The U.S. Postal Service Nears Collapse
Phillip Herr finds the USPS fascinating: ubiquitous, relied on, and headed off a cliff. Its trucks are everywhere; few give it a second thought. “It’s one of those things that the public just takes for granted,” he says. “The mailman shows up, drops off the mail, and that’s it.” He is struck by how many USPS executives started out as letter carriers or clerks. He finds them so consumed with delivering mail that they have been slow to grasp how swiftly the service’s financial condition is deteriorating. “We said, ‘What’s your 10-year plan?’ ” Herr recalls. “They didn’t have one.”
How Rajat Gupta Came Undone
The former head of McKinsey and a trusted consigliere to chief executives around the world, he was that rare businessman whose integrity was considered beyond reproach. Yet if the Securities and Exchange Commission is to be believed, just 11 days before his daughter’s wedding celebration, Gupta had done something virtually no one who knew him could have imagined. According to the SEC, it was on the evening of June 10, 2008, that Gupta, in “a flurry” of phone conversations with Raj Rajaratnam, the founder of the Galleon Group of hedge funds, allegedly divulged Goldman Sachs’s still secret second-quarter earnings.
Why Facebook Needs Sheryl Sandberg
“There are compromises on not being in China, and there are compromises on being in China. It’s not clear to me which one is bigger,” she says. Three people familiar with these internal deliberations say that Sandberg and Mark Zuckerberg fundamentally disagree on the issue. Zuckerberg believes that Facebook can be an agent of change in China, as it has been in countries such as Egypt and Tunisia. Sandberg, a veteran of Google’s expensive misadventures in the world’s most populous country, is wary about the compromises Facebook would have to make to do business there.
Taco Bell and the Golden Age of Drive-Thru
It’s as if the great advances of human civilization, in everything from animal husbandry to mathematics to architecture to manufacturing to information technology, have all crescendoed with the Crunchwrap Supreme, delivered via the pick-up window.
Silicon Valley Cashes Out Selling Private Shares
Vince Thompson doesn’t appear in any accounts of Facebook’s early years. Few of the more than 2,000 employees at the company even know his name. The AOL veteran’s brief stint as Facebook’s first official ad-sales chief lasted less than six months. Even so, when Thompson left the company in early 2006, he exercised his options to buy Facebook stock, as is the custom in Silicon Valley, and took a sizable chunk of shares with him. About 18 months later he moved to Los Angeles and started consulting for media clients such as TVGuide.com on how to tap new sources of revenue, and he began to think about how to create one for himself. He set out on a quest, talking to friends in the New York investment banking world about an unorthodox idea: selling a portion of his Facebook shares, packaged with those of a colleague who left Facebook shortly after he did.
This Tech Bubble Is Different
After a couple years at Facebook, Jeff Hammerbacher grew restless. He figured that much of the groundbreaking computer science had been done. Something else gnawed at him. Hammerbacher looked around Silicon Valley at companies like his own, Google, and Twitter, and saw his peers wasting their talents. “The best minds of my generation are thinking about how to make people click ads,” he says. “That sucks.”
Last of the Old-Style Media Moguls?
Richard Beckman says he’s not particularly fond of Mad Dog, a nickname he earned as a sales executive at Condé Nast, the magazine publisher where he spent 24 years. He finds it demeaning, and says it is belied by the fact that he is actually shy and quiet. In several meetings, he does display an almost theatrical delicacy in the way he speaks and gestures, rotating his wrists in the florid manner of a magician. But there is a note of canine aggression in his voice when he calls from Aspen on Friday, Mar. 18.
Johnson & Johnson’s Quality Catastrophe
After 50-plus product recalls in 15 months, the $60 billion company is fighting to clear its once-trusted name. “Not only is J&J bigger and more decentralized; it’s also much more profitable. Its operating margin in 1990 was 17.7 percent; in 2010 it was 26.8 percent. ‘Where did that increase in margin come from?’ asks Sucher, the Harvard business professor. When J&J acquired Pfizer’s consumer health-care division in 2006, it predicted cost savings of $500 million to $600 million. Sucher says numbers like that suggest cost-cutting may have gone too far.”
Hermès: Handbag Heritage Under Assault
The luxury brand remains under tight control by the Hermès heirs, who have scattered across three continents to pursue careers as varied as deejaying, motorcycle sales, and investment banking. And they want nothing to do with their new minority shareholder. Bernard Arnault is the head of LVMH Moët Hennessy Louis Vuitton and the fourth-richest man in the world. He has met, and overcome, resistance to his maneuvers before. He built LVMH into the No. 1 luxury group in the world by taking control—sometimes brutally—of more than 50 brands, including storied names such as Louis Vuitton, Givenchy, and Guerlain. Just this month he reeled in Bulgari, a 127-year-old Italian jewelry and watch company, once its family owners agreed to sell after a years-long courtship.
Building a Better Reactor
Three Mile Island, Chernobyl, Fukushima. First the accident, then the predictable allegations in the postmortem: The design was flawed. Inspections were inadequate. Lines of defense crumbled, and reliable backups proved unreliable. Planners lacked the imagination or willpower to prepare for the very worst. There’s a way to break out of this pattern. Nuclear power plants will never be completely safe, but they can be made far safer than they are today. The key is humility. The next generation of plants must be built to work with nature—and human nature—rather than against them. They must be safe by design, so that even if every possible thing goes wrong, the outcome will stop short of disaster. In the language of the nuclear industry, they must be “walkaway safe.”