Monday, December 24, 2007

Tailored advertizing?

For all the hype about tailored advertising on the net, I don’t remember the last time I got an ad for anything I would be interested in buying. True, I don’t buy online much because I need to handle most of the things I buy to make sure that it’s really what I want.

I’ve also found that most cost savings from buying online are eaten up by shipping charges, so I can support local merchants and get the product in my hand RIGHT NOW instead of 3 days to a week later.

I know that antidotal evidence is always suspect because its such a small sample, but since I retired I spend a lot of time reading and researching online. I should be getting at least some targeted adds. I can’t remember ever getting any thing but the regular spam.

Sunday, December 23, 2007

Manage your business and your stock price will take care of itself.

If a business does well, the stock eventually follows. - Warren Buffett

If you manage your business to control your stock price, then your business is your stock price. If you manage your business to produce (and sell) your product, then your business is producing (and selling) your product.

Companies issue stock to raise money. Generally, the money is used for capital investment to produce a product. If you’re not raising capital, why issue stock? With the advent of executive stock options, the price of stock and not the level of profits determine compensation for the top executives.

Investors used to use a company’s profit as part of the equation to establish “market value” for a stock. Now, investors seem to be using an estimate of what other investors might pay for the stock tomorrow.

As this is written, initial public offerings (IPOs) for companies expecting to sell over the Internet are selling for several times their IPO price without the company having made a profit. The feeling of investors seems to be, “We think they’ll make money sooner or later, but we think someone will pay more for this stock tomorrow anyway”.

In the late 1950’s and early 60’s, there was a rush to “conglomerate” creating large “holding” companies with many divisions having little business relationship to each other. This diversity was supposed to be hedge against the downturn of a single business unit. That is, if washing machine sales were down, cell phones would be up. By the early to mid 1980’s, companies were shifting back to their “core competencies”, that is, re-focusing on washing machines and selling the cell phone division. Stock prices jumped in the 60s as companies merged. Then the same stocks jumped again years later when the company sold those same acquisitions, sometimes after losses.

The investor has a different set of priorities than the manufacturer. Your company has to decide who its customer is; the investor in its stock or the buyer of its product. This decision-making process gets thrown out of whack when the manager’s compensation is keyed to stock prices and not directly to profitability, sales, or production.

Monday, December 17, 2007

Seems simple to me.

In an article titled "iPods Win, Record Labels Lose, Study Says" at the Red Herring web site,author Ken Schacter quoted David Card, vice president and research director at Jupiter Research as saying “The key message is that if you’re in the music business, particularly the record business, you have to be in different businesses”.

The problems the record business is having with song sharing caused by the explosion of iPod and other MP3 players seems to me to have a simple solution. In fact it’s not really a solution, its a return to the way music used to be sold. I’m old enough to remember 45 RPM records. “In the day” music was sold by-the-song, or rather two songs at at time, one on each side of the record for about a buck a record.

Of course a buck was one hours work at that time so maybe a song should be worth about $2.50 in todays market, roughly half the minimum hourly wage. Elvis Presley may cost more than Elvis Costello, or maybe it’s the other way around by now. I’m too old to know who is Hip, Slick, and Cool any more.

I learned at my daddy’s knee that you can sell one unit at $1,000,000 or a million units at $1.00 and the gross is the same. With the ease of “sharing” songs now, the record companies are faced with a simple choice 1) fight sharing and spend a lot of money to not stop it, or 2) charge a small fee and get a lot of money on many transactions.

Thursday, December 13, 2007

Why traditional networking didn’t work for me.

At the various points in my life that I was looking for work, I tried networking according to the experts. Networking, as I understand it, is someone in your group of associates identifying a suitable opening and telling you about it.

Here’s a sample of the kind of advice you get about how to network

The problem for me is that my personal network consisted of two distinct groups of people.

First my work peers are my competition for any available jobs. Obviously only a few of my competitors will either tell me about possibilities or recommend me for something they want themselves.

My second group is made up of people in completely unrelated fields. These are the people who I use as cross-pollination for new ideas and methods. Many times what they are doing is completely useless to my daily work, but just often enough they provide the nugget of a great idea. Besides, just looking at new ideas keeps you looking. Since they are in unrelated fields, the odds on them turning up a suitable job opening is pretty low.

Since I “semi-retired” I’ve keep reading about networking, assuming that I must have been doing it wrong. The results of my research are in, I’m actually following the common wisdom pretty closely and it’s not a viable technique.

In a 45 year working life that crosses half a dozen different kinds of work I’ve only gotten two (2) jobs by referral. This means that while I have gotten a lot of benefit from my relationships with friends and coworkers those benefits didn’t include job referrals.

While personal and antidotal evidence is not a scientific survey, it is telling in that if networking really worked, any working professional should be about tell countless stories about getting a job by referral, and I can’t think of a single friend who did so.

Wednesday, December 12, 2007

Teachers should teach

I watch a lot of History channel on the cable. It caused me to think about why I like the history channel but didn’t much like history in school - which in turn caused me to think about why I didn’t much like school at all.

Nearly 50 years later I think it was too theoretical. What we learned was more about this is what you need to know to learn something else later in school than about here is how you do something today. Student’s get board by things that don’t seem to have a point so the teacher must show them that point.

The student's job is to show up and pay attention, the teacher is responsible for getting and holding the student's attention. Teachers may not like it, but part of their job is to teach the student why the student should care about the class.

Friday, December 7, 2007

Is it just me?

I was just reading CCN’s on line news page and saw how many items are video clips. Is this the trend for on line news? I really don’t want to take the time to watch a 30 second video clip when I can read a more detailed story in the same time.

Could this be a case of the media overshadowing the message? I am beginning to think we are so in love with a technology that we are loosing sight of when and where to use it. Watching a talking head or even a subject matter expert talk seems to take more time to deliver less information than just reading the article.

Is this just me or are you seeing the same thing?

Wednesday, December 5, 2007

Bring me the solution, not the problem

Ever here the phrase “Don’t bring your boss the problem, bring them the solution”? That attitude is causing most american business to miss systemic problems and to mask them with point solutions.

If your subordinates are “quick fixing” problems in response to your unwillingness to listen to their day-to-day problems, those problems may be getting hidden from you.

The following quote from General Colin Powell helps illuminate the problem “The day people stop bringing you their problems is the day you have stopped leading them.”

You need to know the day to day problems your workers are solving to figure out which processes still work and which need updating. How do you grow a business without constantly improving your product or service? The first place to improve is with current practices that no longer fill your needs?

You must make time to listen to what is not working and test that against operating practices to discover what to change and how to improve. The tools you use can be as complex as a full blown Six Sigma review of a particular process or a simple as counting the number of times the customer complains about that issue.