James Frey: A Million Dollars off A Million Little Pieces

Two words come to mind ...

Con Artist ...

From the Washington Post: Oprah's Grand Delusion

From the NYT: Getting Rich by Making Stuff Up

IT Depart(ment)s Offshore?

Steven Pearlstein's article Economy of Scale Might Inspire Companies to Ditch IT Departments poses a very poignant question at the end.

"I suspect, however, that Carr is on to something, and that there will be an important place in business history -- and the Forbes 500 list -- for whoever figures out how to become the Insull of computing. An equally intriguing question is whether he'll be a Sam or a Sanjay."[1]

The questions of outsourcing, to what degree and where continues to be asked and addressed by businesses all over the world. Although Pearlstein’s article focuses on Carr’s infamous article in HBR and the implications of Carr’s contentions, he leaves the reader hanging at the precipice of the true implications and consequences for Americans.

Outsourcing … and … Offshoring …

Some types of outsourcing are very evident, from displaced workers to closing of domestic companies; while other types of outsourcing are less evident, from Google to PayPal. One we decry as tragedy while the other we applaud for the convenience it affords.

The fact that computing is becoming more like a utility is of no surprise, but to generalize that all computing will become a utility is both fallacious and shortsighted in terms of strategic planning and implementation. Although computing may one day be centralized and homogenized to a large degree, corporate competitive and strategic advantage does not have to be sacrificed because of computing. Though businesses such as Google and PayPal are definitely leveling forces within the business communities, they can also become part of a business’ competitive and strategic arsenal when properly leveraged and implemented.

Regardless of who does the computing, successful IT initiatives are a part of, and maybe key to, successful business initiatives and strategies. In smaller companies, it (often) simply is not cost effective to run IT departments, hence, the need to outsource. However, many larger companies may be able (and willing) to run IT departments yet many will choose to outsource fundamental IT functions to trim the bottom line. As Thomas Friedman puts it:

“The cold, hard truth is that management, shareholders, and investors are largely indifferent to where their profits come from or even where the employment is created. But they do want sustainable companies. Politicians, though, are compelled to stimulate the creation of jobs in a certain place. And residents –whether they are Americans, Europeans, or Indians – want to know that the good jobs are going to stay close to home.”[2]

Though this quote is taken out of its original context, it is still applicable. Computing enhances the ability and accelerates the process to trim the bottom line – regardless if it is treated as (called) a utility (a commodity) or not it still can be outsourced, offshored.
As outsourcing's footprint grows and steps on the more affluent workforce, the more vocal workforce, there will continue to be roiling controversy and confusion (i.e., political, economic, displaced workforce, etc.) All the while our counterparts all over the world are ramping up their skills and resources not just to compete with us but to overtake us.

Are you running recklessly down the road in pursuit of quick profits or are you following a planned path of sustainable profits? (short-term strategy vs. long-term strategy) That is my question to you.

---

[1] Pearlstein, Steven. “Economy of Scale Might Inspire Companies to Ditch IT Departments,” The Washington Post, 30 November 2005, 30 November 2005 <http://www.washingtonpost.com/wp-dyn/content/article/2005/11/29/
AR2005112901096.html>.

[2] Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-First Century, (New York: Farrar, Straus, Giroux, 2005) 211.

WalMart: Memo-gate Redux

I read the article and attached memo in the NYT this morning with dismay and disgust at the writer's obvious lack of situation awareness, perspective and context.

http://www.nytimes.com/2005/10/26/business/26walmart.ready.html

http://www.nytimes.com/packages/pdf/business/26walmart.pdf

He fails to put into proper context the impact of the demographics that WalMart, or any other (similar) retailer, employs and serves. He fails to understand, regardless of cost, the "switching costs" to migrate from publicly funded healthcare to privately funded healthcare may prove to be insurmountable to many of their associates. Notwithstanding, even IF WalMart were to offer an equal or similar healthcare package as Medicaid, the “switching costs” will still remain too high in relation to the incentive to switch (i.e., given that everything is equal, what is the incentive for these people to switch?). Does he, or any other critic, expect WalMart to run a miniaturized version of Medicaid? Or solve the national healthcare crisis? That is inane!

He states that associates who earn $17,500 could face $2,500 out of pocket expenses (14.3%); however, he does not specify how much of this would be derived from deductibles, non-covered services and prescriptions but leaves it for the reader to infer, assume it is a cost WalMart should have covered when in fact it could be related costs not covered by any insurance. High healthcare costs are something everyone faces, poor and rich alike. I would venture to guess that as incomes climb so does the amount of money spent on healthcare (I seriously doubt there is a $2,500 cap) because patients are more likely to demand more services, tests and medications and doctors are all too often more than happy to oblige.

Additionally, he takes out of context the issue of emergency room usage—which I am sure if he researched it thoroughly, he would find it was endemic in many companies which have low emergency room deductibles. Again, this behaviour reflects the demographics, high "switching costs", and the median education of the average associate, as well as the convenience the American society has become used to. Not to mention, that there is no disincentive not to use the emergency rooms, at least from the insured’s standpoint. That might explain why many insurance companies now carry high emergency room deductibles if the patient is not admitted, yet one way to defray the skyrocketing prices of healthcare.

Also taken out of context and omitting important things like statistics, are his quotes about the health of WalMart associates relative to the national population. I can wish I could write garbage like that, be well paid and not get sued.

And what is wrong with associates exercising on the job? Gee pushing a cart is really hard work! No one says Target is stupid (or brutal) for having its employees do exercise (it's amusing to watch).

From my experiences, it is not unusual for large corporations to offer several benefits packages, each tailored to specific demographics. Needs across the different demographics vary due to many variables, many well outside the control of WalMart. DOH!

His opening paragraph is one from someone who has OBVIOUSLY never worked in the retail industry and grasped the economics of such. Increasing part-time employees, having a set ratio of full-time to part-time employees is NOT a new strategy, nor is weeding out less productive workers, particularly senior ones. That is just business strategy and planning, or, maybe just common sense in action. Unbeknownst to him, WalMart is a business and not a not-for-profit charity organization.

He then goes on to take the comment about productivity in light of tenure out of context and shows a complete lack of understanding of what frequently goes on in a retail setting. What he describes may be attributed to poor lower level management or uninspired lower level management (as may be the case) or even lack of incentive (complacency); however, to correlate tenure directly with lower productivity is borderline ludicrous – save in the case of tenured professors that cannot be fired except for gross misconduct (that is for another time). His lack of fundamental understanding of tenure and the hierarchical dynamics within the retail setting is clearly demonstrated throughout the article. (I have experienced this all too often. I am sure through benchmarking and trending many interesting patterns will be revealed in regards to productivity which correlated to attitude and overall health.)

I could go on and dissect the entire article to demonstrate over and over his lack of situation awareness, perspective, and context; however, that is not the point of this blog, but rather raise public consciousness so that every consumer does not fall prey to sensationalistic reporting.

There are other “scandals” which have tarnished WalMart’s image; the immigrant one comes to mind. However, not so much in defense, but in explanation of, WalMart’s action, it is the consumer that drives the market, demand vs. supply, not the other way around (usually, generally). Consumers demand and expect goods, both basic and luxury, at bargain prices; however, they decry WalMart’s actions, both intentional and unintentional, to deliver the expected goods. They ignore and/or do not understand that there are many variables that affect pricing (e.g., competition, operating costs, etc.). Consumers, for the most part, do not realize their actions have fueled current business practices and furthered globalization on an even grander scale. There is an old saying:

“Be careful what you wish for, and more careful what you ask for…”

The same associates who demand lower pricing also demand better pay and benefits. This is unreasonable. Somewhere down the line, the cost of doing business has to be extracted while still meeting everyone’s expectations, remaining competitive and maintaining strategic positioning through the coming years.

There is a pervasive tunnel vision of associates, the public imposed on them by various factors such as education, misinformation as disseminated by the media and self-serving politician (Warren Harding proved that even idiots with charisma can hold office). Most fail to see the big picture or even the simple picture, WalMart, as any other company out there, is out to make a profit. (Hello! Forget objectivity… that takes too much work!) As cold as it sounds, human resources are capital, maybe even commodities. When you become subjective about running a business, you quickly lose sight of the path to your goal—to make a profit, the bottom line.

Why is it that when WalMart came to the aid of the Katrina victims, the news reported about it was minimal at best? Why did WalMart not capitalize on this goodwill effort? Why does WalMart not leverage is power of scale and effect change in attitudes from within in tandem with its PR campaign? WalMart’s supply chain innovations are legendary yet its human resources are still stuck in the industrial age. Although that may be an exaggeration, there is some truth to it.

It seems so much focus was giving the consumers rock-bottom prices through a lean mean supply chain; yet, somewhere along the line the key component of making this happen, human capital, was left on a shelf to gather dust, it was not developed in tandem with the technological innovations. Stale and disinclined management, from the top to the bottom, was isolated from the technology that was supposed to differentiate it from the KMarts, Targets out there. Yet this is not visible to the average consumer. The declining appeal of the stores, the HR scandals, the health insurance issues are visible to the average customer.

I’m not defending WalMart’s actions but instead calling for focus and action by both WalMart and the communities it serves instead of the constant blameshifting and headgames that is currently going on. It is of great disservice to all. WalMart is not the cause of or even major contributor to our troubled healthcare system but yet another symtom of it that is not going to go away with fancy PR or impassioned and inflammatory talk by their critics.

I am waiting for WalMart (and other companies in similar situations) to bring their HR practices in line with their technological innovations; however, I don’t see that happening anytime soon.

The memo published in the New York Times, is yet more talk. When are they going to stop talking the talk and walk the talk? How many more public floggings is it going to take before WalMart finally gets its act together? Does Sam need to come back from the grave to clean up this mess or is he looking down on all this and having the last laugh?

Stay tuned for the next in the series of Memo-gate.

Washington Post: Early Warning: Liberally Ignorant Blog

After reading the blog "The Pressure Cooker at Homeland Security" (Early Warning) by William Arkin posted on 19 September 2005 at 0730 ET (The Washington Post: Online Edition), I am convinced their (web) editors are either:

a.) Out to lunch
b.) Are not doing their jobs
c.) Want to compete with "The Enquirer" for sensationalism
d.) Don’t care
e.) Don’t know; don't bother to check the "facts"
f.) All of the above

Based on Mr. Arkin's purported background (i.e., a former Army intelligence analyst and consultant"), I cannot fathom his general ignorance, either intentional or unintentional, of rudimentary chemistry and/or physics. Here are a couple links about pressure cookers, one written by a high school kid doing a science project:

How to use a pressure cooker!
Boiling Oil Bomb
Fertilizer Pressure Cooker Bombs

If you do a search on pressure cooker bombs, you will find many well documented incidents of people making and using pressure cooker bombs. These bombs are a step, a large step, up from the dry ice "bombs" we used to make in the lab as a joke to wake sleeping coworkers up.

NOTE: Do not try this as it is a health hazard, particularly in large volumes!

The Washington Post is quickly becoming more and more like those flashy tabloids at the checkout stands. I'll bet Catherine Graham is turning in her grave! I wish I could say something redeeming about Mr. Arkin; but, alas, I must say somewhere down the line the taxpayers wasted their money educating and employing him.

Everyone complains about how disorganized the FEMA response was to Hurricane Katrina and they complain about how much money taxpayers pay to explore such situations (e.g., terrorists, natural disasters, etc...). As the old saying goes, "You can't have your cake and eat it too!"

If people took time to assess and understand what is going on, they would realize that there was a breakdown in communication, a breakdown in the process, having the information but not knowing what to do with it, and, admittedly, poor choices made in appointments, organizations and planning, or lack thereof. There is a commercial that goes something like this, "I don't even know enough to know I don't know." If we knew everything, we wouldn't need these reports Mr. Arkin mentions, much less people to do them. No one has all the answers, not even Mr. Arkin.

Lastly, Mr. Arkin may think he's raising awareness, but he's just spreading his ignorance, his narrow-mindedness, backing his writing up with subjectivity instead of cold hard facts, instead of supporting his contentions with empirical data. He's playing the blame game, with little or no intention of proposing, much less finding, any resolutions/solutions to current security issues America faces. It is pure idiocy and ignorance to suggest the following:

"There are just so many warnings about so many areas covering so much of the day-to-day life of America. The cumulative effect is to provide no useful warning at all."

That's exactly what the terrorists are counting on. Way to go Mr. Arkin!

Homeless: Charity's Coin or Wooden Nickel

The Other Side of Charity's Coin

Crisis Prompts Aid for Evacuees, but Area's Homeless Feel Left Behind

There's the picture that goes with the headline in today's Washington Post (a friend sent me the link). Can you say "posed"? Then there is the the metro column that goes on about the area homeless and the Hurricane Katrina victims (see link below).

Every Day, We Ignore the Everyday Poor

Being poor, being homeless, wondering where the next meal will come from, how will the mortgage/rent get paid this month, next month, how will the utilities get paid are all concerns many share or harbour in the back of their minds.... All concerns far too many Americans have yet reading the above articles I cannot help but feeling revulsed that they would capitalize on and exploit the victims of a devestating natural act in the name of raising local and national awareness of the poor, the homeless.

I can understand there are mental health issues for someone being homeless; however, I cannot understand subsidizing, enabling, a subculture that allows rampant procreation and abandonment of children. I struggle to clothe my ever growing children; yet there are children on welfare that dress in designer clothes. I pinch pennies to make sure my children have nutritious meals everyday; yet I see people wearing designer clothes and lots of "bling" in line at the grocery store using food stamps.

They put a homeless outreach center a couple miles from my house, just outside of the historic part of town. Ever since the place opened, the visibility of the homeless has increased. Were the homeless always around? Probably. However, what do those homeless people do? You can drive by at any given time of the day or week and see the same people waiting around to be fed.

I'm not bitter nor do I have anything against homelessness; but I do have something against people exploiting the system, a system that encourages people to be lazy, to NOT be held accountable, to NOT be responsible! Why do we keep feeding the homeless but don't bother to really teach them how to feed themselves? Why do the homeless feel (and sometimes act) like WE owe them? Why are people trying to stir my sympathies? And, taking that one step further, why do they only do it when there is some other "sensational event or cause" to tie it to? Why is it that many immigrants can share a single dwelling but we're trying to house families individually in public housing? There are so many families where each adult works 2-3 jobs to make ends meet; and, at the same time, there are so many families that sit idly by waiting to collect a check every month, many times with the adult claimants having some obscure disability, when it suits them, benefits them. Where is the work ethic? The sense of entrepreneurship? Why are we still subsidizing a failed system? Why are we rewarding poor people to have yet more babies, babies who have the very real potential to depend on us in their adult lives and/or be homeless?

As I stated earlier, I understand there are very real reasons for homelessness, many beyond the control of the homeless. I understand catastrophic events come along and make people homeless. Throwing more money at a problem does not solve it nor does it go away. Stopping the vicious circle does. Analyzing what is truly broken about the system and fixing it instead of applying the band-aid approach. Going to the root of the problem instead of just addressing obvious problems (i.e., hunger). Thinking of solutions that aren't always "politically correct" but are a more common sense and realistic approach. Understanding that yes there is an investment in getting people off the street, off the welfare rolls but, also, understanding that this investment is not without cost, sacrifice, to the poor person, the homeless person. We are too often trying to run our country by popular consensus instead of doing what is best for us today, tomorrow, and in the future. We often look to point fingers when the problem is so enormous it's not readily solved, remedied. We are a cash and carry, convenience society, impatient and intolerant, not wanting to be part of the process but always complaining about the results, the products

Effecting a change in mindset, raising awareness but also accountability at the same time, giving the poor and homeless tools (e.g., education, vocational training, low rate loans) instead of finished products (e.g., food, money, housing), giving them opportunities instead of options.

I watch our tax dollars go into an educational system that is failing our children, putting them at a competitive disadvantage in the ever flattening business world, widening the gap between the poor and the rich. Our schools are a system, trying to get our kids through the system, teaching them how to "work" the system counter to honest work ethic. Where do we break the vicious cycle? I would venture to say education. It goes back to the old saying, "knowledge is power". We have been struggling with the issues of poverty and homelessness for years and years, yet we keep striving to find quick fixes. Why not invest heavily in our educational system? We've already squandered the last 20 or more years, what's another 20 or so (another generation) if we know that in in the long run it will have a positive impact on generations to come? So having said all this... My parting questions....

Why are our teachers paid so little when they are educating our future, our future business leaders, our future political leaders? What incentive is there to be a "good" teacher? What motivation is there to be a good student? They go hand in hand... Think about it....

Two Good Reasons For Homeland Security

Katrina --->

<---9/11

Here are two pictures: one of a man-made disaster, one of a natural disaster. Yet, both pictures tell the same story.

"Two Good Reasons for Homeland Security"

I was going to tell you the story (as any good muse would) but I think I'd like to hear your story-first. What are our options (i.e., immediate, short term, long term, who is in control of these options, etc....)? What are the opportunities (i.e., social, economic, educational, technological, government, etc.....)? Only caveat is whatever story you tell has to tie into the title provided above. Don't worry about grammar or spelling. I'll see what I get and maybe I'll write a compilation of sorts... What do you think? Happy writing!

Options and Opportunities

Perhaps you were wondering why this blog is called "options and opportunities"... So, now having time to sit down and not worry about anything, I can tell you.

Options: Something you are given and have the choice to exercise.
Opportunities: Something you see, seize with the prospect of benefiting from.

Perhaps, this seems like a play on words, the nuances lost in semantics. Yet, the key difference is who is in control of what and when! Although options are nice, sometimes very nice, I would much prefer having opportunities because they are not as limiting as options. I have included the definitions of both words at the end of this post (pulled from www.dictionary.com); however, the definitions are not the focus of this post but rather the impact of these words. So here goes!

Although in a business setting options are often equated with incentives, inducements, they are still limited in their scope either in amount, time frame, terms and are often contingent on a separate, but not always wholly independent event (such as recruitment). A very common option in business is stock options. At the outset this seems great but as you delve further into the option, it becomes apparent that it is contingent on several factors such as: employment (both initial and continuing), vesting periods, and actually having enough monies to exercise these options! Keep in mind, options are something given to you by someone else, a someone else who gives these to you, to control the situation, to control you, your choices, to limit your choices! Although it might feel pretty good to have outrageously great options, they are nevertheless are what the person gives based on what the market will bear, on what the entity/person thinks you are worth and don't involve much risk taking by the person taking them (in the whole scheme of things)! Although options are a fact of business life, why run life in a series of options? Why be at the mercy of someone else's plans, whims and moods?

Opportunities on the other hand, are only as limited as the person siezing them! Capitalizing on opportunities often leads to other opportunities previously not seen, not available. Siezing opportunities often entails meeting new people, forming new networks, and reaching beyond your comfort level (i.e., growing as a person!). Siezing opportunities often means weighing risks and taking chances. Siezing opportunities often separates true collegues from fair weather ones, from ones who are or have become complacent in their current job. Siezing opportunities often separates fair weather friends from true friends (shows you who believes in you and who doesn't!). Although siezing opportunities may lead to failure (and even dismal failure at that), the upside is that success is so sweet in so many arenas. The key success is personal growth! (Stop shaking your heads! You were waiting for me to say financial success! But think about this, if you don't believe in yourself, grow as a person, how will you get others to believe in you, enough to go along with you, support you in your venture?) There is the obvious financial and professional successes, gains. Aside from the aforementioned, the most striking success is how many more opportunities this will make available. Some people call this fortuitous, propitious; however, I would like to believe that this is what they call being the master of your destiny (sorry for this old worn out cliche!). Interesting enough, siezing opportunities often allows you to give options to others!

So, now armed with these thoughts, which side would you rather have? Options? Opportunities? Have you noticed that each word has been coloured throughout this post? I made options red because you really need to be careful not to get lulled into complacency, not to become a sheep, a blind follower, to stop and weigh the long term consequences of taking the options. I made opportunities green because their is so much potential in so many arenas available to those who are bold enough to sieze them! So are you are you a follower (options) or leader (opportunities)?

op·tion
n.

1. The act of choosing; choice. See Synonyms at choice.
2. The power or freedom to choose.
3. 
   
1. The exclusive right, usually obtained for a fee, to buy or sell something within a specified time at a set price.
2. The privilege of demanding fulfillment of a contract at a specified time.
3. A stock option.
4. The right of the holder of an insurance policy to specify the manner in which payments are to be made or credited to the policyholder.
5. Baseball. The right of a major-league team to transfer a player to a minor-league team while being able to recall the player within a specified period.
4. Something chosen or available as a choice.
5. An item or feature that may be chosen to replace or enhance standard equipment, as in a car.
6. Football. An offensive play in which a back, usually the quarterback, has the choice of running with the ball or throwing a forward pass.

op·por·tu·ni·ty
n. pl. op·por·tu·ni·ties

1. 
   
1. A favorable or advantageous circumstance or combination of circumstances.
2. A favorable or suitable occasion or time.
2. A chance for progress or advancement.

Academic Incest

I am sitting here reading several packets for the first project for a upper level university business course. I am dismayed at the quality, or rather the lack of quality, of the projects from a bunch of juniors and seniors from a very distinguished university. I wrote up a collective review of all the projects which was very unflattering. Someone is wasting a lot of money educating these people because based on a cursory review of the projects little time and effort was put into it, thought was an afterthought, if at all.

The assignment was deceptively simple and very realistic. Analyze a business and propose means in which the business could be more profitable. Amazingly, or not, many of the "opportunities" were in conjunction with drinking (beer). Yes, data suggests that bars are very profitable marketing venues. Geez! Oh and let's not forget the video games! (collective groan) How sophomoric!

I suppose what is so dismaying is the fact that many of these students will secure well paying and, possibly, influential jobs based largely on the school they attended. It is scary that many of these students cannot find the mean of three numbers much less weighted numbers, are too lazy to get the information necessary to conduct a proper analysis (even if it is on the internet), do not pay attention to detail, cannot think beyond their own egocentric worlds, and are incapable of forming coherent messages much less arguments in the proper venue and format. It is scary that even this far into their education, they are so green, so oblivious to the real world of business.

I am also dismayed at the state of our educational system which has become mediocre at best and substandard at worst. We have a tenure system that stifles creativity and production, rewards those who play the system instead of those who inspire and hold accountable their students. Not to mention, what amounts to an incestuous relationship which is often referred to as accreditation.

We used to be the land of opportunity but thanks to our entropic educational system we will become a land of limited options. We are quickly and quietly being overtaken on the educational front by other nations, particularly the rising stars, India, China and Philipines yet we sit high on our false seat of superiority.

We have spoonfed our children for so long they no longer remember what it is like to be hungry. The silver spoon is now tarnished and what are we doing? NOTHING!