US still winning in labour mobility, which is not at all surprising but still reassuring given the averse impact the sluggish housing market seems to have had on mobility in the past year.
I still think it’s a bit of a paradox that while labour mobility is much encouraged in the US, it still work counter to the goal that home ownership subsidies offered by the government, which encourages social stability and putting roots down in a community. Which ideally, I suppose, will help one anchor down and develop a sense of community in the short and medium term, but not strong enough to keep one from packing up and driving off in search of better lives if the right opportunity knocks on the door (or none where you happen to be).
An interesting analysis via Freakonomics, comparing social welfare payments in the US to those in Nordic countries.
The Nordic countries collect income taxes on the cash payments made to social welfare recipients at rates that are four to five times the rates paid by American recipients. Then when the Nordic recipients go out to make purchases, they pay consumption tax rates on their purchases that are 4 to 5 times the rate paid by the poor in America. Furthermore, the U.S. government offers a series of tax breaks to promote social welfare that are not found in the Nordic countries.
The difference between the U.S. and the Nordic countries is closed further when expenditures per total population are considered. … If the adjustments for purchasing power are correct, net public social expenditures by government in America in 2003 ranked roughly in the middle of the Nordic countries. Per capita net public social welfare spending in 2003 (in 1990 dollars) in the U.S. was $5,400, while Sweden’s was $6,300, Norway’s $5,900, Denmark’s $5,472, and Finland’s $4,200.
Americans have more opportunity to reach higher incomes because Americans in the upper half of the distribution have much higher incomes than Nordic people in the upper half of their income distributions. On the other hand, households below the 10th percentile in America fare much worse on average than the lowest group in the Nordic countries. Despite a large array of poverty programs, people in the U.S. are falling through holes in the safety net.
Nevertheless, it is undeniable that there is more income inequality in the US. But the study seems to suggest that a high Gini coefficient in the US might have just as much to do with the prevalence of high income earners, as it does with the occurrence of low income earners.
What would be more interesting to see, is whether the differences in redistribution model have an effect on lifetime mobility. I would imagine that a high marginal tax rate over still relatively low incomes – which is the norm in Nordic countries, will dissuade people from leaving all the welfare benefits behind and enter, or re-enter the labour force.
Courtesy of Mutuantfrog, an excellent blog on Japan, I came across this pretty troubling depiction of what the Japanese expect out of life, and what is clearly unattainable given today’s socio-economic configuration.
A recent government white paper found that a large portion of women in their 20s want to be housewives. Not only that, another survey found that around 40% of unmarried women aged 25-35 want a husband who makes at least Y6 million a year. Sadly for them, only 3.5% of unmarried men in that age bracket actually make that much.
This kind of typical post-war middle-class lifestyle is pretty out of reach in a country that’s still struggling through two decades of recession, where the last Prime Minister’s attempt to de-regulate and dismantle the carefully-constructed social contract that included life-time employment, and where society is certain to be confronted with more uncertainty in the near future.
In the translated op-ed , the author suggests breaking down the rigid structure of Japan’s full-time employment system, and make part-time work a more systematic and acceptable feature of Japans labour landscape.
If embraced by the people, I can see how those changes may very well draw out stay-at-home moms into the work force. It may also steady overall future productivity if the policy succeeds in pushing up low birth rates that is plunging the nation into demographic abyss.
But is this really ideal? A more socially acceptable and entrenched part-time work culture will most likely be accessed by women, especially in a still traditionalist society where gender roles persist. Will this kind of labour arrangement be the right transitional model to engage and entice more women into the labour force?
Take a look at the Dutch experience with part-time work.
Back in the 80s, labour force participation of prime-aged women in the Netherlands was one of the lowest in the OECD. Over the next two decades, a part-time work structure gradually emerged and attracted more and more women to the work force. Read more...
What makes one person more ambitious than the next? Is it social factors – upbringing, class, cultural influences, or is it primal – genetically fixed with some kind of temperamental determinism? And is a trait like ambition absolute and unwavering, or is it something more fluid, that is, once dormant, if can be unleashed with the right trigger?
This Time feature finds out.
What I find interesting is how an over-exercise of ambitions can lead to not only extreme stress, but cheating and other moral transgressions.
Cheating was common, and most students shrugged it off as only a minor problem. A number of parents–some of whose children carried a 4.0 average–sought to have their kids classified as special-education students, which would entitle them to extra time on standardized tests. “Kids develop their own moral code,” says Demerath. “They have a keen sense of competing with others and are developing identities geared to that.”
And what better example than those over-ambitious Chinese students (and their parents and teachers) that cheated in a marathon in order to get extra exam credits.
Competitors stood to gain a crucial advantage in China’s highly competitive university entrance exams. Those who finished in under two hours and 34 minutes could add extra points to their score in the gaokao. … The exams are so crucial to the future of Chinese children that both students and their families will go to extraordinary lengths to guarantee success. Last year, eight parents and teachers were jailed on state secret charges after using communication devices – including scanners and wireless earpieces – to help pupils cheat.
The majority of prostitutes working in wealthier European countries come from board, particularly those from former Soviet countries. Free movement of labour, high pay, more lax rules on prostitution, more protection for the ladies, ensure those markets are well-supplied. What attracts knowledge migrants, blue-collar labourers, have the pull on prostitutes.
In Britain, here’s where they come from:
1. Romania (3 in 2006) (12% of migrant total)
2. Russia (1) (9%)
3. Bulgaria (4) (8%)
4. Ukraine (2); Nigeria (5) (7%)
6. Brazil (8) (5%)
7. Belarus (7); Moldova; Poland (6); Hungary; Thailand (9) (4%)
I’m pretty sure the corporate world did not discover the strength of introverted leaders just now, if you consider the myriads of virtues exhibited by those mystical introverts eloquently teased out in this Forbes article.
But it is possible that after the sometime dazzling but on a whole, hugely disappointing decade we’ve been handed by the last crop of business leaders, people are on the look out for a new model.
So are we ready for a new breed of corporate leadership? The thoughtful, silent, wise and stoic type?
I’m reminded of Jonathan Rauch’s excellent essay on introverts.
For one thing, extroverts are overrepresented in politics, a profession in which only the garrulous are really comfortable. Look at George W. Bush. Look at Bill Clinton. They seem to come fully to life only around other people. To think of the few introverts who did rise to the top in politics—Calvin Coolidge, Richard Nixon—is merely to drive home the point. With the possible exception of Ronald Reagan, whose fabled aloofness and privateness were probably signs of a deep introverted streak (many actors, I’ve read, are introverts, and many introverts, when socializing, feel like actors), introverts are not considered “naturals” in politics.
Extroverts are certainly over-represented in politics, it is hard to say whether the same is true for business, given a long list of success the likes of Bill Gates, Warren Buffet, among many more.
I would think the specific role one holds, i.e. founder, CEO, chief strategist, versus marketing director, PR consultant, or VP of sales, is more telling when matched with a certain personality trait, than the vague title of “business leader”.
What to say to friends that are unemployed or laid off?
Stay home and learn, and when you get tired of that, go look for jobs. Occasionally, talk to people: open up, ask for help, and be grateful when you get it.
Amber Johnson from forwarded me this link that features scientifically proven ways to get smart. It includes watching specific types of TV shows that have many overlapping stories, a large cast, moral and plot ambiguities. More obvious suggestions include: learning a foreign language, sleep, listen to music.
Recommendations such as crossword puzzles, chess, and other memory stretching activities are perhaps also equally beneficial for those fighting to stay lucid in old age.
Some surprising ones: playing video games, riding a motorcycle, benefits of aging (our brains reach peak efficiency around 40?), and transcendental meditation.
For a lot of us, the decision of what course or specialty to follow usually got made when we were still teens. However well calculated or arbitrary they might have been, they often set us on a somewhat deterministic path in life. With time, we discover more of who we are, what we like, and what our strengths and weaknesses are. Those later stage discoveries either reinforce the choices we had made earlier, or come into conflict with whom we had grown to become.
Much of the existential angst for young adults centre around the issue of what to do with one’s life. But it always strike me as somewhat counterintuitive, how we have been brought up, and parsed through a system that seem to facilitate, if not actively promote, a somewhat backward way of assessing and arriving at that vital decision. The issue on hand is really the conflict and compromises illustrated by this graph, courtesy of Bud Caddell.
I will not generalize, although I believe this is a common rite of passage for many of us. While still in high school, we choose, or at least look forward to learning more about a field, based on our own social upbringing, family influences, our own interests. But more importantly, we looked at fields of specialty, extrapolated them into careers, and measured them up against prestige, salary, and employment statistics. It was no coincidence that while I was in high school in the late 90s and early 2000s, half of my graduating class went on to study engineering of some kind – the most popular sub-discipline being that of computer engineering. Even though a few years later, the same group could have easily chosen another hot field, finance anyone?
So as a first step in our tentative journey to find our calling, we were guided to look for careers that pay well.
Read more...
A lot of executive research has gone into narrowing down the characteristics that define a great leader. The winner in 2009 is: Mr. Dull. This is no surprise to anyone who’s read Jim Collins’ Good to Great, where he found the best CEOs to be down-to-earth, humble, and diligent individuals that are dependable and follow through on their duties. That was perhaps in direct contradiction to decades of charisma leadership worshipping, where celebrity status had been doled out for the likes of Jack Welch and Lee Iacocca.
Now the reversal is complete. Going from boom to doom, steady growth to certain contraction, the writings on the wall calls out for CEOs that exhibit more substance and less flamboyance, more reliability and less bravado, more resolute sternness over flexibility and shades of grey. This article makes some interesting points on this definitive shift in the sand in terms of this era demands of its leaders, backed up by (obviously) supporting data.
I have several issues with this study and many of the conclusions drawn. One, these studies are done with a definitive need for a clear answer and no shades of grey. One style of leadership will always triumph over the other, regardless of circumstances. Yet I imagine circumstances must have some bearings on the ultimate success of any particular leadership style. For example, leadership needs for an industry in turmoil may be greatly different than an industry that is relatively stable and gets ahead by careful execution.
Secondly, this is clearly the predictable verdict in a bad economy, where, gasp, everyone, from consumers to board members, are looking for security and conservatism. The study may have its merits, but the cynic in me cannot help but feel this is but another stroke of the same populist pandering the paper has been indulging in. When the good times come around again, the tide will most likely turn and all that is condemned and belittled now will reign once again.
Lastly, I can hardly believe that charisma and reliability are always mutually exclusive. Although that is hardly the conclusion drawn here. In summary, the study found the following. Read more...
Technology has enabled real-time feedback. What used to take days, a team of customer representatives, and myriad of layers to get through to management, is now just an email, Twitter, or forum posting away. Businesses are now frantically scrambling to deal with an unprecedented amount of feedback – many unsolicited, and are working on a credible and systematic way of incorporating said feedback into its strategy and execution cycles, product development, customer service, distribution and all other facets of operations.
It’s certainly worked out well for a lot of businesses, particularly those focused on unique customer service propositions. Dell, Zappos have excelled in this. Motrin, not so much. Observation so far: soliciting and processing feedback is a positive attribute for established businesses that are hoping to connect further with its existing customer base. But what about projects or businesses in the start-up phase, what role does feedback play in those?
Freakonomics has an interesting take on the potentially negative side of feedback. True innovators seek to surpass expectations, and make truly amazing products that many of us didn’t know we needed. The idea of crowd-sourcing certain appeal to the demographic, transparent, and two-way communications principles espoused by the internet and new methods of communication. But as much as we eagerly embrace the potential of such endeavours, products that took the market by storm emerged mostly out of a small team of individuals.
Apple came out with IPods, not because the market or consumers demanded it, but because the innovators envisioned a future that had yet to materialize, which is something that entrepreneurs are good at. Polling an existing class of customers for what they would want or expect from a product-in-progress would hardly be of any use. Without any vested interest in the product itself, nor a compelling vision of its end-use, you get mediocre feedback that matters little. Even Threadless – arguably THE poster child for crowd-sourced success, the business model behind the brand was the one thing that had little to do with feedback. Read more...
Loss aversion is not a new theory. The basic premise of the idea describes our strong preference to avoid losses versus our desire for gains. In laymen’s term, we are supposed to feel more displeasure from losing 10 bucks, than the pleasure of gaining 10 bucks. As a result, even when logic implies one should take the loss and move on, many do not.
An obvious example would be stock market behaviour, where signs of loss prevention lurk at every turn. Many investors refuse to sell stocks at a loss even when all signs point to more price drops. The rationale behind such behaviour is that as long as one owns the stock, the price may recover.
In a book named Sway: The Irresistible Pull of Irrational Behaviour, the authors described two scenarios of irrational behaviour attributed to loss aversion. Neither were good for the pocketbook. The first case was an experiment conducted by a business professor on his unsuspecting students: auctioning off a 20 dollar note in class. The game was simple: everyone was free to bid, and the winner takes the note. But one wrench was thrown in: the second highest bidder must also pony up his or her last bid once bidding finishes. The result is unsurprising to adherents of the loss aversion theory: desperate to prevent loss, the two bidders would eventually bid the price up to much higher than its 20 dollar face value. The highest bid once surpassed 200 dollars.
The second case would make every investor cringe in pain, probably because most have experienced it first-hand, albeit (hopefully) on a lesser scale. It chronicled the disastrous investing experience of a startup millionaire who had put all his money into a bio-tech stock (first and second mistakes there), then stubbornly refused to sell as price slid. Eventually, the forty something dollar share became virtually worthless at less than a dollar. So much for loss prevention.
Similarly, this can be used to partially explain various irrational, yet common behaviours we exhibit in our personal and professional lives. People have stayed in relationships that do not work for much longer than necessary, simply because the potential loss of their emotional “investment” is too large to handle. Read more...
I am beginning to wonder if mainstream education and conventional wisdom is treating entrepreneurship all wrong. Last week, I had a conversation with my boss-in-start-up, who introduced the term the “iterative process” into my business vocabulary. Today, I came across this eye-opener.
The article, and the paper discussed, questions if there is any fundamental difference between the way MBAs and your average boot-strapping entrepreneur bring product ideas to market. And the answer is a resounding yes.
1. Change the question.
During the research, it was found from the get-go, the two groups appear to attack two potentially different sets of problems. Entrepreneurs prefer to be in an unpredictable market, since the market can “be shaped through their decisions” as well as their select group of stakeholders and customer-partners. Reasoning that someone smarter and with deeper pockets can always come in and do it better than they do, many entrepreneurs stay off the beaten track and experiment with new markets themselves.
The researcher attribute this behaviour to to the logic: To the extent that we can control the future, we do not need to predict it. Whereas most MBAs are taught to act based on the assumption and logic that: To the extent that we can predict the future, we can control it.
2. Conqueror vs. explorers.
Alas, the paper is full of analogies like these. Actions of MBAs are compared to Genghis Khan, whom given a pre-determined goals and set of means, seek to identify the optimal route and result. An entrepreneur, on the other hand, is compared to Columbus, whom does not begin with a specific goal, but a given set of means. They allow “goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with.”
3. Dealing with setbacks. Read more...
During the past year, business education institutions have been dealt some severe blows. Perceived greed, lack of foresight, and general incompetency of many offending CEOs have been traced back to those hallowed halls that minted MBAs.
But business schools and MBAs are not the only source of business training around. Letters behind the names of bankers and investment professionals tell another story. For years, professional organizations have been churning out certified accountants (CA, CMA, CGA) as well as investment professionals. The most prominent and prestigious one has always been the Chartered Financial Analyst (CFA) designation.
This professional designation is known for the breadth of knowledge it offers, its highly challenging curriculum, as well as its strict code of ethics by which it binds its members. The predecessor to the current CFA institute was set up in 1947 to boost the credentials of finance professionals. Nowadays, it sets the gold standard among investment analysis designations.
The rise of banking, wealth management, and hedge fund industries during the last few decades have elevated and subsequently put a premium price on anybody with a CFA designation. In Bill McGinnis’ opinion, a CFA charter can be more important than an MBA degree. As the president of Exponential Careers and a CFA charterholder, he views the successful completion of the program as something highly regarded by employers. If someone has earned the CFA designation and has significant professional experience, many employers may even view a MBA unnecessary.
But with poor performance in the investment industry and massive stumbles of the banking industry, I wondered if a CFA designation’s reputation had been in any way tarnished. A large proportion of the curriculum focuses on derivative pricing, including the valuation of MBS and ABS. One way or another, the mishandling of those complex instruments contributed to the downfall of the banking system. So given the across-the-board failure of most investment advisory firms, rating agencies, hedge funds and wealth managers, are principles espoused by the CFA designation still relevant? Read more...
I know a number of people who are in the process of starting up their business. It’s an exciting time, but also an uncertain time. Aside from the usual challenges faced by an entrepreneur: fumbling in the dark, making constant adjustments, overstretched and overworked by a myriad of tasks ranging from sales to technical support. But one thing that may ultimately separate success from failure is whether a budding entrepreneur can deal with the dichotomy that exists between his lofty vision and the daily grind.
Start with a vision
For professionals that foray into business for themselves, there usually exist visions of ecstatic social or financial breakthroughs. Needless to say, those businesses are most likely not going to be your neighbour 7/11 or Subway franchise. Not everyone sets out to change the world, but they are looking for meaningful financial returns, along with personal satisfaction in order to justify the risks they have taken with the startup.
Must bridge gap between fantasy and reality
Once the euphoria of the initial phase wears off, the industrious entrepreneur finds himself having to bridge the gap between that vision of success and the relatively uninspiring reality. Even if you are a serial entrepreneur with an enviable rolodex of your respective industry and a solid wad of cash in your back pocket, the initial phases of any business are not for the faint-hearted. The most revolutionary and unique ideas are also the most far-fetched. It requires tenacity, imagination, and an incredible, almost delusional amount of optimism. This process requires one to place all pieces of the puzzle on the drawing board, move them around, take some off, and add them back on. Rinse and repeat. Many businesses cannot even get through this phase, and fold before they begin.
Dealing with the daily grind
Many entrepreneurs nowadays bootstrap themselves up from the ground up. That means no secretary, research assistant, filing clerks, or even office space before the businesses turn a profit. It involves an inordinate amount of grunt work that may not be entirely familiar to those that came off the corporate ladder. What, no scanning over the networks, and nobody to take care of travel arrangements? Agility is a must. Because like it or not, you are now the jack of all trades. Read more...
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=22899cc6-d63e-4da9-8560-2984a6356d25)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=6ed443e6-0215-4345-838f-9e348ddcdae8)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=c7ff3d17-8a0d-440d-8f69-4e883fb96c84)
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=cfceaf33-1b3e-4642-97ce-87dcde70aa65)
Laura Davis: The thing that I love about European vacations is that they can be so much longer than U.S. ones. They get soooo much... 
Bad Credit Auto Loans: Well, the fact's are that there are going to be people on the top and the bottom,... 
DoctorJ: I agree completely that Ayn Rand was a typical Russian reactionary, with neither a proper... 
Dana: A somewhat unexpected Cup this year, no? Which one are you cheering for?