A Blog by Jonathan Low

 

Jun 8, 2013

Who's Winning? The Hugely Popular and Largely Unprofitable Business of US College Sports

There's a slight definitional problem with that headline we feel compelled to correct.

College, or more properly, university athletics are very profitable for certain coaches and entertainment conglomerates. They are largely unprofitable for universities, colleges, students, taxpayers, states and communities and, lest we forget, the student-athletes who make them possible.

As the following pictures illustrates, of the 50 US states, the highest paid public employee in 40 of them is a football or basketball coach. The vast majority of big programs not only do not fund other, less popular sports, but actually cost the sponsoring institution money. For many, something on the order of $10 million a year when financial aid, course offerings and public support are being cut back.

The question is why Americans tolerate this state of affairs. The answer seems to have been answered best by the phrase 'that's entertainment.' Those involved are using public funds for private purposes. But they do so with the full endorsement of their electorates because they are involved in an increasingly rare spectacle: non-political public amusement. In an increasingly global society, local interests are hard to find, at least when it comes to popular acknowledgement. There is value in that convergence branding and personal sentiment, which the broadcasters have brilliantly exploited.

As in so many other aspects of life, there is a growing awareness that external entities are profiting from others efforts and activities. Students who participate in sports at the university level may be the most susceptible, but they are getting recognition and a higher education in return. As in the tech realm, for many, this is no longer enough. And that frustration may eventually be mirrored by the society that supports these expenditures. JL

Alex Mayyasi reports in Price Economics:

Seventy-eight percent of Americans believe that college athletic departments are profitable. Given the ever increasing salaries of coaches, price tags of facilities, and national exposure, the belief is understandable. But this common perception of lucrative football and basketball programs covering the costs of entire athletic departments is a myth. No one knows this better than the colleges themselves. University presidents overwhelmingly view the high cost of athletics as a problem and athletic directors are busy cutting their budgets. Just over half of elite football and basketball programs turn a profit.

Tech Firms Eye Shift to US Hiring Increases

Yes, it's been a while. Maybe not quite as long as the accompanying picture suggests, but maybe not that far off as some might think.

The question of hiring in tech has become a sore subject. Despite the glamor and wealth associated with it, compensation in the field has been flat for over a decade. In some parts of the profession which have become commoditized, wages have even gone down.

Hiring has been increasingly outsourced to China, Malaysia, India and other lower wage locales. So big tech firms' sudden interest in US immigration policy have been greeted with less than fulsome praise. The companies' desire to loosen visa requirements so they bring in whom they want, when they want, for as long as they want, have hit a wall of resistance. So the recent announcements that firms are actively considering increasing US hiring has raised questions about motivation and longevity.

The firms claim that advances in supply chain management have shifted the impetus to having production closer to the source of design and engineering. There are also fears that big subcontractors like Foxconn have now learned enough to set themselves up as fearsome competitors. But there is also a belief in some quarters that the US hiring is a political maneuver designed to satisfy those who want a quid pro quo for any relaxation of immigration policies.

Whatever the reasoning, the important question will be whether any increase in hiring is of a scale and sustainability consistent with the industry's. JL

Craig Timberg reports in the Washington Post:

Motorola Mobility officials said they see significant business logic to having a factory close to the engineers who are designing a new flagship smartphone and the customers they hope will buy it. Officials say it aids innovation while allowing for leaner inventories and lower shipping costs.

I Heart Legal Intimidation: A Cup at the Heart of a Trademark Dispute

An enduring issue in the use of popular symbols is the clash between cultural adoption and increasingly aggressive legal attempts to assume ownership of ideas, concepts, representations and other manifestations of intellectual capital.

The overreach has begun to concern courts in the US which have ruled against those whose efforts to assume 'property rights for common usage have sometimes violated common sense.

An emerging element in this dispute is the entry of public institutions. Their efforts are driven by two factors: a desire to show how 'business-like' they are, thereby establishing a reputation for tough-minded management, a de rigueur leadership attribute whatever the impact on the people who elected or pay them, and a yearning to forestall attacks from forces opposed in principle to all government spending or influence who will seize on any shortcoming as evidence supporting their position.

How a coffee cup abuses the trademark of a heart is a question only designers, lawyers and coffee aficionados can answer. Usually, the litigant with the biggest wallet wins, which also raises questions about whether societal equity has become the preserve of those who can afford to pay (more) rather than those for whom citizenship was once thought to have more than minimal value. The matter is symptomatic of a larger concern about rights and who can or should own them. JL

Andy Newman reports in the New York Times:

In the 36 years since the designer Milton Glaser came up with the logo to help boost New York’s sagging mid-’70s image, the state has filed thousands of trademark objections and cease-and-desist letters. Last year alone, a state official said, more than 100 letters were sent.
Many go to vendors who use the whole logo without permission. But the state has also gone after the makers of “I ♥ Yoga” T-shirts and “I ♥ Paris” bumper stickers. After Sept. 11, when Mr. Glaser designed an “I ♥ NY More Than Ever” logo with a smudge on the heart, the state even threatened to (but did not) sue him, Mr. Glaser said.

Jun 7, 2013

Mobile Is So Now: The Future of Technology is Contextual

It's like that old Carly Simon song says, what we need and are increasingly demanding is 'Anticipation.'  

We are sensory beings but, as the following article explains, our senses may not have kept evolutionary pace with the developments that rule our  lives. The result is that our ability to discern threats and opportunities is degraded by our inability to understand them in the contemporary context. Which makes the future even more worrisome.

For good or ill, software and hardware designers have become aware of this and are beginning to address it. Some will find this intrusive and uncomfortable. Some will be annoyed by the presumption. And some will hardly notice.

The concern is that we may be denied opportunities that could interest us or expand our awareness by the digital prestidigitation. On the other hand, our modern handmaiden, convenience, will be enhanced. Whatever one's attitude or outlook, the fact is that these decisions are already being made for us. Our task will be to determine whether we like them or not - and then to see if there is anything we can do about it. JL

Pete Mortensen reports in Fast Company:

It’s called situational awareness. The way we respond to the world around us is so seamless that it’s almost unconscious. Our senses pull in a multitude of information, contrast it to past experience and personality traits, and present us with a set of options for how to act or react. Then, it selects and acts upon the preferred path. This process--our fundamental ability to interpret and act on the situations in which we find ourselves--has barely evolved since we were sublingual primates living on the Veldt.

Welcome to the End of Job Growth

What if they gave a job fair and no one came?

We are debating the onset of Peak Oil, Peak Auto and Peak Education. But the big headline may be Peak Boomer.

The issue is not the usual story on which we have all been harping for the past five years, the destruction of economic prospects for all those who are not investment bankers or tech luminaries. No, the reason that job growth appears to be slowing is that the Boomers are beginning to leave the job market in discernible numbers - and some are even heading to that big Woodstock in the sky.

What this means is that fewer jobs will be needed and that fewer people will be required to fill them. It is not yet clear what this means for immigration, education, income growth and household wealth creation, but the implications are potentially momentous. Easing of unemployment and, conversely, the uptick in employment prospects could allay a host of social ills. But it will also create some others. More immigration will be needed, not just tolerated (or not, depending on political proclivities) to support the retiring Boomers and the expanding economy.

This is not unalloyed good news. Dislocations due to changing demand for housing, services, investments, credit and a host of other products and services will cause enterprises and institutions to shift what they offer and by whom. As usual, these gales of creative destruction will favor some, depending on where they live and what they do, while penalizing others. The only thing that is certain is the ensuing uncertainty. JL


Matthew O'Brien reports in The Atlantic:

There's a ritual every first Friday of the month. The Bureau of Labor Statistics releases its initial estimate for how many jobs were added or lost the previous four weeks; everybody scrutinizes that; and then Betsey Stevenson and Justin Wolfers tell us what it all means. (Oh, and Jack Welch insists it's all rigged). But this tradition is going to change a bit the next few years: there aren't going to be as many jobs to obsess over. 

Shocked! We're Shocked! US National Security Agency Reports Warrantless Wiretapping of Americans' Phones and Direct Access to Apple, Google, Facebook Servers

It remains one of the iconic scenes in movie history: the cynical French policeman played by Claude Rains in Casablanca telling the tough but charming American bar owner played by Humphrey Bogart that he was 'shocked' to find that illegal gambling was being conducted in a back room - just as he is handed his evening's winnings.

The only thing we find shocking about the revelations of warrantless wiretaps and direct US security access to the servers of Apple, Google and Facebook, among others - and all facilitated under a $600 million government contract with Microsoft - is that anyone is surprised.

Hullo! This is a society in which people provide all of their personal information plus credit card numbers in return for 10 percent discounts on coffee. So why is anyone surprised and why the big hullaballoo?

Putting aside the craven hypocrites like Republican politicians who thought this was fine under the Bush Administration but now find it unAmerican, it is perhaps finally, beginning to sink in that their communications are not exactly private. As if anyone posting a picture of their frat bros around a keg or girlfriends at a bachelorette party doesnt know by now that employers are accessing this information.

The implication is that when people are presented with firm evidence of government intrusion they begin to wonder what that means for personal freedoms. And the government is perhaps learning the limits of its counter-terrorism crusade. But maybe its simpler than that. Maybe it's the dawning realization that we are giving away all this awesome info for free to people who are cashing in on it (one way or another).

So, in the interest of national security we have a modest proposal: if, in the future, the government intelligence agencies want to gather personal information, they should just offer 5 percent discounts at Starbucks, McDonalds, Walmart, local hairdressers and saloon happy hours in return for whatever data they want. Could become the most popular government program in history. JL

Mark Hosenball and John Whitesides report in Reuters:

The debate over whether the government is violating citizens' privacy rights while trying to protect them from terrorism escalated dramatically on Thursday amid reports that authorities have collected data on millions of phone users and tapped into servers at nine internet companies.

Jun 6, 2013

Not That Into You: Consumers Dont Care About Vast Majority of Brands

The question is no longer which 50 percent of advertising is wasted. If recent surveys reflect the true state of brand value, it may be that all of it is.

The problems appear to be that two core features of brand equity from which it or they are able to derive customer loyalty and premium pricing may be failing.

Those two are the ability of brands to deliver on their promises and the ability of said brands to differentiate themselves from other competitors. These are basic factors, crucial to the value and longevity of the brand. In fact, there is nothing more fundamental for a brand than the veracity of its promise to the consumer. That promise is inherent to its existence. That consumers no longer believe most brands deliver on that promise suggests that two things may be happening: first, that brand managers have lost touch with their customers and second, that customers' perception of that promise is changing.

The reasons for this new state of affairs may be due to the proliferation of brands in gradations of brand extension that defy logic, to say nothing of need. The second is that either the promises brands make no longer resonate because the promise has become divorced from the consumer's interests - or that expectations have outpaced the ability to deliver. The reasons for this latter situation may have to do with the tech experience in which devices' capabilities have so astounded customers that anything short of miraculous in unrelated fields is viewed as inadequate.

Whatever the reasons may be, brands are going to have to reassess their purpose if they hope to survive in the digital era. JL

Anthony Edgecliffe-Johnson reports in the Financial Times:

Most people around the world, Havas found, would not care if 73 per cent of all brands disappeared. There are even more sobering findings in Europe and the US, where consumers would not care if 92 per cent of brands disappeared.

Why Do the Folks Who Make Booze Care More About Their Reputations Than Bankers?

90 percent.

That is reportedly the number of mortgage loans that contained fraudulent data prior to the financial crisis they caused. And the people most likely to commit that fraud were the lenders making the loans.

The overwhelming nature of the fraud in that industry created an epidemic that became 'criminogenic; in other words, a culture of wrong doing so pervasive that it fostered, even encouraged, further fraud.

This matters because in the internet age, reputation can work two ways: it can cause those concerned about quality and their reputation for it to be prudent, even cautious, understanding that any misstep will be identified and then amplified globally. But it also works the other way: if so many people are doing it - and perceive that they are getting away with it - that success will 'invite' others to copy their behavior.

Bankers are no more inherently evil than other profession - at least theoretically. But the culture in which they operate supports performance based on norms that may be odds with that of the enveloping society. And they have the financial resources to buy compliance or silence from regulators ostensibly tasked with overseeing their performance. Liquor, by contrast, is a small industry. The players are few, they are well known to each other, and they have a stake in keeping each other relatively honest.

Reputation is based on trust. But if that trust is perverted to mean that one trusts that others will not 'rat them out' because their own economic well-being is based on the same set of behaviors, then the power of reputation as a force for good will be lost. And the economic consequences to the larger society can be profound. JL
 
William Black reports in New Economic Perspectives:

The reality is that accounting control fraud recurrently occurs in “epidemics” and that control fraud is itself criminogenic – fraud begets fraud.

Is Silicon Valley an Echo Chamber?

There was a time, not so long ago, when experts declared that 'industry clusters' were great for business. They fostered innovation and success.  They enabled like-minded individuals to share ideas, seek funding, trade on each other's knowledge and experience, spur new ideas that could quickly grow to scale. Hollywood for entertainment, New York for finance, Washington for politics, Detroit for cars and, of course, Route 128 in Boston (way back when) and Silicon Valley for tech.

But there is a dark side to being a company town. It can become myopic, even incestuous. All of the world's problems are refracted through the prism of that one particular world view. The result can often generate false leads and inefficient use of capital as people, to use one pungent phrase, 'breathe their own exhaust.'

The question is particularly relevant to Silicon Valley, which no longer refers to that area south of San Francisco, but to the whole northern California region. The issue is whether the potential 'solutions' being addressed and addressed are really those of customers, or, as the following article explains, those of the digerati talking to each other. The challenge has been exacerbated by the successes at Apple, whose founder famously disdained the opinions of outsiders and trusted his gut. The resultant hit products have created a culture has become more faith-based than may be practical. 'If you build it, they will come,' seems to be the borrowed mantra. They, evidently, not being smart enough to know what they need or want.

But other industries - say, finance, to pick one out of a hat - have also shown little regard for the rest of the world. And it hasnt ended well. There is a point at which the echo becomes self-reinforcing and the consequences can be disorienting. JL

Nick Bilton reports in the New York Times:

In San Francisco, a bad habit can be the spark that leads to starting a company

Jun 5, 2013

Who Turns Off the US Power Grid First? Iran's Hackers May Be Scarier Than China's

Cyberespionage is bad. Cyberdestruction is worse.

The Chinese intrusions into and thefts from US electronic systems span the spectrum from military secrets to attempts at influencing electronic voting. No one thinks those are positive developments or that they will end anytime soon. Nor, for that matter, that the US will be able to do much more than play catch-up. It's like digital whack-a-mole: stop them here and they show up there. As infamous Civil War General Braxton Bragg once said, 'hit 'em where they aint.'

But the Iranians and their jihadi allies arent all that interested in mere secrets. They are much more determined to destroy US infrastructure from afar. Like the US power grid.

The only question in this coevolutionary battle pitting the already accomplished US team (Stuxnet messing up Iranian nuclear capabilities anyone?) versus the Iranians is whether defense out-thinks and out-works offense - and for how long. And the fun is just beginning to get serious. JL

Dana Liebelson reports in Mother Jones:

To date, Chinese hackers have gotten more public attention, thanks to a February 2013 New York Times investigation of a top-secret government hacking operation based in Shanghai, and high-profile attacks, originating from China, on US media outlets. But experts point out that though China has greater capabilities for cyberwarfare and is actively stealing US military secrets, Iran's attacks could ultimately be more worrisome, because its hackers are targeting critical infrastructure and developing the ability to cause serious damage to the United States' power grid.

The Worm Turns for Apple: Ban of Older i-Devices Thanks to Samsung Patent Infringement

The patent wars, particularly on the Apple-Samsung front, are beginning to look like World War I: a series of hurtful exchanges of legal territory whose ultimate strategic value is utterly meaningless.

Apple won the huge and now largely irrelevant $7 billion judgment against Samsung that set patent attorneys' hearts pitter-patter across the globe. There have been several subsequent iterations, the latest being this ruling from the ITC that claims Apple violated Samsung's patent.

That the devices now banned are older, which in the tech world means hopelessly out of date, even by a year or so, lessens the sting, but not the implication. This is going nowhere. Like the Kaiser, King George and French President Clemenceau in 1918, they keep swatting each other and have little to show for it. The leadership of Apple and Samsung must now hope that they are not the one who ends up like the Tsar of All the Russias: dead at the bottom of a well.

The point is that strategic advantage is not going to be won in the courts. It is going to be gained in the marketplace, the locus of real decisions and value. JL

Susan Decker reports in the Washington Post:

Apple Inc. faces a ban on imports of some older devices including the iPhone 4 after a U.S. trade agency said they infringe a patent owned by Samsung Electronics Co., its biggest competitor in the global market for smartphones.

Jun 4, 2013

Wall Street Hates Facebook. No One is Quite Sure Why

People assume Wall Street or 'the market' has a personality. That it 'cares' about stuff, like leadership or brand or innovation.

But that construct may be utterly delusional, an outgrowth of the desire to assign human characteristics to non-human forms like puppy dogs and i-Phones. Because, in reality, Wall Street and The Market are conglomerations of computers and software and algorithms programmed to look for tiny quantitative aberrations that may provide the discerning and well-endowed with an advantage that, when multiplied over thousands of securities, adds up to a Very Big Number.

So, it is curious that the Computer System Formerly Known as Wall Street 'dislikes' Facebook. There must be something quantitative in there somewhere. Perhaps Mark Zuckerberg's unerring instinct to offend. Or the legacy of catch-up monetization schemes or the lingering questions about whether the company has a strategy and could execute one if it did.  All of which would reduce the net present value of the future cash flows the computers are designed to detect. But whatever that 'it' is, Facebook is either going to have to get used to living without The Street's approval, or figure out what makes it tick. JL

Ryan Tate reports in Wired:

No one can honestly claim they know why Wall Street hates Facebook right now. But it’s clear the social network will have to learn to ignore stock gyrations (and laundry lists of complaints like the one above) if it wants to preserve its long term strategy.

The Iceberg's Tip: US Families Reduce Household Debt to Pre-Financial Crisis Levels

This is good news, make no mistake. But it is also a symptom of a broader and still extant malaise.

American families have continued to reduce their debt levels, at this latest report, to levels below those that preceded the 2007 financial crisis. the problem is that this is borne of necessity, not a newfound commitment to prudent management of household finances.

The reality is that households have still not rebuilt the wealth lost during the crisis and the subsequent recession it triggered and which still lingers. Many are still out of work and too many of those now working are doing so at levels lower than those achieved in the previous jobs. Consumers without the ability to consume constrain the entire economy, making it likely that the de-leveraging process will continue to depress the larger economy.

There is no point in asking what policy makers should do because their positions are dictated by political ideology rather than pragmatic assessment of what might make the most sense for reviving economic growth. This means that each new data point is refracted through the prism of short term political expediency rather than through the mutual advantage to be gained from a more financially secure polity.

Households will hopefully to act prudently, even if their elected representative choose not to do so. The path to eventual recovery leads that way. But as the iceberg analogy suggests, it may take a while to reduce the inherent threat. JL

Jim Puzzanghera reports in the Los Angeles Times:

American families reduced their debt load in the first three months of the year by 1%, bringing it down to pre-recession levels after an uptick in the last quarter of 2012, the Federal Reserve said Tuesday.

The Name Game: Selling Brands for Fun and Profit

It's hard enough with jeans or diet sodas, but imagine the challenges in selling the brand names of newsmagazines that no one under the age of 40 really remembers anymore.

Newsweek was a once venerable brand in the news business. It was one of two newsmagazines - the other being Time - that were respected, even powerful. Their opinion on matters of taste, mores and politics actually mattered.

Out of respect for that legacy, billionaire mogul Sidney Harman bought the name at auction from the Washington Post, which had owned it for decades but could no longer support its unprofitable existence. It was then sold last year to IAC media mogul Barry Diller who many believed would apply his magic touch and revive it. That pipe dream ended when he announced in the past week that he would attempt to sell the name and the archives.

There has been a market for aging, even extinct, brands in the internet era. Consumer goods with catchy, upbeat titles like Fab or Tab have been thought to have some residual value to the aging Boomer market as they mix sentimentality with more money than sense (none of these brands are generally associated with healthful, environmentally sensitive behavior). But since we are in an information age, shouldn't brands based on the conveyance of information be able to command some sort of premium?

Ehhh, probably not. The problem for this brand owner is twofold; first of all, we are now in the era of custom, boutique news. We find the data and the opinions that support our predispositions. In the on-the-one hand versus the other continuum, are heavily committed to the one and dont much care to hear or see the other. Secondly, let's think about the title: Newsweek? How about Newsnanosecond? That would probably be more attuned to the contemporary zeitgeist. 

There may be a market for old magazine covers as birthday gifts for those born in the 'wonder years' before computers. And journalists or librarians may value the reference materials in the magazine's archives though one wonders how much they'd be willing to fork over for that. But the larger issue is that in this information rich society, the legacy value of relatively undifferentiated brands is a buyers' market and they probably dont need a big checkbook. JL

Keach Hagey and Christopher Stewart report in the Wall Street Journal:

Nearly six months after closing the 80-year old newsweekly's print edition, making it digital-only, IAC/InterActiveCorp IACI -0.56%. is exploring a sale of the title, Mr. Diller, who is IAC chairman, said.

Jun 3, 2013

Is Loneliness a Public Policy Problem?

All the talk of the alienation endemic to increasing computer and mobile phone usage has raised a potentially troubling public policy question: what if this behavior is causing problems that may affect public health? And what if that requires tax-funded intervention?

There are rational alternative explanations for the types of behavior western observers are noting. It is conceivable, for instance, that they decline in household income, in employment and in overall financial security which have affected many at the same time as the rise of the internet and related technologies have exploded onto the global consciousness are as or more impactful.

Either way, however, the growth of the condition raises questions about whether public encouragement and even investment in the affecting technologies demands some sort of public response (let's remember, for starters, that a government agency funded and helped create that internet thingy). There is not necessarily a right answer - and there will certainly be little agreement - based on the already hardnosed political positions of those favoring or opposing a role for government in anything. But the more technology becomes a significant and possibly dominant part of our lives, the more its implications will be debated. JL

 Zach McDade reports in The Atlantic:

The share of Americans who report "not feeling close to people" at any given time is 30 percent and growing, and deemed by some a social health crisis.

Microsoft's Office 365 Home Premium Cloud Offers Rare Pay Off

The 'delta' or the speed of change has become an increasingly valued measure of performance. As a culture, we enshrined zero-to-sixty  for cars and path-to-profitability for tech start ups as useful indicators of power. There are many others for different products and professions.

An interesting new test of the efficacy of user buy-in is time to reach one million subscribers. It is no longer enough to simply announce the size and scale of an enterprise's reach and scale. The numbers have become mind-boggling with anything less than hundreds or millions or billions beneath serious consideration.

So it is fascinating to see that Microsoft, rather desperate of late for any sort of good news, let alone some that conveys notions of popular acceptance let alone embrace, has a positive development of this sort to share.

What makes the Office 365 information particularly interesting is that most of the comparisons it draws are with free services, while Microsoft charges for the Home Premium service it offers. The question it raises is whether it signifies something more significant than curiosity or corporate tie-ins with existing products (of of which Microsoft may have provided to favored customers without charge or at discount). The implication, if the answer to the question is yes, this is meaningful, is that contrary to its reputation and recent behavior, the company is listening and learning, which would be quite a cultural change and a potential sign that even organization's dismissed as irrelevant, have resources and abilities that others would be unwise to overlook. JL

Sean Ludwig reports in Venture Beat:

Microsoft’s decision to aggressively push its flagship Office software into the cloud looks like a smart move now that Office 365 Home Premium has passed 1 million subscribers.

Why CEOs Are Terrible At Management

It stands to reason that many CEOs are not very good managers: the data suggest that they are hired, evaluated and compensated on metrics that have little to do with it.

Financial measures based on management of balance sheet, income statement and stock price performance tend to dominate the issues which dominate CEOs' lives. Those are the factors that shareholders and directors appear to care about most. So the component features of those measures tend to be those with which CEOs are predominantly concerned. And, as countless management tomes have informed us, what gets measured gets managed.

The problem is that the world, and particularly the global economy that drives it, has become a more complicated and nuanced place. What works for selling products and services within one's native country is no longer as cut and dried as it once may have been. But actually running a global company, as opposed to one that merely operates globally, is even more challenging. And that is where the current generation of chief executives and the boards of directors who hire them tend to have trouble.

The skills needed to assuage clients, suppliers, employees, politicians, government policy makers and investors are confined to those acquired while studying for the Certified Public Accountants' exam. The so-called 'soft stuff' that helps develop managers, new markets, prickly scientists, dubious acquirees and a host of others who may be essential to the enterprises future success  but who may not give a fig for the subtleties of LIFO vs FIFO or international vs GAAP accounting conventions. But many current or putative CEOs and their boards were already well into the management pipeline before design, software, mindshare and other relatively new concepts took hold. The cost of replacing employees vs treating them like variable costs retains its pull for those uncomfortable with the messy emotional detritus of organizational behavior.

Even some boards, as the following article explains, do not think their CEOs are necessarily as good as they should be, but the compensation arms race and the embarrassment of being jilted for a competitor by a competent leader are sometimes greater concerns than actually managing well in the present. Which accounts for the fact that 41% think the CEO of the company on whose board they sit is in the top 20% yet virtually all pay negotiations set that compensation standard as the goal for recruitment and retention.

Until management builds mentoring, developing and managing others into basic performance calculations, not just evaluations, the gap between managing and measuring will continue to persist. JL

Susan Adams reports in Forbes:

It makes sense that boards are preoccupied with financial measurements. But the attention given to talent development and mentoring is at rock bottom.

Jun 2, 2013

Is Twitter Having An Identity Crisis?

When it comes to business, we prefer as much definition as possible. What do you do, how do you to it, for or to whom, when and where?

This is especially true in tech as markets overlap or are subsumed into each other. Whatever tech function was being performed used to reflect a specific need within the larger purpose of the enterprise. Now, as companies attempt to carve out share for themselves, tech has generally become indistinguishable from and essential to whatever the business mission may have originally been.

Apple continues to focus on the elegance and functionality of its designs. Google is carving out a name for itself as an innovator across the full tech spectrum. Facebook has staked a claim to mobile and advertising. And Twitter...Well, good question.

Twitter has added features, but they tend to be reminiscent of those offered elsewhere. Music, photos, video, etc. The challenge is figuring out a larger point to all this. Consumers want convenience, and business customers are nothing if not slightly more focused consumers of products and services. So, they dont want to waste a lot of their time trying to figure out what is being provided to them. In Twitter's case they have a channel and a platform. They know that lots of hearts and minds are available, but, to do what, exactly?

Twitter is, in many ways, in a stronger position than was Facebook half a year ago. People like it, they use it, they find ways to make it relevant for themselves. But to break through to become truly essential, it will need to help its followers find the business meaning that has been so far, elusive. JL

Adrian Covert reports in CNN/Money:

Over the past five years, Twitter has failed to fully conceive what it wants its core experience -- the broadcasting of short messages from a user to his or her followers -- to be used for.