Doug Criscitello, Executive Director of MIT’s Center for Finance and Policy
From The Hill
With taxpayers at risk for $20 trillion in loans and insured obligations, worth more than the five largest American bank companies combined, the United States government is essentially the largest financial institution in the world. Lending is a risky business as we learned during the last financial crisis. Government activities in this regard are no less dangerous, and perhaps more so, given public policy complexities that extend well beyond profit. Given a bleak fiscal outlook, policymakers may want to consider ways to reduce taxpayer exposure by fortifying financial institutions and financial technology companies with an enormous infusion of loan performance data that only it can provide.
Through a set of more than 100 programs largely initiated or expanded in response to the Great Depression, the Great Society programs of the 1960s, and the 2008 financial crisis, the government has provided over 100 million direct loans and guarantees for home ownership, higher education, business assistance, and a variety of other purposes. As the government has increasingly turned to credit programs to accomplish a diverse set of objectives, with its loan portfolio more than doubling since 2008, it is challenged to keep pace with an increasingly sophisticated financial marketplace, which could actually help reduce the federal lending role.
Government forays into this realm are typically driven by a desire to extend the lending frontier, thereby achieving societal gains, by either closing information gap about borrower creditworthiness or by providing an explicit subsidy to borrowers who likely would not be granted a loan even if a private lender had full information. The government can increase credit availability under either of those conditions because, unlike private lenders, it is able to offer loans without regard for profit. Read More »
Executive Director of the MIT Leadership Center, Hal Gregersen
From Harvard Business Review
Almost everyone on this planet is a worker in some way, but only a minority deserve to be called craftspeople. This is especially true of leaders. We don’t often think of leaders as artisans, but like good craftspeople, good leaders go about their work thoughtfully and purposefully.
These good leaders want every piece they produce to be the best it can be, and to bear their stamp. Some even go a step further. They reflect on their craft and articulate what they do that is special or distinctive. Doing this delivers the great benefit of making it, to at least some extent, teachable. They like to develop the skill in others.
Joining a family business isn’t for everyone. It’s a risky decision that needs a lot of careful consideration. You might build a successful dynasty that grows into a Fortune 500 company, with generations of family continuing to lead the business. Or, like the vast majority of family businesses in the U.S., your business might not make it to the second or third generation. Even worse, your family dynamics could break down, leaving a legacy of dysfunction that long outlasts the business.
So how do you decide whether to join a family business? The next generation should consider six key issues before diving in:
1. There can only be one CEO Think about where you currently stand in the family and where you can potentially go in the business. If you’re in the second or third generation, there may be siblings and cousins all hoping to take over as CEO. Stop and think about whether your goal is senior leadership. If it is, ask yourself if this is realistic. Who is competing for those positions? Is your cousin the “golden child” of the family? Are you the most qualified? Are there family politics involved?
As an expert in organizational communication and leadership, I saw the dismissal of the councils as a dramatic and important moment in the relationship between top business leaders and the president. But does it spell the demise of the often difficult partnership between President Trump and corporate America?
A permanent breach?
CEOs like Merck’s Ken Frazier rightly voted their conscience when they began to abandon Trump’s American Manufacturing Council and the Strategic and Policy Forum. Frazier, the first to resign, said he felt “a responsibility to take a stand against intolerance and extremism.”
The Wall Street Journal, however, was quick to point out that many companies have stopped short of saying they would refuse to work with the White House in the future.
Indeed, despite the heated rhetoric, one thing is clear: Corporate America wants and needs to work with the administration, while the president benefits from a healthy relationship with America’s CEOs.
So if they both need each other, the question becomes how this increasingly tenuous relationship will play out.
Since we recorded this interview, the Wall Street Journal published a short article discussing the strong demand for tech skills around the world. Apparently the area with the greatest gap between supply and demand is Big data/analytics, where 39% of IT leaders feel there is a shortage of people skilled in this area, the highest of any tech field in the survey.
The shortage makes this podcast interview particularly timely because you’ll hear from Dr. Dimitris Bertsimas, Co-Director of MIT Sloan’s Master in Business Analytics, and we discuss this brand new program in depth.