about doing the same. 

So much for management positivity. 

Where does the process begin? 

A corporate culture of well-being begins at the top but requires broad participation. Even with prevalent mental health issues, everyone has the potential to contribute to institutional wellness through personal wellness.

"Taking control of our thoughts and behavior is key to protecting our mental health. One of the central tenets of cognitive behavioral therapy is the belief that it is often not external events themselves but our interpretation of those events that lead to our difficulties," writes Kirsty Miller, Ph.D., a psychologist based in central Scotland. 

"This way of thinking is empowering as it returns control to the individual," Dr. Miller emphasizes. 
 
It's encouraging that young leaders are showing the way.


Notably, 80% of the Deloitte respondents agreed that workers are likelier to be healthy when executives are healthy. Personal well-being is, therefore, a viable path to corporate well-being. 

How important is that finding?

Best-selling author, Patrick Lencioni, summarizes this way: 

"Organizational health will one day surpass all other disciplines in business as the greatest opportunity for improvement and competitive advantage."




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01 November 2022

The Gift of Gratitude

"Thankfulness is the beginning of gratitude. Gratitude is the completion of thankfulness. Thankfulness may consist merely of words. Gratitude is shown in acts."

--Henri Frederic Amiel

Hurricane Ian was a Category 4 storm with 155 mph maximum sustained winds, a 12-18 foot storm surge above ground level, and 18 inches of rain (1-in-1000-year amounts in some places) that came ashore near Cayo Costa in Southwest Florida on the morning of 28 September 2022. NOAA reported that Ian tied the record for the fifth-strongest hurricane to strike the United States.

Hurricane Ian (C) NASA
The reports from survivors have this in common--grief for loss and gratitude for life.

Ralph and Brenda Palmer's electricity was restored in their mobile home park in Fort Meyers, Florida. That made it possible to survey their property and discover a home likely beyond repair. "You can't save everything my children tell me, but it's my life, and it's gone," Mrs. Palmer says to an A.P. reporter nearby. Then she begins to cry.  

"I'm glad to be alive," said 81-year-old Punta Gorda resident Susan DiGregorio. She had planned to evacuate, but the person who was to help her leave had COVID-19, and DiGregorio weighed the risks and decided to stay.

During the height of the storm, she heard aluminum screaming as her roof was ripped off. After that, she said she made peace with death.

"I'm glad to see the sun," she said Friday. "I'm glad to hear the birds that made it through the storm." 

Florida Emergency Management reports at least 127 deaths, mostly from drowning. Power has been restored to all accounts on the mainland that can receive it (from peak outages of 2.6 million accounts across the state). Core Logic estimates $40 to 70 billion dollars in losses, insured and uninsured property. In addition, Governor Ron DeSantis says that the power grids in Lee and Charlotte Counties will likely have to be rebuilt.

What's harder to assess is the blow to victims' mental health. That toll could mount for years.

What is gratitude? 

Psychology Today defines gratitude as an emotion expressing an appreciation for what one has as opposed to what one wants. 

"The practice of gratitude can have dramatic and lasting effects in a person's life, said Robert A. Emmons, professor of psychology at the University of California, Davis. Professor Emmons, a leading expert on the science of gratitude, underscores the health benefits. "Gratitude reduces lifetime risk for depression, anxiety and substance abuse disorders, and is a key resiliency factor in the prevention of suicide." 

According to Pew Research, large majorities of the adult population regularly feel an ongoing sense of gratitude. In addition, Pew discovered that appreciation is found among those with and without a college degree; it is shared by individuals up and down the economic ladder, with higher levels of gratitude more common among highly religious people than those who are not.

Amy Rees Anderson says gratitude is a gift. 

"The gift of gratitude is something we already possess and can learn to discover better," she writes. Her conclusion? "This gift is available should you wish to see it, take it, and cultivate it." 

How can individuals lose everything and be grateful? 

After experiencing a natural disaster of this magnitude, having a sense of normality may take a long time--if ever. Relocating or rebuilding are questions facing thousands of residents. Interviewed by media outlets in hard-hit areas, Floridians in their 70s and 80s say that starting over may be impossible. Their retirement dreams are now washed away with their belongings. Separated from their communities and churches, these retirees are homeless with no place to go.

Fortitude is not evenly distributed. Therefore, some individuals will have to have an oversupply of courage and compassion to help families, friends, and neighbors get through this tough time.

Gratitude begets generosity

As of this posting, the Florida Disaster Fund has raised over $50 million, with more coming daily. From children collecting change to Charles Schwab's $5 million gift, the U.S. and the world are responding to the needs of people in Florida and Puerto Rico from Hurricane Fiona.

Fort Myers Beach, Florida (C) ABC7 

More than money, hundreds of trained volunteers are providing food, water, and shelter to those affected by the storm. Along with these necessities, workers offer hope to upended lives.

The U.S. is a generous country.

Post-pandemic charitable giving in America hit record levels last year. In 2021, $484.85 billion was given to charity based on reports from Giving USA. That's a 4% increase over 2020. However, adjusting for inflation, donations remained flat. 

Who gave?

  • Individuals: 67%
  • Foundations: 19%
  • Bequests: 9%
  • Corporations: 4%

The top five recipients were religion ($135.78 billion), education ($70.79 billion), human services ($65.33 billion), foundations ($64.26 billion), and public society benefit ($55.85 billion).

According to Lake Institute, pre-pandemic, a person's attendance at a house of worship was the single best indicator of overall charitable giving. Those who attend regularly, 3 to 4 times per month, at least, are 3 times more generous than those who attend less frequently or not at all. 

Investing in personal relationships and being worthy of other people's trust is the cornerstone of development.

For the future, philanthropy advisers, BWF, recommend courting high-net-worth individuals; being clear on the charity's distinctiveness when providing services; making sure there's a robust digital presence to communicate the need--and providing an easy way for individuals to respond. 

And remember to say thank you.

People want to make a difference, invest in organizations with strong leadership, and know those funds are being used for their intended purpose. 

Results are the best receipt you can give a donor.

Fully conscious of the moment

In a report from WLRN Public Radio, Sarah Meckley and her daughters survey what's left of possessions inside their Fort Myers home. They're saddened by the material losses but know scores of Gulf Coast residents don't even have a home to return to. 

Meckley and her adult children, Annabel and Abigail, don't complain.  

"All I can say is my two emotions are a sense of gratitude for our community and an overwhelming sense of being overwhelmed," Meckley said. 

That sentiment sums up the resilience of those who survive the worst Mother Nature has to give.  



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© Bredholt & Co. 













01 October 2022

Queen Elizabeth II--Executive Coach

"Let us not take ourselves too seriously. None of us has a monopoly on wisdom."

--Queen Elizabeth II (1991 Christmas broadcast)

Historians tell us that Winston Churchill and Queen Elizabeth II became lifelong friends--with great mutual respect. 

In 1928, after their first meeting when she was two years old, the future prime minister wrote of his first impression that she was "a character ...  having an air of authority and reflectiveness astonishing in an infant." 

(C) Queen Elizabeth II and Sir Winston Churchill. News Express. CO. U.K.

"She was a highly conscientious young woman, with wisdom beyond her years," said John Colville, who served as private secretary to Princess Elizabeth from 1947 to 1949.

Queen Elizabeth II was crowned sovereign on 2 June 1953 in Westminster Abbey, following the death of her father, King George VI, who had been the monarch since 1937.

Tutoring the Queen

Thus began a working relationship and friendship in which Prime Minister Winston Churchill and Queen Elizabeth II met for weekly meetings, prescribed by British law, which stretched from 30 minutes to two hours, of which no records were kept. 

Henry Marten, the vice provost of Eton College, schooled Princess Elizabeth on constitutional history. 1  Churchill tutored a queen without formal education on the complexities of constitutional monarchy, politics, practices, and the law. Both had a profound effect on helping her to become the respected royal icon she was--up to the moment of her passing on 8 September 2022. 2

Queen Elizabeth II met with fourteen sitting prime ministers weekly over 67 years. Her initial preparation for that duty is primarily attributed to time spent with Winston Churchill. 

Liz Truss became the U.K.'s new prime minister after meeting with the Queen at Balmoral Castle in Scotland on 6 September 2022. Truss was formally asked by the Head of State to form a new government after the resignation of Prime Minister Boris Johnson.

Understanding the longevity of Queen Elizabeth II's success comes from knowing who she was and how she approached her role. The Queen's vast time on the world stage begins with a crisis in the Suez Canal (1956) and ends with the Russian invasion of Ukraine (2022). 

In paying tribute, Labour Party leader Keir Starmer said, "She was the still point in a turning world." (T. S. Eliot)

Giving and receiving advice

Queen Elizabeth II, the longest reigning monarch in British history at 70 years and 214 days, combined a royal heritage, and inspirational character, with a profound faith. "She reveres the work she believes God gave her," according to one biographer. Those are appropriate values for someone who was also the Supreme Governor of the Church of England.

Self-effacing, common sense, and the ability to know the pulse of her people. The Queen displayed those qualities and more, though infallible she was not. 

British law forbids a king or queen from giving orders or publicly taking sides on matters of state, though they are free to ask questions and offer a point of view. That means a well-read Queen Elizabeth II, with a wealth of historical perspective, including state secrets placed in her Red Box, was trained to be discreet with her thoughts. 

News reports from No. 10 Downing Street, London, imply that her credibility with prime ministers was reinforced by restraint. Former British Prime Minister John Major said Queen Elizabeth II was a "safe place to speak openly without fear of reprisal."

She knew legitimate areas for giving counsel and when the process ended. Unlike most executive coaches who focus on the client, the Queen was interested in both the client and the institution. That is the United Kingdom of Great Britain and Northern Ireland.

In 2019, The Wall Street Journal proclaimed Queen Elizabeth II as "the world's most experienced executive mentor."  

Suppose the Queen had published her principles for being a trusted advisor (a guaranteed bestseller). The Journal suggested a short table of contents--letting clients speak openly, guarding their secrets, redirecting their thinking--incrementally, and doing everything with humility. 

All of which takes practice.

Queen Elizabeth II knew what seasoned coaches know--the only way to let leaders learn and grow is by allowing them to make their own mistakes.

Breaking protocols and tradition

Can someone old school who lived to ninety-six be institutional and fresh in their thinking?

When Winston Churchill died in 1965, Queen Elizabeth II broke protocol by arriving at his funeral before the family at St. Paul's Cathedral in London. She wanted to be there to show respect and honor the man who was her most trusted advisor in the earliest days of her reign. 

Usually, the Queen is the last person to arrive at any function.

In the days following the 11 September attacks in 2001, Queen Elizabeth II, breaking 600-year- old tradition, ordered the band of the Coldstream Guards to play "The Star-Spangled Banner" to show solidarity with the U.S.

According to The Guardian, on 13 September 2001, over 3,000 people were gathered outside Buckingham Palace when the band played the U.S. national anthem during the changing of the guard ceremony.

A sovereign sense of humor

On a different note, the Queen is shown jumping out of a plane (a stunt double) with James Bond (Daniel Craig) to begin the 2012 Olympics. Earlier this year, she discloses to Paddington Bear, in a video sketch produced for the Queen's Platinum Jubilee, that while her host keeps a marmalade sandwich under his hat, she keeps one in her purse "for later."  

On a visit to Scotland, she was told she looked just like the Queen. Instead of making a scene where she pointed out she was the Queen, Her Majesty replied, "How reassuring." 3

Queen Elizabeth II was a dignified figure with a lineage of thirty-seven generations. Yet behind that pedigree, she was a "character," as Winston Churchill first observed. 

How true his description proved to be.


1 Elizabeth and Margaret: Love and Loyalty

2 andmeetings.com

The Wicked Wit of Queen Elizabeth

 

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© Bredholt & Co.

 

01 September 2022

Do Not Feed the Gators

"Worry is the interest paid by those who borrow trouble."

--George Washington

It's our practice to offer out-of-town guests a menu of non-Disney things to do. Not just because of ever-increasing costs at the Magic Kingdom and EPCOT but to give people an opportunity to experience natural Florida. 

Walt Disney World is not Florida. 

One of the options is an airboat tour of Lake Jesup.* This 16,000-acre lake (65 km), one of the largest lakes in Central Florida, with varying depths of four to nine feet, is the Sunshine State up close. It's a body of murky water home to various species, including Great Blue Heron and Snowy Egrets. 

And it has a reputation as the most alligator-infested lake in the U.S., with 13,000 gators (1.3 million statewide), according to the Florida Fish and Wildlife Conservation Commission. (FFWCC biologists conduct gator census at night using spotlights and counting eyes.)

Lake Jesup, Florida (C) Trip Advisor
How dangerous are alligators?

For the most part, alligators like to be left alone. They're carnivores, but humans aren't one of their preferred meals. As a result, Florida averages six bite victims annually, and the Florida Wildlife Commission says gators killed just 26 people between 1948 and 2020. 

One tragic loss of life was that of 2-year-old Lane Graves at Disney's Seven Seas Lagoon near the Grand Floridian Resort on 14 June 2016, where his family was vacationing. 

Leaving trouble alone

Sometimes trouble comes looking for us even if we did nothing to egg it on. We're innocent. Such was the case of the toddler at Disney.

Florida state law makes it a crime (up to a $500 fine/or 60 days in jail) to harass or feed an alligator. One expert put it this way--"By providing food for these wild animals, which are naturally afraid of humans, we make them bolder and encourage them to seek out people."  

As if there isn't enough to do to stay on course with post-pandemic responsibilities, we tempt fate by going where we don't belong and hanging with people known for giving bad advice. And not taking time to learn from our experiences.     

We risk losing a veil of personal and corporate protection by unnecessarily feeding particular appetites.

Running a principled business.

In "Inside Money," the story of Brown Brothers Harriman, the merchant banking firm, author Zachary Karabell recounts the advice Alexander Brown gave his associates as the House of Brown got underway.
(C) BBH
What would distinguish one firm from another, Brown insisted, was reputation and trust. "Anyone could buy and sell stuff, but not just anyone could develop a trusted reputation," the founder instructed.

What were Brown Brothers Harriman's guidelines to keep from tempting fate?
  • Refrain from dealing with people about whose character there is a question. It keeps your mind uneasy. It is far better to lose the business. 
  • Where the risks are too significant, one loss may wipe out a hundred safe arrivals. 
  • "Shoemaker, stick to thy last." Better to cleave to what you know and be known as someone others can trust. 
The author notes that not all decisions went perfectly, and mistakes were made. "But the template established by Alexander Brown--stick to your last, stay focused, guard your reputation zealously as your most precious asset, be always prepared for hard times, and avoid unnecessary risk--formed the lasting core of the firm," Karabell concludes.

Getting out front

Alexander Brown's principles for the House of Brown began with his values and experience. 

Here are ways to inform your distinctiveness: 

1. Self-awareness is the ability to see ourselves and the enterprise clearly and objectively. We invite the perspective of others, practice self-control, and work creatively and productively in this frame of mind. (positivepsychology.com)

2. Make it a practice to tell the truth. Being truthful means we can grow and mature. Truthfulness makes social bonds, and lying breaks them. To quote Oscar Wilde, "The truth is rarely pure and never simple." (skillsyouneed.com)

3. Surround yourself with individuals of strong moral character from all walks of life. Find people who are more intelligent than you, who have experience, and who can be trusted. Sometimes ordinary people are the most profound. (forbes.com) 

4. Treat people with dignity and respect. That means accepting someone for who they are, even if different from you.

5. Don't jeopardize relationships before their time. While being clear on your point of view, there's no need to intentionally antagonize others. As Mafusa says in The Lion King: "Being brave doesn't mean you go looking for trouble."



*Airboat tours launch from Black Hammack Wilderness Area, Oviedo, Florida.  



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01 August 2022

Closed Sunday

"Remember, the unmoored boat floats about."

--Murasaki Shikibu

Who typically lives longer?  

A business or individual? 

The average lifespan of a U.S. S&P 500 company has fallen by 80% in the last 80 years (from 67 to 15 years), and 76% of UK FTSE 100 companies have disappeared in the previous 30 years.   

According to the U.S. Bureau of Labor Statistics, two out of every three businesses with employees will last two years. About half will last five years.

Smaller businesses dominate the commerce landscape. But, according to the BLS, nearly 20% of those businesses fail within the first year of opening. Then, after five years, half of those size companies go out of business--and only about 30% make it to year 10, as reported in Forbes Magazine.

Most giant corporations have a lot of inefficiencies. The English economist, E. F. Schumacher, pointed toward this factor in his book, "Small is Beautiful." That may contribute to their disappearance as they are bought out, merged, or bankrupt.

McKinsey & Company estimates that by 2027 75% of the companies currently quoted on the S&P will be gone.

100 years+

Yet there's hope.

Organizations, big and small, can be around for decades. Some reach the 100-year mark, such as Coca-Cola, UPS, L.L. Bean, and Kellogg's. Or smaller enterprises such as Seaside Inn, Casewell-Massey, or Pensacola Hardware, which began in 1851.

In addition to having the right people, products, or services and favorable market conditions, researchers have identified two "incongruous" practices carried out simultaneously for a long life:

First, have and preserve a stable core, an unchanging organizational purpose.

The second step is to have a disruptive edge, which involves bringing in outside expertise and learning from other sectors (even the ones that have nothing to do with yours).

Along with other vital factors, including luck, those who achieve longevity appear to balance the radical and traditional to stay on top of their respective fields. 2

What's in the core?

Much has been written about Chick-fil-A, the 55-year-old family-owned business with 2,700 restaurants across 47 states, Washington DC, Puerto Rico, and Canada. Franchise Times reported systemwide sales totaled $16.7 billion in 2021. 

(C) Chik-fil-A

How does the company generate consistently impressive results? 

By joining its organizational core with corporate discernment in practical matters. Both are critical for the execution of strategy. In a highly competitive industry, the Atlanta-based company finds a way to make the ingredients of culture, customer service, tasty chicken, and common sense come together--most of the time. 

No ingredient by itself explains the company's success. 

Here's a closer look at Chick-fil-A: 3

--The chain's business model is unique among its competitors--explicitly guided by Christian values.

--Founder Truett Cathy's faith was embedded into business practices that have directly contributed to the company's success. Mr. Cathy's beliefs are the rulebook for running one of the restaurants. These values are now overseen by his son, current CEO, Dan Cathy. The elder Cathy passed in 2014 at age 93.

--The secret weapon is its rigorous franchise operator-selection process that finds and trains "Truett Cathy clones." As a result, Chick-fil-A's acceptance rate for new owners is 37x more selective than Harvard University. And the start-up fee is $10,000 compared to McDonald's $1.8 million cost.  

--Industry insiders observe that while Chick-fil-A's culture gets most of the attention, the company is populated with top-notch management who are constantly investing in the future. 

--For the eighth year in a row, the restaurant chain was voted America's favorite place to eat, according to the American Customer Satisfaction Index. Chick-fil-A is periodically called out for its support of conservative cultural causes. However, from 2012 to 2019, systemwide sales went from $4.6 billion to $10.5 billion at the height of this backlash. 

In that same period, the average store location grew from $2.6 million to $4.6 million in sales.

(Jim Collins points out that it doesn't matter what core values you have. It matters that you have core values. And that you preserve and are passionately committed to them.)

--By being closed on Sunday, it's estimated that Chick-fil-A gives up $1 billion annually in revenue. Is it worth that price? Leadership says it is. A day off for employees and management and an opportunity to attend a house of worship is an original corporate value. 4

Not playing it safe

With core and operating fundamentals established, does Chick-fil-A have a disruptive edge?

Management believes the path to a viable future combines Christian values with Silicon Valley ideology. 

1. The company brought expertise from Ritz Carlton Hotels and other places to codify hospitality and politeness ("My pleasure.") The goal is to integrate those behaviors with a simple and reasonably priced menu.

(C) Hatch Innovation Center Chik-fil-A/Interior Design Magazine

2. At the Hatch, a company incubator designed to explore next-generation service, Chick-fil-A is looking at drones and driverless delivery. Will robots be as polite as a carefully trained workforce?  

3. Planning is straightforward. Values stay--everything else is on the table.  

Where is Chick-fil-A in its lifecycle?

David Farmer, vice president of Menu Strategy and Development, says progressing gradually is essential. "You have to evolve."    

In a meeting with top management, CEO Dan Cathy said, "One day, Chick-fil-A will no longer exist." He was referring to the diminishing lifespan of businesses.

What does Cathy's caution mean for his 170,000 team members? Without overpromising, and with everpresent Chick-fil-A values: provide excellent service; offer good food at fair prices; continually improve, and be hospitable to everyone.

For now, the only closing Chick-fil-A customers must think about is Sunday.




  U.S. overall life expectancy is 77 years--CDC.gov.
2  Harvard Business Review, September 2018.
3  Business Insider, August 2019.
4. Hobby Lobby, a $6.4 billion business, is closed on Sunday.





  
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