This blog looks at books such as Switch – How to Change Things When Change is Hard by Chip Heath & Dan Heath, published by Random House Canada, Toronto, 2010 because as Dividend buyers part of what we want is not to change.

In the world of big oil companies, because they are big they are looking for big oil reserves. However, you really do not know until you have drilled to determine how big the oil reserve is or can be? Oil companies exploration budgets go up and down with the price of oil and during one downturn, the head of BP exploration lowered the budget and came up with the simple phrase “no dry holes”. This means a lot of things but one thing is to ensure the geologists to spent more time formulating data to weed out the possibility of dry holes, so when the drill was going down the best information possible was used to expect a hole with oil. No system is perfect but BP used its data better and hit rate was 2 out of every 3 holes struck oil which was better than the competition.

In all industries – various publications dominate for example with financial news the Wall Street Journal, for institution investors add the magazine Institutional Investor (II), the large pension funds managers look at II for articles and rankings to see where they allocate their funds. For a firm to be highly ranked, it will translate into more dollars going into that firm. It was this premise that in 1986 Shearson Lehman’s research ranked 15th with nobody ranked in the top 5 in II. The new boss made many formal changes clearing out deadwood, changing the compensation package and to get the company moving he decided analysts were expected to initiate at least 125 client conversations per month and post them on the internal network. In addition, at presentations the I think were changed to we think. The results were besides doing better research which II noticed, customers were noticing the extra attention. One example of the work was when a drug company called Epogen made by Amgen and distributed by J&J was introduced, Shearson identified more than one market for its drug and called it a blockbuster which made money for many clients. It is always possible to rise in the rankings.

How do most of us change something ? do we analyze-think and change or See-Feel and Change. Turns out it is the second one or we are touchy feelings and if you show us we can and do react. Two wonderful examples:

a man wanted to centralize the purchasing system – the company had many different divisions buying products. He took gloves from all over the company with various price ranges and laid them out on a table and said – if we centralized all the gloves would be in the similar price range. The board approved it.

Target department store is known for many things including clothes with bright colors but that was not always the case. The ready to wear trend department manager saw that the year’s fashion was neutral or gray, white, etc. She wanted color, so she bought M&Ms and displayed them in glass bowls and asked do you see the colors? She brought in Apples in different colors and photographs from different boutiques showing colors and how they pop. The interesting thing is she was one person with limited authority and resources but it can be done.

Linking to dividend paying stocks, the examples show change is possible within any company and the organization can benefit from it. What changes are going on in the companies which you own stock in?

There are more questions than answers, till the next time – to raising questions.