Entries Tagged 'business' ↓

Listened to a great podcast today while putting together some Ikea magic in the basement. It’s from the Stanford Center for Social Innovation and it was called “Pursuing Social Enterprise, Making a Difference” and was presented by Tom Tierney (not this one, used to head up Bain). Two things stand out.

First was his concept of up and to the right, the popular idea that careers only progress as people get more responsibility and more income. His take was that this idea isn’t valid and he describes his own switch which came at the height of the dot com boom. He broke to start a non-profit and — well, you can learn the rest on the podcast.

The reason it stuck out to me was my whole new gig at salesforce.com and the mix in of the Salesforce.com Foundation (side note: hey look the foundation site is running on Force.com Sites). The podcast suggests, to my listening anyway, that it’s a one or the other kind of choice. The SFDC Foundation (“SFDCF”?) suggests that it can to an extent be done in parallel.

Sure there are some if ands or buts here (he’s looking for organization leadership, etc) but I bring this up because one of the things percolating in the back of my brain is what to do with the six days I get for volunteer service. I don’t know just yet, but I want to do something worthwhile for sure.  Gotta figure out the right thing.

The second thing that stuck out was a comment Tierney made about strategic planning. He was talking about the need for people and capital and how a strategic plan was what got them marching in the right direction. And then he said something very interesting: if you hire the right people, and you give them capital, you don’t have to worry about the plan. The people will figure out how to move forward on their own.

Brilliant. At a course at the U of C last year, one of the lecturers stated something similar: if you have B players on the team but an A idea, odds are good you’ll fail. If you have A players but a B idea or better, the A players will make it succeed. That has definitely stuck with me. Coincidentally, a friend and I were talking about this at lunch as well, how nobody does five year plans any more since things change too fast.  Good stuff.

Listening to these social innovation podcasts has been interesting. They get me thinking outside of my normal ruts, and that definitely feels like a mental shift — up and to the right.

I’m going to go all out here and reveal my ignorance of general economic theory.  Anyone should feel free to bitch slap me back into reality.  But before you do be sure to read to the end to see what my real point on this is (’cause I’m gonna ramble for a minute).

Deflation has been widely cited as something to avoid, a negative.  What is it?

In economic theory, deflation is a general reduction in the level of prices below zero percent annual inflation. Deflation should not be confused with temporarily falling prices; instead, it is a sustained fall in general prices once inflation passed zero percent to the downside.  Since this idles capacity, investment also falls, leading to further reductions in aggregate demand. This is the deflationary spiral. (Wikipedia)

Haven’t we been seeing this is some sectors for years?  For example, the items no longer manufactured in the US — textiles, electronics, etc — those prices have fallen.  It’s idled capacity in the US, changed investment in the US and eliminated aggregate demand for US provided versions of these.

Yeah, I get that I’m contextualizing it, localizing it to a certain impacted area, which may certainly be abusing the concept of “deflation” a bit more than I should, but if we look at deflation and the deflationary spiral from within these localized contexts, can’t we argue that there are entire populations formerly tied to these now outsourced industries that have been in stuck in this for years, ever since off shoring proved useful?

So then here’s my (first) point on this.  If it’s fair to look at these already offshored industries as deflationary spiral microcosms, isn’t it fair then to also ask if some of the pundits flogging this particular demon are looking at it from within their own context?  And if so, isn’t it fair to also then assume we have to be ridiculously careful about how we look at this issue right now?

In other words, we have to be open to the idea that some of the people getting us hyped up over potential deflation are simply working in industries that no longer provide the value they once did.  Think auto industry.  Think financial advisers (and thanks Kate for your earlier insightful comments on the financial industry).

My second and final point on this is that the government — our government — of, by and for the people — should err here on the side of the people employed by these industries and not on the industries themselves.  Businesses will look out for themselves.

The government can spend a lot of (our) money putting industries on life support only to see them fail anyway.  Or, they can spend a lot of money on the people employed by those failing industries and see at least some of them make a healthy transition to whatever is next.  Spend the money on education — help people get degrees, help those with degrees get advanced degrees, help people through the inevitable change.  It will be hard.  Better now than later.

Wide spread, cross context deflation is certainly and issue to be wary of.  At the same time the government and the people need to look at industries that are still growing. We can’t simply raise the specter of “deflation” and start running around like chickens with our heads cut off.  It won’t work.

PS Full disclosure: I’m lucky enough to be in one of those growing areas, an industry radically transforming IT spend, so my perspective may be slightly skewed.  For those who aren’t — I’m sorry.  I know it’s tough out there.

If you, like me, found yourself listening to NPR Weekend Edition on Saturday, you might have heard the story Are Executives Worth Their Compensation? NPR spoke to Harvard’s Rakesh Khurana (who really needs to update his blog) about the state of things.  I have three responses.

First, Khurana talks about the problem of substituting value extraction for value creation.

He says:

There’s no distinction any more that we make between value creation — that is the creation a products, goods and services that create long term sustainable value — versus value extraction which you can do in a lot of short term ways.

I don’t disagree with this.  But I think he missed a point. The key challenge today isn’t necessarily creation or extraction, it’s realization.  Let me illustrate what I mean with a couple of examples.

Example One – “Create” could be something that earns a patent — for example, Amazon patented the 1-click order.  Extraction might be gathering a licensing fee from companies who want to use it (or suing other people who want to use it without paying a feel).  Realization would be the connecting this technical capability with another situation that would benefit from it.

Example Two – “Create” could be something that earns a copyright — for example, a song.  Extraction would then be either selling recordings of the song or selling the rights to sell recordings of the song.  Realization would be combining this song with something else to create something new and interesting.  Think De La Soul’s “The Magic Number”.  Think any song that uses sampling.

A good executive is able to connect the dots in interesting ways, combine creations in a way that helps them realize their value.  For example, I can write software, but software in a vacuum is pretty pointless.  A good executive will understand the software, understand the problem it solves and how it solves it, and proceed to spread the good news to potential beneficiaries so that it becomes more than it was.

That’s what I mean by realizing value.  It’s a step between creation and extraction, something that combines the best elements of both.  What an executive gets paid for this — that’s beside the point.

Second, Khurana also goes down a rat hole suggesting that businesses should do things because they’re good for society.  I don’t disagree that enterprises can behave in ways that either benefit or harm society, but I do think it’s important to keep in mind that each element will generally do what’s in it’s own best interest and that “should” almost never works.  Enterprises will look out for themselves and should continue to do that.  Society simply needs to do the same.

Whether or not society does that sufficiently right now is open to debate.  My own thought is that we’re out of balance with society not looking out for itself as much as it should.  In theory, we do that together, with tools called “government” and “laws”.  If, as is the case with the financial system, we as a society haven’t looked out for our common interests enough, we have only ourselves to blame.

Before moving on I should also point out that blaming ourselves doesn’t mean we fail to take corrective action now that we understand the problem.  I would argue that this potential for corrective, retroactive action — that’s just another risk that the financial houses exposed themselves to.  That’s part of the game.

Third, Khurana talks about the importance of executives coaching their team.  I totally agree with this.  It is incumbent on any leader in any organization — for profit or not — to build the next generation.  Good call.

OK, now I can go back to work and stop thinking about this for a while.  Have a great one!

So it’s happened.

The domain names I signed up for with the idea I wouldn’t have to renew them anytime soon are starting to expire. These include the non .com fivesticks domains as well as all three teamclock domains.

Part of me wanted to renew them. But push comes to shove it feels better to let them go.

It’s like I’m emimem and I’m cleaning out my closet. Yeah that’s right I said it

I may come to regret it what with all the domain name shortages but I doubt it.

In other news this is my first post using the iPhone word press plugin. Not too bad. But I’ll bet my spelling is worse than usual.

In which I wander around a bit and then ask about “motivating badness”, with a reference to CosmoGirl! thrown in for good measure.

Nicholas Carr’s “Is Google Making Us Stupid” (The Atlantic) brings up a few good points about how the web has changed the way people read. Carr’s basic point is that people who were once voracious readers, who were able to concentrate in a deep way, are finding that this is changing for them as they get more and more used to Google/Internet style writing, reading and browsing.

It has me* wondering (and I’m sure I’m not alone on this): if this is happening to the best readers, the people who were good at it, what is it doing to those who were never good at it? Is it making them worse–less able to comprehend? Or is it an adaptation to their style that makes them better–more able to comprehend because it suits their comprehension style?

This begs a question on the us vs. them: how different are our comprehension styles? I Googled a bit (**) (and, oddly, possibly inappropriately, feel smarter for it) and found these notes on the comprehension problem and some possible solutions. The National Institute of Health & others suggest writing for a 4-6th grade level. Ridiculous to me, but there it is.

Maybe this Google interwebs thing is the solution.

I doubt it. In fact, my approach to research proves Carr’s point and illustrates the problem facing those who never considered themselves deep readers. I took two seconds and made a judgment based on materials selected for me based on someone else’s rules of what I should read. They may have coincidentally been good materials, but they certainly don’t count as deep evidence and it would be foolish to consider them good sources without some additional effort. Back in the day***, I would have bothered to sleuth out some decent primary research on all this. Maybe over an evening.

The problem, in my mind, isn’t just in our approach to reading, it’s our approach to information intake and information processing. And the problem isn’t limited to the web. It’s the same with TV (Fox News, CNN, et al) and radio (any morning show, anywhere). We don’t comprehend well so we don’t take in as much. The information we do take in comes from a limited number of sources, which we probably haven’t vetted with any thoroughness. Consequently, it’s difficult to look at information from a distance and judge it as objectively true or false (or mostly true or mostly false). Sealing the deal, we tend to interact with people with whom we agree, building and enforcing our information ghettos (Reddit is [one of] mine).

There are exceptions — long format radio like This American Life comes to mind — but we’re in this downward spiral.

Google and the rest of the web didn’t develop and become popular in a vacuum. They developed as a solution to a problem — information scarcity — and have created another — information overload. I’m guessing that pendulum swing will be moderated back to the center at some point.

The question is how to encourage that to happen. Being a pessimist, I generally assume that things have to get really bad before people are willing to change. The real question in my mind is, what will that motivating badness be?  And the corollary: is it possible to use the carrot instead of the stick when it comes to something like this?

More later.

Notes.

* In full disclosure: I’m a Kenyon grad, I read a lot (OK, less since the advent of The Critter), and have a bit of smarty pants pride going on (like junky pride, but without the drugs). Never heard of Kenyon? Learn more in CosmoGirl! That Top 100 rating makes it official. Yes, you’re welcome to point out my grammatical failings.

** “Reading the same thought twice is a waste of time.” Really? Really???  Does that mean like 60% of my blog is a waste of time?

*** And yeah, those days are long gone.

The last car I bought, I basically walked in and said can I buy this and they said sure. I paid whatever price it was. And I resented the car from that moment until I traded it in a couple of weeks ago.

So when my wife and I decided we’d need a new car to help transport The Critter (yes, that will be the child’s name on this blog for quite some time until they’re old enough to object), I was determined to do better.

I think I did.

I bought a new 2008 Honda Pilot with Navigation, a car that retails for $37,966, for $28,695. That’s $9,271 under retail, about 24% off.

Moreover, I ended up buying it from the dealer that I wanted to buy from (McGrath, they’re about a mile a way and convenience means a lot) and I also got a good trade in value on the old car.

I had to work for it, and the lovely J helped me at a couple of points where I really needed it. But all I really did was follow the advice on CarBuyingTips.com. You should too.

This is how it all went down.

Step one was narrowing it down to three models. The Toyota Highlander, the Hyundai Veracruz and the Honda Pilot. The Pilot was an add on. I started with the idea that we’d probably buy a Highlander.

Step two was contacting a dealership for each of the brands using various internet services. The first I used was Costco’s car buying service. The basics of this program are simple. You have to be a member. Costco negotiates with dealers and refers you to their approved dealer. This dealer gives you a flat, no haggle price. The second I used was cars.com. Once I sent out requests to these dealers, pricing information came in pretty quickly. It was challenging to understand it all and compare apples to apples, but a little pen and paper did the trick.

Finally it was time to visit the dealerships. We didn’t go in any particular order but wound up at Honda first and it happened to be the Honda dealership that was the Costco approved dealership. The price? Invoice minus $3,500. Wow! One problem: another dealership had already emailed me a slightly better price. This dealer said they would negotiate hold back. Great!

A note on the $3,500. It just so happens that last month Honda was providing dealers with $3,500 cash, so it was a good month to buy a Pilot.

We spent the rest of that day doing test drives and talking to other dealers on the phone. The Hyundai was out of the running very quickly. The Veracruz was simply too expensive for what it was. The Highlander was almost out of the running but we wanted to test it one more time. And we visited another Honda dealership.

This last Honda dealership on that first day was McGrath. I asked them if they participated in the Costco program. Yes, they said. I said great, can I see the Costco price sheet. Sure. And then they came back without one and with something that was NOT the Costco price sheet that two other dealers had shown us and said that the Costco price was 2% over invoice. And they didn’t mention anything about the $3,500. So I asked about it. He went to talk to his manager. They came back with a revised price sheet that then reflected the $3,500 off of the 2%. I said OK, thanks. We’ll be back.

And then was the “How about taking it home tonight?” No, thanks. And then the manager came over and did the same thing. No, thanks, I said. It took a while to get out, but we left.

The lovely J wasn’t around Sat, so the next day we could do anything was Monday. We landed on the Honda Pilot for sure after one more Highlander test drive and so I started calling around to the dealers we had talked to and asking for price quotes, out the door pricing, on exactly the model we wanted.

And I said I was buying a car that day.

Everyone sent them. Except McGrath. They kept trying to get me to come in. I eventually sent them this note after they basically ignored my request for a quote for the third time.

Thanks for the note. Every other dealer has provided an itemized out the door price, by email, without any questions. Since you have not, I’m guessing McGrath isn’t interested in my business. Please tell Rick and Jeremy that I appreciate their time on Friday and that I’m sorry we can’t work together.

A couple of hours later, I got a call, this time from a sales manager I hadn’t met before. Sure they’ll work with me why don’t I come on in. No, I need a price. You’ll get a great price. Just come in. No, I need you to email it to me. So, finally they do and it matches the other low price that I have. By this time the third dealer I had been working with, the first one where I test drove the car, had dropped out. I had two dealers willing to give me the same low price. All that was left was determining my trade in value.

So I took it in, stopped at McGrath first. They low balled it. I said no. They raised it. I said no, it has to be more. They raised it again just a little. I was ready to cave, but I walked away and went to talk to J. She was sitting in the waiting room. The number was still $200 under our minimum ($4,000, Edmunds has a trade-in value of $2,800).

J said we should walk.

It took me a second and then I said, you know what, you’re right.

So she and I walked out together, said goodbye to the pricing person for the used car, the sales manager I had been working with and the rep, and we left. We got back into the old car.

Then the rep we had been working with came running out and said OK we’ll do it.

So we went back in. (In hindsight, it would have been fun to say something like, no the price just went up you have to give us more now. Oh well.)

And then more pricing issues. One of the things carbuyingtips tells you is check their math. We did. And their out the door price was off by a few hundred dollars because of a mistake in the tax rate. My zip code is a suburban zip code where tax is 7.75%, but the address is in Chicago so tax would be 9%, so it’s possible that it was a legitimate mistake and not a “mistake” mistake.

In any case, I had to go through and figure out exactly where the error was, point it out and then point out that he said he would beat the other quote by $100.

In the end, with me doing as much work on my end as I had to, they did. They still wanted to sell me rust proofing (and, to my frustration, no one in the dealership seems to have heard of the Simpsons or the loser salesman Gil or the episode where he sells Coleco’s to Springfield Elementary) and a bunch of extended warranty nonsense. And it took like four hours to get the car delivered.

But we bought the car and everything has so far all worked out very well.

And to those of you worried about getting on too many dealers’ contact lists if you submit a bunch of price requests, so far that has not proven to be a problem. They want to sell you a car. Once they know you’re out of the market, they pretty much don’t waste time or resources on you. The other dealer who gave me a low price, he sent a few messages saying he was surprised that I would use him to get a better price at another dealer. That actually warmed my black little heart a bit, but that’s another story.

The end result? I love this car.

Sure, it’s comfortable and everything, but a big part of why I love it is that I feel like I did OK on the price. Everyone at the dealership kept talking and showing me numbers about how they were losing money on this car, which, in my mind, means that I probably left some money on the table, but I don’t think I left much.

It took was two days worth of work, some time on the net researching and a polite demeanor.  But I found exactly what I was hoping for.

Came down from my shower and the FIL was watching the R&M Classic Car Auction on ESPN2.  (Monterey, last year, I think.)  Cars — old cars, painstakingly restored — were being sold for $100k, $160k, $800k.  Yeah: over $800k. For a car.

And the reason I’m writing this is not that I’m surprised that someone is willing to pay that much.  The reason I’m writing is that part of me would like to have kind of money where I could pay that much.

On the one hand, I’m not particularly proud of this desire.  That kind of money could also do a variety of other good things and it seems more than a little bit of a waste to blow it on an ornament.

On the other hand, no matter how we adjust the system to reduce income inequality, improve infrastructure, health care, etc., there will always be people who spend that kind of money on a decoration.

So here’s my question: what could I do to make that kind of money?  And, what’s the easiest way there that also lets me live within my moral, family, time, integrity (etc.) comfort zone?

That’s what I’m working on figuring out.  Suggestions welcome.

Dreamhost.com, the hosting company I use, over billed all of their customers yesterday. To the tune of $7.5 million. What did they say about it? The blog post is pretty detailed, but I like the email better:

Hi Reid!

Ack. Through a COMPLETE bumbling on our part, we’ve accidentally attempted to charge you for the ENTIRE year of 2008 (and probably 2009!) ALREADY (it was all due to a fat finger)!

We’re really really realllly embarassed about this, but you have nothing to worry about. Please ignore any confusing billing messages you may have received recently; we’ve already removed all those bum future charges on your account (#286633) and fixed everything up.

Thank you very very much for your patience with this.. we PROMISE this won’t happen again. There’s no need to reply to this message unless of course you have any other questions at all!

Sincerely,
The Foolish DreamHost Billing Team!

You should host your website with this crew. Sure, this is a mistake, but they handled it exactly right.

As an exercise: think back to the last time you should have issued a blanket mea culpa. Did you? Did you manage to make it slightly entertaining? I hope so.

Two posts have caught my attention over the last day.  One is on programmer compensation, the other is titled “Don’t be ashamed of your code.”  The first lambastes managers who fail to perceive how their 3% or 4% raise will play out among the developers they employ, and the second explains–indirectly–why managers can only get to a measly 3 or 4.

The challenge is telling the difference between a developer who is traveling through a learning curve–which every developer does, all day, every day–and one who has, for whatever reason, stopped moving through it.  The problem is that there are a lot of these stalled developers out there but identifying them can be tough if you’re not familiar with the technical terrain.

A key part of the developer’s job is self education.  A key part of managing developers is encouraging this natural intellectual stretching and discouraging complacency.   If your business requires regular innovation, the only way you’re going to get it is by making sure your team grows in their technical skills.

And as long as I’m on a tear here, a note to business owners. If your business requires regular innovation, you also want to stay away from the notion that you want code maintainable by average developers.  This is something RUP pushes for and B-Schools and (even SE Schools for that matter) advocate.  And so you may naturally want the developers for whom 3-4% raises will be satisfactory, not the rock stars.  But you need to keep in mind that these rock stars are or will become your competition.  You need to hire them.  Hire as many as you need or at least as many as you can afford and keep them motivated and interested as long as you can.

OK enough of this.  I have to send an email to a customer.