When I retired from USG Corp., my friend, Frank, gave me a gift of a plaque with an Ancient Chinese text called: Master in the Art of Living, which had these thoughts:

-A Master in the art of living makes little distinction between work and play, labor and leisure, education and recreation, and love and religion

-He hardly knows which is which but pursues his own vision of excellence in whatever he does, leaving others to decide whether he is working or playing

My friend, Frank, was an executive coach for individuals and teams at large companies. He wrote me a note with the plaque that he tries to get all his clients to reach this goal. In his mind, somehow I had done so.

Another management consultant I knew once phrased this differently. When you are in a job or career where you are excited about getting up and going to work and don’t worry how long you work and whether its a work day or weekend, you are doing what you should be doing. You are self driven. You are in the right place.

When I was luckily able to fully retire at 55, I spent some time thinking about my work years in light of these two thoughts. I looked back at my four years in public accounting, my dozen or so years each with Donn Corp. and USG Corp. and my last few years at IMC Global. I calculated that probably two thirds of my career, I was truly looking forward to work. I was self motivated and charged up for 21 out of 33 years.

In talking to a lot of people over the years, I have concluded that I was lucky to have had that many really good years. So many people, from staff to line and from secretaries to executives do not feel that blessed in their work lives. Some are OK or satisfied with their work time but this is not the same thing, in my mind.

People ask me how do you achieve this concept of joy and enthusiasm in work? I don’t know. I know that you do know when you have it. But how to get there is very complicated. I was lucky, again, to often be put in complex and challenging situations where I ended up with a lot of control of the outcomes. I also got to work with, be mentored by, and to mentor some great people. These things I know helped me and greatly influenced how I felt about work. I wrote about some of these in my first book, The Business Zoo.

Three thoughts as we end the year:

First, look at your job or career and think about how you really feel about it. If you are not really excited about your work and are able to make a change, consider doing so.

Second, in 2019 I hope to publish my second book which will go into a much more personal level of my work, some of the unique people I encountered, those who mentored me and those I mentored. We will touch on stories from the book along the way in this blog and maybe some of these will be helpful.

Third, that’s for reading, have a wonderful Holiday Season and a great 2019!


We recently visited the beautiful South Carolina City of Charleston. While our wives shopped, my friend, Nat, and I visited historical sites of which Charleston has plenty.

Many people recall that our American Civil War started in this City. The State of South Carolina decided to withdraw from the Union. The U.S. Army tried to maintain control of the strategic port entrance by taking over Fort Sumter. The battle that ensued was brief,  the U.S. Army surrendered and our nation began its bloody four year Civil War.

Today, the National Park Service has a great narrated boat ride and tour of the Fort. We were fortunate to be on the last tour of the day and watched them lower the flag. The tour and the story it tells is a must for anyone interested in our country’s history. Friends know I have been a Civil War buff my whole life, so this was great!

But even more impressive and much more educational, for me, was our tour of the Old Slave Mart Museum on Chalmers Street. We all think we know the story of slavery in our country,  the terrible injustices that it brought and its role in the Civil War. The Slave Mart Museum focuses on the part Charleston played in this and looks at the slave trade as a business. It covers the human tragedies, the splitting of families and babies from their mothers, many of which we have read about or seen in movies or on television. It was a number of the other lesser known facts that I found equally compelling, such as:

-10% of African slaves were transported to the U.S.; the rest to Central and S. America

-40% of slaves entering the U.S. came through Charleston

-In 1860, before the Civil War, over 60% of S, Carolina residents were enslaved blacks

-Crops produced by slaves were sold to Europe which sold guns to Africa for slaves

-By 1808 foreign slave trade was abolished in S. Carolina in favor of the domestic trade

-On the slave market, a young male or female might bring $1,000 ($30,000 today) and someone my age would $50! Values were based on life expectancy and ability to work.

Overall, an incredible learning experience that everyone who is interested in black studies, the Civil War or understanding the whole history and impact of slavery would benefit from visiting. The Slave Mart Museum covers the human side but also the immense business that was slavery.


On my Apple calendar, I was told that October 8 is Indigenous People Day. Although the day is still called Columbus Day, the new term is meant to honor those people who were in North America long before our European ancestors.

In fact, historians now believe that there were several million native people here which were part of up to a thousand separate nations that ranged from Alaska, throughout the U.S. and into Mexico.

I became interested in this at a series of museums we visited in Canada and Alaska. I came to both appreciate and admire these First People. So, as I tend to do, I have now read parts of five books on the subject.

These nations or tribes often had diverse lifestyles based on the land area they occupied and their unique history and cultures. Yet all these native people, regardless of where they lived, had similar stories about the world’s creation, natural phenomena and good versus evil. Some very geographically separated groups, like our Southwest Apaches, even have a similar language to the Alaskan Athabaskan tribes.

And all these Indigenous or First People had issues establishing and transferring leadership and maintaining and spreading their culture. Just like our organizations do today. Only this was way before computers and even the written word.

Because of this, I am using stories about the First Peoples to help me illustrate points in my second book. It only seems fitting to reach back over the past millennia to seek guidance and explanations from those who came before us.

So here is a sample of how I will tie this all in. This provides a lead story in the chapter on Mentoring.

Honor Your Elders who Show the Way

In the far north of Alaska is the Inupiat nation. In the winter, there is no light for 67 days. In the summer, there are 84 days of only daylight. If you lived to become an Elder, you earned it and thus should be honored. The First People all over North America shared that same belief. The young were trained or mentored by the old. And the wisest elders were usually elected the leaders of their tribes.

The Iroquois Council, at its peak, consisted of six tribes, that working together, controlled our entire Northeast and part of the Midwest. The Council had devised a unique set of rules to govern both their overall territory and their individual tribes. Their system of government was studied by Benjamin Franklin and became the general framework for our emerging nation. And, although the Council Elders were all men, they were chosen, and could be removed, by the women of each tribe.

Fascinating and true. But I could not help but notice that old Ben did not include the part about the women in each tribe have the final power!

So think about our nation’s real First People as we honor them with a long overdue holiday in their name.

The Wall Street Journal editorial a while back,  made an interesting observation about our President and his style of leadership and negotiating. The article was primarily focused  on how Mr. Trump is approaching trade issues with China, and the rest of the world and specifically his emphasis on protecting domestic car production. But, I believe this can be applied to much of how our President approaches issues from foreign policy to healthcare etc. The article, by Holman Jenkins, Jr., states that President Trump is playing checkers while the rest of the world is playing chess. He relies on his gut and ignores briefing materials, etc..

Long time readers may guess that I have my own story about this type of game theory.  I learned about chess vs. checkers during my work on USG Corporation’s financial restructuring.

It was early in USG’s three year financial crisis, I was alone in New York having lunch with our newest financial advisor, Lazard. I was with David Supino, one of Lazard’s senior Partners and the head of their debt/bankruptcy advisory practice. An appropriate title as USG Corporation had accumulated massive debt in fighting a hostile takeover and was struggling to stay out of bankruptcy!   

We were at the famous Sea Grill restaurant in Lazard’s office building at 30 Rock (called that before the Tina Fey TV show). As USG’s newly named CFO, I was trying to understand this bizarre restructuring process from David who had done this for decades. USG, you see, had all these multiple groups and levels of creditors we had to satisfy to avoid a forced in-court bankruptcy. I was explaining, to David, my thoughts about how to negotiate with all these parties at the same time. 

My approach was this. On Star Trek’s Enterprise they had a three dimensional Chess set; when you moved a piece at one level it affected pieces at the other two levels. I asked David if this was a good way to look at our situation, like a Three D Chess game.

David stopped eating, spit out a piece of food, and started to shake, laugh and cry all at once. At first I thought it might be a heart attack until David screamed at me, “James, This is your problem! You think you are playing Chess! It’s more like Checkers but half the pieces are missing or broken! There is no Board and no Rules! Now do you understand what it means to be in Financial Restructuring!”

And, as our three year journey continued, I realized that my friendly advisor, David, was exactly correct. As detailed in the Crisis Management chapter of my book, The Business Zoo, any major crisis brings its own terminology, its own rules (or lack of them) and an often unclear path and timetable to ever get out of the crisis. This can apply not only to a financial or business crisis but a personal one as well.

So, what I learned then, and perhaps what leaders around the world need to learn about dealing with President Trump, is that you really need to understand what game you and your opponent think you are playing. And maybe the condition of the pieces and the shape of the board!

Usually business, life and even politics can be pretty straight forward. So, I would choose a really good checker player over a weak chess player any day!


Barnes and Noble, the bookstore chain, has experienced more than its share of trouble. They are hurt by Amazon, by the rise of e-books, the lack of book reading by younger people, too much debt, and excessive turnover in the management ranks, to name a few. Now, their third CEO, in two years was just fired by the Board. According to the Wall Street Journal, here are some of the details: the CEO violated Company policy (not specifically named), this was not due to any SEC type financial reporting or potential fraud, he was removed from the Board immediately, and he will receive No Severance!

This is what should happen but rarely does. If you Google severance pay, the stories never end. From media people like Harvey Weinstein collecting $25 million to Fox’s Roger Ailes receiving $40 million both leaving in sexual harassment scandals. United’s former CEO left in a corruption scandal and received $29 million. All this makes the misconduct departure of Lululemon’s CEO, who only received about $5 million, sound like a real bargain.

The only other recent and well-known example I could find of a CEO leaving for cause and getting no severance was the Vegas mogul, Steve Wynn and his ex-wife was a still a major shareholder in his company.

Why don’t more companies and their Board of Directors do the proper thing and not pay severance for executives who were fired for cause?  One obvious issue is the legal definition of  “cause”. When it involves violation of a company’s policies or code of ethics, this should not be an issue, but it is still usually not followed. If it involves a legal action, such as a lawsuit to establish “cause”, public firms usually run or at least look the other way!

Why? The real reason is that large public firms are afraid. Afraid of having to give depositions; afraid to go to court and mostly afraid the company will look stupid or mean or bad or worst yet, wrong! I know this because, as a CFO, I have been in more than one meeting that involved terminating another senior executive for cause and I am the only one suggesting no severance and that our company should pursue legal action.

In the case of a fallen CEO, it is the responsibility of the Board of Directors to take action whether that is to pursue criminal or civil actions and/or to withhold any severance. Too many Boards are weak. They take the easy way out, pay some hush money, sign a nondisclosure agreement and find a new CEO.

So let’s congratulate the Boards of Barnes and Noble and even Wynn Casinos for taking the first hard step and not further enriching a discredited CEO with any severance package! Most people distrust large firms and their executives. When people read about these undeserved and unexplainable severance payoffs, it only adds to that distrust.

My mother, Dorothea Gagliardi James, enlisted in one of the first groups of WACs in the Army Air Corp. in WWII. She travelled from her home in Philadelphia to military bases in five different states and taught young men aircraft identification before they were sent to fight in Europe. At the end of the war, in Fresno California, she met and married my father, Jake. She left the service as a Staff Sergeant and was always proud of her time in the military serving her country.

About twenty years ago I found out about a drive to raise funds for a memorial in Washington D.C. to honor women who had participated in any war, from the American Revolution to today, and in any capacity-nurse, soldier etc. I volunteered and helped raise money in the Chicago area and made a significant personal gift with help my old firm, USG Corporation.

At the entrance to Arlington Cemetery, is the Women’s Memorial. It is a short subway ride from downtown DC and a short walk from the Kennedy Memorial and the Tomb of the Unknown Soldier. Behind it are what seem to be, miles of, endless white headstones which make up the bulk of Arlington Cemetery. Any trip to our nation’s capital should include a visit to this area.

The Women’s Memorial has a computer registry where you can view a photo and a brief history of some of the three million women who have served our country. They also have exhibits that show military uniforms over the decades and highlight different stories or themes. When we visited, there was a tribute to the 7,000 fallen warriors who have given their lives in our more recent wars.

They also were premiering a documentary film called The Hello Girls. It tells the story of  two hundred female AT&T operators who volunteered to move to France when the U.S. entered World War I. They served as phone operators in the front lines and at military headquarters. Our head commander, General Pershing, said they helped win that war. Some died for their country. One more example of the often, untold role of women in our nation’s history.

Recently, my wife and I took my son, Mike and grandson, Connor to DC. Even a seventeen year old was impressed with everything we saw in Arlington and Washington DC. From printing money at the Bureau of Engraving to the huge Air and Space Museum near Dulles Airport to the Supreme Court and Congress, DC is great and every government building and museum is Free!

So add Washington DC to your vacation list especially for teenagers. It is far more valuable for a life learning lesson or two than Disney World!

And while in DC, check out the Women’s Memorial. It is amazing what you can learn.

As an accountant and CPA, I always thought I understood basic financial concepts. Net Earnings was computed by deducting all your expenses from Sales. And Cash Flow was, well, cash flow, or your Net Earnings plus Depreciation. These were defined by generally accepted accounting principles or GAAP and used to publish a firm’s financial results.

Well, guess what? That is not the way it is anymore. I started to discover this when some of the young people I advise go to work for firms like Salesforce. For many high growth technology firms, like this one, there really aren’t much Net Earnings anyhow and they even report Sales in ways I was never taught!

So recently the Wall Street Journal had an article called “Fanciful Measures of Profit.” This trend does go back to my days in the 1990’s at USG Corporation. USG had borrowed huge sums of money and due to the interest expense (and a slump in the construction markets) we had no earnings. So we reported EBITDA, Earnings before Interest, Taxes and Depreciation. As their CFO, I would joke to investors that when you have no earnings, you report EBITDA instead. My old friend, Warren Buffet’s partner, Charlie Munger, called these “bullshit earnings”, and he was not far off. But the fun did not end there!

The Journal reported that this year alone, companies have filed 450 documents with the Security Exchange Commission, SEC, with variations of my old EBITDA. A popular one is EBITDAO which adds back the cost of stock options issued to management. There is also ones that add back pension cost, leasing cost, exploration costs and almost anything else you can dream up. Technically, all these so-called financial measures must be shown with the traditional GAAP reported earnings. But in quarterly earnings calls and meetings with investors, firms primarily stress these adjusted earnings calculations because it makes them look better. And stock analysts have adapted and now use many of these new earnings measures when they review a firm and recommend their stock.

I am having a hard time with all this. I was taught that, in the end, all firms need to make real net earnings and to generate cash flow to survive and grow. But today companies get around this by borrowing money and issuing more stock. And if the firm, like Salesforce, is in a trendy field like software platforms on the cloud and is growing rapidly, no one seems to care if they have GAAP profits or not. Salesforce stock has climbed over 80% in three years without much real Net Income at all. This was also the story of high sales and stock growth without earnings for years for companies like Amazon and Facebook.

So what to do? Every investor needs to decide for themselves. For every Amazon, Facebook or Salesforce that soars and succeeds, there are dozens of firms that fail. Or, heaven forbid, the next great idea comes along and wipes out the competitive advantage, market share and quickly the value of their stock!

But I have decided that even an old CPA needs to be open to the way this new economy of ours is working and to make some investments in firms that may not have met my conservative old standards. After all, my wife, Tricia, is the one who insisted in 2004 we buy stock in some small computer firm called Apple! (We should have bought more!)

Only time will tell if this new investment approach works!

Crain’s Chicago Business wrote several months ago about how big companies are putting increased pressure on their much smaller trade creditors to extend their payment terms. A small Chicago stamping plant with $10 million in annual revenue, makes parts for Honeywell whose revenues are $39 billion and whose free cash flow is about $5 billion. Until recently Honeywell paid this firm slowly, by most manufacturing measures, at 60 days. Now they have asked for 120 days. This makes the smaller firm their Banker.

Chicago based Boeing, whose sales are even larger at $100 billion last year, recently asked suppliers for 120 day terms as well, according to the same article.

Both Boeing and Honeywell have an “A” credit rating, the best in corporate America.   This means they can borrow money pretty much whenever and from whoever they want and, in today’s financial world, very cheaply. So why do these giant companies penalize  very small suppliers by not paying their bills in a timely fashion? Because they can. Today there are plenty of small suppliers willing to accept these credit terms just for the chance to sell to a giant customer. At least for awhile or until it crushes the small firm’s own credit situation.

Is this a new phenomenon you might ask? Of course not. This has gone on forever in business. What is new is who is doing this and why.

Years ago, my wife Tricia sold office furniture to the then giant telecommunication firm MCI which became Worldcom which became Verizon. Standard terms from small furniture distribution firms were 30 days. One day MCI just decided to take 60 days. As a commissioned sales person, Tricia was charged a financing charge by her own firm which reduced her, already small, commission. At the time, MCI was just starting to have  financial problems, a falling stock price and eventually declared bankruptcy.  So, in the past, large firms often leaned on trade creditors to try to buy time to restructure their business.

My old firm USG Corporation went through its own financial restructuring due to excess debt taken on to avoid a hostile takeover. One of the many things we did to survive was to maximize our days outstanding with our trade creditors. But we did this after talking to the creditors and sometimes making special accommodations with them.

But what is going on today is totally different. Honeywell, Boeing and I am sure a host of other very large and very financially solid firms are unilaterally and without much communication or rationale just stretching out their credit terms to the severe detriment of a lot of small and struggling suppliers. A former USG Corporation financial colleague of mine was concerned that by not paying our bills according to their standard terms we were being “immoral and unethical”.  I never agreed with that characterization at the time or in our circumstances.  But what is going on today I do consider bad business practices that border on unethical.

Business like life relies on relationships. This credit practice is very bad for relationships and karma. And it will likely lead to more failures of small firms which are so critical for our economy.

Just when I thought I had heard almost everything, a group of over 40 year olds are suing Price Waterhouse Coppers for not hiring older workers! The lawsuit alleges that PWC discriminates against older applicants by focusing on college campus recruiting and trying to create a workplace “where youth is highly valued”, according to news articles.

Having grown up in business in what we now call a Big 4 CPA firm, I do have a couple thoughts to offer these disadvantaged older workers:

Although you may be attracted to the initial starting salary of up to $60,000, you better be prepared to work your behind off! CPA firms still average 70 to 80 hours a week, especially in the “busy” season from late fall until spring. Some CPA consultants work these long hours year round depending on the client and projects to which they are assigned. If you take the $60,000 and divide it by sixty plus hours a week you are really earning closer to $35-40,000 a year. And you have very little personal time! It is common to work late at night and six day weeks.

Starting jobs in the professions such as accounting and law have always been like this. There has been some effort, in recent years, to make them less exhausting and more family friendly, but based on the chat sites I reviewed, things have not improved much. This is why these starting positions are a young person’s game. Right out of college, with no spouse, and no family, this makes sense.

CPA and law firms also have very strict hiring criteria. The better firms only hire the best  people from the best colleges. And, yes, they are mostly all young, recent college or MBA graduates. And they all report to young, bright people who may be in their mid 20’s who report to young, bright people who are in their late 20’s. This is the age old formula and it works. By the time a young professional hits age 30, most have left public accounting for a more stable, and family friendly job. The few that remain into their 30s and 40s have been well indoctrinated into the firm’s culture, which is also very hard to do with an older worker starting out.

So, believe me when I tell the older workers, you do not want a starting job with a CPA firm! The money may sound good but it is not a lifestyle that works for those over age 40!


Warren Buffett began buying USG Corporation stock in 2000 right before its second bankruptcy, not great timing. But USG seemed to fit his investment profile: an industry leader in a basic industry-building materials.

Warren and Berkshire Hathaway stayed in during USG’s bankruptcy, loaned the Company money at 10% and then converted it into more stock. Today, Buffett is USG’s largest shareholder with just over 30% of its common stock. For most of the last twenty years, this was good for USG. A friendly stockholder of that size makes any company almost bullet-proof to any unfriendly takeover attempt. And Warren Buffett is usually a very friendly shareholder; until he isn’t.

Recently, a private German building material firm named Knauf made a hostile take-over bid for USG. Knauf has owned about 10% of USG also for the last twenty years. Normally a take-over bid by someone owning only 10% would not be a sure thing, but there was a unique wrinkle in this offer. Warren Buffett joined the proposal by offering Knauf an option to use his shares in getting the deal done. So now USG faces a take-over bid backed by 40% of its shares. And four other funds like Vanguard own, in total, another 20% of the shares. So, it is very likely that USG Corporation will be acquired. It may just be a matter of time and final price.

Since I left USG Corporation before Warren Buffett bought his first shares in 2000, one could ask what does this have to do with me? On many levels, nothing. Most of the people I worked with there are retired or dead. I was USG’s CFO during their first restructuring not the second one that Mr. Buffett waited patiently to end. But even though I was only at USG a dozen years, the experience and the people meant something to me. We fought to save USG in its first major financial restructuring. It took a toll on me, but it also left a mark and feelings of respect and admiration for the place. USG is a very proud and independent company with a lot of history and a unique culture.

So, this event got me thinking!

All the firms I worked for in my business career may be gone. Arthur Andersen by government decree; Donn Corporation sold to USG; IMC Global which merged with part of Cargill to become Mosaic; and now the 100 year USG Corporation. I outlasted them all.

In the generations before me, people worked their whole life for one firm and then retired there. Some of my wife’s grandparents did that in the tire industry in Akron, Ohio. And at least one of those firms, Goodyear, is still around!

But for the millennials of today, my experience probably seems quaint. Only four companies over an entire work career? Nowadays young people will have a dozen or more employers and no reason to wonder what happened to their previous ones. We change jobs as often as we change our cell phones.

So, best of luck and success to the people and culture of old USG Corporation whatever happens to it!

And Warren Buffett showed up twice: early in my working career and after I retired.