What to Do About Disloyal Corporations

Just like that, Pfizer has decided it’s no longer American. It plans to link up with Ireland’s Allergan and move its corporate headquarters from New York to Ireland.

 
 

That way it will pay less tax. Ireland’s tax rate is less than half that of United States. Ian Read, Pfizer’s chief executive, told the Wall Street Journal the higher tax rate in the United States caused Pfizer to compete “with one hand tied behind our back.”

 
 

Read said he’d tried to lobby Congress to reduce the corporate tax rate (now 35 percent) but failed, so Pfizer is leaving.

 
 

Such corporate desertions from the United States (technically called “tax inversions”) will cost the rest of us taxpayers some $19.5 billion over the next decade, estimates Congress’ joint committee on taxation.

 
 

Which is fueling demands from Republicans to lower the corporate tax rate.

 
 

Donald Trump wants it to be 15 percent.

 
 

Mike Huckabee and Ted Cruz want to eliminate the corporate tax altogether. (Why this would save the Treasury more money than further corporate tax inversions is unclear.)

 
 

Rather than lower corporate tax rates, an easier fix would be to take away the benefits of corporate citizenship from any company that deserts America.

 
 

One big benefit is the U.S. patent system that grants companies like Pfizer longer patent protection and easier ways to extend it than most other advanced economies.

 
 

In 2013, Pfizer raked in nearly $4 billion on sales of the Prevnar 13 vaccine, which prevents diseases caused by pneumococcal bacteria, from ear infections to pneumonia — for which Pfizer is the only manufacturer.

 
 

Other countries wouldn’t allow their patent systems to justify such huge charges.

 
 

Neither should we — especially when Pfizer stops being an American company.

 
 

The U.S. government also protects the assets of American corporations all over the world.

 
 

In the early 2000s, after a Chinese company replicated Pfizer’s formula for Viagra, the U.S. Trade Representative put China on a “priority watch list” and charged China with “inadequate enforcement” against such piracy.

 
 

Soon thereafter the Chinese backed down. Now China is one of Pfizer’s major sources of revenue.

 
 

But when Pfizer is no longer American, the United States should stop protecting its foreign assets.

 
 

Nor should Pfizer reap the benefits when the United States goes to bat for American corporations in trade deals.

 
 

In the Pacific Partnership and the upcoming deal with the European Union, the interests of American pharmaceutical companies like Pfizer — gaining more patent protection abroad, limiting foreign release of drug data, and preventing other governments controlling drug prices — have been central points of contention.

 
 

And Pfizer has been one of the biggest beneficiaries. From now on, it shouldn’t be.

 
 

U.S. pharmaceutical companies rake in about $12 billion a year because Medicare isn’t allowed to use its huge bargaining power to get lower drug prices.

 
 

But a non-American company like Pfizer shouldn’t get any of this windfall. From now on, Medicare should squeeze every penny it can out of Pfizer.

 
 

American drug companies also get a free ride off of basic research done by the National Institutes of Health.

 
 

Last year the NIH began a collaboration with Pfizer’s Centers for Therapeutic Innovation — subsidizing Pfizer’s appropriation of early scientific discoveries for new medications.

 
 

In the future, Pfizer shouldn’t qualify for this subsidy, either.

 
 

Finally, non-American corporations face restrictions on what they can donate to U.S. candidates for public office, and how they can lobby the U.S. government.

 
 

Yet Pfizer has been among America’s biggest campaign donors and lobbyists.

 
 

In 2014, it ponied up $2,217,066 to candidates (by contrast, its major competitor Johnson & Johnson spent $755,000). And Pfizer spent $9,493,000 on lobbyists.

 
 

So far in the 2016 election cycle, it’s been one of the top ten corporate donors.

 
 

Pfizer’s political generosity has paid off – preventing Congress from attaching a prescription drug benefit to Medicare, or from making it easier for generics to enter the market, or from using Medicare’s bargaining power to reduce drug prices.

 
 

And the company has donated hundreds of thousands of dollars to the candidacies of state attorneys general in order to get favorable settlements in cases brought against it.

 
 

But by deserting America, Pfizer relinquishes its right to influence American politics.

 
 

If Pfizer or any other American corporation wants to leave America to avoid U.S. taxes, that’s their business.

 
 

But they should no longer get any of the benefits of American citizenship — because they’ve stopped paying for them.

 
 

ROBERT B. REICH’s new book, “Saving Capitalism: For the Many, Not the Few,” will be out September 29. His film “Inequality for All” is now available on DVD and blu-ray, and on Netflix. Watch the trailer below:

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

 

 
 

 
 

 
 

 
 

 

Borrowers Pay the Piper for Lender Misdeeds

I have been turned down by 2 different lenders because my last years’ tax return didn’t show enough income from my business to qualify, despite a credit score of 800 and a down payment of 50%. Does this make sense?

 
 

No, it doesn’t make sense. You and thousands of other potential home buyers are being rationed out of the market because of the misdeeds of lenders during the go-go years leading to the financial crisis. How we got to this state of affairs is the subject of this article.

 
 

The Three Prongs of Loan Underwriting

 
 

Underwriting rules focus on three borrower features that affect the probability that a mortgage loan will be repaid as promised. These are:

 
 
    • Payment obligations relative to income, which measures an applicant’s capacity to make mortgage payments.
 
    • Equity in the property relative to property value, which measures the applicant’s incentive to make mortgage payments.
 
    • Credit score, which measures the applicant’s past reliability in meeting financial commitments.
 
 

Because most loans are sold by those who originate them, acceptable values of underwriting rules, and acceptable tradeoffs between them, are formulated primarily by the agencies who buy them or insure them: Fannie Mae, Freddie Mac and FHA. Loan originators can be more restrictive than the agencies in setting rules, but they cannot be less restrictive unless they are prepared to own the loans themselves.

 
 

In addition to the underwriting prongs described above, loan originators are concerned with the degree of rigor with which the agencies monitor underwriting decisions. An affirmative decision by the originator that turns out to be unacceptable to the agency results in a required buy-back or a mortgage insurance rejection, which carries significant cost to the originator.

 
 

Underwriting Becomes Flexible in the Years Before the Housing Bubble

 
 

In the years before the housing bubble, underwriting systems became increasingly flexible, driven in part by the development of automated systems at Fannie and Freddie, and by the development and increasing use of credit scores. Under these evolving rules, applicants could be weak in one underwriting dimension so long as they were strong in the other two. Flexibility was further increased by the development of alternative documentation requirements falling between the extremes of “full doc” and “no doc”. Compliance with underwriting rules was subject to periodic spot checks by the agencies.

 
 

Underwriting Deteriorates During the Bubble

 
 

A bubble is a period of unsustainable price increases. The bubble period that preceded the financial crisis ran from September 1998 to June 2005, during which the Case/Shiller house price index rose by 10.5% a year. Over the preceding period from February 1975 when the index begins to September 1998, the average annual increase had been 5.5%.

 
 

When house prices are rising by 10% a year or more, borrowers’ equity rises by the same amount, which makes it very difficult to originate a bad loan – one that results in loss to the lender/investor. Borrowers could be qualified on the basis of reduced payments that lasted only a few years because the loans could be refinanced when the initial payment period ended. Those that can’t make the higher payments can sell the house at a profit. In the worst case where the lender had to foreclose, their costs are fully covered by the sale proceeds.

 
 

The bubble led to a liberalization of underwriting rules, and widespread violations of the rules that remained as scrutiny by the agencies largely disappeared.

 
 

Underwriting Becomes Rigid After the Financial Crisis

 
 

House prices stopped rising and began to fall after June 2005, causing enormous losses to mortgage-related firms, the insolvency of many, and a crisis of confidence during 2007-8. Underwriting rules did a 180 during these years, swinging from being excessively liberal to excessively restrictive and rigid. That is where they remain today, although house prices began to rise again starting in 2012.

 
 

Perhaps the most important of the underwriting rule rigidities involve income documentation. The abuses that arose during the bubble years and the losses that occurred when the bubble burst had such a major impact on the mindsets of lawmakers, regulators and Fannie/Freddie that an affordability requirement has become the law of the land; borrowers must be able to document that their income is adequate, regardless of how good their credit is and how much equity they have in the property.

 
 

The affordability requirement imposes an especially heavy burden on self-employed borrowers, who face the greatest difficulty in proving that they have enough income to qualify. Prior to the crisis, a variety of alternatives to full documentation of income were available, including “stated income,” where the lender accepted the borrower’s statement subject to a reasonableness test and verification of employment.

 
 

Stated income documentation was designed originally for self-employed borrowers, and it worked very well for years. Then, during the bubble period, the option was abused and stated income loans became “liars loans”. After the crisis, instead of curbing the abuses, the option was eliminated.

 
 

My mailbox is crammed with letters from self-employed loan applicants with high credit scores and ample equity whose applications were refused because of an inability to document their income adequately.

 
 

The problem is heightened by the much strengthened surveillance over compliance, which increases risk to the originators. Assessing the income documentation provided by a self-employed applicant is a judgment call that carries a high cost to originators if they get it wrong. The loss on a required loan buyback can wipe out the profit on multiple good loans. The prudent path is not to invest any time in such loans, which is the policy taken by the lenders consulted by the frustrated applicant whose letter to me is cited at the beginning of this article.

 
 

For more information on qualifying for a mortgage or to shop for a mortgage in an unbiased environment, please my website The Mortgage Professor

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

 

 
 

 
 

 
 

 
 

 

Borrowers Pay the Piper For Lender Misdeeds

“I have been turned down by 2 different lenders because my last years’ tax return didn’t show enough income from my business to qualify, despite a credit score of 800 and a down payment of 50%. Does this make sense?”

 
 

No, it doesn’t make sense. You and thousands of other potential home buyers are being rationed out of the market because of the misdeeds of lenders during the go-go years leading to the financial crisis. How we got to this state of affairs is the subject of this article.

 
 

The Three Prongs of Loan Underwriting

 
 

Underwriting rules focus on three borrower features that affect the probability that a mortgage loan will be repaid as promised. These are:

 
 
    • Payment obligations relative to income, which measures an applicant’s capacity to make mortgage payments.
 
    • Equity in the property relative to property value, which measures the applicant’s incentive to make mortgage payments.
 
    • Credit score, which measures the applicant’s past reliability in meeting financial commitments.
 
 

Because most loans are sold by those who originate them, acceptable values of underwriting rules, and acceptable tradeoffs between them, are formulated primarily by the agencies who buy them or insure them: Fannie Mae, Freddie Mac and FHA. Loan originators can be more restrictive than the agencies in setting rules, but they cannot be less restrictive unless they are prepared to own the loans themselves.

 
 

In addition to the underwriting prongs described above, loan originators are concerned with the degree of rigor with which the agencies monitor underwriting decisions. An affirmative decision by the originator that turns out to be unacceptable to the agency results in a required buy-back or a mortgage insurance rejection, which carries significant cost to the originator.

 
 

Underwriting Becomes Flexible in the Years Before the Housing Bubble

 
 

In the years before the housing bubble, underwriting systems became increasingly flexible, driven in part by the development of automated systems at Fannie and Freddie, and by the development and increasing use of credit scores. Under these evolving rules, applicants could be weak in one underwriting dimension so long as they were strong in the other two. Flexibility was further increased by the development of alternative documentation requirements falling between the extremes of “full doc” and “no doc”. Compliance with underwriting rules was subject to periodic spot checks by the agencies.

 
 

Underwriting Deteriorates During the Bubble

 
 

A bubble is a period of unsustainable price increases. The bubble period that preceded the financial crisis ran from September 1998 to June 2005, during which the Case/Shiller house price index rose by 10.5% a year. Over the preceding period from February 1975 when the index begins to September 1998, the average annual increase had been 5.5%.

 
 

When house prices are rising by 10% a year or more, borrowers’ equity rises by the same amount, which makes it very difficult to originate a bad loan – one that results in loss to the lender/investor. Borrowers could be qualified on the basis of reduced payments that lasted only a few years because the loans could be refinanced when the initial payment period ended. Those that can’t make the higher payments can sell the house at a profit. In the worst case where the lender had to foreclose, their costs are fully covered by the sale proceeds.

 
 

The bubble led to a liberalization of underwriting rules, and widespread violations of the rules that remained as scrutiny by the agencies largely disappeared.

 
 

Underwriting Becomes Rigid After the Financial Crisis

 
 

House prices stopped rising and began to fall after June 2005, causing enormous losses to mortgage-related firms, the insolvency of many, and a crisis of confidence during 2007-8. Underwriting rules did a 180 during these years, swinging from being excessively liberal to excessively restrictive and rigid. That is where they remain today, although house prices began to rise again starting in 2012.

 
 

Perhaps the most important of the underwriting rule rigidities involve income documentation. The abuses that arose during the bubble years and the losses that occurred when the bubble burst had such a major impact on the mindsets of lawmakers, regulators and Fannie/Freddie that an affordability requirement has become the law of the land; borrowers must be able to document that their income is adequate, regardless of how good their credit is and how much equity they have in the property.

 
 

The affordability requirement imposes an especially heavy burden on self-employed borrowers, who face the greatest difficulty in proving that they have enough income to qualify. Prior to the crisis, a variety of alternatives to full documentation of income were available, including “stated income,” where the lender accepted the borrower’s statement subject to a reasonableness test and verification of employment.

 
 

Stated income documentation was designed originally for self-employed borrowers, and it worked very well for years. Then, during the bubble period, the option was abused and stated income loans became “liars loans”. After the crisis, instead of curbing the abuses, the option was eliminated.

 
 

My mailbox is crammed with letters from self-employed loan applicants with high credit scores and ample equity whose applications were refused because of an inability to document their income adequately.

 
 

The problem is heightened by the much strengthened surveillance over compliance, which increases risk to the originators. Assessing the income documentation provided by a self-employed applicant is a judgment call that carries a high cost to originators if they get it wrong. The loss on a required loan buyback can wipe out the profit on multiple good loans. The prudent path is not to invest any time in such loans, which is the policy taken by the lenders consulted by the frustrated applicant whose letter to me is cited at the beginning of this article.

 
 

For more information on qualifying for a mortgage or to shop for a mortgage in an unbiased environment, please my website The Mortgage Professor

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

 

 
 

 
 

 
 

 
 

 

How A Single Manhattan Bank Hijacked The Highway Bill

 

WASHINGTON — The biggest winner from a bipartisan highway funding deal hammered out by congressional negotiators on Tuesday isn’t a Republican, a Democrat, or even the nation’s roadways. It’s Emigrant Savings Bank, and the billionaire family that owns it.

 

A single line slipped into the package will help the Manhattan-based lender dodge a rule from the 2010 Dodd-Frank financial reform law designed to prevent large and mid-sized banks from relying too heavily on borrowed cash. Emigrant is literally the only company affected by the change.

 

The provision has nothing to do with repairing roads and bridges, of course. It doesn’t even help lawmakers come up with money to pay for those repairs. It only helps Emigrant boost its profit ratios by operating with more borrowed money.

 

The Emigrant bank aid won’t damage the economy. The bank holds less than 1 percent of the assets owned by trillion-dollar behemoths like JPMorgan Chase or Bank of America. But Congress could grant multimillion-dollar favors to just about anyone without risking a banking panic. There’s a reason why legislators granted it to a bank owned by a billionaire family.

 

Emigrant is owned by the Milsteins — real estate kingpins who have been power players in New York state politics for decades. Bank Chairman Howard Milstein bundled funds for President Barack Obama’s 2008 campaign, and convinced then-Rep. Michael Grimm (R-N.Y.) to introduce an earlier version of the one-sentence bill in 2012 after making a $2,500 contribution to his campaign. The bill faded away after garnering a host of bad press, and lost its chief advocate when Grimm pleaded guilty to felony tax fraud and resigned his office in January.

 

But the Emigrant largesse didn’t stop with Grimm. Bank vice chairman Harriet Edelman has given $3,000 to Sen. Richard Shelby (R-Ala.) since the 2014 elections. Over the same time period, Howard Milstein and his wife Abby have given $16,200 to Sen. Ron Wyden (D-Ore.) and $5,400 to Sen. Chuck Schumer (D-N.Y.). In the 2012 cycle, the Milsteins gave $10,000 to Sen. Sherrod Brown (D-Ohio).

 

These usually are figures associated with shepherding a bill through a committee — not ensuring final enactment. But Shelby, Wyden, Schumer and Brown all were negotiators on the highway bill. After Democrats fought off GOP efforts to defang broader Dodd-Frank policies, they allowed the Emigrant provision to slide.

 

Highway bill negotiators are betting their colleagues in Congress won’t jeopardize a bipartisan infrastructure project over a policy change that happens to help Emigrant juice its capital without creating other problems.

 

Potentially more destructive efforts at targeted, opportunistic sleaze almost made it into the highway bill. As recently as Monday night, the bipartisan deal included a major change to the Franklin D. Roosevelt-era Trust Indenture Act that would have rewritten bankruptcy standards to help Education Management Corp. — one of the nation’s largest for-profit college operators that just agreed to pay $95.5 million to settle a fraud case with the Department of Justice. The change would have altered bondholder rights in order to help EDMC slough off debt outside of bankruptcy court. The for-profit school is desperate to avoid a formal bankruptcy filing, which would strip it of the federal funding that constitutes a significant portion of its revenue — thanks to government-backed student loans.

 

Those changes could have had repercussions well beyond a single student lender — potentially hammering pension funds and investors in other distressed firms.

 

“One basic rule of thumb is, don’t fuck with laws passed in the 1930s,” said a Democratic Senate aide. “They were usually passed to fix a problem that led to the Great Depression.”

 

The EDMC bailout failed. But a few other changes to consumer law survived.

 

The final highway bill authorizes banks to barrage the Consumer Financial Protection Bureau with applications to be exempted from key mortgage standards adopted after the financial crisis. The CFPB already allows rural lenders leeway on the rules, but as a result of the highway bill, any bank that does not operate in a region the agency designates as rural can apply for rural status anyway. That allows bank lobbying groups to coordinate application drives to inundate the agency with paperwork, eating up its resources and hamstringing its enforcement efforts.

 

Money for federal highway funding typically comes from a gas tax. But inflation has gradually eroded the power of that tax, which hasn’t been increased since 1993. Instead of raising that tax to pay for new highway work, the bill raids other programs, and embarks on at least one pointless new revenue-generation project.

 

Private debt collectors will soon be haranguing people with delinquent IRS bills thanks to another provision. IRS agents don’t currently expend much energy pursuing many overdue tax accounts, because an agency analysis of 2013 tax data found that 79 percent of such cases involved people essentially too poor to pay. So while private debt collectors will get a slew of contracts with the federal government, consumer advocates say the project will result in lots of harassment, but little revenue.

 

The highway bill also raids a fund that the Federal Reserve uses to help it conduct ordinary monetary policy operations. The legislation saps two-thirds of the fund in order to come up with about $20 billion in funding. But as ex-Fed Chairman Ben Bernanke has noted, the move is really just an accounting trick that makes the central bank’s job harder without actually saving the government any money. The Fed tapped its surplus fund 158 times between 1989 and 2001, according to a 2002 GAO report on the fund.

 

None of these riders are going to create the next financial panic, or force thousands of kids to go hungry. That’s why they’re unlikely to impede the highway bill’s progress to enactment.

 

This is not exactly the Madisonian model of American Democracy. But we’ve become willing to call it a bipartisan triumph.

 

Zach Carter is the Huffington Post’s Senior Political Economy Reporter and a co-host of the politics podcast ‘So That Happened.’ Listen to the latest episode below:

 
 
 
 

Also on HuffPost:

 

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

 

 
 

 
 

 
 

 
 

 

At Hands of Luce Leader, ShapeU Becomes FitMango

The Johns Hopkins undergraduate students behind ShapeU are changing the name of their fitness technology startup to FitMango, according to founder and C.E.O., Seal-Bin Han. I wrote about Seal, recipient of the 2014 Luce Leadership Award, a year ago here.

 
 

2015-12-02-1449021131-6409850-Banner.png

 

Image: FitMango.

 
 

Seal tells me now that the name change reflects their management team’s desire to focus on health clubs and gyms as the company’s primary market, as opposed to college campuses and recreation centers.

 
 

“We wanted to pick a new name that we could brand easily,” Seal said. “The mango isn’t ordinary, but it isn’t pretentious, either. The color is warm and inviting – it’s exactly the vibe that we want to give our users. Also, looking forward, nutrition will be an important part of what we will support and we wanted a name that could aptly reflect both fitness and nutrition.”

 
 

ShapeU was a web application that matched college students into small groups to work out with professional personal trainers, according to the company’s Angel List page.

 
 

Instead of automatically designating its users to the recreation centers of their respective universities, the new FitMango platform now intends to integrate with gyms and health clubs all across the country in order to give users – college students and non-affiliates, alike – the flexibility of finding or creating their ideal small group session of three-to-five individuals among the many gyms in their network.

 
 

2015-12-02-1449021169-308582-features3.png

 

Image: FitMango.

 
 

“We’re strong believers in the small group personal training model,” said Han. “One-on-one is unaffordable to most people at a national average of $60-per-hour and you can’t benefit from the positive peer pressure environment and the social aspect of group training. On the other side, large class sizes can be even worse, given that you will have little-to-no personal attention with the instructor and many issues with overcrowding.”

 
 

The newest team member of FitMango, Hannah Cowley, will be in charge of marketing the platform both inside the partnered gym facilities and around the city of Baltimore.

 
 

“Reaching out beyond the college market is a bold move, but one we are making with confidence in our vision, our mentors, and, most importantly, our team,” Hannah told me. “Our team of talented, motivated people is what has made us successful thus far and what propels us into our bright future. This team inspires me to strive for greater, face new challenges head on, and nurture our idea to reach its full potential.”

 
 

2015-12-02-1449021207-4121435-oursessions.png

 

Image: FitMango.

 
 

In the coming months, FitMango plans to launch at Brick Bodies, along with a host of other gyms in the Baltimore, Maryland area, where the company is headquartered. I attended the Brick Bodies gala for mental health last month in Baltimore and was impressed to meet its visionary owner Victor Brick who has embraced our young leaders and entrepreneurs.

 
 

“Baltimore has become our home and we’re quite fond of it,” said Seal who moved there to studying electrical engineering at Johns Hopkins University in 2013. “We’ve received overwhelming support from the tech community here. You’d be shocked at how many resources are available in this city and how much easier it is to become noticed.”

 
 

“I don’t think Baltimore is a conventional tech city, but FitMango was born in Baltimore. Our home is Baltimore. And we’ve found such amazing opportunities here,” said Jordan Matelsky, the founder and Chief Technology Officer of FitMango.

 
 

2015-12-02-1449021233-420467-headshots.png

 

On left, Jordan Matelsky, Chief Technology Officer, and on right, Seal-Bin Han,

 

Chief Executive Officer. Photos: FitMango.

 
 

In September, Steve Case, the co-founder and former Chief Executive Officer and chairman of AOL, visited Baltimore as part of his “Rise of the Rest” tour, where he heard pitches from local entrepreneurs. According to Technical.ly Baltimore, “Han got in front of the Internet legend twice — once by applying to the pitch competition and once via the startup’s connection to Hopkins.”

 
 

Recently, FitMango raised $200,000 from the Maryland Technology Development Corporation (TEDCO), AccelerateBaltimore, Towson University, Johns Hopkins Technology Ventures, Accenture, and several others.

 
 

“We weren’t looking to raise a big round,” said Seal. “We just wanted to have enough to make it through a well-advertised Beta test in about 45 gyms around the area.”

 
 

2015-12-02-1449022584-9427444-AlanaGallowayMeeraGandhiMitziPerdueEugenieCarysdeSilvaSealBinHanDrKazukoTatsumuraHillyerJimLuceKevinMcGovern.jpg

 

J. Luce Foundation Awardees Alana Galloway, Meera Gandhi, Mitzi Perdue,

 

Eugenie Carys de Silva, Seal-Bin Han, Dr. Kazuko Tatsumura Hillyer, the

 

author, and Kevin McGovern. Photo: Annie Watt/Stewardship Report.

 
 

The platform is currently available as a web application with a native iOS app expected to release in the coming months.

 
 

“A native app is the critical next step,” said Tucker Chapin, head of iOS development at FitMango. “People always have their phones with them and an app makes sure FitMango is convenient and useful.

 
 

The company will continue to serve college campuses and will run its legacy programs on the ShapeU website until January, where all programs for college recreation centers, health clubs, and gyms, alike, will be available on the FitMango site.

 
 

“We’re excited to move forward with renewed enthusiasm in our mission to bring a modern twist to health and wellness, and health and wellness to the world,” said Matelsky. “We’re joining forces with some awesome new people and we are looking forward to expanding the FitMango family.”

 
 

Each year, The J. Luce Foundation presents our annual Luce Leadership Awards to young leaders working to better humanity who embody the characteristics of honor, intelligence, benevolence, and stewardship.

 
 

Seal Bin Han met such criteria in 2014 and was subsequently appointed to the Board of Directors of the Foundation. He continues to exemplify these virtues through FitMango. I can only imagine the places he will go after graduation.

 
 

See Stories by Jim Luce on:

 
 

Korea & Korean-Americans | Young Global Leadership

 
 

HuffPo: The Baltimore Experiment: Getting Out From Under “The Wire”

 
 

The James Jay Dudley Luce Foundation (www.lucefoundation.org) supporting young global leadership is affiliated with Orphans International Worldwide (OIWW), raising global citizens. If supporting youth is important to you, subscribe to J. Luce Foundation updates here.

 
 

Follow Jim Luce on Facebook, Twitter, and LinkedIn.

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

 

 
 

 
 

 
 

 
 

 

The Fundamental Difference Between Leading And Managing: Influence Versus Direction

Leaders influence. Managers direct. While it may not be that black and white, leaders generally do focus on what matters and why as managers focus on how. Both use different forms of influence and direction at different times. But leaders have a bias to influencing by inspiring and enabling through advice and counsel while managers have a bias to command and control.

 
 

Coca-Cola’s Doug Ivester was crystal clear on the difference. Sometimes he’d come to us and say,

 
 

“This is your decision to make. I’d like to give you my thoughts as input.”

 
 

Since he was the CEO, we always considered his thoughts. Most of the time we did things the way he suggested. Sometimes we disagreed. We quickly learned that going back to the CEO and telling him that we decided he didn’t know what he was talking about did not make for pleasant meetings. But it did work when we went back to him and said,

 
 

“Wanted to follow up on the decision we made on this subject. After we talked to you, we did some more digging and uncovered five things that you could not have known about. Given those new findings, we decided to go a different direction than what you had suggested.”

 
 

He was fine with that.

 
 

Other times he’d say,

 
 

“See these stripes. I am the CEO of this company. I’m going to give you some direction which you will follow.”

 
 

It was extraordinarily helpful to know when he was giving us input for us to consider in our decision and when he was giving us no choice but to follow his direction.

 
 

Decision versus input

 
 

The more companies I help with their executive onboarding and team onboarding, the more I’m becoming convinced that clarifying decisions versus input solves a whole host of other problems.

 
 

The most important thing for any two people to understand as they are working together is which of them is going to make which decisions so they know when they should be deciding and when they should be providing input into the others’ decision.

 
 

Decision versus input for CEOs and Boards

 
 

CEOs and boards are a case in point. It’s important for all the players to be clear on when the board is deciding versus advising and when the CEO is deciding and informing versus recommending.

 
 

At the risk of being overly simplistic, in general, for issues of:

 
    • Governance: the board should decide and the CEO should recommend and implement.
 
    • Strategy and long-term and annual plans including P&L, cash flows and balance sheets: the board should decide and the CEO should recommend and implement.
 
    • Operations: the CEO should decide and lead and the board should advise and be kept informed.
 
  • Organization: the CEO should decide and lead and the board should advise and be kept informed.
 
 

Decision versus input for partners

 
 

In any organization, there are natural (and unnatural) partners. It’s helpful for these partners to be clear on which of them is deciding and which of them is influencing which decisions.

 
 

Take the case of a magazine publisher and editor-in-chief. They must work together as partners and communicate all the time. In general, it seems to work best if the editor-in-chief advises on marketing and pricing while the publisher makes those decisions. Conversely, the publisher should advise on content while the editor-in-chief makes those decisions.

 
 

RACI

 
 

Many have found the RACI framework helpful:

 
    • Accountable: Answerable for correct and thorough completion of deliverable or task.
 
    • Responsible: Does work defined and delegated by accountable person.
 
    • Consulted: Provides input and advice (Two-way communication)
 
  • Informed: Kept up-to-date (One-way communication)
 
 

Note the accountable person may answer to a higher approving or commissioning authority that delegates the task or project to that accountable person. RACI applies within the task or project.

 
 

Implications for you

 
 

Think input versus decide. For each important decision, clarify who makes the decision and who is providing input to the person making the decision.

 
 

This article originally appeared on Forbes.com

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

 

 
 

 
 

 
 

 
 

 

12 Qualities That Set Ultra Successful People Apart

Ultra successful people delight themselves by blowing their personal goals out of the water. They succeed along many different dimensions of life–their friendships, their physical and mental health, their families, and their jobs (which they are not only good at but also enjoy).

 
 

2015-11-27-1448653835-8162520-12QualitiesThatSetUltraSuccessfulPeopleApartHP.jpg

 
 

TalentSmart has conducted research with more than a million people, and we’ve found that ultra successful people have a lot in common. In particular, 90% of them are skilled at managing their emotions in order to stay focused, calm, and productive.

 
 

These super successful folks have high emotional intelligence (EQ), a quality that’s critical to achieving your dreams.

 
 

While I’ve run across numerous effective strategies that ultra successful people employ to reach their goals, what follows are twelve of the best. Some of these may seem obvious, but the real challenge lies in recognizing when you need to use them and having the wherewithal to actually do so.

 
 

1. They’re Composed

 
 

Ultra successful people are composed because they constantly monitor their emotions, they understand them, and they use this knowledge in the moment to react to challenging situations with self-control. When things go downhill, they are persistently calm and frustratingly content (frustrating to those who aren’t, at least). They know that no matter how good or bad things get, everything changes with time. All they can do is adapt and adjust to stay happy and in control.

 
 

2. They’re Knowledgeable

 
 

Super successful people know more than others do because they’re constantly working to increase their self-awareness. They vow constant growth. Whenever they have a spare moment, they fill it with self-education. They don’t do this because it’s “the right thing to do”; they do it because it’s their passion. They’re always looking for opportunities to improve and new things to learn about themselves and the world around them. Instead of succumbing to their fear of looking stupid, truly exceptional people just ask the questions on their mind, because they would rather learn something new than appear smart.

 
 

3. They’re Deliberate

 
 

Ultra successful people reach decisions by thinking things out, seeking advice from others, and sleeping on it. They know that (as studies show) impulsively relying too much on gut-instinct is ineffective and misleading. Being able to slow down and logically think things through makes all the difference.

 
 

4. They Speak with Certainty

 
 

It’s rare to hear super successful people utter things like “Um,” “I’m not sure,” and “I think.” Successful people speak assertively because they know that it’s difficult to get people to listen to you if you can’t deliver your ideas with conviction.

 
 

5. They Use Positive Body Language

 
 

Becoming cognizant of your gestures, expressions, and tone of voice (and making certain they’re positive) draws people to you like ants to a picnic. Using an enthusiastic tone, uncrossing your arms, maintaining eye contact, and leaning towards the person who’s speaking are all forms of positive body language that super successful people use to draw others in. Positive body language makes all the difference in a conversation because how you say something can be more important than what you say.

 
 

6. They Leave a Strong First Impression

 
 

Research shows that most people decide whether or not they like you within the first seven seconds of meeting you. They then spend the rest of the conversation internally justifying their initial reaction. This may sound terrifying, but by knowing this, you can take advantage of it to make huge gains in how people respond to you. First impressions are tied intimately to positive body language. A strong posture, a firm handshake, a smile, and open shoulders help ensure that your first impression is a good one.

 
 

7. They Seek Out Small Victories

 
 

Successful people like to challenge themselves and compete, even when their efforts yield only small victories. Small victories build new androgen receptors in the areas of the brain responsible for reward and motivation. The increase in androgen receptors increases the influence of testosterone, which further increases their confidence and eagerness to tackle future challenges. When you achieve a series of small victories, the boost in your confidence can last for months.

 
 

8. They’re Fearless

 
 

Fear is nothing more than a lingering emotion that’s fueled by your imagination. Danger is real. It’s the uncomfortable rush of adrenaline you get when you almost step in front of a bus. Fear is a choice. Exceptional people know this better than anyone does, so they flip fear on its head. Instead of letting fear take over, they are addicted to the euphoric feeling they get from conquering their fears.

 
 

9. They’re Graceful

 
 

Graceful people are the perfect combination of strong and gentle. They don’t resort to intimidation, anger, or manipulation to get a point across because their gentle, self-assured nature gets the job done. The word gentle often carries a negative connotation (especially in the workplace), but in reality, it’s the gentleness of being graceful that gives ultra successful people their power. They’re approachable, likeable, and easy to get along with–all qualities that make people highly amenable to their ideas.

 
 

10. They’re Honest

 
 

Super successful people trust that honesty and integrity, though painful at times, always work out for the best in the long run. They know that honesty allows for genuine connections with people in a way that dishonesty can’t and that lying always comes back to bite you in the end. In fact, a Notre Dame study showed that people who often lied experienced more mental health problems than their more honest counterparts.

 
 

11. They’re Grateful

 
 

Ultra successful people know that it took a lot of ambition, passion, and hard work to get where they are in life. They also know that their mentors, colleagues, families, and friends all played a huge role in their success. Instead of basking in the glory of achievement, super successful people recognize others for the wonderful things they’ve done for them.

 
 

12. They’re Appreciative

 
 

Truly exceptional people are able to achieve so much because they know the importance of slowing down and appreciating everything they already have. They know that a huge amount of their positivity, grit, and motivation comes from their ability to stay grounded and appreciate the opportunities that life has given them thus far.

 
 

Bringing It All Together

 
 

These habits can make any of us more successful if we use them every day. Give them a try and see where they take you.

 
 

What other habits set ultra successful people apart? Please share your thoughts in the comments section below as I learn just as much from you as you do from me.

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

 

 
 

 
 

 
 

 
 

 

10 Practices That Lead To The Demise Of Any Business

Unfortunately, many entrepreneurs seem to prefer to fail their way to the top, rather than do some research and learn from the successes and mistakes of others. It seems to be part of the “fail fast, fail often” mantra often heard in Silicon Valley. As an advisor to many startups, I’m convinced it’s an expensive and painful approach, but I do see it used all too often.

 
 

In general I try to focus on the positives and tell entrepreneurs what works, but sometimes it’s important to reiterate the common things that simply don’t work. I remember a recent book by MJ Gottlieb, “How To Ruin A Business,” that highlights failures. He humbly outlines fifty-five of his own less-than-stellar business anecdotes over a career in business for all to see and avoid.

 
 

Here is my selection of the top ten things to avoid from his list that I have seen lead to failure most often. I’m sure each of you could add one or two more from your own experience, and I’m desperately hoping that together we can convince a few aspiring entrepreneurs to avoid some practices that lead to losses and suffering:

 
 

 

    1. Spend money you don’t yet have in the bank. In the rush of a startup, it’s tempting to start spending the money you expect any day from a rich uncle or a major new customer. But things do go wrong, and you will be left holding the bag. It’s not only embarrassing, but one of the quickest ways to end your entrepreneurial career.

 

 
 

 

    1. Open your mouth while in a negative emotional state. Many entrepreneurs have destroyed a strategic alliance, an investor relationship, or lost a key customer by jumping in with harsh words after a bad day at home or at the office. If you don’t have anything nice to say, keep quiet and wait for another day. You may be dead wrong.

 

 
 

 

    1. Over-promise and under-deliver. Always manage expectations, and always under-promise and over-deliver. As a bleeding-edge startup, you can be assured of product quality problems, missing business processes, and customer support issues. Use the rule of “plan early, quote late, and ship early,” to be a hero rather than a zero.

 

 
 

 

    1. Create a market you can’t supply and support. If your product is really new and disruptive, make sure you have supply to meet the demand at rollout, and a patent to prevent others from jumping in quickly. Too many entrepreneurs have had their new positions in the marketplace taken away by competitors and others with deep pockets.

 

 
 

 

    1. Count on someone who offers to work for free. As a rule of thumb, expect to get exactly what you paid for. People who work for free will expect to get paid soon in some way, or they may take it out in trade, to the detriment of your business. Student interns are an exception, since their primary objective should be learning rather than money.

 

 
 

 

    1. Underestimate the importance of due diligence. No matter how good a supplier or investor story sounds, it is not smart to skip the reference and credit checks. Visits in person are always recommended to check remote office and production facilities before any money is paid up front on a contract.

 

 
 

 

    1. Grow too quickly for your finances and staffing. Growing quickly, without a plan on how to implement that growth can be a disaster. Learn how to reject a big order if you are not prepared to handle it. It takes a huge investment to build large orders, and large customers are the slowest to pay. In the trade, this is called “death by success.”

 

 
 

 

    1. Be confused between working hard and working smart. In business (as in life), you should never reward yourself or your team on the quantity of time spent, rather than results achieved. Quality works at a thousand times the pace of quantity. Prioritize your tasks, take advantage of technology, and constantly optimize your processes.

 

 
 

 

    1. Be afraid to ask for help, advice, or even money. Entrepreneurs often let pride and ego stand in the way of leveling with trusted friends and advisors. The advice you don’t get can’t save your company. I always recommend that a startup create an advisory board of two or three outside experts, who have connections to even more resources.

 

 
 

 

    1. Rely on a verbal agreement in business. Get every agreement on paper early and always, put a copy in a safe place, and have the agreements updated when people and environments change. People come and go in every role, and there is no such thing as institutional memory. People only remember the agreements which benefit them.

 

 
 

If all these failures seem intuitively obvious to you, why do I see them repeated over and over again by new entrepreneurs? Perhaps it is because entrepreneurs tend to let their egos cloud their judgment, they don’t like to be told what to do, or because there is no single blueprint for business success.

 
 

The good news is that, according to the “DNA of an Entrepreneur” study a while back, almost nine in ten entrepreneurs (87%) found more satisfaction from running a small company than working in a large one, even with the pitfalls outlined here. I suspect that most of these have failed their way to this top satisfaction.

— This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.