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Shortcuts: It’s Just Fine to Make Mistakes

March 31, 2011 by Leave a Comment

That column eventually grew into a book, “Better by Mistake: The Unexpected Benefits of Being Wrong” (Riverhead), which will be published Thursday.

Here is an excerpt:

Perfectionists often get caught in the endless cycle of regret and blame that makes it difficult, if not impossible, to move on from their mistakes.

“Perfectionism,” says Jeff Szymanski, executive director of the Obsessive Compulsive Foundation in Boston, is “a phobia of mistake-making. It’s the feeling that if I make a mistake, it will be catastrophic.”

Wait a minute here. Aren’t we always complaining that things are going to hell in a handbasket — that no one really cares about doing a good job? Why not strive to be the very best you can be?

And that is true up to a point.

Being a perfectionist is not a bad thing; in fact, it may mean you have very high standards and you often achieve those standards. Those who have perfectionist tendencies, but those tendencies do not rule — or ruin — their lives, are what psychiatrists call “adaptive” perfectionists.

They find it important to do certain things in the right way, but this need does not hinder their lives and can actually help them achieve great success. For instance, Dr. Szymanski told me, he likes all the glasses in his kitchen cupboard lined up a certain way. That does not mean he freaks out if someone changes them (as friends sometimes do for fun), or that everything else in his house is equally ordered. He also strives to be the best executive director and psychiatrist that he can be.

But he knows he is not a great tennis player, and that’s O.K. with him — it doesn’t mean he will give it up because he is not world class, or line up a pro to work with him seven days a week. He is O.K. being O.K. at some things.

On the other hand, what psychiatrists call “maladaptive” perfectionists need to be the best at everything, and if they make a mistake, it’s a crisis. It is also not just about how they perceive themselves, but how others perceive them: they believe they will lose the respect of friends and colleagues if they fail. They have to hit all their marks all the time.

Their need for perfection can also sabotage their own success. They do not turn in projects on time because they’re not yet perfect. They can’t prioritize what needs to be done quickly and what needs more time to complete. They want to rigidly follow rules to get things “right,” and this often means they’re terribly uncreative, because creativity involves making mistakes, Dr. Szymanski says.

Even worse, they don’t learn from their mistakes, because if, God forbid, one occurs, it should be concealed like a nasty secret. So they cannot get crucial feedback — feedback that would both stop them from making similar mistakes in the future and make them realize that it is not a disaster — because they won’t risk punishment or alienation for a blunder. And such a drive for perfection takes a heavy psychological toll, because every flaw, no matter how small, is cause for agony.

A lot of perfectionists feel that they simply have high standards and that it is the rest of the world that falls short.

The problem with maladaptive perfectionists, Dr. Szymanski said, is not that they should not have goals, but those goals are often unrealistic and inevitably lead to a sense of failure.

There is some controversy in the field among those who study perfectionism about whether, in fact, the term “adaptive perfectionism” is valid, as by their very nature, perfectionists have trouble adapting.

Randy O. Frost, a psychology professor at Smith College in Northampton, Mass., who has studied perfectionism for years, said he would prefer the term “positive achievement striving,” but he acknowledged that that phrase was going to be a tough one to sell.

It is also important to remember that few people fit neatly into one category or another. We all tend to be on a continuum of perfectionism.

E-mail: shortcuts@nytimes.com

Article source: http://feeds.nytimes.com/click.phdo?i=e33de28a04a290e4fb4e5d90847021d4

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Fundamentally: The Case for Europe’s Blue Chips

March 31, 2011 by Leave a Comment

Even as European leaders grapple for a solution to their region’s debt crisis, Wall Street is now debating another question: Should investors, who are flocking to blue-chip stocks for the first time in years, favor the European or domestic variety?

Both the Morgan Stanley Capital International Europe index and the Standard Poor’s 500 are up nearly 4 percent this year. “European stocks still offer compelling values,” said Mark D. Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

The price-to-earnings ratio for European shares is just 13.2, below the 15.2 of the S. P. 500. For many years previously, European stocks traded at a premium to American shares.

There’s also the currency advantage to consider. The Wall Street consensus is that the dollar is likely to weaken further against the euro this year, continuing a trend that’s been unfolding since last summer. If that happens, Americans who invest in European shares will enjoy a lift — over and above any stock price gains — just because of the euro’s relatively stronger value.

They’re already enjoying that tail wind. Shares of Siemens, the German conglomerate, for example, have gained 2 percent this year, as the company has enjoyed better-than-expected profits — partly because of sales growth in rapidly expanding emerging markets. But tack on the effect of the weakening dollar and those returns more than double, to 5 percent.

“A weak dollar is good if you’re an American investing overseas,” said Alec Young, international equity strategist at S. P. Equity Research Services. But “if it lasts too long,” he added, “it could turn out to be bad.”

Just as a falling dollar can improve prospects for American investors abroad, it can be a boost for domestic companies trying to export their products overseas. That’s because a weakening currency makes their products cheaper for foreign customers. Conversely, a stronger euro makes it harder for European companies to export their goods.

“There is a price at which the currency exchange rate impacts the business model,” said David R. Kotok, chief investment officer at Cumberland Advisors. “It’s north of $1.40,” he said, referring to the current exchange rate of just under $1.40 to the euro. “But is it $1.50, $1.60, $1.70? I have no idea.”

For now, he said, European stocks still look attractive.

But it’s not just the weakening dollar that investors must weigh, some strategists say. Another consideration is why the dollar is falling against the euro in the first place.

One reason is that the European Central Bank has signaled that it may soon raise short-term interest rates to combat a rising threat of inflation. In fact, Jean-Claude Trichet, the central bank president, recently hinted that a rate increase could come as early as next month. By comparison, most investors think the Federal Reserve will hold short-term rates in the United States steady until the start of 2012.

Why are the European bankers considering such a quick move? Consumer prices in the region have risen 2.3 percent over the last year, noticeably faster than the 1.6 percent gain in the United States. And rising oil prices, spurred by the political turmoil in the Middle East, is likely to feed European inflation fears.

If the European Central Bank does tighten its monetary policy, it will not only be tapping the brakes on the region’s economy, but may also put further pressure on the dollar, because global investors will be rewarded with higher yields for parking their cash in euros. That, in turn, may add to the pressure European exporters — and their earnings.

“With slower growth and slightly higher inflation there, I would imagine the profit squeeze in Europe will be a little bigger than in the U.S.,” said Nariman Behravesh, chief economist at IHS Global Insight.

Would that be enough to snuff out the European rally?

Mr. Young said he didn’t think so. “If we were talking about rates moving from 4 percent to 5 percent, this would be a bigger issue,” he said. But since rates are only about 1 percent now, “It’s not that big a factor,” he said.

James W. Paulsen, chief investment strategist at Wells Capital Management, disagrees. He said that if the European Central Bank soon raised rates, “European policy officials will probably come to realize by late summer that they tightened too early.”

He expects the domestic economy, meanwhile, to keep heating up. “The combination of hotter growth here and policy changes that could slow the growth there would seem to favor domestic large caps,” he said.

For the moment, investors who are wondering where to place bets may want to make decisions case by case and sector by sector, Mr. Kotok said.

Because of uncertainties about health care reform in the United States, he said, investors looking at pharmaceutical companies might favor Sanofi-Aventis — the French giant that recently bought Genzyme — over a domestic drug maker.

But, he said, if investors want to bet on energy, they might favor a domestic player like ExxonMobil over Royal Dutch Shell, based in the Netherlands, as Exxon is making a big push into the potentially promising domestic natural gas market.

When it comes to your overall portfolio, though, it’s ultimately not a case of either/or, he said. “You need to own stocks both here and over there to be properly diversified,” he advised.

Paul J. Lim is a senior editor at Money magazine. E-mail: fund@nytimes.com.

Article source: http://feeds.nytimes.com/click.phdo?i=d34ec8dedea5e0e05f3c18a86e6962b9

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Advertising: Cashing In Coins and Skipping the Surcharge

March 31, 2011 by Leave a Comment

“We have videos of folks pouring coins into the machine and they’re watching the ticker go up and up and they can’t believe it, because they usually have about 50 percent more than they thought they had,” said Engle Saez, vice president for consumer experience at Coinstar. “They’re elated.”

What may come as less welcome news, however, is the Coinstar service fee, which is 9.8 percent in the United States.

Now Coinstar — with operations throughout the United States, Canada and Britain — increasingly is teaming up with retailers, who essentially pay that service fee on behalf of consumers, who in turn agree to spend their bounty with them. After tallying, instead of receiving a levied cash voucher, users choose a gift certificate for the full value of the coins from retailers including Starbucks, Gap, iTunes and Amazon.com.

For Coinstar, which receives fees for transactions regardless, the growth potential for such partnerships is considerable, because the companies promote Coinstar to their own customers on their Web sites, through promotional e-mails, and in print and online advertisements.

While Coinstar, which converts $3 billion in coins annually, has offered the fee-free option from some retailers for as long as five years, the company had until recently never advertised the option. While Mr. Saez declined to say how many customers opted for no-fee gift certificates, he said that “the ratio is inordinately high” for cash vouchers.

“We haven’t told anyone about it,” Mr. Saez said. “For all intents and purposes it’s been the best kept secret out there.”

•

But now Coinstar is trying to change that. Late last year, in publications including People and The New York Times, Coinstar advertised a program where several retail outlets, including iTunes, Borders and Regal Cinemas, went beyond shouldering the fee to offer gift cards that exceeded the value of a $40 minimum coin exchange by $10, meaning that $40 in coins could be redeemed for a $50 gift certificate.

After that promotion ended on Jan. 1, iTunes made the same bonus offer for the 30 days that ended March 6, while another company, Rixty, is offering a $30 gift certificate in return for cashing in $25 in coins from March 25 through April 17.

Rixty enables consumers who lack credit cards to make cash-based purchases online, primarily for virtual goods in games like Farmville and on social networks like Facebook. When the company first started selling credits to consumers in 2009, it began by offering fee-free credit exclusively to Coinstar users.

“When we launched they were our first partner, and the great thing was on Day 1 we were live on 10,000 kiosks across the country,” said Ted C. Sorom, chief executive of Rixty. (Today there are about 17,000 Coinstar machines in the United States.)

While most Rixty consumers are adults, many are adolescents who earn cash baby-sitting and mowing lawns, but lack credit cards.

“When they go to their parents and say, ‘Can I borrow a credit card to buy a pair of virtual pants in a virtual world that you’ve never really heard of?’ the results are not positive,” Mr. Sorom said.

While his company today has numerous ways to use cash for online purchases, including Rixty gift cards available at retailers like Kmart and J. C. Penney, Mr. Sorom is partial to the freewheeling nature of Coinstar consumers.

“It is found money,” he said of their transactions. “It doesn’t come from a wallet or bank account, and people are much more willing to spend it on something on the edge of their budget, something they couldn’t justify spending money on before.”

•

Coinstar, which says it has kiosks within five miles of 95 percent of the United States population, says it has an average coin transaction of $38 and about 76 million transactions annually.

The largest coin exchange on record for the company involved Edmond Knowles of Flomaton, Ala., who in 2005 cashed in $13,084.59 — all in pennies. Coinstar sent an armored truck to Mr. Knowles’s home to retrieve the pennies.

Amazon, which has offered fee-free gift certificates through Coinstar since 2005, says spending among Coinstar users increases every year, though the online retailer declined to give specifics.

“We know there’s a segment out there that doesn’t have access to credit cards, and we also see a lot of college students who don’t have credit cards,” said Marcell King, senior manager at ACI Gift Cards, the issuer of Amazon gift cards.

More than eight million consumers stopped using credit cards in the last year, a nearly 11 percent increase in the number of consumers who forgo them, according to a recent report from TransUnion, a credit rating agency.

The latest effort by Coinstar, in pilot programs under way at both the Albertsons and Stop Shop supermarket chains, entails a first for the company: offering no-fee gift cards at the very store where shoppers are exchanging coins.

Stop Shop is running its pilot program for a six-month period through May at 50 stores, most of them in Massachusetts, and promoting it through newspaper circular advertisements and billboards — by Eleven Inc. in San Francisco — and in-store radio announcements.

“What we’re hearing from our customers is that they like it and they’re happy with it,” said Mark McGowan, president of the Northeast division of Stop Shop, who declined to provide preliminary data from the pilot program.

Mr. Saez, of Coinstar, said such in-store programs had enormous potential — and should have been initiated long ago.

“We’re trying to appeal to those consumers who are fee-averse by putting a product in front of them that we know is highly, highly relevant to them,” he said. “To convert coins into a grocery store gift card — that one was a no-brainer that skipped over a lot of brains here for many years.”

Article source: http://feeds.nytimes.com/click.phdo?i=e27e9b1da28238a7c7f033d879a5dc82

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U.S. Stock Futures Are Flat in Pre-Market Trading

March 31, 2011 by Leave a Comment

The decline to 388,000 in claims for unemployment benefits last week was less than expected, but the drop still signaled improvement in the labor market.

The data also followed an encouraging ADP report on private-sector jobs and precedes Friday’s employment report from the government.

“Claims are going in the right direction, and that gives us hope that we’ll see a good employment number tomorrow,” said Jerry Harris, president of asset management at Sterne Agee in Birmingham, Ala.

The week has been marked by some of the year’s lowest volumes as traders opt to ride the quarter’s gainers amid global risks. The SP 500 is up 5.6 percent for the quarter, based on Wednesday’s close.

“Today will be quiet as people have already established their positions in preparation for a report that is expected to be positive tomorrow,” Harris said.

The Dow Jones industrial average was up 4.84 points, or 0.04 percent, at 12,355.45. The Standard Poor’s 500-stock Index was down 0.75 point, or 0.06 percent, at 1,327.51. The Nasdaq Composite Index was up 0.98 point, or 0.04 percent, at 2,777.77.

The Institute for Supply Management-Chicago said its index of Midwest business activity fell in March to 70.6 from 71.2 in February. The data was near economists’ expectations and stocks reacted little.

David Sokol, the man widely seen as the leading successor to Warren Buffett to head up Berkshire Hathaway, has resigned after buying shares in chemical company Lubrizol before pushing Buffett to acquire it.

In an interview on CNBC, Mr. Sokol said he did nothing wrong in buying the shares.

Berkshire’s Class B shares fell 1.8 percent to $83.90.

The Macau unit of Las Vegas Sands said it is being investigated by the Hong Kong Securities and Futures Commission for alleged regulatory violations. Shares fell 4.9 percent to $41.41.

Article source: http://feeds.nytimes.com/click.phdo?i=304e413e435adace612376af385f2ff3

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Economix: The Myth of Resolution Authority

March 31, 2011 by Leave a Comment

Today's Economist

Simon Johnson, the former chief economist at the International Monetary Fund, is the co-author of “13 Bankers.”

Senator Ted Kaufman, Democrat of Delaware, has been highly skeptical about whether the federal government's power to shut banks can be applied to global megabanks unless an international accord is reached.Andrew Harrer/Bloomberg News Senator Ted Kaufman, Democrat of Delaware, has been highly skeptical about whether the federal government’s power to shut banks can be applied to global megabanks, unless an international accord is reached.

Back when it really mattered – last spring, during the debate over the Dodd-Frank financial regulation – Senator Ted Kaufman, Democrat of Delaware, emphasized repeatedly on the Senate floor that the proposed “resolution authority” (the power to shut banks) was an illusion.

His point was that extending the established Federal Deposit Insurance Corporation powers for “resolving” financial institutions to include global megabanks simply could not work.

At the time, Senator Kaufman’s objections were dismissed by “experts” from both the official sector and the private sector. Now these same people (or their close colleagues) are falling over themselves to argue that resolution cannot work for the country’s giant bank holding companies. The implication, which these officials and bankers still cannot grasp, is that we need much higher capital requirements for systemically important financial institutions.

Writing in the March 29 edition of The National Journal, Michael Hirsch quotes a “senior Federal Reserve Board regulator” as saying: “Citibank is a $1.8 trillion company, in 171 countries with 550 clearance and settlement systems,” and “We think we’re going to effectively resolve that using Dodd-Frank? Good luck!”

The regulator’s point is correct. The F.D.I.C. can close small and medium-size banks in an orderly manner, protecting depositors while imposing losses on shareholders and even senior creditors. But to imagine that it can do the same for a very big bank strains credulity.

And to argue that such a resolution authority can work for any bank with significant cross-border operations is simply at odds with the legal facts. The resolution authority granted under Dodd-Frank is purely domestic; that is, it applies only within the United States.

Congress cannot readily make laws that apply in other countries. A cross-border resolution authority would require either agreement among the various governments involved or some sort of synchronization for the relevant parts of commercial bankruptcy codes and procedures.

There are no indications that such arrangements will be made, or that serious intergovernmental efforts are under way to create any kind of cross-border resolution authority — for example, within the Group of 20.

For more than a decade, the International Monetary Fund has been advising that the euro zone adopt some sort of cross-border resolution mechanism. But European (and other) governments do not want to take this kind of step.

Rightly or wrongly, they do not want to credibly commit to how they would handle large-scale financial failure –- preferring instead to rely on various kinds of ad hoc and spontaneous measures.

I have checked these facts directly and recently with top Wall Street lawyers, with leading thinkers from left and right on financial issues (in the United States, Europe and elsewhere), and with responsible officials from the United States and other countries. That Senator Kaufman was correct is now affirmed on all sides.

Even leading figures within the financial sector now acknowledge this. Mr. Hirsch quotes E. Gerald Corrigan, former president of the Federal Reserve Bank of New York and an executive at Goldman Sachs since the 1990s: “In my judgment, as best as I can recount history, not just the last three years but the history of mankind, I can’t think of a single case where we were able execute the orderly wind-down of a systemically important institution – especially one with an international footprint.”

It is most unfortunate that Mr. Corrigan did not make that point last year – for example, when he (and I) testified before the Senate Banking Committee on the Volcker Rule in February 2010.

In fact, rather tragically in retrospect, Mr. Corrigan was among those arguing most articulately that some form of Enhanced Resolution Authority (as he called it) could actually handle the failure of large integrated financial groups (again, his terminology).

The “resolution authority” approach to dealing with very big banks has, in effect, failed before it even started.

And standard commercial bankruptcy for global megabanks is not an appealing option -– as argued by Anat Admati in The New York Times’ Room for Debate in January.

The only people I have met who are pleased with the Lehman bankruptcy are bankruptcy lawyers. Originally estimated at more than $900 million, bankruptcy fees for Lehman Brothers are now forecast to top $2 billion. (The AmLaw Daily describes this in detail.)

It’s too late to reopen the Dodd-Frank debate –- and a global resolution authority is a chimera in any case. But it’s not too late to affect policies still under development. The lack of a meaningful resolution authority further strengthens the logic of larger capital requirements, as these would provide stronger buffers against bank insolvency.

The Federal Reserve has yet to announce the percentage of equity financing – i.e., capital – that will be required for systemically important financial institutions (the so-called S.I.F.I.’s). Under Basel III, national regulators set an additional S.I.F.I. capital buffer. The Swiss National Bank is requiring 19 percent capital and the Bank of England is moving in the same direction.

Yet there are clear signs that the Fed’s thinking –- both at the policy level and at the technical level –- is falling behind this curve.

This time around, officials should listen to Senator Kaufman. In his capacity this year as chairman of the Congressional Oversight Panel for the Troubled Assets Relief Program (for example, in this hearing), he has been arguing consistently and forcefully for higher capital requirements.

Article source: http://feeds.nytimes.com/click.phdo?i=62590797b842a39b5e9e8fba0711dba7

Filed Under: Economy News Tagged With: , ,

Economix: A Decline in American Entrepreneurship

March 31, 2011 by Leave a Comment

American workers weren’t the only ones sacrificed by the Great Recession. Start-ups suffered, too.

A new paper from the Federal Reserve Bank of Cleveland tracks various measures of entrepreneurship over the last few years. It found that the number of businesses with employees — one indicator of entrepreneurial activity, like self-employment — took a nosedive.

The chart below shows the number of businesses in the United States, adjusted for population growth.

DESCRIPTIONScott Shane, “The Great Recession’s Effect on Entrepreneurship,” Federal Reserve Bank of Cleveland.

As you can see, the population-adjusted number of businesses began falling even before the recession officially began in December 2007. But once the downturn hit, the number of businesses began falling precipitously.

Some of that decline was because of business failures. But it was primarily tied to the lack of new business formation. The report’s author, Scott Shane, writes:

68,490 more businesses closed in 2009 than in 2007, an 11.6 percent increase in the business closure rate. But in 2009, 115,795 fewer employer businesses were founded than in 2007, a 17.3 percent decline in firm formation.

The financial crisis held back new business formation in many other countries, too, as documented by this paper presented last fall at the Federal Reserve Bank of Atlanta.

Given these findings, it is perhaps no wonder that the job market is still so poor.

Young businesses (not small businesses, despite what politicians may tell you) are the biggest engines of job growth. With so few businesses forming, hiring is staying very depressed. And the main problem in the job market is not layoffs — which are at a record low — but new hiring.

Article source: http://feeds.nytimes.com/click.phdo?i=a3cda0409b0878d08322a0b53f988884

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Case Study: A Decision to Hire a Sales Agent for Big Money

March 31, 2011 by Leave a Comment

THE CHALLENGE To determine whether to hire a highly paid senior sales representative to expand the sale of Prometheus’s software to different industries.

THE BACKGROUND A scientist by training, Dr. Rozenblit understands the needs of researchers. They require a system that is powerful enough to handle millions of data points but that can be adapted as their studies change. Given the tight budgets of most academic institutions, the system cannot be expensive.

Prometheus developed original technology to enable scientists to connect their databases to the Web, allowing multiple users in various locations to access, manipulate and share large quantities of structured data simultaneously. Its software, called HTSQL, was embraced by scientists and technologists and has been Prometheus’s primary product.

Dr. Rozenblit said he believed HTSQL was a game-changing innovation that could also be used to manage data outside of the scientific community — most likely in the financial services and health care industries. Neither he nor his management team, however, knew how to market the software to other industries. “We knew the save in terms of time and money was dramatic, but it wasn’t a product yet,” Dr. Rozenblit said. “It’s not a product until you define a set of customers whose needs you meet and who want to pay you.”

To assess the value of its software, Prometheus had to engage potential clients to determine what problems HTSQL might solve for them. The management team debated who was best equipped to initiate those conversations.

THE OPTIONS Though Dr. Rozenblit and his staff were busy serving existing clients, he considered pursuing corporate accounts himself. After all, no one knew the product and its possibilities better. They also thought about reallocating several employees to approach organizations with large data management needs.

As a slightly more ambitious option, they considered hiring a junior sales representative to try to gauge the potential demand for HTSQL and to pursue new business. An employee at this level would be paid about $60,000 base salary, plus commission.

Finally, Dr. Rozenblit considered hiring a more expensive and experienced sales representative to cultivate relationships and help shape the way HTSQL would be deployed by future clients. A senior representative would command $150,000 to $200,000 in base salary, plus commission.

THE DECISION Dr. Rozenblit chose the last option. In November 2009, he hired Peter Harker, a senior salesman with nearly 20 years of experience selling technology, to lead the product introduction.

Dr. Rozenblit acknowledged that his decision was risky, in part because it forced him to cede some control over the trajectory of his business. Dr. Rozenblit said he wanted to stay connected to the process while removing himself from the daily demands of sales. He decided to include Mr. Harker in all executive team meetings so they could work together to determine how to approach new markets. “How do you let go of your baby?” he asked. “It would have been really hard for me five or seven years ago, but I’m a more experienced manager now.”

Dr. Rozenblit tried to assess his own limitations. Because his team could not define exactly how corporate clients would use HTSQL, he believed that Prometheus needed an experienced representative who had credibility with executive decision-makers and who could prompt a discussion about how HTSQL might help their businesses. “We were effective at selling ourselves to scientists,” he said, “but we had no contacts in the markets we thought were most promising. We needed someone who knew about enterprise software sales.”

Dr. Rozenblit said he believed Mr. Harker had the right blend of product and sales knowledge, and enough credibility to command attention from senior executives. He had a history of joining early-stage companies and helping identify new markets for cutting-edge technology. He had also been an entrepreneur himself, so he understood the scrappy culture and fiscal constraints of fledgling companies.

Article source: http://feeds.nytimes.com/click.phdo?i=db4f90a3053f9c6b839ecab4df7aede3

Filed Under: Small Business Tagged With: , ,

The Boss: It’s O.K. to Sleep at Camp

March 31, 2011 by Leave a Comment

One day after basketball practice, two of my teammates got into a heated discussion about an incident that happened in third grade. It hadn’t occurred to me that these guys had known each other for so long. It was the first time I realized that moving every few years wasn’t the norm.

I married my high school sweetheart when I was in college at Duke, and we had a son who was diagnosed with leukemia. I dropped out of school and exhausted our medical coverage over the next three years. My dad advised me that the military would provide medical insurance. I joined the Army because it was a branch of the service that would let me choose the training I wanted.

Unfortunately, my son died a year later. Marrying young and having a child with serious health issues was too much for the marriage, and it didn’t last. I told my superiors that since there was no longer any reason for me to be there, I’d like to go home. But they pointed out that I still had three years on my contract.

I continued my training on computers and electronic communications and ended up with the equivalent of a master’s degree in computer science. I worked on a command-and-control system at Fort Sill, Okla., that managed an entire operating theater and was deployable anywhere. It integrated information like data about weather, troop movements, munitions and supplies.

Anxious to catch up with my peers, I got a job at a computer firm in New Jersey and enrolled at what was then Rider College. I worked full time and went to school full time, graduating summa cum laude in 1990 at age 30. Afterward I attended the Fuqua School of Business at Duke on a full scholarship.

Then I accepted a job at Procter Gamble, starting as a financial analyst with an eye to becoming a senior finance executive. On one assignment, I served as a controller at a paper plant in Greenville, N.C, to understand how seemingly small decisions have an impact on capital, costs and operations at that level.

A lesson I learned at P. G. from my mentor and boss, Wendell Clark, was to anticipate and prepare for the future. He suggested using the financial model I had developed to adjust various costs and predict the impact in seconds.

Next, I worked at Coca-Cola and helped turn around a noncarbonated beverage division. Then I became chief financial officer at Kidde, the smoke detector and fire extinguisher company. After that I moved to SPX, an industrial equipment supplier, which wasn’t a great fit. It was industrial engineering oriented and I was consumer marketing oriented.

Thankfully, Gary Kiedaisch, the Coleman chief executive at the time, called me to discuss a position there. I joined Coleman in 2005 as C.F.O. and vice president for administration. I became interim C.E.O. in 2007 when Mr. Kiedaisch left the company, and I was promoted to my present position in 2008.

I’m often asked about my camping experiences. During a humanities course in graduate school, I participated in an Outward Bound type of exercise that required us to camp. It was the first time I realized you’re actually supposed to sleep. In all the times I camped with the Boy Scouts, we had thought the name of the game was to keep the fire burning and to run around and scare one another; I’d sleep in the car on the way home.

As told to Patricia R. Olsen.

Article source: http://feeds.nytimes.com/click.phdo?i=dcfdf45b07935f2f279dba02963297b4

Filed Under: Small Business Tagged With: , ,

You’re the Boss: A Tech Tool for Training

March 31, 2011 by Leave a Comment

Tech Support

Everyone does online presentations of one sort or another today. But do you always question the people who are sitting through them to make sure they’re getting the message?

You might want to start, especially if you’re doing any sort of training or tutorials for employees or customers. Teachers, and those who study learning, have known for a long time that people are much more likely to process and retain information if they’re tested on it — and a well-known 2007 study at Washington University proved it. And testing gives trainers, teachers and marketers a chance to see what’s getting through to whom and to adjust accordingly on the fly.

Of course, you probably don’t have a professional educator on your staff to design effective test questions and immediately evaluate each response so that presentation-watchers can be matched instantly to the right follow-up material and questions. What you want is to have all that happen automatically. But how do you build that sort of interactive testing into a PowerPoint presentation or online tutorial?

It’s not an idle question for some small businesses. Take DBS Financial in Akron, Ohio. DBS, which provides car loans to consumers, has three types of training it deems crucial for its 30 employees: how to handle customer collections, how to stay in compliance with the extensive regulation of the collections business (protecting consumer privacy and so forth) and how to stay in compliance with company human resources policy, which covers everything from phone use to avoiding falling on company property during the icy Ohio winters.

“We’d show videos, or have people come in to do classroom training, but it was a huge pain,” said Sam Snellenberger, who runs the company. “We’d have to cycle in employees in three different groups to make sure there was adequate customer coverage, and by the time we were through it took up most of a day. You could see people’s minds wandering during the presentations. And then supervisors would have to work with individual employees to make sure everyone understood everything.”

So DBS started paying $160 a month to use a sort of PowerPoint-like Web-based service called MindFlash that makes it easy for people without much background in training to develop presentations with multiple-response questions. “Everyone does the training now at different times, whenever it’s easiest to free the time up,” Mr. Snellenberger said. “We know everyone’s getting through the material, and we can see who’s having trouble with the questions so we can follow up with them.”

He adds that besides improving the quality of the training, the new approach also reduces the company’s liability if an employee runs into trouble, because it can prove the employee got the training and passed the test. (MindFlash pricing varies with the number of test-takers, and new users will pay a bit more than DBS because of a price increase. Also, bear in mind that if you cancel the service you lose access to past test data.)

I found MindFlash pretty easy to use — I didn’t even bother to take the company’s tutorial or read any help documents, I just plunged right in. You can prepare any documents or presentations or videos using whatever software or services you normally do and then upload them to MindFlash as “slides.” Then you stick in quizzes wherever you want — MindFlash guides you through the process of setting up different types of questions, and gives you plenty of simple options for how to deal with right and wrong responses. It took me about an hour to put together a micro-course on brewing beer at home, complete with quizzes. Feel free to give it a try. And here’s a more extensive demo about training new hires that MindFlash put together for this post. (You have to register with MindFlash to take my course but not to see MindFlash’s.)

MindFlash isn’t the only online training tool out there — another is eLeaP (and PowerPoint does, in fact, let you add a very bare-bones interactivity to a presentation, but it’s not as easy to incorporate as with these dedicated tools, and it doesn’t leave you with user data). One of the big advantages to this sort of interactive question-and-response capability is that what users see during a presentation can be tailored to their responses to questions as they go along. Not only does that make this sort of tool great for training, but I could imagine it being terrific for customer support — and possibly even for marketing, because it offers an effective means for qualifying customers based on their responses.

I couldn’t find anyone using these kinds of training-presentation tools for marketing (MindFlash told me it’s trying to find out), or any marketing tools that allow for this sort of powerful and easy interactivity, but I’d be curious if anyone out there is doing something along these lines. Let me know!

You can follow David H. Freedman on Twitter and on Facebook.

Article source: http://feeds.nytimes.com/click.phdo?i=0c39fbe2a61d3576cc6534718a05f1d4

Filed Under: Small Business Tagged With: , ,

DealBook: Vodafone to Buy Essar Stake in Indian Joint Venture for $5 Billion

March 31, 2011 by Leave a Comment

Vodafone, the giant British mobile phone company, said on Thursday that it would pay $5 billion in cash for the Essar Group’s one-third stake of an Indian joint venture owned by the two companies.

The deal will increase Vodafone’s exposure to one of its most important and fastest-growing markets.

“We’re adding about 3 million customers a month,” said Ben Padovan, a Vodafone spokesman. “India has a population of 1.2 billion, and penetration is about 60 percent, so there’s a lot of market share to go for.”

The move resolves many months of conflict between the companies, as Essar, a conglomerate with interests in steel, power and shipping, has sought to determine the value of its interest and explored the possibility of an initial public offering for its shares.

This year, the two partners quarreled over Essar’s plans to reverse list its stake in the venture by merging some of its shares into India Securities, already a public company — a deal that Vodafone argued would have inflated the value of its stake.

Vodafone is exercising a call option on 11 percent of the joint venture, and Essar a complementary put for 22 percent of the shares. The transaction is expected to settle by November, but will not affect Vodafone’s recently published net debt figures, the company said.

Vodafone currently has a direct equity interest in 42 percent of the company, and the Essar deal will give it 75 percent, Mr. Padovan said.

The rest is in the hands of entities controlled by Indian parters. Indian regulations prohibit foreign investors from owning more than 74 percent of domestic telecommunications companies, and Vodafone plans to divest about 1.3 percent of its stake to remain within the law.

Vodafone has also been embroiled in a lengthy tax dispute regarding its initial stake in the joint venture, which it acquired in 2007 from the Hong Kong billionaire Li Ka-shing’s Hutchison Telecommunications International.

The case is to come before the Supreme Court of India in July, and could leave the company on the hook for up to $2.5 billion in capital gains, in a deal where, paradoxically, it was the buyer.

Last year in May, Vodafone took a $3.5 billion write-down on the value of its Indian business, which has been battered by fierce competition from rivals like Bharti Airtel and Reliance Communications.

The Indian mobile telecommunications market is the second-largest in the world, after China’s, and one of the fastest growing. But the sector is crowded, with more than a dozen companies vying for customers and driving down prices.

Most countries have between three and four major telecommunications operators, and if Indian law were changed to let rival telecoms to conduct takeovers, the sector might see a wave of consolidation.

A representative for Essar was not immediately available for comment.

Article source: http://dealbook.nytimes.com/2011/03/31/vodafone-to-buy-out-essar-stake-for-5-billion/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,
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