The rest of us are obviously in the wrong business.

The business of getting fired may, occasionally, be more lucrative than I had thought.  See here and here.

Update:  AND here.

Want a healthy company? Reward failure.

See here, from today's Wall Street Journal.  Organizations that give people room to mess up and (this is the important part) learn from their mistakes will do better than ones with incentives that encourage either (1) hiding mistakes or (2) avoiding risk.

I have always learned more from mistakes than from successes.  My dad's a chemist, and he always cautioned me to question results that agreed with my hypotheses.  We don't tend to examine our successes.  We should, but we don't, because we like the results.  But we should also examine our failures to figure out (if we can) what happened.

And it's not just giving people room to mess up that matters.  It's rewarding those mistakes publicly because the people who made them were trying to do something good and have learned something from the effort.

OK, it's not a scandal (yet).

My buddy David Smith, who does really interesting research over at the University of Virginia (see here), pointed me to this article about Nevada's corporate climate, especially the shell-friendly regulations (here).  And I quote:

At the same time, Nevada is attracting an outsize number of companies with shaky financial reporting, according to a study published in March by Michal Barzuza and David C. Smith of the University of Virginia.

Want to read that research?  Click here.

More on the HP board's latest decisions.

Look, I don't know Meg Whitman.  I like eBay, but that's not the point.  Here's an interesting take forwarded to me from my buddy Richard Peck (here).

A few take-aways:

1. Process matters.  Follow the procedures for, say, hiring and firing, and there'll be fewer reasons to attack the decision.  (Not zero, but fewer.)
2. If something isn't working well, perhaps it's a good idea to figure out what's gone wrong before jumping into something new.  History is a useful tool when it's ... used.
3. Seriously, I need to be on a public board or two.  I think that I could be useful.

Dear HP Board: Perhaps you need some new blood?

See here and here.  Doing the same thing over and over and expecting different results hasn't worked so well for you, has it?  Perhaps you should consider using someone who studies why smart people do dumb things.

Character matters.

For those of us who love "the pinks" (Financial Times subscribers), this morning brought a lovely piece about how character isn't innate--it's earned.  Luke Johnson wrote A Crisis Is the Only Way to Test Your Value (here).

He's right, for several reasons.  First, it's easy to behave well when everything's going right.  That's no test of character.  Second, experience shapes character.  Character is a series of decisions over someone's lifetime, not a static quality.  And third, someone's reaction to an event will be affected both by his own experiences and the group he's in.  We're affected by social pressure more than we realize, so being alert to that social pressure matters.

Leaders need to understand that it's not "who they are" that matters as much as how they behave, especially when things aren't going well for them.

UBS and the wrong checks and balances.

Kim Krawiec has a great post over at The Faculty Lounge (see here) about the UBS rogue trading scandal and the patterns of behavior that make such high-stakes exposure possible.

"Too good to be true" never is.

In yesterday's Wall Street Journal, Michael Rothfeld reported (here) that Société Générale may have ignored a red flag on Allen Stanford's account.  He writes: 

     At issue is a Swiss bank account held by one of Mr. Stanford's companies at SG Private Banking (Suisse) SA, a Société Générale subsidiary, that was allegedly funded with investors' money and used to make payments into Mr. Stanford's personal accounts and for bribes to his Antiguan auditor. Prosecutors in the criminal probe are examining whether Société Générale failed to follow due diligence procedures or to ask questions about irregular banking activity, the people familiar with the matter said.

I've been working on a mini-essay for an upcoming conference on the intersection of white collar crime and bankruptcy law (see here), and this whole issue of why smart people can ignore red flags fascinates me.  I'll be following this story.  More on the conference as we get closer to the event.