Posts Tagged “Wall Street Journal”
Posted by Tim Askew in Blog, Corporate Rain, Entrepreneurship, Polarization, Politics, tags: Amazon, Carl Jung, Inclusion, James Carville, Jennifer Brown, Mary Matalin, NPR, Peggy Noonan, Starbucks, The Second Coming, W.B. Yeats, Wall Street Journal
In his prophetic post World War I poem The Second Coming, W. B. Yeats writes:
“The blood dimmed tide is loosed and everywhere
The ceremony of innocence is drowned,
The best lack all conviction, while the worst
Are full of passionate intensity.”
There is a Chinese curse that goes something like, “May you live in interesting times.” We certainly seem to be living in one of those times. Peggy Noonan called it “big history” in her Saturday Wall Street Journal column.
My friend Jennifer Brown, author of the recent Amazon business best-seller Inclusion, relates a conversation she overheard last week that got me thinking about the special challenges to entrepreneurial health in a time of severe societal polarization and instability.
Jennifer reports hearing a Starbucks barista sharing about how thoroughly sick she was of the incivility of current political discourse and that she had come to a conscious decision: The minute she logged onto Facebook and saw a single political post, she would immediately log off.
I know how she feels. The political trope of our time has never been so fraught nor the urge to disengage more alluring. Everything is overly charged. It seems folks are bloody exhausted, yet endlessly drawn back into the emotional vortex of the pure drama of a seeming manichaean struggle. (Manichaeism, if unknown to you, is an early Christian heresy that divided the world into absolutes–pure back and white, pure right or wrong–a dualism with little middle way.)
This dominant current meme is reinforced by a report I heard mentioned on NPR recently, which cited a poll from somewhere that over 40% of couples who supported different candidates in the US presidential election ended up breaking up over their differences. Wow! So much for the golden example of James Carville and Mary Matalin, Democratic and Republican strategists respectively, who seem to live a very happy domestic existence despite their political disparity.
There is an almost addictive quality to the dramatic distortion so apparent in our present political moment. It can be all-consuming to the detriment of the focused passion essential to entrepreneurial success. Much like any addiction, our exciting and disturbing political moment allows us to avoid and skirt the very real challenges posed by our essential businesses and personal lives. It is just so much easier to fling ourselves into the exciting societal/political drama than to face the quotidian challenges of everyday life and business. It’s like embracing an escapist sugar high.
This is not to say that political passion and idealism of any stripe are not necessary and wonderful. I respect idealism, of course. Most successful entrepreneurs are idealists. How else do they summon the indispensable courage to attempt to create something out of nothing each day? It is an act of artistic faith, as well as of personal will.
There is an intuitive wisdom in the decision of the young barista mentioned above who chooses to cut off any further political discourse rather than get caught up in ad hominem manichaean disputation. It is sometimes necessary to disengage temporarily. It may well be a healthful disengagement from present polarities to maintain a practical and mindful center. There is no shame in keeping your attention on the main business chance.
Successful entrepreneurs are nothing if not practical people. They are risk-takers but not reckless adventurers. They may live on the cutting edge, but not without shrewd calculation. To maintain that focus this may be a time for the withdrawal from the tropes of the popular meme. It may be a time of making choices as to where to place limited personal energy. Just as it is good to stay clear of individuals who are energy sucks, so is it also sometimes necessary to resist the lemming-like madness of societal drama.
Entrepreneurial practicality militates a functional utile, a nuanced understanding that truth exists in the gray non-absolutes, not in the blacks and whites of political purity. It is important to recognize a bone-deep weariness that can sap creative and functional business energy.
So, this is not a time of tolerance and the truth of “the gray.” But we do not need to surrender to distracting, uncentering angry absolutes.
As Carl Jung warns us, “We all feel the opposite of our own highest principle must be purely destructive, deadly, and evil. We refuse to endow it with any positive life force; hence we avoid and fear it.” Thanks, Carl.
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Posted by Tim Askew in Blog, Corporate Rain, Entrepreneurship, Ethical Culture, Profitability, Wells Fargo, tags: Adam Galinsky, Anita Roddick, Ayn Rand, Daniel Pink, Dr. Lisa Ordonez, Eller School of Management at the University of Arizona, Harvard Business Review, Inc., Marc Kodak, Maurice Schweitzer, Max Bozeman, Michael Douglas, New York University, Richard Cordray, The Body Shop, The Los Angeles Times, To Sell Is Human, U.S. Consumer Financial Protection Bureau, Volkswagen, Wall Street, Wall Street Journal, Wells Fargo Bank
Anita Roddick, the British founder of The Body Shop, once said, “Being good is good business.”
Did you see last Friday’s (September 9, 2016) Wall Street Journal? Well, it grabbed my attention. The page one, above-the-fold headline seemed simple enough. It read “Wells Fargo Fined For Sales Scam.” But what the article recounted was a cautionary tale about corporate culture, ethics, and business profitability.
Wells Fargo Bank was fined $185 million by the U.S. Consumer Financial Protection Bureau for “widespread illegal sales.” It opened no less than two million deposit and credit card accounts without customers’ knowledge, resulting in all kinds of extra fees for Wells’s customers and huge profits for the bank.
This is by far the largest fine in the CFBP’s five year history. In addition to the fine, Wells Fargo terminated roughly 5,300 employees for engaging in improper sales practices. The WSJ quotes CFPB Director Richard Cordray as saying, “Wells Fargo built an incentive compensation program that made it possible for its employees to pursue underhanded sales practices.” These unsavory, profit enhancing internal sales practices were nicknamed “sandbagging” and “bundling” by Wells employees.
How did this happen? Wells Fargo was the envy of the U.S. banking world. It consistently reported the highest profitability of all the major U.S. banks for a number of years.
The story is pretty clear. Wells Fargo had a long-term reputation for being a dependable, down-home, Main Street large bank. But executives and managers instituted a series of stretch goals and sales quotas after 2008 that were virtually impossible to reach. Wells didn’t seem to really care how their employees reached these goals, despite internal complaints.
It seemed to work for Wells. The bank bragged to the investor community of its unique ability to cross-sell products, claiming an average of six products per household through its “bundling” sales process. But, alas, its success was chimerical, based on a system that left its salespeople in the untenable position of only being able to meet their sales quotas through unethical, unfair, illegal, and fraudulent means. For the long-term this was very bad business.
The Los Angeles Times reports Wells employees frequently misused customers’ confidential information to open unauthorized accounts for customers, sticking them with bogus fees and unneeded services. Fearing retribution from managers, employees opened ghost accounts, forged customer signatures, and falsified phone numbers of angry customers so they couldn’t be reached for customer satisfaction surveys. Over 20 different services frequently were bundled illegally into new accounts or added to old ones—things like overdraft insurance or travel insurance.
All this has reaped a huge price in ongoing customer lawsuits and loss of reputation and good will for Wells Fargo.
This put me in mind of a prescient Harvard Business Review article from 2009 authored by Dr. Lisa Ordonez, Vice-Dean of the Eller School of Management at the University of Arizona (with colleagues Maurice Schweitzer, Adam Galinsky, and Max Bozeman) titled “Goals Gone Wild.” The two basic conclusions of her research were:
- Goals cannot create self-sustaining motivation.
- Goals cannot be the entire focus of management.
Unattached to an ethical corporate culture, systemic problems will predictably ensue. Problems like risk-taking, unethical behavior, decreased cooperation, and decreased intrinsic motivation. Daniel Pink’s recent book To Sell Is Human reached a similar conclusion.
Or note the recent compliance calamity at Volkswagen. Volkswagen set two demanding goals for its managers: to comply with mandated environmental standards and to become the largest car company in the world. This proved impossible. But rather than admit that, they decide to cheat massively and systemically by engineering their cars to fool the testers. (For more on this check out my Inc. column of June 13, 2016, “The Slippery Slope of Goals and Incentives.”)
In both the cases of Wells Fargo and and Volkswagen, the price for placing stretch goals and sales quotas above ethics and the law has been colossal. Ethics is surely not an optional “nice thing.” It is a crucial business tool for practical, long-term profitability.
We all know the famous phrase “Greed is good,” voiced by Michael Douglas in the movie Wall Street. Ayn Rand aside, just the opposite is actually true for long-term profitability: Good is greed.
Professor Marc Hodak of NYU puts it this way: “Incentive to perform is frequently indistinguishable from incentive to cheat.” Thank you, Marc Kodak.
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Posted by Tim Askew in Blog, Corporate Rain, Entrepreneurship, Killing the Entrepreneurial Golden Goose, tags: ADP, Baruch Spinoza, Bob Funk, Corporate Rain International, Donald Trump, Inc. Magazine, Markham Shaw Pyle, Shark Tank, The Apprentice, The King and I, Wall Street Journal
Texas essayist and publisher Markham Shaw Pyle recently said, “If the power to tax is the power to destroy, the power to regulate is no less so.”
For the life of me, I cannot tell you why our bloated bureaucracies of city, state, and fed seem to have it in for entrepreneurs and small business. But they apparently do. Why? Why? Why?
If the U.S. and the world is ever to escape the torpidity lingering from the Great Recession, to say nothing of bailing out the indebted entitlement state, it must do so on the success and vitality of creative free enterprise. Yet, everywhere I look I see businesses groaning under unnecessary government intrusion that is antithetical to business health.
Don’t get me wrong. I actually believe in higher and fairer taxation as a partial palliative to the increasing inequity between the very rich and everyone else. Maybe I’m still at heart the spiritual socialist I was in college. But one thing the autodidactics of everyday business has taught me is regulation is increasingly irrational in its omnipresence and labyrinthine incomprehensibility.
I must admit this entrepreneurial cri de coeur comes bubbling up in me every year as we approach tax time. But the conundrum of excessive bureaucratic interference with small business is bloody exasperating year round. The rules are confusing—a babel of unclarity and sometimes of contradiction. New government interventions—wage laws, labor rules, environmental regulations—while mostly well-intended, have unintended business-killig, job-killing consequences.
For example, though God knows I love the prairie sage grouse, the snail darter, the spotted owl, clean air, and untainted water, do we really have to close down agriculture in California? Surely there is a place for simple, practical common sense compromises, rather than rigidly mandated bureaucratic micro-management and ideological and ecological perfection.
Last fall I noticed an interesting op-ed in the Wall Street Journal (Oct. 13, 2015) by Bob Funk entitled, The Golden Goose Is On The Run. Funk states, “For decades, most businesses operated, innovated and expanded despite what was happening in the nation’s capital, or perhaps even oblivious to it. But now the goose that laid the golden egg is on the run. Free enterprise, which made the economy grow and produced rising wages for middle income Americans is under assault.”
The animal spirits of Main Street are palpably moribund. Anecdotally, observing my business friends and colleagues of late, I can tell you businesses are holding back, tentative—not sure if they want to commit more capital and passion in an atmosphere of geometrically growing governmental intrusion. Small business optimism is at a nadir, despite the romantic fascination with entrepreneurship fostered by Donald Trump, Shark Tank, The Apprentice, et. al., as well as the jam-packed popularity of Inc. Magazine’s conventions.
Let me point out just one challenge that my company Corporate Rain International, has to increasingly adjust to. My small firm does business in a number states and locales. Multi-state businesses are increasingly compelled to monitor new laws and regulation in many cities, towns, and counties, as well as the states themselves and an ever omnipresent potpourri of unaccountable federal agencies. Some of these are outright contradictory. For example, how does one reconcile a sick-leave ordinance in Detroit that conflicts with the law in Boston?
As the King says to Miss Anna in the current Broadway revival of The King and I—“Is a puzzlement!”
A 2011 survey by ADP showed that half of small-to-medium size businesses in the US lacked confidence that they would be able to keep up with constantly changing regulation. More than half saw things becoming much more challenging. They were right. In 2014 American businesses paid over 400 million just to settle wage-and-hour lawsuits.
The indebted welfare state should be trying to make doing business easier and simpler. It must. It needs the revenue engendered by the success of the entrepreneur and the creative small businessman. Regulations need to be reigned in with common sense. A reasonable degree of freedom is the essential ingredient of “free” enterprise. Overregulation is ultimately the death knell of freedom, ergo the death of the entrepreneur.
17th century Dutch philosopher Baruch Spinoza speaks to the practical problem of overregulation. He says, “He who seeks to regulate everything by law is more likely to arouse vices than to reform them. It is best to grant what cannot be abolished, even though it be in itself harmful. How many evils spring from envy, avarice, drunkenness and the like, yet these are tolerated because they cannot be prevented by legal enactments.” Thank you, Baruch.
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Posted by Tim Askew in Blog, Corporate Rain, Entertainment Analytics, Entrepreneurship, Stealth Revolution, tags: Abundance, Bob Dylan, Brian Hughes, CBS, comScore, Interpublic, Magna Global, Media Welcomes comScore-Rentrack Deal, MoneyTV, Neilsen, Peerlogix, Peter Diamandis, Rentrack, Stephen Kotler, Wall Street Journal, William Gorfein
This column is usually devoted to issues of meaning and creative business. Almost never does it cast its gimlet eye on the inner-workings of cutting-edge technology–the reason being this writer’s ignorance on all aspects of the subject. (Even for one of the baby boomer generation, my knowledge on the subject is exceptionally primitive, if not troglodytic.)
Nevertheless, I have become increasingly fascinated by what may well be a rapidly approaching disruption in the consumer research niche of the analytics industry focused on the evolving viewership patterns of hundreds of millions of entertainment consumers. This disruption may well threaten the long-time ascendancy of Nielsen, the highly profitable gold standard dreadnought of entertainment research.
Note an article from the October 2, 2015 Wall Street Journal titled “Media Industry Welcomes comScore-Rentrack Deal.” The piece states that the media and advertising industry are eagerly anticipating and hoping that the union of entrepreneurial public companies comScore (SCOR) and Rentrack (RENT) augers serious competition to Neilsen as “their industry grapples with fast-changing viewership habits.” The WSJ quotes Brian Hughes, Sr. VP of audience analysis at Magna Global (a division of Interpublic) as saying, “We are happy to have at least two major players trying to build a better mousetrap given the hurdles we face with measurement.”
Nielson’s throne indeed may be shaky. The analytics industry has long complained of the insufficiency of current methods in tracking the efficacy of ads and content on linear TV and digital devices.
ComScore is the premier provider of audience measurement of web content and digital. Its new junior partner, Rentrack, is primarily known for its measurement partnerships with Hollywood studios, theater chains, and Dish. For the first time Nielsen may have some real competition for billions in advertising research dollars.
The WSJ quotes CBS Chief Research officer David Poltrack, who notes, “Five years ago it looked unlikely that any of these challengers [to Nielsen] were going to be able to pull all the assets necessary to create a total solution approach, and now we’ve got two major initiatives to provide that. Consolidation, in this case, is positive.”
So watch your ass, Nielsen. These two aggressive and newly conjoined entrepreneurial companies may soon be gaining on you.
Even more interesting is an audacious pipsqueak upstart, just entering the commercial markets, called PeerLogix (LOGX). As near as I can figure, PeerLogix seems to have found a way to harness and monetize consumer criminality. This parvenu company apparently accomplishes this by tracking “torrent” files. Essentially their technology is based on measuring “torrent piracy” by any number of apps and websites, most notably Bit-Torrent and Popcorn Time.
PeerLogix seems to be the other side of the coin from Nielsen and comScore/Rentrack, both of whom operate by mining data of consumers using accepted and legitimate media outlets. PeerLogix mines the legally murky underside of the internet and opens up new arenas to research analysts via a software which engages consumers of the content-sharing economy. PeerLogix claims to be able to mine the 145 million (and rapidly growing) worldwide users of torrent files, who leverage the ability of people to network peer-to-peer. CEO of PeerLogix, William Gorfein, states on MoneyTV, “PeerLogix is a company whose software platform can uniquely track and catalog torrent files and their users.”
Well, who knows? Its well beyond my ken, but, as Bob Dylan famously said, “The times they are a changin’.” It’s just that, these days, the times are a changin’ much, much faster. Everywhere and in every industry. Media analytics may well be the next domino to fall prey to disruption.
Peter Diamandis, author of best seller Abundance (with Stephen Kotler), puts it this way. “Everywhere the rate of change is so fast that large U.S. companies are in constant danger of disruption. Not from competition in China or India, no. They’re in danger of being made obsolete from two guys/gals in a garage in Silicon Valley, or anyone, anywhere, empowered by exponential technology, willing to risk it all, driven by their passion.” Well noted, Peter.
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Posted by Tim Askew in Blog, Corporate Rain, Entrepreneur, Fakers, Floppers, March Madness, tags: Aldous Huxley, Corporate Rain, ESPN, Jay Bilas, Larry Ellison, New York Times, Oracle, Peter Drucker, Red Sanders, Sam Borden, Tab Ramos, UCLA, Wall Street Journal, William James
Have you been watching the US college basketball playoff tournament? I have. And I’ve noticed in almost every game I’ve watched this week there will come a moment when a player will make incidental contact with a defender who will promptly fall backward as though hit by the force of a nuclear bomb. As Jay Bilas, an ESPN analyst, puts it, “I’ve had countless games this year where you say, ‘That’s a flop.’ There’s no way that amount of force caused that amount of physical reaction from the defender. You’d have to be shot in the chest with a bazooka to fall like that.” (WSJ, March 17, 2015)
So, flopping can be defined as an intentional fall by a player after little or no contact by an opposing player in order to draw a personal foul from an official against an opponent.
I first became aware of this phenomenon watching the World Cup last summer. I don’t know much about international soccer, but I noticed flopping was being prominently covered in the sports press. One of the favored teams last year was Brazil. Apparently the Brazilians have raised flopping to an art form. A June 15, 2014 article in the NY Times by Sam Borden, titled “Where Dishonesty Is Best Policy, US Soccer Falls Short,” caught my eye. Apparently the US team is simply too honest. Borden states, “For better or worse, gamesmanship and embellishment–or, depending on your sensibilities, cheating–are part of high-level soccer. Players exaggerate contact. They amplify the mundane. They turn niggling knocks into something closer to grim death.”
Assistant US coach Tab Ramos says American players tend to be culturally very straight, forthright people. That is not the way the international soccer world generally thinks. Ramos says, “I don’t know if you call it a problem or a weakness, but it’s clear that the American nature is to try and make everything fair to the game. That’s just how Americans are.”
All this gets me to thinking about my American self and “winning” at small business. Karmically speaking, I believe that being straight is the selfish way to be. It seems to work for me, though admittedly, my business life is as much incentivized by making my personal life whole as by making money. My motto continues to be “Good Is Greed.” I have always tried to follow the admonition of Peter Drucker to “make your life your [business] endgame.” Am I a foolish naif like some say the US soccer team is?
Well, perhaps. I am certainly expected to be a salesman, a prime job for every business owner. Salesmen are often portrayed as liars, thieves, scoundrels, scofflaws. I don’t think lying to people works, but it does seem to work as a base assumption of sports “floppers.” So must I become at least a partial flopper to win? Coach Red Sanders of UCLA famously said, “Winning isn’t everything; it’s the only thing.”
And what exactly is business flopping (lying, exaggeration)? Look at Larry Ellison, founder of Oracle. He was notorious for informing investors and clients that a new product was soon to be available even though it was barely a gleam in the eye of one of his engineers, if that. Or how ’bout ur-entrepreneur Steve Jobs who was mesmerizing as he wove his hypothetical dreams and visions into his listeners as a compelling reality? Admittedly, both these men made good on their existential exaggerations. So were they liars or visionaries? Most of us would surely say the latter. And yet….
I suppose you come down to an “ends justifying the means” conundrum. If we are fiercely committed entrepreneurs, does that mean kicking, biting, lying, and cheating our way to success, even if we have a great product or service? And if we opt for this, is it OK if “everyone is doing it?”
All of us lie fairly harmlessly in our everyday lives. We do it so as not to hurt people’s feelings, to be polite, to smooth our quotidian life process. As a salesman and chief voice of my own firm Corporate Rain, it is my job to present the most glowing, piquant image possible for customers. But am I flopping to Gomorrah when I create an eloquent, perhaps exaggerated metaphor for my company’s work? Am I ultimately sacrificing my entrepreneurial soul to what William James calls “the bitch goddess of success?” Is a right livelihood only made possible by leaping into the rancid fog of a moral and mental abyss?
As an act of faith and formal strategy, I choose (try?) to walk a fulgently moral path. My faith is that I will win that way. Good Is Greed. Yet, as in this column, my questions about myself and everybody else never cease. Or am I simply asking a revised version of the ridiculous medieval question, “How many angels can flop on the head of pin?”
Well, I shall leave off this excessive moral navel-gazing and go back to enjoying my March Madness. Perhaps we are all floppers to one extent or another–excessive emoters, serial exaggerators, closet conmen. Christians call it sin.
I like what Aldous Huxley said: “The end cannot justify the means, for the simple and obvious reason that the means employed determine the nature of the ends produced.” Thank you, Aldous.
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