Chunka Mui gave the closing keynote at the recent annual meeting of NIRI, the National Investor Relations Institute. Following that address, he engaged in a wide-ranging interview conducted by Michael Santoli, a senior editor of Barron’s. Santoli writes the “Streetwise” column, offering a forward-looking take on the financial markets, illuminating market trends and themes and identifying investment opportunities. Below is the video of that interview, divided into five parts.

With Steve Jobs much in the news, we thought it worthwhile to highlight an earlier entry, “Stay Hungry, Stay Foolish,” that gives some insight into the man.

It’s rare that discussions of our research don’t touch on how executive compensation can distort strategic decision making. As we report in “Billion-Dollar Lessons,” our research turned up numerous examples where compensation schemes exacerbated risk taking. Dealmakers and investment bankers, for example, are rewarded based on the deals they close rather than long-term performance, so many fell prey to an IBG YBG attitude (I’ll be gone; you’ll be gone). Too many used easy financing to do deals that could not withstand the test of time. Executives, loaded up with stock options that had tremendous upside for success but little downside for failure, pushed forward on huge investments that had little chance of success. So, you might expect we’d support efforts to limit executive compensation, such as the administration’s recent appointment of an “executive pay czar” to oversee companies receiving federal bailout money.

But we don’t.

While we appreciate the value of information technology, we think that too often it hinders collaboration and thoughtful decision making. An article in yesterday’s New York Times, “Mind Your BlackBerry or Mind Your Manners,” reminded us of how technology can inhibit group processes–and how a flip of a switch can sometimes dispel the distractions.

Here’s a video excerpt containing the opening segment of a presentation by Chunka Mui at a recent Stanford Breakfast Briefing.  The audience consisted of approximately 100 members of the Stanford and Silicon Valley business communities. You can get a DVD of the complete presentation through Kantola Productions, the series producer. Zack Urlocker attended the presentation and blogged about it here and here.

The Stanford Breakfast Briefing series is a monthly business forum that features prominent thought leaders; CEO’s, professors and authors who share their expertise and research to help solve critical issues. It is held at the Stanford Faculty Club on the second Wednesday of every month.

As we wrote in our recent white paper, “Beyond Fear and Greed: Capitalizing on Opportunities in the Current Crisis,” immense opportunities await companies with the stability and wherewithal to take advantage of the recession and their competitors’ adversity. China seems to agree with us. Although some people have reasoned that the global downturn would hurt Chinese companies because they depend so much on exports, and would perhaps even cause political instability in the country, recent articles say Chinese companies are trying to take advantage of the crisis by being aggressive.

While we doubt the wisdom of having IBM buy Sun, we’re intrigued by Big Blue’s recent announcement that it is going to sell systems that will monitor water resources [see 1, 2, 3]. Water systems are leaky enough and, in general, inefficient enough that better management could provide significant benefits, and the Obama administration’s economic-recovery plan will make sure that funds are available. IBM already has relationships with many of the municipalities that will be the buyers. It has the expertise to handle such complex sales. It also has the professional services capabilities to help install and manage the systems.

There are some curious ideas being bruited about in the computer industry these days. It seems that cash is burning a hole in the pockets of healthy companies such as IBM and Cisco. Rather than have the cash sit around earning basically nothing at today’s low interest rates, the companies have decided to start looking for acquisitions. While that can be a splendid strategy in the right circumstances, the combinations being discussed don’t make much sense. Shareholders would be better off if the companies followed Oracle’s example and declared a dividend.

This is the second of two new working papers that apply our research to today’s business challenges. “Perfecting the Art of the Deal: Using a Devil’s Advocate to Greatly Increase the Odds of M&A Success” applies our research to potential mergers and acquisitions. Read it below or download it in PDF form.

Perfecting the Art of the Deal
Using a Devil’s Advocate to Greatly Increase the Odds of M&A Success

By Paul B. Carroll and Chunka Mui

Numerous studies have shown that roughly two out of three corporate acquisitions fail, as measured by the performance of the stock of the acquiring company. What if those odds could be flipped? What if it were possible to succeed two times out of three and just fail a third of the time?

We’ve finalized two working papers that apply our research to today’s business challenges. The first, “Beyond Fear and Greed,” is an overall look at current strategic opportunities and pitfalls. Read the paper here, or download it in PDF form. The second paper, “Perfecting the Art of the Deal,” applies our research to potential mergers and acquisitions and is available in a separate blog entry.

Beyond Fear and Greed:
Capitalizing on Opportunities in the Current Crisis

By Paul B. Carroll and Chunka Mui

Warren Buffett says his guiding principle is to “be fearful when others are greedy and greedy when others are fearful.” There’s certainly plenty of fear out there, and thus plenty of opportunities to get greedy. Greed, however, does not necessarily translate into wealth. In this article, we draw on our two years of research into more than 2,500 major corporate failures and our related consulting work to describe the landmines that companies are mostly like to hit as they try to capitalize on today’s market turmoil. We also lay out a process for ensuring that greed does not send you down the wrong path–increasing the chances that you’ll pick a prosperous road.