Volume IX, Number 4                                                                                                               August, 2007


A newsletter for clients and friends of Chenault Systems

Copyright © 2007 Chenault Systems, Inc.  All rights reserved.


Web Site Review: Management goes to the movies

By Tom Chenault

Okay, movie buffs, now you have another reason for watching movies, which would be to improve your management skills.  Different movies depict different business problems.  This web site can be used, for a small price, to download “study guides” on certain movies.  For example, in the movie, Big, which falls under the category of “creativity”, Tom Hanks plays a 30-year-old, that was transformed from a 13-year-old.  Somehow he ends working for a major New York toy company as a marketing executive.  Ever met a marketing coach?  In Big, a 13-year-old mind shows adults a little common sense and how to be in touch with the customer.

The web site is organized in different ways, such as by topic (e.g. corporate succession, entrepreneurship, leadership, leveraging resources, revolutionary vision, and the role of the firm, sales, team pride, corporate raiders, etc.)  You can also look up the movies by title.

They also have the “MANNY” awards, which is a way to vote for the best business movie.  There is a trivia quiz.  There is a sample study guide to examine a movie case study, which is the Wizard of Oz, under the category of leadership.  “They used the Oz story as a metaphor for issues of accountability, arguing that Dorothy and her team succeeded only after they stopped blaming others for their problems, stopped waiting for someone to wave a magic wand and started taking responsibility for their own destinies.”  Well, that sounds familiar.

These days, certification seems to be the “in” thing in business.  In an effort to get around a slow job market, there seems to be a certification for everything.  With this web site, you can become a Hollywood MBA, if you pay a $10 fee and make a 100% on the 50 question exam (

One of the greatest movies of all time, regarding business decision making, is Godfather I.  This movie falls under the category of “the role of the firm.”  In the beginning of the movie, they establish the importance of loyalty and how that plays into long-term strategy.  Certain favors are granted with the understanding that those favors will be returned in the future.

However, the main theme of the movie is about transition in terms of leadership, the changing marketplace, and what role the Corleone organization plays in the future.  The long-term goal is to convert the business into a non-criminal one by moving from New York to Nevada.

Meanwhile, they are confronted by other organizations to form a drug cartel.  Don Corleone (CEO) feels this is a very dangerous in a legal sense and an immoral road to take.  There is also the risk of losing alliances with police, the newspapers, and politicians, who are all on the “payroll.”  In addition, it conflicts with the long-term move.

As with many business situations, egos are allowed to triumph over logic and conflict ensues.  In the end, Corleone, Inc. settles their problems out-of-court and eliminates their competition with various forms of technology.

Other great movies: We will never forget are High Noon and Zulu (leveraging resources), Citizen Kane (succession), Twelve O’clock High (team pride), Gung Ho (corporate culture), and Wall Street (corporate raiders).

Check out “Movies for Business”.  This could be a way to make otherwise boring management training sessions an interesting experience.


Sarbanes-Oxley hammers small public companies

By Steve Marr

In the wake of the Enron collapse, Congress passed the Sarbanes-Oxley bill hoping to put the brakes on corporate scandals; but -- like similar government actions -- the bill hurts shareholders instead of correcting the situation.

Congressmen argued that by requiring CEO’s to personally certify financial statements--creating reams of additional paperwork -- it would clean up the scandals.

But the annual cost--for public companies with sales under $100 million -- is a whopping $850,000.  For many, that’s the difference between profit and loss.  For others, it translates to losing a lot of earnings per share.

“Like similar government actions -- the bill hurts shareholders instead of correcting the situation initiative.”

Small companies need to be small and nimble, in order to react in the marketplace.  Placing burdens on them only cuts shareholder returns.  As it is, companies spend billions to comply with regulations, with very little obvious benefit to shareholders.

Rather than require firms to comply with complex filings, why not let the free market operate and do its job?  Why not let these companies decide if they want to conform to Sarbanes-Oxley?  That way, shareholders could decide if the so-called benefits are real or not.  These investors could decide to invest only in companies in compliance with the law -- if they perceive benefits -- or choose those which decide to save the costs.

In ancient Judah, King Josiah said of some people, “No accounting shall be made with them for the money delivered into their hands, for they deal faithfully” (2 Kings 22:7 NASB).  True, some deal faithfully while others do not.  But the free market is the best arbitrator of such things, not our federal government.

Reprinted with permission of the Cato Institute, copyright 2007.

Steve Marr is the former CEO of the fourth largest import-export firm in the U.S., a company which facilitated international trade for many of the largest companies in America.

Quotes Worth Noting

“There is nothing as useless as doing efficiently that which should not be done at all.” – Peter Drucker

“Sarbanes-Oxley corporate governance rules enacted in 2002 has become a nightmare and should be scrapped as soon as possible.  It has discouraged risk-taking and is driving foreign companies to shun the New York Stock Exchange for the lighter rules in London.” – Alan Greenspan

“Eccentricity is not, as dull people would have us believe, a form of madness.  It is often a kind of innocent pride, and the man of genius and the aristocrat are frequently regarded as eccentrics because genius and aristocrat are entirely unafraid of and uninfluenced by the opinions and vagaries of the crowd.” -- Edith Sitwell, English biographer, critic, novelist, & poet (1887 – 1964