Why Repressing Emotions Is Bad for Business

.........
Many of the ones that arise in your everyday communications and conflicts stem from five predictable core concerns: appreciation (recognition of value), affiliation (emotional connection to others), autonomy (freedom to feel, think, or decide), status (standing compared with others), and role (job label and related activities). By addressing those concerns proactively, you can steer a potentially negative conversation to a positive place and thus extract greater cooperation from your superiors, colleagues, and reports. .....

A Flair for the Unconventional

WHEN I was a teenager living in New Delhi, I read "The Fountainhead" by Ayn Rand and decided I wanted to be an architect. My parents wanted me to be a doctor, but I stood my ground and took the entrance exam to study architecture.

Admission to college is very competitive in India, especially for a professional degree. At the time, there were about 2,000 students competing for about 28 openings in the School of Planning and Architecture. I was one of six women admitted.

I have a history of doing unconventional things. After I graduated from college, I saw an ad for a beauty contest and entered it for fun. I had no expectations. I grew up in a family where girls were encouraged not to attract attention to themselves, so this was more a rebellious act than any desire to win. To my surprise, I came in second. I was offered a modeling contract, but I had bigger plans. I left for the United States two months later.

I had worked in architecture for a year in India, and I wanted to get a master's in my field here. The semester had already started in that program, however, so I got a master's in management information systems instead. I also got married. It was an arranged marriage.

My last salaried job was working in information technology for Edward Jones, the investment firm. They had a program where I could work at home, which seemed attractive because I had two small children. But when they told me the hourly rate compared to my annual salary, I thought, "Is that all, for my qualifications?"

My husband tried to talk me out of starting a business. "Why do you need to do something different?" he asked. I had seen my parents struggle, and I wanted a better life. "I have to," I told him. I was ready to fail. I started cold-calling and attending networking breakfasts. I wrote a business plan with the help of the Small Business Administration. I was lucky to get a few contracts and felt I owed nothing but outstanding service to these clients for putting their trust in me.

The early years weren't easy. I was always trying to keep costs down, so I'd take late-night flights and look for the cheapest rental cars. Once I took a late-night flight to Arizona and couldn't find my way around. I ended up in the desert and it was pitch black. I wanted to put my head on the steering wheel and cry. Another time, in Washington, I hailed a cab to take me to a meeting. The cab driver, who had just arrived in the country, drove around for two hours. I was afraid I was being kidnapped. This was before cellphones and I was late to the meeting.

It was sheer luck that we were able to survive when the technology bubble burst. A majority of our clients have always been government organizations. A few people said that wasn't too smart, but it saved us. We saw a lot of our competitors go under. I never understood the dot-com hype, and the business model just didn't make sense. I see the same thing now with the overvaluation of offshore companies.

The lessons I learned early in life helped me immensely in making a company grow. My mother used to teach night school and wasn't there when I got home from school, so I learned how to fend for myself. When I was 12, she visited the United States for several months, leaving the household responsibilities to me. I had to learn how to use my time and energy wisely. I learned survival, which is what business is all about. I've also learned that as a leader, how kind you are is more important than how much you know.

Two years ago we put a great deal of time and money into landing a new client in Texas, but the company chose three large multinational companies instead. I said fine, remember us. I got busy with other ways to strengthen the company. The client called recently and said one of its suppliers was not performing. They gave us the contract instead. Persistence pays.

Today's Tip

Advice from the experts-

Economist.com

September 13, 2005

Break Bread with Your Banker

I'm a banker by training, and I always say you really need a quality banking relationship. And if you don't have a relationship you're comfortable with, you need to change. Banks are critical. They can be one of the best partners you can possibly have -- but you need to be comfortable with the people you deal with. You need to know more than one person.

Ken Yancey
CEO
SCORE
Washington, D.C.

05:00 AM | | Comments (0)

September 12, 2005

Put People First

I think the absolute key to running any business is having the capability to look after people -- to inspire people, motivate people, and to put people first. And if you can collect around you a great group people who passionately believe in what you're trying to achieve, and if look after them, you will succeed.

Sir Richard Branson
CEO
Virgin Group
London

05:00 AM | Management & HR | Comments (0)

September 09, 2005

Acknowledge Mistakes Sooner, Not Later

Successful companies take calculated chances when launching new products or beginning new ventures. Many times new ideas are successful and contribute to a company's increase in revenues and profits. However, mistakes are also a part of the process, and knowing when to admit defeat can save valuable time and money.

For the most part, you and your managers know when a mistake has been made. Stepping up to take responsibility shows real leadership. The faster you fix problems, the less mistakes cost. It also leads to greater respect from the organization. Hiding from the truth is like a cancer that can spread quickly and disenfranchise a company's greatest assets -- its employees.

Chris Indelicato
Owner and CEO
Delicato Family Vineyards
Napa, Calif.

05:00 AM | Management & HR | Comments (0)

September 08, 2005

Identify Organic Growth -- and Build Upon It

Look at what end of your business is growing organically. Find out where things are flowing naturally, and then veer in that direction. Don't push the side of the company that's not moving quickly or not what you expected it to be. If you follow the natural growth of your company, you'll be successful even if it's not in the way you originally envisioned success.

Elise Okrend
Co-Founder
Mixed Blessing
Raleigh, N.C.

05:00 AM | Sales & Marketing | Comments (0)

September 07, 2005

Let Work Guide Your Life

For entrepreneurs and small-business owners, balancing work and nonwork roles can be a heightened challenge. Starting up and running one's own business can at times seem to be an all-consuming activity. Prioritizing and clarifying what's important to you in both work and nonwork roles is critical for achieving balance.

Moreover, instead of getting mired in work/life conflict, using these conflicts to identify inefficiencies in the way work is done can be very important. Finally, achieving work/life balance isn't only about avoiding conflict but also about recognizing opportunities for synergy between work and nonwork roles, such as identifying key knowledge, skills, and social connections that can be transferred from one role to the other.

Nancy Rothbard
Assistant Professor of Management
The Wharton School
University of Pennsylvania
Philadelphia

05:00 AM | Management & HR | Comments (0)

September 06, 2005

Explore Your Neighborhood

The success or failure of a new specialty retail store is the result of how much time the new store owner spends on developing creative ways to build their business, rather than building out their store. Hire qualified professionals to build out your store and then get out of the way. There is no money to be made overseeing construction and physically getting the store up and running.

Your startup time should be spent doing all the things necessary to let people in your neighborhood know who you are and what you do. You should also study successful businesses in your neighborhood and figure out what they're doing right. You might also want to consider introducing yourself to successful owners of retail stores in your neighborhood. You'll be pleasantly surprised at how helpful they can be. If you think that all you have to do is open your door and then stand behind your cash register to succeed, you're doomed to fail.

Bruce Olans
Principal
Total Resource Group
Lincolnwood, Ill.

05:00 AM | Getting Started | Comments (0)

September 02, 2005

Form Your Own Kitchen Cabinet

It's never too early for an entrepreneurial board of advisers, if you think of them as a small circle of experts from whom you gain guidance and mentorship that's relevant to your major business questions. Please note, these people are not to be primarily considered as sources of free consulting to help you with your business tactics, but more as strategic guides and mentors. They can help you think through your direction and also help you connect with people who might provide more tactical types of assistance.

Selecting the right folks is one of the first challenges. For example, if your accountant or your attorney is on your board, it instantly becomes difficult to talk through strategic issues that might result in a change in professional providers. A second challenge is to be prepared to change advisers as you and your company change. If you build an understanding of timing into board membership when you first approach potential advisers, it makes changing members easier to deal with graciously as you grow.

Patricia Greene
Dean, Undergraduate School
President's Endowed Chair in Entrepreneurship
Babson College
Wellesley, Mass.

05:00 AM | Management & HR | Comments (0)

September 01, 2005

Convince Customers to Preach Your Gospel

There are only three ways to increase sales. Increase the average transaction amount. Get your customers to purchase more frequently. Or get more customers. But if you can create a truly remarkable experience that builds a base of fiercely loyal customers, who act like apostles for your brand, you increase sales all three ways at the same time.

Jack Mackey
Vice-President
Service Management Group
Kansas City, Mo.

05:00 AM | Sales & Marketing | Comments (0)

August 31, 2005

Always Guard Your Front Door

Today's security threats require more than a "plug and play" firewall system. To properly protect your networks, IT staff must not only deploy the firewall, but monitor and manage it as well. A properly installed firewall should be monitored 24/7 for threats and attacks, and be capable of handling virus definitions and content management.

Lonnie Helgerson
CEO
Expetec Technology Services
Aberdeen, S.D.

05:00 AM | Operations & Technology | Comments (0)

August 30, 2005

It's O.K. To Start Small

You don't need a lot of money to start a business. I see a lot of people not venturing forth because they think they have to get big-time financing. I really believe in the start-in-your-garage philosophy.

Linda Phillips-Jones
Co-Founder and Principal Consultant
The Mentoring Group
Grass Valley, Calif.

05:00 AM | Getting Started | Comments (3)

August 29, 2005

Solve a Problem... Or Find a New One

When generating ideas for a new venture, you may take one of the following two strategies:

Start with the problem to be addressed and brainstorm potential solutions. Generate a new approach to an old problem.

Or you could start with the solution or technology to be used and brainstorm potential applications. In other words, take an old approach to a new problem.

Make relatively small investments in sequential entrepreneurial "experiments," creating the opportunity (but not obligation) to commercialize or proceed with the result.

David Hsu
Management Professor
The Wharton School
University of Pennsylvania
Philadelphia

05:00 AM | | Comments (1)

August 26, 2005

Opportunity Doesn't Knock -- It Answers

You have to go out and find opportunity. If you're an entrepreneur, it's not going to knock on your door. Opportunity doesn't even know where you live, it doesn't know your wife and kids, it doesn't know what a great person you are. As an entrepreneur you have to get up from behind your desk, go down the street, and knock on every door, and maybe opportunity will answer.

That's the biggest thing that I tell folks. If you want to be successful in business, you have to go out and find opportunity, because opportunity will not find you. Again, its all about relationships. The old adage "it's who you know and not what you know" is so true. It really is, because those relationships are the ones that bring you the opportunities.

Tim Knox
Co-Founder
eLab Ventures
Huntsville, Ala.

05:00 AM | Getting Started | Comments (0)

August 25, 2005

Sometimes You Have to Work for Free

Give away your services for free and do pro bono work in the community. For me, I've found it's one of the best ways of marketing your business -- it demonstrates your prowess and expertise. People don't always know your work, and you think just cold calling them will get them to hire you. But people like to work with people they know.

On our Web site, we offer a free media training guide. Most people aren't going to do that themselves. They'll read it, and when it's time for them, they'll call and hire me. It does come back to you.

David Landis
President
Landis Communications
San Francisco

05:00 AM | Sales & Marketing | Comments (0)

August 24, 2005

Rent Before You Buy

If you're an entrepreneur looking into office space for the first time, don't even think of buying. You want to rent. Make sure you get a "good guy" clause in the lease. It allows you to get out of the lease if your business venture doesn't work out. And you and the landlord can still remain friends.

Faith Hope Consolo
Chairman
Retail Leasing and Sales Division
Prudential Douglas Elliman
New York

05:00 AM | Getting Started | Comments (0)

August 23, 2005

Stand Out from the Crowd

The most important thing is to get your positioning as "right" as possible. You want to be perceived by your target market as better than the competition on some attributes that leverage your firm's distinctive competence, so as to have some durable competitive advantage. Every marketing activity then has to strengthen this perception.

Tactically, don't let anyone tell you that you can't measure the impact of your advertising and promotion. Especially for small businesses, it's relatively easy and inexpensive to keep track of the data you need to make these evaluations. They won't be as precise as other accounting entities, but they will be precise enough to make very productive decisions on which campaigns to do more of and which to stop.

Last hint -- don't be afraid to be different and innovative. Those are the concepts that are typically most successful. (Advertising on the backs of the Chinese fortune cookies, which serial entrepreneur Josh Kopelman introduced, is just one example.)

Leonard M. Lodish
Marketing Professor
Vice Dean, Wharton West
University of Pennsylvania
Philadelphia

the most highly compensated HR (human resources) manager ever.......

Google's ex-Microsoft exec can recruit in China

By Elinor Mills, CNET News.com
Published on ZDNet News: September 13, 2005, 11:52 AM PT

A former Microsoft executive can immediately begin recruiting staff for a Google development center in China, rather than waiting until after a January trial, a Washington state judge ruled Tuesday.

Microsoft had asked the King County Superior Court to extend a temporary order banning Kai-Fu Lee from starting the work he was hired to do at Google, arguing that it would violate a one-year noncompete agreement he signed when he became a Microsoft vice president in 2000. Google argued that the contract does not prevent him from doing recruiting work in China.

In his 13-page ruling, Judge Steven Gonzalez restricted Lee to recruiting for Google in China and to talking to government officials about getting a license to do business there but said Lee cannot work on technologies such as search or speech. Lee also cannot set budgets or salaries, or decide what research Google will do in China, according to the order.

Redmond, Wash.-based Microsoft sued Google in July, when the search company announced plans to hire Lee to help lead the launch of a China research and development center. Microsoft claimed that Lee should be prohibited from doing any work at Google similar to what he did at the software giant and that he was privy to Microsoft company secrets that could give Google an unfair advantage.

Mountain View, Calif.-based Google contended that the work Lee will do for it is not the same as what he did for Microsoft in China and that the noncompete agreement he signed is not valid in California or in China.

"We are really pleased with the judge's order," Tom Burt, deputy general counsel for Microsoft, said Tuesday. "For $10 million, (Lee) can interview students and be a leasing agent," he said, referring to Lee's purported salary at Google. The order "reduces him to being, at least until the outcome of trial, the most highly compensated HR (human resources) manager ever."

Google did not return an e-mail seeking comment. (Google representatives have instituted a policy of not talking with CNET News.com reporters until July 2006 in response to privacy issues raised by a previous story.)

Universities

How Europe fails its young

The state of Europe's higher education is a long-term threat to its competitiveness

THOSE Europeans who are tempted, in the light of the dismal scenes in New Orleans this fortnight, to downgrade the American challenge should meditate on one word: universities. Five years ago in Lisbon European officials proclaimed their intention to become the world's premier “knowledge economy” by 2010. The thinking behind this grand declaration made sense of a sort: Europe's only chance of preserving its living standards lies in working smarter than its competitors rather than harder or cheaper. But Europe's failing higher-education system poses a lethal threat to this ambition.

Europe created the modern university. Scholars were gathering in Paris and Bologna before America was on the map. Oxford and Cambridge invented the residential university: the idea of a community of scholars living together to pursue higher learning. Germany created the research university. A century ago European universities were a magnet for scholars and a model for academic administrators the world over.

But, as our survey of higher education explains, since the second world war Europe has progressively surrendered its lead in higher education to the United States. America boasts 17 of the world's top 20 universities, according to a widely used global ranking by the Shanghai Jiao Tong University. American universities currently employ 70% of the world's Nobel prize-winners, 30% of the world's output of articles on science and engineering, and 44% of the most frequently cited articles. No wonder developing countries now look to America rather than Europe for a model for higher education.

Why have European universities declined so precipitously in recent decades? And what can be done to restore them to their former glory? The answer to the first question lies in the role of the state. American universities get their funding from a variety of different sources, not just government but also philanthropists, businesses and, of course, the students themselves. European ones are largely state-funded. The constraints on state funding mean that European governments force universities to “process” more and more students without giving them the necessary cash—and respond to the universities' complaints by trying to micromanage them. Inevitably, quality has eroded. Yet, as the American model shows, people are prepared to pay for good higher education, because they know they will benefit from it: that's why America spends twice as much of its GDP on higher education as Europe does.

The answer to the second question is to set universities free from the state. Free universities to run their internal affairs: how can French universities, for example, compete for talent with their American rivals when professors are civil servants? And free them to charge fees for their services—including, most importantly, student fees.

The standard European retort is that if people have to pay for higher education, it will become the monopoly of the rich. But spending on higher education in Europe is highly regressive (more middle-class students go to university than working-class ones). And higher education is hardly a monopoly of the rich in America: a third of undergraduates come from racial minorities, and about a quarter come from families with incomes below the poverty line. The government certainly has a responsibility to help students to borrow against their future incomes. But student fees offer the best chance of pumping more resources into higher education. They also offer the best chance of combining equity with excellence.

Europe still boasts some of the world's best universities, and there are some signs that policymakers have realised that their system is failing. Britain, the pacemaker in university reform in Europe, is raising fees. The Germans are trying to create a Teutonic Ivy League. European universities are aggressively wooing foreign students. Pan-European plans are encouraging student mobility and forcing the more eccentric European countries (notably Germany) to reform their degree structures. But the reforms have been too tentative.

America is not the only competition Europe faces in the knowledge economy. Emerging countries have cottoned on to the idea of working smarter as well as harder. Singapore is determined to turn itself into a “knowledge island”. India is sprucing up its institutes of technology. In the past decade China has doubled the size of its student population while pouring vast resources into elite universities. Forget about catching up with America; unless Europeans reform their universities, they will soon be left in the dust by Asia as well.

Flat income tax

A dip in the middle

Sep 8th 2005
From The Economist print edition

The Conservatives toy with a politically risky idea

INCOME tax has been paid in Britain for more than two centuries. First introduced by William Pitt the Younger to finance the war against Napoleonic France, it is the Treasury's biggest source of revenue, raising 30% of tax receipts. It arouses strong political emotions, regarded as fair by some because it makes the rich pay a bigger share of their income than the poor, but unfair by others because it penalises enterprise and hard work.

During the past 30 years, income tax has been subject to sweeping changes, notably the cut in the top rate from 98% to 40% under Margaret Thatcher between 1979 and 1988. Now another Conservative politician, George Osborne, is floating a radical reform to match that earlier exploit. The shadow chancellor announced on September 7th that he was setting up a commission to explore the possible introduction of a flat tax in Britain.

Mr Osborne's big new idea stems in part from frustration at the Conservative party's failure to win votes on tax in the past two elections. Their proposal to cut taxes by £4 billion ($7.4 billion) a year did them few favours at the polls in May. Such a paltry reduction in a trillion-pound economy seemed an apology of a policy.

By contrast, the introduction of a flat tax would be a radical step. The reform is already being tried elsewhere. Mr Osborne first expressed interest in the flat tax after a visit in June to Estonia, which introduced it in 1994. Since then eight other countries in eastern and central Europe have followed suit. Poland appears likely to adopt a flat income tax. Even Germany is flirting with the idea (see article).

Introducing a flat income tax into Britain would involve two main changes. At present, there are three marginal tax rates. The first £2,090 of taxable income is taxed at 10%; the next £30,310 is taxed at the basic rate of 22%; and income above that is taxed at the higher rate of 40%. These three rates would be replaced by a single rate, which would be considerably lower than the current top rate. At the same time there would be an increase in the tax-free personal allowance, currently worth £4,895.

Flat-tax proponents say that the reform would yield many economic benefits. If it were combined with an assault on other tax reliefs, then it would simplify a tax system that is groaning with complexity. The latest edition of “Tolley's Yellow Tax Handbook”, which contains all direct-tax legislation for 2005-06, runs to four weighty volumes and has roughly doubled in length since Gordon Brown became chancellor of the exchequer in 1997. Only this week, Mr Brown was upbraided by a parliamentary committee for the complex “nightmare” of his system of tax credits, designed to help poorer families.

Another advantage is that reform could sweep a lot of low-paid people out of income tax altogether. In the past eight years under Labour, the number of income-tax payers has risen from 26.2m to 30.5m. Over the same period, the number of higher-rate taxpayers has risen from 2.1m to 3.6m.

Flat-tax fans also think that it could trigger a new economic dynamism, as people respond to the enhanced incentive to work harder. The more this happens, the more the reform could pay for itself as a bigger economy generates more tax revenues.

So much for the economic case for a flat tax. What of its politics? One obvious objection is that the reform would be unfair, since the richer would pay less tax than they do at present. Advocates of a flat tax make two rejoinders. First, an income-tax system with a single rate remains progressive—the rich pay a higher proportion of their income than the poor—as long as it is combined with a tax-free allowance. Second, the rich can exploit current complexities to avoid taxes in ways that could be curtailed in a flat-tax system.

But could a flat tax be introduced without there being losers? A recent paper from the Adam Smith Institute suggested that this would indeed be possible. Richard Teather, its author, proposed a flat-rate tax of 22%, the present basic rate, with a tax-free personal allowance of £12,000, more than double the current one. “All taxpayers would be better off under the reform,” he argued.

However, the proposal has an obvious flaw. As Mr Teather himself admits, it would result in an initial loss in revenue of £50 billion a year. That is over a third of the total income-tax receipts of £138 billion that the Treasury expects this year; and a tenth of all government revenues.

Unless public spending were slashed, other taxes would have to rise to meet this shortfall. So a more realistic simulation of the impact of a flat tax is to make it revenue-neutral. The Economist asked John Hawksworth, an economist at PricewaterhouseCoopers, an accountancy firm, to calculate what that might involve. He said the current yield of income tax could be preserved with a flat rate of 30% and a personal allowance of £10,000. We also asked Mr Hawksworth to estimate what impact such a reform would have on income-tax payers. Under this revenue-neutral approach, there would be losers as well as winners compared with current tax bills (see chart).

Those who would gain are low-earners as well as high-fliers. For example, someone on £10,000 would gain 8.7% of their income; someone on £100,000 would gain 5% of their income. Those who would lose are in the middle, with losses peaking at 3.5% of income at the current higher-rate threshold of £37,295. In all, more than 10m income-tax payers—a third of the present number—would lose from such a reform.

Clearly, different combinations of allowance and tax rate would generate different results. But the general pattern would remain the same. “If you raise the same revenue but increase the allowance, then it is the people in the middle of the income tax paying population that lose from a flat tax,” says Christopher Heady, head of tax policy at the OECD.

This finding is politically awkward for the Tories. Unless a flat income tax were financed by big increases in other taxes, it is difficult to see how it could realistically be introduced without exacting a lot of pain among middling earners. Yet their votes will be crucial if the Conservatives are to stand any chance at the next election.

The flat tax is an arresting idea—and politically attractive because it gives the Tories a platform to attack Labour's itch to meddle with the tax code—but it does not get the Conservatives off the hook. Mr Osborne wants lower and simpler taxes. However, he will be able to achieve that goal only if he can work out a convincing set of proposals to cut public spending.

Ms. Dolly Lenz - Real Estate Queen of New York - Economist.com Read

Face Value

New York's real-estate queen

At the top of the market with Dolly Lenz

AT $31.5m for 500 square metres of living space, the penthouse at 502 Park Avenue is a pricey bit of property even by the exalted standards of Manhattan. But what the heck. It has two terraces overlooking Central Park, you can see for miles, and when Dolly Lenz is showing it the view in every direction is one of boundless optimism. Let others manage without a 42-windowed Italianate drawing room, a heart-shaped double staircase, white-oak floors sawn from trees personally selected in the Allegheny mountains by Donald Trump Jr and a choice of three elevators—one for the servants, one that you share with the other billionaires in the building and one that is yours alone. But you deserve these things, and to get them you go to Ms Lenz, the top real-estate agent in a city that is obsessed by real estate to the point of derangement.

The average selling price of all apartments in Manhattan passed $1m last year, and is now around $1.3m. At the top end of the market, where Ms Lenz and three or four rivals hold sway, the surge has been more spectacular still—or alarming, if you happen to be out of the market. Apartments with four bedrooms or more, the sort of thing found mainly on the posh Upper East Side or Upper West Side of the city, more than doubled in price between the second quarter of last year and the second quarter of this year, according to Miller Samuel, a property-valuation firm. Across the United States, house prices have been rising at their fastest rate in 26 years, thanks to cheap mortgages (see article). The willingness of homeowners to borrow and spend against this paper wealth has helped America's economy to go on growing briskly, at least until now, despite rising interest rates and record-high petrol prices.

Ms Lenz is an engagingly chatty and precise New Yorker of 47, an accountant by training, born with a Blackberry in one hand and a Chanel bag in the other. She reckons to have sold more than $4 billion worth of property in her 20-year career, and to be selling now at the rate of $400m-450m a year. Her firm, Prudential Douglas Elliman, part of the Prudential Real Estate network, vies for leadership of the Manhattan market with Corcoran, part of the Cendant group. Steven Gaines, author of “The Sky's the Limit”, a gossipy new history of the New York property market, calls her “a powerhouse that no one [can] touch”. She sold almost $400m worth of apartments in the Time Warner Centre on Columbus Circle, which opened last year, and where record prices pushed up the whole top end of the market. Late last year she sold an estate on Long Island for $45m, the highest price ever paid for a New York residence.

Ms Lenz credits the current boom to a mood swing among the rich after the attacks on the World Trade Centre four years ago this week. The market sagged briefly along with the rest of the local economy, she says, but then came roaring back, especially at the top end, when people with money decided that they should enjoy life while it lasted, and that if New York could survive 9/11, it could survive anything.

Another big change in the market, says Ms Lenz, has been the arrival of the “hedge-fund guys”. Fifteen years ago she was selling to doctors and lawyers as well as bankers, most of them wanting an eight-room apartment for life somewhere on the Upper East Side. Now, along with international investors and a few celebrities, her biggest customers are hedge-fund managers and other Wall Street lions who expect to change properties after two or three years like other people change cars. She tells of one hedge-fund manager, 33 years old, who bought a $24m apartment in an hour, explaining that he had “just bought a $19m painting at Christie's, and he was not going to put it up on a $2m wall”. The potential buyers for the Park Avenue penthouse include another “hedge-fund guy” she says, and a “royal-family-type person”.

The developer at Park Avenue, Donald Trump, whose grandiose buildings bestride New York, has played a big part in Ms Lenz's success. He backed a road show that she took to Hong Kong in 1991, selling apartments in an earlier Trump building. She found that Asia's new rich would buy four or five New York apartments at a time, for investment, much as they did with property at home, and she was happy to oblige. Bulk buyers—many from overseas—now make up roughly half her business, usually seeking condominium apartments that they can buy outright. The collectively-owned “co-op” apartment buildings more common in New York are prone to reject absentee landlords as buyers, and anybody else who might ruffle their composure. A few years ago Ms Lenz sold Barbara Streisand's apartment on Central Park West to Mariah Carey, another popular singer, only to have the deal blocked by a residents' committee which balked at the team of bodyguards accompanying Ms Carey to her interview.

Ms Lenz sounds as bullish as you might expect when she talks of the prospects for the New York market now. She sees some froth, but no bubble. Another point on interest rates is not going to worry many of her buyers, she says, although a crisis in the hedge-fund industry would certainly hurt. With so much money heading downtown into loft conversions in Chelsea and Tribeca, she says, the Upper East Side is even looking relatively cheap these days. It is all a matter of supply and demand, and she sees the right amount of both.

She may be right. And yet when a particularly grand townhouse on Fifth Avenue is on the market for $50m, and when every able-bodied New Yorker seems to be retraining as a real-estate agent in the hope of emulating Ms Lenz, it is hard to avoid the sense of a market at its peak. The view from the penthouse at 502 Park Avenue is indeed spectacular, but it is a long way down.

10 Year Stock Market Performance around the world

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Stockmarkets

Sep 8th 2005
From The Economist print edition

Economic freedom

Sep 8th 2005
From The Economist print edition

Hong Kong enjoys the most economic freedom of any of the 127 countries or territories in the Economic Freedom of the World Index, created by the Fraser Institute, a Canadian think-tank. The index measures how far a country's policies and institutions support property rights, personal choice and competition. The index also favours sound money and small government. Plucky Estonia ranks ninth, while Venezuela ranks only a few places above the trammelled economy of Myanmar.

Checking out the last two postings... Master Card and MSFT focus on Small and Medium sized Business... u know where the next trend is.. after the downturn in economy because of drop in corporate funding....

Jacksonville.com: Business: Microsoft strugging to fortify its small business unit 06/17/04

Last modified Thu., June 17, 2004 - 12:23 AM
Originally created Thursday, June 17, 2004


Microsoft strugging to fortify its small business unit


By ALLISON LINN
Associated Press
SEATTLE -- News that Microsoft Corp. discussed a merger with business software giant SAP AG has focused new attention on Microsoft's limited success in a market it would love to conquer.

Microsoft is rejiggering plans to cater to the more specialized needs of small businesses, part of a wider effort to find new revenue streams to augment its traditional cash cows. The hope is to score with accounting and other software that Microsoft is not traditionally known for. The target customer: companies with fewer than 1,000 employees.

The most recent changes -- including putting the Microsoft Business Solutions unit under the direct control of chief executive Steve Ballmer -- come as the company concedes it has not been able to beat the competition as it hoped.

Microsoft made its first big push in the market several years ago, with the $1.1 billion acquisition of Great Plains Software Inc., a longtime player in a fragmented sector lacking a dominant leader. Microsoft believes the market includes as many as 40 million companies worldwide.

Now the segment is more important because Microsoft's big moneymakers -- the Windows operating system and Office software -- have grown so dominant that their respective markets are getting saturated. Microsoft's stock price has remained relatively flat in recent years.

Chris Alliegro, lead analyst with independent research firm Directions on Microsoft, believes Microsoft sees small- and mid-sized business software as the ''potential next big revenue wave.''

But despite Microsoft's potential power -- including around $60 billion in cash to fund acquisitions or product research -- selling to small and mid-sized companies hasn't come easily.

The Business Solutions division, MBS, had the weakest results of Microsoft's seven units in the most recent quarter, meeting expectations but continuing to lose money -- $65 million on revenue of $153 million.

The unit was created out of acqusitions of Great Plains and Denmark's Navision, combined with some of Microsoft's own small-business software. That's left it with a wide array of products catering to specialized needs, such as accounting and customer relationship management, for niche businesses like mom-and-pop manufacturers or small firms needing broad multinational support.

As the company has tried to fold in its acquisitions and train its sales force, some analysts say the unit has lacked strong direction.

''At the end of the day, I think they need a better strategy,'' said Rob Enderle, principal analyst with the Enderle Group.

One such strategy could be to try to grab more overall business from other big companies that sell business-related software, facing off with the likes of Oracle Corp. and Germany's SAP.

In defending its hostile takeover bid for rival PeopleSoft Inc. in a federal antitrust case in San Francisco, Oracle is arguing that it faces an impending threat from Microsoft.

Mindful that Oracle's lawyers would be mentioning its merger talks with SAP, Microsoft disclosed recently that it had made an overture to SAP. The talks didn't get far, the company said, as Microsoft decided such a marriage would be too difficult.

Orlando Ayala, a Microsoft sales star recently named chief operating officer of MBS, insists that businesses with 1,000 employees or less are a ''sweet spot'' rife with untapped potential.

Still, he says he's concerned that companies like Oracle will try to muscle into that turf, joining current competitors such as Intuit Inc. and Salesforce.com. Also lurking is IBM Corp., which makes most of its money selling hardware, software and technology services to big organizations but has made a goal of getting more action from small and medium businesses.

Ayala says MBS's growth has been stymied by the distractions of reorganizing the division. He says recent moves, which included some layoffs, are ''not a retrenchment'' but rather a sign that ''we are putting the pedal to the metal.''

But the company has scaled back its expectations.

At one time, Microsoft had said it expected the unit to have annual revenue of $10 billion, perhaps as early as 2010. Ayala now says the unit has the potential to reach that goal but it would be hard to say when.

He does expect the unit to reach $1 billion in annual revenue in the next two years -- and become profitable ''in a very, very reasonable time frame.''

MasterCard Launches `Priceless' Advertising Campaign Targeting Small Business Market; Television and Print Ads Highlight the Unique Qualities Of Today's Small Business Owner: "MasterCard Launches `Priceless' Advertising Campaign Targeting Small Business Market; Television and Print Ads Highlight the Unique Qualities Of Today's Small Business Owner
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17 June 2004, 08:43am ET
PURCHASE, N.Y.--(BUSINESS WIRE)--June 17, 2004--MasterCard International today unveiled a new Priceless television spot, which targets the small business market. The campaign -- built around the theme of 'What It Takes' to run a small business -- focuses on communicating MasterCard's ability to help small business owners succeed. The ad will first appear on NBC's June 17, 2004, coverage of the U.S. Open golf tournament. It will later run on networks such as CBS, Fox and CNN. The 30-second commercial is part of MasterCard's award-winning Priceless campaign.
The 'What It Takes' television spot focuses on how it takes a person with truly special and unique qualities -- from patience and dedication to a sense of humor -- to handle the day-to-day challenges of running a small business. Recognizing small business owners are stretched for time and lack the resources of large corporations"


PURCHASE, N.Y.--(BUSINESS WIRE)--June 17, 2004--MasterCard International today unveiled a new Priceless television spot, which targets the small business market. The campaign -- built around the theme of "What It Takes" to run a small business -- focuses on communicating MasterCard's ability to help small business owners succeed. The ad will first appear on NBC's June 17, 2004, coverage of the U.S. Open golf tournament. It will later run on networks such as CBS, Fox and CNN. The 30-second commercial is part of MasterCard's award-winning Priceless campaign.

The "What It Takes" television spot focuses on how it takes a person with truly special and unique qualities -- from patience and dedication to a sense of humor -- to handle the day-to-day challenges of running a small business. Recognizing small business owners are stretched for time and lack the resources of large corporations, the MasterCard ad captures real-life small business moments such as working odd hours and dealing with faulty office equipment. MasterCard's "What It Takes" commercial salutes people in business for themselves, while also demonstrating why MasterCard business cards are the most effective way to pay for all the things a small business needs.

A corresponding print ad is slated to break later this summer in publications such as Fortune, New York Times Magazine, TIME and The Wall Street Journal. The creative used in the print versions will follow the "What It Takes" theme leveraged in the new television commercial.

Both the television and print ads are designed to build awareness of MasterCard's suite of solutions created specifically for small business owners. To address the needs of this target market, MasterCard developed MasterCard Working for Small Business, a comprehensive global program that provides small businesses with payment cards, online tools and other resources that deliver financial control, data management, analysis and reporting, along with rewards and benefits.

"This latest Priceless execution is a great example of how we leverage creative to communicate MasterCard's value proposition to important target markets, such as small business owners," said Amy Fuller, vice president of Brand Building for MasterCard International. "By illustrating the types of obstacles small business owners encounter, we're able to clearly demonstrate that MasterCard understands the challenges facing today's small business owner."

Creative for the "What It Takes" campaign was developed by McCann-Erickson of New York: Creative Director, Joyce King-Thomas; Copywriter, Larry Platt; Art Director, David Fox; and Producer, Julie Andariese.

About MasterCard Working for Small Business

MasterCard Working for Small Business is a comprehensive global program that provides small businesses with payment cards, online tools and other resources that deliver financial control, data management, analysis and reporting, along with rewards and benefits. More information on MasterCard Working for Small Business is available at www.mastercardworking.com .

About MasterCard International

MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members' credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard International manages a family of well-known, widely accepted payment card brands including MasterCard(R), Maestro(R) and Cirrus(R) and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless(R) advertising campaign is now seen in 96 countries and in 47 languages, giving the MasterCard brand a truly global reach and scope. For more information go to www.mastercardinternational.com .

CONTACT: MasterCard International
Chris Monteiro, 914-249-5826

chris_monteiro@mastercard.com

or
Waggener Edstrom
Dave Howell, 617-663-4909

dhowell@wagged.com

SOURCE: MasterCard International

destinationCRM.com: Business Process Management Is the Next Phase in the CRM Evolution

Business Process Management Is the Next Phase in the CRM Evolution
Used to complement each other the two will drive greater results than they would on their own.


by Robert Thaler

Monday, June 21, 2004

--------------------------------------------------------------------------------

Explorers who land on uncharted shores or Marines who hit the beach first are heroes. However, in the customer service realm the technology that established the first beachhead between customer and IT systems is treated like a goat. Since adoption of CRM began in earnest about five years ago, many CRM applications have been widely, and unfairly, derided as failures. Business process management (BPM) technology is often posited as the savior that's going to supplant CRM and deliver on its broken promises.
Besides being untrue the perception sets BPM up for the same fall that CRM took. The reality is that the two technologies are complementary--they just represent successive steps in customer-facing technology's evolution.

CRM established the missing and vital link between frontline customer service and IT systems. When CRM emerged, customer service representatives no longer had to navigate separate customer, financial, shipping systems, etc., to complete a customer transaction. CRM unified relevant systems under a single, easy-to-use interface. The Achilles heel, however, was that these systems lacked sufficient access to corporate data sources, which were themselves poorly integrated and unable to provide a coherent, unified customer view. That's where BPM cames in.

BPM encompasses and extends CRM, providing a link to enterprise data sources, processes, and practices. BPM applications unify corporate data sources and give managers control over customer service-related practices and procedures, usually through their CRM application interface. Automating the core practices and process of the business--the touchstone of true BPM technology--enables business analysts to quickly change procedures to respond to shifting customer demand and market conditions, often without adding any workload to the IT department. This powerful combination of workflow and rules engine technologies will realize CRM's promise, and solidify its position as a vital step in the evolution of customer service technology.

Taking care of business, front and back
Process is how people and systems interact to do work. Practice is the corporate policies and guidelines that define and drive decisions. True BPM systems offer practice and process control in a single, integrated package. BPM's role is to provide a flexible data integration framework that supports all enterprise applications and is the primary vehicle for controlling customer-related practices and processes.

BPM extends CRM by picking up where CRM has traditionally left off, which is usually at the entrance to the back room. Until now CRM had little if any "pre-call" research capability based on real-time data retrieval--that is, CSRs would take incoming calls with little or no advance information on the customer. CSRs have to ask the customer repetitive questions and populate on-screen forms manually, often when the company has the data in other systems. A BPM system can support an existing CRM system as, for example, a button on the interface that CSRs use to populate a new screen.

For example, if a customer calls an insurance company and wants a rate for a new car, the company needs to know the customer's address, age, driving record, etc. An insurance company has business rules for quoting a rate, so the BPM system should support the process by automatically collecting the data a CSR needs to complete the transaction. That way the CSR doesn't have to ask the customer for information the company already knows, or keep them holding while they leave their CRM application to search other systems.

Marriage of equals
CRM is a pioneering technology, not a failure. BPM, with its ability to automate practice and process rules and report activity with graphical monitoring, is the next generation of customer-centric technology. There is no subordinate role in this relationship: The technologies need each other to succeed in the customer service arena.

BPM is built to take advantage of the investment companies have already made in CRM. Rules-based BPM solutions that manage practice and process surround and extend CRM, preserving its value and expanding its functionality. BPM gives business analysts the ability to change customer-facing rules and processes immediately, to avoid problems and risks, at the enterprise and department levels without going through IT. Together, BPM and CRM will help forward-looking companies increase profitability through greater customer loyalty.

About the Author
Robert Thaler is director of product marketing, PegaRULES, for Pegasystems. Contact him at Robert.thaler@pega.com

Yahoo! News - CRM Planning: Keys for Project Success

http://blog.topix.net/archives/000016.html

The Secret Source of Google's Power
Much is being written about Gmail, Google's new free webmail system. There's something deeper to learn about Google from this product than the initial reaction to the product features, however. Ignore for a moment the observations about Google leapfrogging their competitors with more user value and a new feature or two. Or Google diversifying away from search into other applications; they've been doing that for a while. Or the privacy red herring.
No, the story is about seemingly incremental features that are actually massively expensive for others to match, and the platform that Google is building which makes it cheaper and easier for them to develop and run web-scale applications than anyone else.

I've written before about Google's snippet service, which required that they store the entire web in RAM. All so they could generate a slightly better page excerpt than other search engines.

Google has taken the last 10 years of systems software research out of university labs, and built their own proprietary, production quality system. What is this platform that Google is building? It's a distributed computing platform that can manage web-scale datasets on 100,000 node server clusters. It includes a petabyte, distributed, fault tolerant filesystem, distributed RPC code, probably network shared memory and process migration. And a datacenter management system which lets a handful of ops engineers effectively run 100,000 servers. Any of these projects could be the sole focus of a startup.



Speculation: Gmail's Architecture and Economics
Let's make some guesses about how one might build a Gmail.

Hotmail has 60 million users. Gmail's design should be comparable, and should scale to 100 million users. It will only have to support a couple of million in the first year though.

The most obvious challenge is the storage. You can't lose people's email, and you don't want to ever be down, so data has to be replicated. RAID is no good; when a disk fails, a human needs to replace the bad disk, or there is risk of data loss if more disks fail. One imagines the old ENIAC technician running up and down the isles of Google's data center with a shopping cart full of spare disk drives instead of vacuum tubes. RAID also requires more expensive hardware -- at least the hot swap drive trays. And RAID doesn't handle high availability at the server level anyway.

No. Google has 100,000 servers. [nytimes] If a server/disk dies, they leave it dead in the rack, to be reclaimed/replaced later. Hardware failures need to be instantly routed around by software.

Google has built their own distributed, fault-tolerant, petabyte filesystem, the Google Filesystem. This is ideal for the job. Say GFS replicates user email in three places; if a disk or a server dies, GFS can automatically make a new copy from one of the remaining two. Compress the email for a 3:1 storage win, then store user's email in three locations, and their raw storage need is approximately equivalent to the user's mail size.

The Gmail servers wouldn't be top-heavy with lots of disk. They need the CPU for indexing and page view serving anyway. No fancy RAID card or hot-swap trays, just 1-2 disks per 1U server.

It's straightforward to spreadsheet out the economics of the service, taking into account average storage per user, cost of the servers, and monetization per user per year. Google apparently puts the operational cost of storage at $2 per gigabyte. My napkin math comes up with numbers in the same ballpark. I would assume the yearly monetized value of a webmail user to be in the $1-10 range.


Cheap Hardware
Here's an anecdote to illustrate how far Google's cultural approach to hardware cost is different from the norm, and what it means as a component of their competitive advantage.

In a previous job I specified 40 moderately-priced servers to run a new internet search site we were developing. The ops team overrode me; they wanted 6 more expensive servers, since they said it would be easier to manage 6 machines than 40.

What this does is raise the cost of a CPU second. We had engineers that could imagine algorithms that would give marginally better search results, but if the algorithm was 10 times slower than the current code, ops would have to add 10X the number of machines to the datacenter. If you've already got $20 million invested in a modest collection of Suns, going 10X to run some fancier code is not an option.

Google has 100,000 servers.

Any sane ops person would rather go with a fancy $5000 server than a bare $500 motherboard plus disks sitting exposed on a tray. But that's a 10X difference to the cost of a CPU cycle. And this frees up the algorithm designers to invent better stuff.

Without cheap CPU cycles, the coders won't even consider algorithms that the Google guys are deploying. They're just too expensive to run.

Google doesn't deploy bare motherboards on exposed trays anymore; they're on at least the fourth iteration of their cheap hardware platform. Google now has an institutional competence building and maintaining servers that cost a lot less than the servers everyone else is using. And they do it with fewer people.

Think of the little internal factory they must have to deploy servers, and the level of automation needed to run that many boxes. Either network boot or a production line to pre-install disk images. Servers that self-configure on boot to determine their network config and load the latest rev of the software they'll be running. Normal datacenter ops practices don't scale to what Google has.

What are all those OS Researchers doing at Google?
Rob Pike has gone to Google. Yes, that Rob Pike -- the OS researcher, the member of the original Unix team from Bell Labs. This guy isn't just some labs hood ornament; he writes code, lots of it. Big chunks of whole new operating systems like Plan 9.

Look at the depth of the research background of the Google employees in OS, networking, and distributed systems. Compiler Optimization. Thread migration. Distributed shared memory.

I'm a sucker for cool OS research. Browsing papers from Google employees about distributed systems, thread migration, network shared memory, GFS, makes me feel like a kid in Tomorrowland wondering when we're going to Mars. Wouldn't it be great, as an engineer, to have production versions of all this great research.

Google engineers do!


Competitive Advantage
Google is a company that has built a single very large, custom computer. It's running their own cluster operating system. They make their big computer even bigger and faster each month, while lowering the cost of CPU cycles. It's looking more like a general purpose platform than a cluster optimized for a single application.

While competitors are targeting the individual applications Google has deployed, Google is building a massive, general purpose computing platform for web-scale programming.

This computer is running the world's top search engine, a social networking service, a shopping price comparison engine, a new email service, and a local search/yellow pages engine. What will they do next with the world's biggest computer and most advanced operating system?

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