09Feb
Filed in Management
Some important Brain Functions Improve with Age according to findings presented in HBR’s Conversation blog.
In areas as diverse as vocabulary and inductive reasoning, our brains function better than they did in our 20s. As we age, we more easily get the “gist” of arguments. Even our judgment of others improves. Often, we simply “know” if someone — or some idea — is to be trusted. We also get better at knowing what to ignore and when to hold our tongues.
It’s important to understand your strengths and the strengths of those around you. I find it encouraging that not only do reasoning and therefore decision making skills getting better, the all important ability to determine the people with the right skills to compliment your own abilities grows as well. But just like the 40 year old quarterback who thinks he’s still in his prime – Oh, that’s right, he had a record breaking year, didn’t he? Well, there are always exceptions, right? -, we have to know when it’s time to pass the torch for some activities to others. Here is how one manager does it:
When gathered to discuss a problem, he keeps his “mouth shut” and listens. Even though — more often than not — he has a good solution, he waits. He does not speak.
“I find it works best if I let the younger workers talk first, wrestle with the problem in their own way,” he told me. “Then after a while, I say what I think might work. I’m not sure why, but this seems to work best and to help us all learn and solve the problem better.”
In fact, though he did not realize it, the executive was using the best parts of his calmer and more experienced middle-aged brain to help him manage his situation — and get better results.
It’s true that by midlife our brains can show some fraying. Brain processing speed slows down. Faced with new information, we often cannot master it as quickly as our younger peers. And there’s little question that our short-term memories suffer.
aging, brain, Management
05Feb
Filed in Management
We’ve all seen it where lots of information compiled to make a decision did little to suggest an obvious course. And that was 20 years ago, when it took leg work to gather that information, not just a few keystrokes in your browser. Getting stuck in analysis was a problem thousands of years ago and Stibel’s article in the Harvard Business Review blog – The Conversation reminds us to avoid it.
I have to admit, when I read the head line I chuckled thinking, “Wow, I’ve worked with some really wise people and I bet when they see this they’ll think the same about me”.
decision making, information, Management
12Sep
Filed in Energy | Environment | Management
In The Carbon Productivity Challenge, McKinsey & Company focuses on two objectives — stabilizing atmospheric greenhouse gases (GHGs) and maintaining economic growth — and proposes the world has 50 years to increase the GDP per unit of carbon dioxide equivalents (CO2e) tenfold. A task the authors equate to the productivity improvement delivered during the 100 years of the industrial revolution.
A daunting task for sure, yet the study highlights that current technology allows us to get there provided investments, significant investments, begin soon.
carbon, Energy, Environment, Management
30Jun
Filed in Management | Technology
The folks at Pragmatic Marketing have put together a great book describing their process for creating products and services that customers want and more importantly will buy.
Tuned In is a quick read and should prove to be a valuable reference guide as you turn to your potential customers to define the products and services someone is most likely to buy.
Management, Technology, Tuned In
11Apr
Filed in Management | Science
“Why do people feel pressure to have an answer for every question?” Even when they don’t know Jack, they make it up on the fly. Ten years ago our training courses included a short video clip of college students at some of the more prestigious universities speaking at length with great confidence about a subject which they obviously knew very little. One episode had students suggesting summer’s were warmer because the Earth had moved significantly closer to the Sun. This video claimed we have been programmed from a very early age to know the answer or make it up. Apparently, some people take to this training better than others. If you really want to know the cause, you’ll need to ask someone else, because I simply do not know.
KM, Management, Venture capital
07Mar
Filed in Philanthropy
VF’s list of America’s 50 Richest Paydays is worth a glance. However, I could not overlook Peter Newcomb editorial comments regarding the largest two “winfalls”. Regarding Bill Gates’ take last year, Newcomb wrote, “Throw in a few hundred million dollars in dividend income and his impending retirement will be all the more comfortable.” Newcomb then added this comment regarding Pete Peterson‘s take from the Blackston IPO, “He intends to give a substantial portion of the proceeds to charity.”
Like or dislike Mr. Gates and Microsoft, I find it difficult to reason that any wealth he accumulates at this point will go anywhere other than in support of the work of the Bill & Melinda Gates Foundation. And while it is always important to point out staunch philanthropists like Mr. Peterson, it is disingenuous to suggest anything less from Bill Gates.
compensation, Management, social responsibility
06Mar
Filed in Management | USA politics
Another high profile company going public has decided to maintain control while selling a majority of the economic stakes in the company to the public. This time it is Al Gore as a founder of Current Media.
I certainly agree, the company’s shareholders have a right to decide the control structure they want to have after a public offering. At the end of the day, people can always choose not to be a party to it. And the average investor (not the same as the average dollar invested) has little voice in the actions of a company. But I still don’t like it. I guess it comes down to creating value for all shareholders and when you remove options – and putting control in the hands of a few reduced options – you lower the value to the group as a whole.
In this case the interesting thing will be how Gore is viewed in this debate (not that I’m trying to pull Barak and Hillary into this). In Al Gores Convenient IPO the comparision with Google focused on Gore’s holding public office and being a voice for many of the institutions who are currently fighting against these type of control structures. I don’t think we should hold Gore or any other ex-public official to any higher standard than we hold each other. And he should not try to tell us to do what he thinks is better for others unless he is willing to do that or more himself.
Finance, governance, Management
23Feb
Filed in Colorado | Economy | Management | Venture capital
Speaking of the TXU purchase, Mr. Bonderman said the company was adept at running a profitable company and equally bad at politics from price increases to ecology to labor relations. These shortcomings lead tothe opportunity which focused on addressing these public concerns.Opportunities for private equity include exploiting public investorsfocus on short term focus, their dislike for debt or leverage, fixingbroken companies and putting companies together that changes thecompetitive landscape.His advice to students wondering which classes to take for a career inprivate equity, which job to take this summer, which classes to takenext year is to “Just relax”.In looking at the public policy of the US, Bonderman says ourlawmakers are thinking like it is 1975 when the US represented 50% ofthe world’s GDP. Now that we are less than 30% and falling the rest ofthe world has choices and will not play by any US tax code.Best run companies are those which build value over long periods oftime. However, fund managers often are looking for short term gains.This makes creating proper incentives for publicly traded companies’managers sub optimal if not downright harmful.
Colorado, Economy, Management, Venture capital
24Oct
Filed in Management
Day two included another round of interesting speakers. We began with a horse of a different color as Paul Orfalea, Founder of Kinkos, shared his store, advice and leadership style (close the door and let the kids run the store). Then we moved on to customer satisfaction and the Net Promoter Score as described by Fred Reichheld, auther of The Ultimate Question. That question being. “Would you enthusiastically recommend our company to a friend?” That’s it. Get them to rate this on a scale of 1 to 10 and if you get a 7 or lower ask them if it is ok for someone to call them. Kaihan Krippendorf, auther of The Art of the Advantage then walked us all through the famous 36 Strategems of eastern warfare. The key to using these is to master the patterns in order to quickly apply the appropriate strategem as you confront different competitive and negotiation situations in your business and personal life. The day concluded with a magical addition to the schedule. Literally, we were entertained by a magician who suggested we should not forget to enjoy the ride and remember the kid in all of us.
Education, Management
23Oct
Filed in Management
The annual Gazelles Growth Summit began today in Las Vegas with a host of interesting speakes. Robert Bloom was first at the podium to discuss his new book Inside Advantage. It is a good read and I will write a separate post on it soon. Bloom is full of real life examples from his long career at several ad agencies including CEO of Publis Group.
Using real life examples including Sothwest Airlines, Zales Jewelers, Juicy Juice () and Curves, Bloom describes his process for creating and defending a sustainable market position. In short define your customer as one individual person, create an uncommon offering for this person, describe how you will define your uncommon offering to your customer and then Own It through a series of Imaginative Acts.
Geoffrey Moore followed with a discussion of some new models for defining where shareholder value can best be improved. Moore began with a discussion of Net Free Cash Flow and suggested the best way for early stage companies to increase valuation is to improve the long term prospects by focusing on increasing “Power” where you can get the biggest bang for the buck.
Moore talked about five types of Power and described how these match to marketing activities as shown in this table:
He went on to suggest small companies should focus on Product Marketing which leads to Offer Power.
Then we were employed to maximize the ethical influencial power afforded us through the laws of human nature as studied and described by Robert Cialdini. He outlined six primary areas that afford us influence:
Reciprocation – I scratch your back; you scratch mine
Consensus – What everyone else is doing
Authority – Trusted, knowledgable source
Education, Management
02Jul
Filed in Technology
A panel of software providers (SixApart, NewsGator, SocialText and SpikeSource) listed the same issues around security, compliance and control confronting Enterprise 2.0 implementations seen in the past. Even so, a few companies are beginning to move forward with implementations and some have found creative ways to use these tools.
Adoption is driven less from personal passion and more from significant corporate pain points. Others are looking to provide internal tools for employees that provide the means of communication found in the student/consumer markets.
change, enterprise 2.0, IT, Management, Technology, web
09Jan
Filed in Management | Technology | Venture capital
Tom Evslin’s post Web 2.0 – Greater Initial Investments Required suggests that early Web 2.0 companies seized the advantage of low cost technical infrastructure and low cost marketing to gain cost advantages. These companies were able to get big cheaper and faster than the first generation internet companies. While he agrees with Fred Willson that the technology cost will remain low, he suggest the lower promotion expense is now behind us. The low cost of technology results in a lower cost of entry and will in fact increase promotional spending and the need for capital.
In any event, both men are suggesting there will be capital required to grow these companies going forward. Those who are putting their business plans together without consideration for this cost increase will at least have some tough funding questions or worse some serious costs overruns.Â
Economy, Management, trends, web
08Jan
Filed in Economy | Management
Why are private boards putting more value on the efforts of top managers than comparable public companies? With no doubt there have been compensation structures for CEOs that were neither aligned with the interest of the shareholders or other stakeholders in the corporation. However, the comparison between the pay at the top of the organization and that at lower levels really misses the mark. This comparison just happens to be simple to calculate, easily understood and highly contentious.
The true value of a CEO is her ability to improve the value of the company. The best way to measure this is to compare the value increase to other similar companies in order to remove the value increase or decrease that impacted all companies in the sector.
The cost of the CEO should be market driven with significant portions based on performance. What is the market rate for a CEO with these skills and necessary experience? Just as the top performers in movies or baseball games are paid many multiples the salary enjoyed by their peers due to the short supply of “stars”, CEOs are short in supply as well.
What is surprising here is that private companies with active investors on their boards are offering higher compensation for these talents than the generally less active boards of public companies? I would suggest that the backlash of the “compensation scandals” have the compensation committee of public companies swinging too far in the conservative direction. The swing was needed, let’s hope it does not continue so that public companies become the minor league training camps for CEO destined to play in the private company major leagues.
Public CEOs take to private firms in order to get top dollar as shown in Private Firms Lure Chief Executives With Top Pay – New York Times
compensation, governance, Management
07Nov
Filed in Economy | Management | Venture capital
In
Web start-ups snub the big money, the International Herald Tribune suggests this is a trend that should be expected to continue for a few if not spread to many companies in the space.“By then, Meebo was being courted by venture capitalists, but it decided to take a modest $100,000 from three angel investors, people who typically contribute small amounts and make few demands.
“We had a bunch of VCs talking to us about potentially putting more money in,†Sternberg said. “We said no. A lot of things happen when you raise a VC round, and they really slow you down.â€
Eventually, Meebo did raise money from venture investors – about $3.5 million from Sequoia Capital. But that was after the company was well on its way to showing that its service was a hit with consumers. At the time, Meebo had about 200,000 daily log-ins.â€
Finance, Management, Venture capital, web
24Mar
Filed in Economy | International Politics | Management
During the next few years, western countries will face a more intense labor shortage than last felt in the first two years of this century. Very few companies are prepared for this with hardly any looking to utilize the aging workforce to fill this shortage. Initially, offshore workers will be able to handle some of the shortage. However, India and China are only a few decades from reaching a neutral or negative growth in trained workers.
A survey in America last month by Ernst & Young found that “although corporate America foresees a significant workforce shortage as boomers retire, it is not dealing with the issue.†Almost three-quarters of the 1,400 global companies questioned by Deloitte last year said they expected a shortage of salaried staff over the next three to five years. Yet few of them are looking to older workers to fill that shortage; and even fewer are looking to them to fill another gap that has already appeared. Many firms in Europe and America complain that they struggle to find qualified directors for their boards—this when the pool of retired talent from those very same firms is growing by leaps and bounds.
Why are firms not working harder to keep old employees?
Economy, KM, Management
18Jul
Filed in Ethics
Economist.com |Is the MBA responsible for moral turpitude at the top? :
“SEVERAL of the corporate scandals that took place in the early years of this decade are currently being replayed in courtrooms from New York to Alabama. The trials of top executives at HealthSouth, Tyco International and WorldCom are reminding the public how unethical was the behaviour of some of the nation’s top managers only a few short years ago.
The finger of blame for this behaviour is sometimes pointed at the MBA, the degree offered by business schools from Harvard to Hawaii. Perhaps this is not as odd as it sounds. After all, MBAs lay as thick on the ground at Enron as managerial hubris, and disinterested outsiders are not alone in asking whether there might have been some connection.”
Do we really think the primary place for social and moral teachings is in the management schools teaching twenty and thirty year olds the latest theory on business and economics? Yes, these schools can and are exposing future manager to difficult situations. But, no, it is not the primary responsibility of these institutions to instill the core values of ethical and legal decision making. Here is an article on the issue worthy of a read.
Education, Ethics, governance, Management
22May
Filed in Management
In calling Fast Company readers to lead change at work and at home, RealTime speakers shared their ideas about the state of business, the power of people, and the future of innovation. Here are 25 of the smartest insights that we took away from the event.
1. Audit Your Company Cultures
2. Informed People Don’t Fear Change
3. Beware “Aspirational Accounting”
4. Empower Your People — Turn Them Loose
5. Prevent Erosion of Human Assets
6. Be Generous With What You Know
7. Expand Your Roster
8. Don’t Judge a Man by the Size of His Wallet
9. Harness Your Skills for Good
10. Groom Your People for Success
11. Promote Brand Awareness Throughout Your Enterprise
12. Embrace Imperfection — Fast!
13. Don’t Let the Venture Capitalists Get You Down
14. Allow Yourself to Dream
15. Increase Your Net Worth
16. Use Every Teachable Moment
17. Shine Some Hope
18. Set a New Standard of Performance
19. Laugh at Yourself
20. Get Up, Stand Up
21. Stop Whining — Start Seeking
22. Leaders: Move It or Lose It
23. Be Honest
24. Don’t Stretch This Rule
25. What’s Your Bottom Line?
change, leadership, Management
03Feb
Filed in Technology
The McKinsey Quarterly
In recent years, companies have worked hard to reduce the cost of the IT infrastructure—the data centers, networks, databases, and software tools that support businesses. These efforts to consolidate, standardize, and streamline assets, technologies, and processes have delivered major savings. Yet even the most effective cost-cutting program eventually hits a wall: the complexity of the infrastructure itself.
IT, Management, Technology, trends
18Feb
Filed in Economy | Management
and on the whole they are all a good thing. The NY Times had an interesting article in the most recent Week in Review, titled The Bright Side of Sending Jobs Overseas. The article takes a hard look at the current political rhetoric around the transfer of jobs outside the US and throws a lot of cold water on it. Economists from both sides of the aisle are in agreement that productivity improvements are good for the long term health of our economy. This includes the movement of jobs offshore where they can be done cheaper. The politicians would have us believe the loss in jobs over the last 3 years primarily went to lower cost locations, but the facts do not support this. In the 1990s the movement of jobs to offshore locations happened at a much faster pace that it is today and the US increased jobs. From 1999 to 2003, business and financial services added 600,000 jobs in the US while researchers argue this area is prime for offshore outsourcing. Computer and mathematical occupations added 150,000 in another area considered to be ideal for moving offshore. Many jobs moving offshore could just as easily be lost to automation.
Let’s face the facts. Productivity improvements displace workers. In the US, in Europe and around the world the displacement of workers will continue. It will even accelerate. The issue is not should you prevent this or slow it down, it is how do you best deal with the postive and negative effects of this.
We should not be talking protectionism but agresively preparing to train employees for a career of change. We can no longer expect career changes to evolve over several generations but must prepare for the reality that many workers will need to learn new skills in order to take advantage of the effects of global trade.
We should not be talking protectionism but building free and fair trade across the globe. The economies and lives of those trading with us should and will improve.
Management, productivity
