• How Much Money Is Enough?

     book by Robert Skidelsky and Edward Skidelsky

    The book linked above is a comprehensive look at money from both a personal finance and macro-economic and philosophical viewpoints. But several other experts have voiced cogent opinions that can help individuals set money goals that will enhance their lives. 

    These resources might help answer questions--or inspire other questions--surrounding this topic:

    Source: "One Money Question To Rule Them All: How Much Is Enough?" by Ron Lieber, New York Times, November 24, 2016.

    Follow up:

    • Read a description of the Skidelskys' work involving the ethical underpinnings of money and wealth. Also evaluate the experts cited in the above links and discussed in the Ron Lieber article. What are your thoughts?
    • Do a pie chart of what you value. Do another pie chart of how you spend your money each month. Compare and contrast in writing.
    • Use the holiday season and the clean slate of the new year to examine your own values around money. Consider setting some concrete objectives.

  • The Business of Recycling Mattress Springs

     image from Second Chance Recycling

    Most folks take their mattresses for granted...until they need a new one. Not only does a new mattress represent a major investment, the recycling of old mattresses presents both a problem and an opportunity. The big problem is disposing of huge mattresses and box springs. The business opportunity exists in reclaiming the raw materials for re-sale and re-use.  Duluth Goodwill Industries does that. But first they had to figure out how to do it in a cost-effective way.  

    Like all recycling businesses, Duluth Goodwill Industries had to consider these central questions: 

    • What is the most valuable part of the item to be recycled? 
    • What will it cost to extract or separate the valuable components from each other, and to get the product to the buyer?
    • What will be the cost of disposing of any unused materials?

    With respect to the mattress and box spring disposals, revenue can be generated from selling the reclaimed components after they are separated and re-formed. For the used mattresses, these components and revenue streams include:

    • Cotton, which is worth 4 cents per pound
    • Quilted mattress tops, which bring in a little less--3 cents per pound
    • Foam padding--10 cents per pound
    • The steel that is used in the springs, which can be sold to foundries at about $10 per mattress

    Because this program in Duluth is part of Goodwill Industries, labor costs are below market. The overhead costs are also less than market. In addition, as a non-profit, Goodwill received much-needed start-up help from the Natural Resources Research Institute in designing and building a key piece of processing equipment. These cost efficiencies would not be available to a for-profit recycling business.

    A new revenue stream, however, may open up in the future, making this and other recycling businesses more viable.  

    The revenue stream is a fee paid by the purchaser of the replacement item. To assess an appropriate fee, the true cost of an item can be calculated using "environmental accounting" techniques.  In the past, the cost to the municipalities and the public at large of disposal and waste have not been factored in. They are, however, a reasonable part of the "Cost of Goods Sold" of an item. This issue is beginning to get the attention of policy makers. In three states--California, Connecticut, and Rhode Island--a $10 fee is collected when each mattress is purchased. This fee covers disposal costs, which could be passed on to recyclers if the components were not going to end up in the landfill.  

    Source: "The economics of mattress recycling: the spring's the thing," by Britta Greene, Marketplace: American Public Media, November 29, 2016.

    Follow up

    • What is "sustainability accounting"? What is "environmental accounting"? Give an example of some situations where businesses have not borne all of the costs of production...but rather have passed them on to municipalities or entities? [hint: "Clean up" projects to rid the environment of pollutants that have been the result of a manufacturing operation is one example.]
    • Read the article or listen to the podcast. What is a major hurdle that this recycler has had to overcome in order to produce revenue from the most valuable mattress component? How did they resolve it?
    • What component of the mattresses (obvious in the pictures in the article and above) is not mentioned regarding recycling and re-sale? Research the possible revenue streams for this component and comment on the feasibility of recycling it. What are the costs of dumping this mattress component in the landfill?


  • Time-share Whistleblower is vindicated

     Patricia Williams--image taken by Jason Henry for the NYT

    Many employees hesitate to "blow the whistle" on fraudulent practices by employers for fear of losing their jobs. This may particularly be a factor for someone who is the sole source of financial support not only for themselves, but for their children. Patricia Williams, however, is a single mother who risked everything to bring to light the improper practices of Wyndham Vacation Ownership, a company that sells time-shares. Ms. Williams, who had 15 years of experience in the industry, was branded as a troublemaker and fired from her position as a sales representative. She found it impossible to find similar employment and compensation.  The retaliation by Wyndham was an extreme consequence, as Ms. Williams had followed company policies regarding "Wyntegrity": she went to her supervisors and managers rather than an outside regulator. These were some of the practices she reported:

    • Some representatives used high-pressure tactics on older customers to increase their number of time-shares.
    • Customers were being told, falsely, that Wyndham would buy back time-share purchases if customers lost interest in owning them.
    • Credit card accounts were opened for buyers without their approval.
    • Sales representatives frequently made oral promises to customers that were not included in the lengthy (and therefore possibly unread) written contracts.
    • Sales supervisors were paid on the basis of the sales output of their subordinates, which created a conflict of interest--since they were supposed to be policing the actions of these subordinates with respect to following company policy.
    • Sales goals were impossible to meet, given an honest sales environment...so "TAFT days" ("Tell them Any Frigging Thing") were used to boost sales when it did not look as though quotas would be met. 

    After a four-year case, a jury recently awarded Ms. Williams $20 million in compensatory and punitive damages. The case, however, may be appealed by Wyndham.

    Source: "'My Soul Feels Taller': A Whistleblower's $20 million vindication," by Gretchen Morgenson, New York Times, November 25, 2016. 

    Follow up

    • Would you be a whistleblower if it meant you might possibly lose your job? Why or why not?
    • What are other consequences--positive and negative; external and emotional--that may result from whistle-blowing. Consider all stakeholders. 
    • What is a time-share?  What are the parameters, limitations, and benefits to this type of purchase? What are the risks to buyers?
  • Pumpkin carving as a business

      from newyorker.com/video

    Halloween is over. All of us who are amateur pumpkin-carvers are probably done with our pumpkin carving for 2016--and have moved on to year-end holiday decorations. However, there is a business in New York City--Maniac Carvers--that specializes in high-end pumpkin carving. Their product line includes:

    • Single-purpose custom pumpkins or works of art
    • Events
    • Carving classes
    • Whole advertising campaigns based on their designs

    The owners, Marc Evan and Chris Soria, are artists--not business people. They were completely unknowledgeable about how to run a business when they started out, but have learned a lot--primarily in the areas of pricing and logistics. 

    Source: "The Pumpkin Carvers," produced by Sky Dylan-Robbins and Nate Lavey, newyorker.com/video, October 29, 2013; reposted in 2016. 

    Follow up

    • How do you make a profit from carving pumpkins when even the most elaborate designs are destined for the dumpster?
    • What is the primary and continuing obstacle for these entrepreneurs in this business?  How can it be mitigated?  Would the ability to surmount the obstacle hurt or help their business and client base? Why? 
  • Truffles: the business of selling a food that tastes like "dirty socks--in a good way"

     truffles--image by Dan Ashman, WNBC

    Truffles are a specialty food item.  According to the podcast, truffles taste like "dirty socks--in a good way." The acquired taste of truffles makes them valuable to high-end restaurants, as "foodies" seek out the truffle experience. Here are some reasons that truffles are special:

    • They are rare.
    • They grow underground, and can only be sniffed out by trained dogs (or pigs).
    • They can't be cultivated on a farm.
    • They only grow in Europe, in regions of France and Italy, so they must be imported.
    • They can't be frozen; their freshness must be maintained through proper temperature control. 

    The interviewers in the linked podcast follow around 24-year-old entrepreneur and truffle enthusiast, Ian Purkayastha, as he spends a day selling $20,000 worth of truffles (about eight pounds) to several NYC restaurants. He makes the sales from a styrofoam box in the back of a rental car. His profit is about 10%, although the restaurants he sells to make considerably more. 

    Purkayastha also produces other truffle products that bring in more money, but he feels that the heart of his business depends on his relationships with the chefs that buy his truffles from the trunk of his car. 

    Source: "A Trunk Full of Truffles," by Stacy Vanek-Smith, hosted by Dan Ashman, Planet Money--Episode 733, National Public Radio, November 4, 2016. [transcript]

    Follow up:

    • Listen to the podcast or read the transcript. What restaurants does Ian Purkayastha sell to in New York City? What menu items do truffles end up in, and why? How much do those menu items cost?
    • What is a surprising--and expensive--selling expense that Purkayastha incurs in his NYC sales?
    • Who is his competition? How do his competitors cut costs? Is there anything that can be done to level the playing field?
    • Have you ever tasted a fresh truffle? What do you think? 


  • Black Friday and Cyber Monday--They're BACK!

      Black Friday 2015 from linked article;  Yana Paskova/Getty Images

    Some consumers look forward to Black Friday, the marketing phenomenon and shopping spree that occurs on-ground on the day after Thanksgiving. The corresponding shopping day for online shoppers is known as "Cyber Monday." Research shows that the demographics are different for these groups. In addition, there are several operational differences from the retailers' side:

    • There is no overlap with respect to staffing requirements for in-store versus online purchases.
    • The logistics for product distribution are concentrated in warehouses for online shopping. (Shipping requirements occur after the point-of-sale). The opposite situation exists for the on-ground Friday shoppers--all goods must be shipped beforehand, and limited-quantity strategies must be managed. 
    • In 2016, observers have noted some differences. Marketing communications for the in-store shoppers are being directed at the discounts and timing of Friday-only shopping, whereas the deals marketed to online shoppers are not only good on Cyber Monday--the deals have been rolling out online throughout November, or are set to apply all of Thanksgiving weekend.

    As usual, the deals online are not as jaw-dropping and spectacular as the Black Friday offers. And, as in prior years, to get those in-store deals, shoppers need to arrive early and read the fine print in the advertisements. 

    Dollars spent by consumers have been shifting from in-store to online purchases--so deals are also offered by many retailers that can be used either in-store or online. There are examples of each type of discount linked in this article. And there are some shopping tips in this article.

    Source: "It's Black Friday Cyber November," by Jed Kim, hosted by David Brancacchio, Marketplace, American Public Media, November 21, 2016 [podcast].

    Follow up

    • Evaluate the phenomenon of Black Friday from marketing, logistics and pricing perspectives--for the consumer as well as the retail businesses.
    • How do you respond to the Black Friday hype, either on-ground or in cyberspace?
    • Find some deals for products in which you are interested, and compare the prices and marketing strategies for each, vis-a-vis Black Friday and Cyber Monday. 


  • Social media addiction and your career path

     image from affordablewebdesign.com 

    Many people feel pressure, in the current business environment, to enhance business connections by creating their "brand" on social media, and to network with others in their field. Many others use social media to keep up with acquaintances or family. Social media is also used as a news source, a source of entertainment, a platform for gossip, and/or an arena for political expression. While these uses may seem attractive, the author of the article below (who is an associate professor at Georgetown University, author, blogger and computer scientist), takes another viewpoint. He posits that time spent using social media may be more harmful than helpful--especially to one's career:

    "I think this behavior [social media use] is misguided. In a capitalist economy, the market rewards things that are rare and valuable. Social media use is decidedly not rare or valuable. Any 16-year-old with a smartphone can invent a hashtag or repost a viral article. The idea that if you engage in enough of this low-value activity, it will somehow add up to something of high value in your career is the same dubious alchemy that forms the core of most snake oil and flimflam in business."

    Cal Newport also notes that, because social media use does not require concentration on difficult tasks over the medium- or long-term, it harmfully trains people to opt for the easier short term reward. This is a feature of addictive substances. An additional feature is of addictive behavior is the need to use more of the substance over time. 

    Newport does not even mention the possible harm that may come from a manager or human resource professional discovering an unsavory post in an employee's feed. 

    Here are some resources where a concerned social media user might measure their own internet obsession and/or addiction:

    • This quiz is from 2004--so it pre-dates the majority of current social media applications: Psych Central
    • This quiz is--ironically--from BuzzFeed, but it is more current.

    Source: "Quit Social Media: Your Career May Depend On It," by Cal Newport, New York Times, November 19, 2016.

    Follow up: Consider these questions:

    • How many minutes or hours per day are you on social media sites?
    • How much of that time is on your smartphone? How much on a laptop or desktop?
    • How much of it is at work? How much of your work time on social media is directly related to a work project or a work connection in your field?
    • How many times per hour do you access social media? Do you have "push notifications" enabled?  For which apps? Do you access these apps when you are in a room with other people? Explain the plusses and minuses of your behaviors.
    • Look up the addiction quizzes linked above. Take both of them--in the presence of a trusted advisor or supervisor--and discuss the results. If you do show signs of addiction, and you cannot quit on your own, would you consider getting professional help before your career derails?


  • Rebuilding infrastructure: opportunities for business

     Hulton Archive, Getty images ( linked article): Golden Gate under construction.

    Donald Trump, our President-elect, is in the construction business. He has the opportunity--pointed out in the article linked below--to:

    "Build something awe-inspiring. Something Americans can be proud of. Something that will repay the investment many times over for generations to come."

    Examples of stellar, memorable projects from the past include: 

    • the Golden Gate Bridge
    • the Lincoln Tunnel
    • Timberline Lodge
    • a public golf course, similar to Bethpage State Park Black Course
    • FDR-era Public Works Administration and Works Projects Administration infrastructure improvements: bridges, roads, airport runways, playgrounds, military and civilian buildings, schools and world-class murals.

    The country might be able to unite behind either a symbolic and grand masterpiece of architecture and design--open to the public--or totally modernized, safe, and sturdy roads, bridges, and schools. Talk about putting America back to work!  There is a lot to be done. Some suggestions made in the article include various rail projects, a bridge project and both freshwater and sea-based projects.

    Somehow, I don't think that the (now back-burnered) southern border wall would fit the bill...  

    Source: "Trump-Size Idea for a New President: Build Something Inspiring," by James Stewart, New York Times, November 17, 2016. 

    Follow up:

    • What do you think about this proposal?  Which projects do you think are best? What are the pros and cons of each? Do you have other ideas?
    • How do infrastructure improvements affect logistics for both small and large businesses? Cite historical and current examples. 

  • Maximizing compensation: The effects of "tip surveys" and mPOS options

     image from BuzzFeed and Huffington Post

    The issue of tips and compensation paid by employers is sometimes debated among human resource managers and politicians legislating the minimum wage. Nevertheless, for individuals who depend upon tips to make a living wage, maximizing tip compensation is a priority. 

    Workers in several locations have taken it upon themselves to come up with creative ways to enhance tips. The opportunity to vote in a "tip survey" such as the one illustrated above is one example; several more are shown in the articles linked below. Anecdotally, and in limited research studies, these seem to have a positive effect. 

    Tip increases have also been noted arising from a different arena: mobile point-of-sale (mPOS) apps. These often give customers a palette of multiple-choice options for percentage or flat rate tipping. This not only prompts the customer to consider tipping, it also relieves them of the responsibility of calculating the tip. 

    For more information about tipping, visit tipping research.com .

    Sources: "3 Reasons Why mPOS is Driving Up Tipping," by Matt Niehaus, Inshore, June 10, 2016.
    "The tip jar goes digital and it is costing you," by Jenny Hoff, creditcards.com, January 27, 2016. 
    "Baristas take note: How to get more money in your tip jar," by Jody Avirgan, Marketplace, American Public Media, February 18, 2013.

    Follow up

    • Does an option presented upon checkout to tip a certain amount or percentage as part of a mobile transaction have any effect on your personal tipping behavior? What is your thought process when you see the option? Discuss your responses and the reasons for those responses. 
    • Have you put money in a "tip survey" jar? What is the most clever tip jar you have seen in person? Did it affect your tipping behavior?
    • Read this article about Facebook implementing a "tip jar." What are your thoughts, pro and con?
  • Re-design of logos and products

    Last weekend's New York Times Magazine ran several articles about the massive trend toward re-designing logos. Part of it is modernization, in terms of what translates well to social media. Part of it is trying to appeal to millennials.  I suspect part of it also is advertising and design companies trying to maximize sales by creating a need--which is one of their areas of expertise. There is also an uptick in product redevelopment. The whole issue is worth a look to those interested in business trends, products, marketing, and design. 

    One of the most interesting topics is: what logo designs and redesigns have not worked. Infamously, there was an almost immediate redesign of the Trump/Pence logo, as the original design was deemed by many to be humorously suggestive. 

    Source: "Do Over: On the Current Obsession for Redesigning Everything," a collection of articles by Jake SilversteinYudhijit Bhattacharjee, Malcolm Harris, Yiren Lu, Paola Antonelli, Nikil Saval, and Rob Walker via a "21st-century redesign craze themedThe New York Times Magazine, published in print on November 13, 2016 (and worth looking at in print or at least on a tablet or iPad).

    Follow up:

    • What products or logos--either mentioned in the Magazine or present in your life experience--have undergone successful redesigns?
    • Identify some unsuccessful redesigns, and explain why they may have failed. 
    • What logos have been so successful over the years that you think they will never undergo a redesign?


  • GoDaddy CEO: setting the "tone at the top"

     Blake Irving of GoDaddy; image by Michael Schennum, The Republic

    Blake Irving, GoDaddy CEO, was featured this week in the NYT "Corner Office" column. Irving responded on several topics:

    • Personal background: His dad was an "eclectic" FBI agent and district attorney; his mom was warm and intense. Irving himself tended not to be influenced much by what others thought. He was a drummer.
    • Education and career plans: Started out as a business major but didn't like it; studied art instead. He was fascinated by Xerox projects and worked there full time while going to school. 
    • Early career experience: Irving described himself as a "happy aggressive" go-getter. He was advised against pushing others--even though it was in a positive way. Early on, he had no intention of taking a CEO path.

    Blake Irving had this to say about his experience as a CEO: 

    "What I have found really interesting, and what I like about it, is that when you’re the C.E.O., you get to set a tone from your seat that’s different than if you’re working within an organization. That  ability— to actually shape the culture, talk about the things we’re going to do, how we’re going to treat each other, what we want our values to be — is different. I didn’t realize it until I was in the seat."

    Being able to set the "tone at top" is a known important feature of establishing the ethical environment of a company.  At GoDaddy, it has been expressed in Irving's support of women in technology positions, pay equality, and working with integrity. 

    Source: "Blake Irving of GoDaddy: At the Top, You Get to Set the Tone," by Adam Bryant, New York Times: Corner Office, November 11, 2016. 

    Follow up:

    • What does GoDaddy do? How did it start? What is your opinion about its products and its prospects? What will they need to do to stay competitive? 
    • What is the "tone at the top" at your organization--at school or work? What was the "tone at the top" in your family of origin? What qualities about whatever the tone is makes you feel most comfortable...or uncomfortable? 


  • SolarCity/Tesla merger: will it work?

    survey image via CleanTech; input from Bloomberg

    There is mixed sentiment among analyst concerning the pending merger of SolarCity and Tesla. Both companies are headed by Elon Musk, a visionary and alternative energy entrepreneur, spokesperson, and major investor. The shareholder vote (the only vote that really counts) will occur this Thursday. Meanwhile Tesla has reported a third quarter gain, although both companies face cash management issues. 

    Optimism exists because of the positive future prospects of solar-based energy and electric cars. The projects are integrated by the Powerwall 2. This in-home battery storage unit is a product that is being developed by Tesla. It can store excess solar energy production generation to prevent it from flowing back to the power grid. Instead the energy can be stored in the Powerwall and used to charge electric cars or to power electric appliances as otherwise needed.

    Source: "California Inc.: Moment of Truth for SolarCity/Tesla Merger," by David Lazarus, Los Angeles Times, November 14, 2016. 

    Follow up: What are your thoughts on, and your interest in purchasing or investing in:

    • the merger of these two companies
    • electric automobile and solar alternative energies in particular
    • the integration of the two industries via battery storage


  • The temps and Supertemps in the gig economy

     source: Bureau of Labor Relations

    The "gig economy" seems like a fabulous idea at first glance, but--like much of society--it is tiered into financial classes. Some individuals operate as sole proprietors or independent contractors, with many "clients" rather than employers.  They perform jobs on a project basis--and include bookkeepers or errand-runners/personal assistant, and may command a wide range of compensation.

    Others operate in a grey area (Uber, Airbnb) where there is one company that operates as a clearinghouse to obtain clients. These workers operate on what in other eras was called a "piecework" basis--they are paid by job, and these job are short term in nature. Other individuals sign up with the more traditional temporary employment agencies, where the company takes a flat fee for placing individuals at entry-level positions for various short-term clients of the employment agency. These workers are actually employees of the temporary agency, and are paid on a "wage" rather than "salary" basis.

    Most of the individuals operating in these areas of the gig economy are making around $15 an hour--or less if they are providing their own assets, and the cost of those assets is figured in. But "Supertemps" make much more. These individuals often have MBAs and executive experience, but for various reasons are not interested in being a permanent employee. Companies need these highly skilled individuals in times of transition--mergers or downsizing, for example. One benefit to the Supertemps is that the compensation is sometimes even higher than regular executive compensation. 

    But transitions require specialized "soft skills" at several levels of corporate organization. Perhaps a new tier is developing for temporary workers who are adaptable to new situations, and who are willing to take on the leadership roles at the middle management level. This means being able to direct the work of other temporary workers needed in a transition situation. Managing others to input data, and providing supervisory checks for accuracy, might command hourly earnings more in the range of $35. When a temporary worker finds himself or herself in a work situation that requires skills beyond those of an entry-level worker, an opportunity to negotiate presents itself.

    As the gig economy expands, employees at all levels will be in demand. 

    Sources: "As Freelancers Ranks Grow, New York Moves To See They Get What They're Due," by Noam Scheiber, New York Times, October 27, 2016.
    "The Rise of the Supertemp," by Jody Greenstone Miller and Matt Miller, Harvard Business Review, May 2012. 
    "Protecting Temporary Workers," OSHA, September 16, 2016.

    Follow up

    • What is the difference between a "wage" and a "salary"? What is "piecework"?  How would you like to be paid, and why?
    • What skills do you have that might put you into a more favorable position for high-end Supertemp work? What improvements to your resume might make you more marketable? Read the article on Supertemps: why do individuals choose to be a part of this "free agent nation"?
    • Define "gig economy" and explain how it has grown over the last decade. What new human resource entities have arisen? What are the plusses and minuses for each of the stakeholders?

  • Investing your charitable and political contributions in your future

      image from Sustainable America

    This blog is directed both to those who feel that they have "lost" with respect to the election results, and to those who are aligned with the outcome, but who still want to direct their charitable and political discretionary income to causes in which they believe. These include, but are not limited to:

    The way each of us chooses to dole out our discretionary income is important. 

    Source: "Where to Spend Your Money Today: Some Things Worth Your Dollars," by the Racked staff, Racked.com, November 9,  2016.

    Follow up: Research the links above and/or other links in the Racked article. List them and describe what they are about. 

  • Handling office interactions the day after the election

      image from The Unitive

    Interacting in a work environment the day after a divisive election can be challenging. "Saying nothing" can also be harmful to work relationships. Regardless of whether your candidate won or lost, skills must be developed to cope at work.

    Tips from the Business Journal and elsewhere regarding how to act if your candidate has won:

    • Be prepared for dealing with sore losers. Put yourself in their shoes, and maybe even ask for what their reactions are (if you can do so without getting into an argument). This might diffuse feelings and create a bridge for moving on.
    • Try this language, "If I were you, I'd feel so frustrated that I wouldn't want to even talk to anyone who doesn't share my views." Then back off, and say no more.
    • Refrain from Facebook or other social media gloating. 
    • When in doubt about the details of how to act, run your actions by the filter: "Am I being a good sport about winning?" Do this before you interact with others--even those who feel the same way you do.

    Tips regarding how to act if your candidate has lost:

    • If you are so upset you cannot face interacting with others, try not to act in an openly hostile way. That would put it on your shoulders to bridge the chasm later. 
    • Don't force--or expect--others to tiptoe around you; this may make them feel miserable as well, which is not productive for either work or relationships.
    • Stay task-oriented on the work you were hired to do. This signals to others that it is OK to interact with you. 
    • Don't "take the bait" if anyone else tries to gloat over your loss. 
    • If you can, be pro-active. Reach out and acknowledge that you feel bad about the results, but those feelings will not get in the way of personal relationships or current projects. 
    • To turn the loss into a positive for your social-intelligence reputation--congratulate others on their win, while acknowledging that you don't enjoy absorbing the loss. If you can, acknowledge the common ground of "being American."
    • Refrain from Facebook or other social-media grieving.
    • When in doubt about the details of how to act, run your actions by the filter: "Am I being a "good sport" about losing?" Do this before you interact with others--even those who feel the same way you do. 

    If you own or manage a business, you may have another option. According to R. Scott Oswald of the Employment Law Group PC, it helps to implement and disseminate a written policy about allowed conversation and actions in the workplace.

    Source: "Have a divided post-election workplace? Here's how to handle it," by Sara Kilgore, Washington Business Journal, November 9, 2016.

    Follow up:  

    • Try to take one action this week to move your work relationships forward in a positive way. 
    • Refrain from using the election events as an excuse to over-indulge in alcohol or other mood-altering substances. The effects of these can alter your work reputation permanently. 
  • Another executive in ethical trouble: this one goes to prison

     Wochit News via YouTube

    Andrew Caspersen received a four year prison sentence in New York last week for his part in a $38-46 million securities and wire fraud. Judge Jed Rakoff said this was a "lenient" sentence because of Caspersen's gambling addiction. Caspersen's victims were his friends, his family, and his employer (PJT Partners, Inc.). He used fake companies and fake addresses among other techniques in defrauding them. 

    Could this have been prevented? Although psychological factors were considered in imposing the 4-year rather than the 7 1/2 to 15 year sentence that comprised the recommendations, the article linked below did not mention any psychological factors that may have affected the victims and contributed to the extent of the crimes. There may have been co-dependency issues and enabling behaviors, since the stakeholders may have been aware of Caspersen's gambling problems, and the fact that Caspersen had been in therapy and quit.

    From an accounting perspective, however, the lack of adequate supervisory internal controls may have been a contributing factor. In addition, ethical behavior is often established as part of the "tone at the top" of an organization--and the  PJT Partners' website names many prominent investment professionals. The necessity of conducting business honestly may not have been communicated adequately to all investment advisors, even though there was an audit committee that included the company Chairman.

    There is no information available on the website or in the article that addresses whether or not there was any regular and contemporaneous review of advisor return-on-investment reports. 

    Source: "Ex-Executive at NY bank gets 4 years in prison in $38 million fraud," from the Associated Press, via CNBC News, November 4, 2016.

    Follow up

    • Why was a gambling addiction considered a mitigating factor in the punishment for this crime? Is it a disease? If so, what are the symptoms?
    • What is meant by the ethical "tone at the top" and why may it be important?
    • What responsibility does an investor retain, after they have turned over their money to a trusted investment advisor? Should they be able to sue and recoup losses if there is fraud, or does "caveat emptor" apply?


  • Women in Power

      Abigail Johnson, CEO of Fidelity; photo by Stuart Darsch

    Although many of the women on Forbes' list of the 25 most powerful women of 2016 are elected or appointed political figures throughout the world, seventeen of the women are business powerhouses, or in positions where they influence world economics. They include:

    • Arundhati Bhattacharya, Chair of the State Bank of India
    • Marilyn Hewson, CEO, Lockheed Martin, U.S.
    • Helen Clark, Administrator/U.N. Development Programme, New Zealand
    • Oprah Winfrey, Media mogul; CEO
    • Safra Katz, Co-CEO, Oracle, U.S.
    • Abigail Johnson, CEO, Fidelity
    • Angel Ahrendts, Senior VP,  Apple, U.S.
    • Indra Nooyi, CEO, PepsiCo, U.S.
    • Ginni Rometty, CEO, IBM, U.S.
    • Ana Patricia Botin, Chair Banco Santander, Spain
    • Meg Whitman, CEO, HP, U.S.
    • Susan Wojcicki, CEO, YouTube, U.S.
    • Sheryl Sandberg, COO, Facebook, U.S.
    • Christine Lagarde, Managing Director, IMF, France
    • Mary Barra, CEO, General Motors, U.S.
    • Melinda Gates, Co-Chair, Bill and Melissa Gates Foundation, U.S.
    • Janet Yellen, Chair, Federal Reserve, U.S.

      Indra Nooyi, CEO PepsiCo; photo courtesy AFP

    Source: "The World's 25 Most Powerful Women 2016," by Alix McNamara, Forbes Magazine, November 1, 2016. 

    Follow up:

    • Do an internet search of the women listed above, and comment on their companies and their business responsibilities and successes. 
    • Whom do you admire the most and why?

  • Quitting the office grind for "blue collar" work

      drawing by Antony Hare in the NYT

    Meaningful work almost always includes problem-solving and autonomy over at least some aspects of a process or a project. In prior eras, many "blue collar" jobs--or working class jobs--were factory jobs, which had been de-humanized and made meaningless by being broken down into repetitive tasks to remove the possibility of an erroneous choice in the production process. "White collar" jobs, which often required college degrees or other post-high school training, were career paths that could provide more fulfillment, as well as a paycheck.

    Ironically, "white collar" office jobs have undergone a dumbing-down or sterilization process in recent years.  Customer service representatives--rather than being attentive to a customer's needs--follow a prescribed and narrow script from which they are not allowed to deviate. Evaluations are often distilled into numbers rather than descriptively providing positive feedback. Sales quotas in the short term often trump the development of long-term business relationships. In short, the autonomy that provides job-fulfillment is missing from many office jobs. 

    Sridhar Pappu addresses the work transition made by four men in his article in this week's NYT Men's Style section. Each sought life fulfillment and satisfaction by moving out of office work and into a job where they were actually making something in the physical world.  

    This template for job satisfaction could also be applied to women in the workplace, in my opinion. Had he not been writing for this particular section of the newspaper, Mr. Pappu might have included some female stories. 

    Source: "Want To Quit Office Life to Work With Your Hands? Ask These Guys," by Sridhar Pappu, New York Times: "The Male Animal" feature in the Men's Style section published on November 4; online October 31, 2016.

    Follow up:

    • What non-office career options have you considered--whether as a child or an adult? List them, along with the pros and cons. How much is money a factor?
    • Being an employee at an established corporation is a different life experience from being a sole-proprietor or owner of a small private LLC. Discuss the plusses and minuses of these various forms of business participation. 
    • Read the article. Discuss the work transition of person whose job change most appeals to you, and explain why.
  • Solar Roof Tiles are the newest thing from Elon Musk

      YouTube video via SmartTech: Tesla Glass Roof Tile Solar intro

    Elon Musk always seems to have new ideas--especially in the realm of two of his interests: space travel and solar energy.  This week he launched his new solar tiles. Instead of being perched in awkward and unattractive panels a few inches off the roof, his new design looks just like a regular roof--only more durable, more attractive, and able to harness the sun's energy and convert it to usable electricity.

    In his dreams, homeowners would take the opportunity to install these tiles at the point in time where their asphalt tiles would need to be replaced anyway. 

    I already have those old-school (but VERY EFFICIENT and cost-saving!) solar roof panels, but I am curious about these new solar tiles as I ponder re-roofing a rental property. As a potential customer I have some questions:

    • Cost: What will these tiles cost per square foot, compared to various other types of  roofing? What would the "payback period" be of any cost differential?
    • Weight: How much do these tiles weigh compared to traditional roofing materials? If they weigh more, is the cost of reinforcing the roof structure factored in to any cost analyses?
    • Useful life: How long are these tiles supposed to last?  If one of the tiles fails, will the whole array cease to work (like a string of Xmas lights)?

    With any new product on the market, it is necessary to "think outside the box" and consider "unintended consequences" in order to be a good consumer. 

    Source: "Elon Musk Unveils Shingles That Could Finally Make Rooftop Solar Sexy," by Alexander C. Kaufman, The Huffington Post, October 28, 2016.

    Follow up: (watch the YouTube video first)

    • Are issues involving solar rooftops on your personal radar at all? Why or why not? Have you ever known anyone with rooftop solar, either in an apartment building or condo, or as part of a single-family home? What about a business? If you do know of any solar electric users, why did they opt for that?
    • Why are these tiles made of glass? What is the impact resistance? What are some of the other questions you have about this product?

  • Annuities: a little-understood retirement investment rut

      image from letusinsureyou.com

    How is this for bedside reading for an elementary school dance teacher: "Your Flexible Premium Indexed and Declared Interest Deferred Annuity"?  This is an investment made by Melanie Panush Lindert, who, as a teacher, put money into a 403(b) account which invested in this annuity. A 403(b) account is the type of investment vehicle that is allowed to public school employees and others--in lieu of a 401(k). School districts contract with a limited number of investment companies, who send salesmen to schools to get teachers to sign up and divert some of their salary into these funds as a retirement investment.

    The problem is, these annuities are often bundled derivative investments that neither the salespeople nor the investor-teachers understand. In fact, they are difficult for ANYONE to understand. Salespeople may be motivated to offer a product simply to get a bonus or a commission, rather than tailoring their advice to benefit the investor. One real-life example of this profit-motivated "advice" is given in the article linked below. 

    The reason that these investments appeal to teachers (and may appeal to other investors who are not interested in "actively managing" their funds) is that they provide, in retirement, a fixed annual income for life, based on the contributions made throughout the years. However, according to Craig McCann, a former investment analyst with the Securities and Exchange Commission who now specializes in analyzing investments using computer models, an annuity investment like the one mentioned above "Never" makes sense for any investor. From the article linked below:

    "[McCann] has employed close to a dozen people with Ph.D.s in math to dissect indexed annuity products as part of his firm’s work, which provides analyses for regulators and litigators representing investors...It took years for his team to master them. 'No agent selling these or investors buying these has the foggiest idea of how these work,' said Mr. McCann, who reviewed Ms. Lindert’s contracts."

    McCann says that most bond investments would provide a better return on investment. How does anyone making retirement investments for themselves know they are getting good advice?

    Source: "Even Math Teachers Are At A Loss to Understand Annuities," by Tara Siegel Bernard, New York Times, October 28, 2016. 

    Follow up:

    • If you are in the financial planning or financial analyst business, please describe annuities in a simple way, using analogies, then using real-life sample numbers. Or read the linked article and do your best. 
    • Describe, in your own words, the profit-motivation of the salesperson in the example given in the article. What are the ethical considerations in this transaction? Can it happen in other investing environments? How?
  • T. rex gets help from an unexpected source in ad

      Audi ad for a hands-free automatically driven car on YouTube

    Advertising remains an arena where creativity flourishes. Creativity becomes a particularly important factor in the arc of introducing a new product to the marketplace--whether the product is intended as a "fad" item, or whether it introduces a new type of product or technology. The first aspect of an effective ad in general--and an ad introducing a new product in particular--is its ability to capture the attention of an audience. This might be more of a factor in an age where many consumers fast-forward rapidly through ads on pre-recorded programs, stopping only if an ad catches one's attention by having a curiosity producing visual image in almost every frame. 

    An ad is particularly successful if it can do three things:

    • make the product advertised as memorable as the ad itself; 
    • be so creative that it accrues hits on its own on YouTube; and
    • Garner enough attention to be considered for a Clio award.

    Multiple free airings of the ad--should it "go viral"--make the ad particularly valuable--and may go a long way to making the ad campaign successful (result in actual sales, if that is the goal). 

    Source: Audi ad on YouTube, September 20, 2016.

    Follow up: In your opinion:

    • To what demographic does this ad appeal, and why?
    • What marketing communication techniques are used in this ad?
    • In what ways does this ad succeed or fail? What is the purpose of this ad? Compare it to others with the same intent.