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Posts Tagged “Google”

Quartz, the cutting-edge NY digital news outlet, caught my eye last week (March 21, 2017) with this headline: “IBM, Remote Work Pioneer, Is Calling Thousands of Employees back to the office.”

This is a big change in direction for Big Blue. As recently as 2009, IBM had 40% of its hirelings working from home.

In fact, a number of companies have quietly begun shifting their home-based associates back to their corporate offices. This trend began to emerge publicly with Marissa Mayer’s startling decision to end Yahoo’s remote work policy back in 2013. Facebook now offers a $10,000 bonus to employees who live close to their office, and many other companies, like Best Buy and Reddit, no longer allow work from home. By September of this year IBM’s over 5,500 marketing people will have to work from physical offices in one of seven central locations: San Francisco, New York, Austin, Armonk, Boston, Atlanta, or Raleigh. Remote work will no longer be an option. (IBM already applies this policy to departments like security, procurement, most of IT, Watson, Watson Health, cloud development, and artificial intelligence.) Companies increasingly feel collaboration, creativity, and community are better fostered in a central office.

As an early successful adopter of the virtual office model with my first entrepreneurial firm, Corporate Rain, in the 1990s, I have always thought “What’s not to like?” After all, you save on office rent, office expenses, and commuting. And research indicates that remote workers are more productive and put in more hours than their office-based kindred. Also, for many people, it has been a partial solution to the work-life balance problem. According to the Gallop Poll, 25% of all American workers are presently laboring remotely.

That said, however, I am increasingly coming to a sense that for many companies, particularly large ones but also some of the small ones, there is a compelling rationale to centrally co-locate their office communities again.

For example, Best Buy reported that productivity had an average increase of 35% in departments that shifted to employees working whenever and wherever they wanted. However, there is a different set of benefits that ensue from central offices–and most of these benefits center around creativity and innovation.

Note John Sullivan, professor of management at San Francisco State University, a specialist in HR strategy–again quoting from Quartz. Sullivan says, “It turns out the value of innovation is so strong it trumps any productivity gain….[Remote work] was a great strategy for the 90s but not for 2015.”

Certainly established companies are searching for how to solve the conundrum of creativity and how to come up with the next transformational eureka out of their behemothic institutions.

They long to infuse entrepreneurial passion and disruptive imagination into their titanic old-line firms. Their hidebound strategies aren’t working, therefore renewed office centralization is increasingly favored as a tool to help create a more generative, communal, cohesive business ambience–hopefully one more like the entrepreneurial laboratory.

Jeff Smith, IBM’s CIO, advocates agile management based around “squads”. He says “…leaders have to be with the squads and the squads have to be in a location.”

There increasingly is a valuation of what many call “the watercooler effect.” (Steve Jobs certainly appreciated the value of how chance meetings and accidental conversations can lead to disruptive ideas.) Note a recent study by Kevin Rickman of George Mason University and Michael Pratt of Boston College, who found that increased offsite work can have very negative effects on the office environment. Mason and Pratt state: “If the office is going to become a collection of employees not working together, it essentially becomes no different than a coffee shop (though perhaps with better internet and worse coffee.).” That may be a bit overstated, but perhaps reflective of the most au courant new HR thinking.

When asked what percentage of Google’s workers telecommute, Patric Pichette, then CFO said, “Our answer is: As few as possible.”

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I don’t think there is a more important issue for the innovator and small businessman these days than that dramatized by the fierce fight for survival of the Uber mobile app, which allows consumers who want rides to connect with drivers who want fares. We need to pay attention.

uber-logoThe Uber fight has huge implications for what Leigh Buchanan, in her May article in Inc., describes as “the slow death of entrepreneurship.” Uber is fighting the Neo-Luddism of the establishment–the establishment being the forces of the inefficient elites in labor, government, and the crony capitalists of big business.

The term “Luddism” comes from Ned Ludd, who created a broad and violent rebellion of weavers against the use of mechanical looms that were replacing the efficacy of traditional mill workers in early 19th century England. In 1811, Ludd’s followers rampaged through the countryside destroying these looms whereever they could find them. They sought a return to the safe-seeming, inviolability of the status quo ante.

What the current uproar of opposition to Uber (and other disruptive technologies like TaskRabbit, Instacart, Postmates, Homejoy, Lyft, Airbnb, Snapgoods, and many others) boils down to is nothing more than the recrudescence of Luddism. It is Neo-Luddism.

Change is hard. It is distressing to those who prefer the comfort of the go-along, get-along present to the terror of the future. Joseph Schumpeter, the classic capitalist apologist, called this “creative destruction.” Constant creative destruction is the price we pay for a healthy, robust, efficient capitalist process. It is the essence of the why and wherefore of entrepreneurship.

The current controversy swirling around Uber is centered in what is often described as the “gig” economy. (The term “gig” comes out of American jazz to describe the occasional and freelance employment of the musician.) In a June,2015 report, McKinsey & Company describes gig work as “contingent work that is transacted on a digital marketplace.” Uber had over 160,000 of these gig workers under contract at the end of 2014.

ned-luddMuch of the so-called “sharing economy” is based on gig work. Under this model people work for whom they want, when they want, doing what they want. This is very threatening to old line labor unions, government monopolies, and entrenched big business interests. It threatens their control. It challenges the hegemony of the tightly managed, but creatively barren, business normal.

I note with approbation Uber’s victory over the forces of municipal bureaucracy and corruption in New York. The Uber app solves the long-term inefficiency promulgated by the incumbent urban taxi cartel. This inefficiency had taken the forms of driver rudeness, dirty taxis, scarce taxis, and cabbie reluctance to transport riders to NYC’s outer boroughs. It also solves problems of getting a taxi at peak hours. Furthermore, Uber and its entrepreneurial cousins have created well-paying job opportunities among a new breed of independent worker that values vocational self-direction. It is HR for people who prize flexibility and freedom. Over 2,000,000 New Yorkers have now downloaded this magical app, which has conquered classic restraint of trade, governmental red tape, bureaucratic lethargy, institutional corruption, and fear of the New.

Robin Chase, Co-founder of Zipcar, in an article in Harvard Business Review states, “This new way of working [which she calls the ‘collaborative economy’ rather than the ‘sharing economy] rewards the ambitious, the hardworking, and the entrepreneurial, and it moves us closer to a real meritocracy. Our resumes become irrelevant, and we can try our hands at many things and more quickly figure out what we want to do more of.”

Uber has been described as “unfair competition” by taxi owners and drivers simply because it is cheaper, more efficient, and more profitable for drivers, and more user-friendly for riders. Yes, Uber is unquestionably trying to disrupt the for-hire vehicle industry. That’s what entrepreneurs do.

In Paris, the unionized Luddites have slashed the tires and smashed the windshields of Uber drivers. In California, the Labor Commissioner’s Office, a wholely-owned subsidiary of organized labor unions, wants all Uber freelance drivers classified as employees, severely diminishing Uber’s monetary raison d’etre and brand control. These are not good omens for disruptive entrepreneurship based in the gig economy.

However, there is also international recognition of both the consumer popularity and efficiency of Uber. Boris Johnson, the Mayor of London, recently told a group of taxi drivers the following: “You are dealing with a huge economic force which is consumer choice, and the taxi trade needs to understand that. I’m afraid it is a tragic fact that there are now more than a million people in this city that use the Uber app.” When cabbies protested that their prices were being undercut, Johnson replied: “Yes. They are. It’s called the free market.”

6260567907_f7eeb830b1_bUber’s struggle with government and the powers that be is popular with consumers, but its fight is also a stand-in for the defense of free business itself. And it has important implications for whether the cosseted sinecures of the outmoded Old can tampen the creative fires of the entrepreneurial New.

Joseph Schumpeter said this about the creative destruction of new railroads, but it could just as well be said of all disruptive technologies from Microsoft to Apple to Google to Uber. He said, “A railroad through new country, i.e., country not yet served by railroads, as soon as it gets into working order, upsets all conditions of locations, all cost calculations, all production functions within its radius of influence; and hardly any ‘ways of doing things’ which have been optimal remain so afterward.” Thank you, Joseph Schumpeter.

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urlF. Scott Fitzgerald famously said, “There are no second acts in American lives.” I hate this quote. Because it is wrong.

I spend as much time as I can mentoring young entrepreneurs. I so admire them. I learn so much from them. They are the quintessential existential heroes of modern business life. And yet…

And yet I find myself often, and increasingly, put off by a growing trope of coldness among many of our newer class of young entrepreneurial strivers. Even in their publicly bruited avowals of pro bono concern for the future of mankind, there seems somehow an unattached sense of being personally outside humanity–above humanity more than part of it. Full of a hipness and knowing intelligence that stands with irony outside the ring of the benighted mass of fellow souls who have fucked up so many things in this world. Souls like me.

Back in February, Rich Karlgaard wrote an interesting column titled “Late Bloomers are in Peril” for Forbes. He noted that American culture is increasingly put off by a new class of academic STEM hero personified by folks like Mark Zuckerberg. Karlgaard feels that Silcon Valley is morphing into Algorithmic Valley, a spiritually barren location that is increasingly hostile to the eccentric inventor and the late blooming oddball who does not necessarily come from the world of perfect SAT scores and an impeccable academic provenance at Stanford, MIT, Cal Tech or Harvard.

Rich_Karlgaard_2Karlgaard states, “…today’s technology business heroes are so freakishly smart and young they don’t inspire the rest of us. It’s worth asking why. My guess: For decades Silicon Valley had among its role models late bloomers and tinkerers. For instance, Bill Hewlett barely got into college; Steve Jobs and Bill Gates dropped out of college; Andy Grove went to City College of New York.” However, our new dominant entrepreneurial elite do not come from the same places as Steve Jobs, Bill Gates, Henry Ford, or Thomas Alva Edison.

The new entrepreneur Karlgaard is talking about is a prodigy who aces the SATs, graduates from Stanford at 20, starts a company, raises millions and sells out to Apple or Google in two years. That’s who VCs are funding, not the out-of-the-box, scarred by life, autodidactic late bloomers. Karlgaard avers that this late bloomer is getting crowded out. He notes the late bloomer “is vanishing in the American imagination, especially with regards to business, and, in particular, technology. America is in danger of losing a valuable narrative about itself, and the consequences are not trivial.”

In fact, this should be a wonderful age for the ripening insights of the late bloomer. After all, 60 is truly the new 40 health wise, and the slow-growing virtues of empathic leadership are increasingly being recognized as a palliative to the growing unease with traditional command and control corporate leadership. Skills of empathy and elasticity come with age and hard knocks– qualities possessed in spades by late bloomers.

Elkhonon Goldberg, in The Wisdom Paradox (2006), notes that, “While the capability of the brain does indeed diminish with age, this deterioration is more than compensated for by gifts of intuition, empathy, and pattern recognition….What I have lost with age in my capacity for hard mental work, I seem to have gained in my capacity for instantaneous, almost unfairly easy insight.”

In other words, there is often a sly innate wisdom to the late-blooming entrepreneur that can neither be taught nor quantified.

My father was an indefatigable NY Yankees fan and he loved Joe Dimaggio, who was noted as a great center fielder. My father related to me that in Joe’s last year he didn’t have a whole hell of a lot left in his arm, which had always been a great intimidator of base runners. He figured he had about one good throw in him per game. So every night his last year, early in the game, after a routine fly out, he would put everything he had into a simple throw back into the infield. 14294619952_3d9ff00146This continued to intimidate runners, even though, for the life of him, he couldn’t repeat the feat again in that game. That is what I mean by the sly wisdom of age. It is a special gift offered by entrepreneurial late bloomers.

Poet Maya Angelou has these wonderful few words for the late bloomer. She says, “The Fifties are everything you’ve been meaning to be.” Thank you, Maya.

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12303879306_1a8ba9cfa7_oWhen asked his reason for robbing banks, Willy Sutton said, “That’s where the money is.”

Right now our exponentially increasing federal government bureaucracy is where the money is and it worries the hell out of me.  I believe there is an increasing moral hazard here that is even more dangerous than innate governmental inefficiency.  I believe it may have implications for the future of US entrepreneurship and capitalism itself.

I started thinking about this a couple of weeks ago at the Inc. GrowCo convention in Nashville when I noticed an inordinate number of companies were focused on government business—how to get it, how to navigate it, how to penetrate it.  It seems to me this focus has enormous potential for skewing and perverting healthy capitalist business process. This is purely anecdotal, but it seemed to me there was extraordinary concern with the ROI of government ass-kissing.

And why not?  “That’s where the money is.”  But what does this say about the societal efficacy of entrepreneurship?  It says to me that the creative focus of our enormously fecund money generating, job creating community may be being subtly shifted from building better mousetraps to inventing schemes for feeding at the public trough, like a lamprey eel sucking on a big blue whale.

This new bureaucratic bloat is leeching energy and incentives away from the practical problem solving of traditional darwinian capitalism, into a focus on firstly looking for ways to manipulate and win within imposed oligarchic rules.  Once again—“That’s where the money is.”  It is a tax-payer funded moral and economic strangulation of healthy capitalist process.

scorpion_and_the_frogTo cite but one example, look no further than the rollout of Obamacare.  From what I can see from Congressional hearings, it’s pretty clear government IT procurement procedures are idiotic.  The Obamacare IT work went to insider firms whose proficiency was in jumping through hoops of government rules.  Efficient companies like Apple and Google didn’t even bother to bid on it.  What passionate entrepreneurial company wants to vitiate their originality and energy fighting bureaucratic torpor—energy that should be going into creating the new, disrupting the old?  Not only is a bloated bureaucracy a burden on efficient government and the taxpayer, but it also obviates the civic logic of the entrepreneurial process.

Indeed, please note Nicholas Eberstadt‘s best-selling book of 2012 called A Nation of Takers:  America’s Entitlement Epidemic.  Eberstadt holds up Eric Conn as poster boy for a new, destructive sort of mutant entrepreneur/legal con man.  Conn has established a whole new niche for legally snookering government into paying thousands of unworthy people disability benefits by effectively navigating the imprecise, easily abused strictures created by unaccountable and inept government rule makers with too much money and too much power.

Aesop tells this story:

A scorpion and a frog meet on the edge of the river, and the scorpion asks the frog to carry him across on his back. The frog asks,”How do I know you wont sting me?”  The scorpion says, “Because if I do, I will die, too.”

The frog says OK and then they set out, but at midstream, the scorpion stings the frog.  As the frog dies he gasps out, “Why?” The scorpion replies, “It is my nature.”

Gore_Vidal_by_Juan_F_BastosJoseph Schumpeter, the Austrian economist and Harvard professor, pointed out that an overweening bureaucratic class is in very much the same relation to healthy business as the scorpion to the frog.  Even if it is ultimately destructive to government itself, bureaucrats will drown free enterprise to create a controlling governmental hegemony.  It is their nature.

Gore Vidal said in his 1968 book Sex, Death and Money, “There is something about a bureaucrat that does not like a poem.” Or an entrepreneur. Thanks, Gore.

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When asked his reason for robbing banks, Willy Sutton said, “That’s where the money is.”

willie-suttonRight now our exponentially increasing federal government bureaucracy is where the money is and it worries the hell out of me.  I believe there is an increasing moral hazard here that is even more dangerous than innate governmental inefficiency.  I believe it may have implications for the future of US entrepreneurship and capitalism itself.

I started thinking about this a couple of weeks ago at the Inc. 500/5000 convention when I noticed an inordinate number of companies were focused on government business—how to get it, how to navigate it, how to penetrate it.  It seems to me this focus has enormous potential for skewing and perverting healthy capitalist business process.  This is purely anecdotal, but it seemed to me there was extraordinary concern with the ROI of government ass-kissing.

And why not?  “That’s where the money is.”  But what does this say about the societal efficacy of entrepreneurship?  It says to me that the creative focus of our enormously fecund money generating, job creating community may be being subtly shifted from building better mousetraps to inventing schemes for feeding at the public trough, like a lamprey eel sucking on a big blue whale.

This new bureaucratic bloat is leeching energy and incentives away from the practical problem solving of traditional darwinian capitalism, into a focus on firstly looking for ways to manipulate and win within imposed oligarchic rules.  Once again—“That’s  where the money is.”  It is a tax-payer funded moral and economic strangulation of healthy capitalist process.

For example, take the failure of the rollout of Obamacare.  From what I can see from Congressional hearings, it’s pretty clear government IT procurement procedures are idiotic.  The Obamacare IT work went to insider firms whose proficiency was in jumping through hoops of government rules.  Efficient companies like Apple and Google didn’t even bother to bid on it.  What passionate entrepreneurial company wants to vitiate their originality and energy fighting bureaucratic torpor—energy that should be going into creating the new?

Indeed, please note Nicholas Eberstadt‘s best-selling book of 2012 called A Nation of Takers:  America’s Entitlement Epidemic.  Eberstadt holds up Eric Conn as poster boy for a new, destructive sort of mutant entrepreneur/ legal con man.  Conn has established a whole new niche for legally snookering government into paying thousands of unworthy people disability benefits by effectively navigating the imprecise, easily abused strictures created by unaccountable and inept government rule makers with too much money and too much power.

EVOLUTION CONSERVATIVES 3So, not only is a bloated bureaucracy a burden on efficient government and the taxpayer, but it also obviates the civic logic of the entrepreneurial process.  The government does not have to be efficient, so it is not.

Journalist John Derbyshire says, “Ultimately, as the Austrian economist Joseph Schumpeter pointed out, a powerful bureaucratic class is in the same relation to commerce as was the scorpion in Aesop to the dog on whose back he crossed the river.  They will destroy commerce and establish socialism, even if it kills them, because it is their nature.”

Thanks, John.

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