When it came time to pay, the man took out a checkbook and wrote out a check. The salesperson was hesitant because the couple hadn’t shopped there before.

The man discerned what the salesperson was thinking and he said calmly: “I sense that you are concerned that this check may bounce, right? Today is Saturday and the banks are closed. Let me suggest that I leave the check and the handbag here. When the check clears on Monday, you can deliver the handbag to this lady. How about that?”

The salesperson was reassured and gladly accepted the suggestion. In addition, he waived the delivery charges. He promised that he would personally make sure that this gets done.

On Monday, the salesperson took the check to the bank. The check bounced…! The irate salesperson called up the client, who told him: ‘What is the big deal? Neither you nor I have suffered any loss. Last Saturday night, I went to bed with that girl already! Oh, by the way, I thank you for your cooperation. ‘

This story reveals the nature of the sub-prime mortgage crisis. When people have high hopes for huge future returns, they lower their guard about the potential risks. This pretty girl thought that the HKD 65,000 LV bag was going to come home on Monday, and so she lowered her guard. Therefore, she believed that her investment in the ONS (one night stand) was worth it even though it was based upon huge and highly uncertain risks.

Investment companies are great with packaging high return (but high risk) deals. The Chinese stock speculators are like this pretty woman. As such, they deserve to lose money. Without people like these, how are people going to make money from the stock market?

As for the media and the stock analysts, they often play the role of the LV salesperson.

Don’t you agree with the truthfulness of the above-mentioned statements?

The Templeton Growth Fund was one of the first mutual funds to give Americans access to investments in companies abroad. Since its start in 1954, the fund has returned 13.5 percent a year on average, meaning a $10,000 investment would be valued at about $8.5 million as of March 31, including reinvested dividends and capital-gains distributions.

Like Warren Buffett, Templeton developed a cult following, with fund investors flocking to annual meetings to hear his pronouncements. Money magazine in 1999 called him “arguably the greatest global stock picker of the century.”

Templeton may be remembered as much for financing the study of spirituality as for his canny investments. In 1972, he set up the $1 million-plus Templeton Prize. Mother Teresa was the first recipient, six years before she collected the Nobel Peace Prize. He always made sure that his award offered more money than the Nobel Prizes.

Launched in 1977, the Xerox 9700 was the first commercial laser printer. The man who personally came up with the idea of laser printing was Gary Starkweather. He joined Xerox in July 1964 as an optical engineer on advanced copier technology.

His idea came while working with lasers as an alternative light source for high-speed facsimile systems. It dawned on him that, rather than scan and transmit someone else’s document, you could generate one using a computer and send the electrical signals direct to the printer portion of the fax machine.

The idea was born, but Starkweather’s management was less than impressed. The high cost of lasers at the time made them believe such a device could never be affordable. Starkweather was told to stop working on his laser printer concept, but he battled on, convinced falling prices would make it a viable option.

As this conflict came to a head in mid-1970, Xerox announced it was to build a new California-based lab to research digital technology. The Palo Alto Research Center (Parc) proved to be a dream come true for Starkweather. He approached them and discovered the department researching personal computing technologies was wondering what they’d use for a printer.

In January 1971, Starkweather and his family relocated to California. Parc’s management fully supported the idea for a laser printer. After Starkweather had equipped his lab, he was instructed to create a working laser printer for the Alto personal computer that was being developed in parallel.

Laser printing with tiny spots of light proved to be an ideal match for the Alto’s bitmapped display. Printing with pixels was a natural way to convert such screen images to paper and lasers were the only light source capable of positioning the millions of points required to create a high-quality page in a second.

Starkweather was soon joined by Bob Kowalski, who helped turn his ideas into real working circuitry. Tibor Fisli later provided mechanical design and fabrication skills, while lab manager Bill Gunning was a source of encouragement.

One challenge was to find a way to deflect thousands of points of laser light hundreds of times a second with inexpensive optics. The solution was to employ a rotating mirror with around 30 faces. As the mirror spun, each face deflected the laser across the photoconductor, while a special light modulator turned the beam on and off millions of times per second.

Starkweather’s team adapted an existing Xerox 7000 reduction duplicator into the first working laser printer in just nine months. Designed for the Alto computer, it used low-cost Helium-Neon lasers, ran at 60 pages per minute and was called Slot –- Scanning Laser Output Terminal. Once completed, Starkweather’s team began researching a smaller, more personal laser printer and a colour model based on the Xerox 6500 copier.

In the meantime, a team lead by Jack Lewis with Tom Robinson and Ronald Rider developed Starkweather’s prototype into a commercial laser printer. Eventually announced on 1 June 1977, the Xerox 9700 printer was based on the 9200 copier, ran at two pages per second, delivered a resolution of 300 dots per inch and was compatible with large IBM 360 systems. The standard model cost $325,000 (£182,000 approx), increasing to $500,000 for one with all the bells and whistles.

Xerox calculated each 9700 needed to generate about 300,000 pages per month in order for servicing and toner refills to be profitable. In reality, the average page count was over a million per month. Some businesses, such as Bank of America in Los Angeles, had 14 9700s running 24 hours a day with Xerox staff attending to their needs around the clock.

The 9700 and departmental laser printing made a fortune for Xerox, but it failed to see any profit in personal models. Despite Xerox scientists working on the idea, it was left to Canon to develop a cartridge toner system. This may have cost the owner more, but was easy to replace and generated a lot more profit.

Canon’s laser engine was subsequently employed by a new breed of personal laser printers, making companies like HP very rich. In the two decades following Starkweather’s idea, personal laser printers spearheaded the DTP revolution and became standard equipment in almost every office -– and the spinning mirror deflection system is still used to this day.

Source: PC Today

The son of a stockbroker, David Ogilvy was born in 1911. Despite the family’s reduced financial circumstances Ogilvy was dispatched to Fettes School, a prestigious private school near Edinburgh, Scotland. What Ogilvy lacked in natural academic ability he made up for in scholarly application, securing a scholarship to study history at Christ Church College, Oxford University.

When he left university, the young Ogilvy sought adventure, trading the Cotswold stone of the Oxford colleges for the boulevards of Paris. In France, he worked in the kitchens of the Hotel Majestic. His first assignment was to prepare meals for customers’ dogs. When Ogilvy had tired of la vie Parisienne he returned to England to sell a new type of cooking stove, the AGA.

As a salesman Ogilvy proved a great success. So much so that he was asked to write a manual on how to sell the cooker for the AGA sales force (thirty years later the editors of Fortune magazine announced that it was probably the best sales manual of all time).

Ogilvy sent his manuscript, “The Theory and Practice of Selling the AGA cooker”, to his brother who was working at London-based advertising agency Mather & Crowther. His winning way with words earned him a place as a trainee at the agency.

To make the story short, the 1960s was a big decade for Ogilvy. In 1963 he published his book Confessions of an Advertising Man, which sold well over half a million copies and cemented his position as an advertising guru. In 1965, his firm merged with Mather & Crowther, to form Ogilvy & Mather. It was a deal that created a company with total billings of $120 million.

Ogilvy took a back seat, preferring to concentrate on the creative side and leaving the administrative chores to others. Then in 1966 Ogilvy & Mather became a publicly-listed company, only the sixth advertising agency to do. Ogilvy sold 61,000 shares of his 161,000 becoming a wealthy man in the process.

In 1975 Ogilvy & Mather was one of the top five advertising agencies in the world with 1000 clients, offices in 29 countries and billings of some $800 million.

David Ogilvy said the secret to success was simple:

1. Make a reputation for being a creative genius.
2. Surround yourself with partners who are better than you are.
3. Leave them to get on with it.

But most important ingredient in any agency is the ability of the top man to lead his troops. Ogilvy was a brilliant advertising “creative”. He came up with some of the most memorable copywriting of his times. Yet he was also a brilliant leader. He knew when to lead from the front and when to take a back seat, how to motivate, how to cajole and how to get the best from his workforce.

Ogilvy is also a shining example of a man who made it to the top in spite of several so-called handicaps to success. He once measured his IQ: expecting a genius score of 145 he found it was a disappointing 96.

He was afraid of the sea, of heights, and of flying, suffered asthma until middle age and didn’t enjoy any of the usual executive pastimes such as golf or tennis. He was also a late-starter in advertising at 39. Yet he still made it to the top of his profession -– and made an indelible mark on that profession.

Source: Business Strategy Review, Autumn 2005

Harold Geneen was born in Bournemouth, England, in 1910. Geneen’s childhood was spent at boarding schools and summer camps. When Geneen started work, as a runner for the New York Stock Exchange, he continued to study at night at New York University. In 1934 his hard work was rewarded with a degree in accounting.

For the next 25 years his career took in a string of companies starting with the forerunners of Coopers & Lybrand followed by Montgomery an accounting firm, then the American Can Co., Bell and Howell Co., Jones and Laughlin Steel Co. and Raytheon. After Raytheon, where Geneen was vicepresident, came the biggest challenge of Geneen’s career and the job that made him famous — International Telegraph and Telephone Company (ITT).

When Geneen arrived at ITT in 1959 the corporation was a ragbag collection of businesses, loosely focused around telecommunications, with revenues of $800,000. During the 1960s the predominant organisational trend was one of diversification and conglomeration. CEOs went into a purchasing frenzy raiding the corporate aisles for any company, no matter what business it was in, so long as it turned a profit. Geneen was no exception.

Over the ensuing decade Geneen purchased over 300 companies operating in over 60 different countries. There was no rationale to these purchases, no common thread, other than that of profit. Sheraton hotels, Avis car hire, Continental Baking, were all tucked away in ITT’s roomy locker.

It was a mammoth undertaking to manage so many disparate companies. Fortunately for ITT, Geneen was a fiercely driven workaholic. His ITT office in New York was equipped with eight telephones and a clock that showed what parts of the world were in daylight, and what in darkness.

Ten suitcase-sized leather attaché cases crammed full of documents were stacked along the window ledges. Six of the cases, stuffed with reports, communiqués and memos from over 400 reporting corporations, followed Geneen around the country and the world.

In his late eighties long after he left ITT, Geneen was still working a ten hour day at his office in New York’s Waldorf-Astoria hotel running a company, Gunther International, that he had bought into in 1992. “If I had enough arms and legs and time, I would do it all myself,” said Geneen. Even then it required all his energy to control the ITT conglomerate. To keep ITT under control Geneen employed rigorous financial accounting methods.

Each month 50 or more executives flew to Brussels to spend several days examining the figures. “I want no surprises,” was one of Geneen’s mantras. Full information was paramount, as was the ability to tell real facts for details masquerading as facts. “The highest art of professional management requires the literal ability to smell a real fact from all others,” asserted Geneen.

And Geneen’s approach seemed to work. From 1959 to 1977 ITT sales rocketed from some $765 million to approaching $28 billion, with earnings up from $29 million to $562 million. It was a success by most people standards, not just Geneen’s.

Yet the more companies Geneen acquired, the harder it was to keep all the plates spinning in the air. In 1974 and 1975 profits fell, Geneen may have been able to keep up a relentless place, but his followers were either unable or unwilling to match it.

Geneen’s efforts to support his company’s share price sometimes strayed outside the boundaries of acceptable practice. In 1972 America’s Securities and Exchange Commission discovered $8.7m had been sunk into nefarious and illegal activities around the world. This allegedly included bribery and colluding with the CIA in an attempt to undermine the Allende government in Chile.

Geneen stepped down as chief executive in 1977, as chairman in 1979, and as a director four years later. Geneen carried on working in a number of different companies of his own creation until his death from a heart attack in 1997.

ITT, however, was a different proposition. Without Geneen to support it the house of cards collapsed. ITT limped on but eventually, after selling many of the companies acquired by Geneen, it was split up into three separate companies.

Harold Geneen was one of the last of his breed. He came to power at ITT at the height of the mania for conglomerates. Size mattered. It’s doubtful if any other CEO in corporate history has acquired more companies, over 300, with less rationale. Of course acquisition is one way to grow earnings, but eventually the relentless growth has to stop and increased earnings must come from existing operations.

In the decade following Geneen’s departure from ITT, the cry from the boardroom was “stick to the knitting”. Companies slimmed down, shed non-core business and left ITT looking like a bloated dinosaur. Yet, Geneen deserves his place in the pantheon of business greats. Why? Because he was the best of his type, the paragon of his age. The king of the conglomerates.

Source: Business Strategy Review, Autumn 2005

Robert Edward Turner III was born in Cincinnati, Ohio, in 1938. He was notable for eccentric and unconventional behaviour rather than academic excellence. He betrayed a penchant for taxidermy and catching squirrels in pillowcases. Then he was punished to issue demerits which required the recipient to walk a quarter of a mile. Turner earned over 1000 demerits in his first year; further than any pupil could walk in the time available.

At Brown University, Turner continued to challenge authority. Eventually, caught with a woman in his room, he was asked to leave, but not before he had made a name for himself on the university sailing team. After university Turner returned home to work in his father’s advertising billboard business. His father made him manager of the firm’s operation in Georgia.

Turner’s often difficult relationship with his father came to a shocking end in March 1963. When Turner was just 24, his father took a silver .38 revolver and shot himself in the head. In these terrible circumstances Turner became president and COO of the Turner Advertising Company.

Turner expanded the company into television with an audacious move to acquire UHF station Channel 17 in 1970. Turner engineered a deal taking Turner Advertising public, acquiring the assets of Channel 17 and forming a new company Turner Communications.

He changed the programming schedule feeding viewers a diet of reruns -– classic shows and black and white movies. It worked and the advertising revenue flooded in. In 1976 the station went nationwide, transmitting to cable systems across the US via satellite -– it was the start of the “super station concept”.

Turned continued to diversify and expand and not always into obvious areas. In 1976 he bought a major league baseball team, the Atlanta Braves, and in 1977 the Atlanta Hawks of the National Basketball Association.

In 1980 Turner used the profits from Turner Broadcasting Systems to launch CNN (Cable News Network). The critics were scathing. A 24/7 all-news network would never work. But once again Turner proved that when it came to business he knew best. “I am the right man in the right place at the right time,” he said.

CNN was a hit. It brought news, like the Reagan assassination attempt, to viewers as events unfurled. It revolutionised the news industry. CNN cemented its reputation with its coverage of the Gulf War when, for the first time, a TV audience could watch a war in real time, from the comfort of their armchairs.

Turner continued to collect television stations; Headline News (1982), CNN International (1985), TNT (1988), SportsSouth (1990), The Cartoon Network (1992), Turner Classic Movies (1994), CNNfn (1995), and CNN SI (1997) were all added to the network.

In 1996 Turner completed the biggest deal of his career to date, when he merged TBS with Time-Warner. Holding 10 percent of Time-Warner, Turner
had the largest single shareholding. It was an astute move leaving Turner well positioned to profit from the development of a new communication phenomena –- the Internet.

Turner assumed the role of vice-chairman in the new organisation, taking responsibility for Time Warner’s Cable Networks division, which included the assets of Turner Broadcasting System (TBS, Inc.), Home Box Office, Cinemax, and Time Warner’s interests in Comedy Central and Court TV. He was also responsible for New Line Cinema and the company’s professional sports teams.

In 2001, Turner was involved in one of the biggest mergers of the post war period when AOL merged with Time-Warner to create the largest entertainment conglomerate in the world. Time Warner’s shareholders received 45 percent of the new company to AOL’s 55 percent. Turner became vice-chairman and senior advisor of AOL-Time Warner.

Turner’s career is distinguished by relentless drive, an uncanny ability to predict consumer demand and a supreme confidence in his own vision. His competitiveness and drive is equally evident in his sailing achievements. He could have made a good living as an international yachtsman.

Probably the best illustration of Turner’s qualities is the founding of CNN. Turner thought differently and pursued his vision relentlessly. He was right, the critics were wrong. Turner may make an occasional bad call, but, more often than not, his instincts have proved successful. It is this quality of vision, and having the guts to execute it, that has made Turner one of the world’s great media magnates.

Source: Business Strategy Review Autumn 2005

Born in Oak Park, Illionis on 5th October, 1902, Kroc can be claimed as the modern concept of fast food inventor. As you might know, Kroc tried out at a variety of jobs before carving out a role as a milkshake mixer salesman. At 52, Kroc had spent most of his life selling mixers. He had been a good salesman and was thinking about his retirement.

In 1954, he walked into the small burger restaurant in San Bernardino run by the McDonald brothers. What impressed Kroc about the restaurant run by Dick and Mac McDonald was the way the business was run.

It was as if Henry Ford had applied his mass production formula to the food business. So efficient was the McDonald’s operation that customers received their meal within sixty seconds. Furthermore, the brothers offered only a very limited menu at extremely competitive prices.

Using all the skills he had, he sold himself to the McDonald brothers, persuading them to license their name to him. In return, they would receive a percentage of the sales for each franchise he created.

In 1955, Kroc’s first restaurant opened in Des Plaines, Illinois. Several others quickly followed according to his strict guidelines. Although he had little trouble convincing franchisees to open McDonald’s restaurants, Kroc still encountered financial problems severe enough to almost bankrupt him.

In 1960, revenues of $75 million translated into profits of $139,000. His solution was to buy the land where the restaurants were to be located and then lease them to the franchisees. This way, Kroc retained control over the business and made more money. A year later, Kroc bought out the McDonald brothers for just $2.7 million.

The four pillars on which Kroc built the McDonald’s empire were: quality, service, cleanliness and value. He also introduced some of his own ideas such as standardizing the size of the burger and the amount of onions served with each one. He even built a laboratory in Chicago to research the ultimate French fries.

Later, he then embarked on a massive advertising campaign. A billion hamburgers by 1963, the 500th restaurant, and the brilliant conception of the Ronald McDonald, appealing to the children. In 1965, more children knew the burger clown than that of the US President.

In 1965 Kroc bring the company went public and bring him $3 million. Kroc expanded overseas after realize the company had firmly established in the US. In 1967, he took the golden arches to Canada, Europe, Asia, and the rest of the world.

Kroc’s great wealth affected him very little as he spent much of his time ensuring his high standards were maintained by the McDonald’s franchises. He died at the age of 81 in San Diego, California.

Source: Business Strategy Review, Winter 2005