347-878-3837

Business

Here are articles on Business

Wish Verizon IOBI would get a clue

Use your product before selling it. Please!

Verizon’s IOBI service sounds nice: manage your phones from your web browser. It’s kind of cool. But they screwed up royally. The product likely cost tens if not hundreds of millions to roll out, and it’s clear no one bothered to try using it.

IOBI lets you change your call forwarding, call blocking, etc. remotely. How? You call a phone number and speak your commands. Sounds pretty sensible, eh? Very 21st century.

Too bad they clearly never tested it. IOBI has two show-stopping problems. First, you can register up to 3 phones allowed to call in to the 800 number to change forwarding. Again, sounds reasonable. I registered my cell phone, home phone, and work phone. But wait! I was traveling and lost my cell phone. Now, I’m totally unable to reforward my phones to the house where I’m staying, since I can only change my forwarding from a pre-approved phone. Why not just let me enter a PIN or password, like I can with every other service in the world? (And even if I call from an approved phone, they require a PIN, so it’s not like they don’t have the capability!)

To make matters worse, the system is only voice activated. Let’s see, a remote forwarding service. Where are people likely to use it from? Their cell phones. While walking down the street. With traffic, wind, and random noise in the background, not to mention a poor connection. I’ve found IOBI is utterly useless from a cell phone. Even when quiet, it often can’t understand me.

I’m amazed that these flaws—which are really show-stoppers—didn’t come up in user testing. It’s a nice service that just doesn’t work except under perfect conditions.

The icing on the customer service cake is that Verizon used to offer a touch-tone activated remote call forwarding that could be called from any phone. I used it for years and was quite happy. But that’s now a discontinued product, so my “trial” of IOBI eliminated any possibility of resuming my reliable, working service.

Chalk one up to progress.

Productivity has limits!

Last night at my birthday party, a friend told me how his company insists he show up at work before 9 to make sure everyone’s productive. It seems we’re always trying to increase productivity. But this isn’t sustainable.

You see, productivity has its limits. Period. A woman can’t have a baby in six months by trying really hard. The process takes nine months. You can’t add a woman, hoping that two women working together can make one baby in four and a half months. The process takes one woman nine months.

Every task takes a certain amount of time to complete. If you’re manufacturing round metal paperweights, the metal has to be melted and then cooled. Those physical processes can only happen so fast without the metal breaking. We might be able to speed them up a little here and there, but at the end of the day, no amount of investment can speed the process beyond a certain point.

So it makes me wonder how we know when we’re as productive in an area as it’s possible to be? I have timed myself over and over, and I write about 400 words of finished draft per hour. My mood doesn’t affect it much, my typing speed isn’t the limit. That just seems to be how long it takes me to write a finished draft. Do I try to improve it, thus improving my productivity, or am I going as fast as possible already (since writing happens subconsciously), and I just relax and go with the flow?

It’s a question worth asking businesses, who often pour resources into misguided attempts at improvement, where the status quo is just fine on its own.

It’s also worth asking yourself. Some people look for their weaknesses and try to improve them. But your weaknesses may be just fine as they are. Maybe your time is best spent enjoying life, instead!

Propoganda, by any other name, is still as manipulative

As I write this, CNN is announcing that the U.S. Military is now posting “unfiltered” videos on YouTube, to show what it’s really like on the ground in Iraq.

In the five minutes I watched the segment, every one of the videos showed uniformed servicemen playing with kids, shooting hoops, and giving presents to grateful families. Wow! Iraq looks like my 19th birthday party, only with cool combat fatigues and neat machinery.

Noticeably missing are the body bags, the servicemen whose limbs have been blown off by roadside bombs, and the blood and bodies of Iraqi civilians killed in the daily suicide bomb attack. And oddly, other than campaign ads for Republicans in 2004, no coffins of the young men and women who have died in Iraq.

Let’s hear it for unfiltered videos.

Coming soon: “unfiltered” financial data on Enron, Worldcom, and many other of your other favorite companies.

The Joys of Overhead (why overhead isn't necessarily bad)

Why Overhead isn’t necessarily bad.

Click here to listen to this article as a podcast.

I never thought I’d be able to grow up and say, “Mom, I’m not just a productive businessperson, I’m overhead!” Many people think overhead is a bad thing. Well, maybe. Maybe not. Overhead’s an essential part of business.

Overhead is the time, effort, money and manpower you spend on parts of the business that don’t directly make money. The cleaning service that keeps your desk so shiny you can see yourself? Overhead. Your office rent? Overhead. That cool new Blackberry? Overhead. The wonderful people who work in your accounts receivable department? Also overhead. And brace yourself: if you’re a manager, you just might be overhead, too.

We talk as if overhead’s a bad thing. That’s just silly. Building and maintaining the support systems to do our job, that’s overhead, but it’s also necessary. In today’s office environment, I’ve had executive clients who hunt-and-peck type their own letters and fill out their own expense reports. They don’t want the overhead of an assistant, they say. Harumph, I say. If they’re high-powered folks (and they people I work with are!), they can do more for the business by concentrating on their jobs, not their expense report. If they could spend 100% of their brainpower on their job, they would build so much great business that the so-called overhead of an assistant is peanuts.

One place the world is very confused about overhead is with non-profits. Many people think the better a non-profit is, the less overhead it will have. “Only 2% of every dollar goes to overhead!” non-profits proudly claim.

What they’re not claiming, probably because most non-profits don’t know how to educate donors, is that with only 2% money available for overhead, they’re not likely to ever build the talented staff, tight business systems, and focused delivery to make a big impact in the world. We routinely accept that businesses may need 30-40% overhead just to get the job done well. The same is true of non-profits.

The way to think about overhead is to ask whether the organization gets better results with the overhead than without. For for-profit companies, it becomes the most fundamental management question: does a dollar spent on overhead turn into more than a dollar of profit. If the answer is Yes, then it’s useful overhead. (Note that I’m not saying a word about CEO salaries here.)

For a non-profit, the bottom line isn’t money, it’s impact. You need to ask: can the non-profit have greater impact with its overhead than without. Consider a Non-Profit Co, a third-world hospital. They could have low overhead by taking donations, buying and distributing medicine. But if they increased overhead by spending money educating hospital staff in public health, they could educate communities to prevent many diseases in the first place. The training costs increase overhead, but increase the positive impact of the hospital even more than if the money were spent directly on medical care.

Personally, I incorporated last month. My last two weeks have been spent filing incorporation stuff, navigating government websites, arranging payroll deposits, transitioning merchant accounts, and doing lots and lots of stuff that is all overhead. I decided to write this article to convince myself that the overhead was time well-spent. And it was, because overhead is only a bad thing if it doesn’t help the business move forward. And in this case, the overhead inspired an article and a podcast. And that, my friends, moves my business forward.

So don’t reject your overhead. Embrace it! Because like it or not, it’s here to stay.

Why did a successful basketball team choose victimhood? Not Imus’s fault.

I’ve written before on taking responsibility for your actions. It’s also key to take responsibility for your REactions.

The flap over Imus’s racial slur is amazing. Yes, he used a phrase that was offensive. But what’s amazing is the incredible, over-the-top display of utter hypocrisy and self-deprecation that’s come from everyone else involved in the controversy.

We may not like to admit it, but Imus used a phrase straight from gangsta rap culture. That culture is primarily created and driven by the African-American community. They write and produce the songs, they sell the songs, they buy the songs. They play the sounds millions of times. Everyone makes money, and no one seems to care at the societal consequences. Even with Imus’s comment, the rest of the media has ironically repeated it two thousand times, thus driving home the association between his comment and the basketball team, in case anyone might have missed it first time around.

But the most horrible part about this episode is the stampede as everyone lines up as a victim. A TV anchor commented, “These wonderful athletes had their victory ruined by a racist slur…” Excuse me? How did 3 words from Imus ruin their victory? They have free will. They can choose to focus on their victory, and it becomes a victory. Or, they can choose to focus on Imus’s slur, and their life becomes a slur. If they choose to ignore the achievements they’ve trained for for years, and instead let one radio DJ’s comment set their entire tone, that’s their choice.

This is your choice, too. When someone insults you, makes a bigoted slur, or puts you down, you can choose how to respond. Respond from a place of victimhood, and that’s the life you write for yourself. Respond from a place of confidence and power, and that script is yours, as well. It’s your choice; choose wisely.

(African-American journalist Jason Whitlock addresses the issue in a nice article.)

Addressing the root cause of problems

How often do we fall into treating the symptom, rather than the cause? Our politicians have certainly done so.

I’ve received 10 fund-raising calls this week for various candidates. “It takes about $100MM to run a campaign, these days.”

A very important message for our politicans: this $100MM campaign crap is going to drain likely half a BILLION dollars from U.S. citizens this year (assuming 2 candidates from each party @ 100MM). I can think of some excellent uses for that money, none of which involve giving candidates more money than God to play with. Not only does it assure that big donors will become ever-more-important (and thus ever-more-influential), but it means candidates must spend all their time fund-raising.

The solution is not to beg for money–I’ve had myself removed from every list after receiving roughly 10 calls from the Dems this week. The solution is to bring in real campaign finance reform, which our existing incumbents are in a fine position to do.

At this point, I’m torn as to what to do. Honestly, I’ve given all the money I care to already. Spending money this early in the game, despite the frantic attempts by the media and the politicians to convince me that it’s needed this early, isn’t going to do much for anyone.

Don’t fix the symptom, guys, fix the cause. Please.

Profit and Cash Flow Explained

What’s the difference between profit and cash flow?

Often, it’s the difference between success and bankruptcy.

Before we begin, let’s use clear language. I won’t say “income” because different people mean different things by that word. I’ll say “revenue” to mean money that comes in from selling a product or service.

Imagine two kids who want to start a lemonade stand. They plan to charge 50 cents per cup. If they sell 100 cups, they will make 100 times 50 cents, or $50 of revenue. Of course, they know it takes money to make money. They figure each cup costs 13 cents to make: 10 cents for ingredients, and 3 cents to pay protection money to the neighborhood bully. Their expenses will be 13 cents times 100 cups, or $13. They will have revenue of $50, expenses of $13, and their profit–revenue minus expenses–is $37.

Profit is the money left once expenses are paid. Some people think business owners can take profit to the bank. If only! Profit is used to pay for any new equipment or materials needed for the business to grow. And unless you buy a politician or two, you pay taxes out of profits as well. (Sometimes, profit is given as “pre-tax profit” and “after-tax profit,” so you know what the business produced on its own.) Only after paying for growth and taxes do owners get to take money home.

Our kids are ready to go! They needn’t buy equipment or pay taxes, so they’re eager to start their business and bank their $37.

But wait! If only this story were so simple. There’s a dastardly twist!

On the very first day, the kids go to the store to buy lemons … only to find out neither of them has any allowance money left. The store won’t loan them the lemons, so they can’t even get started. They’re out of business before they begin, thanks to cash flow.

Cash flow refers to when a business needs money. Often, businesses spend money on salary, utility bills, and lemons before they bring in any revenue. By plotting out when cash will come in and when it needs to be paid out, a business can identify when it needs cash on hand, and can do what it takes to make the cash available.

Companies often take out loans to survive until revenue comes in. If our kids must pay the grocery store $5 for lemons today in order to make $50 by selling lemonade this weekend, they can ask Mom or Dad for a loan, to be paid back once the lemonade sales come pouring in. They borrow $5 today, make and sell their lemonade, and then pay back the loan next week.

(What about the protection money for neighborhood bullies?, you ask. Well, the bullies are kind, generous people who understand cash flow. They’re willing to let our entrepreneurs pay after the revenues come in, avoiding a cash flow crunch.)

Cash flow and profit don’t always match up.

A company can be profitable and still go bankrupt from cash flow problems. If they must pay for materials in January but don’t get paid by their customers until June, they need a loan to survive until June. If they don’t get that loan—even if they have guaranteed sales in June—then they will go out of business. Sometimes customers themselves will pay in advance, effectively giving an interest-free loan to a company to help cover cash flow.

A company can have great cash flow, but not be profitable. Amazon.com raised so much money by selling stock in the mid-1990s, that they had $2,000,000,000 in the bank. Every year, they spent more money than they made, so their yearly profit was negative. But because they had so much money saved up, they could afford to make up the difference out of their bank account. The big stock market cash inflows made up for the continual losses. Only after a decade did Amazon actually start making a profit as a company, so they now have good cash flow and are profitable.

So remember: profit is how much money you have left after you get your revenue and pay your expenses. Cash flow is when you actually get and pay the cash. In the long-term, you must eventually get profitable or find someone like stock investors to keep giving you cash to make up for your losses. In the short-term, even if you’re profitable, you survive or fail based on whether you have cash to pay the bills. That’s why they say Cash Flow is King.

What does a CIO do, anyway?

A CIO job description

For a CEO job description, see my article on CEO job descriptions.

For a podcast of this article, see my Podcast entry.

What does a Chief Information Officer do, anyway? Most of the descriptions I’ve heard make them sound like a glorified purchaser. “They make sure our systems are up to date.” Mega-yawn. CIOs fill a very important role, it’s just no one knows what. Well, today’s podcast will outline the four things you want from your CIO (and probably don’t get).
read more…