May 18, 2024

Corner Office: Paul Venables: Paul Venables, on Asking for the Toughest Jobs

Q. Were you in leadership roles early on?

A. My first job managing people was when I was 16, and I was given the keys to Carvel Store No. 1587 in Stratford, Conn. I was managing people who would come back on college break to work at the ice cream shop. They were older than me, and that was tricky. I learned a lot.

But I’ve always been a guy with a lot of opinions. And with opinions often comes conviction, and you see a better way to do things. So you become vocal and you get comfortable standing up in front of people or talking to people or swaying a room to move in a certain direction.

I should point out that I’m one of seven children, and it was a zoo at my house and therefore you had to work to be heard. Not only did you have to be crafty, smart and loud, but you also had to be on your toes to convince other people to do what you wanted, especially since I was on the younger end. Learning to navigate in that household, I developed some communication skills.

Q. I’ve been struck by the number of C.E.O.’s I’ve interviewed who come from large families.

A. I’m sixth out of seven, so I had five other teachers in the house. I learned certain things from my parents, but each kid had different interests, different styles, and I would learn and almost pick and choose from them — “That looks effective,” or “That’s smart.”

Q. How did you break into the industry?

A. I went to Madison Avenue to get a job, any job, in advertising. So I pounded the pavement, and at the time, you had to take typing tests at all the big agencies. I failed them all. Then I took a job at a small agency. They didn’t require typing tests, and the job I took was as the receptionist. Talk about learning people skills. You interact with absolutely everybody in the building — all the clients, all the people, all the vendors. I picked people’s brains about what they did and how they thought, and it was just a really helpful starting point.

The weird thing is right from that first job, I knew that someday I wanted my own agency. Every job I had after that, I gleaned the information I wanted, thinking: “I’m going to do that. I’m not going to do that.”

Q. Give me an example.

A. A big part of the job is motivating creative people with varied backgrounds and interests. What generally doesn’t work, or only works for a short time, is the fear-based motivation, the overt competition. Competition is healthy at some level, but when it’s presented as “Two parties are going to dance and we’re going to pick who wins,” I believe creativity is suffocated. You may get results once or twice because you lit a fire and people performed. But as an ongoing way to cultivate creativity, I think you have to make people feel like you believe in them. It’s as simple as that.

Q. What else about your culture?

A. We give out a lot of awards. We give a spousal award to the spouse or significant other who we think has put up with us monopolizing an employee’s time or sending them on a lot of travel. We’ll give them something like a weekend away and massages up in the wine country.

We also have an award where we literally give a golden commode — we call it the golden toilet award — to somebody in the trenches who is making things happen and is calm under pressure and takes care of things with dignity.

We also have an old-timers award. We’re coming up on 12 years now, but when we were six years old, we realized we had some people who had been here for five years. That’s pretty good, especially in advertising, where time is a bit like dog years. So we came up with the idea to give people this big glass beer stein boot with the five-year old-timer award emblazoned on it. It comes with a thousand-dollar bar tab at a pub around the corner, and they can spend it however they want. We suspected this would happen, but they often invite the newbies out and so you get this mixing of generations. There’s a great cross-pollination of people and values and ideas. I think we’re up to 38 old-timers by now.

Q. How has your leadership style evolved?

A. I was so focused on starting a company that I was maniacal about every little thing we did. In the last five years, I really focused on the fact that the secret to this thing is the culture. If I get the culture right, it will attract the right people, and they’re going to do the right kind of work.

The culture is not all foosball and Pizza Fridays. We have both and we enjoy both. But culture is about people knowing you’re there to support them, not looking over their shoulder waiting for them to fail, and that you’re there to help when they hit tough times. They can be very honest, come into your office and sit down and say, “I screwed up — help me out,” as opposed to trying to hide it.

I also want to make sure that managers know that their job is to get the people who work for them to be asking to work for them. So they can’t do that old trick of managing up to me and the partners, and being a complete jackal to the people below. They know I’m asking people constantly: “Hey, are they giving you timely feedback? Are they helpful? Are they courteous? Do they have basic human decency?” These things are important.

Q. What career advice would you give to new college grads?

A. The advertising-specific one is ask for the headaches. Find something your boss is doing that he hates doing — it’s difficult, painful, time-consuming — and say, “I’ll take that,” and make it great. Too many people ask for the choice assignments. Do the dishes really well and you’ll be a very valuable person.

The broader advice is that the only things you can control in your life are your attitude and your effort. You can’t control all the craziness of the people around you, the circumstances, the situations, the failures and successes. Give it your all and have a positive attitude. It goes a long way in the world. That’s underappreciated, I think.

This interview has been edited and condensed.

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Economix Blog: Behind the ‘People Who Pay No Income Tax’

Mother Jones has published a video of Mitt Romney at a private fund-raiser making incendiary remarks about Obama voters – and, well, about half of the electorate.

“There are 47 percent of the people who will vote for the president no matter what,” Mr. Romney said. “There are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it, that that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what.”

“These are people who pay no income tax,” he added.

I’ll address just that last part in this post.

Mr. Romney is absolutely correct that about half of American households do not pay federal income tax. (He is also tapping into a now long-running vein of conservative anger at those households.) But he is missing some crucial context on why they do not pay federal income tax.

The nonpartisan and highly respected Tax Policy Center derived the 47 percent number – it is actually 46 percent, as of 2011 – and published an excellent analysis of it last summer.

It found that about half of the households that do not pay federal income tax do not pay it because they are simply too poor. The Tax Policy Center gives as an example a couple with two children earning less than $26,400 a year: The household would pay no federal income tax because its standard deduction and other exemptions would simply erase its liability.

The other half, the Tax Policy Center found, consists of households taking advantage of tax credits and other provisions, mostly support for senior citizens and low-income working families.

Put bluntly, these are not households shirking their tax liabilities. The pool consists mostly of the poor, of relatively low-income working families and of old people. The tax code is specifically designed to reduce the burden on them.

Indeed, the recession and its aftermath have left tens of millions of workers out of a job or underemployed, removing more households from payment of federal income taxes. Moreover, the Bush tax cuts – the signature Republican economic policy of the 2000s, which doubled the child tax credit, increased a number of other deductions and exemptions, and lowered marginal tax rates – erased millions of families’ federal income tax liabilities.

It is also worth noting that though tens of millions of families do not pay federal income taxes, there are virtually no families that do not pay any taxes – between payroll taxes, sales taxes, state and local taxes, and on and on.

For much more detail on the 46 (or 47) percent, read my colleague David Leonhardt’s 2010 column or my 2011 piece for Slate.

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Corner Office | John Riccitiello: Electronic Arts’ Chief, on Painting a Consistent Picture

Q. Do you remember the first time you were somebody’s boss?

A. I was 15, and I was selling lawn services door-to-door. I was successful as a salesman, and they promoted me to be a manager, and then they found out about my age. I was supposed to drive the van, but I wasn’t old enough to have a driver’s license at first. I had the responsibility of actually hiring other salespeople, mostly between the ages of 15 and 25.

Q. Any sense of why they gave you the job?

A. I generally think, especially early in a career, what distinguishes leaders oftentimes is whether they paint a picture. The word “vision” can sometimes be horribly overused, but they paint a picture of the way it’s supposed to work, and it resonates with people. And so I think at that point I had a view that we could generate a lot more revenue per household if we bundled some services. It was a logical way to sell, and it worked really well. They wanted me to teach other people to do the same thing.

Q. What about management roles after that?

A. I was put into some pretty heavy responsibilities early on. I ran Häagen-Dazs International in my late 20s. I was the C.E.O. of Wilson Sporting Goods in my early 30s, and I came into Electronic Arts as its president and chief operating officer when I was 37.

Q. Talk about some of the leadership lessons you’ve learned.

A. When you’re working on a business and it’s small, you’re a clear part of the equation yourself. When you get the scale, though, you’re mostly painting a picture for a lot of people for whom you’re just a concept, as opposed to a friend. So you’ve got to find a way to be incredibly consistent, so when other people repeat the same thing it conjures up the same picture, the same vision for everyone else.

With E.A. four years ago, we were in this interesting spot where our traditional business was in trouble. I could clearly see this digital transformation around social networks and mobile phones. But people are afraid, and you need to paint a picture that everyone can buy into, even though you’re not even sure yourself it’s going to work because you’re trying to see to the other side of a technology transformation. And if you’re not confident, then they remain scared.

The key thing is to really listen to the people on your team to make sure you’re not heading left when you should head right. But you’re constantly adjusting. I’ve often said to people: “This is only 70 percent clear because that’s as clear as it can be. But you have to commit to it 100 percent, and understand that we’re going to pull back and adjust when we learn something’s not working.”

I remember getting a question a year and a half ago: “Why do we have 15 things going on here if we don’t know which ones are going to work?” And I said, “Here’s the way this is going to work: If certain things work, we’re going to do more of them, and if other things don’t work, we’re going to stop doing them. And in no time at all, 80 percent of what we’re doing is going to work because it’s very easy to quickly eliminate the failures, and we should not be afraid of that.”

Q. Any new insights from the last few years about leadership and management?

A. One of the things I would say is that you have to be absolutely genuine. You have to know what you truly believe and what you truly value, and it has to be undeniably consistent. When you’re looking at a global transformation, you don’t know exactly how you’re going to make money on the other side. But if you stop being consistent, then nobody has the confidence to go along.

So while we were going through this radical transformation as a company, everyone could count on two things: that quality came first, second, third, no matter what we were going to do. You could be sure that while we were cutting, we were never going to sacrifice the quality of our product.

And the second thing is that if you were a key contributor to a process of bringing a great product to market, not only were we going to support you, but my No. 1 job is to get the blockers out of the way so your product can find a marketplace. Those were the two things that were consistent. Everything else changed. I think if you’re going to ask people to go along with you, when almost everything they know about their job, their company — how it makes money, how it works, how Wall Street is going to view it — is going to change, you’ve got to pick a couple of things and stay with them. We had to have something that was foundational. And so everyone knows what I stand for. They’re not going to follow you if they don’t know what you stand for.

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Economix Blog: Spending Less on Entertainment and Charity



Dollars to doughnuts.

Americans ratcheted down their spending on entertainment and philanthropic donations in 2010, according to a new report from the Bureau of Labor Statistics.

Every year the bureau collects data on how Americans spend their money. Here’s a look at the budget of the average household:

DESCRIPTIONSource: Consumer Expenditures Survey, Bureau of Labor Statistics

According to these survey data, the average pretax income per consumer unit (which is, more or less, a household) fell 0.6 percent in 2010, to $62,481 from $62,857. But households disproportionately tightened their spending, which fell 2 percent in 2010, to $48,109 from $49,067. Spending had fallen 2.8 percent the previous year.

In fact, in these nominal dollars, the 2010 level of average annual consumer expenditures was lower than that for 2006.

Just about every major spending category fell last year, with two exceptions: health care (up 1 percent) and transportation (up 0.2 percent).

Percentage-wise, the biggest spending decline was in entertainment, which fell 7 percent last year, to $2,504 a household. The second biggest decline was in cash contributions — including payments to charities and religious organizations — which fell 5.2 percent, to $1,633 a household.

After that came spending on food away from home, which declined by 4.4 percent, to $2,505 a family.

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HSBC to Announce 10,000 Job Cuts

LONDON — HSBC, Europe’s biggest bank, plans to announce thousands of job cuts on Monday as part of a wide-ranging cost-reduction program that started in May, a person with direct knowledge of the decision said Sunday.

HSBC plans to cut about 10,000 jobs, or 3 percent of its global work force, said the person, who declined to be identified before the figures are made public. The bank, which employed 307,000 people at the end of last year, is expected to announce the job cuts when it reports earnings for the first half of this year on Monday. HSBC declined to comment on the job cuts, which were first reported by Sky News.

Meanwhile, on Sunday, the bank announced that it would sell 195 of its branches in upstate New York to the First Niagara Financial Group for about $1 billion. The branches being sold hold about $15 billion in deposits.

Stuart T. Gulliver, who took over as HSBC’s chief executive in January, said in May that he was seeking to lower costs by at least $2.5 billion in the next two to three years mainly by scaling back the bank’s retail operations outside Britain. HSBC said in May that it might also sell its bank card business in the United States. It has already withdrawn from the Russian retail banking market.

Mr. Gulliver has said that he plans to radically change HSBC’s business in the United States, which has been a drag on group earnings mainly because of the bank’s ill-advised acquisition of the subprime lender Household International in 2003. Mr. Gulliver has indicated that he hopes to strengthen the business by winning market share with its commercial banking unit.

To compensate for sluggish growth in Europe and its British home market, Mr. Gulliver also plans to win market share in faster-growing economies like those in Latin America and Asia, where HSBC has a historically strong presence. HSBC was helped through the subprime mortgage crisis by its growing business in Asia, where it continues to generate more than half its annual pretax profit.

HSBC would be the latest bank to announce job cuts. Credit Suisse said last week that it planned to eliminate 2,000 positions, or 4 percent of its global jobs. Goldman Sachs and Morgan Stanley are also reducing their head counts. The cuts are expected to help the banks improve returns despite slower economic growth and a stricter regulatory environment.

First Niagara’s deal to purchase the HSBC branches in upstate New York would more than double its branch network in the region. As of the end of June, the firm, based in Buffalo, had 117 branches in upstate New York and 346 total.

First Niagara reportedly beat out several bigger competitors for the HSBC branches, including MT Bank, whose market value is more than three times larger.

HSBC also plans to consolidate 13 of its branches in Connecticut and New Jersey into nearby existing locations.

HSBC’s pretax profit for the six months to the end of June is expected to fall to $10.9 billion from $11.1 billion a year earlier, according to the average of analyst forecasts polled by Reuters.

HSBC’s shares fell 8.7 percent this year, less than its British rival Barclays, which is set to report earnings on Tuesday.

Julia Werdigier reported from London and Michael J. de la Merced from New York.

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Economix: Using Google Searches to Track Housing Prices


The Bank of England has started to use Google search data to help it spot trends in Britain’s housing and labor markets.

There is a strong correlation between how often people search online for “estate agents” and actual house prices, two Bank of England researchers wrote in a report on Monday.

The central bank is now monitoring online search terms like “mortgage” and “house prices,” or “jobs” and “unemployed,” to get a more up-to-date picture of the state of the economy. The Bank of England previously depended only on data like property sales or unemployment figures, which are usually published with a delay.

DESCRIPTIONNick McLaren and Rachana Shanbhogue, Bank of England

“Monitoring current economic activity closely is an important aspect of policymaking, but official economic statistics are generally published with a lag,” Nick McLaren and Rachana Shanbhogue wrote in the bank’s quarterly bulletin. “Internet search data can help predict changes in unemployment in the United Kingdom. These appear to be as useful as existing indicators. For house prices, the results are somewhat stronger.”

The report also pointed toward possible problems with the data. “The data have a short backrun compared to other economic indicators,” the two researchers wrote.

The data are also unlikely to cover every household in Britain, they said. Not everyone searches for homes or jobs on the Internet, and people use different search terms to do so.

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