Daily Archives: October 24, 2009

Will Poor Spend Management Be The End of Harvard?

Back in August, after reading Nina Munk’s Hard Times at Harvard article in Vanity Fair, I asked if Poor Spend Management Will Be The End of the Ivy League after Harvard’s endowment lost a whopping 8 Billion in the first four months of its last finical year. This amount, which is greater than the entire endowment of Columbia University (at 7.1 Billion) put Harvard in dire straits, especially since Harvard’s President warned of an expected 30%, or 11.1 Billion, loss. (The actual loss was about 11 Billion, and the full report can be found on the Harvard Web Site. [PDF])

Then I read this article over the weekend, which noted that Harvard University lost 1.8 Billion alone from the cash account it uses for daily operations through investments in high-risk vehicles (which included stocks, hedge funds, and risky assets), I started to wonder if poor spend management is going to spell the end of Harvard, at least we know it. However, what I really want to know is how could Harvard, with the famed Harvard Business School and Harvard Business Review, be so stupid? Even the dumbest companies know that, unless you have more than three months of operating capital, you keep your daily operations cash in savings accounts, and even if you have more than three months, you only invest it in low risk investments like money-market mutual funds which have a long history of slow and gradual changes (and not high risk stocks that can plummet overnight)!

All I can say is that I’m at a loss for words! Anyone want to chime in?

I Hope You Take More Care With Your RFP Responses Than This!

Pricing FAIL

  Courtesy of the FAIL Blog

If your price changes sporadically every time you quote, for no apparent reason, you’re not going to look very organized!

Anyway, maybe this is why Wal-Mart changed their slogan from “Always Low Prices” to “Save Money. Live Better” because, as Vinnie recently pointed out, not all prices have been rolling back at Wal-Mart lately. Vinnie notes (as I have also noticed) that Mach3 Razors and dog food have been rising inexplicably, and I once walked into Walmart to pick up a can of coffee that was advertised at 4.97 the week before to find it had increased 60% to 7.97. So, while you will live better if you save money, you might not necessarily be saving that money at Wal-Mart.