• Building Good Work Habits the Simple Way

                        Gretchen Rubin on good habits via YouTube

    Most of us have behaviors that we would like to modify, but we often find it difficult to change habits we might call "bad." Many of these habits affect our work life directly and indirectly.  Gretchen Rubin classifies the common habit arenas as the "Essential Seven":

    • Eating and drinking more healthfully
    • Exercising regularly
    • Managing money effectively-earning, spending and saving
    • Resting, relaxing, and enjoying life
    • Accomplishing more, without stress or procrastination (for example, managing our email or social media time)
    • Staying organized
    • Having better relationships with others

    Rubin believes that people have one of four tendencies when it comes to habits, and she is a strong supporter of the idea that people are very different in both large and little ways, and that honoring one's own idiosyncrasies is a major factor in successful habit change. Her main reason to focus on habits is to increase happiness and satisfaction (both components of productivity in the workplace, by the way). She simply articulates the stress-reducing benefits of good habits in this way:

    "Habits are decisions you only need to make once."

    Gretchen Rubin 

    Once the basic principles are understood and put into practice, habit change, as described by Ms. Rubin, is simple. But it still isn't easy. 

    : "The Well Book Club: 'Better Than Before'," by Tara Parker Pope, the New York Times, (Wellness blog), March 23, 2015.

    "Better Than Before: Mastering the Habits of Our Everyday Lives," by Gretchen Rubin, Crown Publishing, March 17, 2015. 

    Follow up

    • Take the habit personality quiz embedded in the linked article. Which of the four tendencies best describes you? How about your boss or colleagues?
    • How can a manager use these principles to understand and motivate employees?

  • Building a better mousetrap: Getting the ketchup to slide out of the bottle

       Video from May 23, 2012: MIT and Harvard in race to create non-stick ketchup bottle YouTube

    Great minds have been working on this problem for years--how do you get viscous liquids in tubes or bottles to come out of those containers through a narrow opening? The classic example is the ketchup bottle. If you've never dealt with a ketchup bottle, watch the video above. 

    There are actually two physics problems: one is that air has to enter the bottle as the ketchup leaves, so it can't take up the whole hole, unless it is a squeeze bottle.

    The second problem is that sticky, viscous liquids do not want to move. They cling to the insides of the container. This creates some frustration with respect to product delivery. Worse, there is a lot of waste--Consumer Reports' tests indicated these levels of waste:

    • 25% of skin lotion
    • 16% of laundry detergent
    • 15% of mustard and ketchup

    MIT announced a prize to solve this problem, and there has been a winner: A new product has been invented and a new business, LiquiGlide, has been formed to produce the product and expand the applications. Kripa K. Varanasi, a professor at MIT and his grad student, J. David Smith, have a developed a "porous solid' that stays permanently wet. The complicated properties of their invention are described in the linked article.

    LiquiGlide has just announced a contract with Elmer's Glue company to produce containers for glue, and the company has another contract with a paint manufacturer in Australia. 

    Possible other applications include:

    • eliminating ice from airplanes
    • allowing crude oil to flow better in pipelines
    • improving toothpaste extraction from tubes
    • improving skin cream, laundry detergent, shampoo, conditioner and other household and health product delivery
    • improving condiment delivery (mustard, ketchup, mayonnaise, etc.)

    Former grad student J. David Smith--now the CEO of LiquiGlide--thinks their product will be "ubiquitous."

    Source: "With New Nonstick Coating, the Wait, and Waste, Is Over," by Kenneth Chang, the New York Times Science section, March 23, 2015.

    Follow up: 

    • Watch the video embedded in the article regarding "Bingham Plastics." Give some examples and describe the way they act in regular and LiquiGlide containers.
    • Think of additional applications for this new technology.
    • Would you be interested in investing in this company, if there is an IPO? Why or why not?
  • Cruise ship logistics

          YouTube video describes one minor aspect of cruise ship logistics:
                              Matching tours and ships with corporate clients.

    How is it possible to handle the logistics for a cruise for 3000-6000 passengers and over 1000 crew members--managing food, drink, luggage, room cleanliness, events, port connections, waste, entertainment, and crowd control--not to mention health crises and complaints? The article linked below described getting ready as "part Nascar pit stop, part loading of Noah's Ark." 

    Here are some of the provisions and systems required for an average-sized week-long cruise:

    • 24,000 bottles of beer
    • 1,400 bottles of champagne
    • 9,000 cans of soda pop
    • on-board bread-baking facilities
    • 15,000 pounds of potatoes
    • 9,000 pounds of tomatoes
    • 2,000 tons of fresh water per day produced by a reverse-osmosis desalination system
    • 1,200 tons of wastewater treatment, including bacterial breakdown of waste, mechanical and chemical systems to remove solids and ultraviolet light for disinfection. The "good enough to drink" water at the end of the process is dumped into the ocean, while solids are stored for drying and incineration
    • 93,000 pounds of laundry are washed weekly
    • 29,000 towels are folded by hand
    • Facilities to crush and freeze all used bottles, cans and compost so that they can't harbor disease
    • Systems to use engine heat to heat laundry and shower water.
    • Collection of condensation from air conditioners to be repurposed as laundry water.

    When things go wrong, they really can be bad. Dr. Peter Cass, a passenger on a Carnival line that had a fire that shut down power and knocked out major utilities remarked, "It’s like being locked in a Porta-Potty for days.”

    There are also health concerns, particularly the possibility of a norovirus outbreak. Hand-sanitizing stations are everywhere on the ship, and there are "containment protocols" including quarantine if there is an outbreak.

    Managing a cruise ship is like taking responsibility for every aspect of life for everyone in a small town. It is a big responsibility, with big financial rewards. But the skill set required includes all aspects of logistics, including meticulous planning, critical-path time management and decision-making, and a clear plan for production, operations and organizational management.

    Source: "A Luxury Liner Docks, and the Countdown's On," by Jad Mouawad, the New York Times, March 21, 2015.

    Follow up

    • What is the toughest logistical problem mentioned in the article?  How does Royal Caribbean manage it?
    • What was one of the specific tasks that the German efficiency engineers tackled for Royal Caribbean?
  • Combatting "Perverse incentives"

          a Doonesbury cartoon by Garry Trudeau illustrating the perverse incentives in Higher Education. 

    Sometimes what is good for corporate managers is NOT good for other stakeholders in the financial community, such as stockholders or taxpayers.

    For example, when taxpayers bailed out AIG, the executives in AIG still got their big salaries and got to keep their jobs--at the expense of taxpayers, who saw a loss of services or higher tax rates as a result. The alternative--liquidation of assets, layoffs and cost-cutting would not have helped the managers. So managers had a "perverse incentive" to take the bailout and ignore their costs to other stakeholders.

    An even more direct example of this is when there is corporate fraud or mismanagement that is prosecuted by a regulatory agency and there is a settlement. This settlement is paid from corporate assets, lowering the underlying value to all of the stockholders. But the perpetrators of the mismanagement go unpunished. The settlement does not come out of their pay, even if they were directly responsible for the wrongdoing.

    Corporate managers have a "perverse incentive" to take unreasonable risks with other people's money..especially when there is little or not chance that they will personally have to pay fines and penalties if and when the matter becomes a regulatory focus.

    Two efforts are trying to change this:

    • A renegade group of Citigroup shareholders, led by Bartlett Naylor of Public Citizen, have brought a proposal to be voted on at this year's annual meeting. If implemented, top executives would have to pay a large part of their annual compensation into a pool of money that would be used to pay any legal penalties if wrongdoing were uncovered by any executives. Top managers would have to wait 10 years to recover their earnings, and any forfeitures would be made public. Citigroup is urging stockholders to vote against this proposal. [Note: Citigroup had to pay $7 billion settlement in July 2014 involving mortgage issues.]
    • Greg Zipes has written “Ties That Bind: Codes of Conduct That Require Automatic Reductions to the Pay of Directors, Officers, and Their Advisors for Failures of Corporate Governance," which was published in the Michigan State Journal of Business and Securities Law. He advocates for a contract that would require executives to pay back 25% of their gross compensation for the three years preceding any corporate governance failure, regardless of whether it could be proved that they knew about the improprieties or were involved. Circumstances covered by this contract would include if the company pleaded guilty to a crime, or if an executive signed and filed a document with the SEC that misstated earnings by at least $5 million.

    It remains to be seen whether either of these efforts will be implemented. But--since they involve executive compensation--they have a chance of being effective.

    Source: "Ways to Put Boss's Skin In the Game," by Gretchen Mortensen, New York Times, March 21, 2015.

    Follow up

    • Explain what a perverse incentive is in your own words. How does cheating on an exam or essay relate to this concept? What are ways to mitigate against the perverse incentives in the school cheating arena?
    • Cite examples from current events where executives have profited from them. 
  • "Unbreakable": a soft skill for tough times

      This is the long version of a remixed FAKE news report, "songify-ed" via YouTube
             re: "The Unbreakable Kimmy Schmidt" Netflix TV series 

    Are you resilient--teachable but "unbreakable"?
    The Netflix series, "The Unbreakable Kimmy Schmidt," produced by Tina Fey, is a funny, very irreverent guide to the skill set needed to:

    • get along with people who are different from you
    • get a job when you don't have any experience
    • turn your life around when bad things happen to you that are not your fault
    • make mistakes without shame, and face up to them straightaway
    • be optimistic in the face of obstacles
    • learn new skills
    • deal with difficult people
    • trust your inner voice
    • be honest in difficult situations

    These are all "soft skills" that people need in order to face the various challenges that are a part of business life. 
    Each episode is only about 23 minutes long. 13 episodes.

    Many people find these inspiring and instructive, but they are not for everybody. 

    Source: "The Unbreakable Kimmy Schmidt," produced by Tina Fey and Robert Carlton, Netflix, March 2015

    Follow up:  

    • Sign in to Netflix. Download and give an episode a try. 
    • Cite examples from the episodes of several of the soft skills listed above

  • Human Resource Managers and Leadership

    Why may skilled Chief Human Resource Officers (CHROs) make great leaders and CEOs?  This assertion was made in a recent Harvard Business Review article, and was addressed in depth in the March issue of the online magazine, Human Resource Executive. The HRB article was based on research done by Ellie Filler of Korn Ferry and Dave Ulrich of the University of Michigan, using the proprietary databases owned by Korn Ferry. They analyzed skills and attributes that managers in all top areas had in common with CEOs (Chief Executive Officers), and found that Chief Human Resource Officers had more in common with CEOs than Chief Financial Officers, Chief Information Officers, or Chief Marketing Officers. Only Chief Operations Officers were more like CEOs. 

    Human Resource professionals are valuable as trusted confidantes for CEOs, as they have expertise about talent and expertise and are skilled at reading people and assessing potential. They can also operate in a "truth-telling" role, counseling CEOs about effective business communication strategies to use to motivate sales people, for example. Maybe more importantly, they can advise against ineffective or damaging strategies. 

    Source: "Being a truth teller," by Susan Meisinger, Human Resource Executive, page 6, March 2015.

    Follow up

    • What does Korn Ferry do, and why might it be important to business majors?
    • What attributes might a good Chief Human Resource Officer have deficits in, that other Vice Presidents might be skilled at?

  • Cable disruption: Options for "cord-cutters"

         Will More People Cut the Cord in 2015? from Bloomberg via YouTube.

    It looks as though many more delivery systems for various series and movies are becoming available.  This could mean a major change for the cable industry--as packaging and delivery of this content has been their business. Cable has been the logistics channel for media.  Here are some of the options in 2015:

    Company Price Channels Special Features What's missing
    Dish Network’s Sling TV $20/mo 20+ including ESPN, TBS, the Disney Channel,
    AMC and TNT; add ons for add'l $
    live and on-demand viewing; many platforms; 3 days of TV ABC NBC CBS; one device only
    Sony’s PlayStation Vue $49.99+ 50 channels, incl CBS, Fox, NBC, USA, TBS, Fox News, Discovery, TNT, FX, Nickelodeon, Comedy Central and MTV. (AMC soon) ; add ons for add'l $; sports; entertainment live and on-demand viewing; recording & saving; 3 days of TV No Disney ABC ESPN
    Apple TV $20-$40/mo ABC, CBS and FOX, ESPN and Discovery Channel + other cable to be determined. on-demand functionality; streaming live and on-demand television to iPhones, iPads and Apple TV set-top boxes. No Comcast, NBC,USA,
    Netflix $7.99/mo+ Thousands of movies and television episodes are included, including original series

    HBO Now $14.99/mo

    All HBO original programming, live and on demand only works with Apple TV hardware
    CBS all access $5.99/mo Live TV available in 14 United States cities, including New York and Los Angeles. Available everywhere in the United States are 6,500 on-demand episodes for current and past series Some sports blocked; 
    no NFL Games
    $99/year Thousands of movies and television episodes are available, including original series like “Transparent,” “Alpha House” and “Bosch,” as well as titles not on Netflix


    Hulu Plus



    Series for preschoolers

    Current and past TV shows from major broadcasters and cable networks are available, in addition to original series

     iPhone, iPad and iPod Touch devices


    No Current Nickelodeon

    : "Suddenly Plenty of Options For Cord Cutters," by Emily Steel, the New York Times, March 19, 2015.

    Follow up:  

    • Figure out what the TV you want will cost. Are you ready to cut the cord?
    • What is the likely future for cable? How can they stay competitive?

  • Hostile takeover possible in high-end mall company drama

                                                  YouTube Video from The Deal

    On March 9, 2015, the Simon Property Group Inc. (SPG) made a takeover offer worth $22.4 billion ($91/share in cash and stock) for the Macerich Company (MAC). Simon currently owns 3.6% stake in Macerich. On March 17th, Macerich rejected the offer and announced that it would try to defend itself against a "hostile takeover" by Simon. Both companies own and operate high-end shopping malls--among other holdings, Simon operates the King of Prussia Mall in Pennsylvania (the largest mall in the world); Macerich operates Santa Monica Place in California. 

    Companies often buy stock in other companies. When a company buys, or attempts to buy, significant amounts of another company's stock, it is often to gain a larger share of the total business in an industry (as well as eliminate competition). Simon sees Macerich as one of the few mall operators that are running vibrant, profitable operations--many malls are failing as consumers shift to online buying. High end malls thrive because of specialty tenants and are also tourist destinations. 

    Macerich is attempting to prevent the takeover. They are doing this by classifying its Board of Directors into groups, each segment of which would serve three-year terms (in order to prevent a proxy fight to replace the board). They also adopted a "poison pill" that will expire after the annual meeting, that will grant shareholders stock options if Simon's ownership goes above a certain threshold. 

    These moves by the Board of Directors for Macerich are controversial. This is because they benefit the current top managers and significant shareholders--at the expense of the smaller shareholders.  The offer made by Simon is 30% above the trading price of Macerich as of last November--and many smaller shareholders have jumped at the chance to sell their stock to Simon at this price. The Macerich Board is trying to convince the shareholders to hold out for their rights under the poison pill, so that Simon will not be able to purchase a controlling interest.

    Another strategy that can be useful in avoiding a hostile takeover is for Macerich to buy back shares from those shareholders who want to jump at this profit opportunity--and then re-sell them, maybe at a bargain price, to another investor who agrees NOT to sell to Simon.  We'll see if it comes to that. 

                         Santa Monica Place, owned by Macerich

    Source: "Macerich Rejects Takeover Offer From Simon, a Rival Mall Owner," by David Gelles, New York Times, March 17, 2015.

    Follow up

    • Do you agree with the assertion that shareholders have not been offered a high enough price for their stake in Macerich? 
    • Who benefits from the refusal to accept Simon's offer? Who gains?
    • Define "poison pill", "hostile takeover", and "controlling interest," making clear who gains and who loses in each case.


  • Apple Pay Fraud--whose fault is it?

                        From CBS via YouTube

    Apple Pay seemed like such a good idea. One app would allow you to pay for small and large items using your phone as an access point to your accounts and credit cards. A security feature was that your name would not show up on the merchant's screens--nor would your numbers--so retail clerks couldn't steal your credit card information.

    Banks and merchants wanted to leap on the Apple Pay bandwagon. But it looks as though they didn't look closely enough before they leaped. That particular feature turned out to be a bug--a checkpoint against fraud that had been eliminated when the name was hidden. And, according to Cherian Abraham, the blogger that identified the problem, the Apple Pay fraud rate is about 6% of all dollars spent.  Meanwhile the fraud rate for credit cards is about one-tenth of 1%. The weak link seems to be the lack of controls of the upload of credit card information to a given phone. 

    If you are a user of Apple Pay, you might be wondering--who is going to pay the costs of this fraud? Am I at risk? Lucky for the consumer, finance laws are set up to put the burden of fraud protection on the retailer and bankers, rather than the purchaser. Nevertheless, a breach would be a hassle.

    Source: "Pointing Fingers in Apple Pay Fraud," by Andrew Ross Sorkin, New York Times Dealbook, March 16, 2015. 

    Follow up

    • How, exactly, do perpetrators commit fraud using Apple Pay? Why is this easier than credit card fraud?
    • Whose fault do you (and these commentators) think this is and why? Apple's management or marketing department's, rushing a product to market before it was ready? Who are the competitors they wanted to beat? Does the blame like elsewhere? How could this problem have been avoided?
  • Chinese production growth weakening

                                The Casualties in China's Economy, by Jonah M. Kessel, YouTube

    How is China's economy doing? An accurate indicator is the demand and supply of steel.

    China's housing market, the major customer for China's domestic steel, is slowing down. But there are still many steel production facilities creating an over-supply, so steel prices have therefore collapsed. Exports of this excess steel have increased 55% over last year.  

    A slowdown in the following three areas foreshadow a weaker Chinese economy:

    • Manufacturing
    • Housing/real estate
    • Local government projects improving infrastructure

    The government in Beijing, led by Premier Li Keqiang, has had a policy of of shifting the economy to favor these goals:

    • Consumer spending-focus
    • Market-driven growth in excess of the current goal of 7%
    • Jobs increases (13.2 million urban jobs added last year)
    • Growing heavy industry
    • Development of the "one belt road"--providing logistical support to heavy industry by supporting the financing and expansion of the rail industry 

    All of these goals are being threatened by persisting effects of the global financing crisis and the softer demand for domestic housing, which are having a ripple effect throughout China's economy. The lowered demand for steel, for example, means that there is a lower demand for "coking coal" in the smelting ovens. This in turn means a lower demand to use the trains for transporting the coking coal to the steel mills. Nevertheless, in support of the long term goals, China still intends to spend about $130 billion this year on new rail lines. This will be threatened if the economy continues to shrink.

    The downturn has produced a few opportunities, however, for savvy middle managers in the steel industry who have been creative about shifting gears to self-employment and accommodating new markets.

    Source: "An Upside-Down Economy" (print), by Neil Gough, the New York Times, March 11, 2015.

    Follow up:

    • Cite an example from the article of a steel salesperson who successfully re-tooled his career path in light of these trends in the Chinese economy.
    • Read carefully: Is the Chinese economy operating at a lower Gross Domestic Product than it did last year? What, precisely, is changing? Think of an analogy that would make this more clear (something else that grows for years, maybe?).

  • Is the Apple Watch for everyone?

    BloombergBusiness on the Apple Watch

    Having trouble deciding which Apple Watch to get? There's plenty of help out there in cyberspace, but business students take note: The marketing strategy zooms straight past the REAL question: What do you need an Apple Watch for?

    The anticipation of "the next" Apple product generates excitement among techie news organizations, who want to generate traffic by being the first to report on the new technology. These media outlets are invested in the traffic their articles generate, so they may not be the most reliable sources of objective information. One strategy, however, is to appear objective, as demonstrated by the TechCrunch article linked to the graphic below.

    Anyway, if you want some input on deciding which watch is best for you, try these sites: 

    Of course, there are other watches out there as well:

    from TechCrunch

    Sources: "Which Apple Watch are you?", via Tony Wagner, Marketplace, American Public Media, March 11, 2015.
    "Which Apple Watch is Right for you?" by Darrell Etherington, TechCrunch, March 12, 2015.

    Follow up:

    • Describe Apple's marketing strategy with respect to the Apple Watch, in terms of target demographic and product functionality. 
    • So, which Apple Watch persona fits you? College Freshman? Start-up Founder? Monopoly Man? Why would you buy an Apple Watch?  Why wouldn't you?
  • GM stock buy-back: Who benefits?

    newsy business on YouTube

    General Motors (G.M.) has capitulated to a major shareholder's pressure, and has announced a plan to buy back $5 billion of its own common stock. Harry J. Wilson, who was part of the government's oversight group during the 2009 bailout of G.M., spearheaded the effort to force the buy-back.

    What happens when a company buys back its stock? The company's cash reserves are used, so they decrease. Also, the number of stock shares "outstanding" decreases. This means that the remaining stockholders will have higher "earnings per share" than they would have had if more shares were still held by the public. Not only Wilson would benefit from this--all stockholders would benefit.

    The risk to G.M. is: Does the company have enough cash after the buy-back ($20 billion) to weather the payouts that may be required due to recall costs? Analysts seem to think it is not a problem. In addition, Mary Barra, G.M.'s CEO, believe that they have plenty of cash to deal with the safety problems, expand the Cadillac brand and other new products, and deal with problems in Europe. 

    The market responded positively to the buy-back announcement, and so did Mr. Wilson, in an interview this week:

    "l was very impressed at how Mary (Barra) handled this and what it says about her general style and management approach.

    Source: "GM to buy back $5 billion of its stock," by Bill Vlasic, the New York Times, March 9, 2015.

    Follow up

    • How much did Harry Wilson want GM to buy back, and why?
    • What is the difference between "issued" stock, "outstanding stock" and "authorized stock"? 
  • Mountains and Money

    drawing is part of Mountaintop Removal by Bob Engelhart, in the Hartford Courant

    There is a conflict of interest between those who want to protect Appalachian mountains from disfiguring topping-off in search of coal, and the coal mining companies who seek new sources of coal for power generation. Blasting off the tops of mountains is a major part of this mining strategy.

    But a shift is taking place. PNC Financial, a major source of financing for the mountaintop mining of coal, decided to stop financing companies that use this technique in Appalachia. This came because of environmentalist's pressure on Wall Street banks. Most other major banks have already abandoned supporting companies that use this technique to mine coal. 

    Only GE Capital and UBS are still financing this practice--and if financing totally dries up, the business practice will stop. This is a very effective strategy for environmentalist groups.

    Source: "A New Tack In the War on Mining Mountains," by Andrew Ross Sorkin, the New York Times, March 9, 2015. 

    Follow up:

    • Why is the strategy of approaching banks to stop financing business practices more effective than lobbying institutions to stop investing in these companies?
    • Where have similar strategies been employed, and what have been the results (read the article). 
  • Don't hire your clone.

    2013 interview with Vivek Gupta; YouTube

    This weekend, the New York Times interviewed Vivek Gupta, the CEO of Zensar Technologies, who imparted his wisdom about leadership, management and hiring. 

    Here are his some of his thoughts on these topics:

    • Leadership: As a child, Gupta moved around a lot, so he "latched on" to a new friend or group whom he felt was better than he was in something, so that he could learn from them. He also tried to emulate his father, who died when Gupta was in college, because underlings described his father as tough, but a wonderful manager.
    • Management: He learned early to think outside the box and not pre-judge a person because he or she was not like he was himself. One woman in particular he hired as a salesperson became a standout, although his initial reaction was to judge her against the kind of salesperson he had been. 
    • Hiring: Gupta tries to focus on a person's potential, not only their track record. He also likes to ask interviewees for their "elevator pitch." He looks for people who are willing to take a risk and try something new. 

    Source: "Beware of Hiring People Just Like You," by Vivek Gupta, the New York Times Corner Office, March 7, 2015, in print 3/8/15. 

    Follow up:

    • What is an "elevator pitch"?  Why is it important to have one?
    • What adjective does Mr. Gupta use to describe himself? What are the pros and cons of this attribute for a manager?
  • Can't make a decision? There's an app for that


    Do you have trouble making decisions?
    If you do...of course--there's an app for that. These apps include:

    • Decision Buddy (android)--best for group decision-making 
    • ChoiceMap (apple)- prompts you for input so you can make intermediate decisions
    • FYI Decision -displays great visual results
    • Decide Now -no input required at all--makes the decision for you

    The uses of these apps include helping make decisions about car purchases, baby names, phone carriers, or where to go on vacation. As well as almost everything else. With many of the apps, you can evaluate several relevant factors associated with each decision, including costs and preferences.

    If you are REALLY indecisive, you might try the app called Decide Now--it makes your decision for you with the spin of a wheel--no intermediate decisions for you to make at all. 

    But, as the article points out...the app doesn't have to live with the consequences of whatever decision you make. Maybe a business-owner or manager would not want to delegate their decision-making prerogatives to an entity that isn't a stakeholder in the outcome.

    I wonder if updates will include a feedback loop for inputting results to improve decision-making. 

    Source: "Aids for the Indecisive, when options abound," by Kit Eaton, New York Times Tech, March 4, 2015. 

    Follow up

    • Would you ever use an app to help you make a decision? What types of decisions? What are the pros and cons?
    • Which of the apps described do you like the best and why?
  • Etsy is going public

    Etsy's artisans may not be happy about the IPO...YouTube

    Etsy is a company that originally (2005) only sold hand-made crafts. But in 2013, it started allowing the sales of "manufactured" goods as well. Artisans who were struggling to keep up with demand could hire people to help them produce product, or otherwise outsource their production. This was an important factor in allowing Etsy to grow from $125 million in sales in 2013 to $195 million in sales in 2014.

    Nevertheless, Etsy was still running a net loss of $15 million in 2014.

    The IPO hopes to raise from $100 million (NPR's estimate) to $300 million (Bloomberg's estimate). As part of the IPO, Etsy had to disclose in its filing documents the risk factors associated with the business. Etsy identified this: 

    "If we are unable to maintain the authenticity of our marketplace, our reputation and business could be adversely affected."

    The Marketplace commentators translated this as "losing their soul."

    Some of the craftspeople-sellers (as well as the original founder, who has left the company) agree that veering from the "core values of hand-made goods" and becoming more corporate are harming the brand. But the artisans are not going to be weighing in where it counts. We will have to wait to see how the market responds to Etsy's IPO. 

    Sources: "Etsy Goes Public, Hoping to Remain 'Authentic'," by Dan Weissman, Marketplace, American Public Media, March 5, 2015. 

    "Etsy Crafts IPO Putting New York Tech Back on the Map," by Leslie Picker and Alex Sherman, Bloomberg Business, January 13, 2015. 

    Follow up

    • What is special about Etsy? How does it differ from other online retailers? Do these differences positively or negatively affect the IPO?
    • What does IPO stand for? What does it mean in plain English?
    • How does Etsy make their money? Include both revenue streams from the craftspeople-sellers as well as other sources of revenue.
  • Using goal-setting to motivate employees


    Specific goal-setting is an identified strategy for employee motivation. To complement the classic goal-evaluation mnemonic pictured above, Entrepreneur magazine suggested the following five strategies for making goal setting work as a motivational tool for employees:

    • Increase employee happiness (identified by economists at the University of Warwick as a factor that increases productiveness by 12%) by identifying employees' personal goals and helping them achieve those goals.
    • Connect employee objectives to the larger company objectives, so that they can see that their work is important to the organization as a whole.
    • Set goals that are challenging, goals that will make a difference, and goals that are within the employee's skill set so they are achievable.
    • Write down the goals.
    • Create a plan and timeline for achieving the goals, and monitor employee progress at regular intervals so that employees stay on track. 

    Developing and evaluating goals should be done on an annual basis, creating a cycle of forward-looking achievement. 

    Source: "5 Ways to Set Up Your Employees for Success in 2015," by Zeynep Ilgaz, Entrepreneur online magazine, December 30, 2014. 

    Follow up

    • Do you have a goal strategy related to school or your job? If so, have you followed any of the guidelines above (particularly with respect to writing down your goals and periodically monitoring your progress)?
    • What is the most effective motivational strategy that has been used on you in any employee situation? If you have not worked, have any motivational strategies been tried on you as a student that have been effective in increasing your learning? [Do not answer this question with respect to a personal goal of achieving a high grade; answer it in terms of the educator's goal of motivating you to learn more.]
  • What to save for retirement

    The graphic above, put in easier-to-understand terms, says that if you are making $60,000 a year at age 35, you should have that much saved in various retirement funds (401K and IRAs, for example). This also says you should have $480,000 saved by the time you retire at 67...if you are still "only" making $60,000 per year. If you are making $100,000 per year at that point, you should have $800,000 saved. This is Fidelity Investment's recommendation. 

    If that sounds like a lot--it is: but it still might not be enough for you. A person would have to save 10% of their income per year--assuming they are making $30,000 when they start their career and get a 3% raise each year, and make 7% annually, compounded, to have "enough."  "Enough" is a little under $1,000,000--and that is only enough if one is taking out just 4% of the balance per retirement year (under $40,000). This isn't lavish, but it is sustainable. 

    The trouble is, financial advisors often steer investors into "actively managed portfolios" or other costly investment vehicles that have up-front or high fees. This reduces the return to below 7%, which in turn reduces the nest egg at retirement. One does not want to be caught without a financial safety net when Social Security and other government programs are being cut. 

    Source: "Americans Aren't Saving Enough for Retirement, but One Change Could Help," by Eduardo Porter, New York Times, March 3, 2015. 

    Follow up

    • Use the internet to find out what the future value of an annuity of $4000 for 40 years would be, at an interest rate of 6%. Could you save $4,000 a year? Could you save more?
    • How much would you have to save per year between now and when you are 35 to have your projected annual salary at 35 saved by that time? 
    • What are the factors that work against a middle-class saver's odds of being able to save enough to fund their retirement? What does the article suggest would help?

  • How big banks can serve the next generation better

    Millennial Disruption Index

    Last week I wrote a post about a large consulting firm's take on what banks need to do to address current market needs. The graphic above and the article below offer advice to the banking industry as well--but from the Millennials' perspective. The banking industry really needs this advice, based on the Millennial Disruption Index, as banking is the industry with the "highest risk of disruption."

    Suggestions for bank service and image improvement include: 

    • making ETC (education, transparency and choices) a high priority--using YouTube & infographics to make things clear
    • providing absolutely current mobile access technology
    • understanding the multiple levels of diversity within the generation
    • letting Millennials educate other Millennials

    SourceMillennials and Money: How Banks are Missing the Mark by Shama Hyder, Forbes Magazine, February 25, 2015.

    Follow up

    • Over what time period was the Millennial generation born? What are some of its characteristics relevant to business and marketing?
    • According to the article, what would 71% of Millennials rather do than hear about what banks have to say?
    • Here is the same question I asked when the banking consultant gave its take on what banks need to do: Now do you want to go into banking? What, in this article, makes the career arc sound more interesting than the post from last week based on a consultant's blog?