Commentaries and insightful analyses on the world of finance, technology and IT.

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February 17, 2010

Should CEOs and other Senior Managers use social media?

I was a delegate at the just concluded Nasscom Leadership Summit in Mumbai. It was extremely well organized with huge participation from many executives and CEOs from accross the globe. There was an interesting track on Social networking and applicability of the same for today's CEOs.  There was participation from various experts in the space about the need of senior leadership of today to be aware and participate in social media. It is important for the leaders and the organizations to understand the challenges of what they are getting into by actually getting into it...

There are many senior leaders who are actively involved in participating in social media. Reeta Roy, president and CEO of the MasterCard Foundation, actively tweets on her work with the foundation and travels to various countries accross the globe where she is making a difference.

Mahesh Murthy, founder and CEO of PinStorm, a digital marketing firm; uses Twitter to share information about company, connect with people, and to research for writing his blog posts.

Steve Case, co-founder of AOL and now chairman of The Case Foundation and of Revolution (investor in Revolution Money, Exclusive Resorts, Miraval, Zipcar, Waterfront, etc); shares about what he is reading about philanthropy and technology and about his travels to different social and technology conferences on twitter.

Bill Mariott blog features in their corporate website and is a great example of what the CEO stands for and feels for...

I think corporate blogging and tweeting is beyond marketing and can provide information of customers opinions and challenges first hand. It can also help in a turnaaround like the case from Domino's story.

Bank of America has started a twitter based customer center using social media which is helping customers.  There are many other financial services companies using blogs and other technologies to reach out to customers.

What do you think? How can CEOs of financial services companies like banks or capital markets benefit from social media? Should they go the way of thier peers in other business verticals? Look forward to hearing your views on the same. 

 

Posted by Srinivas Prabhala at 10:37 AM | | Comments (5) | TrackBacks (0)

February 05, 2010

World Economic Forum Findings on Private Equity

Apologies that this is a bit overdue, I could not completely miss the opportunity to share some perspective considering Davos just wrapped up and Infosys’ role in the WEF. Not sure how many of you saw the latest report installment from the WEF on the impact of Private Equity (http://www.weforum.org/pdf/FinancialInstitutions/PrivateEquity_VolIII_WorkingPapers.pdf), but it has been (not) surprisingly positive considering the usual reputation PE gets in mainstream media coverage. This third report investigated 20 industries across 26 countries from 1991 to 2007 (you lose the impact of the last market meltdown, but have a significant number of years in the sample) to examine the macroeconomic effect of PE on industry performance while taking cyclicality into account.

 

 While the first WEF report looked at PE’s willingness to invest and impact on employment concerns and the second drilled down further into PE influenced management practices and impact on labor productivity, the third pulls all the way back to provide the broader perspective. It is interesting that they uncovered a few key facts that not only PE-backed companies grow faster, but entire industries grow faster with active PE investment. With was accomplished by taking 400+ observations in each of 20 “PE Industry” classifications, a “PE Industry” has at least one investment in a 5 year period, to examine prior and post-investment impact. This would make sense that all market participants are chasing the same business so that all participants must optimize operations to compete which led to an on average 0.9% performance improvement for the “PE Industry”. This is quite striking when it is noted that those industries also employed 0.4-1% more employees during the period of PE investment. Again, these are industry not company specific averages so do not draw this to be impact of PE investment at a specific company. To finish, the other side of the cyclicality investigation simply confirmed that PE investments made at the top of the market did not fare as well, again, no new information in that regard.
The other major section of the report looked at effect of Government investment and balancing that investment with venture capital which is a bit outside my area. However, feel free to take a quick look at the information, particularly in the executive summary where Infosys’ own N. Murthy’s famous founding investment is noted. The big take away from the findings to me was that sectors with moderate Government investment outperformed those with venture-only or extensive Government funding in terms of value and patent creation. However, results varied by country and I am not sure of the broad conclusions that can be drawn.

Posted by Jeremy Kloubec at 06:42 PM | | Comments (0) | TrackBacks (0)