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Doomed Legislation May Decide Presidential Election

by Michael McAuliff on April 14, 2012

Huffington Post…

WASHINGTON — Pay attention, America. Democrats and Republicans in Congress each will launch heated, political debates next week on tax bills that will never pass. But they nevertheless could be the most illuminating, consequential showdowns all year. The tussles will start Monday over the so-called Buffet Rule in the Democratic-led Senate — a $47 billion tax hike on $1 million-plus earners. That bill will likely fail the next day. Then, over in the GOP-controlled House, will be a $46 billion business tax cut plan. Together, the two bills offer Americans one of the clearest contrasts in the two parties’ political platforms and ideologies likely to be seen before the November election. “Taxes and the debates around them often offer an extra-clear window into the politics of each party,” said Julian Zelizer, a political historian at Princeton University whose latest book looks at the recent rise in Americans’ awareness of political history. Zelizer noted that the arguments next week should have added resonance, as millions of Americans finish their taxes, and will give people a fresh chance to decide which party’s vision they like better. “The contrast here essentially gets to the philosophy of each party,” Zelizer said. “Democrats with the Buffett Rule see it as an issue of tax fairness. The wealthy should help more at a time when most people have less money. The other side believes you have to lower taxes to spur economic development.” Both positions are popular, at first glance. A Gallup Poll released Friday found 60 percent of Americans favor taxing people who earn more than $1 million at a rate of 30 percent, as the Buffett Rule proposes. The office of Majority Leader Eric Cantor (R-Va.), sponsor of the competing tax cut proposal, pointed to a survey commissioned by his office that found 80 percent of the public favors his break. Partisans on both sides have been plotting intense messaging efforts, especially Democrats — including President Barack Obama — who have held numerous events and press conferences to push the Buffett Rule, which aims to make sure millionaires pay a higher rate that someone like Warren Buffett’s secretary. Republicans have been more focused on blaming Obama for high gas prices and slow economic growth. But with Cantor’s small business tax cut coming at the same time as the Buffett debate, the parties’ competing visions will be on display directly opposite one another. Cantor’s bill proposes cutting taxes for all small businesses (defined as having fewer than 500 workers, not by income) by 20 percent for a year. The cut would be capped at 50 percent of payroll. It would push tax rates toward 15 percent, from 35 percent, for one year. It would be funded by slapping $46 billion on the nation’s debt. The Buffett Rule aims to prevent the extremely rich from paying around 15 percent income tax rates — as many do, including likely GOP presidential nominee Mitt Romney. It would cut the deficit by $47 billion over 10 years. “The contrast couldn’t be more clear,” said Cantor spokeswoman Laena Fallon.”While Democrats are busy formulating their latest tax hike that will do nothing to grow the economy or create jobs, House Republicans will pass a tax cut to help 22 million small business job creators keep more of their own money so they can grow and hire again.” According to Congress’ nonpartisan tax cruncher, the Joint Committee on Taxation, Cantor’s bill may benefit the 14.4 million small business entrepreneurs with an average break of about $6,500. From the GOP perspective, letting business owners keep more of their money will help them grow as they see fit. “We need to empower small business men and women,” Cantor said recently. But Democrats argue that the wealthy already have all they need to create jobs, and giving them more is just another giveaway. “It seems like in the Senate they’re keeping to the tune of job creation and deficit reduction,” said Rep. Xavier Becerra (D-Calif.), the vice chairman of the Democratic Caucus. “The Buffett Rule reduces the deficit. It has millionaires pay their fair share of taxes compared to their secretaries and middle class Americans. He called Cantor’s measure ” welfare for the wealthy ” and said it would give nothing to millions of sole proprietors and family-owned businesses that don’t have formal payrolls. Becerra said emphatically, “No,” when asked if either bill had a chance of hitting the president’s desk. “Republicans won’t support the Buffett Rule, it’s clear. And Democrats don’t believe we should be giving millionaires another tax break,” he said. “It really does crystallize where Republicans are on tax breaks, and I think with the Buffett Rule, it helps better define Democrats as truly trying to do everything possible to target our assistance and our efforts to create jobs at the middle class,” Becerra said. Democrats also have a proposal offered by Sen. Chuck Schumer of New York that would give small businesses tax breaks if they hire new workers or give raises. The GOP opposes it, saying the measure restricts businesses. “It really is a philosophical difference between, ‘We’re going to micromanage whether or not you’re entitled to tax relief and make it really complicated,’ versus, ‘You probably know what you’re business needs are, and we’re not going to try to figure all of that out from Washington,’” said a Republican leadership aide who was not cleared to speak publicly and asked who asked not to be identified. The Democrats’ Buffett Rule would clearly target very wealthy people. Both sides agree on that, though Republicans argue it would hurt “job-creators.” The impact of Cantor’s bill is less clear. His office touts it as a boon to all small business, but its largest beneficiaries will be businesses that are doing well, including celebrities, sports franchises, high-end medical operations and financial services. According to an analysis by the non-partisan Tax Policy Center, nearly 94 percent of the benefits would go to the top 20 percent of small businesses. Nearly 60 percent of the breaks would land in the monied laps of the ballyhooed 1 percent. Cantor’s office disputes those figures, and points to the Joint Committee on Taxation, which released its analysis Friday evening. Cantor spokeswoman Fallon said the new study examined the bill with a better methodology than the Tax Policy Center used. The Tax Policy Center study found that firms earning more than $200,000 a year would get nearly 84 percent of the breaks. Congress’ data found those businesses also would do disproportionately well. The Joint Committee on Taxation found that those $200,000-plus businesses would get more than 64 percent of the benefits, while they account for about 11 percent of the eligible firms. And the fraction of the top 1 percent of small businesses — the 125,000 that produce more than $1 million a year in adjusted gross income — would snag 18.3 percent of the tax break. The vast majority of small businesses — 9.2 million — would share about 15 percent of the break. Using either set of figures, it’s a large difference that highlights the ideological chasm like a radioactive-dyed X-ray. To Democrats, it’s the 1 percent getting even more. To Republicans, the Buffett Rule is a tax hike and the Cantor bill would let the job creators keep more of their money instead of giving it to the oppressive federal government. “Sadly, an administration that promised it would focus on jobs is wasting yet another day on a political event that won’t take a single person off the unemployment line,” Senate Minority Leader Mitch McConnell (R-Ky.) said this week while Obama touted the Buffett measure. The Tax Policy Center, sponsored by the Brookings Institution and the Urban Institute, sides with the Democrats. “It puts a lot of money in the high end,” said Roberton Williams, a Tax Policy Center analyst of Cantor’s bill. “There’s already tons of cash sitting on the sidelines earning very low interest that is not being invested. This will add to that pile.” The vital question for voters watching the debate next week will be whether to add that pile, or take away. Would giving the wealthy more to invest help? Or would it be better spent on deficit reduction or the middle class? The answer may decide the fall elections.

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Doomed Legislation May Decide Presidential Election

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Tom Grasty: The Difference Between "Invention" and "Innovation"

by Tom Grasty on April 3, 2012

Huffington Post…

Two and a half years ago, I co-founded Stroome, a collaborative online video editing and publishing platform and 2010 Knight News Challenge winner . From its inception, the site received a tremendous amount of attention. The New School, USC Annenberg, the Online News Association and, ultimately, the Knight Foundation all saw something interesting in what we were doing. We won awards; we were invited to present at conferences; we were written about in the trades and featured in more than 150 blogs . Yet despite all the accolades, not once did the word “invention” creep in. “Innovation,” it turns out, was the word on everyone’s lips. Like so many up-and-coming entrepreneurs, I was under the impression that invention and innovation were one and the same. They aren’t. And, as I have discovered, the distinction is an important one. Recently, I was asked by Jason Nazar, founder of Docstoc and a big supporter of the L.A. entrepreneurial community, if I would help define the difference between the two. A short, three-minute video response can be found at the bottom of this post, but I thought I’d share some key takeaways with you here: INVENTION VS. INNOVATION: THE DIFFERENCE In its purest sense, invention can be defined as the creation of a product or introduction of a process for the first time. Innovation , on the other hand, occurs if someone improves on or makes a significant contribution to an existing product, process or service. Consider the microprocessor. Someone invented the microprocessor. But by itself, the microprocessor was nothing more than another piece on the circuit board. It’s what was done with that piece — the hundreds of thousands of products, processes and services that evolved from the invention of the microprocessor — that required innovation. STEVE JOBS: THE POSTER BOY OF INNOVATION If ever there were a poster child for innovation it would be former Apple CEO Steve Jobs. And when people talk about innovation, Jobs’ iPod is cited as an example of innovation at its best. But let’s take a step back for a minute. The iPod wasn’t the first portable music device (Sony popularized the “music anywhere, anytime” concept 22 years earlier with the Walkman); the iPod wasn’t the first device that put hundreds of songs in your pocket (dozens of manufacturers had MP3 devices on the market when the iPod was released in 2001); and Apple was actually late to the party when it came to providing an online music-sharing platform. (Napster, Grokster and Kazaa all preceded iTunes.) So, given those sobering facts, is the iPod’s distinction as a defining example of innovation warranted? Absolutely. What made the iPod and the music ecosystem it engendered innovative wasn’t that it was the first portable music device. It wasn’t that it was the first MP3 player. And it wasn’t that it was the first company to make thousands of songs immediately available to millions of users. What made Apple innovative was that it combined all of these elements — design, ergonomics and ease of use — in a single device, and then tied it directly into a platform that effortlessly kept that device updated with music. Apple invented nothing. Its innovation was creating an easy-to-use ecosystem that unified music discovery, delivery and device. And, in the process, they revolutionized the music industry. IBM: INNOVATION’S UGLY STEPCHILD Admittedly, when it comes to corporate culture, Apple and IBM are worlds apart. But Apple and IBM aren’t really as different as innovation’s poster boy would have had us believe. Truth is if it hadn’t been for one of IBM’s greatest innovations — the personal computer — there would have been no Apple. Jobs owes a lot to the introduction of the PC. And IBM was the company behind it. Ironically, the IBM PC didn’t contain any new inventions per se (see iPod example above). Under pressure to complete the project in less than 18 months, the team actually was under explicit instructions not to invent anything new. The goal of the first PC, code-named “Project Chess,” was to take off-the-shelf components and bring them together in a way that was user-friendly, inexpensive and powerful. And while the world’s first PC was an innovative product in the aggregate, the device they created — a portable device that put powerful computing in the hands of the people — was no less impactful than Henry Ford’s Model T, which reinvented the automobile industry by putting affordable transportation in the hands of the masses. INNOVATION ALONE IS NOT ENOUGH Given the choice to invent or innovate, most entrepreneurs would take the latter. Let’s face it, innovation is just sexier. Perhaps there are a few engineers at MIT who can name the members of “Project Chess.” Virtually everyone on the planet knows who Steve Jobs is. But innovation alone isn’t enough. Too often, companies focus on a technology instead of the customer’s problem . But in order to truly turn a great idea into a world-changing innovation, other factors must be taken into account. According to Venkatakrishnan Balasubramanian, a research analyst with Infosys Labs, the key to ensuring that innovation is successful is aligning your idea with the strategic objectives and business models of your organization. In a recent article that appeared in Innovation Management , he offered five considerations: 1. Competitive advantage: Your innovation should provide a unique competitive position for the enterprise in the marketplace. 2. Business alignment: The differentiating factors of your innovation should be conceptualized around the key strategic focus of the enterprise and its goals. 3. Customers: Knowing the customers who will benefit from your innovation is paramount. 4. Execution: Identifying resources, processes, risks, partners and suppliers and the ecosystem in the market for succeeding in the innovation is equally important. 5. Business value: Assessing the value (monetary, market size, etc.) of the innovation and how the idea will bring that value into the organization is a critical underlying factor in selecting which idea to pursue. Said another way, smart innovators frame their ideas to stress the ways in which a new concept is compatible with the existing market landscape, and their company’s place in that marketplace. This adherence to the “status quo” may sound completely antithetical to the concept of innovation. But an idea that requires too much change in an organization, or too much disruption to the marketplace, may never see the light of day. A FINAL THOUGHT While they tend to be lumped together, “invention” and “innovation” are not the same thing. There are distinctions between them, and those distinctions are important. So how do you know if you are inventing or innovating? Consider this analogy: If invention is a pebble tossed in the pond, innovation is the rippling effect that pebble causes. Someone has to toss the pebble. That’s the inventor. Someone has to recognize the ripple will eventually become a wave. That’s the entrepreneur. Entrepreneurs don’t stop at the water’s edge. They watch the ripples and spot the next big wave before it happens. And it’s the act of anticipating and riding that “next big wave” that drives the innovative nature in every entrepreneur. This article is the seventh of 10 video segments in which digital entrepreneur Tom Grasty talks about his experience building an Internet startup, and is part of a larger initiative sponsored by docstoc.videos, which features advice from small business owners who offer their views on how to launch a new business or grow your existing one altogether.

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Tom Grasty: The Difference Between "Invention" and "Innovation"

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Arianna Huffington: Delivering in a Delevering World

March 22, 2012

On Monday, I was in Newport Beach to speak at the annual client conference of PIMCO, the world’s largest bond investment company — whose CEO Mohamed El-Erian is a frequent and very popular HuffPost blogger . More than 300 of PIMCO’s clients gathered for a three-day retreat around the timely theme of “Delivering in a Delevering World.” “Delevering,” as it’s traditionally used, means decreasing a company or country’s leverage, usually by paying down existing debt. It is a term more likely to be heard at finance conferences than around dinner tables, but it’s an idea that gets to the heart of our current economic crisis. Because the ways we pay down our debts, in life and in business, have a real influence on our ability to arrive at what El-Erian recently labeled “win, win, win” outcomes: “a win for the individual; a win for the unit, be it the family or a company; and a win for society.” We desperately need some win, win, wins. Unfortunately, on both the political and economic level, we’re being told that delevering means that we must cut, cut, cut. And we’re about to go into another budget battle in which the word “deficit” is likely to be heard a lot more than the word “growth.” But smart delevering isn’t just about cutting. Delevering is a means — but to many in Washington (and on the campaign trail) these days, it’s become an end unto itself. And the relentless emphasis on cutting has obscured the more important question of what is being cut. In far too many cases, our approach to delevering is keeping us from growing, and keeping us from developing our human capital and tapping into all our resources. And it’s no comfort to know that the U.S. isn’t alone in its misguided approach to delevering. In Europe, imprudent delevering has a host of countries facing, as PIMCO managing director Saumil H. Parikh puts it , the “twin underlying problems of too little growth and too much debt.” Europe’s response to recession was austerity, and, as they’re finding out, you can’t cut your way to growth. As Businessweek’s Peter Coy writes , “Europe is choking off its own recovery by insisting on premature austerity,” as opposed to the idea of “Gas now, brakes later.” Now they’re teetering on the brink of another recession and have taken one of the main recovery weapons out of their arsenal. But according to Herman Van Rompuy , European Union President, the EU must rigidly keep to its self-destructive austerity limits for the sake of “the credibility of the whole operation.” So I guess sending a dozen or so countries into another recession, and causing misery for tens of millions of people, doesn’t hurt “credibility” as much as simply admitting your mistake and course-correcting. In Europe, excessive delevering is in danger of delivering them from their future. So it’s clear that in America, as around the world, what we need is delevering that delivers a more prosperous economy, a more compassionate society, and a fuller use of our human resources. One of the tragic stories of our time has been the inability of our leaders and institutions to deliver these things, a failure that, as El-Erian wrote on HuffPost in February, has undermined America’s ability to “regain economic dynamism, create ample jobs, and deal with growing inequalities.” But we also need delivering from the obsolete dogmas of the past, from the dysfunctional political and economic systems of the present, and from all the distractions that take us further from our own creativity, ingenuity and wisdom. In his office, PIMCO founder Bill Gross has a quotation from the financier J.P. Morgan: “Lending is not based primarily upon money or property. No sir. The first thing is character.” But our capitalist system has strayed dangerously far from the path charted by Alfred Marshall, who in 1890 explained that the “desire of men for approval of their own conscience and for the esteem of others is an economic force of the first order of importance.” There’s a reason Adam Smith’s free-market gospel, The Wealth of Nations , was preceded by his Theory of Moral Sentiments . He understood that economic prosperity has to be built on a firm moral foundation. But the evidence of capitalism without conscience is all around us. I suspect that if JP Morgan were to claim today that “character” was at the heart of our country’s finance system, he would be laughed out of the room. Earlier this month, Parikh wrote , “Is the global economy in the eye of the hurricane or has the hurricane passed over completely?” For millions of people around the world the forecast is still dark and stormy. Here in America, more than 4 million homes have been foreclosed on since 2006, five million people have been out of work 6 months or longer, and the average student loan debt is $25,250. But instead of proposing solutions that would deliver us from these multiple crises, our leaders are throwing up their hands and asking us to accept this as the new normal — or what Bill Gross has termed “the paranormal.” Such a response would have been completely unacceptable during an actual hurricane like Irene, which prompted such admirable responses from ordinary citizens, the media, and government. So why are we accepting it when, as El-Erian put it , there is still the “clear and present danger of America losing the war against the curse of joblessness”? And when Joseph Stiglitz’s footnote to the drop in unemployment to 8.3 percent is that, at this rate, it will take 13 years to regain full employment? We clearly need to be delivered from a shrunken presidential campaign that is missing the opportunity to bring the country together around real solutions. As David McCullough once told me , “Every presidential election is a renewal. Like spring, it brings up all the juices. The people are so tired of contrivance and fabrication and hokum. They really want to be stirred in their spirit.” Anybody’s spirit felt stirred over the last 6 months of this presidential race? Fortunately, there are plenty of people using incredible innovation, creativity and empathy on a local level to help us overcome our problems — from Code for America to DonorsChoose to SeeClickFix . Delevering and delivering. Delevering can be used to help us establish the right priorities. In my own life, my mother was certainly an expert at wise delevering — and leveraging. She skimped and saved to put my sister and me through college. She wore the same coat for 10 years. She never took vacations. We lived in a one-bedroom apartment. And when that wasn’t enough, she borrowed money, too — to pay for our education. And it was a wise investment — because it helped deliver her children’s dreams. She never let our lack of resources crush our aspirations and our hopes for the future. Whether it’s at the individual, the community, or the national level, delevering can lead to contraction or it can lead to a focus on what really matters. It all depends on what we intend to deliver. Add your voice to the conversation on Twitter: twitter.com/ariannahuff

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The Faces Of The Long-Term Unemployed

February 12, 2012

— J.R. Childress is up before the sun, bustling about in the French colonial brick house he built. He helps pack his wife’s lunch, downs some eggs or cereal for breakfast, pores over online and newspaper job listings and hopes – even prays – this will be the day when his fortunes turn around. He’s determined to stay busy, job or no job, for sanity’s sake. Maybe he’ll help a neighbor. Exercise. Or check out computer blueprints of construction projects around Winston-Salem, N.C., to stay connected to the world where he thrived for three decades. Childress has been laid off twice since late 2009, most recently for 10 months. “Every day is a struggle,” he says in a soft drawl. “The struggle is the unknown. You’ve worked your way up the ladder and you get to a point in life and a position in work where you’re comfortable … then all of a sudden everything goes away. It’s like being thrown into a hole and you’re climbing to get up, but it’s greased. There’s no way of getting out.” The frustrations of one 53-year-old North Carolina man are multiplied millions of times over across time zones and generations in a country still gripped by economic anxiety, despite increasing signs of recovery. And they resound in a presidential campaign pitting an incumbent defending his economic record against GOP opponents who are attacking it. Unemployment in January was at its lowest level in three years – 8.3 percent – and 1.8 million jobs were added last year, compared with about 1 million in 2010. But there’s still a long way to go: There are 5.6 million fewer jobs than there were when the recession began in late 2007. About 12.8 million people are out of work and what’s especially troubling, according to Federal Reserve Chairman Ben Bernanke, is the large number of long-term unemployed – more than 40 percent have been jobless more than six months. The long-term unemployed don’t fit into any neat category. They’re young and old. They have high school diplomas and master’s degrees. Some become so discouraged, they stop looking for a time or become mid-life college students. Others find temporary jobs, then return to the jobless rolls for long stretches. In 2011, the average length of being out of work was 39 weeks – about nine months. But statistics tell only part of the story. They don’t gauge the despair of a thirtysomething office manager who has stopped counting how many resumes he’s sent out. Or the apprehension of a 60-ish tool-and-die maker who lost his job, returned to school, but still can’t find work – and doubts he ever will again. Or the rejection J.R. Childress feels, declaring that unemployment “makes you feel you’re not a part of society because you’re not earning your way.” Childress started working after high school, first in factories, then in construction, eventually earning a six-figure salary as vice president of operations at a company. In October 2009, he was laid off when road construction and building projects came to a near halt. After a year without work, Childress took a huge pay cut to be a construction foreman, but that job ended last April. He’s convinced he has two strikes against him: his age and lack of college degree. “I’m putting out resumes, but they’re going into a black hole,” he says. Prospective employees, he says “want 33, not 53. … They say, `We really like you, but if we spend our time training you, when construction comes back, you’re going to leave.’” He pauses, and adds: “That’s not paying my bills.” Childress’ wife works and their 24-year-old twins are out of college so that eases their financial burden, but he says he asks himself: “`Am I going to be 75 or 80 and not be able to retire? … What did I do to deserve this? When is it going to turn around for me?’” ___ Jerome Greene doesn’t mince words when he describes life without a steady paycheck for more than three years. “It’s been like hell,” he says. “It’s very hard to see people leave and go to work in the morning and come home every night. It’s hard to see people spending money, going out and having fun and you can’t. It’s very stressing. But there are people in worst situations than I have and I feel sorry for them.” Greene, about to turn 50, worked for 16 years as an Oracle software developer, most recently at a Pennsylvania company that made electronic components for cars. When he was laid off in June 2008, the recession was just taking hold, and he still had job interviews. By fall, with the economy in free fall, his phone stopped ringing. Greene hoped the downturn would be brief and he’d weather it with unemployment benefits. But the jobless rate hovered above 9 percent and Greene’s 99 weeks of unemployment expired. He had trouble sleeping. Depression set in. Without health insurance, he took precautions – carrying hand sanitizer and his own pen when doing errands to avoid getting sick and having to pay $65 for a doctor’s visit. “There’s no room for error,” he says “There’s no extra money.” At the same time, Greene, who is single and lives outside of Pottstown, Pa., has become an active social networker, online and in person. He participates in several groups, looking for job tips, sometimes doing presentations himself, perfecting his “elevator speech” – the 30-second pitch to prospective employers. “Emotionally, it helps,” he says. “You see that you’re not alone. … I guess you can say misery loves company. But there are positive people, too.” Mingling has other benefits, too. One holiday party led to freelance work on web development projects. Greene is encouraged by the improving economy and has been getting calls for interviews, though they’re outside the Pennsylvania area and he’d prefer to stay put. “Maybe,” he says, “there is an end to this.” No matter, the experience has changed his outlook. “It has made me very cynical when it comes to the work environment,” he says. “People have to take charge of managing their careers. They should prepare for the next round of layoffs … The rest of the world is beginning to catch up with the U.S. Companies are going to continue to outsource, they’re going to continue to do stupid things … and I don’t think recessions are ever going to go away. Having a job just interrupts a job search.” ___ The memory stings even now for Jon Creek, all these years after the job interview. He’d applied to be a bookkeeper at a property management company when one of the owners caught him off guard: “He said, `You’ve been out of work for a year now. You can only clean the garage so many times. Why can’t you get a job?’” Creek recalls. “My answer was, `I’m trying to get a job now,’” he says. Creek, who lives in Mason, a suburb of Cincinnati, was a construction company office manager until he and almost everyone else at the firm were laid off in December 2007. He’d known the business was in trouble and says he actually turned down another better-paying job earlier, out of loyalty. It took 18 months to land part-time work as an insurance agent’s assistant at $240 a week – a dollar less than his unemployment checks. A year later, Creek was stunned when a certified letter arrived with his final paycheck and notice that his job was over. Again, it was the economy. To add to the injury, his boss had posted the news on her Facebook page before telling him. “Everybody knew but me,” he says. And since she hadn’t done the proper paperwork, he couldn’t file for unemployment. That was August 2010. Creek – who holds a bachelor’s degree in business administration – has been looking since, worried that as time passes, someone unemployed for, say, six months may seem more appealing. “I worked hard. I did everything right,” he says. “Now I’m at the point of asking myself, `Will I ever be able to get anything?’ It’s not just about a salary. It’s about being able to go out and say, `I do this. This is my identity.’” On occasion, Creek, now 35, has become so discouraged, he’s temporarily quit looking. “If you send out your resume so many times, every employer in the city has it,” he says. “If you take it out of the mix for a while, perhaps you’ll get noticed next time.” Being unemployed not only hurts financially – Creek has an $11,000-plus student loan – it leaves emotional scars, too. “The only people I talk to during the day are my wife, my dogs and service people,” he says. “It’s very isolating, very lonely.” His wife, Leslie, a financial analyst, is a constant comfort. “She tells me I’m smart, that I have a lot to offer,” he says. Creek is considering returning to school this fall to get a master’s degree in accounting. “Sometimes you feel like playing the victim card,” he says, “but you really don’t want to. It tells the employer you’re not very confident. I tell myself good things are to come … but it’s hard to remain hopeful.” ___ Jean Coyle knows it’s ironic that long ago, she taught college classes about retirement planning. As a tenured professor at universities in Illinois and New Mexico, she lectured on gerontology, age discrimination and women’s issues. When she was 52, she made a life-changing move, entering the seminary and leaving with two masters’ degrees. In 2002, she was ordained as a Presbyterian minister. As an associate pastor at a Presbyterian church in Washington, D.C., Coyle did crisis work, visiting homes and hospitals, counseling and preaching, conducting funerals. She expected a long career but in 2007, she lost her job in a church budget cut. At 62, Coyle – who holds five degrees – thought she had much to offer. She applied to hundreds of churches and organizations around the country. “I don’t know if I was really naive or not, idealistic or not,” she says. “I just believed I was supposed to be doing this and something would happen. There would be an opportunity.” She hoped her past dealing with the sick and dying would prove especially valuable. “I think you might find a 26-year-old seminary graduate with that experience but not often,” she says. “Churches say, `We want someone who’s going to be there 20 years.’” Coyle found a temporary staff job with the Presbyterian Church (U.S.A) but after three years of looking for a pastoral position, she reluctantly retired in 2010. “I’m literally sitting in the midst of job search files that I’m finally throwing away,” she says, from her home in Washington’s Virginia suburbs. “I know I’m never going to be interviewed again. This is a major thing for me. It’s hard to say. I’m a type-A person. I love working. I want to work until I drop and collapse at my desk. That wasn’t meant to be. It’s very painful, very difficult. … The positive part is to be able to say I’m retired rather than I’m unemployed. But people often turn away and say, `Oh you’re retired.’ You feel discarded. You feel invisible.” Coyle stays busy by filling in for pastors when they’re on vacation or ill and participates in 13 volunteer activities – everything from pet therapy to neighborhood watch to usher at a college theater. “I always used to tell my gerontology students,” she says, “that the saddest thing in the world is to have the answers and no one is asking you the questions anymore.” ___ Ted Casper figured the path to a paycheck would pass through the classroom. When he was laid off at a semitrailer plant in southern Wisconsin in spring 2009, he initially thought he’d rebound quickly. He was a skilled tool-and-die maker and had never been unemployed for more than a few days. “I thought I’d spend a week filling out applications,” Casper says, “and I’d spend my next week deciding which of the three or four jobs I would take.” He soon discovered he had misjudged. “It was a real eye-opening experience,” he says. “I started looking for work and no one was looking back.” It wasn’t just that he had no prospects. His wife, Gail, who has diabetes and Addison’s disease, a hormonal disorder, had already lost her job at an auto dealership. And they were in the final stages of foreclosure, no longer able to make their $900 monthly mortgage payments. Their annual income had plummeted from $90,000-$100,000 to about $23,000 – mostly his unemployment checks. Casper, then in his late 50s, followed a familiar route for unemployed blue-collar workers. He returned to school, enrolling at Blackhawk Technical College in Janesville, Wis. Two years later, he had an associate degree in industrial engineering technology. But he was 60, and competition was fierce – and younger – with thousands of unemployed factory workers in the area, many from a recently shuttered General Motors plant. “I got zero responses,” says Casper, of Edgerton, Wis. “I literally didn’t even get the form letter that goes along with the `thank you but no thanks.’” So last summer, Casper returned to Blackhawk to study business management. “I kind of accepted the fact there’s no employer out there that will hire me,” he says wearily. He’d like to start a business – making furniture is a possibility. Casper is philosophical about his fate. “There are times when you realize a lot of this is my fault,” he says. “There were times when I was working and wasn’t saving. … On one level, it feels like someone should be taking care of me. On the other level, I feel I should have been doing it on my own.” He just received his first Social Security check, but still hopes for another career. “If you can’t find a job,” he says, “maybe you’ve got to go out and create one. … There’s always something ahead. You just have to reach out for it.” ___ Dennis Hansen sometimes wonders whether all his schooling was worth it. An aquatics biologist, Hansen has taught college, had his research published in scientific journals and spoken at conferences from New York to Hawaii, but in recent years, he’s bounced from no job to a temporary job to taking any job for a paycheck. In late 2009, the Duluth, Minn., lab where he worked as operations manager, testing the toxicity of chemicals (and the impact on fish and water), closed because of declining business. Much of its work had come from Department of Defense contracts. After a year without work, Hansen, 32, was hired to monitor Lake Michigan and Lake Superior water for the state and federal governments over two summers. He also had short stints as a census worker and as an extra post office hand during one holiday crush. It hasn’t been enough: Hansen says he has a $13,000 credit card debt and that’s just for basics – his $600 monthly mortgage, heat and food. “It’s definitely a roller coaster,” Hansen says, with the ups coming when he’s done well in a job interview and the downs when there’s a rejection: “That’s when I’m frustrated, angry and wondering why I went to college for 10 years.” Hansen is resourceful and versatile: In college, he stocked grocery shelves, put motors in yachts and worked as a valet. Since 2009, he’s applied for everything from oil field worker in Williston, N.D., to chemist in Iraq for a government contractor. “The more money they offer,” he says, “the farther I am willing to go.” Hansen says he never expected to be out of work so long, figuring his experience and research would make him a shoo-in for a job. In December, he had an interview but lost out to someone with a Ph.D. “I was beat out by someone even more overqualified than I was,” he says. In January, another rejection. His marriage plans are on hold – “I don’t want to have a potluck welfare wedding,” he says – and his joblessness casts a shadow over his relationship with his girlfriend. “We were watching the news when there was a report that the economy is getting better,” he recalls. “She said, `When is OUR economy going to get better?’ That’s just crushing for a guy.” ___ In North Carolina, J.R. Childress spends Thursday nights at his group, Professionals in Transition, where the underemployed and the jobless meet to share tips, review resumes and support one another. Childress is casting a wide net in his job search and having learned to live on a quarter of his former salary, he says, if a new position offered “half or better, I’d consider that a bonus.” He recently had promising news – he was interviewed to be a contractor selling state license plates. “You hope that just around the next corner or the next person you talk to is going to have something,” he says. “I pray. I say show me the way. … But you’re no longer planning ahead. You’re planning to get through the next day.” ___ Online: ___ EDITOR’S NOTE – Sharon Cohen is a national writer for The Associated Press, based in Chicago. She can be reached at features(at)ap.org.

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Mathias Terheggen: The Wealth Gap Challenge

February 10, 2012

Philanthropy and the wealth gap challenge Economic growth and the question of its “if and when” is a very popular topic these days. Analysts have been providing outlooks on 2012′s economic development. But in their attempts to foresee the future one thing is already clear: regardless of how the economies will develop, the outcome is going to be more positive for those who already have and earn a lot compared to the financially less fortunate. This phenomenon, the “wealth gap,” is not new and we have become used to the fact that, with few exceptions, particularly in developing countries the wealth disparity is growing steadily. What is new though is that within developed economies — among them are some of the strongest globally — the wealth gap is widening too. Countries as diverse as the U.S., Italy and Germany all have grown their Gini-coefficient, a measure of income inequality, over the last 30 years. And even Hong Kong, whose economy grew by over 6% at 3% unemployment last year, not only holds a global record for growing the number of millionaires but also, or maybe therefore, one for the highest income inequality ratio among developed economies. An ever-growing challenge This has given rise to substantial concern. While low levels of economic inequality are desirable to maintain an impetus for individual economic development, a large wealth gap is known to discourage individual economic efforts which, in turn, results in lessened economic power for large parts of the society. Public upheaval and political revolutions as seen during the Arab Spring are only the most blatant symptoms of the detrimental effect on societies caused by limited economic opportunity and unfair wealth distribution. With low-income households statistically producing a higher number of off-spring, strong income inequality virtually results in an increasing number of children slipping off into poverty, poor healthcare and education. The generation responsible for long-term economic growth is hence disengaged, and a society’s ability to innovate from within itself jeopardized. Ultimately, this will limit the future economic potential also of those on the more fortunate side of the wealth gap, too. Donating doesn’t do the trick The economic crisis of 2008 caused a tightening of public budgets which, in turn, has resulted in reductions of social welfare. This has led to a more critical public view on the financially successful, and so the wealthy nowadays have both an intrinsic and an extrinsic motivation to re-consider their role in dealing with the wealth gap and related social issues. It comes by no surprise that therefore the past years have seen many wealthy go public with their social engagement and openly demand more substantial measures to foster social equality from their peers. The public response has been very mixed with reactions reaching from friendly acknowledgement to acid accusations of fig-leaf efforts. A closer look at the role private philanthropy can play in closing the wealth gap might therefore be appropriate. One myth to make away with at the outset is that donations to the poor won’t solve the wealth gap challenge. While total global private giving is estimated to exceed USD 600 bn annually, this amount represented less than half of the wealth transferred from the bottom 80 to the top 20 percent of households in the US during the financial crisis from 2007 to 2009 alone. Hence, private philanthropy by wealthy individuals must play a different role if it means to prevent societies from getting destabilized. An entrepreneurial approach Indeed, philanthropy can have a catalytic role in encouraging and supporting social innovation: being liable to their own preferences and requirements only, as opposed to donors like most public fund-raising non-profit organisations, philanthropists can take higher risks like funding interventions and organizations in early stages of development. Philanthropists can afford the risk for a project to default, e.g., through a project owner’s unexpected death, knowing that the draw-back will be off- set by other successful initiatives within their portfolio. In addition, today’s private donors are increasingly seeking ways to make their social engagement not only more strategic and long-term in order to achieve systemic change, but they go far beyond their mere financial contributions. Building on their professional success they leverage their knowledge and network, engage non-financial capacities like companies and employees, and most importantly, they apply their mind-set and experience as an entrepreneurs and investors to their philanthropy. Addressing social issues with an entrepreneurial approach including the idea of revenue generation through the provision of social products and services has resulted in efficiency and scalability and triggered some of the most remarkable recent trends in the social sector. On the giving side Venture Philanthropy and Impact Investing have taken giving beyond grants towards actual investments that include the expectation of a financial return for the investor. The ratio of social versus financial return generated by the investment may vary depending on the social investor’s priorities. But the mere fact of making an investment, rather than giving money away, has a groundbreaking effect on the recipient’s commitment, not least as it is an explicit sign of trust in the recipient’s abilities. All these trends yield social interventions that often address social issues that weren’t addressable before. But in all cases they increase the efficiency and effectiveness thereby growing the social impact. Enabler and catalyser It is through this role as enabler, supporter and advocate of social innovation that private philanthropy addresses the wealth gap challenge: not only do they deliver new social interventions, but by using their extensive networks and acting as figures of public influence they promote what ultimately will be adopted by larger non-profit organisations and, increasingly, by governments. Especially the latter are turning towards private philanthropy on their search for social innovation that enables the public sector to fulfill its social mandate while minding the costs. The recent launch of a program by the German bank for economic development, KfW, that provides financing to social entrepreneurs under the condition that they can secure additional funding by private donors, is an apt example of governments trying to harness the innovative power of private philanthropists. These interventions will increase the ability of the less fortunate both in developed or developing countries to have access to appropriate healthcare and education. This will help lay the foundations for future economic growth and participation in it: by linking private philanthropy of the wealthy to the economic participation of the less wealthy, the social fabric that makes for a stable, fair society is strengthened. Transparency to gain momentum Private philanthropy will not balance societies that are otherwise challenged in their social cohesion through an overly inhomogeneous distribution of wealth and income. But it can, if done credibly, be a starting point for systemic change — all the while shaping the future of the wealthy, too. Transparency on individual efforts could create the desired momentum as it allows for discussions on objectives and priorities as well as for collaboration. However, given the reputational risk and the challenges of building a successful philanthropic track record, such transparency may at first only be acceptable within the peer group. Closed conferences, of which there aren’t too many yet, but where leading philanthropists, experts and social-sector professionals gather to exchange knowledge and further their philanthropy, have proven to be a very effective means. Very often such gatherings boost alliances around a shared theme of interest, they build scale and subsequently become visible to the broader public including private, public and civil sector organizations.

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Melissa Richer: How Millennials Are Shaping the Future of Social Entrepreneurship and Technology

February 7, 2012

In 2011, the terms ‘social entrepreneurship’ and ‘social business’ began to make weekly appearances in mainstream media (see recent Huffington Post coverage here , here , and here ). These startups are at the forefront of the ‘new economy.’ They make money by solving social and environmental problems, and they do not fit into the traditional nonprofit or for-profit mold. When I entered the workforce 5 years ago, I mostly heard that my generation was ‘difficult to work with,’ ‘savvy with that social media thing,’ and ‘free-spirited.’ Now people see us differently. In 2011, we were the entrepreneurs, survivors, and ‘ generation sell .’ Oftentimes people ask me about the future of social entrepreneurship. This is because I founded Ayllu , an organization that tracks social businesses in 80+ developing countries and reports on market trends. I tell them that right now social entrepreneurship is a hot trend and there are funders, conferences, university departments and newspaper sections devoted to it. I believe that in the not-too-distant future, social entrepreneurship will become so prevalent that it will no longer be a niche sector. It will simply be part of the new economy that emerges from today’s convalescent markets. In the years ahead, social entrepreneurs will take advantage of innovations in the technology sector. Here are technology-related trends that have major social change potential in 2012 and beyond: Crowd-based Models : Crowd-funding brings people together online, and pools their money to finance a project. It is a big social entrepreneurship trend, which Kiva made famous a few years ago. Now many social entrepreneurs have innovated on this concept. Solar Mosaic makes it possible for anyone to fund community solar installations in places like schools or hospitals. inVenture realized small businesses in developing countries need growth capital, so they created a crowd-investing platform. And One Percent Foundation innovated on the giving circle concept by pooling 1 percent of its members’ income and donating it to charities. In the future, as technology becomes cheaper and more prevalent, social entrepreneurs will move beyond crowd-funding. They will use other crowd-based models to create social change. This trend is already manifesting itself in the mobile technology space. Mobile Technology: Today, nearly 70 percent of people in developing countries have mobile phones. In just a few short years, more than 1 billion people who were formerly ‘off the map’ are on it. This market opportunity is tremendous in terms of size and scale, as are possibilities for social innovation. Social entrepreneurs are building new models: Labor Voices combats human trafficking with a ‘yelp model’ where migrant workers can rate and review their employers anonymously. In developing countries, Medic Mobile uses mobile technology to help rural health workers coordinate with clinics and patients. In Kenya, people use their cell phones like credit cards, and Kopo Kopo helps business owners accept mobile payments from customers. Health Technology: Healthcare is one of the most diverse areas for social entrepreneurship. Lumoback , a mobile healthcare startup, designed a smart phone-powered device that improves posture and chronic back pain. Embrace developed a low-cost baby incubator to save premature infants in the developing world. And BioSense created a device that tests pregnant women for anemia in rural India, and can save thousands of lives each year. These trends are part of the big data and collaborative consumption movements. With so much information at our fingertips, solutions are emerging to analyze and organize information (big data). And thanks to the Internet, online collaboration is creating new kinds of marketplaces (collaborative consumption). In the past 10 years, we humans have become dependent on technology and it’s difficult to navigate life without it. Sometimes it feels as if our devices are in control of us, and not vice versa. But, in the next 10 years technology will become ‘smarter.’ It will adapt to us and become more integrated with our daily activities. Millennials will play a large role in evolving technology to create social end environmental benefits. Social entrepreneurship is our way of addressing the immense global challenges we inherited (see here and here ). We will use it to shift the global economy in a positive direction.

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After Greenspan, Bernanke Ends Cult Of Personality At Fed Through Transparency

January 28, 2012

* Achieves new stress on jobs in setting inflation target * Cleverly makes shifts through policy framework revamp * Ends era of cult of personality through new transparency By Stella Dawson WASHINGTON, Jan 27 (Reuters) – Ben Bernanke has achieved at the Federal Reserve what John Maynard Keynes only dreamed of – that economists be viewed not as cult heroes but as humble, competent people on a level with dentists. Alan Greenspan, Bernanke’s predecessor as Fed chairman, was proclaimed a “Maestro” in a 2000 biography as he presided over the longest-ever U.S. economic expansion, working mostly behind a veil of secrecy and boasting of mumbling incoherently. In the 1980s, then-Chairman Paul Volcker chomped on a huge cigar, glowered and blinded the public with a blizzard of data on monetary aggregates to wrestle down inflation. Both were larger-than-life personalities. Bernanke in contrast cuts a modest figure, and has taken much of the mystique from U.S. central banking by making the Fed a more open institution – a move he forwarded this week by unveiling a new monetary policy framework with an explicit inflation target of 2 percent. In the process, he is quietly revolutionizing the Fed and leaving a lasting legacy for the framing of U.S. monetary policy. By adopting an inflation target – a step Bernanke has advocated since his days as a Princeton professor – the Fed chief implicitly gave the central bank more room to concentrate on lifting employment. “He is a shrewd and extremely smart guy,” said Michael Bordo, an economic historian at Rutgers University who specializes in monetary policy and has reservations about the wisdom of the change for fear of a resurgence in inflation. Already in a break from Greenspan, Bernanke had introduced a more collegial style of discussion at Fed meetings to solicit greater input of views, and in another transparency first, he began holding quarterly news conferences last year. This week he also released for the first time interest rate projections from all 17 Fed policymakers to help guide markets on the range of thinking within the central bank. None of these steps seem radical, but they adhere to Bernanke’s long-espoused goal of increasing the transparency of the Fed to give investors better information and improve market efficiency. They also have the effect of giving the Fed new leeway to focus more on unemployment. A QUIET CALL TO ACTION The U.S. central bank has a dual mandate – stable prices and maximum employment. Under Volcker and Greenspan, the emphasis was on delivering low inflation – a pressing issue after the stagflationary period of the 1970s. Full employment in their view would flow from the delivery of stable prices. “Bernanke has moved us back to an earlier time by giving a greater weight to employment,” said Bordo. He has done this in three ways. First, forecasts Fed policymakers delivered this week show that they expect inflation to meet the new 2 percent target if not undershoot, while unemployment will stay high – clearly exposing that the Fed could fail in its dual mandate. At 8.5 percent in December, the U.S. jobless rate remains well above the 5.2 percent to 6.0 percent range Fed officials want to achieve. At the same time, a government reading on Friday on core prices in the fourth quarter showed a sharp pullback in inflation pressures. Prices excluding food and energy rose at a 1.1 percent annual pace, underscoring the prospect that the Fed could miss its new inflation target on the downside. Second, Bernanke said several times during a news conference on Wednesday that this may warrant action. “If recovery continues to be modest and progress on unemployment very slow, and if inflation appears to be likely to be below target for a number of years … I think there would be a very strong case based on our framework for finding different additional tools for expansion,” he said. Lastly, analysts said that Bernanke left little doubt that for all his collegiality and stress on collective decision making among the Fed’s 17 members, it is the smaller Federal Open Market Committee, which Bernanke dominates as chairman, that has the final say. “There are no mechanical relationships between these projections and the outcomes of the FOMC decisions,” the chairman said. If that wasn’t clear enough, he said later: “The FOMC will always trump the projections of forward interest rates.” The message was not lost on Michael Feroli, a former Fed official now at JPMorgan. “This is still the chairman’s committee, and as long as Bernanke is the chairman, at least through early 2014, the Fed will remain growth-friendly and committed to doing all it can to ensure the economy recovers,” he said in a note to clients. Thomas Gallagher, a Fed-watching veteran at the Scowcroft Group, agrees. He saw the biggest message underlying Bernanke’s explanation of the new policy framework was a determination to pursue further monetary easing to address weak employment. “He is going to do whatever he can to prevent another recession. He is just going pedal to the metal. That is a pretty powerful stance,” Gallagher said. READY, OR NOT? The Fed has already cut overnight interest rates to near zero and snapped up $2.3 trillion in bonds to try to ignite a faster recovery and ward off deflation risks. Indeed, Treasury yields fell on Bernanke’s message pushing the 10-year note yield below 2 percent, delivering a mild easing through the communication process alone. Former Fed governor Laurence Meyer of Macroeconomic Advisers is less sure Bernanke is ready to go even further to meet the employment mandate. The conditions Bernanke laid out for that – exceptionally low inflation and inadequate progress in lowering unemployment – have not yet clearly been met, he said. “What’s the bottom line? Hard to say.” But New York Federal Reserve Bank President William Dudley on Friday also delivered a decidedly dovish message. “Clearly, much work remains to achieve the Fed’s dual mandate of maximum sustainable employment in the context of price stability,” he told reporters after a speech. If the new framework does give the Fed more wriggle room to address weak employment growth, it will not be without controversy. Bill White, former chief economist at the Bank for International Settlements, said the Fed – by focusing on the short-term problems of low inflation and high unemployment caused by a large output gap – fails to look at longer-term credit imbalances. He said a growing body of research suggests that even when a central bank has an explicit inflation target, inflation expectations can become unanchored, especially when public and private debt levels are large. “They are constantly giving the economy steroids, or cortisone to ease the pain, which any doctor will tell you that over the long term is deadly,” White said. The Fed’s hope is that ever more monetary easing will stimulate economic growth before the debt burdens overwhelm businesses, households or governments. The legacy of Bernanke, whose second term as chairman expires in 2014, is a new policy framework that by heightening the importance of inflation with an explicit target, implicitly strengthens his hand for more easing to get unemployment down. (Reporting by Stella Dawson; Editing by Tim Ahmann and Andrea Ricci)

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Lauren DeLisa Coleman: 2012 Elections: View From the Cloud

January 25, 2012

As the presidential nominations race heats up, one can barely keep track of all the video content related to the elections. Debates, gaffs, press conferences are all being downloaded, edited and shared at lightning speed; thanks to technology. Being an informed politico or smart constituent isn’t as easy as it used to be simply due to the sheer amount of digital information that’s available on a daily basis. But voters across the country are beginning to participate in a trend that could just make for one of the most informed constituencies ever: storing video content on the Cloud. “I, for one, have a lot of things to do during my week,” explained LeAnne Lindsay, a mortgage administrator in Philadelphia, PA. “I want to keep up, but it’s really hard. I was trying to get through coverage on my lunch break, but that’s a challenge. Now I’m just downloading and organizing all my election-related video through content storage systems and watching it during the weekend and even reviewing it when I think there may be something where there is some double-talk from candidates. I don’t want to miss a thing, but it needs to be on my time.” Welcome to the 2012 elections, Cloud style. You no longer have to take up space on your computer with massive video files. Citizens are tapping into the Cloud to upload content and simply access it when they have the time. An example of Cloud computing is something you probably use everyday: Gmail. All the content is stored on super computers elsewhere, easily accessed when you want it. There are several products being used, but a popular one seems to be a newcomer called QVIVO. The platform is a pioneer; most Cloud media lockers have shied away from video due to its large file size — hundreds of times larger than music. Netflix doesn’t store subscribers’ downloaded movies and TV shows, and the companies that do store your media on a Cloud locker, such as Google and Amazon, only store music at this time. Only now are startups such as QVIVO taking this next logical step to a providing consumers with a strong management system for video storage. QVIVO not only automatically imports users’ media files but organizes them into slick libraries complete with cover art, trailers and subtitles. All the Internet’s popular files and formats are supported in HD. QVIVO is the only cloud of its type that actually manages video media in this manner, on any platform. iCloud approaches video in a completely different manner from QVIVO when it comes to content management. “Unlike other Cloud media platforms, we’ve spent a considerable amount of time perfecting video,” said QVIVO co-founder Liam McCallum. “Uploads are lightening fast, and all the heavy lifting of converting files to right formats is done automatically for users in the QVIVO Cloud.” QVIVO is also connected. For example, a family member’s profile could be linked to their Facebook accounts so that they can check-in, ‘like’ and rate their favorite media surrounding the candidates. In addition, with a single button users can tell friends what they’re into while watching video of candidates. QVIVO apps are free and will soon be available for the Android and iPhone. Ben Mitchell, an election watcher from Michigan, concurs with the value of this technology for his needs. “I can’t tell you the amount of time I’ve spent trying to get home-streaming working smoothly around the house,” Mitchell said. “The fact that I can now stream video around the home between any PC with QVIVO installed is a winning feature for me, so I’ve been trying it with all sorts of subject matter and just recently found it’s really great for keeping track of what’s going on with the candidates as well. I can stay on top of the reports better.” Looks like having one’s ‘head in the Clouds’ no longer has a negative connotation. While the verdict may be several months away as to the selection of the Commander-in-Chief, many people have already voted positively on the Cloud for managing the political discussion. Lauren DeLisa Coleman is a writer specializing in new technologies. If you would like to contribute as a citizen reporter to The Huffington Post’s coverage of the 2012 elections, please contact us at www.offthebus.org

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Obama’s Latest Executive Order

November 9, 2011

WASHINGTON — President Barack Obama is coming out against swag. That’s swag, as in the coffee mugs, pens, T-shirts and other public relations articles that federal government agencies purchase with taxpayer money to promote their work. The swag ban is part of an executive order the president will sign on Wednesday to cut waste and make government more efficient. Obama has been using his executive powers on modest proposals to promote job creation, assist homeowners and consumers, or alleviate spending. Besides putting an end to the promotional gear, the new order directs agencies to reduce travel spending, cut back on cellphones and laptops issued to employees, cut down the size of the executive vehicle fleet and post documents online instead of printing them – measures that individually would hardly merit a White House news release. The administration’s goal is to cut spending by 20 percent in areas covered by the executive order. “We’re cutting what we don’t need so that we can invest in what we do need,” Obama said in a statement. The president was expected to make brief remarks on the administrative action Wednesday after signing the executive order in the Oval Office. The White House on Wednesday also plans to announce four finalists in a cost-saving contest among federal government employees. One finalist suggested the creation of a tool “lending library,” another proposed ending the purchase of U.S. code books that are already available online. Among examples cited by the White House of cost-cutting already under way are the Internal Revenue Service’s plan to cut 27 percent of its travel costs by relying more on teleconferences and webinars and the Homeland Security Department’s decision to conduct annual audits to reduce the number of unused cellphones and air cards. At the Commerce Department, the White House said, the agency has reduced the number of fleet drivers to one for all top departmental officials, including for new Secretary John Bryson.

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Caroline Dowd-Higgins: Career Management Is Leadership Behavior

September 6, 2011

You must take responsibility for your own career future since it’s not your boss’s job to look out for you. Many people are blindsided by lay-offs and downsizings that are economy driven and don’t have anything to do with work performance. We are all expendable so it’s imperative to have a short-term and long-term plan and be in charge of your own career destiny so it never happens by default. Here are some great tips to help you become more pro-active as you develop and implement your personal career action plan. Network Before You Need It — you should always be growing your professional community even when you are not job searching. Think of it as building relationships, an opportunity to stay on top of current trends, and a chance to share your strengths story and abilities with others. The hidden job market is alive and well since approximately 80 percent of jobs are still never posted. People hire who they know and trust so you must not be a well-kept secret. Get out there and meet people face-to-face so you are ready when opportunity knocks, or when you need to rally your troops for advice and counsel. Remember to be a good networker and pay-it-forward to others in need. Have an Exit Strategy — with mergers & acquisitions in the corporate and non-profit arena part of the new normal, you must be ready to leave on your own terms before the pink slips are distributed along with the new company letterhead. Consider where you want to go when things are going well on the job so you have the luxury of thinking clearly, without stress and can plan your next steps well in advance. Always Tell Your Strengths Story — men have been talking about what they do well with confidence for decades and women lag far behind in promoting themselves. You must be your own best self advocate and learn to talk about what you do well so you can articulate your unique special sauce and professional worth. Consider the humble confidence mindset so you can brag comfortably in your own skin about the accolades you have earned. Remember nobody gave you these success stories — you worked your tail off to earn them. Keep Your Resume/Portfolio Current — things change fast so you need to have your resume/CV or professional portfolio polished and ready when opportunity knocks or when you find yourself in job search mode. Share your documents with trusted advisors to get their feedback on what your professional persona is on paper and how effective your materials are at showcasing you at your best. Seek out the services of a professional resume writer if you need expert assistance. Don’t Rely on Your Boss to Grow Your Career — no matter how great you think your boss may be, and many are not, he/she is not in charge of your next career move. You alone have accountability for where you want to go. If your current boss is not star material, giving you opportunities to grow within an organization that you love, it may be time to look for one that is. Re-evaluate Your Goals — life changes (a lot!) so you must evaluate your goals and your plan of action on a regular basis and adjust accordingly. If you find yourself pursuing an advanced degree, for example, you need to build that time into your long-term plan. Be flexible knowing that the only thing constant is change but keep your eye on the prize. Check-in with Your Accountability Master — someone on your personal Board of Directors needs to be charged with keeping you on task with your professional goals. It’s easy to get side-tracked, overwhelmed, and just plain stressed-out so your accountability master will give you a swift kick and the vote of confidence you need to do what you really need to do in order to move forward. Seek Out Professional Development Opportunities — in order to stand out from the pack you must be a lifelong learner. Don’t wait for your organization to invest in your future. Seek out conferences, credentials, workshops, and other opportunities to sharpen your skills and enhance your value-add in the workplace. This is an investment in your future and it’s tax-deductible. Whether you are an official leader in your workplace or not, you must embrace the mindset of a leader when it comes to your personal career management. Stay current in your field, or investigate new ways to play to your strengths. Have the courage and confidence to talk about what you do well and map out a short-term and long-term plan with action steps so you can achieve the goals you so well deserve. You need not do this all alone. Tap the expertise of your personal Board of Directors, especially your accountability master to keep you on track and be in control of your career destiny. You deserve to be in charge of your own career — so assume that leadership role now! Caroline Dowd-Higgins authored the book “This Is Not the Career I Ordered” and maintains the career reinvention blog of the same name ( www.carolinedowdhiggins.com ) She is also the Director of Career & Professional Development and an Adjunct Faculty member at Indiana University Maurer School of Law.

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Boomers Will Be Pumping Billions Into Anti-Aging Industry

August 20, 2011

NEW YORK — Baby boomers heading into what used to be called retirement age are providing a 70 million-member strong market for legions of companies, entrepreneurs and cosmetic surgeons eager to capitalize on their “forever young” mindset, whether it’s through wrinkle creams, face-lifts or workout regimens. It adds up to potential bonanza. The market research firm Global Industry Analysts projects that a boomer-fueled consumer base, “seeking to keep the dreaded signs of aging at bay,” will push the U.S. market for anti-aging products from about $80 billion now to more than $114 billion by 2015. The boomers, who grew up in a culture glamorizing youth, face an array of choices as to whether and how to be a part of that market. Anti-aging enthusiasts contend that life spans can be prolonged through interventions such as hormone replacement therapy and dietary supplements. Critics, including much of the medical establishment, say many anti-aging interventions are ineffective or harmful. From mainstream organizations such as the National Institute on Aging, the general advice is to be a skeptical consumer on guard for possible scams involving purported anti-aging products. “Our culture places great value on staying young, but aging is normal,” the institute says. “Despite claims about pills or treatments that lead to endless youth, no treatments have been proven to slow or reverse the aging process.” Its advice for aging well is basic: Eat a healthy diet, exercise regularly, don’t smoke. “If someone is promising you today that you can slow, stop or reverse aging, they’re likely trying hard to separate you from your money,” said S. Jay Olshansky, a professor at the University of Illinois-Chicago’s School of Public Health who has written extensively about aging. “It’s always the same message: `Aging is your fault and we’ve got the cure,’” Olshansky said. “Invest in yourself, in the simple things we know work. Get a good pair of running or walking shoes and a health club membership, and eat more fruits and vegetables.” But such advice hasn’t curtailed the demand for anti-aging products, including many with hefty price tags that aren’t covered by health insurance. These include cosmetic surgery procedures at $10,000 or more, human growth hormone treatment at $15,000 per year and a skin-care product called Peau Magnifique that costs $1,500 for a 28-day supply. Another challenge for consumers is that many dietary supplements and cosmetics, unlike prescription drugs and over-the-counter medicines, aren’t required to undergo government testing or review before they are marketed. The Food and Drug Administration and the Federal Trade Commission do crack down at times on egregiously false anti-aging claims, but generally there’s little protection for people who don’t get hoped-for results. Mary Engle, director of the FTC’s division of advertising practices, said her agency focuses on the cases that could cause serious harm, such as bogus cancer treatments that might prompt an ill person to forgo proper care. She said the agency lacks the resources to crack down comprehensively on ads with exaggerated claims that exploit customers’ hopes for better looks or more energy. “Often it doesn’t rise to the level of fraud,” she said. “There are so many problematic ads out there and we really have to pick and choose what we focus on.” In contrast to the caution of mainstream organizations, there are many vocal promoters of anti-aging products and procedures, including the American Academy of Anti-Aging Medicine. It hosts annual conferences in the U.S. and abroad, and claims 22,000 members, mostly physicians. In its mission statement, the academy says the disabilities associated with normal aging “are caused by physiological dysfunction which in many cases are ameliorable to medical treatment, such that the human life span can be increased.” One of the academy’s co-founders is Robert Goldman, a doctor of osteopathic medicine. He contends that much of the resistance to the anti-aging movement comes from sectors of the health and pharmaceutical industries that feel threatened financially – for example by the surging use of over-the-counter nutritional supplements. “It all has to do with who’s controlling the dollars,” he said. Though many anti-aging interventions are expensive, Goldman said people on tight budgets still can take useful steps such as drinking purified water, taking vitamins and using sun screen. “People should be healthy and strong well into 100 to 120 years of age,” Goldman says in a biographical video. “That’s what’s really exciting – to live in a time period when the impossible is truly possible.” Olshansky, who over the years has been among Goldman’s harshest critics, believes there will be scientific breakthroughs eventually, perhaps based on studies of the genes of long-lived people, that will help slow the rate of aging. In the meantime, Olshansky says, “I understand the need for personal freedom, the freedom to make bad decisions.” A look at some of the major sectors in the anti-aging industry: ___(equals) Hormone replacement therapy: Numerous companies and clinics promote hormone replacement drugs, including testosterone for men and custom-mixed “bioidentical” hormones for women, as a way to slow the aging process. Many consumers have seen ads featuring muscle-bound Dr. Jeffry Life, now 72. He used testosterone and human growth hormone in his own bodybuilding regimen and recommends hormonal therapy for some of the patients patronizing his age-management practice in Las Vegas. The FDA has approved hormone replacement drugs for some specific purposes related to diseases and deficiencies, but not to combat aging. “Finding a `fountain of youth’ is a captivating story,” says the National Institute on Aging. “The truth is that, to date, no research has shown that hormone replacement drugs add years to life or prevent age-related frailty.” Dr. Evan Hadley, director of the institute’s Division of Geriatrics, says hormone replacement drugs can have harmful side effects. He said there is a need for more research, such as an institute study of testosterone therapy, to identify the potential risks and benefits. “There is indeed potential that people can be healthier in old age,” Hadley said. “But it still requires evidence about what’s going to help and what’s not.” Hormone drugs can be expensive. HGH shots can cost more than $15,000 a year, according to the institute. A hormone-based dietary supplement known as DHEA (dehydroepiandrosterone), a precursor of estrogen and testosterone, is marketed online for $12.95 per capsule by Utah-based NutraScriptives. Some proponents say over-the-counter DHEA supplements can improve energy and strength, boost immunity and decrease fat. The institute says there’s no conclusive scientific evidence of any such benefits. Life says he’s a staunch advocate of exercise and healthy eating, but insists that hormone replacement therapy, under a doctor’s supervision, is a crucial addition for some men, and that includes him. “There’s no way I could look and feel the way I do if all I had done the last 13 years was exercise and eat right,” he said. “Even if you do everything right, if you have a deficiency in testosterone, you will lose the fight.” Life acknowledged that the cost of testosterone replacement, probably more than $5,000 year and not covered by insurance, could be daunting for some. But he contends the investment pays off in more vitality. “It’s hard to put on price on good health,” he says. ___(equals) Cosmetic Surgery: According to the American Society of Plastic Surgeons, there were 13.1 million cosmetic plastic surgery procedures performed in the U.S. in 2010, a 77 percent increase over a decade. One notable trend is increased preference for less invasive procedures that enable patients to get back to work and social settings without a long leave of absence. The most popular of these is treatment with the wrinkle-smoothing drugs Botox or Dysport. They account for 5.4 million procedures, averaging about $400 per treatment. Other popular noninvasive procedures include soft-tissue facial fillers, chemical peels and microdermabrasion. More invasive procedures come at a higher price. Face-lifts can run from $6,000 to $15,000; the plastic surgeons’ academy reported performing 112,000 of them in 2010. Dr. Peter Schmid, who runs a cosmetic surgery practice in Longmont, Colo., says his field is flourishing because of evolving attitudes among appearance-conscious boomers. A recent Associated Press-LifeGoesStrong.com poll found that 1 in 5 boomers either have had or would consider cosmetic surgery. “Cosmetic surgery has become table talk at home. There’s a lot of satisfaction and acceptance from people who’ve had it, friend to friend, word of mouth,” Schmid said. While the noninvasive procedures cost less than a face-lift, the effects won’t last as long and repeat treatments might be needed several times a year, Schmid said. He advised patients to calculate carefully which type of procedure makes the most sense for them financially. Schmid, who is on the board of the American Academy of Cosmetic Surgery, cautioned against any rush to try new procedures that get a burst of publicity. “There’s a certain vulnerability because everybody’s looking for that quick fix, that fountain of youth,” he said. “Many people will shop emotionally instead of objectively, before something has been tried and tested.” Some critics of the anti-aging industry are supportive of cosmetic surgery, provided the patient can comfortably afford it. Professor Robert Binstock, an expert on aging at Case Western Reserve University’s School of Medicine, told of a recently widowed friend whose spirits lifted after getting the bags under her eyes removed. “If you feel better looking in the mirror in the morning, fine,” he said. “I have no objection to people being narcissistic.” ___(equals) Skin care: One of the industry’s booming sectors is anti-aging skin care, featuring wrinkle creams and facial serums. By some estimates, the U.S. market for cosmeceutical products – cosmetics with medicine-based ingredients – is approaching $20 billion a year. The FDA, which oversees cosmetic safety and labeling, doesn’t require manufacturers to prove the effectiveness of cosmetic products before they go on sale, and many ads make claims which critics say are exaggerated or unverifiable. The American Academy of Dermatology recommends consulting a dermatologist on what skin care products have been proved safe and effective in human studies. Consumer Reports has ventured into the realm of anti-aging cosmetics several times recently, using high-tech optical devices and other scientific methods to assess the products. Last year, the magazine tested nine face serums, available at drug stores for prices ranging from $20 to $65 and all claiming to reduce wrinkles. “After six weeks of use, the effectiveness of even the best products was limited and varied from subject to subject,” according to the review. “When we did see wrinkle reductions, they were at best slight, and they fell short of the miracles that manufacturers seemed to imply on product labels.” Earlier, the magazine tested wrinkle creams. “Even the best performers reduced the average depth of wrinkles by less than 10 percent, a magnitude of change that was, alas, barely visible to the naked eye,” it said. Its top-rated product, Olay Regenerist, cost about $19 at the time of the testing. La Prairie Cellular, the most expensive at $335, was rated among the least effective. Similar conclusions were reached in testing 16 over-the-counter eye creams. “Even among the best-performing products, wrinkle reduction around the eyes was generally pretty subtle,” the magazine said. “After six weeks of daily use, none came close to eliminating wrinkles.” It said the most expensive, Perricone MD at $95 a jar, was no better than cheaper drugstore brands. One recent development in anti-aging skin care is the use of stem cell technology. ReVive’s expensive Peau Magnifique is among the new products, claiming to “recruit adult stem cells into brand new stem cells.” Neither Consumer Reports nor the FDA has conducted any specific assessment of Peau Magnifique’s effectiveness. On a Web site called Makeupalley.com, some customer reviews raved about it; others trashed it as a waste of money. ___ Online: ___

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Karen Leland: How To Use QR Codes To Engage Your Customers

August 18, 2011

While on vacation seven years ago, entrepreneur Rico Elmore couldn’t find a pair of sunglasses that would fit on his not-so-small noggin. Elmore’s hefty-head experience spawned an ah-ha moment, and today he is the proud proprietor of Fatheadz Eyewear , a company that makes oversized sunglasses and extra wide eyewear for folks with large heads. Always looking for ways to innovate, Elmore has recently been using mobile marketing, and QR codes in particular, as part of his plan to engage customers. QR codes (Quick Response Codes) are commonly aimed at mobile phone users. If you have a camera-equipped smartphone with a QR code reader, your phone can scan the image of a QR code to display text, contact information, connect to a wireless network or open a web page in your phone’s browser. “In early 2011, I was flipping through an outdoor retailer trade publication when I saw a QR code in the magazine,” says Elmore. “I thought it was very cool and decided to look into how we might start using them in our marketing.” Within 60 days, Fatheadz had integrated the use of QR codes into their campaign involving the ongoing sponsorship of race car drivers. “For all of our sponsored drivers, we give them a ‘Hero’ card they can autograph and give out to their fans,” says Elmore. “We put a QR code on the back, and when the fan scans it on their mobile device, up pops our web page.” Once on the website, fans can see information about their favorite race car driver, including which sunglasses they wear — and buy them. Elmore says the QR code campaign has increased web traffic by a whopping 10 percent. What’s next? Elmore says he plans on expanding the use of QR codes to prospective retailers by printing them on business cards and other marketing collateral and then linking them to product videos on his site. Dan Hollings , an expert on mobile marketing, says that video is one of the most effective uses of QR codes. “The key is to create a short video (under three minutes) about your product or service or some useful information relating to your product or service,” says Hollings. “Then post the video on your website, YouTube and Facebook and link a QR code to it that brings the visitor to the video. It’s as simple as that.” Even though QR codes are relatively simple to set up and use, many small businesses don’t know where to begin. To start, check out Qr.net and createandtrack.com , just two of the hundreds of sites that offer QR code creation. Once you’ve created a code, Hollings says you can then easily link it to a video, your website or a podcast. Once you know where you want to send your potential clients, the next step is to promote it. Publish your QR code on your business cards, flyers, DVDs, brochures, mailers, signage or any other material you give to potential clients. Hollings says he’s even seen them placed on complementary coffee mugs at conferences. Still feeling a bit shy about bringing QR codes into your marketing mix? Get your feet wet by using one yourself. Now that you know what to look for, you’ll see them everywhere. So download a QR reader on your smartphone and scan away. Who knows, you might just end up with a pair of your favorite racecar driver’s sunglasses. Has your small business been doing anything with QR Codes or other forms of mobile marketing? We would love to hear your comments. This article originally appeared at Xero.com , online accounting software for small business. Karen Leland is a freelance journalist, best-selling author and president of Sterling Marketing Group where she helps businesses negotiate the wired world of today’s media landscape — social and otherwise. For questions or comments, please contact her at kleland@scgtraining.com.

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Family Office Exchange is betting that RIAs and the ultra-affluent can’t get … – RIABiz

May 31, 2011

Family Office Exchange is betting that RIAs and the ultra-affluent can’t get … RIABiz This is the story of Family Office Exchange ramping up its efforts in response. Impervious to the gravitational pull of a down economy, the family office business keeps plowing ahead and one big Chicago-based consultancy is planning its own aggressive … and more »

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Champagne And Easy Money: The Web’s Young Stars Confront Another Bubble

May 10, 2011

Peter Thiel looked on in awe. The billionaire early investor in Facebook and co-founder of PayPal, Thiel had spent countless hours in close quarters with young entrepreneurs. But he’d never traveled through the Caribbean on a 14-story cruise ship with 1,000 of them. For three days in April just off the coast of Miami, the ship served as the venue for this year’s Summit Series , an invite-only business conference that draws some of the world’s most successful Internet startup founders. The yacht, the flowing champagne and the brand-name speakers were all part of Summit’s three-year-old business model: convene an elite group of young entrepreneurs, add investors, philanthropists, alcohol and a few celebrities and see what happens. This year’s gathering was the largest Summit yet — perhaps a sign of the times. For an elite class of tech entrepreneurs, including many who danced and drank on the cruise, there is no recession, no unemployment crisis. But, as waves of cash flow into Internet startups, there is talk of a sequel to the late ’90s dot-com bubble . “Markets are defined by greed and fear. We are in the greed mode right now,” declared Fred Wilson, a top New York City venture capitalist, in a blog post late last month. “This is a time to raise money and sock it away for a rainy day.” Startups are heeding Wilson’s advice. Thus far, 2011 has been the venture capital industry’s best annual fundraising start since 2001, as deep-pocketed backers aimed funds at hot late-stage technology companies, such as Facebook, Twitter and Zynga. Facebook’s value rose 58 percent during the first quarter to $65 billion, according to research firm Nyppex, while Zynga’s climbed 80 percent to $8 billion. As U.S. venture capitalists raised $7 billion during the first quarter of 2011, Internet firms snatched up $2.3 billion in funds, according to research firm CB insights. Those totals were up 76 percent and 46 percent, respectively, from the first quarter of 2010. Across the globe, more than $5 billion flowed into young web companies in the first four months of 2011, Reuters reported . The result has been something of a mad dash to raise startup funds — any funds. At the Summit Series, attendees could hardly throw a business card without hitting the founder of an Internet company that had raised millions in recent months. Take Travis Kalanick, a Summit-goer who founded Uber , an on-demand car service that uses mobile apps. In February, less than eight months after its launch, Uber rounded up nearly $12 million from investors at a $60 million valuation. Kalanick said Uber has more than 10 investors with a long line of suitors eager to snap up shares. Aaron Batalion, co-founder of the daily deals site LivingSocial , also had something to toast at this year’s Summit. Four days before the conference, and less than four months after landing a $175 million investment, Living Social raised $400 million at a whopping $3 billion dollar valuation. The cash rolling in at many young Internet companies has been a welcome, if frothy, development: In 2009, venture capital investments fell to a 12-year low , according to a report by National Venture Capital Association and PricewaterhouseCoopers. “During the downturn, good companies just couldn’t get funding,” said John Frankel, a partner at ff Venture Capital. “But the pendulum has quickly swung back.” In 2010, venture capital investments rose for the first time in three years, to $21.8 billion. Frankel and other investors say that in recent months they’ve seen valuations for early-stage web startups jump to two or three times the level of the previous three years. “You’ve got a whole group of investors who missed out on Groupon and Facebook and really don’t want to miss out on the next big deal,” Ben Lerer, founder of the online men’s lifestyle network Thrillist and a partner at Lerer Ventures, told an audience at Bloomberg’s Empowered Entrepreneur conference in April. “There’s a lot of money out there,” Lerer added. (Lerer is the son of Ken Lerer, a cofounder of The Huffington Post.) Wall Street, too, has raced to get in on the flood of attention on Internet startups. Rather than waiting for high-flying tech companies like Facebook, Zynga or Twitter to go public, banks are piling into the private secondary markets in an attempt to cash in. (Aboard the Summit Series’ 14-story yacht) In January, Goldman Sachs invested $450 million in Facebook in a deal that valued the social network at $50 billion. Last week, Reuters reported that a group of Facebook shareholders is trying to offload $1 billion worth of shares on the private secondary market. The sale would value the social-networking giant at more than $70 billion. In February, JPMorgan Chase raised $1.22 billion for its Digital Growth Fund to invest exclusively in later-stage tech companies. The bank quickly purchased a 10 percent stake in Twitter, valuing the company at $4.5 billion. Companies that are selling stock through secondary markets are getting the economic benefits of going public without increasing disclosure, said Jim Anderson, the head of Silicon Valley Bank’s software, Internet and e-commerce division. “Valuations are just indicators,” Anderson added. For many web companies, he warned, “there’s real uncertainty about the revenue model.” The red-hot market for private company shares has drawn the attention of the Securities and Exchange Commission and led critics to call it a “shadow market” where investors are being kept in the dark about the companies they are buying into. Even as employees or VCs use secondary markets like SecondMarket or SharesPost to sell their stock, the companies themselves are not required by law to disclose detailed financial information. Historically, employees and early investors at successful tech startups were left holding valuable stock they couldn’t unload until an IPO or an acquisition. But secondary markets, their proponents say, free up capital by allowing employees and early investors at private tech companies to unload their stock before a public offering. At least some of this new cash is circulating back into the startup world. Armed with the expertise, money and interest, tech entrepreneurs-turned-investors are assisting and financing the current generation of startup founders. Some do it because investing in startups is more appealing than leaving cash in the bank or putting it in the stock market; some do it simply to stay plugged into the startup world. “You now have a wave of entrepreneurs who have founded companies, sold their stock, and are using the money to either start another company or reinvest in other startups,” said Frankel, the venture capitalist. THE SUMMIT COLLECTIVE “The Roots are about to take center stage for their final performance of the Summit Series,” blared a voice over the ship’s intercom. Moments later, crowds poured out onto the pool deck as a neon laser-light show pulsated across the boat’s stern. Three days of hyperactive networking mixed with champagne, extreme ocean sports and TED-style speeches by industry titans like Richard Branson and Google executive Jared Cohen had worn attendees down. But the celebration continued on through the night. Not until 6 a.m., when boat security ordered the crowds to disperse, did attendees finally return to their rooms. Summit’s final morning wasn’t the only time the ship’s security intervened in the festivities. Earlier in the trip, two tipsy attendees were detained and subsequently fined after jumping off the boat into the ocean. (The jump, a premeditated dare, did not result in any injuries.) For many, Summit felt more like a spring break getaway with friends than a business conference. Weeks before the jaunt, participants connected with friends and colleagues online using Summit’s private social network, dubbed “The Collective.” On the ship, they sported lanyards that carried their name and company and were provided with small plastic “e-toys” to swap virtual business cards. Yet many didn’t need identification. Attendees already knew fellow “Summiteers” from previous conferences or through business dealings. Summit’s collective is a microcosm for the startup world: a group of young, smart, mostly white males hailing from the East or West Coast who are intimately connected to the investment community either through exclusive social networks, late nights spent boozing at invite-only gatherings — or because they are active investors themselves. “I don’t remember seeing so many 27-year-old angel investors running around,” said one Summit attendee, who also noted that many attendees blurred the line between startup founders and startup investors. Though data on individual investors, also known as “angel investors,” is scarce, it is widely believed that the total number of angels and amount of angel investments has grown substantially in the past five years. (A panel at this year’s Summit Series) Part of the reason is individuals now have access to a wide array of resources that didn’t exist five years ago to learn the trade and to access deals, such as AngelList, an online networking service that matches entrepreneurs with investors. “The result is better and more reliable investors which is a huge benefit to entrepreneurs,” said James Geshwiler, founding chairman of CommonAngels, a Boston-based network of investors. And for the “in crowd” of entrepreneurs at Summit, there’s no shortage of opportunities. “It’s very different than it was a few years ago,” said Robby Walker, co-founder of Greplin, an Internet search tool that lets users search across their Facebook, LinkedIn and other personal Web services. “A few years ago, when you raised a Series A, investors did due diligence and lawyers got in involved. Now you do a convertible note over lunch.” Greplin raised $4 million during its first round of financing, or Series A, in February and now boasts a distinguished group of angels including Bret Taylor, the former CTO of Facebook; Paul Buchheit, co-founder of FriendFreed; and Christina Brodbeck, a design lead at YouTube. As cash piles up and today’s top entrepreneurs become pickier about whom they take money from, a new class system for investors is emerging. “We’re not just looking for money, we’re looking for someone to offer advice, networks and relationships,” said one tech entrepreneur at the Summit Series who spoke on the condition of anonymity. But, to some, stories of soaring valuations and seamless funding rounds are reminiscent of the late 1990s, when cash flooded the markets and set off a dot-com craze. That bubble burst in 2000, littering the tech field with failed companies and heavy losses. Yet many analysts say there are notable differences between the late-’90s boom and today’s Internet investment environment. For one, venture capital firms are investing considerably less capital than they were during the boom. Ben Horowitz, co-founder and general partner at venture capital firm Andreessen Horowitz, crunched the numbers and found that venture capital firms had invested $200 billion between 1998 and 2000. More dollars were invested in that single 3-year period than in total over the prior 18 years. Between 2008 and 2010, venture capital firms invested $90 billion, which is less than half the 1998-2000 level. “I remember 1999,” said email service ccLoop founder Michael Wolfe, who was previously the vice president of engineering at Kana , a web-based communications firm that went public in 1999 at a multibillion-dollar valuation. “Today’s valuations may be 20, 30 or 50 percent too high, but they’re nothing compared to the valuations we saw during the late-’90s bubble.” Those valuations, according to Wolfe, were around 10 times what they should have been. Horwitz and Wolfe are part of a growing chorus of analysts who view the current surge as more of a boom than a bubble. “I’m bullish on the fundamental’s of today’s Web startups,” said Wolfe. Internet businesses, he points out, can be built with substantially less capital than in the ’90s because technology costs have dropped precipitously, enabling entrepreneurs to develop products and bring them to market quicker and with fewer resources. During the late-’90s boom, investors placed bets on capital-intensive Internet companies that burned through cash quickly and took years to turn a profit. Some analysts also claim that today’s tech investors are a different, more discerning breed. “In the ’90s grandmas were investing in startups,” said Walker, Greplin’s founder. “Today it is trained professionals and people with intimate knowledge of the space backing these companies.” Valuations for most late-’90s dot-com rockets generally didn’t soar until after companies went public, after which money from the masses piled in. This exposed ordinary investors — the day-traders and giddy optimists -– to risk as they rushed to the public markets to buy up tech stocks, some technology investors say. Today, valuations for the hottest technology companies are soaring well before initial public offerings. These companies are waiting longer to go public, which keeps average investors from buying shares — U.S. securities law prohibits investments by individual investors who have less than $1 million in assets (or below $200,000 in annual income). “It’s not your cab driver buying shares in today’s tech startups. It’s fairly smart, sophisticated individuals. These private markets are restricted to people who are generally not foolish with their money,” said John Frankel. But this doesn’t mean there’s not a bubble. Supposedly sophisticated investors can be just as susceptible to frenzies as the general public. After all, paid professionals fueled the most recent housing bubble. But if there is a tech bubble today, presumably the average Joe won’t be directly affected when it bursts, some analysts believe. Bubble detractors also say that high valuations for today’s hottest Internet companies are not inflated because the market opportunity for digital media has become so large. Today, about one in three people are online, or roughly two billion global users, according to data from Internet World Stats , compared to 1999, when less than five percent of the global population used the Internet. Flush with cash and in the crosscurrents of several seemingly game-changing trends , the startup world is confident that tomorrow’s billion-dollar businesses are being built today. Thiel, in his keynote on the second day of the summit, offered some advice to an audience filled with entrepreneurs and investors. “One of the most important things Facebook did was never sell the company,” he said. That is the mantra echoing through the startup world right now: Don’t sell and stay private so you can maintain control of your company’s vision. If Summit’s attendees and the investors that floated in their wake are any indication, the world of soaring valuations, million-dollar funding rounds and lofty entrepreneurial hopes will, for now, remain invite-only. Disclosure: The reporter’s brother was involved in the creation of the Summit Series. He has not played a role in its organization since 2009.

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Anthony A. Dreyspool Joins Brock Fiduciary Services

May 10, 2011

NEW YORK, NY–(Marketwire – May 10, 2011) – Anthony A. Dreyspool has joined Brock Fiduciary Services LLC , a provider of independent fiduciary services to employee benefit plans and others. Dreyspool has 30 years experience as a lawyer specializing in legal matters involving ERISA fiduciary matters, including management of employee benefit plan assets. He is the founder and owner of Park Avenue Presentations, a producer of webinar conferences on ERISA and other topics and the author of ERISA Fiduciary Law for Non-Lawyers. He was for 15 years the chief ERISA attorney for The Equitable Life Assurance Society of the United States, and is a former partner of DLA Piper LLP and a former of counsel to Paul, Hastings, Janofsky & Walker LLP.

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Saul Garlick: How to Launch a Social Enterprise

May 5, 2011

Every day it seems I am asked the same questions: How did you start your social enterprise? What advice can you give to others who want to get something started? The questions usually leave me dumbfounded. I never feel like I have a good answer. My social enterprise, ThinkImpact , has gone through many changes and iterations over the years and would better be described as having evolved. However, that explanation is vague and unsatisfying to the aspiring social entrepreneur. Fact of the matter is, at some point in time, ThinkImpact did get started. How does one start? The answer is to pick an idea (not the perfect idea) and run with it. Here is how I would describe the process. An idea is born and you begin having conversations with friends about it. You feel good sometimes and bad sometimes because the feedback you get is so mixed. There are literally hundreds of reasons NOT to pursue the idea. At this point, many give up. Not you. You are determined. So you set out to make it a reality. You call someone who has done it before and ask, “How did you start your social enterprise?” You think they will tell you something specific, concrete and useful. They don’t. Every story is different and the order by which we social entrepreneurs kick off our enterprises is often different and chaotic. Lawyers, accountants, insurance, staffing up, getting office space, finding a board, raising cash, building a brand, speaking at conferences, building human resources policies, writing a blog, building a website, testing your product, measuring your impact… you soon feel like there is no logic to anything. How anyone runs one of these organizations begins to feel overwhelming. You take a deep breath. After all, Rome wasn’t built in a day, and you have some time. Then you revert back, what’s next? And people refer you to speak with more “experienced folks”. Real estate tycoons, techies, social entrepreneurs, bankers, non-profit leaders. You are wondering what this is really all about. There don’t seem to be answers anywhere, just more questions. Well, the determined do the following: 1. They pick a moment and decide to prototype their idea and put it in the market 2. They build a pitch deck to explain their product/service and business model 3. They build a simple brand format (logo, color scheme) so that they can make business cards, letterheads and a website 4. They bootstrap in a tiny office in their apartment with some self-financing 5. They read about financial management and systems 6. They get feedback on their product/service, push hard and do it all over again until someone believes in the idea enough to give them resources to build and expand the initiative Eventually the pressure of the daily cash flow eases, the product/service gains a following of sorts, and the systems formalize. For those out there who want to get started, read The Art of the Start by Guy Kawasaki. Then read something on financials like Financial Intelligence . What are some of your startup stories? Where are you getting stuck in the process? Any great resources for building out your social enterprise? This blog is cross-posted at http://socialedge.org

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Winston Baker Welcomes New Event Director

May 5, 2011

Janice Kovach to Join Global Event Production Team to Produce Renewable Energy Conferences Among Other Emerging Sectors

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Adelaide Lancaster: The Secret Weapon of Successful Entrepreneurs

May 3, 2011

I give the same answer to at least half of the business advice questions that I am asked. “How should I get the word out about my new service?” “What’s the best way to reach my target market?” “What conferences are worth attending?” “How much should I pay my staff?” “How do I find a good manufacturer … sales rep … or cost-effective printer?” “Ask your network,” I reply again and again and again. In my opinion it’s the easiest and fastest way to get the best answers to almost any question. Veteran entrepreneurs usually nod in agreement, mentally scan their network, ask my help in filling any gaps, and then go along their way. Newer entrepreneurs often give me an uneasy look. Maybe their network isn’t that big yet. Or maybe they aren’t yet comfortable asking for help. Or maybe they’re still hesitant to share behind-the-scenes details on their business. But more often than not, it’s the word ‘network’ that turns them off. Believe me, I get it. I too was jaded by “traditional” networking, that is before I was an entrepreneur. The conventional career wisdom when I was growing up was “It’s not what you know but who you know that matters.” It seemed that no one missed an opportunity to remind youngsters that the most important ingredient for success was a thick Rolodex. While some people were probably relieved to hear this, I was a bit resentful. After all I had spent years working hard to cram my brain full of useful information and my resume full of worthwhile experiences. Instead of being able to freely focus on opportunity, promise and ability, success seemed to hinge on a few arbitrary acquaintances. To me, networking was a necessary and unrewarding evil at best. Needless to say when I became my own boss, networking wasn’t at the top of my to-do list. I warmed to the idea when I recognized that word-of-mouth referrals were the best way to get clients. But, since I was still a newbie, I only saw my network as a sales tool. I quickly learned however that, as an entrepreneur, my network was much more than that. Instead of collecting ‘in case I need to know you’ connections, my network became my lifeblood, a never-ending source of experience, knowledge, resources, introductions, ideas, advice, feedback and support. Aside from connecting me to the right clients and opportunities, it is my strong peer relationships that have: prevented me from learning lessons the hard way; shortened my learning curve; given me honest and hard to come by feedback; enabled me to benefit from the first hand experience of others; and provided inspiration and rich ideas. I can’t think of many of my accomplishments where the contributions of my network haven’t been significant. For example, my peers were completely instrumental in the book that my partner and I just finished. Here’s a short list of things that my network provided us with for this gargantuan task: an agent who quickly sold our book, critical advice from recent authors on important contract points with the publisher, feedback on our approach and framework, a rich pool of interviewees, suggestions on equipment and transcription services, an inside look at various publicity proposals, ideas and inspiration about viral campaigns and generation promotional ideas, introductions to other writers and journalists, as well as support and encouragement. I was talking recently to a new entrepreneur who was, unsurprisingly, reluctant to ramp up her networking efforts. Fresh from the corporate world, she was tired of the schmoozing and the ‘what can you do for me’ routine. As I excitedly extolled the importance of peers and colleagues in the journey of entrepreneurship, I caught myself telling her that it’s who you know that really matters. The familiar tone of this phrase almost stopped me short. I was quick to explain the difference between the old quid pro quo style of networking and the kind of support that entrepreneurs engage in, but nonetheless I was firm in my message and underlying meaning: Invest the time and energy in building a strong network of peers. They will improve your business, save you effort and expense, and enrich the journey. A strong network really is the secret weapon of successful entrepreneurs.

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Dylan Reid: Faced With A Grim Job Market, Young Entrepreneurs Create Their Own Employment

April 26, 2011

As June approaches, the million and a half students set to graduate from college in the U.S. this year likely have just one thing are their mind: the job market. For each of these students faced with an uncertain, unstable or imprudent future, there will be a strong impulse to pursue the safest path, often on the periphery of their passions. So to all this year’s graduates wavering between boring job prospects and graduate school admissions, debating backpacking trips across Europe or Latin American missions with the Peace Corps, we propose an alternative. Instead of looking for a job: create your own. The time for entrepreneurship is now. Employment may be scarce, but opportunities for talented students and recent grads to start companies are abundant, especially in the U.S. Increasingly, our national attention is focused on entrepreneurs, with university and government programs supporting R&D and offering low-interest loans for new ventures to start and scale. Tools like crowd-funding and out-sourcing are cutting costs and allowing entrepreneurs to bootstrap from virtually nothing. Accelerators and incubators are sprouting up across the country, transforming once quiet cities into interconnected innovation hubs. And as countries become more connected, more and more entrepreneurs are launching enterprises that operate across countries, continents and around the world, catering to cultural differences and regional needs. The international impact of startups like Facebook, Twitter and Google have laid the groundwork for new wave of global thinking. Growing up on a small farm in New Jersey, Jason Halpern remembered the difficulty of installing solar panels so far off the grid. Small farmers, he realized, had much to gain from solar but its complex and costly infrastructure placed it out of reach for many. While a student at the University of Pennsylvania, Halpern and childhood friend Pat Murphy set out to create a portable and affordable solar generator designed for farmers. After participating in contests and attending conferences at their school and around the area, they pieced together a prototype. They won a $500,000 Edison Innovation Fund Cleantech Grant from the State of New Jersey. And today their company PowerFlowerSolar is developing a range of portable solar generators for farmers, the military and for use in disaster relief. “Bringing power,” as Halpern says “to the places that need it the most.” Not every young entrepreneur has such a clear vision from the onset. Some stumble into entrepreneurship with only a vague plan. Upon graduating Wharton in 2009, Jonathan Hefter turned down lucrative job offers in finance and moved into his parent’s basement where he taught himself to code. It was then that he came up with the concept for the Neverware Juicebox, a super-fast, inexpensive server that speeds up old computers. After getting an invitation to join New York incubator Dogpatch Labs, he was able to perfect the first server. Today, Neverware Juiceboxes are revitalizing outdated computers in public schools across New York and New Jersey. While these entrepreneurs are exceptional, their stories are certainly not unique. They are only a few among the growing number of top students and recent grads in the U.S. and abroad foregoing the arduous process of job seeking for job creation. They are turning their passions into products and experiences into enterprises. They are working across a wide range of sectors and distant geographic locales. They are seeing opportunity in uncertainty and in doing so shaping the future and from the stories of their success a new generation of young talented people might be encouraged to do the same. At the Kairos Society this is not only our hope — it’s our vision. As the world’s most expansive network of student entrepreneurs, we are committed to making our vision a reality. By connecting the world’s most promising young entrepreneurs to each other and the resources they need to succeed, we are helping to foster the businesses that will drive the future and continually question what is possible.

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Wall Street Stocks Slip On Fears Of Inflation’s Effect Taking Place

April 25, 2011

U.S. stocks fell on Monday on signs some corporate outlooks were being strained by concerns over higher raw material costs, including consumer products maker Kimberly-Clark Corp. The market’s decline in a low-volume session followed some strong earnings last week, which helped pushed the Dow to a closing high for the year. The S&P 500 has moved to the top end of its recent trading range where it is facing resistance. Kimberly-Clark (KMB.N) sank 2.9 percent to $64.13 and was one of the S&P 500′s top percentage decliners after it cut the low end of its full-year outlook, saying the cost of pulp and other goods were rising more than twice as much as it had expected. The Kleenex tissue maker is one of the companies most exposed to rising commodity costs because its products contain oil-based materials and paper. Johnson Controls Inc (JCI.N) fell 3.3 percent to $39.38 after the company, one of the world’s largest auto suppliers, said its fiscal third-quarter results would be hit by a drop in car production following the earthquake in Japan. “There are some legitimate inflation concerns among investors related to raw material prices, which could put pressure on margins later in the year,” said John Carey, portfolio manager of Pioneer Investment Management in Boston, which has about $260 billion in assets under management. Of S&P 500 companies that have reported results so far, 75 percent beat analysts’ expectations. That is just above the average over the past four quarters but well above the average of 62 percent since 1994, according to Thomson Reuters data. Helping the Nasdaq, SanDisk Corp (SNDK.O) rose 1.6 percent to $49.81 after raising its 2011 margin outlook late on Thursday. The Dow Jones industrial average .DJI was down 34.40 points, or 0.28 percent, at 12,471.59. The Standard & Poor’s 500 Index .SPX was down 2.89 points, or 0.22 percent, at 1,334.49. The Nasdaq Composite Index .IXIC was up just 0.10 of a point, or unchanged on a percentage basis, at 2,820.26. Energy and materials companies’ shares ranked among the weakest of the session, with the S&P Energy Index .GSPE down 0.7 percent and the S&P Materials Index down 0.6 percent. Crude oil futures prices fell after hitting their highest level since September 2008 earlier in the session, while silver reversed course after a sharp rally. The CBOE Volatility Index .VIX, known as the VIX, rose 7.8 percent after falling last week to its lowest level since 2007. This week is another hectic one for earnings with 180 S&P 500 companies set to report, including Amazon.com (AMZN.O), Coca-Cola Co (KO.N), Microsoft Corp (MSFT.O) and Exxon Mobil Corp (XOM.N). The week’s agenda includes a two-day meeting of the U.S. Federal Reserve’s policymaking committee on Tuesday and Wednesday. Fed Chairman Ben Bernanke will hold the first of four annual press conferences on Wednesday after the Federal Open Market Committee’s meeting ends. Investors will look for clues about the direction of monetary policy when the Fed’s bond buying program ends in June. Traders noted that activity would likely be subdued as many major European markets remain closed over the long Easter weekend. About 2.92 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq as of midday, below average for this point in the session. (Reporting by Ryan Vlastelica; Editing by Jan Paschal) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Carlo Cottarelli: Tax Matters for Developing Countries

April 22, 2011

You hear a lot these days–not least from me–about the fiscal problems of advanced economies. But let’s not forget the fiscal problems that low-income countries face, though they are of a different kind. For all too many low-income countries, government tax revenues are far from enough to meet the needs of their people. Some have made good progress, and this helped them weather the crisis better than many advanced economies–but there is an underlying, quiet crisis of inadequately resourced governments. Nor is it just the level of revenue that matters; tax design and implementation are also critical to the efficiency of economic activity, to fairness, and to the legitimacy of the state. Sharing experiences Supporting low-income countries’ efforts to strengthen their ability to raise revenue is an important part of the IMF’s role in helping them maintain stable and growing economies. How best to do this was the topic of two recent IMF conferences: one, in Nairobi , focused on sub-Saharan Africa ; the other, with a global focus , in Washington, DC, earlier this week. In both cases, I was impressed by just how candid and frank participants–government officials as well as civil society, donors, business and academics–were about what has and hasn’t worked for them. At both events, participants made very clear their view that the IMF’s technical support has, and is, helping their countries become better governed states that are responsive to the needs of the people. But they also made very clear that ultimately the solutions to these problems must be home-grown. We want to hear your ideas too, on both our recent paper on this topic and the G-20′s request for major international and regional organizations (including the IMF) to advise them on what they could do to help. Please visit our comments page to weigh in. More than “show me the money” There was, of course, a lot of technical stuff at both events . I now know much more about the details on which revenue mobilization ultimately depends, such as taxpayer segmentation, compliance management, production sharing agreements, transfer pricing, and small business taxation, among other critical issues. But it is the broader issues that left the most powerful impressions. Four in particular stand out: (i) Strong Commitment Many low-income countries have shown strong commitment to strengthen their revenue systems, through both administrative reforms and improved tax policies. There is a lot still to do. In sheer revenue terms, an additional 4 percentage points of GDP or so was suggested needed in some low-income countries if they are meet the Millennium Development Goals . But there have also been notable successes: Tanzania, for instance, achieved a 5 percentage point increase in its revenue to GDP ratio in the decade after 2000. Such good results exemplify the need for a commitment to the reform process over the medium- to long-term; sustainable changes require continued effort, and, particularly, continued political support. (ii) Equity, fairness and good governance Strengthening revenue systems is about much more than increasing revenue. Effects on growth and efficiency clearly matter–the poor are not likely to be best served by tax systems that treat investment harshly, for instance. But equity and fairness matter a great deal too, maybe even more. They matter in themselves: after all, a main reason that low-income countries need more revenue is to finance poverty-reducing measures. And equity and fairness also matter for the legitimacy and effectiveness of the tax system: taxes that are seen as unfair will be poorly complied with. And poor compliance leads itself to actual and perceived unfairness, as only some pay their fair share. Then there are links between taxation and building modern, accountable and responsive governments overall. One reason we have long seen combating corruption in tax administrations as so critical, for instance, has been its potential value in spearheading wider improvements in public governance. Ensuring that elites are seen to pay a decent amount of tax is important in this context, too. (iii) Avoiding exemptions and preferences Exemptions and preferential treatments in tax systems are a pervasive source of revenue loss in many developing countries–as they are too, of course, in many advanced economies. Discussions at the two recent conferences made clear again that many low-income countries fully understand the misallocation of resources and inequities these create. They feel, though, largely powerless to do much about them because of both strong domestic interests and a perceived need to compete with neighboring countries for foreign investment. Increased transparency has an important role here, particularly in the form of analyzing the revenue losses associated with tax expenditures. So, perhaps, does stronger regional tax cooperation, so countries can avoid “beggar thy neighbor” tax policies. (iv) Political will But addressing inappropriate tax policies, and improving revenue administration and enforcement, is ultimately an act of political will. The trouble is–and this is my final impression–that we still know very little about this ‘political will.’ We know it is needed in order to drive through tough policy changes. And that it matters to build and support firm, even-handed enforcement. But there are many hard questions, to which we don’t yet have the answers, about where political will comes from and how to create it. Our best hope of finding the answers is by continuing the kind of dialogue we have had in Nairobi and Washington. From iMFdirect blog

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Akhtar Badshah: Creative Capitalism, a CEO’s Viewpoint

April 14, 2011

I had a pleasure of moderating a discussion with Arunas A. Chesonis, the Chairman, President and Chief Executive Officer of PAETEC, founded in 1998. I sought to understand why he — as a CEO and business leader — invests in the city of Rochester, New York, and why he has developed a culture of investing back into the community at PAETEC. Chesonis, an MIT graduate and an entrepreneur, is a visionary who thinks outside of the box regarding how to build a business and how to build a community around him. He told the audience at the BCLC Corporate Community Investment 2011 conference in Philadelphia that one of his company’s four guiding principles is “caring culture,” a concept in PAETEC’s objectives and a metric for performance evaluation. Chesonis said: “If you have two managers and both are very good, but one is involved in the community, he’ll drive more business and will build more relationships within the company, outside the company, and with clients. That’s the manager who will get the promotion. People like that get to move up in the organization because they’re the ones who do business better.” Community involvement at the individual employee level, he said, not only helps managers excel — their success helps to grow the business. In our talk, he explained that PAETEC also uses the same criteria when considering procurement bids from his partners. With price being more or less equal, PAETEC wants to know how engaged potential business partners are in investing back in the community. He wants to know how they’re investing in communities, how they’re giving back, how they’re making the country do better. For Chesonis, corporate social responsibility (CSR) is a strategic weapon. He said that if you’re not doing CSR, if you’re not engaged in CSR, then you’re not going to be as successful, you’re not going to optimize your stock price, you’re not going to optimize your performance, and you’re not truly, fully engaged with all your team members. In short, it’s better business to be engaged in CSR. So how does Chesonis make sure engagement is constant and thorough? First, he sees engagement in CSR as building an extended family among a range of stakeholders (even the name of the company stems from the first letter of the names of the Chesonis family). He said he came to Philadelphia for the BCLC conference to lend support to those who are in the CSR business. “Maybe,” he said, “I’ll give you some tricks that we’ve used to trick people within our ecosystem into seeing why this is important for all of us.” Second, engagement in CSR work should be decentralized. At PAETEC, Chesonis lets his community relations managers decide where to focus the company’s CSR efforts instead of dictating what to do with a top-down approach. “I feel like I’m the match.com for CSR at my company. It’s my responsibility to connect my employees with our community,” he said and noted that he wants connections to grow organically between his community relations managers and the local organizations. Building your own community is important, and connecting your community to other communities in common goals is the next step in building capacity. Chesonis asked, “Wouldn’t it be great if there were a BCLC in all communities?” Organizations that convene and connect, he said, are needed at the local chamber level so that local corporate citizens and community leaders can come together, learn, and expand their capacity. Having a network of local BCLC-like organizations, he said, would encourage public-private partnerships. Chesonis said: “It’s hard for SMEs to travel to national conferences and major events like this — that makes local collaboration level so much more needed. People could develop their own approaches at the local levels and decide what fits best with their communities and businesses.” While his community relations managers guide the company’s strategy, the Chesonis family is building its own legacy in environment and energy research — the need for intense research in these fields is astounding, he said. With the belief that researchers should be allowed time to fail and experiment to find the best, most innovative solutions, Arunas and his family are funding long-term research spots for post-grad MIT students. Most Nobel Prize winners in science, he noted, made their discoveries at the age of 28: “We need to be funding young, energetic people who have time and inspiration to immerse themselves in their research 100 hours per week.” He ended the thought that corporate responsibility should be a strategic priority for all companies. “Don’t be a ‘dumb philanthropist’ and just write checks,” he said. “Work on the strategic piece-what’s good for a company can be good for a community and vice versa.” For those in business still sitting on the fence, this is a good piece of advice.

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Chriss Street: Why Bankers Want a Muni Bond Taxpayer Bailout

April 3, 2011

On May 5, 2009, I testified in front of Barney Frank’s Financial Services Committee that if Congress provided a guarantee of municipal bonds, the United States of America would lose its’ AAA credit rating. Over the next year-and-a-half, I was labeled the “typical Orange County ultra-conservative alarmist” when I spoke at dozens of investment conferences on growing risks of munis to investors. Even as the general market price of long term munis dropped over 20% in the fourth quarter of last year, virtually every major Wall Street investment bank continued to reassure investors that municipal bonds were a great buy. All that hoopla ended yesterday, when Jamie Dimon, the CEO of JP Morgan Chase Bank, acknowledged at a U.S. Chamber of Commerce event in Washington D.C., that hundreds of tax free municipal bonds issues will ” not make it ” and default. Mr. Dimon has intimate knowledge of the municipal bond market, because his firm is the third largest underwriter and issued $47 billion of munis last year. Mr. Dimon added : “I don’t think it’s going to shatter America, I just think it’s a part of the credit cycle.” Mr. Dimon and his bank have obviously sold their municipal bond holdings, but perhaps the timing of the release of this insider’s perspective on a coming market crash has something to do with his bank’s own needs. Currently there are 50,000 municipal bond issuers in America and they have sold over $3 trillion in bonds to mostly individuals, mutual funds and money market funds. A good portion of tax free bond sales were to fund local government worthy projects, such as roads, schools and even city halls. But another huge portion of the money raised in the municipal bond market has gone to support politically connected contractors and other crony capitalists. Mr. Dimon has real insider knowledge of this dark side of the muni market; since his firm in 2009 paid $75 million in penalties and forfeited $647 million to settle SEC charges in an alleged municipal bond kick-back and derivative scam. It seems those nice people at JP Morgan Chase somehow got $3.5 billion in underwriting business after sprinkling $8 million in cash on the friends of elected sanitation officials in Alabama. If one issuer alone could cost a bank almost three quarters of a billion dollars, how much could hundreds of defaults cause the banking industry? And, what if it turns out thousands of these muni deals were tainted by pay to play? How much more could a coming market crash cost the banking industry? Many Americans believe the current financial problems that state and local government are going through are due to high unemployment costs and lower income taxes, but the majority of state and local revenues come from property taxes. If U.S. property tax revenues had risen at the rate of inflation since the start of the real estate bubble in 1996, total property taxes collected this year would have been $296 billion. But collections last year totaled $476 billion, 60% or $180 billion more than inflation. Furthermore, instead of falling back by the 33% plummet in home values since 2006, property taxes rose another 27% or over $100 billion since 2006. The reason for the rising property taxes in this dreadful property market is that local government has been wildly efficient in raising assessed values of property, but incredibly inefficient in cutting values. This has started to create a tax revolt that is growing very rapidly as homeowners are appealing or litigating to drive their property tax bills down. Below is a chart of the State of California projected tax revenues versus budget expenditures. The fastest growing budget cost is snowballing interest and principal payments for municipal bonds. Ten years ago these bond payments were only 3% of the budget, but in two years they will reach 10% of the budget. The State revenue projections shockingly assume property taxes collections do not decline, but a 30% decline in assessed values would cost the state $20 billion. Jamie Dimon is one of the smartest bankers in the world and he fully understands his bank and the rest of the banks are facing a muni bond financial meltdown. The banking industry recently used their money and power to get Congress to stick taxpayers with the $3 trillion bailout of the banks’ busted mortgage loans. The bail-out was so successful for Mr. Dimon, that last year he pocketed a $17 million bonus. I believe Mr. Dimon’s new-found honesty about the risks of municipal bond defaults is part of a strategy to convince Congress to once again saddle taxpayers with a bailout of state and local government. From Mr. Dimon’s perspective, JP Morgan Chase Bank should be about bonuses and taxpayers should be about bailouts.

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Japan Government To Reportedly Take Partial Control Of Nuclear Plant Owner

April 1, 2011

March 31, 2011 10:40:09 PM TOKYO (Reuters) – TOKYO, April 1 (Reuters) – Japan’s government plans to take control of Tokyo Electric Power Co , the operator of a stricken nuclear power plant, by injecting public funds, the Mainichi newspaper said on Friday. But the government is unlikely to take more than a 50 percent stake in the company, an unnamed government official was quoted by the daily as saying. “If the stake goes over 50 percent, it will be nationalized. But that’s not what we are considering,” the official was quoted by the paper as saying. The company, also known as TEPCO, has come under fire for its handling of the emergency at its Fukushima Daichi nuclear complex, triggered by a March 11 earthquake and tsunami that left more than 27,500 people dead or missing. Mainichi quoted an unnamed government official as saying: “It will be a type of injection that will allow the government to have a certain level of (management) involvement.” A series of missteps and mistakes, combined with scant signs of leadership, have further undermined confidence in the company. Poor communication has led to some heated exchanges in media conferences as journalists demanded information. TEPCO could face compensation claims topping $130 billion if Japan’s worst nuclear crisis dragged on, Bank of America-Merrill Lynch estimated this week, further fuelling expectations Japan’s government will step in to save Asia’s largest utility. Investor concern about the future of Tokyo Electric mounted after its president, Masataka Shimizu, was admitted to hospital and the company said on Wednesday that 2 trillion yen ($24 billion) in emergency loans from Japan’s major banks would not cover its mounting costs. Liabilities for compensation claims alone could be up to 11 trillion yen ($133 billion) — nearly four times TEPCO’s equity — if the nuclear crisis drags on for two years, an analyst at Bank of America Merrill Lynch wrote in a report. TEPCO shares are down almost 80 percent since the disaster. Bank of America-Merrill Lynch said shareholders were very likely to take a big hit and a rapid resolution of the crisis was the only way to keep costs down. If the situation can be turned around within the next two months, compensation costs may be less than 1 trillion yen. Costs will rise to 3 trillion yen if it drags on for six months, analyst Yusuke Ueda wrote. Experts, however, say a final resolution of the nuclear disaster is likely to take decades and there could be many further setbacks. TEPCO could burn through 2 trillion yen in about a year, said CLSA equity analyst Penn Bowers, as it pays extra for fuel to run its thermal plants, among other costs. TEPCO has around $91 billion in debt including some $64 billion in bonds. That excludes about $24 billion recently secured in loans from domestic lenders. At the end of December, TEPCO had equity of about $35 billion, its accounts show. (Reporting by Yoko Nishikawa, Kazunori Takada and Taiga Uranaka; Writing by Dean Yates; Editing by Alex Richardson) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Fed Announces Plans To Hold Regular Media Briefings

March 24, 2011

Federal Reserve Chairman Ben Bernanke will start holding regular media briefings on monetary policy next month, a historic shift to greater openness at the traditionally secretive U.S. central bank. Bernanke will kick off a program of four-times-a-year news conferences on April 27 following a regularly scheduled two-day Fed meeting on monetary policy, the central bank said on Thursday. It will be the first regularly scheduled briefing by a Fed chairman in the history of the nearly 98-year-old central bank. Future briefings will coincide with Fed meetings at which officials provide their quarterly economic forecasts, which fall in June and November this year. “The introduction of regular press briefings is intended to further enhance the clarity and timeliness of the Federal Reserve’s monetary policy communication,” the central bank said. Bernanke has taken a number of steps to boost transparency at the Fed during his tenure as chairman, and the latest announcement brings it into line with some other central banks. The head of the European Central Bank holds a news conference after each ECB policy meeting, while the governor of the Bank of England briefs media quarterly. Congressional and public outcry for greater Fed disclosure grew louder in the wake of the recent financial crisis, during which the Fed undertook extensive unorthodox emergency measures. The Fed has a reputation for conducting its operations behind closed doors and shielding details of its decision-making from view. Despite a gradual shift to greater openness in recent years, the Fed has fought to keep some of the details of its operations secret. This week, it lost a court battle to withhold the names of banks that had taken emergency loans from its last-resort lending facility during the financial crisis. To make its operations more open, the central bank has in recent years begun issuing its forecasts quarterly, rather than twice a year, and moved up the publication of minutes of policy meetings to three weeks from about six weeks. It did not begin announcing its interest rate moves until 1994. Since the financial crisis, Bernanke has stepped up efforts to explain the central bank’s actions to the public, giving two extensive television interviews and delivering speeches at which reporters have been able to ask questions. Janet Yellen, the Fed’s vice chairman, has led a subcommittee since November to examine the central bank’s communications practices. The Fed said on Thursday it would continue to review its policies “in the interest of ensuring accountability and increasing public understanding.” (Reporting by Mark Felsenthal; Editing by Neil Stempleman and Dan Grebler) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Don McNay: Are You Working Towards Your Dream?

March 13, 2011

“And she never had dreams, so they never came true” -J. Giles Band As a structured settlement consultant, I go to meditations and settlement conferences with people who anticipate receiving large sums of money. I ask every person the same question. “Forget about what is going on today. If you won the lottery, what would you spend the money on?” The initial answers are usually vague, like “invest” or “put money in the bank.” Then, I tell them that when I become a billionaire, I am going to buy the Cincinnati Reds. When I tell them about my lifelong desire to own the Reds, they start talking about the things that interest them. From a planning standpoint, the lottery question is a great one. Everyone has dreams and desires but usually keep them hidden, back in the recesses of their minds. The lottery question gets those dreams and desires out in the open, on the front burner. Some of them have expensive aspirations (owning a NASCAR team comes up frequently). But, usually, they want things like sending their children to a nice college, buying a particular piece of property or helping their church. Once we start the conversation, the list gets longer and longer. My goal is to get people to think long-term. They need to clear their thinking of the rat race of every day life. The lottery question makes that happen. You don’t find many Americans who really think long-term. Many people go through life never developing real goals or good habits. We need a lottery question to help guide the people in Washington and Wall Street. Those of us on Main Street need it, too. Someone once said that American business people think quarter to quarter, Japanese business people think decade to decade and Chinese business people think century to century. We’ve watched short-term myopia destroy Wall Street. We need to take a lesson from our friends in the Far East. My father always said, “If you tell me who your friends are, I’ll tell you who you are.” You want to be hanging out with dreamers. And you want to be a dreamer yourself. A college friend introduced me to the J Giles song, “Angel in Blue,” and its sad lyric struck me even then. My friend was a person who never seemed to have any dreams or goals. I’ve always had bunches of them and I couldn’t understand a person who didn’t. I think everyone has some kind of dream or goal, but it gets buried by the overwhelming burdens of everyday life. Maybe that is why the lottery question is so effective. It takes people away the realities of their current situations and puts them in fantasy world, where they can start clean. If people take the time to ask themselves both the lottery question, it will allow them to focus on their goals and objectives. Once they get focused on their dreams, they may actually come true. Don McNay, CLU, ChFC, MSFS, CSSC of Richmond, Kentucky, is an award-winning columnist, structured settlement consultant and Huffington Post Contributor. He is the author of the book, Son of a Son of a Gambler: Winners, Losers and What to Do When You Win the Lottery. He has appeared on the CBS Evening News With Katie Couric along with numerous other television and radio programs. You can read more about Don at www.donmcnay.com . McNay has Master’s Degrees from Vanderbilt and the American College and is in the Hall of Distinguished Alumni of Eastern Kentucky University. McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field.

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Dan Solin: Investors Continue to Buy Underperforming Funds

March 9, 2011

I have a cushy job for you. You will be the fund manager of a mutual fund. Its benchmark index is the S&P 500. All you have to do is beat that index and you will be handsomely rewarded. How difficult can this be? There are only 500 stocks in the index. They are among the biggest and best known in the country. Apple, Bank of America, Colgate-Palmolive, DuPont. You get the drift. It’s easy to research these companies. The amount of publicly available information is staggering. They are followed by the best and brightest analysts on Wall Street. These companies have regular conferences where they will update you on their performance and prospects. Just pick the outperformers from this limited group and overweight your mutual fund with them. You are not competing with a human. The guidelines for maintaining the index are published on its web site . You can easily replicate the index. All you have to do is beat it and you will be a hero to millions of investors. Money will flow into your mutual fund. Your personal compensation will go through the roof. How does “stock guru” sound to you? Standard & Poors issues regular reports where it compares the returns of actively managed fund managers to their benchmarked indexes. Its most recent report is for the year-end 2010. The report is corrected for survivorship bias, which means it takes into account those funds that are no longer in business. Typically, funds go out of business due to poor performance. Most studies ignore those funds, which distorts the results. In the past three years, seventeen percent of domestic equity funds merged or liquidated. For 2010, almost two-thirds of large-cap, actively managed funds, that used the S&P 500 as its benchmark, were outperformed by the index. This is fairly consistent with prior years. In almost every other category, a majority of actively managed funds underperformed their benchmark. When the assets of the funds measured are considered, the record for actively managers is better, with a majority outperforming their benchmark index. The results are worse for bond funds. The majority of active managers failed to beat their benchmarks. For investors, this report validates the view that chasing returns by trying to find outperforming actively managed funds is a fool’s errand. The harsh reality is that most actively managed funds will underperform their designated index. Basing your selection on funds that outperformed in the past is ill-advised. There is no data indicating that past performance is indicative of future performance. To the contrary, there are many studies indicating that outperformance can be attributed to luck and not skill. Luck does not persist. Don’t expect to find the Standard & Poors survey, or the peer reviewed studies debunking the myth of fund manager skill, in the office of your local broker. Their interest is in keeping the dream of superior performance alive, through the use of costly actively managed funds. It’s all part of the grand plan to transfer your wealth to their pockets. The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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Brett King: The iPad 2 Pushes Customer Expectations Further

March 2, 2011

The Apple iPad 2 was launched by the so-called “rockstar CEO” Steve Jobs today in San Francisco to a broad reception of live blogging, tweeting and “cloud” participation online. It will give shareholders a brief moment of comfort to see that Steve is still fit and well despite his medical leave. While there has been a lot of online coverage of events and conferences in recent time, the live blogging and tweeting around the iPad 2 launch shows that we really are living in a real-time ‘news’ consumption age. The concept that you can have a press release to ‘spin’ an announcement anymore is just ridiculous. You are dealing with real-time assessment of your brand, your products and capability now. It is engagement 2.0. Now… back to the iPad 2. The new iPad 2 will retail at the same base price ($499) as the old iPad, and will retain the 10-hour battery life. But the new iPad is 1/3rd thinner, 10% lighter and is more than twice as fast as the old iPad. The video processor, often criticized when it came to gaming and video playback, has been upgrade to 9x the speed of the old video chip. The iPad 2 also comes with two cameras, a front and rear-facing camera enabling the FaceTime live video chat capability. The iPad 2 has simple HDMI integration also so you can play your iTunes video downloads straight to your HD TV, infact, the Airplay feature even allows you to stream video and pictures to your TV and other devices. You can sync wirelessly, too, with the new iPad 2. Apple has come up with an innovative ‘case’ they call a smart cover. The case is actually a screen protector with magnets that integrates with the iPad 2. When you remove the screen cover, the iPad 2 automatically senses it and powers up automagically. Apple’s recent success Apple has sold more than 15 million iPads since their launch last April, and they’ve just sold their 100 millionth iPhone globally . Impressive! But the really interesting stat is that they’ve remitted more than $2 billion to app developers globally (350,000 apps plus), and have more than 200 million account holders who’ve supplied their credit card details to the iTunes store. With 200 million customers, they would be a major competitor to any bank if they decided to build banking/payments into the iTunes store… Worth thinking about! What the iPad 2 means for service organizations The iPad 2 continues to shift expectations for consumers. Consumers now have very high interaction and user experience expectations, but most service organizations are still stuck in the ’80s and ’90s when it comes to ‘functionally’-led solutions for customers. User interface design needs to be a core competency of any services business these days, or you need to have a great supporting team in place. Apple showed off Apps like iMovie ($4.99), GarageBand ($4.99) and the FaceTime (free) App as examples of how interaction is changing as a result of the iPad. But more than that, Apple showed how the iPad is changing interactions in schools, at the workplace, for doctors treating patients, for pilots doing flight planning and many other examples. The iPad user interface along with multi-touch is reinventing these types of journeys through smart redesign of the interaction. To expect that customers will be forgiving in the face of poor operating procedures, poor interaction design and outdated screen design and flow is a huge mistake. Using regulation or internal bank policy (for an example) as an excuse, just won’t cut it anymore. Customers will be measuring the effectiveness of their service providers based on these types of ‘interaction’ metrics now, not on how many branches you have or what your interest rates are. Start thinking about redesigning your customer journeys and interactions. This is a core capability for any customer facing business these days. Steve Jobs back on stage at the iPad 2 launch today in SFO The iPad 2 launches in the US on March the 11th, and in the UK, Australia, Canada and a bunch of other countries on the 25th of March. You can check it out on the Apple.com site right now! Mobile Crunch did a great live coverage on their blog of the iPad2 launch event if you’d lke more details.

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9th Annual Coal Markets

February 20, 2011

Singapore, 22 – 23 February 2011

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Don Tapscott: The State of the World: 10 Belated Reflections on 2011 Davos

February 9, 2011

It is my custom after attending Davos to formulate my top 10 reflections. These are not necessarily the top issues discussed at Davos but rather some observations about the state of the world. 1. The Age of Wiki Revolutions Not surprisingly, the historic events in Tunisia and Egypt captured the attention of many at Davos. The timing was impeccable, reminding some of the Davos conspiracy theory — that the world’s leaders organize big events to time well with the Davos meeting. Tunisia and Egypt are examples of a new species of revolution based on social media. Traditional revolutions have a leadership and are positioned to take power with popular support. The new “wiki revolutions” are so explosive and happen so fast, that there is no clear vanguard to take power, leaving a vacuum. The vacuums that result pose significant challenges for everyone who cares about moving from oppression, dictatorship and fundamentalism to openness, democracy and 21st century governments. Appropriately, Tunisia’s so-called Jasmine Revolution was hailed by many as a model of social and democratic revolution in the Arab world. “We are going to leverage social media to build a horizontal democracy rather than a vertical democracy,” said Yassine Brahim, Tunisia’s new minister of infrastructure and transport. The new governor of Tunisia’s central bank, Mustapha Kamel Nabli, went to Davos to reassure attendees and the international media that Tunisia was getting back to business as normal. Nabli said Tunisia plans to move forward following the toppling of President Zine al-Abidine Ben Ali. “The situation is stabilizing and security is back. This means that democracy has taken root. We have come a long way. People had had such depressed feelings for so long that something had to break — which was fear of the regime. When it was removed everything happened very quickly.” “I would like to convey to investors that that the country has returned to business. Democracy is good for investment,” Nabli said. Foreign companies will be “doing business in a much more favorable environment.” He promised corruption would be replaced with transparency, and asked international investors not to flee the country or speculate in ways that would hurt the economy. Yes, everyone was left wondering: what country is next? And how will each of these wiki revolutions play out? 2. Bifurcated Norms for the New Realities The theme of Davos was “Shared Norms for the New Realities.” It reflects what the Forum organizers say is the top global issue: The world is increasingly complex and interconnected, and, at the same time, experiencing an erosion of common values and principles. This undermines the public’s trust in leadership, which in turn threatens economic growth and political stability. In the words of the WEF’s founder Klaus Schwab, we need to “concentrate on defining the new reality and discuss which shared norms are required for making global cooperation possible in this new age.” Compared to previous Forum meetings, there is growing awareness by corporate executives that business can’t succeed in a world that is failing. Environmental sessions at Davos used to be attended by environmentalists only. Now the participation is much broader. This year serious business leaders spoke convincingly of their responsibilities for helping develop a globally sustainable economy. A broad cross-section of business leaders spoke of the urgency of helping Africa. I chaired two sessions. The first was “Rethinking our Institutions for the New Realities.” The second was about how young people around the world share a positive new culture and set of norms, but were bumping up against “old models.” At both sessions there was a rich, sometimes exhilarating discussion about the need for change. But when it comes to norms being shared we’ve got a long way to go. In fact, a bifurcation is underway. Many CEOs, government leaders, economists and media still view the world in traditional ways. The biggest disconnect was about the state of the global economy. Many executives are quite comfortable with the status quo. They think the financial and economic crisis is over and that we’re now coming out of a predictable and traditional business cycle. Implicit in this view is that there are no truly new realities, just variations on the age old business rhythms. According to the typical CEO, especially bankers, all is well. Profits are good and bonuses can’t be far behind. It was reported last week that the top five U.S. banks will pay staff a combined $119 billion for 2010, up 4 percent from 2009. Nevertheless, bankers insist the proper tonic for other sectors of the economy is austerity. Writing from Davos for States News Service, Simon Johnson noted that “Leading bankers, in particular, insisted on the paramount importance of providing unlimited government support to their sector during 2008-09; now they insist with equal or greater vigor that support to all other parts of society be curtailed.” These business leaders are trying to turn back the clock. When they see any signs of improvement they have a natural inclination to fall back on old ways and conclude it is business as usual. This is a big problem. Those who say the global economic crisis is over are wishful thinkers with a false sense of comfort. There were bifurcated norms on many of the issues discussed. Some were uneasy at the uprising in Egypt, insisting this was bad news and that such instability would be harmful for business. They preferred the old paradigm where the West supports any government — including despots and tyrants — if it suits the West’s strategic interests. This was in sharp contrast to those who saws Egypt’s turmoil as an opportunity for democracy, social justice and economic prosperity. They believe that the main problem for economic growth in the Mid-East is that it is run by despots who act as a brake on their local economies. They agree with the young people tweeting from Tunisia and Egypt that “Democracy is good for business.” 3. A New Era of Global Risks We haven’t come to grips with what it means to live in a networked and increasingly interdependent world. There are traditional risks like nuclear war, terrorism, climate change, infectious diseases, economic crisis and failed states. But new risks are emerging everywhere. Consider something as seemingly mundane as the global supply chain. The vast networks that provide the world with food, clothing, fuel and other necessities could handle an Iceland volcano and one other catastrophe like the failure of the Panama Canal. But according to experts, a third simultaneous disaster would collapse the system. People around the world would stop getting food and water, leading to unthinkable social unrest and even a disintegration of civilized society. By tackling this issue, the Forum is filling a void that no other organization addresses. It gets people talking constructively, in sharp contrast to the recent failures of other bodies such as the Doha Development Round of the World Trade Organization and the Copenhagen Conference on climate change. This year the Forum inaugurated a Risk Response Network. Risk Officers from top corporations, governments and international organizations will be brought together online. They will draw on insights from the Forum’s communities and contributors, including expert Forum working groups and a network of the world’s top universities. If some new global crisis arises, these leaders could spring to action on a secure network, drawing on insights from the any of the Forum’s 50 communities. It is hoped that rather than just reacting to unanticipated problems like the European Sovereign Debt Crisis, leaders could be more proactive and take preventive action. Chancellor of Germany Angela Merkel warned participants against being complacent about the risks of a further financial crisis, saying that the international mechanisms needed to prevent another crash are not yet in place. She stressed that Germany stands firmly behind the Euro and will continue to defend the currency. 4. For Growth to be Sustainable it must be Inclusive In the Davos wrap-up communiqué this was one of four themes, but again there were big differences in the views of participants. Some CEOs don’t really care, believing that the world economy can continue to grow without concern for how the wealth is shared. As far as they were concerned, the global economy is back on track and business is back to usual. I said you can’t call it a recovery if it’s not inclusive. The people at the very bottom aren’t benefiting. Huge parts of the world are mired in economic stagnation. This has huge risks, as is illustrated by the developments in Egypt and Tunisia. In one television interview I argued that we’re in more than a global slump. The journalist challenged me, saying “what slump – economy is doing great, already running at 4 percent growth.” I replied that he should tell that to the millions of young people who are unemployed – to them the term jobless recovery is an oxymoron. The incident was reflective of the divide. United Nations Secretary-General Ban Ki-moon said that a “revolution” is urgently needed in thinking and policy to bring about sustainable economic growth that can both protect the environment and raise living standards. Chanda Kochhar, managing director and chief executive officer of the ICICI Bank of India, said we will only make growth sustainable “if we make our growth inclusive.” Greek Prime Minister George Papandreou said there had been a “race to the top” among the rich. More and more wealth was concentrated in fewer hands, while the middle and working classes were being forced to make do with less and less. Despite the well-meaning concern, there was inadequate about how to achieve inclusive growth. In the United States 80 percent of new private sector jobs come from companies less than 5 year old. But smaller companies are having a tough time. There is lower demand due to recession and some behavioral change from consumers along with very high levels of uncertainty in the economy. There is a credit crunch as banks are not lending money and there is a lack of venture funding. Internationally the situation is ever more complicated. These problems need to be addressed with fresh thinking. 5. The Potential of a New Global Youth Radicalization As the events of Tunisia and Egypt unfolded I became convinced that a new youth radicalization is underway. First, there is a massive generation of young people coming of age. Born between 1977 and 1997, the children of the baby boom in North America outnumber their parents. The echo is larger than the boom itself. In South America the demographic bulge is huge, and even bigger in Africa, the Mideast and Asia. A majority of people in the world are under the age of 30 and a whopping 27% under the age of 15. Second, despite the digital divide, this generation is the first to grow up digital. They have been bathed in bits; computers, the internet, and interactive technologies are a fundamental part of the experience of youth. To them, technology is like the air. When young people today use digital devices, they are interacting, searching, authenticating, remembering, collaborating, composing their thoughts, and organizing information. They interact with the media and know how to inform themselves and use technology to get things done. Third, as they become adults, they are entering a world that is broken. Youth unemployment is high around the world. In Spain more than 40 percent of young people are without work. In France the rate is over 20 percent. Many failing institutions are in need of reform. Throughout the Mideast there are undemocratic regimes with few human rights. Women want to be part of the work force but in many countries are denied full opportunities to do so. Put these three factors together and there is a perfect storm brewing. During the 1960s there was a generation gap where young people and their parents had different attitudes towards many things, from civil rights and women’s role in society to war. The youth radicalization of the time brought about significant changes in society, among them the end of the war in Vietnam. But this time is different. Today a huge, deeply frustrated generation has at their fingertips the most powerful tool ever for finding out what’s going on, informing others and organizing collective responses. The leaders of Iran, Tunisia, Egypt , Syria, Saudi Arabia or even China can take steps to prevent them from communicating with new media, but ultimately this will not work. Turning off the Internet, as Egypt has tried to do, only broadens dissent as outlying nodes on the human network become engaged and for everyone the best way to communicate is to come into the streets. Further, as the Internet becomes an essential part of the economy’s infrastructure, shutting it down is akin to self-inflicting a general strike. 6. Oblivious Bankers Take the Offensive At last year’s meeting, the prevailing mood was that banks needed to be reined in, the sooner the better. US banking executives used to be the stars of Davos, but the last two years they were a low-key, humble and dour-looking group. I remember my wife and I attended the reception one of the world’s largest financial institutions and were greeted with eerie enthusiasm by a welcoming line of the CEO several of his top execs. They stood at the door in a wedding-style line greeting, thanking every guest. They were just delighted to have some new faces at their sparsely attended event. Even the Wall Street Journal reported that an international backlash at Davos has “bankers are on the run.” What a difference one year can make. In private, and sometimes in public, top bankers were hitting back, warning that the mind-set of increased regulation was jeopardizing the economic recovery without making the system any safer. The Times (UK) reported that Jamie Dimon, the chief executive of JP Morgan Chase, led the attack, which provoked a furious response from French President Nicolas Sarkozy. Gary Cohn, No 2 at Goldman Sachs, warned the new rules would merely ensure that the next crisis was in the unregulated world. The Times also reported that people close to Tim Geithner were privately exasperated by Cohn, even before it emerged that his boss Lloyd Blankfein’s compensation had been a salary of $2 million and $12.6 million in shares. 7. Asia, Asia and More Asia When it comes to talk about the Asian Tigers, India displaced China this year, including hosting the final gala that was a technological and cultural tour de force. But the region’s biggest individual star was Russia’s President Dmitry Medvedev, whose speech notes were conspicuously on an iPad. Obama might have to stand down as the Internet President. Medvedev presented ten reasons investors should flock to Russia and it was impressive. The government has begun an unprecedented economic modernization program, including uniform regulation to make it attractive to investors. Russia hopes to join the WTO and OECD and is working to establish a common economic area with the European Union. The government is promoting innovative joint ventures as part of a massive technological modernization program and a great number of enterprises will be working on the development of Russia’s Innovation Center Skolkovo. The Russian government will also pass laws to protect intellectual property rights. The country is striving to be more energy efficient and implementing programs to expand broadband technology throughout the country. In the next ten years, thousands of Russia’s leading minds will receive masters and doctorate degrees in the world’s top institutions and will take leadership roles in Russia’s economic development strategy. Finally, the country has launched large scale infrastructure projects, including having obtained the right to host major global sporting events. Medvedev’s speech came just two days after the deadly terrorist attack on Moscow’s Domodedovo airport. Medvedev told attendees that “All our efforts to further develop the world economy will be for nothing if we fail to defeat terrorism, extremism and intolerance, and if we fail to eradicate altogether these evils which are the greatest danger to mankind.” Indonesia, the world’s fourth most populous country, also considerable buzz. Indonesian President Susilo Bambang Yudhoyono attended the Forum along with a number of his ministers and senior officials. Indonesia has a lot of poverty, and Yudhoyono warned about the fallout of recent increases in food and energy prices, which “impact inflation and poverty, and could lead to social and political unrest.” Yudhoyono also used Davos to network. “In terms of investment, Davos is an extraordinary place for us to build networks because this forum is attended by more than 1,000 chief executive officers from more than 1,000 companies,” Trade Minister Mari Elka Pengestu said. But in the talk of India surpassing China as the world’s economic juggernaut was most interesting to me. India has the advantages of being a more open and less hierarchical society. China’s disciplined command-and-control style work force could ultimately be trumped by a massive force of Indian professionals who are creative, collaborative, entrepreneurial and life- long learners. 8. Crippling Sovereign Debt Almost everywhere countries, regional states and cities are in debt. Many thought prior to Davos that this would be one of the Forum’s biggest issues, but it wasn’t. Nevertheless, the increasing reliance on borrowed money to sustain government expenditures was referenced often. It’s easy to see why. The debt/GDP ratio for the Eurozone is a startling 85 percent, but the situation is worse in the US. The Congressional Budget Office estimates that the US debt/GDP ratio will continue to rise this decade and next, reaching 200 per cent around 2030. The highest debt to GDP ratio the US has experienced was 109 percent just after World War II. The deficit headache will get worse as baby boomers retire and social security pay-outs increase. But in the US, it’s not just the federal government that has problems. Of the 50 US states, 48 ran deficits in fiscal 2010. Federal stimulus funds to the states will run out 2012, so it’s possible that more than one state will default. So might a number of cities. Taken together, state and municipal debt is more than $2 trillion. It’s not clear to me how this global problem will be solved. The irresistible force to cut government spending is confronted with the immovable object of essential services, entitlements, military spending and extraordinary expenditures stemming from corporate bailouts and fiscal stimulation. Many Tea Party members just elected to Congress have vowed to cut government spending come hell or high water, despite warnings this may wreak havoc with the US and global economy. 9. Progress on New Models of Global Problem Solving The World Economic Forum is quickly morphing from a once-a-year talkathon into a year-round network of leaders and leading thinkers tackling global problems – from think tank to do tank. Nature hates a vacuum, and new networks are expanding to fill a void in our systems for global cooperation. The forum itself is an example, getting people acting constructively, in sharp contrast to the recent failures of other bodies such as the Doha Development Round of the World Trade Organization and the Cancun or Copenhagen Conferences on climate change. The world is organized around nation states based on national economies and that is unlikely to change in the foreseeable future. The idea of national sovereignty was initiated hundreds of years ago with the Treaty of Westphalia of 1648 and persists today. After the second world was there were many bold initiatives to create better systems of global cooperation, including Breton Woods, The United Nations, The General Agreement of Trades and Tariffs (GATT), the World Trade Organization and now the G8 and G20. But these international systems for cooperation are failing in achieving world goals of economic growth, climate protection, poverty eradication, conflict avoidance, human security and promotion of shared values. What’s needed is a Wikinomics approach — embracing more agile, networked structures enabled by global networks for new kinds of collaboration. Nation states would continue to play a central role but can overcome their silo thinking and behavior by sharing information more effectively, cooperating on real-time networks, and basing their decisions more deeply in the processes of multi-stakeholder networks. But how would this new, networked system of global cooperation work? There are many tough issues. How would these vast multi-stakeholder networks achieve legitimacy? How could they be held accountable? How would they interact with existing structures? How would participation be achieved? What should existing governments and other institutions do to embrace global networked cooperation and problem solving? 10. The Internet Does Change Everything, including Davos Understandably social media, mobility and the relentless digital revolution continues to drive change and cause concern in everything from intellectual property to youth revolutions. One striking indication is that Davos (really) embracing social media and consequentially opening up. The Forum wants to shake its elitist reputation and be seen as an open venue for global debate. But not everyone who wants to participate in the discussions can make their way to this small Swiss town. So Forum officials have arranged the next best thing: participating in Davos via social media. The newly established Social Media Corner was a hub of activity. Most of the major sessions were streamed live online and then posted on YouTube. WEF officials say that more than 42.000 people watched the sessions live, and the YouTube recordings were watched more than 60,000 times. Press conferences were also streamed live and viewers could submit questions to those in the press conference. “Ask a Leader” series put questions from the general public to participants. More than 120 participants uploaded a video response directly to the person who submitted the question via YouTube. The videos were viewed more than 20,000 times over the 5 days. Randi Zuckerberg from Facebook hosted Live Stream interviews with crowdsourced questions with participants ranging from Kumi Naido to Paulo Cheolo to John Kerry to Bono. More than 104,000 people watched the live interviews during the 5 days. More than 400 Davos participants were on the official Twitter list, including Presidents, Prime Ministers and top business leaders. The hash tags #WEF and #Davos were mentioned more than 65,000 times on Twitter. The Forum blog, featuring 50 guest posts from participants was read more than 21,000 times. The Forum is serious in wanting to be less elitist. This year’s social media innovations were a good start.

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Ron Ashkenas: Is Your Calendar Managing You?

February 3, 2011

Cross-posted from Harvard Business Online Not long ago, I was talking with a senior executive who was frustrated that some of her high priority initiatives were not moving fast enough. After exploring various reasons for the slow uptake, I asked her to look at her calendar and calculate the amount of time she personally spent on these initiatives. The answer shocked her: a grand total of two hours over the course of two months, and this was being generous. In my years of consulting, I’ve found that this disconnect between stated priorities and the actual allocation of managerial time is extremely common, and often happens without the manager even realizing it. The only exception is during a crisis or in the face of an impending deadline — when somehow the use of time magically shifts to match the short-term priority. But in the absence of crisis, managers’ schedules fill up with all sorts of lower-value activities that water down the focus on high-priority projects, change efforts, or opportunities. In fairness to managers, they probably shouldn’t be spending as much personal time on high-priority initiatives as their subordinates, to whom they may have delegated all or part of the responsibilities. But delegating is not an excuse for disappearing. If a manager like the one mentioned above wants to see progress, she needs to visibly demonstrate support for the initiative, run interference with other related groups in the company, coach the designated leaders, create a sense of urgency , and make decisions. These, and many other activities, take time. And although most managers know that they should make this commitment, they still don’t. I’ve written previously about some of the psychological dynamics of why managers spend their time on low-value activities . Through the years I’ve found that there is a very tactical, but unconscious, trap that many managers fall into: They let their calendars manage them. If you are a manager, think about how your daily, weekly, monthly, and yearly schedule is constructed. First there are corporate or divisional meetings — essentially command performances — in addition to the standing and ad-hoc meetings called by your boss. Many of these are dictated by the rhythms of corporate processes such as strategic planning, budgeting, and performance management — and include countless other preparatory meetings. Of course if you are an operational manager or running a team, you also have to schedule your own meetings: staff meetings, one-on-ones, town meetings, visits to key locations, and more. Somewhere in this mix are interactions with customers, either external or internal, depending on your job. You may also be invited to staff meetings and various project review meetings which may or may not be about your own priorities. If this is not enough, many managers also attend industry conferences and briefings, leadership workshops, or other developmental events. On top of all this is the time required to actually accomplish your day-to-day job — reviewing reports, reading spreadsheets, preparing and modifying presentations, and the like. Finally — if you’re really well-organized — you might devote a little time to “thinking and planning” (although not much in the formal sense), your family, and other non-work pursuits. Collectively, the demands we face at work are daunting and require constant juggling and trade-offs. For senior people much of this juggling is done by an executive assistant and/or chief of staff, while middle or junior managers do it themselves, often with the assistance of electronic scheduling that automatically puts meetings on the calendar. Unfortunately, neither method substitutes for thoughtful prioritization by the manager herself. Without such prioritization, the outcome is often a schedule that bounces managers from meeting to meeting, trip to trip, and requirement to requirement — without a sense of how to add the most value. If you are concerned that your calendar is managing you, here’s how to start taking back control. First, do a calendar analysis. Examine the events and activities described above that apply to you, and find out how much time you are really spending on the areas where your presence will make a difference. If that’s not enough, conduct a zero-based reconstruction of your calendar to reflect a better balance of value-adding time. To do this, start by designating specific times that you will devote to your highest priorities, even if you’re not sure how you will use those times. If you find later that you won’t need all of those slots, you can change them. But if you don’t save them now, you’ll lose that choice. Next, build your calendar from the ground up. Add in the mandatory meetings that you have to attend that also add value, such as decision-making meetings or customer visits. Finally, go through the calendar and create a list of recurring meetings and other activities that seem to create less (or no) value. For each of these, ask yourself: Is the activity or meeting needed at all? If needed, do I need to attend or can I designate someone else? Can this be done less frequently? Can it be done in a different way that will require less time? These tough questions may be worth addressing with your boss, your team, or with a coach. But if you don’t address them, and continually try to zero-base your schedule, it will end up managing you (instead of the other way around). How do you get more control over your time?

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Eboo Patel: Davos: The Global Village and the Local Community

January 26, 2011

The World Economic Forum — like the Clinton Global Initiative, the TED Conference, the Aspen Ideas Festival and other such global confabs — is a carnival of ideas, opportunities, dreams and confessions. It’s less manic than CGI, not quite as laid back as TED, but definitely part of the same family. And it has the added distinction of being, as far as I can tell at least, the Mothership — the event that launched the pattern in which the global meritocratic elite would gather together face-to-face to discuss a wide-ranging, even eclectic agenda. Clinton very definitely shaped his conference to be Davos-like (with the added layer of the attendees making “commitments” to do good works in the world), and while TED began life with a smaller and quirkier dream, it has morphed under Chris Anderson’s leadership to rival (in talent and ideas at least) any other gathering on the planet. Other major conferences tend to gather a narrower range of people to talk about a single subject (the World Health Organization) or have become so unwieldy as to be impossible to navigate (most UN gatherings). The World Economic Forum and its close cousins are different, and professor Klaus Schwab, the founder, knows it. In his introductory session for Davos newbies, he explained the big idea and how it came about. As a Management Professor, he advanced something called “stakeholder theory” – the idea that companies are not just responsible to their shareholders but to a broader range of stakeholders. If such stakeholders gathered to discuss issues, shape a common agenda and find resonances, not only would the company be stronger, but society would be better. Schwab wrote a book about the idea in 1970, and then decided that he wanted to build a platform to try putting it into practice. The first World Economic Forum took place in 1971. The result, 40 years later – a conference that CEOs, presidents and prime ministers feel like they have to come to, and that some happily pay literally hundreds of thousands of dollars to attend – is nothing short of astonishing. The people who come to the World Economic Forum are segmented into different communities – government leaders, media leaders, strategic partners (which are basically Fortune 500 companies, and are the ones who pay the big bucks to attend). Over time, Schwab has added other key communities — technology pioneers, young global leaders, social entrepreneurs, global growth companies (which are going to be the future Fortune 500 and are largely in China). The list of communities shows that he’s a man who is on the cutting edge without being faddish. All in all, it’s a reasonable representation of many of the groups who make things happen at the global level in our world. The more I thought about it, the more I realize that the core idea — and this is not a criticism, simply an observation — is quite old and simple: a healthy social ecology gathers its various segments every so often to bat around ideas, address recurring problems and shape a to-do list for the year or ten ahead. It’s old-school community development really, something that good alderman do in their neighborhoods and good mayors do in their cities: gather the shopkeepers and real estate developers and homeowners and cops and kids and teachers and say, “So what’s this neighborhood going to be about next year?” The fact that Professor Schwab came out of the management world simply means that his scope was global and his network was CEOs. Comparing Davos to a local community development meeting will inevitably bring up local/global issues. The image is so crystal clear it begs to be said out loud. Isn’t it quaint that a slice of the world’s ecology gathers in a Swiss hamlet to engage face-to-face. It makes that global village metaphor feel so, well, real. I wish. In a smart Atlantic piece, Chrystia Freeland explains the rub: “Today’s global super-rich are increasingly a nation unto themselves.” They move their companies where their customers are (increasingly Asia), they can’t find their way around their hometowns because they are so infrequently at home. If lifting people into the middle class in India with jobs and goods means someone has to fall out of the middle class in Indiana, well, that’s globalization. One of the reasons for the increase in the number of World Economic Forum-type events is because the group that gathers here likes to be together. The down-low on Davos is that the really exciting events – the soirees, the nightcaps, the endless-discussion dinners — happen after 10 p.m., like in a college dorm. Leading up to the World Economic Forum, I got dozens of e-mails advertising various late-night social events, and almost nothing touting the formal agenda during the day. These people like to socialize with each other. This is their community. Look, nobody expects the CEO of Citi to walk to work, become president of the PTA and support the neighborhood Little League team. But there was a time that great companies were proud of the cities they were based in. That meant something for jobs, neighborhoods, art museums, local charities. Are those days numbered? Interesting that a stakeholder-driven, community-development-like approach to shaping an agenda for a globalized world could hold such dangerous consequences for local communities. (This piece is re-posted from the Washington Post .)

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Don Tapscott: Davos 2011: Davos Becoming a Year-Round Network to Tackle Global Problems

January 26, 2011

Davos, Switzerland — The World Economic Forum is quickly morphing from a once-a-year talkathon into a year-round network of leaders and leading thinkers tackling global problems. Nature hates a vacuum, and the Forum is expanding to fill a void in our systems for global cooperation. It gets people acting constructively, in sharp contrast to the recent failures of other bodies such as the Doha Development Round of the World Trade Organization and the Cancun or Copenhagen Conferences on climate change. It also fills a special role in bringing together the leaders of the Asian “Tiger Countries” into dialogue with the West — something no one else is doing well. We need such networks for dialogue and for launching important initiatives. True, no one “elected” the Forum to try and solve global problems. But increasingly legitimacy flows to those who actually accomplish things and most participants would say that the Forum is doing just that. For example, over the last two years a thousand leading thinkers have been collaborating in 72 so-called Global Agenda Councils, rethinking many aspects of society from poverty to the future of government. One group of legal scholars has a modest little project — rethinking the global legal system, which they argue is “no longer fit for function.” These councils meet several times a year and collaborate between meetings on a global technology platform developed by the Forum. Many of the recommendations from these councils have been implemented by governments and corporations and some important initiatives have been catalyzed. One of these, the Global Risk Response Network to be launched here this week, addresses a new set of emerging risks that threaten the global economy, society and even the very existence of humanity. Failure of the financial system, weapons of mass destruction, new communicable diseases, collapse of environmental systems, water security and 20 other possibilities make the world a volatile place subject to significant and potentially catastrophic risks. Consider something as seemingly mundane as the global supply chain. The vast networks that provide the world with food, clothing, fuel and other necessities could handle an Iceland volcano and one other catastrophe such as the failure of the Panama Canal. But according to experts, a third simultaneous disaster would collapse the system. People around the world would stop getting food and water, leading to unthinkable social unrest. The Risk Network is designed to help corporate, government and civil society leaders better mitigate such risks. The world’s most relevant global decision-makers will be brought together through a community of Risk Officers from top corporations, governments and international organizations. It will draw on insights from the World Economic Forum’s communities and contributors, including expert Forum working groups and a network of the world’s top universities. If a global crisis arises, these leaders could spring to action on a secure network, drawing on insights from any of the Forum’s many communities. More important, rather than just reacting to unanticipated problems like the European sovereign debt crisis, leaders could be more proactive. This approach was informally prototyped during the Haitian earthquake disaster. It wasn’t the United Nations that organized the world’s response to Haiti – it was myriad organizations and individuals that self-organized to save lives and restore order and Haitian society. The informal network of collaborators orchestrated by the Forum was one of these, pointing to the potential of a more disciplined approach. Rather than a typical think tank, the World Economic Forum is becoming a do tank. Don Tapscott recently co-authored Macrowikinomics: Rebooting Business and the World.

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Scott Gerber: What’s The Best Way To Increase The Size Of Your Network?

January 24, 2011

Q: What is the best way to increase the size of my network? How can I get myself and my brand in front of people? –Christina Montgomery, FL The following answers are provided by the Young Entrepreneur Council , an advocacy group founded by serial entrepreneur Scott Gerber that works to take action against youth unemployment by teaching young people how to build successful companies. The council’s members include Generation Y entrepreneurs and experts in a variety of fields. A: Attend Events First, figure out what kind of network you want to build: do you want to meet other entrepreneurs? Marketing thought leaders? Fellow kayak enthusiasts? Then, go to your college alumni e-mail list or even Craigslist, and see whether there are any meet ups in your area. If there are none, think about starting your own group and posting to your college list/Craigslist. Get out there and mingle! –Eric Bahn ( @beatthegmat ), founder of beat the gmat A: Go Out There Make sure that you have business cards with your logo on them with you at all times. Wear a t-shirt with the logo on it. It’s easy and when someone glances at the shirt it opens the door for you to tell them about it. Being out and about you may find customers, future contacts, employees and who knows maybe even someone who might want to work with you. People get to see the brand face to face. –Ashley Bodi ( @businessbeware ), co-founder of Business Beware A: Tap Social Media For Personal Branding The best way to meet new cool people is through a personal introduction from someone already in your network. Ask someone you know if they know someone who you should meet. Most likely they do and would be happy to do an e-mail intro. –Elizabeth Saunders ( @RealLifeE ), founder of Real Life E A: Be A Connector Networking is hard work, not because the interactions are actually difficult, but because it must happen on top of all the other daily tasks your business requires. This makes it easy to stay holed up in your office. I am constantly amazed at how quickly and easily those extra meetings pay off, so be sure to time take for the early breakfast meeting or meet someone for coffee in the afternoon. — Anderson Schoenrock ( @ScanDigital ), co-founder of ScanDigital A: Become An Industry Expert The best way to increase the size of your network is to be active both online and offline in the same places your target audience is active. If your audience is on Twitter, you should be on Twitter. If you audience also attends local Meetups, you should attend local Meetups. The first step is to be there and listen. The second step is to engage. –Heather Huhman ( @heatherhuhman ), founder of Come Recommended A: Leave Your Comfort Zone Sometimes meeting new people is as easy as shooting them an email and inviting them to lunch. When you email a prospective lunchtime consultant, be sure to clearly identify who you are, offer concrete reasons why you are worth the person’s time, list the specific topics you would like to discuss, and throw out at least three potential dates, times and locations. –Scott Gerber ( @askgerber ), founder of Sizzle It!

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Dr. Leslie Gaines-Ross: 8 Ways Reputations Will Change in 2011

December 30, 2010

As Weber Shandwick’s chief reputation strategist, I have decided to join the ranks of the end of the year palm readers and offer my predictions for the next year. Time and time again during the past twelve months, I have been asked to hold my finger up in the air and divine from whence come the changing winds of reputation. My head has filled with reputation-related ahahs and hunches. Now is my chance to let it all out. So here is my list of what to look for in 2011. 1. Hijacked Reputations: As increasingly more information gets leaked, mismanaged and corrupted via the Internet and otherwise, more and more companies will suffer as a result. Repairing such reputational damage will not be easy — what used to be 15 minutes of shame may now last forever on the Internet. The best antidote will be, as it always has been, being prepared beforehand to act quickly, decisively and transparently. 2. Reputation Recoverers Anonymous: The prevailing trend for 2011 will be reputation recovery. As the “stumble rate” increases (Weber Shandwick regularly measures this), so does the rate at which many companies will pick themselves up and rejoin the race. Trophies will increasingly be handed out to CEOs who lead their companies back from worse to first. In 2005, there were 455,000 search mentions of reputation recovery. Five years later, that number has soared to nearly 2, 500,000 mentions. Reputation rehab is a new industry to watch. 3. Reputation Warfare. Reputation warfare will expand and intensify. Enabled by the Internet and social media, individuals and small groups will continue to rise up and take greater control of reputations by slinging criticism, some valid, against companies and other entities. Adopting strategies on how to better leverage and counter these reputation insurgents will be essential (See my article on Reputation Warfare in Harvard Business Review for more insights). The release of confidential U.S. embassy cables via WikiLeaks is only the most conspicuous of these attacks. It will become apparent in the year to come that WikiLeaks was only the tip of the iceberg. 4. Online Reputation Revisionism. Further advances will be made in establishing a workable system of erasing or amending unfairly disparaged online reputations. One such particularly promising idea is likely to be at the forefront: a one-time only policy that grants social amnesty to young adults turning 21 who are about to enter the workforce. Google’s CEO Eric Schmidt hinted at the wisdom of this kind of social amnesia: “every young person one day will be entitled automatically to change his or her name on reaching adulthood in order to disown youthful hijinks stored on their friends’ social media sites.” The day will come, maybe not next year but soon, when a communally agreeable system of “social amnesia” will arise. We can expect increasing discussion in 2011 on what form that system will take, since the need for one is critical. 5. Ascendancy of Social CEOs: Chief executives will increasingly join the 21st century, expanding their use of various online channels to burnish their company reputations, including writing or participating in internal blogs, telling the company story at conferences and on corporate YouTube channels and being interviewed by journalists on online media channels. The socialization of CEOs has begun and will continue in 2011. 6. Reputation Blacklisting: List mania will continue to expand. Every day new rankings and league tables are born: best companies to work for, best companies to launch a career, best companies for hourly workers, best companies for C-level executives. These rankings help companies build and differentiate their reputations through third-party endorsements. In the year ahead, however, we can also expect the long overdue but inevitable reaction to such “best of” lists. Look for more reputation “blacklists” to sprout and then propagate – for example, worst companies for women to work for, worst companies for training and least socially responsible companies. 7. Reputation Risk Insurance: After a year of reputation scandals and downfalls, now would be the time for reputation risk insurance to firmly take hold. Several large insurance brokers already cover reputational damage as part of their directors’ and officers’ liability insurance (D&O) designed to shield board members from shareholder law suits. A more expansive reputation-based product is due that would compensate companies whose reputations have taken a hit whether offline or online and caused them to suffer declining sales, additional marketing and public relations expense and other reputational fallout. 8. The Corporate Brand Rises: In the next year, companies which own a portfolio of individual brands will focus more intensely on developing the reputation of the parent corporation, not just the individual brands. Consumers have access to a dizzying array of information. Even the most unsophisticated consumer can now easily identify the company standing behind any brand. If the parent company’s reputation is strong, known for treating its employees well, being transparent and sustainable, and having good leadership, consumers are more likely to make a purchase and then tell their friends about it. We will revisit these trends as next year closes and 2012 awaits us.

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$12 Billion Hedge Fund Has Its Own Unofficial Golf Pro

November 18, 2010

NEW YORK (By Matthew Goldstein) – Sam Evans may not have the most powerful or lucrative position in the hedge fund world. But his job at SAC Capital Advisors is one a lot of people, and not just financial industry types, would die for. Unlike his co-workers, the hundreds of traders and analysts who work at Steven Cohen’s $12 billion hedge fund, Evans does not stare at computer screens, map out stock charts or work the phones for information on the markets all day. Rather, he spends much of his time negotiating the greens — quite literally. Evans, 49, who joined Cohen’s Stamford, Connecticut-based firm in August 2009 after more than 20 years as an institutional stock broker, is SAC Capital’s unofficial golf pro. Evans job isn’t so much helping SAC Capital portfolio managers and others at the fund with their strokes, as it is helping them gain a better understanding of some of the companies Cohen’s hedge fund puts money into. As part of the hedge fund’s business development group, he sets up dozens of golf outings for SAC Capital traders and analysts over the course of a year. Guests at these small gatherings are varied, say investment bank sources familiar with Evans’ job description. Invitees might be wealthy individuals from whom Cohen is trying to raise money. Or they might be corporate executives with companies about which the hedge fund is trying learn more. A handful of SAC Capital employees and Wall Street analysts may also tag along from time to time. An amateur golfer with a respectable 7-stroke handicap, Evans has found a unique way to marry his golf skills with the big rolodex of corporate executives he struck up friendships with during his time at Donaldson Lufkin Jenrette and more recently Deutsche Bank. A member of more than a half dozen prestigious East Coast golf clubs, Evans has played with an elite group over the years, including former President Bill Clinton. Now there is nothing unusual about brokers, traders and business executives spending a lot of their free time teeing off on the links. Many a corporate merger has been agreed to in principle on the back nine. And Wall Street investment firms are famous for sponsoring charity golf outings that are widely attended by hedge fund traders, mutual fund managers and corporate executives. Investment firms and mutual funds often arrange similar “corporate access” events — typically conferences and dinners — where money managers and analysts are invited to meet and schmooze with business leaders. Yet, the ability of a big hedge fund to get several hours alone with a corporate executive on a golf course reveals the great information disparity that exists between ordinary investors and the savviest of traders. “To some extent, the notion of a level playing field and a truly public market is a myth,” said Donald Langevoort, a Georgetown University Law Center professor. SOMEBODY’S GOT TO DO IT What’s clear is that there aren’t many on Wall Street, much less at a hedge fund, like Evans, who gets paid to play golf three or four times a week with corporate executives and other rich people at historic courses like Merion Golf Club in suburban Philadelphia or Shinnecock Hills Golf Club on Long Island. In fact, one person who knows Evans and has golfed with him calls him something of a “pioneer” in the $1.7 trillion hedge fund industry. Others, upon learning of Evans and his unusual post, expressed a sentiment similar to the one stated by the manager of another hedge fund: “How do I get a job like that?” Evans, a 1987 Harvard Business School graduate who was named one of Wall Street’s top institutional equity salesmen in a Reuters survey in 2000, declined to comment through an SAC Capital spokesman. Like his boss, Cohen, he appears to guard his privacy vigorously — a fairly intensive Internet search for a picture of him on the links came up empty. Jonathan Gasthalter, SAC’s spokesman, also declined to discuss Cohen’s decision to hire Evans and his unusual corporate role. To some degree, Evans may owe his job to the new reality hedge fund managers find themselves in following the worst financial crisis in decades. Today, even the industry’s most successful managers must work harder than ever to woo new investors and keep current ones from bolting. But beyond the need to raise capital, Evans’ time spent on the greens also sheds a light on the many often subtle ways that hedge funds use to get access to corporate executives and a potential edge over their competitors. “While this job sounds unique, it is my understanding there are a lot of people with jobs at hedge funds who are there to help facilitate information flow,” said Jill Fisch, a University of Pennsylvania Law School professor, who specializes in corporate governance issues. “The whole goal at a hedge fund is to have an information edge.” PAR FOR THE COURSE Securities experts said there’s nothing inherently wrong with a hedge fund organizing small golf outings for its traders and analysts to meet with corporate executives in order to get to know a company or an industry better. That is the kind of fundamental research and basic information gathering that often separates one hedge fund from the other. But securities lawyers said there is always a concern that in a casual setting like playing three hours of golf, a company executive may blurt out some confidential corporate information and the hedge fund later trades on it. “The potential issues are fairly obvious because these are events where there is unlikely to be strong compliance control,” said Langevoort, the Georgetown professor. “Everybody knows in their head what the rules are. But when you go out in one of these settings it is easy to slip.” A securities lawyer in New York, who did not want to be identified because he and his law firm do a lot of regulatory defense work for Wall Street investment firms, said concern about the leaking of confidential information is always greatest when traders and executives gather in more intimate settings as opposed to some well-attended public event like a football or baseball game. In the wake of the October 16 2009 arrest of Galleon Group co-founder Raj Rajaratnam and nearly two-dozen others on insider trading charges, federal authorities have said stamping out the misuse of secret corporate information by hedge funds is a major priority. Authorities are particularly focused on the ways hedge funds gather information to get a so-called trading edge. The Galleon investigation also has caused headaches for Cohen because several people charged in the case had once worked at SAC Capital. But so far no one has been charged with wrongful trading while working at Cohen’s fund. CHIP SHOTS To be sure, there’s no indication that the golf excursions arranged by Evans have raised any concerns with regulators or federal authorities. People familiar with them said Evans’ main task is to set up golf dates with corporate executives to help cement better relationships, not unearth confidential corporate information. In fact, SAC Capital takes steps to make sure that even if some executive let his lips flap a bit too much while waiting to hit a putt, the fund doesn’t trade on anything that is said. A former SAC Capital employee familiar with the golf outings said shares of companies whose executives attend a golf outing that Evans has either arranged or co-sponsored are put on a “restricted list” — meaning the stock can’t be traded for a set period of time. In September, for instance, SAC Capital put shares of chemical company DuPont on the restricted list, after Evans and another SAC employee attended a small golf outing with Deutsche chemical analyst David Begleiter and Dupont Chief Financial Officer Nicholas Fanandakis. The outing, which also included a few mutual fund managers, was officially organized by Begleiter. The small outing was held at Merion Golf Club, often rated as one of the top private courses in the United States, because Evans is a member of the 114-year-old club. He and Begleiter became friendly during the nine years Evans worked for Deutsche. Officials with Deutsche and DuPont declined to comment. Chandler Withington, Merion’s assistant golf professional, said in an email that the club does not disclose “information on any of our members without their consent.” In a regulatory filing, SAC Capital reported owning 65,000 shares of DuPont, a rather meager position for a large hedge fund. Evans, a former college swimmer and baseball player at American University, did not take up golf until graduate school. Standing approximately 6’4″ inches tall, he is said to be ambidextrous, able to throw and write with both hands. People who know him say Evans has worked hard to hone his golfing skills, even overcoming a case of Guillain-Barre syndrome in 1994 — an ailment that can cause temporary muscle paralysis. Several of his friends, who did not want to be identified, said Evans values the relationships he made with wealthy individuals and corporate executives while working on Wall Street. They added that he would not do anything to jeopardize the friendships he has made or his reputation. Jack Thompson, an avid golfer who is in the business of raising capital for a number of investment funds, said he sees nothing unusual about using golf as a way to get to know a person or a company. “This is no different than the CEO of some company golfing with customers,” said Thompson. “They are networking and sharing information. It doesn’t mean they are doing anything wrong.” Some on Wall Street said getting face time with a corporate executive on a golf course is akin to a hedge fund throwing a splashy party at a nightclub or renting a cruise boat to entertain guests — something many funds are known to do from time to time. Others point out that many hedge funds work with doctors to get insight on medical industry trends and some even hire private investigators to gather dirt on chief executive officers. For instance, in 2007, William Ackman, the manager of Pershing Square Capital Management, employed an outside consultant to track the corporate plane travel of Ceridian Corp.’s then chairman L. White Matthews. Ackman, in mounting a campaign to push for changes at Ceridian, had charged the company let Matthews misuse the corporate jet by flying seven times in 63 days to his vacation home in Jackson Hole, Wyoming. SHUSH Still, there is something about golf, with its leisurely pace and the tendency of players to turn off their phones and Blackberrys for a while, that can encourage normally tight-lipped people to let their hair down. Over the years, it’s something securities regulators have noticed as well. In 2001, for instance, the Securities and Exchange Commission and federal prosecutors charged a San Diego man with making $137,485 in illegal profits from a confidential tip he got while golfing with the director of a company that was on the verge of being acquired. Federal authorities charged Douglas Gloff with trading on the inside information after the director of Acuson said the company was “going to go away.” Authorities didn’t charge the unnamed director with any wrongdoing after concluding he made a mistake and tried to prevent Gloff from trading on the confidential buyout information. Regulators said the director called Gloff and told him not to buy any Acuson shares “unless you want to go to jail.” Gloff subsequently pleaded guilty to insider trading, forfeited his illicit trading profits and paid a $137,485 fine to the federal government. Still, securities experts say a savvy trader can glean a lot from a long golf game with a company executive even if the talk on the greens has nothing to do with business. They point out that an astute trader can learn a lot from a person’s body language and demeanor. “Sometimes you can watch a person for four hours and get an idea of how things are going at a company,” said Georgetown’s Langevoort. “You can learn a lot from what he doesn’t want to talk about.” Cohen just might be onto something here with the hiring of Evans. As one of the hedge fund industry’s most successful managers for more than two decades, he’s had a reputation for making some groundbreaking hires. SAC Capital was one of the first hedge funds to hire an in-house psychiatrist, Ari Kiev, to talk to stressed traders and analysts. Kiev died last November. Several years ago, Cohen aggressively started adding compliance people to the payroll to make sure traders at the fund do not cross the line. Other big funds have since followed suit. So, who knows? Maybe instead of “2 and 20″ — a typical hedge fund’s management and performance fees — “fore!” will become the industry’s new mantra. (Reported by Matthew Goldstein; Editing by Jim Impoco and Claudia Parsons) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Ron Ashkenas: Why Best Practices Are Hard to Practice

November 12, 2010

Not long ago a senior HR executive confessed to me that her company’s succession planning and talent management processes didn’t work very well. She also expressed frustration that her team had spent countless hours studying other well-known companies and had copied most of the best features, but somehow what worked elsewhere didn’t work for her company. More recently I met with a senior team to share ideas about reducing complexity — and during the course of the conversation I talked about how GE had developed the Work-Out approach to build a culture of simplification. Several of the executives quickly remarked that they had tried Work-Out in their organization already, but it didn’t produce any results. Again, what had worked in one company hadn’t worked in another. It would be easy to say that processes and tools cannot be picked up and moved from one organization to another. After all, each organization is unique — with different markets, commercial forces, structures, histories, leadership , and cultures. But if there weren’t any universals, the sharing and transferring of best practices would be a waste of time, and there would be little learning across companies (or even within companies). But in truth some firms are exceptionally good at “stealing shamelessly.” For example, think of all the companies that have benefited from Toyota’s production model. So why do some organizations succeed at utilizing processes and tools developed elsewhere while others fail? Here are two common pitfalls of applying best practices, and how to avoid them: Lack of adaptation: The first pitfall is the temptation to take on a process or tool without tailoring it to the new environment. Because companies are so different, it is rare that a practice developed in one place can be applied elsewhere without significant customization. This not only requires learning the tool or process, but truly understanding the principles behind it. Practice comprehension calls for hard work — far beyond making road trips or sending a few people for training. For example, some years ago GE’s senior team visited Wal-Mart to learn about its “quick market intelligence” approach. What they found was that dozens of managers from Wal-Mart’s headquarters went out to the field during the week, and would then spend Friday in Bentonville to analyze what they had learned. On Saturday they would share their findings with store managers through a company-wide video-conference. GE took away from this the benefits of capturing and disseminating field data quickly and systematically, but realized that sending managers back and forth wouldn’t work in their businesses. As an alternative, GE developed a QMI process that required business leaders to conduct regular, pre-scheduled group teleconferences between headquarters people and managers who interfaced directly with customers. Each GE business was allowed to adapt the process, based on the nature of the business. Lack of adoption: The second pitfall is to utilize a borrowed process or tool without full leadership support and commitment, as though just having the tool itself will generate the desired results. A former client at GE called this “the difference between doing it and really doing it.” In the succession planning case mentioned above, the HR leader admitted that her people were driving the process instead of line management — so for most people it was a form-filling exercise that led to a nice book, but wasn’t used for making key staffing decisions. In the other company that had unsuccessfully tried the GE Work-Out approach, it turned out that the process was really a glorified brainstorming meeting and that senior managers did not put themselves on the line to make real-time decisions (a key feature of Work-Out) during the sessions. One of the characteristics of great companies is that they actively learn from others. But to be successful at doing this requires more than just identifying and borrowing best practices; it also requires adaptation to your culture and full adoption by your leadership. Without paying attention to these two steps, it is unlikely that best practices will actually be put into practice. How does your company adapt — and adopt — best practices? Cross-posted from Harvard Business Review .

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Patricia Handschiegel: The New Power Girls: Meet The Power Girl Who Is Changing How Brands Market Online

October 5, 2010

Palo Alto, CA is quiet but busy on a late weekday afternoon as I join fellow Power Girl Julia Kung for a business lunch on the outdoor patio of one of the city’s cute restaurants. A half dozen or so dot the “downtown” area of the sleepy town, many of which appear to serve Italian food. As we take our seats and dig into a selection of fresh bread, we are like any other women in the city, having a late lunch. Julia’s in killer gray peep toe ankle boots and a chic, oversized top. I’m in gold Christian Louboutin heels. Our companies were doing business together at the time, but like most Power Girls, business is always peppered with friendships and camaraderie. Today’s new modern women entrepreneurs and executives aren’t just blazing it in business, they’re also cool, fun people you get along with. When it comes to marketing, Julia is the best in the business. A hybrid mix of old and new school practice, with a tech-savvy that’ll blow your social media expert out of the water, Julia’s work is garnering major attention in the business. Her work with Moxsie.com has captured major fashion industry cred like WWD and California Apparel News. In the past year, she’s been invited to speak at prestigious conferences like Internet Retailer. Most marketers today operate under false assumptions, aren’t savvy about page views and analytics, rely on tired, elaborate “call to action” campaigns because they believe that every consumer wants (or has time) to “engage,” etc. When marketing strategy came up among a group of female founders this past week, I couldn’t help but to email Julia to tap her insight. Here’s what she shared: You’re one of the best cross-platform, cross-media marketers I know, particularly on the web. What’s the secret? There is no secret at all. Since Moxsie is a small company and our target demographic is very wired and engaged on many platforms, it’s a no-brainer. Also, the twin limitations of bandwidth and budget mean that we can’t rely solely on traditional marketing and advertising, so we have to get creative and experiment. We’re always willing to be the guinea pig with new technology. I’m impressed by big brands that are able to get corporate buy-in for new media since it’s got to be harder for them to take those risks. Finally, I’d like to emphasize that it all depends on the product. Our site might have all the bells and whistles, and we might promote and cross promote on a billion platforms, but it won’t matter if the independent fashion we sell isn’t appealing. Luckily, we carry the best stuff! Moxsie’s generated tons of traffic and sales through your marketing efforts, what do you feel has been the key/critical piece to your strategy? This’ll be a surprising answer from someone who sells independent fashion, but I think our location has been very key. New York and LA are generally considered the US fashion centers, but Moxsie’s location in the Bay Area means that we have easy access to a lot of great partners. Polyvore, Kaboodle, Twitter, and TheFind are examples of companies that we’ve established great working relationships with. They like it when we test new products for them, and we like that these products help us drive sales. Also, I’ve been very lucky to hire extraordinary people for the marketing team: (Nathan Zaru and Mayka Mei- check out Mayka’s blog at themaykazine.com). They’re young, eager to learn, and great at multi tasking. Most importantly, they are well versed in new media and have specialized skill sets that encompass the whole range of marketing needs. We’re a very small team, but we’re able to accomplish so much because of this. Companies may feel overwhelmed by all the noise, wide marketplace and reach they can have. How can they remain focused? The marketing mantra is “what’s the goal?” As long as you only use tools and media to accomplish the goals you set out initially, you won’t be distracted. Moxsie created what’s essentially a new niche (indie fashion) — how important is it today for companies to differentiate, especially since there is so much of the same things online? Why would customers come to your site if you’re exactly the same as something that already exists? Moxsie carries accessibly priced independent fashion for men and women, which is already unique. We’ve also made the purchasing experience unique too! For example, you can see a live twitter feed of Moxsie mentions through the twitter-sphere when you’re browsing so you know what sorts of things other people are interested in, during check-out we allow you to choose a charity that we donate a portion of our proceeds to, every purchase from our warehouse is gift-wrapped, and people that purchase from us get special deals that aren’t available to everyone else. These are just some of the ways we make sure that the Moxsie experience is an indelible memory. What do you feel are the online marketing must-haves for companies today? Investment in social media is crucial for B2C companies, and usually very useful for B2B. The basics of marketing and also SEM + SEO are obvious necessities. Probably the most important must-have isn’t any sort of tool, but the right mindset. Marketing should be an adventure! What are some of the mistakes a lot of companies make in marketing online? Never waste an opportunity. This is when I offer anyone who’s read this far into the article a 15% off coupon code on www.moxsie.com- Just use “NEWPOWERGIRLS” in your shopping cart for 15% off. It’ll be live till the end of 2010. Thanks for reading this far people, and may I recommend our women’s shoe and boot selection ? They are to die for. I love that. How important are blogs and media today to online strategy? Are these things still relevant when companies can now reach audiences themselves more than ever? Blogs and media are extraordinarily important! Moxsie stays in touch with a large number of bloggers. We love the blogging community because it’s fun, unfettered, and allows information to be communicated so creatively. Additionally, many of these blogs are influencers not only of consumers but of other media. It all feeds off of each other. Moxsie’s also really great about advertising online — what’s behind your success in it? There is definitely no magic formula here. We’ve done plenty of testing to determine which formats and audiences work best. Since we have a limited budget, we keep our focus narrow and campaigns are always ROI driven. Is there anything companies absolutely should NOT do online? You have to try everything once, right? Can’t be scared of making mistakes. If there’s one don’t, I’d choose Google’s corporate motto of “Don’t be evil.”

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Grant Cardone: Work from Home Successfully

October 5, 2010

Want to work or run your business from home and like the idea of never having to go anywhere, work in your underwear, and do as you please with no one looking over your shoulder? Well, whether you are working for someone else from your home or running your own business from home, there are some things you must know to make a home-run business successful. I have run multiple businesses from a home office for over 20 years. Each of these started out small and grew into something much larger. Each quite different, each requires a different focus and different levels of support. I started my first business when I was 29 from home only because I couldn’t afford an office. In the beginning, I was everything from sales person , sales team, CEO, shipping, receptionist, bookkeeper, and boss. For almost 3 years I worked for less money than I ever had and put in double the hours. I figured out how to make my home business successful and then was able to expand into multiple businesses with partners and employees. Still today I continue to operate a home office with support staff and partners working from traditional offices. With technology what it is today this is becoming more and more a possibility for the self-starter and self-disciplined. And those two traits will be required! There are many benefits to working from home from getting more done, working all hours, reduced travel time, tax advantages, and cost savings but you should beware of the many pitfalls and traps. Some of the problems with working from home are first the blur between work and personal life. Some find themselves unable to get focused on the business at hand and others unable to turn it off. I believe both of these responses are more about the individual than the location of the office. Also many people believe that they will have more freedom working from home and finally be their own boss. This I believe to be an unrealistic expectation. If you aren’t disciplined and a self-starter then working from home is a bad idea. But in this economy, (really any economy) self-discipline and personal motivation is critical no matter where you office. In the beginning, you probably will not have the support of a team and will be doing everything. Also many people run a home business that looks more like a home than a business that others will not take seriously and even you don’t take seriously. Here are some tips you may find beneficial to making your home business successful. 1. Define your spaces and separate work from home. Have a room dedicated for work. This room should not be mixed with family. Set aside a workspace that when you enter it, you are there to work. Your family needs to know this is your office not their home. 2. Set regular hours, and stick to the schedule. This is not a vacation because you are at home, it is work. Tell the kids, “I’m going to work, see you later.” I added one hour to my schedule when I had my first child so I could spend it with my daughter and then each day I also have lunch with them. Then it’s back to my office uninterrupted by family. 3. Prepare as you would any public job. Get dressed, get shaved/makeup and be presentable as a professional as you would in a public office. 4. Have a professional desk and chair. It doesn’t have to be expensive but you need a place to work from that is professional. 5. Private phone number, computer, email address and social media addresses. Do not mix your communication terminals with personal activities. The tools you use to communicate must be professional and set apart from those you use for personal uses. 6. Avoid retreating to family on tough days. This kills people at home because it is easy to retreat into the comfort of your kids, the sofa, TV or refrigerator. It is called work, dig in on tough days and push through! 7. Wear the boss hat. You have to be able to manage yourself by being the boss of you that directs you on what is expected, what has to get accomplished and manage yourself accordingly. 8. Get a predictable start each day. I start with the one hour with my daughter, then exercise, breakfast, shower, get dressed and go straight to my office. When in my office I start by writing my long-term goals, then today’s to do list and then start hammering away at it. 9. Keep statistics. If you don’t keep statistics on yourself it will be very unlikely that you are able to create a successful business. I keep stats on everything; out bound calls, in bound calls, teleconferences, emails, articles written, and the likes so that I can see my activity growing each day. This is also the only way to rationally discover what is working and not working. 10. Use the office after your schedule. One of the advantages of a home office is you can use it more than you would an office away from home. Once I have spent time with my family, then I return to my office at all times during the night when I am inspired. I predict over the next five years there will be an explosion in people working from home due to the massive numbers of unemployed that will last for years, combined with an aging population living longer and unable to retire and then aided by the technology development provided by the internet. Working from home is not for everyone but it does become a great option for the highly disciplined and self-motivated. There are tons of advantages of working from home but you remember that when you go to work from home, you still have to go to work to work! Grant Cardone, NY Times Best Selling Author and Sales Training Expert

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Ellen Brown: Basel III — Tightening the Noose on Credit

September 17, 2010

The stock market shot up on September 13, after new banking regulations were announced called Basel III. Wall Street breathed a sigh of relief. The megabanks, propped up by generous taxpayer bailouts, would have no trouble meeting the new capital requirements, which were lower than expected and would not be fully implemented until 2019. Only the local commercial banks, the ones already struggling to meet capital requirements, would be seriously challenged by the new rules. Unfortunately, these are the banks that make most of the loans to local businesses, which do most of the hiring and producing in the real economy. The Basel III capital requirements were ostensibly designed to prevent a repeat of the 2008 banking collapse, but the new rules fail to address its real cause. Why Basel III Misses the Mark Two years after the 2008 bailout, the economy continues to struggle with a lack of credit, the hallmark of recessions and depressions. Credit (or debt) is issued by banks and is the source of virtually all money today. When credit is not available, there is insufficient money to buy goods or pay salaries, so workers get laid off and businesses shut down, in a vicious spiral of debt and depression. We are still trapped in that spiral today, despite massive “quantitative easing” (essentially money-printing) by the Federal Reserve. The money supply has continued to shrink in 2010 at an alarming rate. In an article in the Financial Times titled “US Money Supply Plunges at 1930s Pace as Obama Eyes Fresh Stimulus,” Ambrose Evans-Pritchard quoted Professor Tim Congdon from International Monetary Research, who warned: The plunge in M3 [the largest measure of the money supply] has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly. In a working paper called “Unconventional Monetary Policies: An Appraisal”, the Bank for International Settlements concurred with Professor Congdon. The authors said, ” The main exogenous [external] constraint on the expansion of credit is minimum capital requirements .” (“Capital” means a bank’s own assets minus its liabilities, as distinguished from its “reserves,” which apply to deposits and can be borrowed from the Federal Reserve or from other banks.) The Bank for International Settlements (BIS) is “the central bankers’ central bank” in Basel, Switzerland; and its Basel Committee on Banking Supervision (BCBS) is responsible for setting capital standards globally. The BIS acknowledges that pressure on banks to meet heightened capital requirements is stagnating economic activity by stagnating credit. Yet in its new banking regulations called Basel III, the BCBS is raising capital requirements. Under the new rules, the mandatory reserve known as Tier 1 capital will be raised from 4 percent to 4.5 percent by 2013 and will reach 6 percent in 2019. Banks will also be required to keep an emergency reserve of 2.5 percent. Why Is the BCBS Raising Capital Requirements When Existing Requirements Are Already Squeezing Credit? Concerns about the credit-tightening effects of Basel III were reported in a September 13 Huffington Post article by Greg Keller and Frank Jordans, who wrote: Bankers and analysts said new global rules could mean less money available to lend to businesses and consumers… European savings banks warned that the new capital requirements could affect their lending by unfairly penalizing small, part-publicly owned institutions. We see the danger that German banks’ ability to give credit could be significantly curtailed,’ said Karl-Heinz Boos, head of the Association of German Public Sector Banks. Insisting that French banks were ‘among those with the greatest capacity to adapt to the new rules,’ the country’s banking federation nevertheless said they were ‘a strong constraint that will inevitably weigh on the financing of the economy, especially the volume and cost of credit.’ Juan Jose Toribio, former executive director at the IMF and now dean of IESE Business School in Madrid, said the rules could hamper the fragile recovery. “‘These are regulations and burdens on bank results that only make sense in times of monetary and credit expansion,” he said. For smaller commercial banks and public sector banks (government-owned banks popular in Europe), the credit-constraining effects of Basel III are a serious problem. But larger banks, said Keller and Jordans, “were quick to praise the agreement and insisted they would meet the required reserves in time.” The larger banks were not worried, because ” The largest U.S. banks are already in compliance with the higher capital standards demanded by Basel III, meaning their customers won’t be directly affected .” Their customers, of course, are mainly large corporations. “Small businesses that rely on borrowing from community banks,” on the other hand, “may be more affected… They will try to make up for the higher capital requirements by lending at higher rates and stiffer terms.” If the big banks that brought you the current credit crisis can already meet the new requirements, what exactly does Basel III achieve, beyond shaking down their smaller competitors? As David Daven remarked in a September 13 article called “Biggest Banks Already Qualify Under Basel III Reforms”: “Indeed, on the day Lehman Brothers collapsed, they would have been in compliance with the Basel III standards.” Punishing Your Local Bank for Wall Street’s Misdeeds What precipitated the credit crisis and bank bailout of 2008 was not that the existing Basel II capital requirements were too low. It was that banks found a way around the rules by purchasing unregulated “insurance contracts” known as credit default swaps (CDS). The Basel II rules based capital requirements on how risky a bank’s loan book was, and banks could make their books look less risky by buying CDS. This “insurance,” however, proved to be a fraud when AIG, the major seller of CDS, went bankrupt on September 15, 2008. The bailout of the Wall Street banks caught in this derivative scheme followed. The smaller local banks neither triggered the crisis nor got the bailout money. Yet it is they that will be affected by the new rules, and that effect could cripple local lending. Raising the capital requirements of the smaller banks seems so counterproductive that suspicious observers might wonder if something else is going on. Professor Carroll Quigley, an insider groomed by the international bankers, wrote in Tragedy and Hope in 1966 of the pivotal role played by the BIS in the grand scheme of his mentors: [T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations . The BIS has now become the apex of the system as Dr. Quigley foresaw, dictating rules that strengthen an international banking empire at the expense of smaller rivals and economies generally. The big global bankers are one step closer to global dominance, steered by the invisible hand of their captains at the BIS. In a game that has been played by bankers for centuries, tightening credit in the ebbs of the “business cycle” creates waves of bankruptcies and foreclosures, allowing property to be snatched up at fire sale prices by financiers who not only saw the wave coming but actually precipitated it.

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Ellen Brown: Basel III — Tightening the Noose on Credit

September 17, 2010

The stock market shot up on September 13, after new banking regulations were announced called Basel III. Wall Street breathed a sigh of relief. The megabanks, propped up by generous taxpayer bailouts, would have no trouble meeting the new capital requirements, which were lower than expected and would not be fully implemented until 2019. Only the local commercial banks, the ones already struggling to meet capital requirements, would be seriously challenged by the new rules. Unfortunately, these are the banks that make most of the loans to local businesses, which do most of the hiring and producing in the real economy. The Basel III capital requirements were ostensibly designed to prevent a repeat of the 2008 banking collapse, but the new rules fail to address its real cause. Why Basel III Misses the Mark Two years after the 2008 bailout, the economy continues to struggle with a lack of credit, the hallmark of recessions and depressions. Credit (or debt) is issued by banks and is the source of virtually all money today. When credit is not available, there is insufficient money to buy goods or pay salaries, so workers get laid off and businesses shut down, in a vicious spiral of debt and depression. We are still trapped in that spiral today, despite massive “quantitative easing” (essentially money-printing) by the Federal Reserve. The money supply has continued to shrink in 2010 at an alarming rate. In an article in the Financial Times titled “US Money Supply Plunges at 1930s Pace as Obama Eyes Fresh Stimulus,” Ambrose Evans-Pritchard quoted Professor Tim Congdon from International Monetary Research, who warned: The plunge in M3 [the largest measure of the money supply] has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly. In a working paper called “Unconventional Monetary Policies: An Appraisal”, the Bank for International Settlements concurred with Professor Congdon. The authors said, ” The main exogenous [external] constraint on the expansion of credit is minimum capital requirements .” (“Capital” means a bank’s own assets minus its liabilities, as distinguished from its “reserves,” which apply to deposits and can be borrowed from the Federal Reserve or from other banks.) The Bank for International Settlements (BIS) is “the central bankers’ central bank” in Basel, Switzerland; and its Basel Committee on Banking Supervision (BCBS) is responsible for setting capital standards globally. The BIS acknowledges that pressure on banks to meet heightened capital requirements is stagnating economic activity by stagnating credit. Yet in its new banking regulations called Basel III, the BCBS is raising capital requirements. Under the new rules, the mandatory reserve known as Tier 1 capital will be raised from 4 percent to 4.5 percent by 2013 and will reach 6 percent in 2019. Banks will also be required to keep an emergency reserve of 2.5 percent. Why Is the BCBS Raising Capital Requirements When Existing Requirements Are Already Squeezing Credit? Concerns about the credit-tightening effects of Basel III were reported in a September 13 Huffington Post article by Greg Keller and Frank Jordans, who wrote: Bankers and analysts said new global rules could mean less money available to lend to businesses and consumers… European savings banks warned that the new capital requirements could affect their lending by unfairly penalizing small, part-publicly owned institutions. We see the danger that German banks’ ability to give credit could be significantly curtailed,’ said Karl-Heinz Boos, head of the Association of German Public Sector Banks. Insisting that French banks were ‘among those with the greatest capacity to adapt to the new rules,’ the country’s banking federation nevertheless said they were ‘a strong constraint that will inevitably weigh on the financing of the economy, especially the volume and cost of credit.’ Juan Jose Toribio, former executive director at the IMF and now dean of IESE Business School in Madrid, said the rules could hamper the fragile recovery. “‘These are regulations and burdens on bank results that only make sense in times of monetary and credit expansion,” he said. For smaller commercial banks and public sector banks (government-owned banks popular in Europe), the credit-constraining effects of Basel III are a serious problem. But larger banks, said Keller and Jordans, “were quick to praise the agreement and insisted they would meet the required reserves in time.” The larger banks were not worried, because ” The largest U.S. banks are already in compliance with the higher capital standards demanded by Basel III, meaning their customers won’t be directly affected .” Their customers, of course, are mainly large corporations. “Small businesses that rely on borrowing from community banks,” on the other hand, “may be more affected… They will try to make up for the higher capital requirements by lending at higher rates and stiffer terms.” If the big banks that brought you the current credit crisis can already meet the new requirements, what exactly does Basel III achieve, beyond shaking down their smaller competitors? As David Daven remarked in a September 13 article called “Biggest Banks Already Qualify Under Basel III Reforms”: “Indeed, on the day Lehman Brothers collapsed, they would have been in compliance with the Basel III standards.” Punishing Your Local Bank for Wall Street’s Misdeeds What precipitated the credit crisis and bank bailout of 2008 was not that the existing Basel II capital requirements were too low. It was that banks found a way around the rules by purchasing unregulated “insurance contracts” known as credit default swaps (CDS). The Basel II rules based capital requirements on how risky a bank’s loan book was, and banks could make their books look less risky by buying CDS. This “insurance,” however, proved to be a fraud when AIG, the major seller of CDS, went bankrupt on September 15, 2008. The bailout of the Wall Street banks caught in this derivative scheme followed. The smaller local banks neither triggered the crisis nor got the bailout money. Yet it is they that will be affected by the new rules, and that effect could cripple local lending. Raising the capital requirements of the smaller banks seems so counterproductive that suspicious observers might wonder if something else is going on. Professor Carroll Quigley, an insider groomed by the international bankers, wrote in Tragedy and Hope in 1966 of the pivotal role played by the BIS in the grand scheme of his mentors: [T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations . The BIS has now become the apex of the system as Dr. Quigley foresaw, dictating rules that strengthen an international banking empire at the expense of smaller rivals and economies generally. The big global bankers are one step closer to global dominance, steered by the invisible hand of their captains at the BIS. In a game that has been played by bankers for centuries, tightening credit in the ebbs of the “business cycle” creates waves of bankruptcies and foreclosures, allowing property to be snatched up at fire sale prices by financiers who not only saw the wave coming but actually precipitated it.

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Jack Myers: Advertisers Have Stopped Complaining and Learned to Love the Media

September 14, 2010

After more than a decade of advertisers’ complaints and discontent with media, their tone has noticeably changed in the past several months. Upcoming ANA conferences are focusing more on success stories and positive experiences than the calls-to-action media vendors have come to expect. Marketers are being invited to industry events to extol the values and virtues of their relationships with media and agency ‘”partners’” rather than to deliver wake-up calls and ‘”Come to Jesus’” sermons demanding that media and agency suppliers step up to the plate and deliver better service, support and evidence of return-on-investment. The holy grail of R-O-I has subtly changed as marketers have invested in analytics resources such as Marketshare Partners and TRA , and ultimately learned that the marketing and media suppliers they have been challenging to improve are actually delivering more and better results than expected. While traditional media metrics such as Nielsen ratings will remain dominant for the remainder of this decade at least, their purpose and role have been more clearly defined as procurement tools, required for media negotiation and purchase but subservient to more marketing focused and results-oriented planning research. This is good news for investors who are concerned about the health of national media, advertising and marketing services companies and the many early stage companies that are being funded on expectations of advertiser support. The U.S. national media business should be held up as a standard of economic well being. While it’s clear that traditional media and marketing companies must invest in and nurture digital enterprises and innovation, marketers are demonstrating renewed confidence in the traditional pillars of national media and marketing communications. For the extended subscriber-only version of this report with detailed economic analyses, subscribers can click here . If you do not have your required subscriber passcode, contact maryann@jackmyers.com . Disclosure: Jack Myers is an advisor to Marketshare Partners and TRA. For a full list of Myers’ portfolio companies and underwriters, visit www.jackmyers.com . To comment, visit www.jackmyersthinktank.com . JackMyersThinkTank and MediaBizBloggers are free and underwritten as an industry service by corporate subscribers to Jack Myers Media Business Report . For subscription information, visit www.myersreport.com . Visit the archives of JackMyersThinkTank and MediaBizBloggers . Jack Myers can be contacted directly at jm@jackmyers.com .

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Fred Whelan and Gladys Stone: What’s On Your Career Bucket List?

August 12, 2010

You may remember the hugely popular 2007 movie ,”The Bucket List” starring Jack Nicholson and Morgan Freeman about two terminally ill men who decide to do all of the things on their wish list before they “kick the bucket”. For many of us, there is a similar bucket list of things that we want to do in our career before we retire. The career bucket list has less to do with promotions and career advancement. It’s more about unique things you would like to try and experiences you would like to have in your career at least once before you retire. As you develop your list of the one or two or ten things you’d like to accomplish, put a time frame around it so you’re more apt to get it done. Here are some of the more common things we hear people say during coaching sessions: Living and working internationally -You’ve probably fantasized about this with your spouse: after work taking a long walk by the Seine or down the Champs-Élysées in Paris. Enjoying weekend getaways to Italy, Spain and Switzerland and taking in the sights. Experiencing the charm of learning a new language and gaining a real appreciation for another culture. If you’re part of a global company, chances are this may be an option for you. Many people dream about an international assignment but don’t take the necessary steps to make it happen. If your spouse works or if you have kids, there will be other considerations, all doable. There are thousands of families living abroad while working for US companies. If this is something you’ve always wanted to do, start the wheels in motion now. The sooner you begin the process the sooner you’ll be packing your bags! Starting your own company – Who hasn’t dreamed about being the boss, and we’re not talking about Bruce Springsteen. Maybe you have an idea for a product or service which you think is unique and different. Things may be holding you back from taking the leap even though you believe in its potential success. Starting a business is a major consideration. As a first step you may want to do some research and evaluate your idea. Then see where that leads. If starting your own company is a dream of yours, it’s important to take the initial steps or it will always remain a dream. Giving a big talk – How many of you have been part of a huge audience, impressed with a captivating speaker and thought, “I wish I could do that.” The thought of being able to inspire hundreds of people is exhilarating. There are organizations like Toastmasters that can help prepare you to be a dynamic speaker. The speaker you want to emulate didn’t start with an audience of 2,000. Most likely they started out by speaking up in meetings, then running meetings, giving office/client presentations, being a panel member, speaking at small conferences and working their way up to large events. As scary as it may seem, most people’s reaction to their first big speech is, “I can’t wait to do it again.” There is no greater feeling of satisfaction than accomplishing things that really matter to you – things that may not be connected to financial gain, but give you a terrific feeling for having done them. People tell us that achieving things on their career bucket list gives them a sense of fulfillment that lasts long after they have retired. Tell us what’s in your career bucket, “I’ve always wanted to…..” Fred & Gladys Whelan Stone Executive Search and Coaching Authors of GOAL! Your 30 Day Career Plan for Business & Career Success

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Matt Wilson: 10 Best Cities to Start a Business in as a Young Entrepreneur

August 4, 2010

Under30CEO.com recently asked its readers to vote on the best cities for young entrepreneurs . Considerations included the resources available, schools, events, social atmosphere, weather and the networking opportunities that young entrepreneurs look for. Take a look at the list below and let us know your thoughts, and while you’re at it, take a look at last year’s results as well. Top 10 cities list courtesy of Under30CEO.com the resource for young entrepreneurs 10. Seattle Squeezing into the top 10, Seattle makes its mark on the list. Seattle has always been driven by old industrial companies but more recently newer technology and internet companies have begun to call it home. Companies like Amazon and Starbucks call Seattle home with Microsoft, Boeing and Nintendo in nearby communities. Seattle’s climate, while mild year round, is still not ideal with lots of rainy and cloudy days. However, Seattle’s location in the Northwest gives it a huge advantage in outdoor activities with natural forests, lakes, oceans and mountains all nearby. 9. Washington DC DC is an obvious choice for the list with its ideal location to the political scene. Washington has a large number of attractions like the National Mall and countless museums. The area is also home to leading colleges like Georgetown, American and George Mason University. These schools bring a very active social scene to the city which makes it a great spot for young people along with providing numerous resources for start-ups. 8. Portland, OR Portland has been referred to as the “greenest” or most “environmental friendly” city in the US. Portland has also been growing faster then the average over the past decade showing the increased interest in the city. Portland is a great business location with lower energy costs then the bigger cities and also air, rail and shipping transportation available to any part of the world. As with the Northwest cities Portland has a temperate climate and all the outdoor activities one could dream up which makes it great for the upstart adventurer. 7. San Diego Making an appearance on the list this year in large part due to the climate. San Diego is warm, sunny and dry. The area is also known for its beaches which is a major plus for any young business person. The city is characterized as wealthy with a major tourism economy. Along with its population (8th largest in US) the city makes an ideal place to build a business. 6. Chicago Chicago is known as one of leading financial centers in the world making it a truly business minded community. The city is located on the shore of Lake Michigan giving it a unique blend of beaches and a downtown life. The city has an active social scene and streets like Michigan Ave will appeal to anyone’s recreation or shopping interests. 5. Denver “The Mile High City”. Denver is a bustling city at the base of the Rocky Mountains. The city has a lot to offer a young entrepreneur with its numerous professional sports teams to some of the best ski resorts in the country only a short drive away. The winters are cold but for the skier or snowboarder it becomes the perfect city to build a business and hit the slopes. 4. Boston Boston has a vibrant college community which has a major impact on the overall city. Colleges like Harvard, MIT, Boston College and others contribute countless jobs and revenue to the city. The schools have also attracted the high-tech industry to the city along with many major companies. The city is home to countless start-ups, incubators and resources to entrepreneurs as many college students take a stab at their own business. The cold winters and high cost of living possibly stop Boston from being at the top of the list. 3. Austin Austin has built a reputation on being the “live music capital of the world”. However Austin has also become a major tech hub with many start-ups and major corporations calling it home in recent years. Many people in Austin experienced the dot-com boom and bust in the late 90s. The city has a great climate and abundant resources as it continues to move forward as a technology hub with much lower costs of living then places like Silicon Valley. 2. San Francisco San Francisco is near Silicon Valley giving it no choice but to be a major hub for start-ups and high-tech companies. Start-ups like Twitter and Craigslist call San Francisco home along with countless numbers of small companies looking to make it big. The city is a big tourist destination giving the young community plenty to see and do along with many great west coast destinations only a short drive away. Because of the vibrant tech community networking events, conferences and meet-ups are being held consistently giving new companies a chance to network and learn with the best. 1. New York This year the #1 city for young entrepreneurs is New York City. New York is the largest city in the United States which gives it just about anything a business or young person would want. There is a major social scene in the city where it reigns with the most bars in the country and also countless festivals, meet-ups and social activities. The city is one of the leading business centers in the world where the New York Stock Exchange and the Nasdaq are housed. Despite the expensive cost of living, in recent years the city has become a thriving place for start-ups and young entrepreneurs. The city is often referred to as Silicon Alley and continues to push forward with its start-up community. This article originally appeared on Under30CEO

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Brett King: The 5 stages of social media grief

July 22, 2010

This week I’ve met with some very interesting people and the subject of social media has been high on the agenda. Yesterday, I met with Tom Cannon, who is leading the charge on the Internet Banking initiative that is part of HSBC’s “OneH” project – essentially their customer dashboard, single-view of the customer baseline technology. Earlier in the week with Sam Oakley from WolfStar, John Beck the Technology Editor for the Financial Times/The Banker magazine in London, and my good pal Christophe Langlois from Visible Banking , amongst others. At these sessions we invariably repeated a discussion I’ve had 30 times in the last few months with innovators in the banking space the world over. The question simply being “when will the banking senior executives get social media?” Facebook, Twitter, Foursquare – when will it end? Facebook this week announced their 500 millionth active user . That number is pretty significant. Firstly, any corporation that can claim it’s customer base would make it the third largest country in the world (behind only China and India) has a case for celebration. Secondly, it doesn’t look as if its growth will slow any time soon. Lastly, their growth is not restricted by physical distribution or inventory constraints, their marketplace is anywhere you are. Twitter is not far behind, with 190 million users as of June 2010 , and 65 million tweets a day. Foursquare , the Geolocation Social Networking service is up there too – adding 100,000 new users every week at the moment. When will it end? It’s won’t – that’s like asking when the internet and mobile phones will end. Which brings me to the realization that dealing with innovation in banking is a lot like dealing with grief. So here are the 5 stages of Innovation Grief for Banks and Bankers (It probably works for most companies actually) Stage 1 – Total ignorance When a new innovation comes out banker’s simply ignore it because ‘banking has been around for centuries and it fundamentally doesn’t change…” Stage 2 – It’s just a fad “Visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms … Commerce and business will shift from offices and malls to networks and modems … Baloney . Do our computer pundits lack all common sense? The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works … Yet Nicholas Negroponte, director of the MIT Media Lab, predicts that we’ll soon buy books and newspapers straight over the Internet. Uh, sure.” – Clifford Stohl, Newsweek, 27 February, 1995 Ok so now it’s on our radar, but it’s just a fad – all the fuss will blow over soon. Stage 3 – I still don’t get it, where’s the money? Because of Stage 1 and Stage 2 banker’s are looking at social media’s incredible rise to fame and then looking at their competitors (who are mostly doing nothing) and saying, “well as an industry no one is making any money out of this, so let’s not bother just yet…” How can you tell you are this stage? You have a Facebook page for the bank, but no one actively managing your social media listening post Stage 4 – The Sonic Boom Tom Cannon gets the credit for this analogy. He said internet banking, mobile banking, social media is all the same for bankers. It’s like them sitting there watching the Concorde or an F15 doing a low-pass, fly-by and not yet registering what they are seeing as significant, until the Sonic Boom hits them and blows them off their feet. By then it is already too late because at Mach 1 or Mach 2 your competitors are already way, way in front of you. This is where the message finally breaks through the ignorance! BOOM! This is the stage we are hitting for most banks today… If you work in a bank how can you tell if you are at this stage – your bank has just hired a Head of Social Media. Social Media is starting to hit banks like a Sonic Boom Stage 5 – The Mad Scramble Excuse the vernacular, but this is the “oh, crap” moment where bankers suddenly realize that they should have been heavily invested in this 3-4 years ago, and their lack of preparedness is highlighting to their customer base, employees and the world just how out of touch bankers are. The mad scramble may have occurred because of a PR disaster like those that BP has experienced with the Gulf Oil Spill, that Bank of America experience with Ann Minch’s Debtor revolt, or that Citibank experienced with the Fabulis debacle. This is when the knee-jerk hiring spree starts with hit and miss initiatives occurring throughout the bank. How do you know when you are at this stage? The CEO of the bank is talking about Social Media in press conferences and how the bank is committed to better reaching customers through this medium. Getting out in front So how do you stop the grief cycle within your organization? The first thing bankers need to do is rethink their organizational structure around customer. Social Media is a tool for reaching customers, for engaging customers. It is as important as investing in branches, it is just as critical as having a telephone number for customers to call, but more than that, it can help you transform your business internally too. To fix your organization to serve customers in the digital and social media age – you need to think independently of channels . We talk about multi-channel alot these days, but clearly social media is showing us that new channels and ways of interacting can grow very fast. Who’s to say what will come after social media? Something will. The key is that channel complexity continues to grow, and no single channel should be singled out as more important. For customers branch is no more important than Internet, mobile than social media, call centre than ATM. These are tools to engage, and increasingly banks need to be more pervasive – everywhere the customer is. So break the back of organization structure silos around channels. Think customer – think total channel engagement, and get moving on Social Media fast: BOOM!

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Susan Klein: The Controversy Surrounding the Criminal Probe into the Gulf Oil Spill

July 19, 2010

Now that oil is no longer pouring into the Gulf, everyone can breathe easier –except the people responsible for the spill. They may go to prison. The Justice Department has a criminal investigation underway. Admittedly, governmental investigations of business torts are more likely to result in fines than prison time. Joseph Hazelwood, who captained the Exxon Valdez when it ran aground, was the only person indicted in connection with that accident and he was sentenced to community service after being convicted on a misdemeanor charge. The BP spill is different, of course. Eleven people died when the Deepwater Horizon caught fire, and the environmental damage is unprecedented. The feds may reasonably decide that the magnitude of the catastrophe requires a high profile criminal prosecution, the same conclusion President Bush’s Justice Department reached in the wake of the Enron debacle. Still, if history provides any guidance, years will pass before anyone is indicted and few people, if any, will spend much time in prison. We know that a criminal investigation is underway because Eric Holder, the Attorney General, has said so many times. He first announced it at a press conference on June 1. Since then, he has commented on it and clarified its scope, emphasizing that BP is not the only potential target . Both for launching the investigation and discussing it openly, Holder has taken serious heat. Initially, political opponents of the Obama Administration contended that the investigation diverted BP’s attention from its efforts to plug the well and deal with the consequences of the spill. The merits of this allegation never were clear. Even before the probe was acknowledged, BP’s managers knew the EPA would punish the company severely. The reputational damage and civil consequences flowing from the spill were also known to be enormous. BP’s executives must also have expected a criminal investigation. In 2007, the company pled guilty to felony violations of the Clean Water Act after a refinery outside Houston, Texas exploded, killing 15, injuring 170, and ultimately saddling BP with $373 million in criminal and civil fines. The prospect of being prosecuted criminally may even have strengthened BP’s resolve to make every possible effort to get matters under control. The U.S. Sentencing Guidelines, which apply to every federal criminal felony conviction, mandate significantly lower sentences and fines for corporations and individuals who cooperate with federal investigators. Reductions are even greater (and may include deferred or non-prosecution agreements, called DPAs and NPAs) when corporations police themselves by creating compliance programs and reporting potential federal criminal and civil violations before to getting caught. Conservatives also slammed Holder for publicly acknowledging the investigation. They claimed, first, that he departed from Justice Department policy which, they said, is neither to confirm investigations nor to deny them. They also charged that, by speaking about the investigation in public, Holder caused BP’s stock to tank. Finally, several commentators and editorial boards criticized Holder for participating in the negotiations, headed by President Obama, which led to the creation of the $20 billion BP victim compensation fund. The Washington Post argued that Holder’s “presence inevitably raised the specter of the criminal probe — and the possibility that it could be used to pressure BP on the size and terms of the fund.” Texas Representative Joe Barton (in)famously characterized to BP as the victim of a “shakedown.” In a column endorsed by Sarah Palin and many others, conservative commentator Thomas Sowell argued along the same lines, while raising the level of hyperbole considerably. Sowell accused President Obama of following in Adolf Hitler’s footsteps by using a crisis as an excuse for subjecting a private enterprise to an illegal and unprincipled exercise of raw power. None of these criticisms makes sense to us. Start with the claim that Holder acted wrongly by acknowledging that a probe was underway. True, the general policy of the Justice Department is to disclose neither the existence of a criminal investigation nor its details. But in two sections (1-7.401C and 1-7.530B), the U.S. Attorneys’ Manual expressly recognizes that “[t]here are exceptional circumstances when it may be appropriate to have press conferences … about ongoing matters before indictment or other formal charge, … includ[ing] cases where … the heinous or extraordinary nature of the crime requires public reassurance that the matter is being promptly and properly handled by the appropriate authority.” Disciplinary rules governing public statements by prosecutors similarly permit communications needed to inform the public of the nature and extent of the government’s response to high-profile crimes. The BP oil spill is the worst environmental disaster in U.S. history. If a crime was committed in connection with it, then the crime was extraordinary by definition and is obviously a matter of great public interest. By confirming the existence of the investigation, Holder acted properly and responsibly. Now consider the charge that Holder’s public statements caused the value of BP’s shares to tumble. Assuming the charge is correct (something that is not self-evident, given the fairly continuous decline in the price of BP stock from April 23rd to June 25th), one must ask, So what? Holder is the highest law enforcement officer in the land. The criticism supposes that he should have acted so as to enhance the value of a private company rather than to protect the public interest. That can’t be right. Public officials are supposed to advance the public good. Shareholders can protect themselves from these extraordinary occasions which require public disclosure by diversifying their stock holdings. Finally, consider the charge that Obama and Holder acted improperly by using the crisis to twist BP’s arm. Although we certainly believe that governmental coercion of private persons, including companies, should be regulated by law, when creating the compensation fund the federal government neither confiscated BP’s money nor coerced the company into paying victims of the spill. Thomas Sowell recognized this, but he thought it an irrelevant nicety. In fact, this is the heart of the matter. The compensation fund is creature of a contract between BP and the federal government. Like all contracts, this one created value for both sides. President Obama showed Americans that he was focused on the disaster and trying to protect them. BP showed the world that its word was good. Hoping to salvage some measure of goodwill, BP had verbally promised to cover losses stemming from the spill. The agreement to create the compensation fund made that promise formal. It also gave BP an opportunity to stretch out its payments and reduce the volume of spill-related civil litigation greatly. As an article in the New York Times pointed out, in return for agreements not to sue, BP is offering to quickly reimburse victims for their full economic losses, thereby sparing them years of delay and the burden of paying attorneys. The compensation fund is an example of mutual gain, not Hitler-esque subjugation. Years or decades will pass before all civil and criminal liabilities stemming from the disaster in the gulf are resolved. Real arm-twisting will occur at many points. Plaintiffs’ attorneys will threaten BP with enormous punitive damage awards to squeeze as much money as they can from BP for their clients. The federal government will hit the responsible companies with billions in penalties and may threaten to put their executives in prison. Fortunately, given the magnitude of the disaster, intense media interest, reporting requirements for public companies, and the transparency of the compensation fund, the negotiations that resolve these complaints will likely be open and above board. Attorney General Holder can and should be involved in these negotiations. Global settlements, DPAs and NPAs, which have been utilized under both Republican and Democratic Administrations, provide many advantages when compared to criminal prosecutions and concurrent civil regulatory actions by multiple federal agencies. Such agreements encourage full disclosure to the investing public, allow targeted reform of mismanaged or corrupt corporations, ensure restitution to victims, and may protect shareholders and employees from bankruptcy proceeding, all while minimizing the collateral consequences on the current law-abiding customers, shareholders, and the general public. Attempting this type of negotiation in the wake of a national disaster of this magnitude is something that cannot be done on the down low.

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Susan Klein: The Controversy Surrounding the Criminal Probe into the Gulf Oil Spill

July 19, 2010

Now that oil is no longer pouring into the Gulf, everyone can breathe easier –except the people responsible for the spill. They may go to prison. The Justice Department has a criminal investigation underway. Admittedly, governmental investigations of business torts are more likely to result in fines than prison time. Joseph Hazelwood, who captained the Exxon Valdez when it ran aground, was the only person indicted in connection with that accident and he was sentenced to community service after being convicted on a misdemeanor charge. The BP spill is different, of course. Eleven people died when the Deepwater Horizon caught fire, and the environmental damage is unprecedented. The feds may reasonably decide that the magnitude of the catastrophe requires a high profile criminal prosecution, the same conclusion President Bush’s Justice Department reached in the wake of the Enron debacle. Still, if history provides any guidance, years will pass before anyone is indicted and few people, if any, will spend much time in prison. We know that a criminal investigation is underway because Eric Holder, the Attorney General, has said so many times. He first announced it at a press conference on June 1. Since then, he has commented on it and clarified its scope, emphasizing that BP is not the only potential target . Both for launching the investigation and discussing it openly, Holder has taken serious heat. Initially, political opponents of the Obama Administration contended that the investigation diverted BP’s attention from its efforts to plug the well and deal with the consequences of the spill. The merits of this allegation never were clear. Even before the probe was acknowledged, BP’s managers knew the EPA would punish the company severely. The reputational damage and civil consequences flowing from the spill were also known to be enormous. BP’s executives must also have expected a criminal investigation. In 2007, the company pled guilty to felony violations of the Clean Water Act after a refinery outside Houston, Texas exploded, killing 15, injuring 170, and ultimately saddling BP with $373 million in criminal and civil fines. The prospect of being prosecuted criminally may even have strengthened BP’s resolve to make every possible effort to get matters under control. The U.S. Sentencing Guidelines, which apply to every federal criminal felony conviction, mandate significantly lower sentences and fines for corporations and individuals who cooperate with federal investigators. Reductions are even greater (and may include deferred or non-prosecution agreements, called DPAs and NPAs) when corporations police themselves by creating compliance programs and reporting potential federal criminal and civil violations before to getting caught. Conservatives also slammed Holder for publicly acknowledging the investigation. They claimed, first, that he departed from Justice Department policy which, they said, is neither to confirm investigations nor to deny them. They also charged that, by speaking about the investigation in public, Holder caused BP’s stock to tank. Finally, several commentators and editorial boards criticized Holder for participating in the negotiations, headed by President Obama, which led to the creation of the $20 billion BP victim compensation fund. The Washington Post argued that Holder’s “presence inevitably raised the specter of the criminal probe — and the possibility that it could be used to pressure BP on the size and terms of the fund.” Texas Representative Joe Barton (in)famously characterized to BP as the victim of a “shakedown.” In a column endorsed by Sarah Palin and many others, conservative commentator Thomas Sowell argued along the same lines, while raising the level of hyperbole considerably. Sowell accused President Obama of following in Adolf Hitler’s footsteps by using a crisis as an excuse for subjecting a private enterprise to an illegal and unprincipled exercise of raw power. None of these criticisms makes sense to us. Start with the claim that Holder acted wrongly by acknowledging that a probe was underway. True, the general policy of the Justice Department is to disclose neither the existence of a criminal investigation nor its details. But in two sections (1-7.401C and 1-7.530B), the U.S. Attorneys’ Manual expressly recognizes that “[t]here are exceptional circumstances when it may be appropriate to have press conferences … about ongoing matters before indictment or other formal charge, … includ[ing] cases where … the heinous or extraordinary nature of the crime requires public reassurance that the matter is being promptly and properly handled by the appropriate authority.” Disciplinary rules governing public statements by prosecutors similarly permit communications needed to inform the public of the nature and extent of the government’s response to high-profile crimes. The BP oil spill is the worst environmental disaster in U.S. history. If a crime was committed in connection with it, then the crime was extraordinary by definition and is obviously a matter of great public interest. By confirming the existence of the investigation, Holder acted properly and responsibly. Now consider the charge that Holder’s public statements caused the value of BP’s shares to tumble. Assuming the charge is correct (something that is not self-evident, given the fairly continuous decline in the price of BP stock from April 23rd to June 25th), one must ask, So what? Holder is the highest law enforcement officer in the land. The criticism supposes that he should have acted so as to enhance the value of a private company rather than to protect the public interest. That can’t be right. Public officials are supposed to advance the public good. Shareholders can protect themselves from these extraordinary occasions which require public disclosure by diversifying their stock holdings. Finally, consider the charge that Obama and Holder acted improperly by using the crisis to twist BP’s arm. Although we certainly believe that governmental coercion of private persons, including companies, should be regulated by law, when creating the compensation fund the federal government neither confiscated BP’s money nor coerced the company into paying victims of the spill. Thomas Sowell recognized this, but he thought it an irrelevant nicety. In fact, this is the heart of the matter. The compensation fund is creature of a contract between BP and the federal government. Like all contracts, this one created value for both sides. President Obama showed Americans that he was focused on the disaster and trying to protect them. BP showed the world that its word was good. Hoping to salvage some measure of goodwill, BP had verbally promised to cover losses stemming from the spill. The agreement to create the compensation fund made that promise formal. It also gave BP an opportunity to stretch out its payments and reduce the volume of spill-related civil litigation greatly. As an article in the New York Times pointed out, in return for agreements not to sue, BP is offering to quickly reimburse victims for their full economic losses, thereby sparing them years of delay and the burden of paying attorneys. The compensation fund is an example of mutual gain, not Hitler-esque subjugation. Years or decades will pass before all civil and criminal liabilities stemming from the disaster in the gulf are resolved. Real arm-twisting will occur at many points. Plaintiffs’ attorneys will threaten BP with enormous punitive damage awards to squeeze as much money as they can from BP for their clients. The federal government will hit the responsible companies with billions in penalties and may threaten to put their executives in prison. Fortunately, given the magnitude of the disaster, intense media interest, reporting requirements for public companies, and the transparency of the compensation fund, the negotiations that resolve these complaints will likely be open and above board. Attorney General Holder can and should be involved in these negotiations. Global settlements, DPAs and NPAs, which have been utilized under both Republican and Democratic Administrations, provide many advantages when compared to criminal prosecutions and concurrent civil regulatory actions by multiple federal agencies. Such agreements encourage full disclosure to the investing public, allow targeted reform of mismanaged or corrupt corporations, ensure restitution to victims, and may protect shareholders and employees from bankruptcy proceeding, all while minimizing the collateral consequences on the current law-abiding customers, shareholders, and the general public. Attempting this type of negotiation in the wake of a national disaster of this magnitude is something that cannot be done on the down low.

Read the full article →

Video: Realignment May Help Struggling College Sports Teams: Video

June 25, 2010

June 25 (Bloomberg) — Rick Horrow, founder of Horrow Sports Ventures Inc. and a Bloomberg Television contributing editor, reports on the reasons behind the the recent movement among conferences of major college sports teams. (Source: Bloomberg)

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Video: Realignment May Help Struggling College Sports Teams: Video

June 25, 2010

June 25 (Bloomberg) — Rick Horrow, founder of Horrow Sports Ventures Inc. and a Bloomberg Television contributing editor, reports on the reasons behind the the recent movement among conferences of major college sports teams. (Source: Bloomberg)

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Raymond J. Learsy: Oil,Cartels, Venezuela- A Moment of Truth For The Department of Justice and the Obama Administration

June 15, 2010

This post is not about the merits of fossil fuels, fully cognizant of the growing existential danger they present to the environment and planet, but rather about the price of fossil fuels and our government’s decades long complicit policies in the transfer of literally trillions of dollars of the nation’s wealth to oil interests and despots around the world. Trillions that have helped to destabilize today’s world lubricating the clash of civilizations, making it possible for the billions upon billions to be expended by Mid-East oil producers to radicalize generations of the young and vulnerable throughout all corners of the globe, to the ethos of jihad and intolerance. The issue is highlighted in a remarkable and eye opening court battle currently being litigated: United States District Court for the Southern District of Texas (No. 06-3569) Spectrum Stores Inc,…et al Plaintiffs -Appellants v. CITGO Petroleum Corporation; Petroleos De Venezuela S.A… et al In essence the case charges that CITGO Petroleum Corporation, an American refining company with refineries in Lake Charles La., Corpus Christi, Tex, and Lemont, Ill. supplying more than 13,500 domestic gasoline stations and wholly owned by the Venezuelan State oil company, Petroleos de Venezuela S.A. is “liable under the Sherman Act for its participation in a global price-fixing conspiracy with the OPEC member nations and other private oil companies.” The essence of the charge against CITGO, and I quote form the complaint as filed: “If the member nations of the Organization of Petroleum Exporting Countries (“OPEC”) were American companies, their participation in an open price fixing conspiracy would be illegal under the Sherman Act. The member nations might take comfort in the special protections afforded sovereign nations but private, especially American companies cannot. This case seeks to hold CITGO Petroleum Corporation, an American refining company wholly but indirectly owned by Venezuela, liable under the Sherman Act for its participation in a global price fixing conspiracy with OPEC member nations and private companies.” The brief goes on to comment, “The conspiracy’s avowed purpose and direct, substantial and foreseeable effect is extraterritorial; increasing the price of oil and Related Petroleum Products (RPPs) globally, including the United States, which is a key target of the conspiracy…CITGO and OPEC have had common high ranking officials. CITGO officers prepared OPEC’s Long-Term Strategy and organized OPEC summits and conferences; provided technical services and information on the U.S. market.” In essence, the complaint alleges That CITGO conspired with OPEC and is therefore liable as a principal and materially assists the cartel in achieving those aims. But here is the nub of the matter. Given the issue of ‘Sovereign Immunity’ as it attains to this proceeding the court has asked the Obama administration to file a brief commenting on the merits of the complaint. In early July the Department of Justice is scheduled present the court with their amicus brief setting forth the Administration’s position. Amazingly, perhaps even inadvertently in that it is a clarion wake up call to our government, CITGO having wrapped itself in the cloak of Sovereign Immunity, has made our government’s actions the cornerstone of its defense. In CITGO’s court filings, incorporating a chronology of the International Oil Policy of The United States which in turn “summarized that over thirty years of public policy statements made by members of (former Presidential Administrations), all reflecting a commitment to cooperation instead of confrontation with foreign sovereign oil-producers.” And therein lies a profound and hidden truth. A truth stemming from a fateful pilgrimage by then Vice President George H.W. Bush in 1986 to then King Fahd’s throne in Saudi Arabia to rescue America’s domestic oil industry reeling from oil prices veering toward single digits. Bush pleaded for a then moribund OPEC to be resuscitated in order to ratchet up oil prices. With the implicit backing of the American government, King Fahd’s Saudi Arabia was quick and eager to comply. Within a year prices near doubled and the rest is history. Thus by giving OPEC a reprieve, Bush and the benign, better said insidious neglect and complicity of subsequent American administrations over the decades, helped saddle world consumers, rich and poor countries alike, transferring literally trillions into the coffers of the OPEC producers and their Big Oil cronies. In the guise of protecting the American oil industry, and likely because of its influence, the United States became OPEC’s guardian. With the American government being acquiescent, OPEC oil producers had little to fear politically. An example of our government’s cartel embracing policies one need look no further than George W. Bush’s – it runs in the family- scuttling through threat of veto the proposed NOPEC Bill (NOPEC Act, S.879, 110th Cong (2007) that would have readily passed in Congress – of which then Senator Hillary Clinton was a co-sponsor and then Senator Obama voted to support), legislation that would have lifted sovereign immunity in American courts for all OPEC related entities, permitting action by the Federal Trade Commission and the Department of Justice under the Sherman Act before the American Bar of Justice. Brazenly, CITGO in its reply to the charges, permitted itself to instruct the court and anyone else interested, in the following civics lesson: according to CITGO, “The United States government has never pursued anti-trust sanctions against any oil producing sovereign…It has instead consistently opted for cooperation and constructive diplomacy with oil producing nations as reflected in numerous public policy statements made by members of the Executive Branch over decades.” Well there you have it, a clear statement of our government’s abject alliance with the machinations of the OPEC cartel. The brief being prepared by the Department of Justice will resonate far and wide. It will be a tell tale act of further collusion by our government in a trillion dollar decades long extortion visited on us and the rest of the world by OPEC and its allies. Or it will be a comprehensive break with past policies whereby our courts and our government are once again on the side of the American people and not the oil nabobs.

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