June 28, 2017

Corner Office: Dane Atkinson of SumAll, on Making Pay an Open Book

Q. Were you an entrepreneur early on?

A. My parents made me work for money at a very young age. I had a dog-walking business when I was about 6 or 7 years old. I wrote my first piece of software when I was about 11. At around 13, I started working in advertising, because a lot of people didn’t know how to use computers. They paid me $25 an hour. By the time I was 18, I was C.O.O. of a subsidiary of one of the Grey advertising companies. We had about 20 or 30 employees.

Q. That’s a big management role at a young age.

A. I tried to ignore the fact that I was younger, and I would lead from the front. So I worked longer hours, just to make sure people knew that I wasn’t taking advantage of them. I looked after them, and that really helped protect me from other mistakes.

Q. How many companies have you started?

A. Well over a dozen, if you count the act of starting. Fewer if you just count the ones that were successful.

One reason entrepreneurship is so amazing — and one of the reasons I recommend it to everybody — is that unlike most other career paths, it is the purest lens for looking at yourself. If you’re in a big operation, you can blame the surrounding environment. When you’re starting your own company, it’s just you. There really is nothing else. So you have to take that medicine at its purest form, which I think matures you as a person faster.

Q. What were some early lessons running your first company, SenseNet?

A. I made every mistake possible. One of the biggest mistakes I made was that, in your first company, you can really get attached to the idea of equity and ownership, and so it becomes much more of a baby to you. You lose that after you do it a couple of times, but I was overly greedy early on with the ownership. It was a huge learning curve.

Q. Tell me about the culture of your current company.

A. We have a wildly different environment. For example, everybody knows everybody’s salary. It’s pure transparency, which manifests itself with a much greater level of trust. Everybody knows each other’s ownership stake, too.

Q. What was your thinking behind that?

A. The first few months of the company, all we did was talk about culture. We didn’t even know what we were going to do first. We really overthought how to build an environment.

The usual corporate doctrine can be configured poorly for employees. It’s almost designed to enable evil to happen. You can tell an employee they have 10,000 shares, but it doesn’t mean much if I just give myself 100 million shares or whatever. Their stake is going to be worthless. Most of the engineers out there have no idea what their ownership stake really is. They’re just told, here’s how much you own. It’s worth this now, and it could be worth that later.

Q. What happens if you want to pay somebody above-market wages? How do people react?

A. I can’t hire them. So far I’ve not been able to go “out of bounds” to hire people. I try to get the consensus of the team, but if they say it doesn’t make sense, then I don’t hire them.

Q. But you’re the C.E.O.

A. I’m good at arguing. I’m good at getting people to believe in things. But if I can’t get them to believe that we should hire this person for a certain amount, then I might actually be wrong.

When we first started with this, we’d send out the package details of every new hire to the entire team. That caused a lot of stress. So we’ve switched that and now just their peer group will know the new hire’s compensation and be forced to a vote. The information is shared on a drive that everybody can see, but we don’t broadcast it out to everybody. Very few people look at them, though. But they know the information is there if they want to see it, and that creates more trust in a deeper way.

Q. What else about your culture?

A. We have a trial on-boarding process. Anyone we hire goes into a 45-day test period. But we have a really high bar, and only about 65 percent make it through. At the end we have a fresh, clean start and we decide if we want to get married. It turns out to be much healthier for on-boarding when you make sure everybody likes who we’re bringing on.

Q. And with the 35 percent who don’t work out, what’s the pattern?

A. Sometimes people don’t fit into our environment. We’re still at a stage where culture makes an extreme difference. Sometimes we’re not an organization that’s as supportive for them as we’d hope to be. A couple of people who didn’t make it through required an additional level of mentoring. And we believe in mentoring. But if they need an excessive amount, they won’t develop. They won’t grow fast enough, and it’s not the right place for them, or for us. So we save each other the hassle.

Q. A lot of companies struggle to create an environment where people have frank discussions about employees’ performance. How do you do it?

A. You’re expected to have hard conversations as often as you can. That’s how you get better. You’re expected to sit down with your peers and say: “You know what? You really didn’t do that well.” And those conversations are amazing because they de-stress the frustration that people can feel. So you’re unhappy with the way somebody managed the project. You sit down and you talk with them. Maybe you didn’t understand the full picture. We’re all human beings. You have a basic belief that everyone’s here for the same goal and is competent. Then, once you understand their pain points to work through, you can better eliminate where they really failed.

Q. How do you hire?

A. We want ambition. We want people who are hungry. We want people who love what they do. A big screen for us is seeing what people’s personal hobbies are. We look for the playgrounds people play in. We want people who are writing books or building an app or doing other things that show that it’s not just a job — they have an actual native passion for it. So we usually ask a lot about people’s hobbies.

This interview has been edited and condensed.

Article source: http://www.nytimes.com/2013/08/16/business/dane-atkinson-of-sumall-on-making-pay-an-open-book.html?partner=rss&emc=rss

Economix Blog: Understating Job Growth

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

One of the many bright spots in the June jobs report was that April and May had their employment gains revised upward by a combined 70,000 jobs. In other words, job growth in those months was actually better than originally reported.

Which brings me to a peculiar trend, first brought to my attention in May by Justin Wolfers: Most months during the recovery — 37 of the 47 months for which we now have a third estimate of employment — the Labor Department initially understated job gains. And most months during the recession — 13 of the 18 months — the bureau initially understated job losses.

Source: Bureau of Labor Statistics, via Haver Analytics. Source: Bureau of Labor Statistics, via Haver Analytics.

That is to say, the revisions have been largely pro-cyclical. Job changes were better than we originally thought when they were good, and they were worse than we originally thought when they were bad.

I’m not sure what explains these patterns. Revisions in previous cycles do not seem to have been as heavily pro-cyclical; there was more of a balance between upward revisions and downward ones in both recessions and expansions. (If you have any potential explanations for the change — other than pure chance — please share your thoughts in the comments.)

I also wonder what effect the repeated understating of monthly job growth might be having on the recovery.

Would consumers, employers and investors be more optimistic (and willing to spend more money) if the original jobs estimate each month (which gets the most press) reflected the stronger hiring that later became evident? Or am I overestimating how much the official numbers affect behavior?

Article source: http://economix.blogs.nytimes.com/2013/07/05/understating-job-growth/?partner=rss&emc=rss

You’re the Boss Blog: When Innovation Becomes the Problem

The Next Level

Avoiding the pitfalls of fast growth.

“Innovate or die” is an expression you hear tossed around a lot. It tells me quickly that the people using it are not really all that innovative and in most cases do not know what it takes to build a fast-growth company. When the fast growth starts to fade, as it always does, the problem is rarely innovation. More often, it’s an inability to do the things that have to follow innovation. It’s really about getting stuff done.

Getting stuff done means packaging, selling, delivering and collecting the money to increase revenue and profits. If you are best in class at getting stuff done and use creativity to reduce complexity and chaos, you just may have yourself a fast-growth business. But if you do, you will quickly learn that the biggest risk to your business is not that it will die because you stop innovating — it’s that it will die because you fail to rein in your innovating and start executing.

Here’s what often happens: Right in the middle of the selling part, someone comes up with an idea to expand the market, add a new product, add more features or offer a new service — in short, an innovation. Not only is innovation more fun than selling, it is what made you a successful start-up when you disrupted the market and created a new fast-growth niche. The organization cheers and rewards the innovators and soon enough you have innovation everywhere – but very little stuff getting done. What happens next is chaos and eventually you realize that you have very little revenue to show for your innovation, which is not good when you are in growth mode.

I remember one summer in high school I worked for my Uncle Buddy laying carpet. On the job, I wanted to talk to customers — basically about anything other than laying carpet. My uncle would look up and say, “Cliff, put tacks in the floor and lay the carpet.” The fast-growth winners are companies that have employees that step up and put tacks in the floor. The fast-growth losers talk about things like “innovate or die.”

Most successful fast-growth entrepreneurs can recall the day when they told their employees to stop innovating and start doing. No talking – just action. I remember a late-night staff meeting where we were long on excuses and short on results, and I simply could not take it anymore. I stood up and said, “Nobody else in this company can create unless it is approved by me. I want everybody to go and do what we already said we were going to do. You either do it or eliminate it. Your decision.”

I know I sound like a bureaucratic dictator, but I was running one of the fastest-growing companies in America, according to Inc. magazine, and I was totally frustrated that I could not get our product out the door. We had innovation everywhere — engineering had a new platform, programming had new features, marketing had new campaigns and the sales people wanted to hire new representatives to sell our “old” stuff so they could sell the new stuff. What helped me to say no was learning that Steve Jobs had once said, “I’m actually as proud of the things we haven’t done as the things we have done. Innovation is saying no to 1,000 things.” But saying no is hard. You are saying no to inspired people and potential revenue.

But the winners do it, like Jeff Platt, chief executive of Sky Zone, which builds indoor trampoline parks. Here is a guy who has built a business with a highly successful revenue model and has pre-sold more than 100 high-end franchises. When I heard him speak recently, he spoke with the confidence and knowledge of someone older than his 28 years. “In our world, at Sky Zone, we strive for operational excellence and to create ‘wow’ guest experiences,” he said. “At this stage of the company, we choose not to focus on bringing in new product offerings and new experiences for guests because we currently need to direct our attention on being brilliant at our core business.”

This is a guy who invented and patented the cable to tie trampolines together into an amusement park. In fact, he created a whole new industry by combining fitness and fun. Now, instead of focusing on innovation, Jeff is focused on training. One of the ways he is doing this is by investing money in e-training modules to make material available instantly to every employee across the country. He is also investing significant time in creating training courses for part-time, full-time and management positions. “We are focusing on getting stuff done,” he told me.

With an average of 10,000 to 15,000 attendees per park each month, it might be tempting for Mr. Platt to think about how to drive more revenue from each guest through new product innovations. If Sky Zone could figure out how to get $1 more out of each guest, it would be looking at more than $4 million in additional revenue each year. Or he could go back to the basics and focus on creating such a “wow” experience that those guests leave the park compelled to go out and tell everyone how great Sky Zone is.

That’s what I call getting stuff done — and that’s what I call a winner.

Cliff Oxford is the founder of the Oxford Center for Entrepreneurs. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/04/19/why-innovate-or-die-is-a-lie/?partner=rss&emc=rss

State of the Art: 2 Ways to Subscribe to Microsoft’s Office, Eternally

But how do you do that? Microsoft Word is already a word processor, a Web design program, a database and a floor wax. What on earth is left to add?

For the last few versions, Microsoft has mostly just shuffled around the existing features. Reorganizing them into a Ribbon toolbar to make them easier to find, for example, or brightening the background for a cleaner look.

This year, the biggest news isn’t the software, but how you pay for it.

Way 1: buy the Office suite as you always have, for $140 (Word, Excel, PowerPoint, OneNote) to $400 (those programs plus Outlook, Access and Publisher).

Way 2: buy an annual subscription to these programs for $100 a year. That plan is called Office 365. (That’s right: the programs known for a year as Office 15 are sold as Office 2013, and available through Office 365. Nobody ever accused Microsoft of clarity in naming.)

Microsoft argues that this subscription offers all kinds of benefits. First, you can download and run the Office programs on up to five computers, including Macs and PCs. You can change which five they are at any time. (Windows PCs get Office 2013, with settings magically synced across computers. Macs get the older, less refined Office 2011 for Mac.)

If your home or office has a bunch of computers, you could save money; buying five copies outright would set you back $700. That’s more economical only if you plan to use that increasingly ancient version for at least seven years.

With a subscription, you’ll always get the latest version — Office 2015, Office 2031, Office 2119 — but, of course, you have to pay $100 a year forever. (If your subscription lapses, you can open or print your documents, but you can’t edit them or create new ones.)

You might be appalled at the notion of paying Microsoft an annual fee forever to get something you used to own outright. Or might like the idea of a fixed, knowable fee that keeps you up to date.

Either way, an Office 365 subscription gets you more than just five copies of the software. It also includes Office on Demand, which is the ability to download Office programs onto any Windows 7 or Windows 8 computer — at a branch office or a friend’s house, say. Touch up your slides, write up that proposal; when you log out, the downloaded Office software vanishes.

The SkyDrive is a free 7-gigabyte online storage disk for files that you want to access from anywhere, from any computer, tablet or smartphone with an Internet connection. In Office 13, it’s more important; in fact, the factory setting is to save new documents onto your SkyDrive. And if you subscribe to Office 365, you get another 20 gigabytes. That’s a lot of slides and spreadsheets.

Even that isn’t the end of the pot-sweetening. The same $100 fee also buys you one hour a month of free Skype-to-phone calls. (Microsoft bought Skype last year.) That is, from a computer, tablet or phone that has Skype installed, you can call to regular landline or cellphone numbers — something that usually costs a few cents a minute. (Calls to computers and smartphones, using Skype addresses, like Skibunny20304, are still free.)

So far, it must sound as if the only thing new in Office 2013 is how you pay for it. But there are also plenty of nips and tucks to the software itself.

The programs have a new design that matches the clean, rectangular lines of Windows 8’s Start screen. No drop shadows, shaded toolbars or rounded corners on buttons or boxes.

Speaking of touch screens — and Microsoft has been speaking of them incessantly lately — a new Touch Mode is supposed to spread out Office’s buttons and menu items, so that you can more easily hit them with a finger. It’s not much spreading, though. You’ll still wish you had a mouse.

E-mail: pogue@nytimes.com

Article source: http://www.nytimes.com/2013/03/07/technology/personaltech/pogue-microsoft-office-365.html?partner=rss&emc=rss

You’re the Boss Blog: Why We Never Use Professional Recruiters

Building the Team

Hiring, firing, and training in a new era.

This column is called “Building the Team.” It’s about leadership, which I’ve focused on in my first few posts and will return to later. It’s also about training, talent development, goal setting, culture and career development. But it starts with getting the right people on the team, and that’s the theme I will address in my next few posts.

The first step is recruiting, and my view is straightforward:

1. Always be recruiting.
2. Do it yourself. Don’t outsource to a professional.
3. The process is just like any other marketing or sales campaign.

The reason to always be recruiting is obvious. You just never know where and when you might meet extraordinary talent (I’ll write more about this in a coming post). The reasons to do it yourself may be less apparent. Isn’t that what professional recruiters are for?

According to the American Staffing Association, the industry for search and permanent replacement services generated $11.5 billion in revenue in 2011. Clearly, given the size of the market, many companies find value in hiring an external recruiter. But I would bet good money that this industry will shrink over the next five years because of one company: LinkedIn.

LinkedIn now has 202 million users, up 39 percent from last year, according to its most recent quarterly earnings announcement. It adds two new members every second. Why do so many people use LinkedIn? It is the place for employees to find a future employer and for employers to find their future team members.

Here’s how we use LinkedIn for recruiting campaigns to build our team:

Define the role. We can’t start recruiting until we know the position we are trying to fill. When a manager on our team requests budget for a new head count, we ask the following questions: What are the goals for this person? What are the day-to-day activities? To whom will he or she report? What is the expected compensation?

Develop the candidate profile. Before we begin a search, we have to know who we are looking for: Is there someone within H.Bloom who is the perfect profile for this position? If not, what are the attributes that we believe are most important for the role? These attributes will help us filter as we review hundreds of candidates online: years of experience, previous experience, specific skills, educational background, location, work at a particular type of company.

Build a list of potential candidates. LinkedIn makes this easy. Here’s the process:

First, upgrade to a premium account. The price varies based on how many LinkedIn e-mails (called InMail) you want to send to candidates you find on the site. The options start at $24.95 a month for the Business Edition, which allows for three e-mails per month, and go up to $499.95 per month for Talent Pro, which allows for 50 InMails per month. If someone doesn’t reply to your e-mail within seven days, that credit is put back into your InMail account. I subscribe to Talent Pro, and I have never found myself wanting for more InMails. At first, I thought this was expensive. But when I compared it with the approximately $20,000 that I would have had to spend for a recruiter for one new hire, I recognized the cost savings.

Once you have set up your account, click on Advanced to the right of the search box at the upper right of the home page. This brings you to the Advanced People Search page where you can enter the job attributes that you have already identified. There are spaces for name, location, company, school and then additional search criteria like industry, seniority level, company size and years of experience. Once you’ve finished entering the attributes you are searching for, click search to see the candidates who meet your specifications.

You will receive a list of profiles. Click on a name to see that person’s entire online résumé. You can also see if the person is connected to anyone you know personally. When you find someone who meets your requirements, send him or her a message by clicking on Send InMail.

Develop your pitch. LinkedIn makes it easy to find the right candidates to target. But it’s up to you to create a persuasive pitch that will grab the attention of someone who is content in a current job. Here’s what we think about when developing an initial pitch:

• What our company does. It is important to convey this up front.

• Why our company is different. We describe our growth (to show real traction), investors (to demonstrate a stamp of approval from someone else) and press (to convey that we are unique within our industry).

• What we are looking for. We define the role, its potential impact and why we think the candidate might be a fit.

• Suggest a simple goal for the e-mail, a next step like setting up a call or a coffee meeting.

• Try to create urgency by saying something like, “I’ll be in town next week.”

• Keep it short. Your e-mail will be received out of the blue. You want to provide enough information to pique the person’s interest.

• Work on a catchy subject line. Think about the profile you are targeting. What is the best one-liner to grab this person’s attention?

It is a numbers game. Dan Portillo, a partner at the venture capital firm Greylock Partners (which was an early investor in LinkedIn) published a presentation recently where he described what he called the 100 Rule: To find one person worthy of an offer, you need to contact 10 to 15 candidates. To find 10 to 15 people worthy of offers, you need to contact 100 potential candidates. In other words, the conversion rate is from 10 to 15 percent.

Always respond. If someone takes the time to write back to your unsolicited e-mail, take the time to send a thank you e-mail, even if the person is not interested at this time.

We have used this recruiting process to grow to 80 employees without ever using a professional recruiter. Next, I’ll provide a specific example with the details of how we used LinkedIn for a recent recruiting campaign.

Have you tried recruiting through LinkedIn? How did it work for you?

Bryan Burkhart is a founder of H.Bloom. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/02/19/why-we-never-use-professional-recruiters/?partner=rss&emc=rss

Bucks: Stock Investing Isn’t the Only Risk in Your Life

Carl Richards

Carl Richards is a financial planner in Park City, Utah, and is the director of investor education at the BAM Alliance. His book, “The Behavior Gap,” was published last year. His sketches are archived on the Bucks blog.

Often when we think of risk, we’re only focused on the risk of investing in the stock market. We think, “Oh, the stock market is risky, and it’s a little scary to buy risky things.”

I can’t tell you how many conversations I’ve had with friends — particularly when they get a little older — that are only focused on this one risk. “I don’t want to own stocks because, boy, that’s risky.”

I remember a conversation I had with a friend of mine who lives in a small town. She was telling me how worried she was about the stock market going up and down. Now, keep in mind, she had very little of her money in the stock market. But she had some money in stocks, as is appropriate for somebody who could expect to live for another 15 or more years.

Here’s the interesting part. When she finished telling me about her stock market worries, she told me she was also very worried about how the price of everything seemed to be getting more and more expensive each year.

This gets us to the big point. When you make a decision to avoid one type of risk, you might be exposing yourself to another one.

In this case, my friend was very concerned about the risk of holding stocks. But she overlooked the risk that comes with holding too little in stocks — which can help her keep up with inflation.

It’s going to cost you more to buy the same loaf of bread in 20 years. Just look at prices 30 years ago, when a loaf of bread cost $0.53, and a gallon of gas was $1.36.

I remember when I was a kid, 30 years or so ago, riding my bike down to the gas station and putting a quarter in the soda machine to get a bottle of Fanta Red Cream Soda. Today, if my kids wanted to ride down to the gas station to get a soda, it would cost them at least a dollar. (Bikes are also a lot more expensive than they used to be.)

The point is that we shouldn’t be thinking in terms of avoiding risk.  It can’t be done. Instead, we should be considering which risks we’re willing to take on.

The reality of investing is about making these tradeoffs. It’s about raising your hand and saying, “I’m O.K. with taking on this risk over here, in order to get rid of that one over there.” That’s essentially what the market is —- a place to trade risk and reward.

Back to my friend in the small town. (She isn’t unique. I seem to have this same conversation about risk with lots of people.) When I heard her concerns, I told her a story that always seems to help. If you have a well-designed investment portfolio that’s tied to your goals, you’ve already made decisions and tradeoffs about the risks you’re willing to take. We’re better off in the long run sticking with those plans, because once you start looking for a no-risk investing solution, you’ll likely to veer off into some shady, perhaps fraudulent, investment schemes.

So next time you’re nervous about the risk you’re taking with your investments, remind yourself which risks you’ve actually gotten rid of because of those decisions.

Article source: http://bucks.blogs.nytimes.com/2013/01/14/stock-investing-isnt-the-only-risk-in-your-life/?partner=rss&emc=rss

Facebook Responds to Anger Over Proposed Instagram Changes

But when Mr. Pinnix, 40, learned this week about changes to the company’s terms of service that would apparently allow his photos to be used as advertisements, he did not hesitate. He deleted his account and has not looked back.

“Many of the photos I take are of my wife and kids,” he said. “The idea that those could be used in ads without my consent is disconcerting.”

Concerns like those have been mounting on social networks this week as Instagram users reacted to the coming changes, part of a push by Facebook, which bought Instagram this year, to make money from the service.

On Tuesday evening, the complaints, which included angry Twitter posts and images on Instagram protesting the changes, prompted action. Kevin Systrom, a co-founder of Instagram, wrote a blog post saying the company would change the new terms of service to make clearer what would happen to users’ pictures.

“We’ve heard loud and clear that many users are confused and upset about what the changes mean,” he wrote. “I’m writing this today to let you know we’re listening and to commit to you that we will be doing more to answer your questions, fix any mistakes and eliminate the confusion.”

Eric Goldman, an associate professor at the Santa Clara University School of Law, said the latest skirmish between Facebook and its users was part of the sometimes uncomfortable dynamic between companies offering free online services and their eventual need to turn a profit from them.

“The interest of the site is never 100 percent aligned with the users, and the divergence inevitably leads to friction,” Mr. Goldman said. “It’s unavoidable.”

When Facebook announced the changes on Monday, it provided few details about how it would integrate advertisements and photos, other than to say that when the changes took effect on Jan. 16 they would not affect any photographs uploaded to the service before then.

That did not prevent unhappy users from threatening to take their portfolios of photographs to rival services, such as EyeEm, another social photo-sharing application. Many, including Mr. Pinnix, considered returning to Flickr, the former king of photo-sharing services, which is owned by Yahoo. In a stroke of lucky timing, Flickr had just released a new application for the iPhone that has drawn considerable praise from users.

The operators of services like Instaport.Me and Instabackup, which let people create copies of their Instagram photos, said they were seeing higher-than-average volume.

Linus Ekenstam, who helped found a service called Copygram that lets people back up their Instagram accounts and order physical prints of their favorite photos, said demand for the company’s free exporting tool had skyrocketed.

“It’s a thousand percent more activity than we’re used to,” he said. “Today is crazy.”

He estimated that 10,000 people were using the exporting tool, and 1.5 million photographs had been backed up.

Of course, that is a sliver of the expanding Instagram universe. The company has said that more than 100 million users have contributed more than five billion photographs to the service. But should that momentum slow, it could damage the plan for producing advertising revenue on the scale Facebook was counting on after spending $735 million in cash and stock to buy Instagram. The company also risks scaring off skittish brands and advertisers who would not want to anger Facebook or Instagram users who disagree with how their images are used.

The history of the social Web is full of cautionary tales of companies, including Digg , whose users eventually got so fed up with how the companies meddled that they fled, leaving the companies in ruin.

In Tuesday’s blog post, Mr. Systrom sought to quell the mounting unrest and reassure users that the company would not be peddling photographs of children playing on the beach or friends partying in nightclubs to the highest bidder.

“To be clear, it is not our intention to sell your photos,” he said.

He said that the company also did not intend to put its members in advertisements.

“We do not have plans for anything like this, and because of that we’re going to remove the language that raised the question,” he said. “Our main goal is to avoid things likes advertising banners you see in other apps that would hurt the Instagram user experience.”

He did concede that the company might do something like promote a brand like Topshop and show Facebook visitors which of their friends already follow Topshop, blurbs that could include their user name and avatar.

Mr. Systrom also reassured Instagram users that they still “own their content and Instagram does not claim any ownership rights over your photos.”

“Nothing about this has changed,” he said.

Of course, Mark Zuckerberg, Facebook’s chief executive, said nearly the same thing in April: “We need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook. That’s why we’re committed to building and growing Instagram independently.” Since then, the company has cut off Instagram’s easy integration with Facebook’s rival Twitter and bound the photo service more tightly into Facebook.

Rebecca Lieb, an analyst with the Altimeter Group, said worries about Facebook changing for the worse had become common almost any time Facebook altered its site, whether in the design or in its privacy policies. It underscores the importance and omnipotence of the service in its users’ lives as much as it signals a distrust of Facebook.

“There’s always a reaction when Facebook does anything because the user base is so unbelievably large,” Ms. Lieb said. “But while what its users say can be very loud and very viral, what they do can be two very disparate things.”

“There are always Facebook users who say ‘This is the last straw,’ ” she said. But in the end, she said, “There’s not a lot of portability. Where would you go?”

Article source: http://www.nytimes.com/2012/12/19/technology/facebook-responds-to-anger-over-proposed-instagram-changes.html?partner=rss&emc=rss

Corner Office | Karl Heiselman: Wolff Olins’ Chief Asks Applicants ‘What’s Your Story?’

 

Q. How has your leadership style evolved over the years?

A. I’m trained as a designer, and I never had any ambitions to lead a company or be a C.E.O. In fact, I was quite skeptical of upper management, and so that was never really an ambition of mine. But once I understood what my strength is — as a designer — and applied that to the job, I started to get some success.

There were a whole bunch of things that, for a while, I beat myself up for not being. But when I said to myself, “Let me approach this as a design problem,” then it became really fun. I started to say: “O.K., if I’m designing this business, what would it be like? What kind of people would we work with? How important is money? What kind of work do we want to do? What do we want the culture to be like?” Those are really fun questions to ask.

Q. Tell me more about the culture you’re trying to create at your company.

A. I stole this phrase from Netflix: “No room for brilliant jerks.” The thing that we’re looking for more than anything else is people who are ambitious and optimistic, and if you’re brilliant at what you do, but you’re a jerk, then this isn’t the right place. We’re a creative company, and when you make stuff, you have to be in the right state. If you’re panicked or stressed out or you don’t feel valuable, then you’ll produce bad work. If you feel confident and supported and pushed and motivated and the rest of it, then you’re going to do great work.

So I think getting people into the right state is half the battle. If you create those conditions, you can get great people. And I’m always amazed at what people will do if you give them the right context and the right environment.

Q. How do you hire? What qualities are you looking for?

A. Let’s assume the skills are there. The most important thing is whether I want to hang out and talk with the person. It’s not a likability contest as much as it’s about chemistry. The first thing I always ask is, “What’s your story?” The way somebody answers that is a pretty good indication of what they’re all about. If they’re just talking about the job, I find that really unattractive. If I feel like they’re being sincere and honest about what it is that they want to do with their life, even if it doesn’t line up exactly with what we want in our position, I find that far more attractive.

When you ask people, “What’s your story?” they can answer that a million ways, and where somebody goes with the answer is a pretty good indication of who they are. Again, it’s such an obvious thing, but you want to hire someone who you feel like you want to spend time with.

I’ve worked with people in the past who might be amazing at what they do, but when you’re not looking forward to talking to them, that’s not a good sign. I remember one person I interviewed for a very senior position whom I saw from a distance, and he just had this pretty aggressive look on his face. When they’re not being looked at, you can tell a lot by the expression on their face.

Q. What else is part of the hiring process?

A. One of the things we’ve been doing more recently that’s been helpful is giving somebody an assignment, and have them come back and present to a larger group. That way, you can see how they really think, as opposed to how well they interview. And they don’t have to have the right answer for the assignment. It’s not about the answer; it’s about how they approach the assignment. Somebody can be smart enough to have the job, with the right skills, but they might not be charismatic enough, meaning teams and clients won’t follow this person. It’s hard to teach that. Do you want to listen to the person? Do you want to follow the person? This is pretty basic stuff.

Q. Any people who were big influences on you?

A. There’s a woman named Sara Little Turnbull who’s one of the first women industrial designers — just an incredible woman. She was a visiting professor when I went to the Rhode Island School of Design. One of the things that she asked us to do was, “Write a day in your life five years from now: where you live, where you work, do you have kids, and just describe your day.” That had a profound effect on me.

In school, you always think of your career in terms of: “Do I want to be an architect? Do I want to be a graphic designer? Do I want to be a filmmaker?” But nobody helps you think through whether you could be an architect who’s designing hospitals, or residential architecture in California. She was probably the one voice during my school years who wasn’t saying what’s wrong with our work all the time, but was saying what’s possible and what you can do. I found that hugely empowering.

My father is a huge influence as well. I probably got my slight distrust of upper management from him, because he was a middle manager and a civil engineer, and he would always rather hang out with the guys than manage up. He was more interested in the real work than the politics. And he could talk to anybody. He could deal with upper management, and he was always curious about other folks.

I think that helped me to understand — even though it sounds obvious to say it — that everyone is so different. One designer I work with is a tortured artist. Everything he’s working on is torture, and it’s the biggest opportunity and scariest thing of his life every time. Another is super-confident about everything — he’s got it, no problem. Motivating those two individuals to do great work is really different.

That’s why things like “six steps to managing” aren’t useful, because you’re not managing an assembly line here. It’s about being able to understand where someone’s coming from, and understanding that when you’re communicating with somebody, you’re not trying to convince them you’re right — you’re trying to get the best work out of them. The way you do that is not the same for everybody.

Article source: http://www.nytimes.com/2012/12/16/business/wolff-olins-chief-asks-applicants-whats-your-story.html?partner=rss&emc=rss

Business Briefing | Markets: Money Leaves Stock Funds Ahead of Fiscal Deadline

Opinion »

Editorial: A Paperwork Mountain

With backlogs for disability compensation and pensions, the Department of Veterans Affairs struggles to meet its promises.

Article source: http://www.nytimes.com/2012/11/24/business/money-leaves-stock-funds-ahead-of-fiscal-deadline.html?partner=rss&emc=rss

Off the Charts: A Historical Cycle Bodes Ill for the Markets

A major reason for the earlier confidence was that in the 15 years from the end of 1984 through the end of 1999, the total return of the Standard Poor’s 500-stock index was more than 740 percent, even after adjusting for inflation. That amounted to a compound annual real return of more than 15 percent.

At the end of 2011, by contrast, the 15-year return — from the end of 1996 — was just 3 percent. And most of those gains came in the first three years of the period. Since the end of 1999, the stock market has not come close to keeping up with inflation.

The first of the accompanying charts shows compound 15-year real returns on stock market investments from the period that ended in 1943 through the one that ended last month.

Broadly, it appears there is a cycle that is repeating itself, in which the 15-year return tops out at more than 15 percent and then falls precipitously.

In June 1964, the real return over the previous 15 years averaged 15.6 percent a year, the highest that figure had ever been. The stock market did not begin to fall then, but it could no longer maintain the torrid pace, and the 15-year return figures began to decline. On a real total return basis, stock prices hit their highs for the era in late 1968, and by the mid-1970s were in free fall as high inflation combined with a bear market.

By 1979, an investor who bought stocks in 1964, when the market seemed to be a sure moneymaker, had lost money after adjusting for inflation, even after including dividend income.

In the early 1980s, the stock market turned around, and by mid-1997 the 15-year return figure had reached a new high of 15.8 percent.

The second chart overlays the two cycles. The first line goes from the end of 1943 through the end of 1980, when the line was in negative territory. The second one, beginning at the end of 1980, continues through the end of last year.

The match between the lines is far from perfect, but there are significant similarities. If past is prologue, the 15-year return is likely to continue to decline and to turn negative in about four years. That does not necessarily imply that stocks will fall during that period, since that could happen with small gains over the period. And, of course, there is no assurance that history will repeat itself.

It is probably significant that opinion surveys show Americans are more pessimistic than they have been in many years. There is a fear that the American economy is in decline and that this country will be unable to compete with emerging Asian economies, principally China. There was a similar fear in the late 1970s, although then the fear was that the United States could not compete with Japan.

Perhaps overconfidence inspired in part by a strong stock market also played a role in American military history. Within a few years after the 1964 peak for 15-year returns, the United States escalated the Vietnam War. Within a few years after the 1999 peak, the United States decided to invade Iraq.

The other two charts indicate that the stock market may have done surprisingly well over the last 15 years, considering how little the economy grew over that period. Through the third quarter of last year — the most recent data available — real gross domestic product had risen at an annual rate of just 2.3 percent over the previous 15 years. That was the lowest return since the 15 years ending in 1960, a period that was distorted because it included the rapid decline in real gross domestic product in 1946 as the production of weapons halted after World War II.

Similarly, over the last 15 years the total real personal income earned by Americans has risen at an annual rate of just 2.6 percent. That is the lowest for any similar period for which G.D.P. data is available. Both the G.D.P. and personal income rates of growth are well below where they were when the cumulative stock returns bottomed out in 1982.

After the pessimism of the late 1970s and early 1980s, the economy and the stock market turned around as it became clear the American economy was resilient and could adapt to a changing world. The question now is whether that can happen again.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Article source: http://feeds.nytimes.com/click.phdo?i=3a91deadddebcd385c97913a62fa1454