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and efficient operations will be critical in the financial services business, and therefore we need to embrace and integrate them into everything we do. We need to continually strive to give our customers more, better, faster and cheaper.

Eliminate waste and bureaucracy

Bureaucracy, silos and politics are the bane of large corporations; they must be combat- ted vigorously and continually. While appropriate rules and procedures are critical to the control and discipline of an organization, unnecessary rules translate into bureau- cracy, which destroys initiative, neutralizes passion, stifles creativity, eliminates account- ability, and makes it hard for people to do a good job and for managers to manage well.

Maintain a strong system of internal governance and controls

Good internal governance is essential to effective management. It ties together all our businesses worldwide with a common set of rules, expectations and oversight activities. These help safeguard our reputation, which we believe is one of our most important assets, and align the company’s performance with the best interests of our shareholders.

Measure performance through a complete and balanced scorecard

A mark of an exceptional company is its ability to outperform its competitors, regard- less of economic conditions. Any company can improve earnings in the short run by taking on additional risk and cutting back on investments. But it may be the kind of growth one comes to regret. Our obligation is to build a company that can thrive in any environment.

To reach that level of performance requires using a complete and balanced scorecard that goes beyond earnings to address many questions, such as:

  • Are we recruiting and developing great people?

  • Are we innovating better products?

  • Are we relentlessly improving our core processes?

  • Are we making good returns on capital?

Business leaders are frequently asked to identify their “three big areas of focus.” It is a frustrating question. To build a great company, you must accomplish all of the above, and more. There is no simple solution.

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