Month: February 2007

One of the side effects of traveling on these multi-country “tours” is a lot of time in airports, planes, cars, and trains. While there’s not really all that much about waiting to get somewhere that’s truly exciting, the plus side is I’ve had a chance to work off a three or four month stack of BusinessWeek magazines. Reading so much back to back gives you a funky perspective on their articles.

Take this one titled “A Little Blue Pill for Women?”, about a female version of Viagra.

Drug development is never easy, however, and flibanserin faces a tougher road than usual. There’s an ongoing controversy about whether or not a female analog to erectile dysfunction even exists. In October, the Endocrine Society issued guidelines cautioning that sexual dysfunction, if it exists at all, may have nothing to do with any “defect in the woman’s physical sexual response system.” The Society concluded that the most common current treatment, testosterone, should not be recommended. The big question: If a woman doesn’t experience physical desire, is it a medical condition, like inadequate blood flow in men, or something purely psychological? “Maybe she just doesn’t like the guy she’s with,” says Washington (D.C.) psychotherapist David Waldman.

I’ll let you read in to that paragraph what you will, but I doubt the debate about Viargra was whether erectile dysfunction was caused because “he just didn’t like the woman he’s with”.

In that same issue, the cover story was about How Business Trounced the Trial Lawyers, which gives us insight in to how Business has made significant strides in getting tort reform done throughout most of the states. However, there’s a concern in the business world that tort reform might go to far. Could it be business is concerned that individuals might have, from time to time, legitimate grounds for complaint?

Sitting in a conference room high over Houston’s Galleria neighborhood, James L. Reed Jr. and two other attorneys from Looper, Reed & McGraw contemplate the new legal landscape. Looper Reed’s 60 attorneys represent small and midsize businesses, so one would presume that their clients have only benefited from the new environment. But Reed notes that there has been a “ripple effect” from the changes that is affecting commercial cases, too. His colleagues J. Cary Gray and Jack Rains, both self-described conservative Republicans, agree.

“It’s a hell of a lot harder for one of our clients when a contract gets breached to collect all of their damages,” complains Gray, noting that conservative judges take a very narrow view of what kind of damages they will even allow a jury to consider. In general, Gray says, he thinks many Texas judges are “afraid of big verdicts coming out of their courtrooms,” even in a dispute between businesses. Citing a group of rice producers he and Gray represent and the limits they may face on their claims, Reed notes: “They’re starting to get educated about how much tort reform is too much tort reform.”

No, as it turns out, from a vantage high above Houston, in their glimmering tower, the titans of Business have decided that when they screw each other, they can’t successfully sue anymore. That they may harm individuals who no longer have recourse through the courts is irrelevant – they’ve accidentally shut off their OWN legal options as well. Boo-hoo!

The article that took the cake, in my opinion was on Steve Jobs and the backdating of options. Turns out there’s a serious question about how involved he was and how much he knew/approved, and the reports coming out haven’t really clarified the situation very much.

Jobs is a master marketer whose 30 years of experience have sharpened his skill at creating stylish, breakthrough products. He combines not just hardware and software smarts but a sense for how all that technology must fit together with the music, movies, and other content consumers want. Jobs proved that in his stewardship of Pixar Animation Studios Inc. (DIS ) before it was sold to Walt Disney & Co. (DIS ) a year ago, and in forging agreements with music companies and Hollywood studios to create the iTunes marketplace. The reward for shareholders: Apple’s stock price has climbed 1,025% since Jan. 1, 2001, just before the iPod era began, to a total market value of $72 billion.

That’s why few expect Apple’s board to push Jobs out even if the government does move against him. Some suggest that it would hang tough with him even if criminal charges were filed by the Justice Dept., which is a remote possibility for many reasons. So far, the government has found sufficient grounds to indict only five executives on backdating out of all those at the 200-plus companies involved in the scandal. It’s not easy to prove that an executive intended to deceive shareholders rather than just engaged in sloppy paperwork, say lawyers. And there would be hell to pay for going after Jobs given the damage that could be done to Apple’s investors, customers, and business partners. Says Harvard Business School management professor David B. Yoffie: “Obviously, these are inappropriate activities that anyone should be ashamed of. But it wouldn’t be in shareholders’ best interests to have Steve Jobs leave for something that happened four years ago that didn’t have a material impact on their holdings.”

In short, Steve came back to Apple. Apple made lots of money for shareholders. Steve may have been at least careless or incompetent on this matter, if not acted illegally. But Apple made lots of money for shareholders. So Steve should stay and the government should leave him alone, even if he acted illegally.

At least Jack Welch, from time to time, writes some good commentary on the last page. Take this article on corruption globally.

Now, anyone who has ever put in a new kitchen knows that renovations always cost twice what you expect, but an $11 billion overrun certainly seems to suggest that, yes, there is corruption in America.

But it’s rare?comparatively. We recently returned from a trip to Latin America where we met with hundreds of business people in Brazil and Argentina. Their stories of ubiquitous corruption, much of it at the hands of the government, were chilling. Tax evasion is widespread; enforcement is spotty. In Argentina, several CEOs told us that if you attempt to conduct business without playing by the unwritten rules imposed by layer after layer of government bureaucrats, an army of tax auditors arrives at your door, paralyzing your company and often times staying until an employee or two goes to jail.

He goes on to point out similar scenarios throughout most of the world. So, before you complain about “corruption” being a major issue in the US, keep in mind that we’re well ahead of most of the world on this front. Unless you’re talking intellectual corruption brought on by some of these BusinessWeek articles.

No one’s asking you to pay US$40,000 to be able to pick from the box that will let you miss out on being drafted in to compulsary service, afterall, like in Thailand.