I’ve written many times describing the value of benefits and their effects on worker productivity.

Last year we looked at Amazon as a poster child for treating lower-level employees as expendable, replaceable ciphers.

However, some companies are eschewing Wall Street’s demand for short-term profit in favor of treating their employees and the environment better in the name of long-term profits and sustainability.

… a new type of business called a benefit corporation, which means its mission is to consider the needs of society and the environment, in addition to profit. There are 27 states that have passed legislation allowing companies to incorporate as benefit corporations…

Companies not located in one of those 27 states can apply as Certified B-Corporations.

The companies pledge to think about people and the planet in addition to profit, and an outside nonprofit inspects them and makes sure they’re doing so.

The premise is more back to the future than original — it’s called “stakeholder capitalism” and dates back more than 60 years.

Economists like Robert Reich, the one-time Labor Secretary, wondered if the Market Basket saga was a sign that the country was “witnessing the beginning of a return to a form of capitalism that was taken for granted in America sixty years ago.” He wrote that he hoped it was a return to “stakeholder capitalism,” in which employees and customers are also part of a company’s decision-making, as opposed to the “shareholder capitalism” of the last few decades that has focused on maximizing shareholder value.

While it’s Wall Street’s short-term, investor-as-god thinking that’s behind the minimization of workers and customers, it’s those same people, i.e., workers and customers, who are driving the change in attitude — along with multiple studies that prove treating all stakeholders well pays off.

More proof that, as I and others have said multiple times, business is like a three-legged stool — customers, investors and employees. When one or two legs are wildly out-of-whack with the third the stool falls over.

Maybe not immediately, but sooner than you think.

Wall Street and investors don’t care; they just go their merry, destructive way.

Flickr image credit: Gábor Kovács

Several years ago I read an article discussing what Gen Y wanted in their workplace. I found it somewhat amusing since the “unique” traits they wanted from work and management weren’t very original; I found the same thing earlier this year and they are the same traits I’ve heard from candidates for better than 30 years—long before Gen Y was thought of, let alone born.

But when I read a Talentbrew post about Gen Y’s attitude towards the recession I was floored—for at least 3 minutes.

While the capable of us have taken on the roles of Gen Xers and Boomers, we’ve likely done it without a raise, or at best, a minimal one.  Put simply, this infuriates us.  Gen Y was given constant positive reinforcement. We had piggy banks full of allowance earned just for making our bed or cleaning our own room.  The worst player on the team was awarded a “Most Improved” trophy.  When the economy changes for the better, we expect to be compensated, handsomely, for our efforts. Or we’ll leave.

How’s that for a sense of entitlement?

I know comments such as this are like waving a red flag in front of a bull, so I sent the link to Jim Gordon.

Jim graduated last June and is in his first job; he draws the Sunday comic mY generation and I often bounce stuff off him to be sure I’m not wildly out in left field.

After thinking it over for a few days, here is Jim’s response.

Alright, after picking through that article, I find it easy to sympathize with the author.

It’s very difficult for me to have any semblance of trust in my employer when I, and everyone around me, is being contracted.

It’s not that turnover is high either, but instead I have this air of uncertainty every day when I walk into work – will today be my last?  Every month or two, I have a new neighbor, though my position has a bit more staying power.

I find it very hard to say I “deserve” something, though.

I feel the author of the article insinuates that he/she deserves much better.  While I agree that often the scale from which our pay is currently derived is, well, off to say the least, I don’t think somehow the definition of “fair play” reflects the same way on society today.

I don’t mean to sound like an underachiever, but really the way one views the economic crisis depends upon how that person was raised.

I don’t agonize over short-term losses (4-5 years), but instead plan for the long-term (10-15).  Build thick skin, know what it’s like to lose, accept denial, appreciate acceptance, and move on in a self-centered direction.
Vanity is one attribute I will defend, which is seen as a flaw of Gen Y.  Assuming we learn from our mistakes, we know what it is like for a market to polarize.  Why?  That’s ALL some of us know.

We were living the life in the 1990’s, but “not much compares to a recession like this.”  That last bit was quoted from, well, everyone.  People who have experienced deep recessions say this, people who haven’t—everyone goes back to the point that this is really one of the worst recessions on record.

You know what, though?  I’m going to survive it and use it as a tool to build a road to where I want to be.  I’m not going to expect 5-star treatment afterward.

I may find another job, but that’s because, like many who have done so before, I want to find something that adds more value to me and my life.

That means I wasn’t taught that the world is an oyster—I was taught that life is tough, and (to quote The Rolling Stones) you can’t always get what you want…

Read the final paragraph in the Talentbrew post to learn what it will take to hire Gen Y in the future.

The only cosmic justice I see here comes from knowing that it is Gen Y’s parents who will be hiring and managing the attitude they raised.

Image credit: KM Photography.. on flickr

I found a great quote on JD Prickett’s blog by Harvard’s Roland Barth.

“Show me a school whose inhabitants constantly examine the school’s culture and work to transform it into one hospitable to sustained human learning, and I’ll show you students who graduate with both the capacity and the heart for lifelong learning.”

I agree passionately that the school’s culture is the basis for its accomplishments and that the principal’s MAP (mindset, attitude, philosophy™) is the source, whether active, passive or by benign neglect.

Unfortunately, the culture described above is constrained, distorted or totally destroyed by education policy—Dallas Independent School District is a great example of how truly bad policy can destroy learning.

Prickett, a school administrator (not in Dallas) hit the nail on the head when commenting on the pressure to produce good test-takers he said “the price of short-term success is long-term failure.”

No Child Left Behind, test performance-based funding and similar idiocies over the years have focused education directly on short-term results.

And that sounds like any number of banks, auto companies, insurance carriers and other corporate entities whose short-term thinking and drive for quarterly results left them constrained, distorted and totally destroyed.

Short-term thinking and quick profits of any kind are incapable of breeding long-term success in business or education.

Too bad. It’s solid K-12 education and life long learning that truly fuels our economy, underlies our democracy and makes for a strong, engaged populace.

Of course, the full effect of actions such as DISD’s are a long-term function that won’t be felt until long after the members of local, state and federal legislators are out of office leaving a mess significantly worse than the current economic debacle.

Even when Congress does do something it’s often botched. They’re rushing out a $150 billion education aid package spread over two years and more than doubling the current DOE budget. A flash flood of money that will be hard to manage and too much is bound to be wasted.

And, of course, there’s the ideological fight as opposed to whether it will work.

“Representative Howard P. McKeon, Republican of California and the ranking minority member of the House education committee, said, “By putting the federal government in the business of building schools, Democrats may be irrevocably changing the federal government’s role in education in this country.””

True, but maybe the federal government’s role does need to change, especially in mandating expensive requirements—No Child Left Behind, multiple security measures—and leaving the States to find ways to pay for them or be penalized; an action similar to a company mandating doubling the number of new products in development with no increases in budget or head count (yes, that’s been done many times).

When did ‘decade’ and ‘long-term’ become dirty words?

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: flickr

By Wes Ball, author of The Alpha Factor – a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.

OK, here’s the deal.

• We all know that short-term, tactical management is killing American business, right?

• We all recognize that top-level managers in publicly-held corporations are being driven crazy with external pressures from investors and stock analysts so they can’t do the “visionary leadership” job they need to do.

• Most of us have experienced the destructive effects of this corporate ADD as it filters down to the ranks of “worker bees” who are really keeping the company going, yet feel unappreciated.

• We have all seen the exodus of good people who wanted to make a difference for their employer, yet felt they were just wasting their time.

So why does it go on and on?  I even see it in privately-held companies, and it frightens me that they would want to embrace this self-destructive behavior.

I’m beginning to believe it’s an impossible problem.  So…

I’m throwing out a challenge today for anyone who can show me a publicly-held company that doesn’t have this problem.  I want to see that someone has figured out how to overcome this and has been successful at it.  I want to believe that it is possible, because I was certainly able to do it in my company – but mine was a privately-held business, so I could ignore people on the outside of my company.

Please, show me that I’m wrong.

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: byokitis  CC license

Post from Leadership Turn Image credit: JOE M500

I have gas pains, you have gas pains and so we rant.

Rants don’t alleviate gas pain, but they do relieve pressure.

We rant about crude prices and the mean oil producing countries that are more concerned with their own internal economy than with being nice and increasing production.

We rant about the oil companies and accuse them of manipulating prices.

Not that our rants aren’t mostly true, but…

There is something else going on.

Alkylate—or the lack of it.

‘The alkylate shortage has become the most important driver of summer gas prices, said Doug Leggate, an analyst at Citigroup Global Markets. “Supply of [alkylate] will set the price of summer gasoline – not inventory levels.”

What’s alkylate I hear (most) of you ask.

“…a little-known and expensive gasoline additive that some in the industry are calling “liquid gold.” It has become a must-have ingredient since refiners stopped using MTBE two years ago…”

Where does it come from?

“Oil companies deny they are purposely limiting production of alkylate, which like gasoline, jet fuel, and asphalt is a byproduct of the refining process. But only recently have some started studying how they can boost output… “

Of course the effort is recent, planning ahead, AKA, strategic thinking, goes against accepted business practice.

Should the oil companies have seen this coming?

Be sure to check out another other Fun Friday post at Talk Stock Trading

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

In a post last November I said, ” The 212-year-old force that was instrumental in building the most powerful industrial nation on the planet could be just as instrumental in presiding at its demise.”

Since then, I’ve taken a certain amount of ribbing, some friendly, some not, but all posing the same question, “Who the hell are you to make that statement?” I suppose the answer is “nobody,” at least in the sense of being any kind of authority, which I definitely am not.

But that doesn’t make me wrong.

In an opinion piece in Business Week, two real authorities, Clayton M. Christensen and Scott D. Anthony broach the subject from the other side.

They ask, “Why do smart, motivated, hardworking managers find it so difficult to innovate? Here’s one key culprit: the belief that management’s primary obligation is to maximize shareholder value. That credo, which is shaky to begin with, distorts managers’ sense of responsibility. And in fact it has been rendered obsolete by developments in the capital markets.”

They explain, “Through the 1960s…The average shareholding period was more than five years. Managers seeking to maximize the long-term strength and growth of their companies could reward these patient shareholders. But today shares are held, on average, less than 10 months. Should managers really regard such investors, whose investment horizons are shorter than the most nearsighted of managers, as stakeholders whose value they ought to maximize?”

They suggest, “Perhaps it is time for companies to adjust the paradigm of management responsibility: “You are investors and speculators, not shareholders, and you temporarily find yourselves holding the securities of our company. You are responsible for maximizing the returns on your investments. Our responsibility is to maximize the long-term value of this company. We will therefore act in the interest of those whose interests coincide with our long-term prospects, namely employees, customers, the communities in which our employees live, and the minority of investors who plan to hold our securities for several years.”

Well, the proof is in the pudding, or, in a very well known case, it’s in the denim. In 1985, led by then CEO Robert D. Haas, the founder’s great-great-grandnephew, and with the support of the Haas family, Levi Strauss went private. At the time, Haas said that the company couldn’t succeed in the future when all Wall Street/investors focused on were quarterly results.

I lived in San Francisco back then and still remember people cynically saying that the family would take Levi public in a short time just to make more millions.

How wrong they were. Sure, Levi’s had its ups and downs, but it’s still private, still going strong and still investing in the future.

More proof? Check out Warren Buffet’s holdings, or any other “patient” investor.

Yesterday’s redux was about the importance of liberal arts in a tech-gone-crazy world.

New studies, with hard salary data, bear out this truth.

Yes, tech starting salaries are higher, but that difference goes away relatively quickly.

Not only that, but the tech skills needed today, especially the “hot” skills, didn’t exist 10 years ago, or even three to five years ago, so a tech career requires a willingness to constantly learn the newest whatever that comes along.

That translates to 40 years of racing to keep up with the newly minted competition.

Even staying current won’t assure a good career path, since if you want to go higher more soft skills, such as written and verbal communications, are required.

And in case you are part of my millennial and under audience, written skills don’t refer to proficient texting, while verbal skills mean competently carrying on face-to-face conversations.

Liberal arts can (should) open your mind to other experiences and viewpoints increasing your EQ and SQ, which is critical to getting ahead (and getting along).

There’s another reason liberal arts is even more important now and in the future — AI.

Techies are so enamored with the technology they haven’t given much thought to the fact that AI is best at repetitive functions — like coding.

AI apps like Bayou, DeepCoder, and Commit Assistant automate some tedious parts of coding. They can produce a few lines of code but they can’t yet write programs on their own, nor can they interpret business value and prioritize features.

The stuff AI can’t do isn’t found in a tech education, but liberal arts provides the foundation to do them.

Sometimes a cliché is useful. The bottom line is an education that combines tech skills for the short-term and liberal arts for both short and long-term is the real career winner.

(Note: Although the image above says liberal arts is for sales and marketing, it’s even more crucial for techies.)

Image credit: Abhijit Bhaduri

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Short post, longer articles, but worth the read.

Not all founders are focused on valuation.

Some think it through, realize their mission is the most important thing and find like-minded investors.

What has made us really successful is this idea that we’re not building a company. What we’re doing is solving a problem. In that sense, we’re not emotional about our solution but, rather, constantly listening to our customers and the market and being able to then adjust alongside that. –Shivani Siroya, founder of Tala.

Others get seduced by the idea of ego-boosting valuations, money to drive growth and a buy-out that lets them retire — or do it again.

Most founders dream of building a product that eventually becomes a household name and sells for a billion dollars, but chasing that goal comes with some downsides. The grow-at-all-costs model inevitably forces you to sacrifice something you care about in service of short-term revenue growth, whether that’s your culture, your employee experience, your products, or your creative approach.

That said, when they find the fun gone some go to great lengths to extricate themselves and their company from the investor attitude of “growth first/last/always!” as opposed to the radical idea of pleasing customers, employees and thinking for the long-term.

The Wistia founders felt so strongly that they preferred debt to selling — a large amount of debt.

We turned down the offer to sell Wistia and instead took on $17.3M in debt. This allowed us to buy out our investors, gain full control of Wistia, and take the path less traveled in the tech industry.

Read Wistia’s story, as told by it’s founders, on it’s site.

There’s a lot of hard-won wisdom, along with pragmatic explanations of what look like touch-feely decisions.

What is often forgotten in startup land is the high value associated with being happy to get up and go to work.

Image credit: Tala and Wistia

Poking through 11+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

Sometimes old posts just depress me. I wrote this one in 2008 and it’s still applicable today. With very slight alterations, it would be just as applicable in 1908 or 1808 or even earlier and it will probably be just as applicable in 2118 and beyond.

Expecting companies to “do the right thing” when they think the right thing will impinge on their bottom line is just plain stupid. It hasn’t worked historically and I doubt it will work in the future; certainly not on the tech world, whose arrogance makes Wall Street look humble.

The only thing stupider is businesses’ inability to understand that the right thing is often more profitable — of course, they could take a lesson from Blackrock,  but more about that tomorrow.

Read other Golden Oldies here.

Yesterday I asked, “What else does Wall Street and the financial industry do besides cripple corporate strategic efforts?”

They fight for self-regulation, assuring watchdog agencies and Congress that they are good guys that should be trusted to do the best thing and that the economy will tank if any kind of control or regulation is enacted—and they win.

They win based on the money spent to focus the efforts of well-connected lobbyists on stopping cold, or at least significantly watering down, any legislation or rules that might offer protection to us—the people who keep them all in BMWs and champagne.

Wall Street and the other financial services industries aren’t alone in this, every industry does it, but the money guys seem to be exceptionally successful—until something blows up. Then, when public outcry is loud and tempers are hot, Congress has the leverage to pass anything—whether it fixes the problem or merely makes them look like they care.

Deregulation was one of the prime factors in the S&L mess in the eighties; earnings pressure combined with personal greed fueled many of the recent corporate financial fiascos—think Enron, WorldCom, Adelphia Communications, Citigroup, Goldman Sachs, J.P.Morgan Chase, Deutsche Bank, and others.

And now, of course, we have the Sub-prime debacle with which to contend.

And after each of these, Congress, the SEC and others all run to add laws and rules to prevent it from happening again.

The repercussions from the latest snafu (Navy term meaning ‘situation normal—all f*ked up’) are reverberating through the credit markets making it more than difficult for corporations, small business and just plain folks to access it.

Who will step into the breach to provide investment and liquidity?

Private equity and big hedge funds—both with even less regulation and even larger egos and greed factors than more traditional Wall Street firms.

But a land grab by big hedge funds and private equity firms might create new problems. The Securities & Exchange Commission and the Finance Industry Regulatory Authority oversee investment banks to some degree, and the Federal Reserve is moving in that direction. But hedge funds are largely unregulated and aren’t bound to make any disclosures to anyone but their investors. Even that information is often incomplete. A move by hedge funds into traditional corporate finance would mean even less transparency than exists on Wall Street now.

It’s a sad fact that the 214-year-old force that was instrumental in building the most powerful industrial nation on the planet could be just as instrumental in presiding at its demise.

Understand, it’s not that I have much faith in government regulation, but have seen little-to-no proof that self-regulation works—it’s too much like having the fox care for the hen house.

So-called government intrusion is the result of the inability of various industries to “self-regulate” for any reasons other than short-term profit, doing as much they can get away with and pushing the boundaries beyond what’s reasonable.

So you tell me, how can we get well-reasoned laws that aren’t defeated or seriously watered down by special interest groups and industry lobbyists before the crisis?

Image credit: pinkfloyd

I read two articles yesterday. They both focus on how the long-term thinking of Jeff Bezos and  Marc Benioff inform their decision making and are well worth your reading.

Bezos is famous for ignoring Wall Street for Amazon’s first two decades.

When it comes to making the most important and the most long-term decisions, Bezos has a simple rule that’s quite useful: “Focus [your vision] on the things that won’t change.”

At Amazon, this means that everything is built around their value of customer obsession.

Benioff has a different approach to making decisions, but still based on the long-term vision he embedded in Salesforce’s culture from the day of founding.

I came back with a clear vision of what the future of the internet was going to be in regards to software-as-a-service and cloud computing. I also had a much deeper sense of my spiritual self. So I said, “When I start a company, I will integrate culture with service.”

When I started Salesforce, on March 8, 1999, I said we’re going to put one percent of our equity, product and time into a foundation and create a culture of service within our company. We’ll be creating new technology, the cloud; we’ll be creating a new business model, subscription services; and we’ll create a culture built on philanthropy.

Last month Warren Buffett, Jamie Dimon and a legion of executives came out publicly against Wall Street’s short-term focus.

The emphasis on quarterly earnings, and the importance of beating estimates, is warping American business and the economy, argue almost 200 CEOs who belong to the Business Roundtable, a lobbying organization. Short-term thinking leads corporations to choke back on hiring, and to starve research and development of the spending the fuels long-term growth. The pressure of quarterly earnings is one reason fewer companies are interested in going pubic, preferring the slower growth that comes with being private than the scrutiny that comes with being listed.

Wall Street’s short-term thinking never got a toe-hold at either Salesforce or Amazon, but the reasons it didn’t created significantly different cultures.

While Benioff’s obsession culminates in giving back, Bezos’ obsession comes at a substantial cost to Amazon warehouse workers, the environment and even society.

Image credit: Scott Ellis