1. Go to Gmail on the web ( https://mail.google.com/mail/u/0/#inbox ) and log in.

2. Click the gear icon in the upper-right and then click See all settings.

3. Click Accounts and in the Send Mail As section, click Add another email address.

4. Enter the name “yllus.com Information” and email address contact@yllus.com, leave Treat as an alias checked, and click Next step.

5. Click the Send Verification button to receive an email confirmation. This message will go to the Group and thus your inbox.

6. Click the verification link, and click the Confirm button when prompted.

7. With that all done, do a hard refresh (F5 / Ctrl-R) to reload Gmail. Then start composing an email; you’ll notice you can select either your Gmail account or your Google Group email address as the sender in the From field. This also works when replying to incoming emails.

Source: Sending from a Google Group address in Gmail – Technology Help

A random conversation I had this week at the Canadian Football League reminded me of a question I was asked and looked up the answer to nearly a decade ago: Why do so many websites offer three levels or plans to choose from when it comes time to purchase their product? And really, what is the optimal amount of choices to make available to a potential client?

The answer is multifaceted, but as you’d expect, the prevailing wisdom is that 3 choices – and elevating one as the best or most popular – works best. Here’s a quick rundown as to why.

The Centre Stage Effect. Formal psychological studies have been done on the positioning of products on a page, and it appears that consumers infer that the middle option is placed there because of its popularity (a self-fulfilling prophecy if there ever was one).

The Compromise Effect. UXmatters has a great paper on shortcut decision making; it mentions a research study that had one set of study participants be offered two microwaves at a $110 and $180 price point; participants chose fairly evenly, with a small majority preferring the cheaper option. But when a second set of study participants was offered three options, a clear winner emerged: The middle price point. The conclusion? When a consumer can’t decide whether to go high or low, a compromise option that sits in the middle is what our mostly logical minds push us towards.

Also: The Bandwagon Effect. Further, studies have illustrated that when consumers are pointed towards a choice and given the information that it is the most popular choice amongst their peers, the middle choice becomes even more compelling. Basically, consumers who may have little information at the time of their purchase as to what “level” fits them best will use whatever information is at hand – like the popularity of a choice – to finalize their decision.

The Washington Monthly – Political Animal – The secret of Costco’s success revealed! (hint: no MBAs need apply)

… Costco does not hire business school graduates—thanks to another idiosyncrasy meant to preserve its distinct company culture. It cultivates employees who work the floor in its warehouses and sponsors them through graduate school. Seventy percent of its warehouse managers started at the company by pushing carts and ringing cash registers.

Those sentences speak volumes. They tell you that Costco is a company that values its own hard-won experience over trendy B-school subjects like management theory and Econ 101 abstractions. They’ve found a formula that works and they’re not going to mess with it. I’ve long found the typical B-school curriculum to be problematic. On the one hand, you have management “theory,” which frequently is not well-supported by rigorous research, and might be characterized as more theological than anything else — Tom Frank has often been insightful about the ideological function served by this kind of business literature.

Then, on the other hand, you have B-school economics. One of the great sins about economics as a university subject is that, particularly at the introductory and intermediate levels where people are most likely to study it, the econ that gets taught tends to be almost entirely theoretical, not empirical. Few economists understand how businesses work, because few of them have actually bothered to ask businesspeople how they make business decisions. Instead, they make assumptions. But even assumptions that seem highly plausible in theory can turn out to be wildly off-base in fact.

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Getting back to Costco: the abstract theorizing that MBA students learn in microeconomics courses often has little relevance to practical business situations. The simplified textbook models teach the lesson that policies like unions and the minimum wage are inefficient and wrong — that message comes through loud and clear. Economics as it’s taught in most American colleges today more or less encourages poor labor practices.

In an era of global competition it’s hard to justify not maximizing shareholder revenue, but with the below there is a spark of hope: Evidence that companies that treat their employees better also perform better.

Costco CEO Craig Jelinek Leads the Cheapest, Happiest Company in the World

Despite the sagging economy and challenges to the industry, Costco pays its hourly workers an average of $20.89 an hour, not including overtime (vs. the minimum wage of $7.25 an hour). By comparison, Walmart said its average wage for full-time employees in the U.S. is $12.67 an hour, according to a letter it sent in April to activist Ralph Nader. Eighty-eight percent of Costco employees have company-sponsored health insurance; Walmart says that “more than half” of its do. Costco workers with coverage pay premiums that amount to less than 10 percent of the overall cost of their plans. It treats its employees well in the belief that a happier work environment will result in a more profitable company. “I just think people need to make a living wage with health benefits,” says Jelinek. “It also puts more money back into the economy and creates a healthier country. It’s really that simple.”

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Jelinek earned $650,000 in 2012, plus a $200,000 bonus and stock options worth about $4 million, based on the company’s performance. That’s more than Sinegal, who made $325,000 a year. By contrast, Walmart CEO Mike Duke’s 2012 base salary was $1.3 million; he was also awarded a $4.4 million cash bonus and $13.6 million in stock grants.

Costco has no public-relations staff. Jelinek conducts an interview with a journalist alone, an anomaly at major corporations, and afterward Costco Chief Financial Officer Richard Galanti calls to inquire whether the boss inadvertently said anything negative. Sinegal returns a reporter’s phone call on a Saturday morning, leaving his cell number.

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Costco’s constitutional thrift makes its generous pay and health packages all the more remarkable. About 4 percent of its workers, including those who give away samples and sell mobile phones, are part-time and employed by contractors, though Costco says it seeks to ensure they have above-industry-average pay. And while Walmart, Amazon, and others actively avoid unionization, Costco, while not exactly embracing it, is comfortable that the International Brotherhood of Teamsters represents about 15 percent of its U.S. employees. “They are philosophically much better than anyone else I have worked with,” says Rome Aloise, a Teamsters vice president.

Most retailers “see their employees as a cost to be minimized and typically end up underinvesting in them,” says Zeynep Ton, an adjunct associate professor of operations management at the MIT Sloan School of Management. She thinks that ends up creating operational problems that shoppers are all too familiar with: surly employees in stores engulfed in chaos, an environment that makes ordering online look a lot better. One solution to surly cashiers is to get rid of them completely. Walmart said that this year it would add 10,000 self-service checkout systems (though it did not say whether these systems would displace workers). Costco has also experimented with self-service checkouts, but Jelinek says he’s now removing them because employees do the work more efficiently. “They are great for low-volume warehouses, but we don’t want to be in the low-volume warehouse business,” he says.

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Many conscientious companies such as Costco are performing well financially. Over the last few years, Nordstrom (JWN), the Container Store, Sephora, REI, and Whole Foods Market (WFM), all of which are known for treating employees well, have outpaced rivals. “This is the lesson Costco teaches,” says Doug Stephens, founder of the consulting firm Retail Prophet and author of the forthcoming The Retail Revival. “You don’t have to be Nordstrom selling $1,200 suits in order to pay people a living wage. That is what Walmart has lost sight of. A lot of people working at Walmart go home and live below the poverty line. You expect that person to come in and develop a rapport with customers who may be spending more than that person is making in a week? You expect them to be civil and happy about that?”

— Steve Blank: What’s A Startup? First Principles, January 25, 2010

Inc.com – 5 Questions Great Job Candidates Ask

What do you expect me to accomplish in the first 60 to 90 days?

Great candidates want to hit the ground running. They don’t want to spend weeks or months “getting to know the organization.”

They want to make a difference–right away.

What are the common attributes of your top performers?

Great candidates also want to be great long-term employees. Every organization is different, and so are the key qualities of top performers in those organizations.

Maybe your top performers work longer hours. Maybe creativity is more important than methodology. Maybe constantly landing new customers in new markets is more important than building long-term customer relationships. Maybe it’s a willingness to spend the same amount of time educating an entry-level customer as helping an enthusiast who wants high-end equipment.

Great candidates want to know, because 1) they want to know if they fit, and 2) if they do fit, they want to be a top performer.

What are a few things that really drive results for the company?

Employees are investments, and every employee should generate a positive return on his or her salary. (Otherwise why are they on the payroll?)

In every job some activities make a bigger difference than others. You need your HR folks to fill job openings… but what you really want is for HR to find the right candidates because that results in higher retention rates, lower training costs, and better overall productivity.

You need your service techs to perform effective repairs… but what you really want is for those techs to identify ways to solve problems and provide other benefits–in short, to generate additional sales.

Great candidates want to know what truly makes a difference. They know helping the company succeed means they succeed as well.

What do employees do in their spare time?

Happy employees 1) like what they do and 2) like the people they work with.

Granted this is a tough question to answer. Unless the company is really small, all any interviewer can do is speak in generalities.

What’s important is that the candidate wants to make sure they have a reasonable chance of fitting in–because great job candidates usually have options.

How do you plan to deal with…?

Every business faces a major challenge: technological changes, competitors entering the market, shifting economic trends… there’s rarely a Warren Buffett moat protecting a small business.

So while a candidate may see your company as a stepping-stone, they still hope for growth and advancement… and if they do eventually leave, they want it to be on their terms and not because you were forced out of business.

Say I’m interviewing for a position at your bike shop. Another shop is opening less than a mile away: How do you plan to deal with the new competitor? Or you run a poultry farm (a huge industry in my area): What will you do to deal with rising feed costs?

A great candidate doesn’t just want to know what you think; they want to know what you plan to do–and how they will fit into those plans.

All Hail the Generalist

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Approximately 2,700 years ago, the Greek poet Archilochus wrote that “The fox knows many things, but the hedgehog knows one big thing.” Isaiah Berlin’s 1953 essay “The Fox and the Hedgehog” contrasts hedgehogs that “relate everything to a single, central vision” with foxes who “pursue many ends connected…if at all, only in some de facto way.” It’s really a story of specialists vs. generalists.

In the six decades since Berlin’s essay was published, hedgehogs have come to dominate academia, medicine, finance, law, and many other professional domains. Specialists with deep expertise have ruled the roost, climbing to higher and higher positions. To advance in one’s career, it was most efficient to specialize.

For various reasons, though, the specialist era is waning. The future may belong to the generalist. Why’s that? To begin, our highly interconnected and global economy means that seemingly unrelated developments can affect each other. Consider the Miami condo market, which has rebounded quite nicely since 2008 on the back of strong demand from Latin American buyers. But perhaps a slowdown in China, which can take away the “bid” for certain industrial commodities, might adversely affect many of the Latin American extraction-based companies, countries, and economies. How many real estate professionals in Miami are closely watching Chinese economic developments?

Secondly, specialists toil within a singular tradition and apply formulaic solutions to situations that are rarely well-defined. This often results in intellectual acrobatics to justify one’s perspective in the face of conflicting data. Think about Alan Greenspan’s public admission of “finding a flaw” in his worldview. Academics and serious economists were dogmatically dedicated to the efficient market hypothesis — contributing to the inflation of an unprecedented credit bubble between 2001 and 2007.

Finally, there appears to be reasonable and robust data suggesting that generalists are better at navigating uncertainty. Professor Phillip Tetlock conducted a 20+ year study of 284 professional forecasters. He asked them to predict the probability of various occurrences both within and outside of their areas of expertise. Analysis of the 80,000+ forecasts found that experts are less accurate predictors than non-experts in their area of expertise.

Tetlock’s conclusion: when seeking accuracy of predictions, it is better to turn to those like “Berlin’s prototypical fox, those who know many little things, draw from an eclectic array of traditions, and accept ambiguity and contradictions.” Ideological reliance on a single perspective appears detrimental to one’s ability to successfully navigate vague or poorly-defined situations (which are more prevalent today than ever before).

The future has always been uncertain, but our ability to navigate it has been impaired by an increasing focus on studying bark. The closer you are to the material, the more likely you are to believe it. In psychology jargon, you anchor on your own beliefs and insufficiently adjust from them. In more straightforward language, a man with a hammer is more likely to see nails than one without a hammer. Expertise means being closer to the bark, and less likely to see ways in which your perspective may warrant adjustment. In today’s uncertain environment, breadth of perspective trumps depth of knowledge.

The declining returns to expertise have implications at the national, company, and even individual level. A collection of specialists creates a less flexible labor force, one that requires “retraining” with technological developments creating constantly shifting human resource needs. In this regard, the recent emphasis in American education on “job-specific” skills is disturbing. Within a company, employees skilled in numerous functions are more valuable as management can dynamically adjust their roles. Many forward-looking companies are specifically mandating multi-functional experience as a requirement for career progress.

Finally, individuals should manage their careers around obtaining a diversity of geographic and functional experiences. Professionals armed with the analytical capabilities (e.g. basic statistical skills, critical reasoning, etc.) developed via these experiences will fare particularly well when competing against others more focused on domain-specific skill development.

The time has come to acknowledge expertise as overvalued. There is no question that expertise and hedgehog logic are appropriate in certain domains (i.e. hard sciences), but they certainly appear less fitting for domains plagued with uncertainty, ambiguity, and poorly-defined dynamics (i.e. social sciences, business, etc.). The time has come for leaders to embrace the power of foxy thinking.

This is rather cynical, but I imagine that these pronouncements aren’t for my ears anyways: They’re made to justify keeping “information technology professionals” on the overtime exempt list, or to raise immigration caps for technology workers. (Which is often well justified, but I wonder at the distortion it introduces to the domestic labour pool.)

TIME.com – The Skills Gap Myth: Why Companies Can’t Find Good People

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The first thing that makes me wonder about the supposed “skill gap” is that, when pressed for more evidence, roughly 10% of employers admit that the problem is really that the candidates they want won’t accept the positions at the wage level being offered. That’s not a skill shortage, it’s simply being unwilling to pay the going price.

But the heart of the real story about employer difficulties in hiring can be seen in the Manpower data showing that only 15% of employers who say they see a skill shortage say that the issue is a lack of candidate knowledge, which is what we’d normally think of as skill. Instead, by far the most important shortfall they see in candidates is a lack of experience doing similar jobs.

Employers are not looking to hire entry-level applicants right out of school. They want experienced candidates who can contribute immediately with no training or start-up time. That’s certainly understandable, but the only people who can do that are those who have done virtually the same job before, and that often requires a skill set that, in a rapidly changing world, may die out soon after it is perfected.

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Another way to describe the above situation is that employers don’t want to provide any training for new hires — or even any time for candidates to get up to speed. A 2011 Accenture survey found that only 21% of U.S. employees had received any employer-provided formal training in the past five years. Does it make sense to keep vacancies unfilled for months to avoid having to give new hires with less-than-perfect skills time to get up to speed?

Employers further complicated the hiring process by piling on more and more job requirements, expecting that in a down market a perfect candidate will turn up if they just keep looking. One job seeker I interviewed in my own research described her experience trying to land “one post that has gone unfilled for nearly a year, asking the candidate to not only be the human resources expert but the marketing, publishing, project manager, accounting and finance expert. When I asked the employer if it was difficult to fill the position, the response was ‘yes but we want the right fit.’”

Another factor that contributes to the perception of a skills gap is that most employers now use software to handle job applications, adding rigidity to the process that screens out all but the theoretically perfect candidate. Most systems, for example, now ask potential applicants what wage they are seeking — and toss out those who put down a figure higher than the employer wants. That’s hardly a skill problem.

Meanwhile, applicants are typically assessed almost entirely on prior experience and credentials, and a failure to meet any one of the requirements leads to elimination. One manager told me that in his company 25,000 applicants had applied for a standard engineering job, yet none were rated as qualified. How could that be? Just put in enough of these yes/no requirements and it becomes mathematically unlikely that anyone will get through.

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Adam Wiggins – How To Scale a Development Team

As hackers, we’re familiar with the need to scale web servers, databases, and other software systems. An equally important challenge in a growing business is scaling your development team.

Most technology companies hit a wall with dev team scalability somewhere around ten developers. Having navigated this process fairly successfully over the last few years at Heroku, this post will present what I see as the stages of life in a development team, and the problems and potential solutions at each stage.

Stage 1: Homebrewing

In the beginning, your company is 2 – 4 guys/gals working in someone’s living room, a cafe, or a coworking space. Communication and coordination is easy: with just a few people sitting right next to each other, everyone knows what everyone else is working on. Founders and early employees tend to be very self-directed so the need for management is nearly non-existent. Everyone is a generalist and works on a little bit of everything. You have a single group chat channel and a single all@yourcompany.com mailing list. There’s no real need to track any tasks or even bugs. A full copy of the state of the entire company and your product is easily contained within everyone’s brain.

At this stage, you’re trying to create and vet your minimum viable product, which is a fancy way of saying that you’re trying to figure out what you’re even doing here. Any kind of structure or process at this point will be extremely detrimental. Everyone has to be a generalist and able to work on any kind of problem – specialists will be (at best) somewhat bored and (at worst) highly distracting because they want to steer product development into whatever realm they specialize in.

Stage 2: The first hires

Once you’ve gotten a little funding and been able to hire a few more developers, for a total of 5 – 9, you may find that the ad-hoc method of coordination (expecting to overhear everything of importance by sitting near teammates) starts to break down. You have both too much communication (keeping tabs on six other people’s work is time-consuming) and too little communication (you end up colliding on trying to fix the same bug, answer the same support email, or respond to the same Nagios page).

At this point, you want to add just a sprinkle of structure: maybe an iteration planning on Monday, daily standups, and tracking big to-do items and bugs on a whiteboard or in a simple tool like Lighthouse. Perhaps you switch to a support system like Zendesk where incoming support requests can be assigned, and you add a simple on-call rotation for pages via Pagerduty. Your single internal chat and email channels continue to work fine.

Resist the urge to introduce too much structure and process at this point. Some startups, on reaching this stage, declare “we’ve got to grow up and act like a real company now” and immediately try to switch to heavy-handed tactics. For example: full-fledged SCRUM, heavyweight tools like Jira, or hiring a project manager or engineering manager. Don’t do that stuff. You’ve got a team that works well together in an ad-hoc way; you probably have some natural leaders on the team who direct a lot of the work while still being hands-on themselves; and while your product is launched and in the hands of users, in many ways you’re still trying to figure out what your company is really all about. Introducing bureaucracy into this environment is almost guaranteed to block you from doing what you’re really supposed to be doing, which is pivoting in search of your scalable business model.

Focus at this stage is key. Everyone is still a generalist, but the whole development team should be aligned behind a single goal (aka milestone) at a time. If you try to attack multiple battlefronts at once, and you’ll do everything badly. Great companies are more likely to die indigestion from too much opportunity than starvation from too little. Pick your battles carefully and stay focused.

Crisis on the brink of Stage 3

Grow to 10 – 15 developers, and you’re on the verge of a major team structure change. I’ve been told that many promising startups have been killed by failing to weather the transition between these stages.

With this many developers, iteration planning, standups, or any other kind of development-team meeting has become so big that the attendees spend most of their time bored. Any individual developer will find it difficult to find a sense of purpose or shared direction in the midst of trudging through laundry lists of details on other people’s work.

In programming, when a class or sourcefile gets to big, the solution is to break it down into smaller pieces. The same principle holds for scaling a development organization. You need to break into targeted teams.

Stage 3: Breaking into teams

Dividing your single team of generalists is harder than it sounds. Draw the fences in the wrong place, and you’ll create coordination problems that make things even worse. Find the right places to divide and you’ll see a massive increase in focus, happiness, and productivity.

The key to a good team is a well-defined sphere of authority, with clear interfaces to other teams. The team should own the vision and direction for the part of your product that it works on. It should be able to operate with maximum autonomy on everything it owns without having to ask for permission or information from other teams, except for the infrequent case of a feature or bug that crosses team boundaries.

A close mapping between your software architecture and your team architecture will be a big help here. By this time you have probably already converted your monolithic application into a distributed system of multiple components communicating over REST, AMQP, or other RPC mechanism. (And if not, you should strongly consider doing so, coincident with your dev team split.) There should be an obvious mapping between software components – each of which has their own source repository and deployment location/procedure – and your nascent teams.

Deciding what person goes on what team will be somewhat arbitrary at first. My approach was to sit down with each developer and dig in to try to understand what parts of the system they were most passionate about working on. From there I divided up the teams as best I could. Some people found perfect homes on their first team assignment, others were dissatisfied and needed to transfer to another team fairly quickly. Over time, the team territories became very well-defined, so it became much easier to slot new hires in the right place. Let developers follow their own passions and they will gravitate toward the team where they will do the best work.

Separately, you should have found your product/market fit by this point. If you’ve grown to this size and are still figuring out your company’s meaning for existence, you’ve got big problems. If that’s the case, stop growing, and scale back down until you nail product/market fit.

Specialization

Another reason to break into teams is specialization. Types of engineering specialists include ops engineers/sysadmins, infrastructure developers, front-end web developers, back-end web developers, business engineers / data analysts, and developers who focus on a particular language. Language specialists are becoming more common, because many internet-scale companies write high-concurrency components in functional programming like Erlang, Scala, or Clojure, generally handled by a different set of developers than the authors of the Ruby, Python, or PHP web components.

Early on, specialists are rarely desirable. There’s too many different layers to work on in delivering a software product relative to the number of people available to contribute, so the everyone pitches in on everything. This may put a developer doing such far-ranging work such as ops projects like kernel updates on the OS, to front-end projects like writing JQuery effects for the UI.

Once you reach the point where you’ve got a dozen developers, your product has reached a level of usage and maturity where the problems are getting much harder. Scaling the database is something that is not only a full-time job, but requires a deep level of specialized knowledge that can’t be acquired if that person is also simultaneously learning to be a JQuery expert and an iOS expert and an Erlang expert.

You need people who can and are willing to focus on just a few closely related areas so that they can build very deep knowledge in those areas. Some of these will be your existing generalists deciding to specialize, and some will be new hires. You can now hire for the kind of specialist that would not have been appropriate when your company was smaller. Generalists are always useful to have around, and some of them may move into management – filling business owner roles for a team, rather than hands-on development.

Heroku’s first teams

Heroku’s initial team breakdown looked like this:

• API – Owns our user-facing web app and the matching Heroku client gem.
• Data – Builds and runs our PostgreSQL-as-a-service database product.
• Ops – Shepherds and protects availability of the production system.
• Routing – Manages everything necessary to get HTTP requests routed to user web processes.
• Runtime – Handles packaging code for deploy and starting/stopping/managing user processes.

Each of these teams owns between one and five components. For example, the API team owns the Rails app which runs at api.heroku.com and the Heroku client gem. The Data team owns the provisioning and monitoring tool for our database service, as well as all of the individual running databases. (Peter van Hardenburg was the intrapreneur who founded and now leads our Data team. He tells a bit of that story in the later part of this video.)

Team size and roles

For us, the ideal team layout has been two developers and one business owner. One developer is not enough over the long term (they need a second pair of eyes on the code, and besides, one is a lonely number). Three developers works fine as well. Get to four or five and things start to become a bit crowded; there may not be enough surface area for them to all work without stepping on each others’ toes constantly. Almost all of Heroku’s teams have two developers.

“Business owner” is a somewhat clumsy term, but it’s the best we’ve come to describe the person doing some combination of product management, project management, and general management for the team. The business owner fills the important role of knowing the business value of the team’s work to the company and how it fits in with the larger product. They can broker cross-team communication, help prioritize projects and tasks by business value, and may provide status reports on the team’s progress or presentations to the senior executives and/or the entire company to justify the team’s ongoing existence.

I’m a fan of hacker-entrepreneurs in the business owner role: a strong technical background means they have an in-depth understanding of the work being done, and are able to command huge respect from those whose work they are directing. This sort of person is not necessarily available for all teams, but find them when you can. In many cases it involves quite a bit of convincing to get a hacker to give up coding as their primary function.

Avoid having developers belong to more than one team. They are makers and need to be able to focus their full attention on their team’s current projects without distraction or attempts at multitasking. Business owners, however, can sometimes belong to multiple teams. It’s not always a full-time job, and there are benefits to cross-team communication by having one person be a business owner for two or more related teams.

Cohesion

In the earlier stages, you should avoid attacking on multiple battlefronts, and instead keep all developers focused around a single goal for the company. With creation of fiefdoms for each team, this has changed. Now you can and should attack on multiple battlefronts. Each team should be executing independently against its own goals, and not worrying too much about what other teams are doing.

It’s awesome to be able to pursue three, four, five big goals simultaneously. A few months after breaking into teams at Heroku, we had a day where three different teams were all releasing major new features. It’s an incredible feeling.

But now you have a new problem: lack of cohesion. Your decentralized teams are setting their own roadmaps and deciding on features independently. But to avoid fragmentation in your product, someone needs to decide an overall direction and set of product values. More succinctly: you need a strategy.

But this post is long enough as it is. I’ll save discussion of cohesion and strategy for another time.

The Millions – Fifty Years On: Jane Jacobs and the Rebirth of New York

Why did a city like New York recover when a city like Detroit, which had a more durable industrial base, fell into blight and decay? The answer, Jacobs argues in The Economy of Cities, turns on the ability of a city’s inhabitants to innovate. Cities grow, she says, through a process she calls “import replacement.” This occurs when local tradesmen produce for themselves the goods and services they had previously been importing and then use the skills learned from this local production to create new products, which they can then export in great bulk.

Detroit, she notes, began as a port for shipping flour across the Great Lakes. Soon, local manufacturers were building their own steamships to make the lake crossings and got so good at it they began making ocean-going ships for use in other cities. This not only put money into local coffers, but supported the dozens of local engine-parts makers Henry Ford drew upon when he founded the Ford Motor Company.

But here’s the rub: the auto industry was so successful that once Ford arrived at his greatest innovation, the assembly line, the industry so dominated Detroit’s economy that there was no local market for further innovation, and, as Jacobs points out, it was only a matter of time before another city – in this case, cities in Japan – improved upon Ford’s ideas and made better, cheaper cars.

The Economy of Cities came out four years before the gas crisis that set Detroit’s long tailspin in motion, but it eerily predicts the dilemma the city faces today, in which a moribund auto industry, out-innovated by foreign competitors, had to be bailed out by the U.S. taxpayer to avoid collapse.

Like Detroit, New York began as a port city, but in New York’s case a principal byproduct of its shipping trade was a robust banking industry, which survived the city’s manufacturing collapse. Even as New York was begging for a bailout from the federal government in the mid-1970s, young hotshots like Ivan Boesky and Michael Milken, many of them children and grandchildren of immigrants who had filled the ghettos earlier in the century, were inventing new ways to own and finance large companies. Think of all the financial innovations of the last thirty years: junk bonds, hedge funds, leveraged buyouts, asset-backed securities, credit derivatives, subprime mortgage markets, and on and on.

Yes, bankers are evil, and, yes, the banking industry required a federal bailout even larger than that of the auto industry’s, but like it or not, New York is the safest large city in America, with a vital private sector and a buoyant real estate market, largely because the living, breathing organism we call Wall Street has spent the last thirty years innovating its way out of obsolescence.

By chance, today I came across a reprint of Fortune magazine’s 1986 cover story about the tale of Microsoft’s IPO. It’s interesting in itself, but what’s particularly striking is how coolly and calmly Gates and his people negotiated with their IPO partner, Goldman Sachs, to ensure the same little scheme didn’t work on them.

Of course, I could be attributing malice to LinkedIn’s partner banks when the cause for the underpricing could simply be ignorance – how exactly does one justify valuing a social networking company at $9 billion with earnings of $15.4 million last year?

Fortune Magazine – Inside The Deal That Made Bill Gates $350,000,000

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Gates thinks other entrepreneurs might learn from Microsoft’s (MSFT) experience in crafting what some analysts called ”the deal of the year,” so he invited FORTUNE along for a rare inside view of the arduous five-month process. Companies hardly ever allow such a close look at an offering because they fear that the Securities and Exchange Commission might charge them with touting their stock.

Answers emerged to a host of fascinating questions, from how a company picks investment bankers to how the offering price is set. One surprising fact stands out from Microsoft’s revelations: Instead of deferring to the priesthood of Wall Street underwriters, it took charge of the process from the start.

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Gates asked Martin to leave while he conferred with Shirley and Gaudette. This was a different Gates from the one who two months before thought $20 too high. ”These guys who happen to be in good with Goldman and get some stock will make an instant profit of $4,” he said. ”Why are we handing millions of the company’s money to Goldman’s favorite clients?” Gaudette stressed that unless Microsoft left some money on the table the institutional investors would stay away. The three decided on a range of $21 to $22 a share, and Gaudette put in a conference call to Goldman and Alex. Brown.

Eric Dobkin, 43, the partner in charge of common stock offerings at Goldman Sachs, felt queasy about Microsoft’s counterproposal. For an hour he tussled with Gaudette, using every argument he could muster. Coming out $1 too high would drive off some high-quality investors. Just a few significant defections could lead other investors to think the offering was losing its luster. Dobkin raised the specter of Sun Microsystems, a maker of high-powered microcomputers for engineers that had gone public three days earlier in a deal co-managed by Alex. Brown. Because of overpricing and bad luck — competitors had recently announced new products — Sun’s shares had dropped from $16 at the offering to $14.50 on the market. Dobkin warned that the market for software stocks was turning iffy.

Gaudette loved it. ”They’re in pain!” he crowed to Shirley. ”They’re used to dictating, but they’re not running the show now and they can’t stand it.” Getting back on the phone, Gaudette crooned: ”Eric, I don’t mean to upset you, but I can’t deny what’s in my head. I keep thinking of all that pent-up demand from individual investors, which you haven’t factored in. And I keep thinking we may never see you again, but you go back to the institutional investors all the time. They’re your customers. I don’t know whose interests you’re trying to serve, but if you’re playing both sides of the street, then we’ve just become adversaries.”

As negotiations dragged on, Shirley became impatient. Eshelman, the securities lawyer from Shidler McBroom, was waiting in San Francisco to get a price range so he could send an amended prospectus off to the SEC. Finally Gaudette told Dobkin, ”I’ve listened to your prayers. Now you’re repeating yourself, and it’s bullshit.” The two compromised on a range of $20 to $22, with two provisos: Goldman would tell investors that the target price was $21 and nothing less, and Dobkin would report Monday on which investors had dropped out.

Monday’s news was mixed. Six big investors in Boston were threatening to ”uncircle” — to remove their names from Goldman Sachs’s list. Chicago and Baltimore were fraying at the edges — T. Rowe Price, for instance, said it might drop out above $20 — while the West Coast stood firm. The market had closed flat, worrying Goldman’s salesmen. But their spirits revived the next day as the Dow surged 43 points. Gaudette, now confident that he and Dobkin could agree on a final offering price, flew with Neukom to San Francisco to pick up Martin, and the three boarded a red-eye flight for New York.

Sleepless but freshly showered and shaved, Gaudette reached Goldman Sachs’s offices at 11 o’clock on Wednesday, March 12. Neukom walked over from Sullivan & Cromwell, where the other lawyers were preparing the last revision of the prospectus. After lunch the two Microsoft officers went to Dobkin’s office and patched Shirley and Marquardt into a speakerphone.

The conferees had no trouble agreeing on a final price of $21. The market had risen another 14 points by noon. The reception for a $15 offering that morning by Oracle Systems, another software company, seemed a favorable omen: The stock had opened at $19.25. About half the potential dropouts, including T. Rowe Price, had decided to stay in.

And in the end now you can download Microsoft Office of the latest version and find more software update at softwarekeep.ca!

The New York Times – Why Your Boss Is Wrong About You

Performance reviews are held up as objective assessments by the boss, with the assumption that the boss has all the answers.

Now, maybe your boss is all-knowing. But I’ve never seen one that was. In a self-interested world, where imperfect people are judging other imperfect people, anybody reviewing somebody else’s performance — whether as an actor, a writer, a spouse, a friend or a worker — is subjective. It’s why when employees switch bosses, more often than not their evaluation changes as well.

Under such a system, in which one’s livelihood can be destroyed by a self-serving boss trying to meet a budget or please the higher-ups, what employee would ever speak his mind? What employee would ever say that the boss is wrong, and offer an idea on how something might get done better?

Only an employee looking for trouble.

Is there a way out? I believe there is, and it works for both government and business. It’s something I call the performance preview. Instead of top-down reviews, both boss and subordinate are held responsible for setting goals and achieving results. No longer will only the subordinate be held accountable for the often arbitrary metrics that the boss creates. Instead, bosses are taught how to truly manage, and learn that it’s in their interest to listen to their subordinates to get the results the taxpayer is counting on.

Instead of the bosses merely handing out A’s and C’s, they work to make sure everyone can earn an A. And the word goes out: “No more after-the-fact disappointments. Tell me your problems as they happen; we’re in it together and it’s my job to ensure results.”

…

Performance reviews aren’t the only ways to measure effectiveness, to be sure. Workers whose output is tangible and measurable — how much garbage is picked up, how many streets are cleared of snow — are increasingly evaluated according to numerical goals. I’d argue these measurements are similarly flawed. Workers are almost always better at coming up with metrics that lead to systemwide gains than bosses alone are. The key to systemwide success (as opposed to individual success) is still employees working together under the leadership of good managers.

From a TEDxMidwest talk given by Jason Fried of 37 Signals:

Why work doesn’t happen at work

We’ve all heard of the casual Friday thing. I don’t know if people still do that. But how about no-talk Thursdays. How about — pick one Thursday just once a month and cut that day in half and just say the afternoon — I’ll make it really easy for you. So just the afternoon, one Thursday. The first Thursday of the month — just the afternoon — nobody in the office can talk to each other. Just silence, that’s it. And what you’ll find is that a tremendous amount of work actually gets done when nobody talks to each other. This is when people actually get stuff done, is when no one’s bothering them, when no one’s interrupting them.

And you can give someone — giving someone four hours of uninterrupted time is the best gift you can give anybody at work. It’s better than a computer. It’s better than a new monitor. It’s better than new software, or whatever people typically use. Giving them four hours of quiet time at the office is going to be incredibly valuable. And if you try that, I think you’ll find that you agree. And maybe, hopefully you can do it more often. So maybe it’s every other week, or every week, once a week, afternoons no one can talk to each other. That’s something that you’ll find will really, really work.

Another thing you an try is switching from active communication and collaboration, which is like face-to-face stuff, tapping people on the shoulder, saying hi to them, having meetings, and replace that with more passive models of communication using things like email and instant messaging, or collaboration products — things like that. Now some people might say email is really distracting and I.M. is really distracting, and these other things are really distracting, but they’re distracting at a time of your own choice and your own choosing. You can quit the email app, you can’t quit your boss. You can quit I.M., you can’t hide your manager. You can put these things away, and then you can be interrupted on your own schedule, at your own time, when you’re available, when you’re ready to go again.

The Acceleration Trap

Faced with intense market pressures, corporations often take on more than they can handle: They increase the number and speed of their activities, raise performance goals, shorten innovation cycles, and introduce new management technologies or organizational systems. For a while, they succeed brilliantly, but too often the CEO tries to make this furious pace the new normal. What began as an exceptional burst of achievement becomes chronic overloading, with dire consequences. Not only does the frenetic pace sap employee motivation, but the company’s focus is scattered in various directions, which can confuse customers and threaten the brand.

Realizing something is amiss, leaders frequently try to fight the symptoms instead of the cause. Interpreting employees’ lack of motivation as laziness or unjustified protest, for example, they increase the pressure, only making matters worse. Exhaustion and resignation begin to blanket the company, and the best employees defect.

We call this phenomenon the acceleration trap. It harms the company on many levels—over-accelerated firms fare worse than their peers on performance, efficiency, employee productivity, and retention, among other measures, our research shows. The problem is pervasive, especially in the current environment of 24/7 accessibility and cost cutting. Half of 92 companies we investigated in 2009 were affected by the trap in one way or another—and most were unaware of the fact.

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If your company is caught in the acceleration trap, you have several ways to break free: Halt less-important work, be clear about strategy, create a system for winnowing projects, and declare an end to the current high-energy phase.

Stop The Action

Instead of asking employees to suggest new initiatives to improve the company, why not turn the question around? Ask employees for ideas about what to terminate. Employees often respond with a slew of good suggestions. At one company we studied, they came up with some 540 ideas, three times the annual number of new-project ideas they had been suggesting. The company ended up halting 40% of its projects. Regularly ask yourself, your managers, and the whole company: “Which of our current activities would we start now if they weren’t already under way?” Then eliminate all the others.

Be Clear About Strategy

Asking “What should we stop doing?” and then terminating nonessential tasks requires CEO fortitude. Projects that need to be killed may have highly placed sponsors, so the CEO must be prepared to step on some toes. Ultimately, the choice to keep or cut loose hinges on whether an activity directly supports the company’s strategy—so that strategy must be clearly understood throughout the entire firm.

Decide How To Make Decisions

Not every project that supports the company’s strategy is of major importance. So companies need a systematic way to make hard choices. When the Otto Group, a leading international trading and services corporation with 53,000 employees, restructured, managers found themselves burdened with 20% to 30% more work. So in 2007, the company initiated a stop-action review. Each executive was asked to select a single project that he or she wanted to complete by all means. But that still left too many in play, according to Thomas Grünes, then head of central services, so the list was then halved based on each project’s required investment, value-to-cost ratio, and, in certain cases, symbolic value for employees.

For example, the final list included a redesign of reception areas and staff restaurants, which increased pride and performance “and thus was a very important initiative, although the economic value was not obvious,” Grünes says. To guard against bloat, the company has made that process an annual activity.

Declare The Turmoil Over

If the acceleration trap consists not of a plethora of projects but of ceaseless turmoil, the CEO can extricate the company by calling an end to the current round of changes. After taking the helm at ABB, Jürgen Dormann instituted a number of emergency measures to relieve employees from change and frenetic activity.

In one of his weekly messages to employees, he declared that the reorganization crisis was officially over. “What we see today is more than just light at the end of the tunnel,” he stated. “This is the end of the tunnel.” Employees felt proud and relieved.

I learned my lesson and moved downtown. My commute is a leisurely twenty minute walk west on King and south on Bay. Believe me, it makes a difference.

Via Ezra Klein comes a graph from an International Monetary Fund discussion paper illustrating the effect of long-term unemployment on the average male’s overall earning potential: