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CFOs Face Challenges Forecasting Capital Spending Plans for 2021

Finance chiefs must decide whether to make long-term investments based on changes in demand during the pandemic Finance chiefs across industries are facing a common challenge: Predicting whether pandemic-driven shifts in customer demand and consumer behavior are here to stay. The task, which is part of the budgeting process for 2021, in many cases means placing a bet on what they expect the future will look like—and what they think their companies should spend on plants and other big-ticket items. Capital expenditures are investments in assets such as land, buildings and technology that companies use to generate growth. Executives often make these longer-term spending plans covering multiple years. The pandemic has made the call much harder. “They look at their projects, they look at their capex, and they don’t know where things are going to be in the future,” said Mark Gottfredson, a partner at advisory firm Bain & Co.

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How Managers Can Support Remote Employees

In the global transition from corporate hallways to home offices, we’ve left something behind: meaningful access to managers. Gone are the instant answers to unblock progress, information streams that managers are privy to before the rest of the organization, informal feedback and coaching while walking together after a meeting, and predictable process and structures for communicating about work and ensuring mutual accountability. Last week, during a coaching call, a senior director lamented, “I’m stalled because I don’t know how to connect with my manager on the less formal stuff — the way I used to.” He’s not alone. Manager distancing is frustrating employees and stalling work. But managers are finding themselves struggling, too. For every employee who is trying to reach their manager, a manager is attempting to connect with half a dozen or more direct reports, plus trying to get direction from their own boss. In a poll of

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These Tiny Last-Minute Tax Changes Could Be a Big Deal in 2021

From stimulus checks to early retirement-plan withdrawals, here are some late-breaking items that could alter either your 2020 return or how you approach your taxes in the year to come With taxes, small changes often add up to big differences—and major confusion. Last year Congress passed two important bills in response to Covid-19 that contain a slew of tax changes, with the most recent one signed by President Trump on Dec. 27. Some of the changes apply only to 2020, while others affect more than one year or take effect beginning in 2021. The new year also brings automatic inflation adjustments that slightly shift tax brackets and some other thresholds. That’s a lot to keep straight, so here’s a rundown of the most recent tax changes and when they apply, according to the Senate Finance Committee, plus an overview of this year’s key tax numbers. Happier New Year in 2021! •

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Cruise Ships Can’t Sail Away From Covid

Small luxury operators have tried strict testing requirements and capacity limits, but onboard outbreaks persist Authorities around the world halted voyages on large passenger ships in March after Covid-19 tore through scores of vessels, but cruising never really stopped. Smaller cruise ships exempted from the suspension continued to sail selected routes. To keep the deadly virus off ships, these boutique operators experimented with a variety of new precautions. The result: They mostly failed. Coronavirus infections repeatedly pierced so-called safety bubbles promoted by luxury cruise lines. Since June, about 200 people have tested positive for the virus on nearly two dozen cruises, according to a Wall Street Journal tally. At least one person, a crew member, died in his cabin with the virus, according to the U.S. Centers for Disease Control and Prevention. “Transmission has not been controlled sufficiently,” the CDC said in a September report that cited the virus’s continued spread on smaller cruise

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The Discipline of Teams

What makes the difference between a team that performs and one that doesn’t? Early in the 1980s, Bill Greenwood and a small band of rebel railroaders took on most of the top management of Burlington Northern and created a multibillion-dollar business in “piggybacking” rail services despite widespread resistance, even resentment, within the company. The Medical Products Group at Hewlett-Packard owes most of its leading performance to the remarkable efforts of Dean Morton, Lew Platt, Ben Holmes, Dick Alberding, and a handful of their colleagues who revitalized a health care business that most others had written off. At Knight Ridder, Jim Batten’s “customer obsession” vision took root at the Tallahassee Democrat when 14 frontline enthusiasts turned a charter to eliminate errors into a mission of major change and took the entire paper along with them. Such are the stories and the work of teams—real teams that perform, not amorphous groups that we

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Business Travel Was Terrible—and I Miss It So Much

A newfound appreciation for long waits at airports, bland rental cars and rooms without views I keep hearing business travel may never return to pre-pandemic levels— Bill Gates suspects 50% of it will disappear—and it makes me sad. I should be grateful to have a job of any kind, and I am, but I miss those work escapes. If I’m being honest, my family misses my business travel more than I do. My family has been saying polite things about how being stuck at home in 2020 has made us all closer, but I think they’ve had enough. They’d really prefer me out of the house. If I ever leave again, they’re going to celebrate like they won the Super Bowl. I’ll be back in two days, I’ll say. Take 20, my family will say. I miss little things about work travel, like packing. I’d fold my clothing into a bag, and

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Home Design for the Post-Covid-Pandemic Age

This past year has been a time of upheaval and change, forcing Americans to rethink how they live. As architects, we believe our homes must change to support the new demands on our living spaces and communities. During lockdown, countless people have had to find room in their homes for offices, exercise spaces and more. They’ve also had to use their porches and lawns as informal social spaces as gathering places like cafes have shut down. THE YEAR IN REVIEW Why the U.S. Economy Will Take Off in 2021 Why Covid-19 Home-Based Testing Could Make All the Difference How to Understand This Crazy Year in Investing—and What to Do Now Will Coronavirus Be the Death of Cities? Not So Fast Full Report (In print Dec. 17) We have an idea that gives people a way to help transform their homes for this new environment—as well as build social and neighborly

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Why Rookie CEOs Outperform

When seeking the best CEO candidate, boards might begin with lofty goals. But directors recognize that a botched succession could hurt their reputations (not to mention their shareholders), so in many cases they end up focusing not only on the upside potential of a candidate but also on the downside risk, asking: Who is the safest choice? Who is least likely to fail? And their answer is often the candidate with prior experience in the top job. In fact, the share of newly hired CEOs who previously held the role has quadrupled since 1997 and now stands at 16%. In most endeavors, experience is a good thing. But new research from the executive recruiting and leadership advisory firm Spencer Stuart finds that for CEOs, it often carries surprising costs. In a study of 855 S&P 500 CEOs appointed over a 20-year period, the researchers found that those with experience in

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The Martini Lunch Tax Code

Congress’s latest Covid relief and omnibus spending bills are a mash-up of special favors for teachers unions, the booze industry, wind power, race horses, and so much more. There’s even a bailout for Broadway; take a bow, Chuck Schumer. But for a sign of the political times, and how far Congress has strayed from basic economic logic, you can’t beat the return of the full business meal deduction. President Trump has been pushing this for months, and Treasury Secretary Steven Mnuchin made it a priority in negotiations. Perhaps Mr. Trump recalls fondly the days when real-estate and other executives could write off lunch or dinner at the 21 Club. Go ahead and order that Clos de Tart 2005. You can write it off. In the 1970s this became known as the “three-martini lunch” deduction when Jimmy Carter campaigned against it. The full deduction finally went away during the Reagan tax

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Countries Ban Travel From U.K. in Race to Block New Covid-19 Strain

Countries across Europe and beyond barred travelers from Britain on Sunday in an effort to keep out a highly infectious new strain of the coronavirus that is spreading rapidly in England. The British government said on Saturday the new strain appeared to be spreading 70% faster than earlier variants and is responsible for a surge in cases in London and its surrounding areas. Recorded cases across the U.K. in the week to Sunday rose 51% over the week before. The emergence of the variant presents a serious setback for suppressing the pandemic before new vaccines can be rolled out across the country, suggesting major restrictions will continue into the new year. There is no evidence yet that the new variant causes more serious infections or will neutralize the vaccines, British scientists say, but there are concerns it will make controlling the virus’s spread less manageable, even with a vaccine. Viruses mutate constantly

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For NASA, It Should Be Mars or Bust

Since the Apollo program ended almost 50 years ago, every newly elected U.S. president has been vexed by the same question: Where next to send astronauts? NASA’s current target is the moon, but the moon belongs to a previous generation of American pioneers. A grander, more fitting ambition for the space program that first landed human beings on another heavenly body is Mars—a destination that NASA has been preparing to reach since the days of its early visionaries. It is now time to realize their dream. The Artemis program is NASA’s centerpiece today for human spaceflight. Its aim is to put astronauts on the lunar surface by 2024, but the prospects for that date are dim. There is still no well-defined mission plan, and work on the Artemis rocket and capsule are behind schedule and over budget. As for sending astronauts to Mars, NASA has somehow always been a couple

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Roku Torments Entertainment Giants in Quest to Dominate Streaming

Less than two weeks before the Christmas Day release of the movie “Wonder Woman 1984” in theaters and in American living rooms, the biggest streaming-media player in the U.S. didn’t have a deal to show it. Roku Inc. ROKU 1.12% had yet to reach an agreement with WarnerMedia that would let it stream the highly anticipated, big-budget spectacle—or anything else appearing on HBO Max—to its millions of customers. It had tough financial terms WarnerMedia wouldn’t meet. Roku was long viewed as the scrappy startup that invented the streaming-media player. Now, it is a $40 billion juggernaut increasingly comfortable throwing around its weight. The leading distributor of streaming-video apps in the U.S., Roku has waged several fights this year with giants of the entertainment industry, emboldened by its dominant market position and skyrocketing valuation. This week, Roku ended its eight-month standoff with WarnerMedia after agreeing to financial terms. An impetus for both sides was “Wonder Woman 1984,”

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