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Bill Gates No Longer World’s Richest Man After Giving Away Billions

March 7, 2011

NEW YORK (By Michelle Nichols) – Bill Gates didn’t lose his title as the world’s richest man last year; he gave it away by plowing billions into his charitable foundation, experts say. Forbes will release its 2011 billionaires list on Wednesday and Gates, investor Warren Buffett and last year’s richest man, Mexican tycoon Carlos Slim, will almost certainly be in the top three. The trio have topped the list for the past five years. But it would be no contest if Microsoft co-founder Gates had not already given away more than a third of his wealth to the Bill and Melinda Gates Foundation, which focuses on global health and development and U.S. education. “It wouldn’t be a competition,” said David Lincoln, director of global valuations at wealth research firm Wealth-X. “(Gates) would have a comfortable margin if he had never discovered philanthropy.” Lincoln said Gates was currently worth about $49 billion, behind Slim, whose fortune he estimated at $60 billion. Buffett, also a philanthropist, is now worth some $47 billion. But had Gates not given away any money, he would be worth $88 billion, Lincoln said. Gates and his wife Melinda have so far given $28 billion to their foundation, the largest in the United States. Forbes’ 2010 billionaires list put Gates’ fortune at $53 billion, but he was knocked into second spot by Slim’s $53.5 billion, losing the crown for only the second time since 1995. Slim has said businessmen do more good by creating jobs and wealth through investment, “not by being Santa Claus,” and while he has still pledged several billion dollars to charity, his efforts have been a fraction of Gates’ philanthropy. Buffett, who Forbes ranked as the third richest man in the world last year with $47 billion, has also pledged almost all of his fortune to the Gates Foundation and has given $8 billion to the organization since 2006. But Buffett’s Berkshire Hathaway Inc has fared better than Gates’ Microsoft. Microsoft shares now trade about where they were a decade ago, while Berkshire shares have roughly doubled. Since the end of 2009, Microsoft shares have fallen 16 percent, while Berkshire shares are up 29 percent. Slim’s major companies, which include Mexico’s former state telecoms monopoly Telmex, have also seen gains in their stock prices. “DRAMATIC” PHILANTHROPIC INFLUENCE Gates and Buffett have joined forces to encourage other billionaires to publicly pledge to give away at least 50 percent of their wealth during their lifetimes or upon their death as part of a campaign called The Giving Pledge. Glen Macdonald, president of the Wealth and Giving Forum, said Gates’ philanthropy had influenced the way other rich people in the United States approach their own philanthropy. “Encouraging people and leading by example — there’s no question that’s going to have influence on people’s giving patterns,” said Macdonald. “They are going to give sooner and they are going to give in greater amounts.” But Macdonald, whose group has advised 600 wealthy U.S. families on their philanthropy, disagrees with the public nature of The Giving Pledge, which requires billionaires to release a letter explaining their intentions. So far 59 billionaires have joined The Giving Pledge, publishing their letter at www.givingpledge.org. The campaign does not accept any money nor tell people how to give away their wealth, it just asks for a moral commitment. Paul Schervish, director of the Center on Wealth and Philanthropy at Boston College, said Gates’ influence had been “dramatic” and likened philanthropy to a gem, saying Gates was “changing the facets by learning and teaching others.” “He would be the first to admit that he is not the origin of the movement, of all the ideas in the movement, for which he is a leader,” Schervish said. “One of the things we’re dramatically finding is (many more) people beginning foundations and endowing them at higher levels while they are still alive,” he said. (Editing by Mark Egan and Cynthia Osterman) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Angela Haines: Creating a Company Culture Takes More Than Free Lunches

March 3, 2011

When Laura Ching and her two co-founders of Tiny Prints , a Sunnyvale, California-based online customized stationery company, first sat down to create their enterprise in 2003, they were four years out of the Stanford Business School and had all spent time working at big companies. “We saw an opportunity to create a utopian culture to fix some parts that we saw were broken at some major corporations,” Laura says. “So we set up some core values, including to instill a passion to win, to nurture creativity, to treat each other like family and to insist that every dollar counts- -e ven building our own IKEA desks because we couldn’t afford anything else” Now five years later the three find themselves at different stages of their lives, both personal — with spouses and children — and professional, with about 250 employees, but “we still maintain those values,” says Laura, ” though we have to work harder to stay true to them.” Company culture is one of those buzz phrases that gets some managers boasting about Nacho Wednesdays and Bingo parties or wearing t shirts and flip flops and allowing pets in the office, but many start ups find competitive value early on by going beyond bells and whistles to create a productive atmosphere. Flexible hours and competitive compensation certainly help. But Towers Watson workforce strategist Julie Gebauer, author of Closing the Engagement Gap , notes that “engagement” or getting employees to participate in the company culture with heads, hands and heart, “is not about employee programs but about what kind of leaders they have and leadership’s focus and commitment. They care about what their company stands for and their ability to build their own skills. If you talk only about projects and schedules, there is nothing for them to connect with personally.” Her observations are seconded by culture guru Howard Schultz, CEO of Starbucks , who says even when you start a company, “everything matters — everything. You are imprinting decisions, values and memories onto an organization.” Laura Ching of Tiny Prints, which posted revenues of over $100 million in the past twelve months, admits that she has introduced a “look forward to Mondays” theme by offering lunches, happy hours, games,” but the real point was “for us to understand why employees don’t look forward to Mondays. We’ve set up committees to discuss how we apply our values. If we find out that one reason employees don’t look forward to Mondays is that their workloads are too heavy, we adjust expectations too and don’t just offer free lunches.” In 2004, when CEO Michelle Conceison founded her indie music management company with only two employees, “culture was the first thing on my list because I wanted a company that both employees and clients wanted to be associated with.” But she admits that it’s a “squishy thing which I can’t always explain.” For her it started with her company name. “Usually music agencies carry the founder’s name. So I chose Market Monkeys which always makes people smile — a good beginning for such a cut-throat business.” Before conferences, key sales points in her business, Michelle writes personalized letters to her employees, reminding them of the spirit of her organization, “to keep the promises we make so that together we can do great things.” At the conference, she continues, “our culture is evidenced in the room we set up for our clients, the lighting, the handouts, maybe it’s the way we sit in the room always ready to talk to our clients, or the fact that we give all of them a pleasant place where they can play and be treated like professionals.” Last year her business, now with about 25 clients, grew 30%. Productive companies figure out how to focus attention on employee needs. CEO Victoria Nessen Kohlasch, of NK and Associates , a marketing company — with $500,000 annual billings — that helps small and medium sized companies including banks, insurance companies, and caterers with branding, says one of her core values is reinforcing employee strengths. She explains, “I don’t ask them to overcome their weaknesses because that’s not fair. I have a great operations person who I don’t expect to make creative decisions. You just can’t make your people jacks of all trades.” An early adapter of commitment to culture is women’s retailer EILEEN FISHER which posted 2010 sales of $310 million and currently employs 880 employees. Its Chief Culture Officer Susan Schor, says that “we’re not into metrics as much as we care about valuing our employees so they can contribute, so they’re motivated and can pursue what they’re good at and have positive relationships with each other.” Susan Schor says that the company offers perks, such as an annual $1000 well-being stipend — for massages, or gym fees or yoga classes — as well as annual clothing allowances. And the proof that their employees “feel very respected” is a turnover rate of 11% in the stores, compared to 45-50% for the industry, and only 4.5% for the rest of the company. No doubt good culture also creates good business. Last year Entrepreneur.com announced that EILEEN FISHER made The Great Place to Work Institute ‘s list of The Best 25 Medium-sized Companies to Work in America — for the 7th consecutive year! Visit a new hub for women entrepreneurs: www.wstartup.com and share your ideas!

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Ernan Roman: Relationship Marketing Innovators: 5 Best Practices at Threadless.com

February 28, 2011

THE PROBLEM: How do you transform your organization’s relationships with customers? How do you get them to see your organization as a gathering-place, a destination for constructive interaction with others? We discussed these questions with Tom Ryan, CEO of the community-driven on-line apparel retailer Threadless.com. THE SOLUTION: Implement Threadless’ Five Relationship Marketing Best Practices. Threadless sells tee shirts in very large numbers to a fanatically loyal on-line community. The art for the tee shirts is sourced from a worldwide community of artists and designers. Once the art is submitted, the community of over 1.4 million registered users cast their votes, which helps management decide which designs go on to become Threadless tee shirts. Per the Sloan Management Review: 95% of those purchasing from Threadless.com have voted and posted comments, before making a purchase. Each of CEO Tom Ryan’s five principles is a potential game-changer. When implemented as part of your organization’s overall strategic plan (not just the marketing plan), his five ideas will transform your organization from a transaction-driven enterprise to a relationship-driven one. BEST PRACTICE #1. Funnel passion. “Accept that great ideas can come from anywhere,” Ryan advises, “either from employees within the company or from customers and fans outside the company. We believe that passion and ownership over an idea are the most critical factors to making it successful. Is your organization set up to capture and funnel passions? Or do you have to pitch up from corporate layer to corporate layer to get an idea cleared?” BEST PRACTICE #2. Make marketing a conversation — and don’t take yourself too seriously. In other words, skip the hard sell — or any sell — when using social media tools to interact with your community. As Ryan observes: “It’s very common for marketers to think of consumers who use social media tools as having grabbed hold of a huge megaphone. Marketers then try to grab that megaphone back, and use it as a broadcast tool so they can sell very large groups of customers. It’s more useful to think of social tools as being like a telephone line, something you use to reach out to connect meaningfully with one person at a time.” BEST PRACTICE #3. Make your product your marketing. Look constantly for ways to make your product or service interesting enough for people to talk about to others. Ryan notes: “We like to think of our shirts and designs as entertainment content, as stuff that is so interesting that it starts new conversations and attracts good word-of-mouth on its own.” BEST PRACTICE #4. Empower your customer — usually the benefits outweigh the risks. Ryan says, “we include our community in virtually all aspects of our business”. They submit the designs, they vote on them, they critique them, and they buy the products. As a result, they have a vested interest and a sense of ownership in what the company does. BEST PRACTICE #5. Act human. Authenticity, Ryan warns, is non-negotiable for today’s marketers. “It’s about treating your customers as you’d want to be treated. In keeping with that, we let folks at Threadless speak to customers in a voice that is truly theirs, but also represents the company.” Try This: Implement all five of Threadless’s best practices. Turn your customers into a community — and engage them to participate in many aspects of your company’s operations, including product and service development. This change will carry two transformational benefits: First, the quality of your understanding of your customers’ needs and expectations will increase exponentially. And second, customers will change how they view your company. They will shift from viewing you as a “supplier” of products/services to a company that offers relevance, personality and (yes) friends with whom they choose to communicate over time! Ernan Roman is President of the marketing consultancy, Ernan Roman Direct Marketing. Recognized as the industry pioneer who created three transformational methodologies: Integrated Direct Marketing, Opt-In Marketing, and Voice of Customer Relationship Research. Clients include Microsoft, NBC Universal, Disney, Hewlett-Packard and IBM. Ernan was named to “B to B’s Who’s Who” as one of the “100 most influential people” in Business Marketing by Crain’s B to B Magazine. His latest book on marketing best practices was published in October, 2010, and is titled: Voice of the Customer Marketing: A Proven 5-Step Process to Create Customers Who Care, Spend, and Stay . Ernan is also the co-author of “Opt-In Marketing: Increase Sales Exponentially with Consensual Marketing” and author of “Integrated Direct Marketing: The Cutting Edge Strategy for Synchronizing Advertising, Direct Mail, Telemarketing and Field Sales.” www.erdm.com ernan@erdm.com

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The Henry Ford Promotes Christian Overland to Executive Vice President

February 25, 2011

DEARBORN, MI–(Marketwire – February 25, 2011) – Christian Overland, Vice President of Collections and Experience Design for The Henry Ford, was named Executive Vice President, it was announced by Patricia Mooradian, president of the organization. 

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Colliers Appoints Dahlstrom Head of Investment Services Group

February 22, 2011

Twenty-five year commercial real estate industry veteran Warren Dahlstrom joined Colliers International’s Investment Services Group as president. He will oversee ISG’s U.S. platform while based in Washington, DC. He also will be responsible for growing the organization through key hires of top-tier brokers and other professionals. Dahlstrom is an investment property professional that has sold, financed or built buildings valued at more than…

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Lucy P. Marcus: Future Proofing the Boardroom: Today’s Agendas

February 18, 2011

The board room agenda is going through a reformation . To ensure that we are helping organizations future proof themselves, what are some of the essential things that boards and board members need to think about, no matter the size, location, or sector of their organization? Five areas need an update in the way we as board members think about them: infrastructure, technology, internationalization, communication, and balancing continuity and change. Infrastructure Boards must embrace the political, economic, and social reality of the way the world is operating today and tomorrow. One of the areas that needs a real rethink is building organizations that can operate effectively in a low-carbon economy. The main issues here are about energy consumption, integrating clean tech and sustainability, and they apply to all facets of the business: from facilities, to building stock and rolling stock, from changing work patterns and practices to the ways in which companies engage with their stakeholders and the local communities where they are based. It touches everything an organization does, how it behaves, how it invests, and it means board members need to be asking the questions about how these decisions will impact the business five and ten years down the road. Most importantly, it isn’t about green washing or perception; it is fundamentally about how the organization does business. Technology At the heart of many of the issues on the modern board agenda is technological innovation. Technology, thus, is not a stand-alone issue, but an integral part of how effectively and successfully a company can be run. It is not an end in itself, but an instrument that can only prove its worth if it serves a concrete purpose. Coupled with that is the speed at which new technology comes into play and the level of disruption it creates in the process of integrating it into the daily running of a company. For all the importance of disruptive innovation, if ‘old industries’ and the tech sector communicate effectively, if one understands the other’s needs, and the other, in turn, comes to grips with the significant benefits that today’s technology offers, innovation more generally can be enormously helpful in future proofing companies. For this potential to be fulfilled, boards must make sure that their organization is flexible enough to recognize important technological developments and incorporate them into existing business models. Internationalization Regardless of a company’s main business or where it is located, its success will ultimately depend on grasping the completely internationalized environment in which it operates. The world today is politically, socially, and economically more inter-connected, and this offers opportunities and poses risks at the same time. Board directors need to be able to think outside the walls of their own corporate board room, they need to speak their own language as well as the language of the markets where they want to be, for while the world gets smaller and in some respects more similar, local cultural difference remains and understanding it gives companies a distinct edge. Corporate boards need to set an example and help implement an agenda that is focused on attracting the best people from anywhere and put them in a place where they work most productively for the success of the company as a whole. Communication No corporate board will be able to implement its modern agenda without effective and dynamic communication, both with all its stakeholders (customers, staff, investors, etc.) and within the board room. Within the boardroom, this is about asking the necessary questions and being open to hear the answers, however uncomfortable they might be. Outside the boardroom communication is about the image and strategy of the company, and it is about the methods used to communicate this message , and increasingly so. A board that sends out a message of a forward-looking, socially and economically responsible, and politically aware strategy and does it by old and new forms of communication also sends a message about the right balance between continuity and change, about the unity of word and deed, demonstrating in action to which it rhetorically commits. Balancing Continuity and Change Embracing new ideas and news ways of thinking does not mean completely disregarding the old. Boards will only succeed in their task of future proofing their organizations only if they see the connections between the old and the new. This requires casting a critical eye on the old, innovating where fruitful, and integrating new technologies and items on the corporate social responsibility agenda into the tried and tested business practices of corporate governance, risk assessment, and finance. Corporate directors need to understand the purpose, strengths and limitations of existing practices and be willing and able to take steps to address them. The modern board agenda does not disregard ‘old issues’, it is not driven by short-lived ‘flavors of the month’ or temptations of every disruptive technology or idea that comes into the room, but is rather guided by the needs and vision of the business. This need for balance requires board rooms to have a mix of people to ensure a comprehensive and complementary diversity of approach, background, and skills Stargazing is most effective if it is done from a strong foundation where the nuts and bolts of the company work, and where they are grounded in a solid foundation. This is nowhere more obvious then when it comes to a company’s financial stability and sustainability. Past, present, and future are a continuum when companies seek opportunities for investment and expansion; when they carefully assess risks connected with either; and as they determine the right level of (not only monetary) compensation for their directors and staff. Note: For more information on the juxtaposition of grounding and stargazing see Future Proofing the Boardroom: Grounding and Stargazing . This was originally published on the Marcus Ventures website and on CSRWire .

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Lucy P. Marcus: Future Proofing the Boardroom: Grounding and Stargazing

February 14, 2011

The role of modern corporate boards is the juxtaposition of grounding and stargazing. Grounding is about making sure that the company fulfills all of its legal requirements, manages its risks properly, and does business in a responsible way. It is about all of the vital things we associate with board oversight tasks in corporate governance, compliance and corporate risk. But with that comes an equally and perhaps even more important role: grounding needs to be complemented by stargazing. This is where a board demonstrates its mettle in making sure that their organization is ready and able to expand its horizons, to strive to achieve more and stretch itself to become the robust and resilient business that is capable of responding effectively to the unknowns in its future. Stargazing should be a big component of the strategic work that a board does. Both grounding and stargazing require asking questions, looking beyond the obvious and the comfortable, and actively engaging with the organization. The emphasis these days seems to be on the tick-boxing of risk management. In speaking with fellow board members from around the world and across a wide variety of sectors, I’ve found that concern for risk exposure coupled with a desire not to appear too meddlesome and the time commitments required to do the job properly means that they sometimes leave too little time room for discussions of strategy. This is a real loss for organizations of all sizes, as part of the purpose of having independent directors with a broad range of skills is to draw on the knowledge and understanding around the table and the broader perspective they bring to help propel the organization to new heights. Grounding is a big part of the vital role of directors -0 ensuring that companies are managing their risk, fulfilling their requirements, “playing by the rules”, and being good corporate citizens. But even when fulfilling that role, strategy needs to play a part. In every audit committee and compensation committee, there must be room for considering what the company can do to push itself that much further to achieve more, and better, things for all its stakeholders. Most importantly, getting the balance right between the two functions of grounding and stargazing helps to ensure that the company is doing what it needs to future proof itself, and it requires board members who can think outside the box and who also know when to get back in the box. Note: This was originally published on the Marcus Ventures website and on CSRWire .

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Middle East Unrest Could Be ‘Exceedingly Dangerous’ For The Global Economy

February 3, 2011

With the crisis in Egypt showing little sign of abating, its effect on trade increasingly poses a threat to the global economic recovery. The prices of oil and other commodities have been rising since the protests began last week, as purchasers fear trade channels could be disrupted. Speculation is driving a dangerous trend, one that could drain economies and consumers of vital resources, as gas and food become more expensive. But the real risk lies ahead, experts warn: If the unrest spreads to other countries, then the global recovery, which lately has been picking up steam, could face a major barrier. World economies have in recent months shown promising signs of recovery. In the U.S., where high unemployment and falling home prices continue to impede progress, manufacturing and lending have picked up, and the stock market has enjoyed a steady rise. But oil could change that. “We can digest what’s happened so far reasonably gracefully,” said Mark Zandi, chief economist at Moody’s Analytics. “If the trouble spreads over the Middle East, and the oil supply is significantly disrupted, that would be a problem.” The price of Brent crude oil, an industry benchmark, rose above $103 a barrel on Thursday. It’s the highest value since September 2008, after a summer of record-high oil prices helped drag the economy into recession. Egypt serves as a crucial link in the transport of oil. In 2009, Egypt’s Suez Canal and Sumed pipeline conveyed 2.9 million barrels daily, according to the U.S. Energy Department. As fears of a blockage mount, the Egyptian army has increased security around the canal, and some shipping companies have ordered vessels not to change crews in Egypt. If the trade passages were blocked, ships would be forced to add 6,000 miles to their journey. Though blockage hasn’t happened and oil supplies haven’t been disrupted, rising prices suggest buyers fear the worst. “Right now I don’t think what we’re seeing is a permanent shock,” said Gregory Daco, a senior U.S. economist at IHS Global Insight. “You’d have a permanent shock were the fundamentals to change, were supply and demand to change.” Further risk lies beyond Egypt’s passageways. Just weeks after protesters in Tunisia took to the streets, demonstrations began in Egypt, and then in Yemen. Activists have organized in Syria, and the Algerian government has taken steps to defuse tension. If the unrest spreads to oil-producing countries in the Middle East, the region’s oil supply could be compromised. Such an event would likely drive the price of oil still higher, with potentially devastating consequences. “If it went up to $150 and stayed there for the rest of the year, then all the benefit of the tax cut deal would be wiped out,” Zandi said. “The economic recovery would probably remain intact, although the risks would be very high.” “If anything else went wrong, a double-dip scenario would look very likely,” he added. Oil-producers do have methods for dealing with a compromised supply. Abdullah al-Badri, secretary general of the Organization of Petroleum Exporting Countries, said this week that his organization could put millions more barrels on the market if need be. But there’s no guarantee that would prevent inflation. If the price of a barrel of oil were to rise by $10.70 — or roughly 10 percent — and stay there for a year, the American economy would lose 270,000 jobs, according to a new simulation produced by IHS Global Insight. After a year, the country’s economic output would be 0.4 percent lower than it otherwise would have been. After two years of a sustained price increase, output would be 0.6 percent lower, the simulation predicts. A higher cost of oil impacts Americans in myriad ways. It boosts gas prices at the pump, it raises heating costs and it deprives consumers of the money they would otherwise spend on other things. As transportation in general becomes more expensive, the cost of airplane tickets rises, and it becomes more costly to ship goods, which, again, hits consumers’ wallets. A dollar increase at American gas pumps tears more than a billion dollars from the economy each year, economists say. “The oil price is woven into virtually the entire fabric of most economies,” said Jeffrey Garten, a professor of international trade and finance at Yale, and a former undersecretary of commerce for international trade in the Clinton Administration. As high prices would sap consumers’ wealth, governments would be placed in a difficult position. A possible remedy, Garten suggested, would be to raise interest rates, in attempt to bring prices down. But in the wake of the recession, and in the years leading up to it, American monetary policy has been premised on the idea that low interest rates spur growth. Raising rates would likely stall lending, dealing untold damage to the economy. “The thing about the global economy today is it is stretched very taught,” Garten said. “We always talk about inflation and eyes glaze over, but inflation at this particular time could be exceedingly dangerous.” The Egyptian unrest has affected the prices of other commodities as well, but oil prices stand out at the principal threat, experts say. Egypt is a major exporter of cotton, and trade with the U.S. accounted for more than 30 percent of the cotton export business during the first half of last year, according to Egypt’s records . The price of cotton , which more than doubled over the course of last year, shot higher as protests began. But cotton isn’t oil. “Cotton will have some impact, but cotton isn’t that important for the U.S. economy,” said Dean Baker, co-director of the Center for Economic and Policy Research, in Washington. “If people spend 10 percent more on clothes, they’ll be unhappy, but it’s just not going to be that big of a hit to their pocket book.” The potential pain likely won’t be limited to the U.S. The current crisis, if it worsens, could have devastating effects in the Middle East, as investors move dollars out of the region. After protests began, the Swiss Franc and the U.S. Dollar have strengthened, a sign that investors are buying those currencies. Much depends on the crisis’ spreading. But already, the Egyptian unrest is moving global prices. “The world economy is so interwoven that nobody really understands all the connections,” Garten said. “It is very easy to underestimate what a little country like Egypt could do.”

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Ed Lawler: Evaluating Employees? Add Environmental and Societal Impact to Your Performance Checklist

February 3, 2011

It’s that time again. Most “well-managed” organizations have collected the information they need to appraise the 2010 performance of their employees and either have given — or are about to give — the results to them. In most cases, the companies I have studied measure only the performance of their employees with respect to their impact on the business’ bottom-line: financial performance. Well-managed companies measure both the results achieved and “how” they achieved them. Yet, very few companies have appraisals that go above and beyond — considering employees’ performance as it relates to the environment or society. As a result, employees see their impact on sustainability and social issues as a nice “to do” — not a “must do” — part of their jobs. They don’t have to make tough decisions about trade-offs between profits and environmental impacts and they are not focused on making win/win/win decisions with respect to profit, people and planet. Motivating Performance in 2011 What can be done about this? It’s obviously too late to change how individuals are being appraised based on their 2010 performances, but 2011 is a whole new year. This is exactly the right time to set goals for each employee within your organization that include social and environmental — in addition to goals for financial performance. If this is not done, supporting sustainability will remain a nice “to do,” not a “must do” part of your overall strategy. On the other hand, if these goals are included, there’s a much better chance employees will be motivated to find win/win/win actions. One last point about performance management that’s worth sharing: research at the Center for Effective Organizations on performance appraisal systems show that they often are not very effective at motivating behavior. However, when they include the right approach to goal setting, they do tend to have a positive effect on motivation. Not any kind of goals will do; they need to be specific and progress toward them measurable. Difficulty is also important. If the goals are too difficult, people either don’t try to achieve them or cut corners and cheat in order to reach them, as in the case of Enron. If the goals are too easy, they motivate mediocre performance. But if they are challenging, but achievable — they motivate good performance. Let’s look at the facts. The failure of most organizations to evaluate their employees on social and environmental performance measures is symptomatic of a larger problem. Most organizations, whether they are for-profit or not, fail to implement management approaches and systems that create sustainable effectiveness. They are managed to optimize short-term financial performance, not long-term financial, social and environmental performance. Changing the performance management system is just one step in the right direction, but it’s a necessary and important step. Edward E. Lawler III is co-author of Management Reset: Organizing for Sustainable Effectiveness . A distinguished professor of business at the University of Southern California (USC) Marshall School of Business, he is also the founder and director of the University’s Center for Effective Organizations (CEO), one of the country’s leading management research organizations.

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Marshall Goldsmith: Managing Up: Getting Your Higher-Ups To Pay Attention To You

January 30, 2011

Peter Drucker once said, “Great wisdom not applied to action and behavior is meaningless data.” How true this is! As a knowledge worker, if you haven’t got the attention of the higher ups, your greatest ideas probably won’t ever see the light of day. First, what is a knowledge worker? Knowledge workers are people who know more about what they are doing than their boss does. My guess is that you, like most of my readers, are a knowledge worker. Many knowledge workers (especially those with technical backgrounds) have years of education and experience that enable them to come up with great ideas. Yet this same group has almost no training in how to “influence up” and ensure that their great ideas actually get accepted. Great ideas that are never implemented don’t make much of an impact on the organization. Now, as a knowledge worker, how do you improve the odds of your boss taking your suggestions? The guidelines listed below are intended to help you do a better job of influencing your upper management. They won’t always ensure your success, but they will definitely improve your odds! Take responsibility. Think like a salesperson–not a technician. In many ways, influencing up is similar to selling products or services to external customers. They don’t have to buy — you have to sell! Any good salesperson takes responsibility for achieving results. No one is impressed with salespeople who blame their customers for not buying their products. When making your pitch, treat upper managers like great salespeople treat their customers. While the importance of taking responsibility may seem obvious in external sales, an amazing number of people in large corporations spend countless hours blaming management for not buying their ideas, as opposed to blaming themselves for not selling those ideas. If more time were spent on developing our ability to present ideas and less on blaming management, a lot more might get accomplished. Focus on the big picture — not just what’s in it for you. An effective salesperson would never say to a customer, “You need to buy this product, because if you don’t, I won’t achieve my objectives!” Effective salespeople relate to the needs of the buyers. They don’t expect buyers to relate to their needs. In the same way, effective “upward influencers” relate to the larger needs of the organization, not just to the needs of their unit or team. When influencing up, focus on the impact of the decision on the overall corporation. In most cases, the needs of the unit and the needs of the corporation are directly connected. In some cases, this connection isn’t so obvious. Don’t assume that executives will automatically make the connection between the benefit to your unit and significant, positive impact for the larger corporation. Strive to win the big battles. Don’t waste your energy and psychological capital on trivial points. An executive’s time is very limited. Do a thorough analysis of your ideas before challenging the system. Don’t waste time on issues that will only have negligible results. Focus on issues that will make a real difference. Be willing to lose on small points. Be especially sensitive to the need to win trivial, nonbusiness arguments on things like restaurants, sports teams or cars. People become more annoyed with us for having to be “right” on trivia than our need to be right on important business points. You are paid to do what makes a difference and to win on important issues. You are not paid to win arguments on the relative quality of athletic teams. Present a realistic cost-benefit analysis of your ideas. Don’t just sell benefits. Every organization has limited resources, time and energy. The acceptance of your idea may well mean the rejection of another idea that someone else believes is wonderful. Be prepared to have a realistic discussion of the costs of your idea. Acknowledge the fact that someone else’s cause may have to be sacrificed in order to have your plan implemented. By getting ready for a realistic discussion of costs, you can prepare for objections to your idea before they occur. You can acknowledge the sacrifice that someone else may have to make and point out how the benefits of your plan outweigh the costs. Realize that your upper managers are just as “human” as you are. Don’t say, “I am amazed that someone at this level…” It is realistic to expect upper managers to be competent; it is unrealistic to expect them to be better than normal humans. Is there anything in the history of the human species indicating that when people achieve high levels of status, power and money they become instantly wise and logical (or even sane)? How many times have we thought: “I would assume someone at this level…” followed by “should know what is happening,” “should be more logical,” “wouldn’t make that kind of mistake,” or “would never engage in such inappropriate behavior”? Even the best of leaders are human. We all make mistakes. When your managers make mistakes, focus more on helping them than on judging them. Make a positive difference. Don’t just try to “win” or “be right.” We can easily become more focused on what others are doing wrong than on how we can make things better. An important guideline in influencing up is to always remember your goal — to make a positive difference for the organization. Corporations are different from academic institutions. In a university the goal may be sharing ideas, not having an impact on the world. In faculty meetings, hours of acrimonious debate on obscure topics can be perfectly normal. In a corporation, sharing ideas without having an impact is worse than useless. It is a waste of the stockholders’ money and a distraction from serving customers. When I was interviewed in the Harvard Business Review , I was asked, “What is the most common area for improvement for the leaders that you meet?” My answer was “winning too much.” Focus on making a difference. The more other people can “be right” or “win” with your idea, the more likely your idea is to be successfully executed. In summary, think of the years that you have spent perfecting your craft. Think of all of the knowledge that you have accumulated. Think about how your knowledge can potentially benefit your organization. How much energy have you invested in acquiring all of this knowledge? How much energy have you invested in learning to present this knowledge so that you can make a real difference? My hope is that by making a small investment in learning how to influence up, you can make a large, positive difference for the future of your organization — and the future of your career. For greater detail see, “Effectively Influencing Up” in Leading Organizational Learning , Goldsmith, Morgan and Ogg eds., Jossey-Bass, 2004.

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Robbin Phillips: 4 Biggest Mistakes Small Businesses Make With Social Media

January 28, 2011

Everyone in business today is in a frenzy to “use social media to grow their business”. Ugh. Hate to disappoint, but Facebook, Twitter, blogs and other social media tools are not magical. They’re communication tools and communication is hard work. Connecting with your customers on a deep and emotional level can pay off big time for all businesses, but it can also backfire. I’m not one to focus on mistakes and prefer, like my friends Dan and Chip Heath (authors of Switch ), to stay focused on the “bright spots.” But there are just some basics you have to avoid. So here are some of the most common mistakes I see: Mistake number one. Many businesses forget that they are dealing with real human beings. With hopes and dreams and pet peeves. People relate to each other through two-way conversation, both online and in person. Ever met someone who hogs the conversation? I have. And I tend to walk the other way when I see them coming. These shiny new tools are not like megaphones. Talking about yourself won’t make others talk about you. Don’t shout offers and deals and me, me, me. Take your marketing hat off and think like a human being. Invest in getting to know your customers better than your competition does. Listen. Be curious, and interested and engaged. Tell stories and share knowledge. Most of all, ask yourself how you can provide meaning and value. How can you be helpful? How can you support your best friends and biggest fans? How can you lift them up? It’s about people. Mistake number two: Lots of businesses, especially small businesses don’t take time to plan or set goals. There is a lot of sameness out there in small business land. What makes you different? How can you let your personality and voice shine when you communicate? What is your unique point of view? What’s the passion conversation you share with your customers? And the planning that is most often overlooked? Who in your business has the time and personality to be “social”? Get very real with this one. Don’t just add it to someone’s job description to tweet or update Facebook or keep up a blog. You have to find someone within your company who has a real passion for connecting with people. Then give them to the freedom to engage and respond. And even surprise and delight your customers. Mistake number three: No one’s home. Said another way, don’t start something you can’t finish or don’t intend to do well. If you decide to blog, make a decision to do it on a consistent basis. Not randomly. And the more often, the better. Be consistent, present and responsive. Or don’t do it all. Mistake number four: So many businesses believe “social media” is a magic bullet. I hate the word social media. I prefer word of mouth marketing. That’s something that has been around and will never go away. Technology by its very nature will change. What’s hot today technology-wise is often dead or very different tomorrow. Positive word of mouth requires a positive experience. Now there are just more ways to provide that that experience. Be remarkable. Both online and offline. (After all most word of mouth happens in person.) Sorry to disappoint, but there is no magic bullet when it comes to making personal and emotional connections with your customers. So there you have it. Remember you are dealing with people. Think “word of mouth” vs. social media. Let your organization’s real personality shine to you will draw kindred spirits your way. Plan and set goals. Be committed to your plan. And most of all, work on creating remarkable experiences for your customers. Treat them like your very best friends.

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Association of Gaming Equipment Manufacturers (AGEM) Announces Opening of AGEM Europe Office and Appointment of Tracy Cohen as Director of Europe

January 19, 2011

LAS VEGAS, NV–(Marketwire – January 19, 2011) – The Association of Gaming Equipment Manufacturers (AGEM) announced today the opening of an AGEM Europe office to serve the organization’s growing membership base there and the appointment of Tracy Cohen to serve as AGEM Director of Europe.

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Mentor Graphics’ VP, Joseph Sawicki, Joins ISQED Board

January 12, 2011

SANTA CLARA, CA–(Marketwire – January 12, 2011) –  The International Society for Quality Electronic Design ( ISQED ) today announced that Joseph Sawicki, vice president and general manager of the Design-to-Silicon division of Mentor Graphics Corporation ( NASDAQ : MENT ), has joined the group’s Strategic Steering Committee. Mr. Sawicki is a leading expert in IC nanometer design and manufacturing challenges, and is responsible for Mentor’s design-to-silicon products, including the Calibre® physical verification, DFM and RET/OPC platform, and the Mentor® TessentT design-for-test product line. The ISQED Strategic Steering Committee is responsible for mapping the future direction of the organization.

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More Business School Students Turn Toward A Degree In Doing Good

January 2, 2011

Business school students today may not have their eyes set on big bonuses quite like their predecessors. Studies show that they’re turning their finance and entrepreneurial skills towards founding socially responsible businesses. MSNBC reports that more and more students pursuing business school degrees are basing their courses on an eventual career in the nonprofit sector. The Wharton School of Business at University of Pennsylvania has seen an increase in applicants who want a degree in social enterprise. Emily Cieri, the director of Wharton’s entrepreneurial program, told MSNBC : “Ten years ago our students were primarily interested in working in finance and consulting. We’re seeing a large increase in the number of students with entrepreneurial backgrounds…They are saying they’ve come to school to understand how to run an entrepreneurial company with much higher growth and have a greater impact.” Individuals are now taking a business-model approach to solving social problems. Ashoka , a nonprofit that’s helped social entrepreneurs start charitable businesses for 30 years, visited the University of Maryland recently to hear students from its business school’s Center for Social Value Creation pitch social business plans. David Wish attended the event to promote his organization, Little Kids Rock , which provides instruments and music instructions free to schools. He also wants to become an Ashoka fellow . Wish told NPR : “Being in the presence of people who have devoted their life’s work to that is really an inspiring thing.” LISTEN: Read more about the trend towards socially responsible degrees and businesses at MSNBC .

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Video: John Connor Says Russia Likely to Join WTO Next Year

December 23, 2010

Dec. 23 (Bloomberg) — John Connor, manager of the Third Millennium Russia Fund, talks about the prospects for Russia joining the World Trade Organization in 2011. Connor, speaking with Margaret Brennan on Bloomberg Television’s “InBusiness,” also discusses investment opportunities in the country. (Source: Bloomberg)

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Video: U.S. Files WTO Case Against China Over Wind-Power Aid

December 22, 2010

Dec. 22 (Bloomberg) –The Obama administration filed a complaint at the World Trade Organization over support China provides its wind-energy manufacturers, acting on a petition brought by the United Steelworkers union. Bloomberg’s Megan Hughes reports. (Source: Bloomberg)

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Judah Schiller: 5 Must-Dos to Engage Your Employees in 2011

December 22, 2010

Forget about rabbits. 2011 is officially the Year of the Human. The daily news may be filled with stories about scarcity — we’re seemingly running out of everything from natural resources to patience to [fill-in-the-blank here]. But the one thing we are definitely not running out of, at least not any time soon, is feeling, thinking people. Yet, many companies are still missing the boat when it comes to getting their people to show up at work with their hearts, minds and bodies present. Most employees view work only as a means to an end–a way for them to collect a paycheck and receive health benefits. Part of the problem is that companies consistently fail to make a strong connection between their own “big picture” and its relevance to their employees. They continue to talk at rather than with their workers, dictating what’s good for them, rather than making an effort to understand their wants and needs. It’s no wonder that these are the same companies that continue to battle against low morale, high turnover and flagging productivity. According to Human Resources Magazine, employee disengagement is estimated to cost the U.S. economy as much as 350 billion dollars every year. Choosing to tap into employees’ full potential, or not, can ultimately mean the difference between the success or failure of your business. Employee engagement is often lumped in with those things we know we should be better about doing, but often aren’t (flossing and cleaning out the refrigerator come to mind), and is still something that is sorely lacking in the world’s greatest companies. But unlike flossing and cleaning out the fridge, engagement can be fun, interactive, and can result in amazing returns for your business and the people who are the lifeblood of your organization. Here are 5 “must-dos” to effectively engage your employees in 2011: 1) Ask and you shall receive: The New Year is here, and it’s not business as usual. Instead of trying to “solve problems by using the same kind of thinking that created them,” look to your employees to help define your corporate challenges and, in turn, devise innovative solutions to address them. One dynamic way to do this is to create an internal design team that includes people from of all levels of your company. Commit to taking regular “pulse surveys” to find out what your people are thinking about, worrying about and dreaming about, rather than resorting to the ho-hum annual survey. How do they like to work? What makes them happy? What gets them excited? Taking the first step to simply listen will begin to foster trust and deepen your connection with your employees. 2) Find the fun: They don’t call it work for nothing, but all work and no play makes for an unproductive and bored-out-of-their-minds bunch of employees. Fun should be a consistent and easily accessible part of your office environment. Many innovative ways to connect already exist in the outside world. It’s time to start welcoming more of these tools inside the walls of your company. Targeted social media and gaming sites like SVNGR.com and Seriosity.com can help keep your employees accountable and anchored to your mission, each other and their own personal incentives. 3) Use social good as a Trojan horse for engagement: Connecting the dots between engagement and social responsibility is no longer the “wave of the future.” It’s what companies need to be doing now to get ahead. Aligning your employees around a common cause that transcends generational divides, gender and ethnicity is a sure-fire way to spark a sense of purpose and belonging. When your employees feel educated, inspired and empowered around the company’s commitment to social responsibility, sustainability and citizenship, the real magic starts to happen. This kind of “good work” is also what the next generation of employees is adamantly expecting from their employers. 4) Inspire viral and grassroots learning: It might be hard to believe, but in the next four years, Millennials will make up more than half of our country’s workforce. This super-digitalized generation is already accustomed to being engaged virally and through social media. Offering online mentoring and learning opportunities, as well as easy and entertaining ways to collaborate and share ideas, such as through Spigit.com , Slideshare.com and Twiddla.com , enables your employees to dictate what’s most important to them and spur companywide participation. A little healthy “collabotition” in the workplace goes a long way to igniting ambition and inspiring innovation. 5) Create a company of micro-philanthropists: It’s likely that your company already donates money to various causes. Why not ask your employees to get involved, rather than dryly recounting the company’s actions during the next all-staff meeting? Sites like Donorschoose.org , Mobilegiving.org , Changenet.org and Causecast.org all allow individuals to make small donations to the organization of their choice. Make giving an integral and personal part of your company culture by allowing each of your employees to choose a specific non-profit recipient and track the impact of their donation. Whether you are already engaging your employees in one or some of these areas, the most important thing to keep in mind as we head into the Year of the Human is to start viewing “work” through more holistic eyes. Engagement is a two-way street and, to be successful, it requires commitment, enthusiasm and consistency — all things that tend to be in greater supply at the fresh start of a New Year.

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Judah Schiller: 5 Must-Dos to Engage Your Employees in 2011

December 22, 2010

Forget about rabbits. 2011 is officially the Year of the Human. The daily news may be filled with stories about scarcity — we’re seemingly running out of everything from natural resources to patience to [fill-in-the-blank here]. But the one thing we are definitely not running out of, at least not any time soon, is feeling, thinking people. Yet, many companies are still missing the boat when it comes to getting their people to show up at work with their hearts, minds and bodies present. Most employees view work only as a means to an end–a way for them to collect a paycheck and receive health benefits. Part of the problem is that companies consistently fail to make a strong connection between their own “big picture” and its relevance to their employees. They continue to talk at rather than with their workers, dictating what’s good for them, rather than making an effort to understand their wants and needs. It’s no wonder that these are the same companies that continue to battle against low morale, high turnover and flagging productivity. According to Human Resources Magazine, employee disengagement is estimated to cost the U.S. economy as much as 350 billion dollars every year. Choosing to tap into employees’ full potential, or not, can ultimately mean the difference between the success or failure of your business. Employee engagement is often lumped in with those things we know we should be better about doing, but often aren’t (flossing and cleaning out the refrigerator come to mind), and is still something that is sorely lacking in the world’s greatest companies. But unlike flossing and cleaning out the fridge, engagement can be fun, interactive, and can result in amazing returns for your business and the people who are the lifeblood of your organization. Here are 5 “must-dos” to effectively engage your employees in 2011: 1) Ask and you shall receive: The New Year is here, and it’s not business as usual. Instead of trying to “solve problems by using the same kind of thinking that created them,” look to your employees to help define your corporate challenges and, in turn, devise innovative solutions to address them. One dynamic way to do this is to create an internal design team that includes people from of all levels of your company. Commit to taking regular “pulse surveys” to find out what your people are thinking about, worrying about and dreaming about, rather than resorting to the ho-hum annual survey. How do they like to work? What makes them happy? What gets them excited? Taking the first step to simply listen will begin to foster trust and deepen your connection with your employees. 2) Find the fun: They don’t call it work for nothing, but all work and no play makes for an unproductive and bored-out-of-their-minds bunch of employees. Fun should be a consistent and easily accessible part of your office environment. Many innovative ways to connect already exist in the outside world. It’s time to start welcoming more of these tools inside the walls of your company. Targeted social media and gaming sites like SVNGR.com and Seriosity.com can help keep your employees accountable and anchored to your mission, each other and their own personal incentives. 3) Use social good as a Trojan horse for engagement: Connecting the dots between engagement and social responsibility is no longer the “wave of the future.” It’s what companies need to be doing now to get ahead. Aligning your employees around a common cause that transcends generational divides, gender and ethnicity is a sure-fire way to spark a sense of purpose and belonging. When your employees feel educated, inspired and empowered around the company’s commitment to social responsibility, sustainability and citizenship, the real magic starts to happen. This kind of “good work” is also what the next generation of employees is adamantly expecting from their employers. 4) Inspire viral and grassroots learning: It might be hard to believe, but in the next four years, Millennials will make up more than half of our country’s workforce. This super-digitalized generation is already accustomed to being engaged virally and through social media. Offering online mentoring and learning opportunities, as well as easy and entertaining ways to collaborate and share ideas, such as through Spigit.com , Slideshare.com and Twiddla.com , enables your employees to dictate what’s most important to them and spur companywide participation. A little healthy “collabotition” in the workplace goes a long way to igniting ambition and inspiring innovation. 5) Create a company of micro-philanthropists: It’s likely that your company already donates money to various causes. Why not ask your employees to get involved, rather than dryly recounting the company’s actions during the next all-staff meeting? Sites like Donorschoose.org , Mobilegiving.org , Changenet.org and Causecast.org all allow individuals to make small donations to the organization of their choice. Make giving an integral and personal part of your company culture by allowing each of your employees to choose a specific non-profit recipient and track the impact of their donation. Whether you are already engaging your employees in one or some of these areas, the most important thing to keep in mind as we head into the Year of the Human is to start viewing “work” through more holistic eyes. Engagement is a two-way street and, to be successful, it requires commitment, enthusiasm and consistency — all things that tend to be in greater supply at the fresh start of a New Year.

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Bank Of America To Stop Processing WikiLeaks Payments, WikiLeaks Lashes Out On Twitter

December 18, 2010

Bank of America announced it will stop handling transactions for WikiLeaks, the controversial non-profit group that has published secret government data and communications. In a tense response posted on Twitter late last night WikiLeaks urged customers to stop doing business with the bank and suggested the consumers could find safer places to put their money. See WikiLeaks’ Twitter response below: According to the AP: “The bank said in a statement that it believes that site ‘may be engaged in activities that are, among other things, inconsistent with our internal policies for processing payments.’ It joins financial institutions including MasterCard and PayPal that have stopped handling payments for the site.” In a cover story published last month in Forbes , WikiLeaks founder Julian Assange, who was recently released from a British prison, said that the organization’s next leak, due out early next year, will involve at least one major American bank . In a 2009 Computer World interview, Assange said that his organization had obtained a 5GB hardrive from a Bank of America employee, but had been struggling with the best way to present the hard drive’s data.

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Drugmaker Lays Off 1,700 Via Conference Call Ahead Of Holidays

December 17, 2010

On Nov. 30, employees at Sanofi-Aventis pharmaceuticals, the world’s fourth-biggest drugmaker, received an email from the company wishing them a happy Thanksgiving and telling them to check their email again at 5 a.m. on Tuesday, Dec. 2. A.R., a Sanofi-Aventis sales representative in California who wished to remain anonymous, as her contract forbids publicly disparaging the company, said she and her coworkers each received one of the two mass emails the company sent out that Tuesday morning. Both emails contained a code, an 800-number and a call time, either 8:00 a.m. or 8:30 a.m. The employees who were instructed to call in at the earlier time were told they could keep their jobs, but the 1,700 employees who called in at 8:30 a.m. weren’t so lucky: They were laid off by a voice on the other line that told them to stop working immediately, and had no opportunity for question or comment. Unfortunately, A.R. found herself in the second group. “The way they did this was so brutal and inhumane,” she told HuffPost. “We were each assigned an employee number when we started working there — an ‘NM’ followed by five digits — and that’s how I felt that day. Like a number, rather than a valued human being with feelings.” Sanofi-Aventis told its employees they would be paid through Dec. 31, and gave them a modest severance package. A.R., who had only been working at the company a year and a half, received 13 weeks of pay and benefits. A.R. says a representative from an outside company hired by Sanofi-Aventis to repossess materials came by almost immediately after the layoffs to take back the company car she had been driving. “My manager had convinced me to sell my personal car three months earlier because he said the company was in really good shape,” she said. “So I sold it. I might have to use my severance pay to buy a new one now, so I can drive around to job interviews.” Jack Cox, the senior director of media relations for Sanofi-Aventis, said the company acknowledges that its method of laying off employees “wasn’t ideal.” “Rather than cascade these announcements and stretch the notifications over the course of days, we decided to address these colleagues at one time, to explain the rationale for the reductions and express appreciation for the contributions they’ve made to the organization,” he said. “We acknowledged in the call that delivering this news on a teleconference wasn’t ideal, but given the scope and scale of the reductions, there was no other way to share this news quickly and consistently.” The automated call seems to have had a ripple effect in at least one employee’s life. A.R. says she was so “shaken” by the whole process and is so worried about the possibility of finding employment in this economy that she can’t sleep at all, and it’s affecting her ability to perform in job interviews. “I’ve gone through a roller coaster of emotions, angry to panicked to sad, and the feedback I’ve gotten on interviews is that I seem too anxious, like I’m more interested in getting any job than that particular job,” she said. “I say, ‘I’m sorry, I just got laid off.’”

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Drugmaker Lays Off 1,700 Via Conference Call Ahead Of Holidays

December 17, 2010

On Nov. 30, employees at Sanofi-Aventis pharmaceuticals, the world’s fourth-biggest drugmaker, received an email from the company wishing them a happy Thanksgiving and telling them to check their email again at 5 a.m. on Tuesday, Dec. 2. A.R., a Sanofi-Aventis sales representative in California who wished to remain anonymous, as her contract forbids publicly disparaging the company, said she and her coworkers each received one of the two mass emails the company sent out that Tuesday morning. Both emails contained a code, an 800-number and a call time, either 8:00 a.m. or 8:30 a.m. The employees who were instructed to call in at the earlier time were told they could keep their jobs, but the 1,700 employees who called in at 8:30 a.m. weren’t so lucky: They were laid off by a voice on the other line that told them to stop working immediately, and had no opportunity for question or comment. Unfortunately, A.R. found herself in the second group. “The way they did this was so brutal and inhumane,” she told HuffPost. “We were each assigned an employee number when we started working there — an ‘NM’ followed by five digits — and that’s how I felt that day. Like a number, rather than a valued human being with feelings.” Sanofi-Aventis told its employees they would be paid through Dec. 31, and gave them a modest severance package. A.R., who had only been working at the company a year and a half, received 13 weeks of pay and benefits. A.R. says a representative from an outside company hired by Sanofi-Aventis to repossess materials came by almost immediately after the layoffs to take back the company car she had been driving. “My manager had convinced me to sell my personal car three months earlier because he said the company was in really good shape,” she said. “So I sold it. I might have to use my severance pay to buy a new one now, so I can drive around to job interviews.” Jack Cox, the senior director of media relations for Sanofi-Aventis, said the company acknowledges that its method of laying off employees “wasn’t ideal.” “Rather than cascade these announcements and stretch the notifications over the course of days, we decided to address these colleagues at one time, to explain the rationale for the reductions and express appreciation for the contributions they’ve made to the organization,” he said. “We acknowledged in the call that delivering this news on a teleconference wasn’t ideal, but given the scope and scale of the reductions, there was no other way to share this news quickly and consistently.” The automated call seems to have had a ripple effect in at least one employee’s life. A.R. says she was so “shaken” by the whole process and is so worried about the possibility of finding employment in this economy that she can’t sleep at all, and it’s affecting her ability to perform in job interviews. “I’ve gone through a roller coaster of emotions, angry to panicked to sad, and the feedback I’ve gotten on interviews is that I seem too anxious, like I’m more interested in getting any job than that particular job,” she said. “I say, ‘I’m sorry, I just got laid off.’”

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Alan Lewis: Getting a Grasp on the New Normal: How Change Can Boost Your Business

December 15, 2010

Today, most organizations believe they are not working as well as they used to. Their leaders blame the rapid and unpredictable changes that are going on around them. But many of them have failed to grasp one fundamental truth: change is the new constant. To be successful in the 21st century requires accepting that change is here to stay. Consider the case of Netflix. The company is nearing the end of one of its most successful years – its stock prices have doubled, the subscriber base jumped by 52 percent in the third quarter and its site now accounts for 20 percent of all Internet traffic during the typical American evening. While so many of its competitors (i.e. Blockbuster, Hollywood Video, etc.) are struggling, Netflix has shown a great affinity to reacting and responding to today’s environment – adapting its services to the internet and mobile devices. Like Netflix, companies across industries are seeing constant change as a tunnel to innovation, success and sustainability. And one of the most critical components for success is now the ability to build a culture that can adapt and thrive in change. As the founder and chairman of Grand Circle Corporation for the last 25 years, I have seen my fair share of change. After all, our organization operates in one of the most volatile and unpredictable industries on the planet: international travel. We realized early on that change is a persistent condition every successful organization must address. But beyond the travel industry, every business environment is fraught with levels of uncertainty. Leaders must remember to look outside their companies – that way, when a big change does happen, they’re not blindsided or caught off guard. While there’s no way of anticipating what tomorrow will bring, leaders should strive to stay ahead of the change in their industry by spotting trends in their embryonic stage. How so? Actively seek information, pay special attention to what your customers are saying and stay close to forward-thinking business professors – this won’t necessarily give you 20/20 vision into the future of your company, but you’ll be ahead of the game in many ways. As other companies feel the sting and see the advantages of mastering change, there are five lessons that have helped Grand Circle thrive and grow – despite the unpredictable environment – that can be applied to any organization: Flexibility Trumps Efficiency – Focus on fostering flexibility within your organization; it will help ensure that those around you are behind and a part of the change in your company. Mission and Vision Creates Inspiration – Inspire those around you with a mission and vision that supports growth and change. Values, Not Structures, Drive Effective Organizations – Values should be at the base of your corporate culture; if there’s too much emphasis on structure, you’re not leaving any room for change. Investments in People and Learning Create Advantage – Allow your employees to grow and change as your company continues to evolve and take on new areas of competency. Relentless Measurement of Excellence is Essential – Make sure you’re keeping a pulse on the progress of your organizations; you’ll be able to see what strategies are yielding results. As the “new normal” emerges – companies must be prepared. Change is right around the corner. Are you ready? Alan Lewis is owner and chairman of Grand Circle Corporation, the largest U.S. direct market tour operator of international vacations for older Americans and co-author of “Driving With No Brakes.”

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International Digital Publishing Forum (IDPF) Announces New Executive Director

December 14, 2010

Publishing Industry Veteran Bill McCoy to Lead Organization

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International Digital Publishing Forum (IDPF) Announces New Executive Director

December 14, 2010

Publishing Industry Veteran Bill McCoy to Lead Organization

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Don Tapscott: Macrowikinomics: Thriving in the Age of Hyper-Transparency

December 10, 2010

This article is the fifth installment in series to be written by Don Tapscott and Anthony D. Williams, authors of the newly released book Macrowikinomics: Rebooting Business and the World . Mark Parker, the CEO of Nike calls it “A masterpiece. An iconic and defining book for our times.” The Economist says it’s a Schumpeterian story of creative Destruction.” The book argues that many of the institutions of the industrial age have finally come to the end of their lifecycle, and are now being reinvented around a new set of principles and a networked model. Today’s blog looks this new age of WikiLeaks and hyper-transparency **** The arrest of Julian Assange doesn’t change the new reality faced by governments and corporations that have always craved secrecy. Even if Assange is put behind bars for an extended period, others will be happy to take his place. Think of the whack-a-mole game at the arcade. Hit one on the head and another will pop up. The WikiLeaks episode is just a hint of the world to come. We are entering an era of hyper-transparency. Courtesy of the Internet, people everywhere have at their fingertips the most powerful tool ever for finding out what’s really going and informing others. They are gaining unprecedented access to all sorts of information about governments, corporations and other organizations in society. Assange has announced that WikiLeaks is going after private-sector corporations next, starting with the financial services industry. This will undoubtedly unleash a new round of whistleblowers keen to reveal what they see as evidence of duplicity and moral turpitude by their corporate masters. But forced transparency goes beyond revenge by disgruntled employees. Customers can evaluate the worth of products and services at levels not possible before. Employees share formerly secret information about corporate strategy, management and challenges. To collaborate effectively, companies and their business partners have no choice but to share intimate knowledge. Powerful institutional investors today own or manage most wealth, and they are developing x-ray vision. Finally, in a world of instant communications, whistleblowers, inquisitive media, and Googling, citizens and communities routinely put firms under the microscope. Overall this is a positive development. Whether you’re a government or company, when you’re increasingly naked, fitness is no longer optional. Survival will force you to get buff. To be sure, all organizations have a right to secrecy. Companies have legitimate trade secrets. Transparency should refer to the release or exposure of pertinent information — information that can help stakeholders if they have it or harm them if they do not. Employees should not violate confidentially agreements or the law as in the case of WikiLeaks. But rather than defaulting to opacity as was done in the past, increasingly it makes sense to default to openness. Consumer electronics retailer Best Buy has adopted the principle that “our customers should know everything that we know” including data about the defect levels of the products they are selling. CEO Brian Dunn says this is not just a matter of building trust but rather “customers have a right to this information.” Nike has decided to reveal information about its patents and through launching the Green Exchange shares critical environmental data so that other companies can benefit. Fedex has built transparency into its supply chain as the company has found that free and open flow of information reduces transaction costs. Accenture CEO Bill Green has shocking candor with employees about everything from their financial performance to his personal struggle and tough decision to terminate the company’s contract with Tiger Woods. “Transparency with employees builds trust; it speeds up the metabolism of collaboration and increases loyalty,” he says. “Being open makes us better, and it’s just the right thing to do.” Rather than something to be feared, transparency is becoming central to business success. Every company needs a transparency strategy. It has to rethink what new information should be made available to employees, customers, business partners and shareholders. Corporations that are open perform better. Transparency is a new form of power, which pays off when harnessed. Embrace transparency as a force for good. It will result in high-performance business operations. Create good value because value is evidenced like never before. Embrace the principles of integrity, honesty, consideration and accountability as part of your organization’s DNA. In doing so you can build trust — the sine qua non of the networked world. Don’t confuse transparency with the lack of privacy. Transparency is an opportunity and increasingly an obligation for institutions. But transparency applies to institutions, not to individuals. Individuals have no such opportunity or obligation; they have a right to privacy. So while you’re becoming more open as an organization become more scrupulous to protect the private information of customers, employees and other people who are stakeholders. Much of this transparency argument also applies to governments. They are also becoming more open, which is good. Fifty years ago, few countries routinely released information about their economies. Indeed, many treated such information as state secrets. Now scores of countries post detailed economic statistics on the IMF’s website. A half-century ago, no country had laws specifically requiring government officials to provide information to their citizens. Now, nearly seventy countries do, and the number is still growing. Until as recently as the late 1990s, environmental regulation consisted largely of governments telling corporations what production processes to use. Newer regulations are increasingly about directing companies to tell the public the pollutants they are creating. By throwing thousands of raw cables out in the open, WikiLeaks has invited the world to sift through the details and draw its own conclusions. Washington’s elite may be discomforted by the notion that journalists and interested citizens alike can now hunt for embarrassing and perhaps even incriminating interchanges among diplomats. But in a world of hyper transparency, it turns out that many things including war and diplomatic relations will be subject to scrutiny. Even the world’s most ardent freedom-haters — including the despotic regimes in countries like Burma and Iran — cannot restrain the nascent forces of openness that are percolating in their societies. As the Iranian youth mobilization for freedom so vividly demonstrated, an explosive combination of youthful demographics and the spread of the Internet is helping oppressed peoples everywhere wrest open the authoritarian stranglehold that hangs over their social and economic destinies. Smart companies and governments understand that becoming more transparent is in the best interest of the public. Macrowikinomics available at: Macrowikinomics.com Follow Anthony Williams on Twitter: www.twitter.com/adw_tweets

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Ron Ashkenas: For Successful Collaboration, Think Outside the Box

December 8, 2010

The head of a large financial services division recently asked me how to encourage his people to take more initiative . He explained that his organization was highly functionalized with separate units for sales, trading, investing, portfolio management, credit, risk, and operations; some of which reported to him and some to the corporate center. With this configuration, the only way to get things done — either internally or for clients — was for people from the different functions to take the initiative to work together. But since each unit was mostly concerned with its own priorities and didn’t necessarily see the bigger picture, much of the cross-functional collaboration just didn’t happen organically . For example, a product manager in this executive’s division was getting complaints from customers about slow transaction processing. When she talked to the operations team she was told that the problem stemmed from an older system that couldn’t handle peak period volume, and wasn’t scheduled to be updated for another year. She and her customers were basically told to get used to the delays. A week later, when the continuing customer complaints escalated to the division head, he asked this product manager why she hadn’t insisted that the operations and systems people get together and find a solution. Her answer was that they didn’t report to her, so she didn’t have the authority to take that kind of initiative. This is an all-too-common dynamic. As organizations become increasingly specialized, matrixed, and global, most senior managers — like this executive — recognize that they no longer have control over all of the resources they need to achieve their goals. Instead of getting things done through direct authority, they need to influence peers , share resources, create ad hoc teams, and reset priorities. The problem is that senior executives don’t have nearly enough time to orchestrate all of these shifts singlehandedly. Instead they need their managers to recognize the cross-functional linkages, seek out the people they need, and make things happen. It needs to be part of the culture. So why don’t managers (many of whom complain about not being empowered ) take more initiative to go beyond their narrow functional responsibilities? Why do they hesitate to “reach across the organizational aisle” — especially when it’s so critical to their customers and bosses? The reality is that all of us live and work within a personal box that constrains what we think we can do. Obviously part of the box is determined by official limits set out in job descriptions, hierarchical arrangements, and formal work rules. But a large part of the box — perhaps even most of it — is self-created and self-imposed. We work within our comfort zones, doing what we think we should do and what we are used to doing. And most of the time we don’t question, challenge, or test those limits, which makes them self-perpetuating. If managers want to succeed in today’s organizations, they are going to have to redefine their limits and go beyond their traditional comfort zones. Instead of being constrained by reporting lines, they need to driven by whatever it takes to get results (within the limits of respect and integrity) — and if that means chasing down people in other hierarchical structures, so be it. Of course, once they get through to these people, they will have to influence them to adjust priorities or come up with creative solutions — and it’s very possible that they will ruffle some feathers along the way. If our product manager had redefined her limits, she would have felt authorized (and empowered) to engage operations’ and systems’ people in solving her customers’ problems. Given that they had other priorities and schedules, it might have led to some tough conversations and may or may not have generated a solution. But without taking the initiative, the only thing that would happen for certain is nothing. What’s your experience with pushing beyond your usual boundaries?

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Les McKeown: Is Your Business Falling Into ‘The Big Rut’?

December 7, 2010

Over-dependence on systems and processes is natural to a particular stage in any organization’s development — one which I call ‘ Treadmill .’ While we’ve all experienced the frustrating tendrils of this kind of bureaucracy, it actually becomes highly dangerous if complexity and redundancy begin to distort reality. Treadmill usually occurs after a fast-growing company has begun to introduce systems and processes to tame the creative chaos it has unleashed. Too often, leaders see the benefits those systems and processes bring, and then overdo it. Google is a good example (in its core search activity), as is Disney, whose very existence depends on staying innovative and not succumbing to creativity-sapping bureaucracy (currently, it’s losing the battle). Left unchecked, an organization in Treadmill will slide inexorably into the next stage in decline, an almost-always fatal stage I’ve labeled ‘ The Big Rut ‘. When it’s in The Big Rut, the organization is so far in the grip of systems, processes and procedures that creativity, risk-taking and real entrepreneurial zeal and passion are almost completely extinguished. The creative burst that spurred the company to success is gone: the mavericks, boundary-oversteppers and entrepreneurial types are slowly expunged (or expunge themselves) and there is no-one left in senior positions who will wave a red flag and stop the company’s inevitable decline into irrelevancy. So, how does senior management of an organization in Treadmill prevent a decline into The Big Rut? There are three keys to ensuring that a reasonable dependence on systems and processes doesn’t swell into arthritic bureaucracy: 1. Re-tool your hiring process The number one amplifier of bureaucracy for any organization in Treadmill is the hiring process. Once the organization discovers the real benefits of adhering to good systems, the tendency is to emphasize compliance and detail-orientation when hiring new people, at the expense of initiative and risk-taking. These new hires then in turn hire in their own image, and the organization is populated with systems-focused types who value form over function, efficiency over effectiveness, compliance over results. The key to staying out of The Big Rut lies in introducing the word ‘and’ into your hiring profiles: by redefining the must-haves for new hires to identify people who value compliance AND initiative, a systems mindset AND creativity, compliance AND effectiveness. Netflix is a great example of a rapidly growing organization that gets this — as can be clearly seen in the ‘must-haves’ they look for in new hires (and note — they have this slideshow embedded right into the job page on their own web site so all potential new employees are well aware of what the company is looking for). 2. Refresh your performance assessment process When an organization reaches Treadmill, the performance assessment process typically begins to focus on non-compliance and infractions — what this person didn’t do in the period under review — rather than on the successes they achieved, and how the organization can ‘bottle’ and repeat that success. To avoid sliding into The Big Rut, the performance assessment process must be re-focused to emphasize and encourage those entrepreneurial activities that keep the organization flexible and vibrant: what did this person do that was exceptional, showed initiative and was creative (even if they failed)? How can the organization learn from both their successes and their failures? How can we repeat this person’s successes in a wider context (and not just punish failure)? One impressive example of this is in Cisco ‘s leadership competency model: CLEAD (Collaborate, Learn, Execute, Accelerate, Disrupt). Out of all the leadership competencies Cisco could have included, during all the kill-me-now, do-we-have-to-discuss-this-again meetings that I’m sure they had, somebody worked hard to get ‘disrupt’ in there — and assessing key people against their ability to disrupt is exactly what’s needed to stay out of The Big Rut. 3. Provide a safe mentoring environment The third major amplifier of bureaucracy in Treadmill is the pressure to adhere to systems and processes in real time: it sucks the entrepreneurial air out of the organization, negating the opportunity for people to experiment, take risks and show initiative. A great way to counter this is to provide a mentoring program which doesn’t mirror the reporting lines in the organization, thus providing people with a safe environment in which they can try out ideas and experiment, without worrying that they might invoke a career-limiting reaction from their manager and supervisor — GE has been renowned for this for years, providing even entry-level leaders with structured cross-functional mentoring to encourage creative thinking. An additional secondary ‘win’ can be achieved by asking those mavericks, boundary-oversteppers and entrepreneurial types — who otherwise may well be looking for greener, less hidebound pastures to work in — to act as the mentors. Take a close look at your systems and processes — are they providing a safe haven for entrepreneurial risk-taking, creativity and initiative or are they choking the life out of your business? Want to know how close you are to Treadmill, or (gulp) The Big Rut? Take the Predictable Success Lifecycle Quiz .

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9 Of The Most Mismanaged Charities In America: 24/7 Wall Street

November 20, 2010

By Wall Street 24/7 : Rating the non-profit sector is tricky. The main ratings services Charity Navigator and BBB Wise Giving Alliance are both flawed. Moreover, some in the non-profit world object to the idea of assigning grades to the sector because the organizations vary so much in size and scope. That’s nonsense. There clearly are some non-profits that are superior to others. The question is how to do it in the fairest way possible. Charity Navigator, which bills itself as the largest rating service, analyzes a number of factors related to a charity’s financial health including how efficiently it raises funds and the amount it spends on administrative expenses. Charities interested in receiving the BBB Wise Giving Alliance certification must pass the organization’s standards for financial accountability and transparency. In addition, they pay an annual fee of as much as $15,000 to display the group’s seal. GuideStar, another service, provides access to charity financial documents but does not offer any qualitative analysis. For donors, though, there is a fourth alternative, The American Institute of Philanthropy (AIP), which we found to be superior. AIP rates more than 550 charities, and boasts that its reviews are the toughest in the industry. The watchdog’s reports are more in-depth than its rivals and go beyond the information the groups report to the IRS through its Form 990 because charity accounting rules give organizations lots of leeway. As AIP notes on its website, ” … (we) make adjustments to better reflect the goals of most donors who want their cash donations to be used efficiently. We do not allow charities to count the funds they spend on direct mail or telemarketing in their program spending, or to include large amounts of undisclosed and often overvalued donated goods in their expenses, even if their accountants allow them to do so.” Charities may be unfairly penalized for complying with complex accounting rules under ratings that are derived from financial calculations derived from data the organizations report to the federal government, according to AIP. Other experts in the non-profit world expressed similar sentiments. In determining its list of the worst-run charities, 24/7 Wall St. relied on the AIP’s ratings. We also considered data from Charity Navigator and BBB along with media reports. The charities on the list were either rated “F” by AIP or were held in low regard by other raters. Moreover, they were heavily dependent on telemarketers for their fund-raising. Though most non-profits are run by responsible managements and boards of directors, a select few are not. One way that these organizations get tripped up is because of nepotism. Though having family members working in the same organization is not necessarily a bad thing, it can be a warning sign. “It’s definitely a red flag” says AIP analyst Laurie Styron in an interview. “It crowds out the best available people from landing jobs based on their merits. It promotes a lack of oversight.” There is no better poster child for nepotism and mismanagement run amok than Feed the Children, which reportedly collects $1 billion and became famous for its gut-wrenching TV commercials and rated “F” by AIP for years. In 2009, Feed the Children fired Larry Jones who founded the charity 30 years earlier after he admitted to installing hidden microphones in the offices of three executives who opposed to him. He is fighting for his job back and the charity has struck back claiming that Jones took kickbacks from vendors, kept a hidden stash of pornography in his office and gave himself and his wife, who also worked for Feed the Children, unauthorized raises. His daughter Larri was fired in August. Son Allen has filed a defamation suit against his sister and several board members because she said he was bipolar during a Feed the Children board meeting. A federal appeals court recently ruled against him. Though Allen Jones didn’t work for the charity, its board Feed The Children has accused him in a lawsuit of taking materials from a charity food distribution warehouse in Elkhart, Ind, according to the Oklahoman newspaper. Members of 24/7 Wall St. list of mismanaged charities all solicit donations nationally and all are either poorly rated or not held in high regard by the charity raters. The fact that some of these charities operate as if they were family businesses should make donors cautious. These are the most mismanaged non-profits in America — and check out 24/7 Wall Street for more information:

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Edward Muzio: Your Reorganization: Better Left Undone?

November 19, 2010

Reorganization is the drug of choice in many workplaces, and it isn’t hard to see why. Take an organization of people, put someone in a leadership position, and introduce a confusing, far-reaching, ill-defined problem. The leader, feeling the need to live up to his or her title, quickly realizes that the problem is bigger than any one person. If the problem arose in the current state of things, a new future state is needed to solve it. After all, it was Albert Einstein who said that “we cannot solve our problems with the same thinking we used when we created them.” How can you argue with Einstein? And so, the pressure to involve the group, to improve the system, and just to do something leader-like combine, naturally drawing the well-meaning leader to take action on the system. Let’s look to the organizational chart! We will see how things look, and where we can make improvements. To make the lure of the drug even stronger, a line of impressively-credentialed internal and external consultants is standing by to help. Any of them is happy to offer expert insight into possible changes. Whether or not their help is used, their existence lends credibility to the strategy. Credible it is! It’s logical, it feels natural, and it’s much more comfortable than sitting around doing nothing. But there is a terrible, fatal flaw with “the reorg” hiding in plain sight: The org chart has nothing to do with reality. Making changes to a human system based upon an org chart is like planning a drive through Los Angeles by consulting a map of Paris, drawn on a cocktail napkin, by a fifth grader. Consider its history. The org chart is a leftover from long before today’s information age. The first one is believed to have been drawn in the mid 1850s by a railroad superintendent named Daniel McCallum to optimize track construction over long distances. Back then, the organization was top-down and hierarchical. Each worker was a point in the process, and higher-level individuals had broader views of the systems than their subordinates within them. Today’s information age workplace is completely different; Therein lies the problem. Consider the following picture: an org chart on the left, today’s reality on the right. Both images display an overall manager with three supervisors, managing three subordinates each. But the “org chart” completely misses all of the other communication links within the organization and outside of it, which together comprise the majority of information movement. There’s a parallel here. Those of sufficient age may recall the popularity of the “telephone tree,” a prior generation’s tool for information transfer to parents of schoolchildren. Each parent was assigned a position in the tree. When a piece of information — such as a snow-day cancellation — needed to be quickly disseminated to everyone, you would receive a call from your “superior” in the tree, and then you would call your “subordinates” with the update. Each person would make only a few calls, and the information would cascade quickly down the hierarchy. If this doesn’t sound familiar to you, it’s because some years ago e-mail killed the telephone tree. With e-mail, any group member can disseminate information instantly, to some or all of the others, with the click of a button. One parent schedules a pizza party for everyone; another asks half the group for help with fundraising; Four individuals living in the same neighborhood collaborate to arrange a carpool. This new method of communication was adopted rapidly, because it was easier. It rendered the phone-tree obsolete. Perhaps a few schools keep the phone-tree around today. But if you were to attempt to understand a group of parents by studying the phone tree, you would be missing most of the story. That is precisely what an org-chart-based reorganization does. Reorganizers study an obsolete, inaccurate, non-representative, infrequently-used map of a system, and then implement a set of changes to that system based upon the conclusions drawn from the faulty map. In other words, they review the left half of the figure above, and use it to make changes to the right half. Then, in what is perhaps the most insidious step of all, they redraw the inaccurate map — the new org chart — based upon the expected results of the changes, rather than upon the reality of the new situation. To really understand this, consider a situation in which two individuals are removed from the organization. As you can see below, the org chart fails completely in its purpose of adequately representing the real impact to the crystalline network of this change. And yet, the “new org chart” in this scenario will be drawn exactly as it is shown on the left, with the removal of two “boxes.” It will be used going forward as the basis for understanding the system, regardless of what happens in real life. What happens in real life is decidedly different! Person two and person four, for example, are both members of Person one’s staff. Previously, they had little direct contact, and no direct link. But somehow, Person 10 had become a de facto interface between the heads of two departments. When Person 10 departs, this link will be one of more than fifteen broken links in the figure. The looming chaos is completely hidden by the false sense of order implied by the org chart. Most of us have who have been a part of an organizational change have experienced this phenomenon. A seemingly insignificant person retires, for example, and the resultant confusion takes months to sort itself out. Conversely, a manager with an important title changes jobs, and nobody seems to notice. The lesson is clear: No matter how long and hard the org chart is studied, changes to it produce shock waves and impacts that differ wildly from predictions. This is not at all surprising when you realize that the predictions were based upon a faulty map. And yet, for some reason, we keep repeating the same behavior. Sure, an org chart may be useful for defining reporting relationships, assigning responsibility for the completion of annual performance reviews, and for articulating the path of flow for top-down informational bulletins that require live delivery from management. But the next time you’re planning on making wholesale, system wide changes based upon your org chart, I strongly suggest that you stop, think again, and find a different solution to your problem. LA is a big city, and that fifth grader’s map of Paris isn’t going to keep you from getting lost.

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Ron Ashkenas: Do Your Teams Produce Reports or Results?

November 17, 2010

Cross-posted from Harvard Business Online . From product development to strategy to technology management , much of the work done in organizations is assigned to teams . Yet often when the output from these teams is examined, few actually generate measurable results . Instead they produce reports, recommendations, and presentations — for a higher level decision and possible implementation. As a middle manager at a large pharmaceutical company once told me, “I’ve been on dozens of teams over the years, but can’t recall ever being responsible for a result.” Here’s a typical example: The operations manager for a financial services firm wanted to reduce the time required to set up new trading accounts for corporate clients. To make this happen, she pulled together a team of people from sales, trading, technology, operations, credit, and risk. Over the course of six months, the team (which met for an hour or two every week) analyzed the set-up cycle times, benchmarked competitors, mapped the current process, interviewed customers, and explored technology options. Based on this work, the team produced a thoughtful set of recommendations which they presented to the operations manager and other members of the executive group. After asking numerous questions, the executives were satisfied that they understood the situation, thanked the team for its excellent work, and agreed to debate the decision among themselves. So what’s wrong with this picture? The team did a good job and was recognized for it; the operations manager received the information she needed; and the executive team had a basis for its decision making. The only problem is that — after six months of effort — the set-up time for new corporate trading accounts had not improved one bit. Instead of results, the only outcome was a f ancy slide deck . In many organizations this oft repeated pattern becomes an accepted part of the culture. Success becomes defined as a good set of recommendations, even if there is no tangible change . The simple alternative to the cycle is this: Challenge your teams to produce a real result and not just a report. Imagine our case if the operations manager had asked her team to actually reduce set-up times over the course of three months? Instead of studying the issues, the team might have quickly identified possible improvements, initiated experiments, collaborated with a couple of new accounts, and mobilized people who worked on setting up the trading accounts. In three months they could have tried a number of creative approaches, some of which may have produced results and all of which would have produced added knowledge about how to proceed. In addition, the team would have built momentum for implementation and significantly increased the readiness for change. Compare that to a deck! Naturally this approach may not be appropriate for every issue. But if you really need to drive change in your organization, and you are in position to commission a team, remember that you have a choice. You can allow the team to develop recommendations and plans that others will carry forward — or you can hold the team accountable for producing real results. Does your organization have a culture that expects reports or results?

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Robert F. Brands: Innovation Requires Risktaking

November 16, 2010

“If you’ve never failed… you’ve never lived” is a popular video on YouTube describing the failures of people like Thomas Edison, once called “too stupid to learn” by his teacher and Walt Disney, who was fired from a newspaper for “lacking imagination.” Not every idea succeeds, and indeed, some of America’s most triumphant inventors, artists and entrepreneurs have most likely failed at some point in their lives. But without risk and the possibility of failure, there can be no Innovation and no success. That is precisely one of “Robert’s Rules of Innovation” imperatives: No Risk, No Innovation. The success rate when it comes to innovation is very slim. In fact, just 1 in 100 new product entries succeed in the grocery business, according to a study by allbusiness.com. For every innovative product that comes out of the NPD process, there are plenty of ideas that don’t work out — deemed as failures. What’s important is that companies have a tolerance for failure and encourage risk taking. Fear of failure can kill innovation. Never punish for failed ideas. Instead, learn from them how to improve in the future. Establish a level of trust so your team won’t be afraid to think outside the box. To build a successful culture of Innovation, encourage everyone on your New Product Development team to take risks! ” Robert’s Rules of Innovation ” gives five simple steps for encouraging initiative and Innovation. Here are some tips: 1. Profiles in Risk: Clearly communicate the risk profile you are asking your people to adopt and state why it is important to the organization’s success. 2. Failure Management : Never allow an unsuccessful risk to hamper a team member’s opportunities and advancement. 3. Key Learnings Process : Establish a formalized, non-accusatory process for harvesting key learnings from unsuccessful risks. Distribute these lessons learned.

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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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Brett King: If you are looking for ROI from Social Media? Think again…

November 9, 2010

Thankfully, I think we are almost at the point of having serious conversations about how social media can be utilized in most organizations, rather than still asking the question “Is Social Media just a fad?”. However, there are some massive misconceptions on what social media will do for the organization. As a result, often we aren’t even hiring the right skills today to build a competent social media presence. We’re also looking to measure social media in a way we measure other marketing initiatives, channels, advertising campaigns and media, but social media is neither a channel, marketing, media or simply an initiative. Do you need a social media ‘ ‘…. Sentiment analysis, optimization, key influencer engagement, advocacy generation, brand monitoring and attributes, social media outreach, trending, buzz, listening post… Sounds extremely complicated. It needn’t be. The fact is, the reason all of these social media disciplines are popping up is because social media is taking us in new directions in respect to interactions both within the organization and with our customers. I find, however, that in many camps social media is considered a marketing function. Social Media Marketing is a term adopted by many to suggest that social media should become a part of an integrated marketing communications plan. But that falls short. Let me ask you this? Would you consider a teller in a bank, or a customer service representative sitting in a call center a marketer? Hmmm, well yes and no. They are involved in selling and/or marketing products, and they represent the brand. But this is a competency in it’s own right, and staff in the branch and call center are not managed by the marketing department. So how does someone tasked with responding to real-time Twitter or Facebook inquiries fit into marketing? They don’t. Campaigns don’t generally fit in social media either unless you can generate a viral campaign that adapts to social media. Having said that I was impressed by the “Buzz Marketing” initiative that IKEA produced at the end of last year. The fact is, just as when the Internet arrived in 1994 and the “Dot Com Bubble” started building momentum in 1999, we made a bunch of assumptions about how the ‘channel’ worked, and many of those proved to be wrong. Such as the assumption that you could be pure-play online ala Pets.com and people would use your site just because it was www cool . The truth is, you absolutely need to be involved in social media, but don’t expect that by hiring a few staff to put a Facebook page up and respond to Tweets in real-time will be the end of this discussion. We’re only just starting to understand the full impact of social media in business terms. How it is changing? I like Alex Schultze’s quote about the bursting of the social media bubble in his recent blog post : I’d say YES – the social media bubble is about to burst. People are recognizing already that the endless hours of watching the incoming streams from Twitter and Facebook or all the status updates on LinkedIn are hours wasted. All the paid tweets and people or agencies, who have been hired to tweet are not going to contribute to the bottom line. And the fan pages people build to get “fans, followers, connections” are just hopes that it will do something for the business – but it won’t. Alex Schultze – Xeesm The points are all valid, and yet, just like the dot com boom, when there is a ‘normalizing’ of core social media activities, that is when we’ll really start to use social media constructively and real returns will result. Firstly, we’ll understand how customers discuss or rate our products or services in a social context and what are the inflection points. Secondly, the mobile device will become even more critical as we start to recognize tribal behavior beyond the app, and see social media in the sphere of location and context. Lastly, we’ll see organizations starting to understand that the real-time nature of social media is something to be respected and responded too. It will start to shape more responsive organizations. In that way, perhaps the most important understanding about social media is that it is a leading strategy indicator, not a lagging ROI generator. “Show me the money!” The ironic thing is that you might already be getting ROI from Social Media, or losing revenue because of not having it and not even know it… When you engage communities digitally, it does directly result in positive brand sentiment, and it will help you learn about the needs of your customers, effect bottom line revenues, etc. However, can you point to a Facebook page, a quick turn around to a customer service problem on Twitter, and show the actual increases in bottom line revenue or net earnings? Probably not. So the problem is not ROI from social media, but how we measure organizational performance in respect to revenue. The traditional metrics are just not robust or granular enough to give us a perspective on this. Largely because we have such big disconnects between ‘revenue generation’ and customer journeys. Metrics generally assume that if revenue is generated in one channel, it is because the products rocks, that channel rocks, or because the marketing that lead customers to that channel rocks! That’s too simplistic a view of the world these days. I enjoyed the following slideshare presentation from Olivier Blanchard which satirizes the question of ROI in Social Media. Olivier Blanchard Basics Of Social Media Roi The key thing is that Social Media is definitely impacting a bunch of areas of business today, but it doesn’t fit cleanly into our accounting, balance-scorecarded, CPM driven world. The sweet-spot is to learn from social media, build that learning back into the business and adapt from the interactions that it drives. To do this, we need to think beyond ROI, but we most definitely need to be there, listening and engaging customers.

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Bloomberg: Congress ‘Can’t Read’ And Some Members Don’t Know What, Or Where China Is

November 6, 2010

New York City Mayor Michael Bloomberg said Saturday that some newly elected members of Congress “can’t read” and don’t know what or where China is. Bloomberg delivered his stinging assessment of Washington’s newcomers during an interview with The Wall Street Journal . “If you look at the U.S., you look at who we’re electing to Congress, to the Senate–they can’t read,” he said. “I’ll bet you a bunch of these people don’t have passports.” The three-term, billionaire mayor warned against a trade war with China — something both major parties found politically helpful in last Tuesday’s election — and suggested that America assess its policies for answers: “I think in America, we’ve got to stop blaming the Chinese and blaming everybody else and take a look at ourselves,” he said. Last month, The New York Times reported that at least 29 candidates on both sides of the aisle ran ads critical of China and opponents who would support policies that help foreign workers–not Americans. In one of its last acts before the midterm elections, Congress passed legislation retaliating against China , contending that the nation is undervaluing its currency. Time ‘s Zachary Karabell believes Americans are wrong: The U.S., leading the charge for developed nations, has convinced itself that China has purposely kept its currency undervalued to make its exports more attractive. Our new conventional wisdom is that China’s policy leads to escalating trade deficits and the loss of American manufacturing jobs. It has also allowed China to accumulate $2.5 trillion in foreign reserves — and become the most significant foreign creditor for the U.S. and its ballooning debts. We’re even irked because the Chinese are saving way more than they consume, worsening the global imbalances that are supposedly imperiling the tenuous recovery from the financial turmoil that shook the world. To rectify these problems, China must allow its currency to appreciate dramatically — 20% to 40% — quickly Like Bloomberg, Karabell believes its us, not them: When did we collectively go through the looking glass and end up in this distorted economic universe? The idea that the U.S. is not responsible for its own economic stagnation, housing bubble and unemployment is a black-is-white, up-is-down view that only insecurity can breed. It’s not us; it’s them and their cheap goods. Bloomberg travelled to Hong Kong as the new leader of the C40, a coalition of 40 cities, and was there to attend the organization’s conference. According to the group, 1 in 12 people worldwide live in one of its 40 cities. The mayor argued that city authorities are often better placed than national governments to combat climate change and vowed to promote the use of electric taxis.

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Zilligen Named President at Ogilvy CommonHealth Specialty Marketing

November 4, 2010

PARSIPPANY, NJ–(Marketwire – November 4, 2010) – Ogilvy CommonHealth Worldwide ( www.ogilvychww.com ), representing the largest assembly of creative talent in the world of healthcare communications, today announced the appointment of Michael Zilligen as president of Ogilvy CommonHealth Specialty Marketing, the organization’s full-service advertising and promotion agency, focused on high-science and specialty markets.

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Anthony Tjan: The Fallacy of Financial Metrics

October 27, 2010

In both entrepreneurial and larger companies, we too often spend time focusing on the desired financial performance target, rather than the inputs that drive those numbers. Because boards, investors and management demand an objective way to measure performance, we often go right to the result without focusing on what caused those results. Financial performance is a result, a by-product, a consequence of something else. The financial “numbers” ultimately represent the scorecard we care about, but they do not help us understand how to score. When we ask management teams what are the most important drivers (or what we call operating metrics) of their financial results, I usually see one of two reactions: a) a dog in front of the television blank stare or b) a further breakdown of financial results: “sales on the West Coast drove the results.” When pressed further, we may get even further sales breakdowns which tell us little. As my partner, Dick Harrington, says, “We end up slicing baloney with a scalpel” and are talking too much about the “what” without getting the “why.” Operating metrics are the inputs that correlate or drive the desired results of a business. If you focus on the inputs, you need to worry less about the financial outputs. Examples of inputs include customer convenience, product quality, customer retention, or customer referral rate. Let me provide a couple of concrete examples. In many of our retail or restaurant investments, we espouse a value proposition of convenience. The more convenient we can make the experience, the happier the customer will be, and the more likely we will have customer repeat and referral, meaning not just higher revenues but higher quality of revenues. How does convenience translate into a measurable operating metric? As a proxy for convenience we measure metrics such as turn-away rates and wait times for service. That is, when a prospective patron walks in or makes a call for a reservation how often do we turn them away because we are full or short-staffed? We want that turn-away number as low as possible to reinforce convenience. If we detect a repeat issue we can see how to solve it, perhaps through improved reservations systems or increased staffing. Other metrics we might measure include weekly cleanliness scores, customer loyalty, and periodic customer satisfaction reviews. Of course we will look at these operating metrics alongside the financial and more quantitative results, but again–the point is to uncover the correlation between operating drivers and financial outcomes. Businesses need to focus on the 3-5 metrics that represent the most important drivers of value creation. It helps align an organization towards doing the right thing in a repeatable and scalable manner. When you just ask a team to chase results on a plan, you may never be sure what drove that result even if you are successful. There is a difference between having a good year of numbers and a sustainable business model that allows for more predictable year-over-year results. From a managerial tool perspective, a weekly or monthly dashboard that highlights not just the financial results, but also the operating metrics is smarter and more actionable. A dashboard with operating metrics serves effectively as an exception-based report where you look for deviations from the norm of operating metric levels and then consider whether the issue is systemic or one-off. It is true that people behave based on what they are measured by. Here are some guidelines on setting a culture driven by operating metrics and measuring your team on the right stuff: 1. Ensure management understands the difference between operating metrics and financial metrics – operating inputs versus financial ratios. The latter is for number-crunching analysts to focus on, the former is for managers and it is what will make the latter automatic. 2. Clearly communicate across the organization a small number of the most important operating metrics. It takes some thought to filter through the many possible inputs / operating metrics, but pick only the 3-5 that have the highest correlation to the desired financial goals. 3. Regularly review an operating metric dashboard, but focus on exceptions. You’ll be able to scan the health of your business very quickly. In an earlier blog, I interviewed superstar Oprah doctor and cardiac surgeon Mehmet Oz, and discussed the vitals for good personal health. Indeed, an excellent analogy is that operating metrics should represent the blood pressure and cholesterol levels of a company. Focus on the right ones, regularly measure them, and if they are out of whack, do something before your company has a heart attack. This article first appeared on Harvard Business Publishing on June 8, 2009.

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MIT Entrepreneurship Review: JetPens: How To Be An Entrepreneur On Your Own Terms

October 26, 2010

“I didn’t have a very specific vision for a company. I wanted to do something that would increase the probability of success, and I also didn’t particularly want to answer to investors,” says JetPens co-founder Adrian Mak, who started his company in 2004 with an initial investment of $9,000. The company managed to achieve profitability after two years, without any additional financing, by selling Japanese pens, pencils and stationery to pen fanatics. Since characters in Asian alphabets are much more complex than the English alphabet, the writing instruments available in Asia are much more precise than those in the US. Because they never had to sell any equity to outside investors, the three founding partners have retained autonomy over the business and its profits and have shaped the organization to fit their personal goals. Of all the possibilities, why pens? AM: We saw from online forums that people were looking for them and realized that online retail fit our skill set well. We also saw that we could try it out in a way that wouldn’t be very capital-intensive. To start out, we spent about $5000 on merchandise, launched a cheap pilot to prove the business model, and got good results. So in at the beginning, you focused instead on proving the business model and bringing up the business? AM: Although some people perceive entrepreneurship as risky, we tried to create a scenario to minimize risk. We did things in a non-capital-intensive way. We avoided outside investors so we could keep control. We did a lot of things to save money in the beginning; for example, we didn’t spend any money on advertising early on because we had more time than money. We spent a lot of time doing online social marketing and search optimization. How else did your limited budget affect your strategy in the beginning? AM: A lot of our decision-making was driven by our lack of financial resources. It didn’t make sense to outsource warehousing either at our initial scale, so we kept all our merchandise in my living room, which was also our first office. Actually, I’d say all these decisions were made because we had no money, but we had a lot of desire. As for our marketing strategy in 2004, Facebook was just getting started and Twitter didn’t exist. Blogs and forums were really useful in our early days. This helped us with search engine rankings and driving traffic to the website. What advice would you give aspiring entrepreneurs, especially those who are still in school? AM: If you are young and don’t have a lot of obligations, just go for it. When you come up with your business plan, it doesn’t have to be really elaborate. Just work out the core economics of your business and work from there. I made a one-page spreadsheet to figure out how much money I needed to live on, and how many units we would have to sell to reach that number. It turned out that the number was within reason, and this spreadsheet was half our business plan. What would you say to aspiring entrepreneurs who are trying to figure out their motivations and values? AM: With the benefit of hindsight, I’d highly recommend understanding psychologically why you want to be an entrepreneur, because there are several good reasons. Do you primarily want to gain financial freedom, to make a big impact, to become a billionaire, or to create your ideal work environment? You want to gear your business decisions to reflect this, and good decisions should flow out of your core psychological desire — especially the type and size of market you decide to pursue, decisions about raising money and setting your company’ s level of aggressiveness. Check out the MIT Entrepreneurship Review for more information on Adrian and JetPens. You can also follow the MIT Entrepreneurship Review on Twitter at @ MITEReview .

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EVCARCO Announces New Chief Investment Officer and Board of Director Member, Joshua D. Spivey, to Devise Growth Strategies for the Company

October 18, 2010

DALLAS, TX–(Marketwire – October 18, 2010) –  EVCARCO ( OTCBB : EVCA ) ( OTCQB : EVCA ) announces today that Joshua D. Spivey is EVCARCO’s new chief investment officer, effective October 18, 2010. In this role he will work closely with the founders and executive team of EVCARCO to manage the organization’s assets and devise strategies for growth. He will also act as the liaison with the investment community and maintain good investor relations.

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Jonathan Bernstein: How to Fail at Crisis Response

October 8, 2010

When crisis management professionals analyze what went wrong with an organization’s crisis response, a constant factor in “wrong way” examples is failure to test existing crisis plans via simulation exercises, something that is much easier to do now thanks to Internet-centered tools. I asked Robert Burton, Director of Risk Management at Blue Waters Global, LLC , about this phenomenon. Jonathan Bernstein: In my experience, a lot of organizations create crisis response plans of various types, but then never test them. Why is that? Robert Burton: It really varies from one industry to the next but generally an organization believes that if they have a plan they are prepared for a crisis and that the “box” has been checked. Where an industry is required to have a response plan (be it a crisis, emergency, business continuity, security or even disaster plan), it is easy for the entity to hire the consultant or write the plan internally and place it on the shelf to gather dust. Plans are never complete without testing them from a number of directions to ensure validity, and even then they should continue to evolve. Continual risk assessment and plan improvement is essential. JB: If you have a multi-location business, how can you engage all the members of your crisis response teams in a simulation exercise without incurring a huge expense? RB: To get buy-in and be successful for such exercises, you first need an interactive Internet tool that is secure, scalable and easy to use. Multiple locations may also mean testing partners and other vendors to ensure they are prepared to meet the needs during the time of a crisis. In our experience there are five components that a crisis management evaluation tool must have: Communications and Collaboration — During the exercise design, the delivery and after the exercise it is critical that teams can easily communicate and collaborate. Situational Awareness Dashboard — During an exercise it’s important that the tool provides a synopsis of current exercise activities — in our system we call that the Situational Awareness Dashboard. This should be easily accessible and provide a thousand foot view of what’s happened and what the current state of play is. Easy to use and easy to follow — The tool has to be easy to use at the front end much like a simple web site or you will run the risk of losing your constituents before the exercise even starts. Immediate Results — The tool should enable an organization to get immediate feedback from the exercise. This can be done in a number of ways depending on the evaluation criteria and scoring methodology. Training — It’s vital that teams are provided with the basic information regarding the plan and their roles during crises. Having access to training on a regular basis can only be done cost effectively in an eLearning format especially when it comes to organizations that are dispersed across a city, region or the world. JB: I think a lot of C-suite executives are at least somewhat technophobic. Do you know any tricks for getting them over that hurdle and comfortable with using any of the Web-based tools for crisis management? RB: We are seeing a shift due to easy-to-use social media sites such as Facebook and Twitter and also the fact that younger executives are now entering the C-suite. Easy- to-use is the key. Will an organization buy-in to a tool that is difficult to use? So easy-to-use and no technical training but with all the bells and whistles is what you want. JB: How often does an organization need to run simulations in order to truly be ready for a breaking crisis? RB: The general rule of thumb is that the plan should be tested when a procedure or other part of the plan changes, when personnel that might be impacted by the plan change, when new personnel join a team, when a regulatory body requires it, when an incident has occurred that may require changes and as often as its determined in the organization’s policies and procedures. If an organization is continually responding to incidents then the plan will be indirectly tested, which may reduce the requirement to run regular simulations. JB: What do you say to organizations that do horribly on their first simulation exercise? RB: Testing a plan for the first time always has the potential for something going horribly wrong. However, what I will say is that if you have built up to the first simulation exercise with training personnel on their roles and run through a number of potential scenarios in meetings then you should be at least prepared to respond in a coordinated and efficient manner. Working through a problem for the first time with new plans and personnel will be a learning experience for all and ultimately lead to more successful exercises in the future. Organizations should focus on an exercise program where they have a goal to conduct a certain amount over a period of time to ensure any gaps are filled.

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Ron Ashkenas: Why We Secretly Love Meetings

October 7, 2010

Cross-posted from Harvard Business Online Is too much of your time spent in unnecessary or ineffective meetings ? If so, you’re not alone. Most managers consider meeting fatigue and meeting failures as two of the most significant drains on their productivity . As a result, an entire industry has sprung up over the past twenty years focusing on “meeting management.” Every company has courses on how to run good meetings , and in case you miss the training there are posters , laminated cards, and checklists for preparation, conduct, and follow-up. As a result of this saturation of meeting education, almost every manager knows the basic rules: Be clear about what you want to accomplish; invite the right people; send out pre-reading in advance; have an agenda and follow it with discipline ; send out notes with key decisions and action steps. You know the drill. Unfortunately these basic and widely understood guidelines for effective meetings are probably the least followed procedures in corporate history. If the government conducted “meeting audits” almost every company would fail. Most managers still complain about ineffective meetings, and then proceed to schedule multiple meetings and run them poorly. It’s an amazing phenomenon. This leads to one of the dirty little secrets of organizational life: Despite their protestations, at an unconscious (or conscious) level most managers actually like meetings, and for several reasons. They encourage social interaction. Most people don’t enjoy working alone; they want contact and relationships with other people. Meetings make them feel part of a community, and give them an outlet for sharing their personal feelings and opinions, not only on work issues but also on personal or political topics. So, some of the seemingly off-target chatter in meetings (even the complaining) is actually the realization of an important social outlet. They keep everyone in the loop. As firms have become more matrixed and interdependent, meetings serve as the informal loom that weaves together the organizational threads. People need to know what’s going on in other parts of the organization. They need informal sources to supplement the formal communication mechanisms — and to guide them through political and personal minefields. These information networks are created, reinforced and expanded through meetings. They often represent status. Membership on multiple committees means that you are important, your opinion is valued, and you have a seat at a decision-making table. Attendance at staff meetings means that you are part of the leadership team. Even being asked to present or answer questions at a meeting on a one-time basis gives you visibility with senior people and is status-enhancing. These psychological drivers of meetings are very powerful — and usually trump all of the logical and rational “meeting management” advice that is doled out in courses and articles. In other words, what seems like wasted or unproductive time for many managers is actually fulfilling important personal and organizational needs. This does not pardon meetings run wild and the time we lose to them. Managers at all levels need to be continuously on guard against unnecessary meeting proliferation and poor meeting disciplines. For example, several years ago in GlaxoSmithKline’s research organization there was a realization that — as a result of multiple project meetings and the inclusion of all functions on drug development teams — many people were spending as much time in meetings as they were on actual drug development work. As a result the company developed a “fit for purpose” meeting process in which only the people directly involved in a particular phase or issue of the project attended the meetings, while others just received information. All organizations should periodically look at their meeting patterns and make adjustments like this in addition to encouraging the use of agendas, virtual meeting approaches, and all the rest. However just complaining about too many meetings or poorly run meetings won’t do much good. Like moths to a flame, we’ll keep coming back, no matter what we say. What are your feelings about meetings?

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Rob Mulligan Tapped to Head Pro-Trade Group’s Washington Office

October 7, 2010

NEW YORK, NY–(Marketwire – October 7, 2010) –   Rob Mulligan , the former top international executive with TechAmerica, has been hired to head the Washington, D.C. office of the United States Council for International Business (USCIB), a leading pro-trade group representing America’s top global companies. He succeeds Timothy Deal , who has retired following 14 years with the organization.

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Donna Flagg: Managing Behavior With One Strike, You’re Out

October 5, 2010

Corporate America has a bad habit. It tolerates, perpetuates and systemically ignores bad behavior by keeping problem employees around far longer than they should. Organizations are then left with disease within the ranks, festering there to infect the business and derail results. I came to this realization while in the midst of writing the performance management section of an employee handbook for a client when our attorney pointed out how illogical a process it was. Until then, the client had employed a fairly standard model commonly used to manage problem employees “out” that is often referred to as “30, 60, 90.” It went something like this: Step 1: Communicate conditions of poor performance with the employee • Counsel, document and advise the employee of the next 30 day follow-up. Step 2: Conduct first 30 day follow-up • At 30 days, if performance has not improved, place employee on written warning and advise him/her that there will be another 30 day follow up. Step 3: Conduct 60 day follow up • At 60 days, if performance has not improved place the employee on final warning and advise him/her that there will be another 30 day follow up. Step 4: Conduct 90 day follow up • If performance has not improved, terminate employment, effective immediately. The point is that if an individual’s performance is going to improve, it shouldn’t take a full quarter to find out. It’s a waste of resources, misuse of time and certain to cause a loss in productivity. Alternatively, the system can be structured differently to give companies the information they need about an employee’s ability to turn it around sooner, rather than later. It could go something like this. Step 1: Be explicitly clear about what the organizational expectations are. Step 2: Be even clearer that the company has no intention of tolerating behaviors, conduct or breaches should they surface at any time down the road. Step 3: Then, if an employee does violate company policy, inform him or her of the problem ONCE, and explain why it is in fact a problem. This is the warning and his/her chance to fix it. Make sure the employee knows that if it happens again, his or her employment with the company is over. Step 4: And you wait. Hopefully they “get it” and don’t want to lose their jobs, and the company never has to revisit the issue again, or watch them languish further through a laborious and inefficient process. The “problem” is eliminated and the company is clean of the people who bog the business down. It’s quite straightforward actually. If we treat employees like children, we increase our chances that running a business will feel more like running a daycare center. One thing to keep in mind however, is that if there is a legitimate performance issue that requires an employee to learn and master skills that he or she does not currently possess, this is not a behavioral problem. In this case, if there is a chance that development, or lack thereof, is the underlying cause, then it’s better to coach and train then to threaten with disciplinary action. This gives both the organization and employee an opportunity to decide together whether the objectives of the job can be met. If it turns out not to be the right place for the employee, both parties can mutually agree to make a change.

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Video: OECD’s Saint-Amans Discusses Efforts to Curb Tax Evasion: Video

October 1, 2010

Oct. 1 (Bloomberg) — Pascal Saint-Amans, head of the international cooperation and tax competition division at the Organization for Economic Cooperation and Development, talks about the OECD’s study of tax havens and international efforts to eliminate tax evasion. The Group of 20 nations has called for a fresh drive against tax evasion since the financial crisis that started in 2008. The OECD, which tracks compliance with tax standards, said in January that nations signed 195 tax-information exchange agreements last year, up from 23 in 2008, as they sought to be struck off the group’s “gray list” of tax havens. Saint-Amans speaks with Mark Barton on Bloomberg Television’s “Global Connection.” (Source: Bloomberg)

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Dean Garfield: Why Innovation Isn’t Just Another Buzz Word

September 24, 2010

Far too often in Washington, we lose sight of the practical. Essentially, how specific policies stand to impact millions of people and the communities in which they live and work. From health care and energy to technology and innovation, the standard default is analysis and legislative language, not the ingenuity (and vast potential) of a concept or idea. By focusing on the wonky instead of the practical and transformative, we lose sight of the potential of technology to completely change the game . Earlier this week, the organization I lead launched “Faces of Innovation,” a new online campaign that showcases the way in which innovative technologies and the people behind them are positively impacting our data-to-day lives. More specifically, this Web series is aimed at helping the public and policymakers better understand how policies important to the high-tech sector, such as the research and development (R&D) tax credit and ICT enabled clean energy, directly link to developing innovations that make our lives better, businesses and households more efficient , and America more competitive. The message? R&D and innovation matter. Consider the following: due to R&D and the race to innovate in the ICT sector, we are all walking around with computers in our mobile devices that are a million times cheaper, a thousand times faster, and a hundred times smaller than the original computers. As a result, we can access Wi-Fi in a plane, translate language in real time, smartly monitor our energy usage, deploy mobile diagnostic devices to the underserved, and accomplish on the go what only a select few could a mere decade ago. If the exponential pace of development that has taken place in the tech sector were applied to other sectors, a plane traveling from New York to Paris which took 7 hours and cost $900 in 1978 would now take less than 0.25 seconds and cost less than a penny. Unfortunately, the nation’s drive to continue to invest in R&D is stalling at a time when such investment is most needed to keep up with our global competitors. In the early- to mid-1980s, federal funding accounted for approximately 45% of all R&D funding, it is now down to approximately 26% of all R&D. That is bad. Fortunately, the private sector continues to invest. Even in an economic crisis the private sector continues to increase its spend on R&D. In fact, private sector R&D spending will likely exceed $260.3 billion this year and will account for 64.8% of all U.S. R&D. Yet, despite this, more needs to be done. We need policymakers to stand alongside the private sector and make R&D a national priority. We need to encourage and reward innovation, as well as the people behind it. And, without question, we need to do so while the U.S. is still considered a global leader. Check out “Faces of Innovation” by clicking here.

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Video: OECD’s Gurria Says U.S. Economy Now in `Soft Patch’: Video

September 20, 2010

Sept. 20 (Bloomberg) — Angel Gurria, secretary-general of the Organization for Economic Cooperation and Development, talks about the state of the U.S. economy and the outlook for the labor and housing markets. Unemployment in the U.S. may hold above pre-recession levels until at least 2013 as the economic recovery is restrained by Americans paying down debt and a decline in household net worth, according to the OECD. Gurria speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

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Les McKeown: No Role Models, No Tools — Our Best Hope for Recovery?

September 15, 2010

We’re about to experience either a period of turgid, lackluster business growth, or an entirely new, exciting phase of corporate innovation and expansion that will be unrecognizable from anything that has preceded it. My money is on the latter. Why do I believe that despite deep global malaise and economic uncertainty, we will in the next decade see a new era of explosive, creative entrepreneurship? For this simple reason: the next generation of business leaders have no other option. To put it bluntly, the men and women men and women who will step newly into the C-suite over the next ten years are going in naked. They have few role models — almost none if you exclude the spunky startup types, and even fewer working tools in their leadership toolkit. The events of the last four years have carpet-bombed the leadership landscape. We’re all aware that the level of trust in business leaders is low in Main Street, and as anyone who works in industry and commerce will tell you, front-line employees and managers alike are more disengaged from top level management than ever before. Beneath the surface of that disengagement lies disappointment at least, and in many cases, open contempt. So as our new generation of CEOs, COOs and their peers emerge and take their places around the boardroom table, they do so with less attachment to the ways of their predecessors than ever before. In addition — and even more crucially — they are bringing with them an almost-empty briefcase. That box of tricks that they assiduously developed over the years in management education: the hard-won MBA, the years of Exec Ed., the grinding accumulation of skills, beliefs, vision and values — what value can our new leaders place in a toolkit that so obviously failed the very people they are replacing? Given this barren landscape — new leaders with few role models and even fewer effective tools — what will happen next in corporate America? An obvious argument can be made for stasis: that faced with a devastated leadership landscape the next generation will freeze in place and act as neutered stewards of our reduced circumstances. It’s possible — but based on my interactions over the last 15 years with those who will become senior leaders in the next 10, I don’t think that will be the case. Instead, everything I’ve seen leads me to believe we will see the emergence of three new dynamics, each one lower in the organization chart, which taken together will transform how businesses are run and reignite corporate innovation and growth: 1. The Connected Leader Probably like you, I have a nodding acquaintance with many of the people who live around me in my local town. Put us on a desert island and take away the comforts of life that we have taken for granted, and we’ll very quickly get to know — and depend upon — each other in a much more intimate and codependent way. I see the same dynamic developing in currently emerging leaders. They feel more like they are living through an episode of Lost than Mad Men . And as a result, their willingness to share and co-create, to combine knowledge, insights and experiences, to informally mentor and coach each other — between organizations as well as within organizations, is higher than it was for any previous generation. For C-level execs in the future, “being well connected” will have little to do with any old boys network, or what school you went to, and will be much more about who you are actively collaborating with. 2. The Predictively Agile Manager Our newly connected C-level execs are bringing into the boardroom one deeply seared self-realization that was drilled into them while watching their predecessors fail: that they are highly dependent on their managers to interpret the world around them. The old command-and-control model — the one that portrayed the C-level executive as being the master at the wheel, directing the ship while everyone else followed their orders — was (thankfully) one of the most visible casualties of recent corporate collapses. Our newly emerging leaders recognize that their managers are not just their hands and feet — there to get things done on command — but that those managers are also the eyes and ears of the C-suite; that they have a key role in not just monitoring, but interpreting and responding to changes in the surrounding environment, and communicating upward and sideways, rather than working in ensconced silos. In the future, the C-suite and the SVP / VP / manager group will work much more hand in glove than ever before — with highly positive effects on the growth of the organization. 3. The Innovative Employee Our newly emerging leaders are bringing with them not only connectedness and a new perspective of the importance of their manager group, they are also highly aware that in order for their businesses to grow in a stagnant economy, they must innovate. And it is here that the most interesting side effect of the “empty briefcase” emerges. Faced with the bankruptcy of old management models, many new leaders are looking deep into their organization to renew innovation, creativity and (controlled) risk-taking as an institutional skill. Knowing that they in themselves don’t have all the answers, the new C-Suite will be more active than ever before in mining the well of knowledge and experience that lies further down in the organization. New ideas will be encouraged and accepted more readily, employees will re-engage and will refocus their energies to help the business grow, and we’ll see an explosion of innovation. So even though (in fact, because) the next generation of leaders is emerging with no role models and no toolkit, I believe we are on the cusp of the most exciting era of corporate invention, innovation and growth since the days of Edison, Tesla and Ford. What say you?

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Max Fraad Wolff: Somewhere Between the Emerald Isle and the Land of the Rising Sun

September 14, 2010

The great austerity versus spending debate has been growing louder. The crescendo will likely be reached in the final run-up to the 2010 mid-term elections. This debate will rage for the next several years. At some point the sheer size of U.S. government debt issuance and the unsustainably low present interest rates will collide. The U.S. government will sell over $2.2 trillion worth of debt this year and pay $400 billion in interest on this debt. The only reason the interest expense is so “low” is that we are paying an average interest rate of 2.4%. In the three-year period from 2008 to 2011 America will pay and has paid, $847 billion in interest on the national debt. America is now somewhere between the long, slow slide of the Japanese economy — the land of the rising sun — and the austerity drenched emerald isle — Ireland. Ireland has slashed and enabled the market to begin to correct for the excesses of debt and speculative growth. Japan has tried to ease and stimulate its way out of what has become a 20-year soft patch. Ireland’s GDP has fallen more than 7% and her unemployment rate is over 13%. Japan has seen very low growth for nearly 2 decades. However, Japan has managed remarkable social cohesion and low unemployment. Below you will see the three nation’s unemployment charts as measured by the Organization for Economic Co-Operation Development (OECD). Japan has seen an enormous run-up in government debt and Ireland is suffering to prove its bona fides to bond markets and investors. These two nations are vastly different from the U.S. and from one another. However, they might function as bookends to the present debate in the U.S. All graphs display the U.S., Irish and Japanese unemployment rates against the average rate for the 33 developed nations of the OECD. The serious and persistent problems in the U.S. economy have created an environment where policy makers and pundits scream for greater proximity to either the Japanese or the Irish approach. I would argue that the Japanese, American and Irish approaches all involve the same mistake. Obviously, the circumstances and options open to each nation are different. No nation can fix structural problems with cyclical approaches. When the old structure is seriously broken a new structure must be built. The other choice is to attempt to speed up or slow down the adjustment process. This is done by meddling to smooth the business cycle or bracing for impact. Massive doses of government spending can reduce pain and slow adjustment. This has been the Japanese approach. Harsh market medicine will make a shorter more savage correction. The Japanese style approaches risks by staying down longer. The Irish medicine risks mass suffering fueled by political instability and wounds that fester and cripple. The bigger point is that this does not have to be the path that we follow. We can try a third way. We can confront that the structure of the U.S. economy needs to be adjusted and use market intervention to ease and speed the arrival of new and sustainable economic arrangements. This is absolutely not what we have been doing. America needs to spend less, save more and generate jobs. This must be done with decreasing government spending and a shift in the nation’s tax burdens. Labor needs to pay less in taxes — to grow jobs and assist the recovery in middle class households. This means that capital and profit will have to pay more of the total bill. The more growth our structural shifts generates, the less the increase in tax burden and the less the reduction in government spending that will be required. We have to re-invest in education, infrastructure, health care, public goods and reducing national debt. The costs, results and sufferings of our present issues in health, education, infrastructure and transport shorten and lower our life standards. These shortcomings are also crippling our competitiveness. Spending in these areas — more importantly changing how these areas function — is not mutually exclusive with balancing budgets. In fact, we can’t balance the budget without confronting where our first place spending is not generating world-class results. Our economy is structurally unsound. That means we need to change a portion of how the economy functions. Ours is not a simple question of less or more state involvement — although that is what we hear from most folks — left, right and center. We need to shift what gets taxed more and what gets taxed less. We need to slowly shift back to a system where the vast middle class can get jobs that earn enough to live. America will not be as relatively rich as she was for most of the period since WWII. This will still be a rich country. Our middle class will need to spend less on private consumption than what was spent from 2002 to 2007. Our lives can still be better! This means more public goods and more savings. Public transit, parks, health care, education and community development enrich many more lives at much lower cost than private pools dug in behind unaffordable McMansions. It’s time to let go of the notion that all change means decline. It is time to concentrate on facilitating the structural evolution of the U.S. economy. If we don’t, we are in for years of stifling debate in a deep growth valley between the Japanese and Irish paths.

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Video: OPEC Role in Energy Markets Undimmed After 50 Years

September 14, 2010

Sept. 14 (Bloomberg) — Bloomberg’s John Cookson reports on the 50th anniversary of the 12-nation Organization of Petroleum Exporting Countries and its role in oil markets.

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Video: OECD’s White Says Bank Capital Isn’t `Magic Bullet’: Video

September 13, 2010

Sept. 13 (Bloomberg) — William White, chairman of the economic development and review committee at the Organization for Economic Cooperation and Development, talks about bank capital rules agreed to by regulators yesterday in Basel, Switzerland. The Basel Committee on Banking Supervision will require lenders to have common equity equal to at least 7 percent of assets, weighted according to their risk, including a 2.5 percent buffer to withstand future stress. White speaks with Erik Schatzker on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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OECD Sees Leading Economies Diverging

September 11, 2010

The Organization for Economic Cooperation and Development is expecting growth in the leading economies that comprise its membership to diverge in the coming months according to The Wall Street Journal

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