Tech currently has a high profile for arrogance, not to mention chauvinism and bigotry, with Google, Apple and Facebook are its most public whipping boys.
However, their comeuppance came with the intense media focus that will likely force them to at least put some effort into cleaning up their respective acts.
Not like their psychological brethren on Wall Street.
And while tech has a modicum of excuse that stems from age—its frat house culture has gotten worse as entrepreneurs have gotten younger—proven by the numbers, i.e., more women entered tech in the 1980s than do today—Wall Street has none.
The investment banking world has always been a bastion of white, male elitists; and hardcore harassment—an old boys group that didn’t give a damn what anybody thought.
Google’s Larry Page created his own acquisition yard stick,
The toothbrush test: Is it something you will use once or twice a day, and does it make your life better? …The esoteric criterion shuns traditional measures of valuing a company like earnings, discounted cash flow or even sales.
Page, for example, is looking for “usefulness above profitability, and long-term potential over near-term financial gain.”
Potential and usefulness are esoteric concepts to most bankers and “long-term” isn’t even in their vocabulary.
Bankers are fine with the hard stuff revolving around money, but are often useless on human side.
But often, when big tech companies are looking to grow through acquisitions, it is the culture and vision, not the earnings and revenue, that are of paramount importance.
Of course, investment banks need to lose a lot for it to really start mattering, but it looks like they are.
The acquiring company did not use an investment bank in 69 percent of American technology acquisitions worth more than $100 million this year, according to Dealogic.
All I can say is that it couldn’t happen to a more deserving group of guys—their comeuppance was a long time coming and it’s hitting the only place they might notice—their bank balance.
A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here
This is a short post, because I want you to read the longer one at the link.
In an opinion piece, Sam Polk, a former hedge-fund trader and current founder of the nonprofit Groceryships, talks about wealth addiction.
Wealth addiction was described in 1980 by the late sociologist and playwright Philip Slater, but Polk speaks about it from a been there/done that perspective.
I was 30 years old, had no children to raise, no debts to pay, no philanthropic goal in mind. I wanted more money for exactly the same reason an alcoholic needs another drink: I was addicted.
Read the post, then look in the mirror and ask yourself if you are or are getting addicted.
Wealth addiction isn’t a case of wanting to get rich; it is a case of nothing is enough.
And it applies to more than money—from followers to titles to trophy relationships and everything in-between.
According to the American FactFinder, a report from the U.S. Census Bureau, data from 2007-2011 indicates the median earning for a single worker in Clark County is $32,337.
Scott Bailey, regional labor economist for the Washington state Employment Security Department, says if you take out all of the seasonal workers from that number, it jumps to about $46,000 or $47,000. The median for men being $51,502 per year, and $40,023 per year for women.
Bailey says more than half the individuals in the county make less than $51,556.
Therefore, substantially more than half of us don’t live meaningful lives.
(New York City, at a median $50,895, is slightly lower, but with a far higher number of peole whose lives aren’t meaningful and those poor folks don’t even have someone to tell them.)
Obviously, Madore lives in an alternate reality.
As do most politicians, corporate chieftains, a good deal of Silicon Valley, Wall Street and others.
Workers today crave more from work than just a paycheck.
They want to work for, or start, companies that contribute to the greater social good, from encouragement and time to volunteer and sanctioned participation and support in various forms of fundraising to companies who (gasp) give up some profit in the name of “doing good by doing well.”
Candidates and customers flock to companies like Toms Shoes and Warby Parker that guarantee to donate an item for every item sold.
There was a time that companies seemed to give more of a damn about their communities and employees.
Yes it was more paternalistic and I’m not suggesting a return to that, but the enshrinement of greed in the name of profit goes deeper.
Milton Friedman, his cronies and a media frenzy happened.
In 1970, Nobel Prize-winning economist Milton Friedman wrote an article in the New York Times Magazine in which he famously argued that the only “social responsibility of business is to increase its profits.”
And as that mantra took hold so did the attitude that the only stakeholders that mattered were shareholders.
The belief that shareholders come first is not codified by statute. Rather, it was introduced by a handful of free-market academics in the 1970s and then picked up by business leaders and the media until it became an oft-repeated mantra in the corporate world.
Which, in turn, entrenched Wall Street’s quarter-long, short-term thinking and gave rise to the Carl Icahns of the investing world.
Friedman’s statement gave tacit approval and wide latitude to corporate raiders, leveraged buy-out firms and others to do literally anything in the name of profit and investor returns.
Lynn Stout, a professor of corporate and business law at Cornell University Law School, said these legal theories appealed to the media — the idea that shareholders were king simplified the confusing debate over the purpose of a corporation.
And we, i.e., society, accepted that attitude for half a century.
The results can be seen every day and they aren’t pretty—unless you’re part of the so-called 1% (or even the top 25%).
While there is change afoot, it begs the question—is it too little too late?
This is especially true at a company like Microsoft, where the silos were intentionally built decades ago as part of the corporate structure.
Vertical silos, by nature, create, at the least, rivalry, but, more often, an “us against them” mentality within each silo.
For thousands of Microsofties, that’s the only cultural world they have known; many of them grew up in it, both in terms of years and promotions.
Changing culture is recognized as the most difficult organizational change any company, no matter the size, can undertake.
And one of the greatest error’s a CEO makes is thinking that all he needs on board is his senior staff the rest of people will fall in line.
For most companies, let alone one the size of Microsoft, terminating managers and workers that don’t fall in line isn’t even an option, since there is no way to replace them.
Yet having large numbers of your workforce on different cultural pages is a recipe for disaster.
The results of Ballmer’s changes will unfold over the next couple of years—in spite of Wall Street’s quarterly focus.
Changing culture is tremendously difficult; Charlie Brown didn’t pull it off at AT&T; Lou Gerstner said it was the most difficult part of turning around IBM.
Here are four stories that come after the exposés that happen when things go wrong. I find it interesting to learn the aftermath, even if it’s a work-in-progress, especially when it is positive.
Just as Nike and others were in the spotlight in previous years, top electronic companies like Apple and Hewlet-Packard have increasingly come under the gun for the conditions in their overseas contract-manufacturing facilities, such as Foxconn, where just one factory has 164,000 employees and they have dozens. Now Apple is moving to change that—but not as a leader.
But the shifts under way in China may prove as transformative to global manufacturing as the iPhone was to consumer technology, say officials at over a dozen electronics companies, worker advocates and even longtime factory critics. (…) Changing the company’s culture is slow going. But the needed reforms, executives at Apple and Foxconn hope and believe, are falling into place.
What would you do if you woke up one morning at the age of 51 to find that what you had worked your whole career to achieve was gone and you were on the street with no job? That’s what happened to employees Lehman Brothers and many other banking houses in the Fall of 2008. Most were devastated, but Canadian Michael Tory took stock
“How did I feel? I woke up that Monday morning and I had my health, my family, my reputation and energy, I had lost nothing, really. It was a profound revelation to me. I had lost nothing important and, that day, I decided to start my own company.”
and proceeded to start a pure advisory firm focused on its clients (unlike Wall Street).
None of the partners would get stinking rich, but, equally, they would not have to act as shills, eternally pushing services or products because they paid jackpot returns, not necessarily because they were in the best interests of the client.
Anyone at all involved with the tech world, and many who aren’t, heard when Yahoo CEO and ex-president of PayPal Scott Thompson was fired for listing a computer science degree on his resume that he didn’t have. Now Thompson is heading up a tiny startup called ShopRunner and just joined the board of PaySimple, another startup. According to Wedge Partners analyst Martin Pyykkonen Thompson need to prove himself.
“You have to kind of re-earn your stripes and your credibility and do something meaningful,” Pyykkonen said. “If he can pull it off with a small company, maybe that leads to the next tier up.”
but Thompson has a totally different take on what he’s doing.
“The only person I really need to prove anything to is myself. The jury’s still out, but I’m having a great time.”
Brian Lam interned at Wired and spent five years as editor of Gizmodo, Gawker Media’s gadget blog, where he nearly destroyed himself. Now, still on the Net, he’s redeemed his life.
And then, he burned out at age 34. He loved the ocean, but his frantic digital existence meant his surfboard was gathering cobwebs. “I came to hate the Web, hated chasing the next post or rewriting other people’s posts just for the traffic,” he told me. “People shouldn’t live like robots.” (…) And now he actually has time to ride them. In that sense, Mr. Lam is living out that initial dream of the Web: working from home, working with friends, making something that saves others time and money.
If you think a cat owner would be thrilled getting a call from Hollywood for their cat to appear in the “Heathcliff” movie you would be wrong, especially if that cat were Maru, whose videos have been viewed some 160 million times.
Today is the first day of the last month of the year and it finds me in a not very business-serious frame of mind. That means the next few Saturdays probably won’t have much in the way of business-redeeming content, but that doesn’t mean they won’t be interesting or just plain fun.
Knowing that my readers share my concern for the downtrodden I thought it would be a nice gesture to check and make sure that the folks who toil in the canyons of Wall Street on the latest efforts to screw up the economy aren’t being mistreated. Nope! Looks like they are doing just fine.
The report showed that total compensation on Wall Street last year rose 4 percent, to more than $60 billion. That was higher than any total except those in 2007 and 2008 — before the financial crisis fully took its toll on pay. The average pay package of securities industry employees in New York State was $362,950, up 16.6 percent over the last two years.
Now that we know their income is safe let’s take a look at how they’re spending it and the difficulties they face starting with housing.
After paying $15.5 million last November for a 3,000-square-foot apartment at the Carlyle, (…) there is the little matter of the $455,352 a year that Mr. Grey, the chairman of Paramount Pictures, will have to cough up in maintenance charges.
But don’t fret for Mr. Grey; he didn’t buy a home he actually bought Art (with a capital a)
“Art is what people are willing to pay for, and an apartment like this is like a piece of art,” the Long Island real estate developer Steven Klar told a colleague of mine at The Times, Alexei Barrionuevo, in late July as he listed his penthouse on West 56th Street for $100 million.
“When we’re cruising and burning 100 gallons of fuel an hour, I don’t think it’s costing me $300 an hour,” said Bob Schmetterer, the former chairman and chief executive of Euro RSCG Worldwide, the giant advertising and marketing company, referring to his 80-foot Marlow Explorer. (It holds 3,000 gallons, and he was moored aboard it in Maine when we spoke.)
The site’s founders, Christian Leone and Leah Park, both Gilt Groupe veterans, aim to put a haute spin and a higher-than-usual price on their wares by applying to consignment shopping roughly the same precepts that govern the sale of art and antiques: in short, calling out an item’s provenance to close the deal.
Which brings us to next Saturday and a look at unusual holiday gifts; some of which even the rest of us can afford.
I ran into the following quote from Adam Smith and thought he’d be a good subject for today’s Quotable Quotes. It’s too bad that Smith, known as the godfather of free market capitalism, doesn’t carry more weight with our bankers and politicians, although Occupy Wall Street seems to get it.
“The disposition to admire and almost worship the rich and the powerful is the great and most universal cause of the corruption of our moral sentiments.”
All those bankers who have refused to provide the credit necessary for SMB to move forward might want to consider these wise words, “It is not by augmenting the capital of the country, but by rendering a greater part of that capital active and productive than would otherwise be so, that the most judicious operations of banking can increase the industry of the country.”
Sadly, the world has changed to the point where customer outrage has little to no effect, although Smith’s words still ring true for some, “The real and effectual discipline which is exercised over a workman is that of his customers. It is the fear of losing their employment which restrains his frauds and corrects his negligence.”
This struck me as a great truth considering the ideologues that pass for politicians these days, “I have never known much good done by those who affected to trade for the public good.”
It’s not fair to bash bankers and pols and let the corporate world off Smith’s hook, so here’s one just for them, “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”
Conspicuous consumption was out of style, or at least underground, after the 2008 crash, but is back in full force now proving that Smith understood exactly what drives them, “With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches.”
Finally, the so-called 1% would do well to remember this, “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”
A McKinsey study on the value of corporate social responsibility found “…highly innovative Fortune 1000 companies derive greater financial returns from their corporate-responsibility activities than their less innovative counterparts do,” and suggested three actions to improve CSR ROI,
“Upwards of 40 percent of industry’s energy efficiency improvement opportunities can be realized through low or no-cost projects rooted in corporate culture change”
They must know something since dollar savings to date are not millions, or even hundreds of millions, but billions.
“The key to this model is the formation of multi-disciplinary, cross-functional site teams, with insight from operators, maintenance, mechanics, core process experts, energy experts, engineers and management.”
Two of the biggest stumbling blocks on this path are Wall Street, with its short-term, i.e., quarterly, focus and the current definition of “stakeholder.”
Typically, stakeholders are viewed as investors, management, customers and workers; progressive companies have added the local communities where they do business and a few have tiptoed further.
Whereas Richard Branson points out in Screw Business As Usual every living thing and the planet itself are stakeholders.
Sadly, rather than being in the lead, the majority of US corporations are staying focused on short-term results and narrow definition of stakeholder.
But the winners in the future will be those companies, large or small, whose thinking is longest and definition is broadest.
I hope you are one of them.
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Kung Hei Fat Choy (Wishing you an abundance of wealth and prosperity!) Happy Year of the Dragon
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Tech currently has a high profile for arrogance, not to mention chauvinism and bigotry, with Google, Apple and Facebook are its most public whipping boys.
I’ve written many times about the importance of 
Here are four stories that come after the exposés that happen when things go wrong. I find it interesting to learn the aftermath, even if it’s a work-in-progress, especially when it is positive.
I ran into the following quote from Adam Smith and thought he’d be a good subject for today’s Quotable Quotes. It’s too bad that Smith, known as the godfather of free market capitalism, doesn’t carry more weight with our bankers and politicians, although Occupy Wall Street seems to get it.
A McKinsey study on the 
