Separate accounts. We are admittedly biased, but this really is the remaining option. You have to get comfortable with the quality of the credit research your manager makes. Firms simply can't and shouldn't do it in-house. As the yield curve steepens, more firms will find the duration available only via individual credit investment; for this you need an asset manager with a real credit team and a tool like Clearwater.
Adam Dean
President
SVB Asset Management
San Francisco
Guess I just don't get it. If I were a CFO/treasurer and earning money-market rates on millions of dollars of idle cash, I should be fired. My clients' idle corporate funds are earning 4.2% with liquidity and an extremely high degree of safety. If you can't figure out how to accomplish that, then you're not much of a CFO/treasurer.
David Lightweis
Principal
Trinity Consulting Group International
Via e-mail
Saving a Reputation
The best way to think about "reputation" is to understand its role in a brand's value-proposition/value-delivery system ("What's a Reputation Worth?" May). Toyota didn't just take a hit to the esteem in which it was once held; its brand proposition was undermined. Toyota's value proposition rests squarely on reliability. It is the chief reason consumers were willing to pay more for a Toyota, and why its resale values were higher versus its competition.
Now that Toyota's management has put its core benefit to consumers at risk, the brand will never regain the position it once held in the minds of consumers. Being slow to respond was bad enough, but that wasn't the key problem. The key problem was that the Toyota value-delivery system was also undermined, which was probably more important than the safety issues themselves. That is, a reliable brand can be counted on to advise its customers of a potential problem before it becomes an issue. Instead, some idiots rolled the dice with the company's most important asset — the brand's key reason for being. Not only did they undermine reliability, they made Toyota untrustworthy.
The monthly sales gain mentioned in the article is nothing to get excited about, because it was achieved with incentives. This is the point of measurement. Reputation is measured every day in terms of market share, revenues, and profits. It's the only measurement that matters.
Robert Miller
Via e-mail
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