Lets Talk Private Equity

I recently had the opportunity to interview the chairman of a mid-level private equity firm. Here's what he had to say about private equity, business degrees, and people skills.

Q: How did you find your way into this business?

A: I started my career as an attorney working on numerous types of mergers and acquisitions. I brought one of my clients into a deal based on my judgment and in turn made them about $350 million dollars. Soon after they asked me if I would be interested in starting a private investment firm with them and a few others. The rest as they say is history. We’ve been doing business for fourteen years now.

Q: It was tough to find much information out about your firm prior to our interview. Do you guys keep a pretty low profile?

A: We like to be mysterious. We find that being under the radar we are able to target the specific types of investments we want. When everyone knows about your firm you tend to get hundred of business plans and phone calls a week – most of them are exactly what you are not looking for.

Q: So how do you approach prospective businesses you may want to invest in?

A: Actually we don’t. We have a third party marketing firm create the initial marketing tools to contact prospective businesses. The reasoning behind this is that the marketing firm knows how to make us stand out from the crowd. If we just sent a letter out chances are it would get thrown away.

Q: How does communication play a role in what you do?

A: Communication is one of the most important aspects of this business. When we’re involved in a deal with a business and we need to find very specific people or resources, we are on the phones networking with everyone we know to find what we need. The interpersonal skills are invaluable in this business. We are a small firm so our ability to leverage our contacts and networking to find what we need is imperative.

Q: Leveraging resources is so important in this business. As a small firm, how are you guys competing with other firms how have so much more at their disposal?

A: We started a fund a few years back. We have social events for members to interact as peers and get involved. The events are huge for networking. People know what we’re investing in and since they have a stake they start sending us referrals for top-tier finance and management professionals we otherwise wouldn’t have known about. Since everyone has a stake in the investments people are eager to give us names and numbers. It makes getting your foot in the door that much easier. I can call a CEO and set a meeting. No gatekeepers, no voicemails.

Q: How do you primarily communicate with your team members and prospects?

A: I love email. While we do have a team, most of us are involved in specific things. One person usually stays somewhat involved as a back up person. Usually we keep each other informed primarily through email.

Q: One of the main documents you are giving me as a writing sample is the Letter of Intent. Can you tell me a little more about it?

A: The letter of intent is what we send businesses we are seriously interested in working with. It’s essentially a loose contract that formally states that both parties are interested in conducting business with each other. It’s very wordy and there is a reason for that. If we begin to work with a company and things go wrong before we commit [financially] we can get out of the contract. It’s important to build a back-door into everything. Sometimes things are not what they seem going into something.

Q: You graduated from Harvard Law School. Looking back, has a brand name like Harvard given you opportunities that other schools could not? Does the School make or break your options?

A: I’ve worked with people from all over that have been to top law schools and average law schools. Typically the person either has it or they don’t. The law school you go to doesn’t guarantee anything. I will say that going to Harvard provided me with excellent connections. All in all, going to a top school just makes it easier to get where you want to go.

Q: What’s some sound advice you would give to a business student who is on their way to graduating?

A: Two things come to mind. The first is to make sure you are very familiar with balance sheets and have a good financial background. A lot of people forget the basics. Don’t forget that stuff. Secondly, get solid experience. I can not count how many highly intelligent kids come out of top business schools with MBA’s but have no real experience.

Idea of the Day

If you already know what I'm talking about, then you're probably mumbling and rolling your eyes as you think about that boss or manager who had serial entrepreneurial tendencies. The rest of you are thinking, "what is he talking about." Let me start off by saying that entrepreneurs truly are some of the most influential people in today's society. Fortunately we live in a society that rewards free thinking and creativity. However, in the business world - especially the small business world - the prevalence of the "Idea-a-day" mentality can be seriously hurtful to a business's longevity.

As an example, think of the stock market. Sound investments are typically well thought out and formulated for consistent long-term growth. The majority of day traders who are trying to buy and sell and make the quick and easy buck typically - although a few beat the market - grind their savings into sawdust.

The same goes for business strategy. You have to plan the work and work the plan as the old adage goes. Ironically, you would be surprised how many leaders get caught up doing just the opposite. People tend to get an idea and become excited and want to get it in place as soon as possible but typically observe the opposite.

My suggestion: Team accountability. Get together as a team and spend time to formulate a long term plan. Where is your business now, and where do you see it in five years? Write down the goals and vision of your business. Then work on a shorter term, 90 day plan to orchestrate your sales and marketing strategy. Take time to really plan things out. Often times I see excitement rush a project from conception to launch in just a few days and as a result it typically falls apart after a few weeks.

My step-by-step prescription for success:

1. Set your organization's goals. Make sure they're on paper. Ideally, you should have them hanging in every office. Open goals lead to more accountability. Where will your company be in 5 years?
   
2. Create a 90 day plan. This is where you formulate strategy. How are you going to grow the business? This is where you fill the proverbial tool box with the necessary items to be successful.
   
3. Stick to the plan. Work the plan. It's OK to have ideas, but develop them slowly and launch them accordingly. I can't tell you how many times Managing Directors and other executives have come to me with the next huge idea that they can't wait to start. Nine times out of ten they are a waste of time (the other one idea is the reason why they are managing directors).
   
4. Measure performance and make changes as needed. Monthly is ideal.

Do the research, plan your "investment" and attain consistent growth. The days of the day traders are few and far between.

Bruce Lee's Five Rules of Productivity

By: CC Holland

Famed martial artist and actor Bruce Lee was undoubtedly an icon and a trailblazer. But did you know he was also a personal productivity guru? Well, maybe not exactly. But The Positivity Blog notes that several of his fundamental beliefs for life can translate pretty well into guidelines for personal productivity.

1. “As you think, so shall you become.” Keep yourself and your thoughts on the right track to reach your goals.
2. “If you spend too much time thinking about a thing, you’ll never get it done.” Don’t overthink, don’t procrastinate, and just do it.
3. “To know oneself is to study oneself in action with another person.” How people respond to you says a lot — and what you see, hear and feel in other people may be a reflection of you.
4. “Showing off is the fool’s idea of glory.” Bragging is an attempt to gain validation from others, but it alienates those around you and makes you look needy. Instead, practice inner validation by setting and achieving goals.
5. “To hell with circumstances; I create opportunities.” Be proactive instead of reactive; don’t blindly go with the flow. Be willing to take the lead to get what you want.

Track Back: http://blogs.bnet.com/teamwork/?p=226&tag=homeCar

You Can't Just Be an Entreprenuer

Someone told me that. She had asked me what it was I really wanted to do. "An entrepreneur," I responded "You can't just be an entrepreneur. You don't have the experience or have the capital," she said. I didn't know whether to take it as advice, criticism, or an insult. I will say that yes it's harder for young people to run out and borrow millions. Today though technology is cheap, resources are plentiful, and the best start up capital is "know how".

Here is a reaffirming article from BusinessWeek about the "Start-up Itch" and how today's entrepreneurs are becoming younger and younger.

The Startup Bug Strikes Earlier

Slide Show >>

By Stacy Perman

As the entrepreneurial career path becomes more accepted, its appeal to the young is rapidly growing, as are the resources to make them successful

There was a time, not so long ago, when a person choosing the entrepreneurial career path wasn't exactly greeted with rampant enthusiasm. Among the notable exceptions: Michael Dell famously started his eponymous computer company (DELL ) out of his University of Texas, Austin, dorm room. And what would eventually become software behemoth Microsoft (MSFT ) began life when Bill Gates was still a Harvard undergrad.

Both men eventually dropped out of college to pursue their wildly successful ventures, but their paths to fame and fortune were decidedly not the norm. For the most part, and for the rest of us, conventional wisdom held that to be successful, one got a degree or two and then worked for an established company. Tinkering and dreaming was left to -- ahem -- entrepreneurs, not serious businesspeople.

That was then. Nowadays, "Entrepreneur is no longer a dirty word," says Gerald Hills, an entrepreneurship professor at the University of Illinois at Chicago and executive director of the Collegiate Entrepreneur's Organization, a network of student groups on 500 college campuses. "It's nearly what everyone thinks of when they think about opportunities. They think of entrepreneurs now." Shorn of its stigma, the once-risky career route is now viewed as a positive calling, particularly given the wobbly economy and the no-longer-sacrosanct benefits of corporate life -- pensions and job security are fast becoming relics of a bygone era.

OUT OF THE CRADLE. The short-lived dot-com epoch that launched countless ideas into startup ventures before imploding also helped make the entrepreneurial route a viable alternative to the traditional job path. While a more sober reality has replaced the heady New Economy days, entrepreneurs are finding an expansive array of sophisticated resources, tools, and options for helping them start and operate a new business. More simply, the trail has already been blazed.

And while more and more young entrepreneurs may be embarking on the same general path, their destinations couldn't be more varied. Take surfer Matt Rivers, who five years ago used money he had earned dishwashing to buy the Pump House Surf Shop in Orleans, Mass. -- at the age of 17.

Then there's Alasdair McLean-Foreman, who started HDO Sport, a high-tech sporting-goods company in Cambridge, Mass., when he was a Harvard freshman and a member of the track team. And in 1997, Paula Yakubik, then 25, quit her job as a newspaper reporter and founded public-relations firm MassMedia in a rented cubicle in Las Vegas. Today, she has two offices in Nevada and over 30 clients.

DORM LABS. Instead of flying blind, fledgling entrepreneurs of all ages can turn to a number of organizations and resources for help in nurturing a diverse set of ideas. Business-plan competitions with juicy cash purses have sprouted up all over the country. In September, the Small Business Administration announced a partnership with Junior Achievement Worldwide to launch a small-business portal for teen entrepreneurs, mindyourownbiz.org.

A number of networking associations are also targeted to particular communities of likeminded businesspeople and their specific issues. For instance, YoungEntrepreneur.com, based in Blaine, Wa., is an member-based Web site that offers advice, strategies, information sharing, and help in securing funding.

In fact, colleges and universities that once emphasized academics in recent years have established a number of entrepreneurial programs and incubators to help polish, educate, mentor, and develop those dorm-room eurekas into full-fledged businesses. No longer the exclusive purview of MBAs, many entrepreneurial programs are now geared toward undergraduate students (see BW Online, 10/25/05, "Teaching the Startup Mentality").

"I've been in education for 30 years," says the University of Illinois' Hills, "and I've seen a real shift as more and more students want to start a business. They don't necessarily want to wait to give it a go."

VIRGIN VENTURE. Five years ago, the University of Maryland in College Park, launched the Hinman Campus Entrepreneurship Opportunities (CEO) Program. The two-year course was established with a $2.5 million grant from alumnus Brian Hinman, a Silicon Valley entrepreneur. It takes 35 students at a time, who must apply for admission. The program and its students are housed in a special high-tech dorm that's designed to give participants a residential learning environment where they experience an entire business lifecycle, from concept to execution to operation.

According to Karen Thornton, the program's director, while 75% of the students take part as a learning opportunity, 25% have actually gone on to create businesses from the ideas they hatched at Hinman. In recent years, Iowa State and Oregon State have launched similar programs based on Hinman's model.

Being an entrepreneur means making your own opportunities, and there's no telling where a good idea can lead you. After all, Virgin Group got its start when 15-year-old Richard Branson dreamed up a magazine called Student in his native London. Virgin Group is now an $8 billion global empire comprising some 200 companies in 30 countries, and in 1999, the celebrated founder became Sir Richard Branson when Queen Elizabeth II knighted him -- for "services to entrepreneurship."

Mobile Marketing - Could it be Cool?

The second I heard the words "Mobile Marketing" I thought of the spam box on my email, full of offers for free Ipods and get-a-way trips. My initial reaction to the concept of mobile marketing was quite negative and the future was looking bleak.

At last though, I thought, could there be a way to make mobile marketing valuable for consumers? I brain stormed a few examples and want to see what people think about using SMS in marketing strategies.

1) Airline Companies - This was the first example I thought of: Airliners. Southwest paved the way for paperless E-ticketing. Using text messages to notify customers that they can check in or perhaps sending a text about cheap rates in their area could boost revenues for the airliners and at the same save consumers money.

2) Ticketmaster.com - Receive a text message when tickets go on sale for that band you've been dying to see. I can't tell you how many times Rush has been to Jacksonville and I missed out on the show because I forgot! If I had been reminded to get those tickets I could have seen Neal Pert rock a ten minute drum solo!

3) CNBC - Text me the opening numbers of the NYSE, DOW, and NASDAQ. Be the wise guy at work who knows everything before everyone else. Sound smart and look good for clients and bosses and be the king of the water cooler. Oh yeah, CNBC can throw a few ads up - Not to mention grow their branding efforts.

Maybe mobile marketing isn't all bad? Maybe it's just change that I was afraid of. I hope that ad executives and marketing officers will stay creative and remember that the best way to gain and keep consumers under their guise is to keep providing them will good value. If I start getting spammed I'm going to take the high road - I'll sue somebody.

A Complete Guide to Internships

Internships are becoming more and more important in obtaining a great job right out of college. I found this article and thought it would be helpful for anyone looking to do an internship over the summer or in the upcoming year.

By Derrick Dortch
Special to washingtonpost.com
Wednesday, March 12, 2003; 4:00 PM

If you want a great job after college you must do more than earn good grades and get involved in extracurricular activities. Good grades and extracurricular activities are looked upon favorably by employers but they are not enough. According to the 2001 Job Outlook Survey by the National Association of Colleges and Employers (NACE), employers say that the perfect candidate is a graduate who brings relevant work experience to the table. This experience is mostly gained through internships.

The purpose of this article is to provide you with information on internships and give you a starting strategy to get one.

What Is an Internship?

An internship is a structured learning experience in a work setting that gives a student the opportunity to learn about a career interest and gain valuable knowledge and experience in a particular field. In an internship, you work just like an employee but your purpose is to receive mentorship, supervision, and training. Internships are designed to assist students in the career exploration process to determine if that career matches their interests and skills.

Are Internships Important?

Internships are very important to a college student preparing for the world of work. It should be seen as an integral part of your academics. To get this relevant experience, students should intern with employers who are doing the kind of work they are interested in pursuing after college. Here are a few reasons why internships are so important.

Internships:
•Test your skills and interests.
• Provide insight into prerequisites needed for employment.
• Develop a network of professional contacts for future opportunities and references.
• Increase your awareness of the skills you need to develop.
• Provide valuable work experience such as workplace communication skills.
• Build a strong resume.

How Early Should I Begin Planning for an Internship?

Plan your internship as soon as possible. If you are able to intern your freshman year that is great but it should be a priority for your sophomore and junior years. Take your first semester in college and get acclimated but after you are settled, consider talking to your career center about internships and how to develop an internship search strategy. Even if you are not sure what you want to do, exploring various fields will help you decide on what career match your interests, passions, and goals.

When Are Internships Available?

The majority of internships take place in the summer but many are available year around. In Washington D.C. and other major cities, companies, government agencies and non-profit organizations will have interns working during the fall, spring, and summer semester.

How Early Should I Begin Applying?

Application deadlines vary from organization to organization. Summer internship positions in large organizations or very competitive internship programs sometimes have deadlines as early as October, November, or December. Others will have deadlines in February, March, or April. It all depends on the organization and their hiring process. During the beginning of the fall semester or even at the end of the summer begin planning where you want to intern in the summer. Check with the organization(s) about the application procedure and deadline. Remember proper planning and preparation are key to getting the internship you want.

How Many Hours Should I Work at an Internship?

Summer internships can be full or part-time positions depending on the organization. If you decide to intern during the fall and spring semesters, it is recommended that you work 10 - 15 hours a week maximum. Remember that your academic studies are a priority. Exceeding 15 hours at an internship during the semester/quarter is not recommended unless your class load is light and flexible.

Are Internships Paid or Unpaid?

Summer internships can be paid or unpaid depending on the organization and career field. The majority of summer internships are paid. If a summer internship is unpaid they may only require you to work part-time so that you will be able to get another job. Internships during the academic semester/quarter many times are unpaid but there are a few organizations where interns are paid. Some organizations will pay for travel to and from work so make sure you discuss this with the internship provider before accepting a position.

Do I Need to Do Anything Before Looking for an Internship?

Whether you are just beginning your career exploration process or if you're a veteran, there are some steps that are always helpful to follow. This process should begin with a self-assessment. Evaluate your interests, skills, and passions. Select the career fields that match you the best.

Where Do I Find Internships?

Your career center. The staff and resources of your college/university career center are available to help you find an internship. There are private career consultations and workshops. Most career centers also have a library and Web site with a number of books and online resources to help you find an internship. Career centers usually maintain internship opportunity listings online or in their resource area.

The Internet. Use the search engines on the Web and see what you discover.

Company Web sites. Most companies will list internships, summer opportunities and special programs in the employment or career opportunities section of their Web site. Look for Career Employment/Opportunities on the home page. This link is sometimes on the home page but if it cannot be found look in the site index, contact us, about us or search sections of the Web site.

Online internship listing services. There are a number of online internship search engines available for you to conduct your search.

Career books. There are a number of books published on internship opportunities. Two of the most popular are "The Internship Bible" published by The Princeton Review and "Peterson's Yearly Internship Book" published by Thomson Learning. Libraries and bookstores usually have a good selection of books on internships. Also online bookstores like Amazon.com are good resources as well.

Newspapers. Look in the employment section of newspapers. If you see a full time listing that interests you, contact that company and see if there are any internships available. Every spring, The Washington Post runs a section in the employment guide of internship listings.

Career fairs. Each university will usually have an annual career fair with companies, organizations and agencies looking for interns. Talk to your career center and find out when the career fair will be held and how to prepare it.

Alumni. Alumni can be a great resource for information on internship opportunities in their career field or place of employment. Contact Alumni Affairs/Relations office for alumni contacts in your field(s) of interest.

Network contacts. Networking is very important in your career development. Joining associations and attending professional events and job fairs will help you build your network. Use contacts to learn about opportunities that are available in your field of interest. Each career area has at least one association and newspaper or journal. Associations for various industry sectors and career fields (i.e. American Management Association, American Medical Association, etc.) may have internship listings in their publications or Web sites. Check out AssociationCentral.org for a directory of associations listed by industry or career field.

Professors/Professional staff. Many professors or professional staff will have contacts outside the university in organizations of interest. At many colleges and universities, a good number of professors are adjunct and maintain a professional job outside of teaching. They may have internships at their place of employment or know of organizations in need of interns. Talking with them about your interests may yield great contacts and opportunities.

Parents, family, and friends. Share your career interests with your parents, family member and friends. They may know of a contact who can help you get an internship in that area of interest.

Develop your own internship. You may know of a contact in a career field of interest. Talk with them about an internship in their place of employment.

Explore each of these options carefully and you will find that there are a number of internships available. Although there may be many opportunities remember there are many college students like you working to get the internship. Make sure you waste no time in sending out your sales package to assure your candidacy. Now you know where you want to intern, go for it!

Who's Who of World Wide Business

Who are the mover's and shakers? Here they are, the worlds top 25 businesses. Coincidentally almost all of these businesses were listed on Forbes' list of most desirable companies for MBA's to work at. It's also important to note that many of these countries are growing and expanding due to new ventures in emerging economies like China, India, Bangladesh, and eastern European countries. View the full Fortune 500 here.

Rank	Company	Revenues ($ millions)	Profits ($ millions)
1	Wal-Mart Stores	351,139.0	11,284.0
2	Exxon Mobil	347,254.0	39,500.0
3	General Motors	207,349.0	-1,978.0
4	Chevron	200,567.0	17,138.0
5	ConocoPhillips	172,451.0	15,550.0
6	General Electric	168,307.0	20,829.0
7	Ford Motor	160,126.0	-12,613.0
8	Citigroup	146,777.0	21,538.0
9	Bank of America Corp.	117,017.0	21,133.0
10	American Intl. Group	113,194.0	14,048.0
11	J.P. Morgan Chase & Co.	99,973.0	14,444.0
12	Berkshire Hathaway	98,539.0	11,015.0
13	Verizon Communications	93,221.0	6,197.0
14	Hewlett-Packard	91,658.0	6,198.0
15	Intl. Business Machines	91,424.0	9,492.0
16	Valero Energy	91,051.0	5,463.0
17	Home Depot	90,837.0	5,761.0
18	McKesson	88,050.0	751.0
19	Cardinal Health	81,895.1	1,000.1
20	Morgan Stanley	76,688.0	7,472.0
21	UnitedHealth Group	71,542.0	4,159.0
22	Merrill Lynch	70,591.0	7,499.0
23	Altria Group	70,324.0	12,022.0
24	Goldman Sachs Group	69,353.0	9,537.0
25	Procter & Gamble	68,222.0	8,684.0

Domain Holders Take Advantage of You and Me

Source: http://news.findlaw.com/ap/high_tech/1700//02-27-2008/20080227100502_25.html

As if it's not difficult enough to find a marketable and appealing domain name these days, some companies are now suspect of manipulating buyers by analyzing recent domain searches and using the data to inflate domain prices. This has been a growing issue as the number of domain purchases over years has skyrocketed and along with that so have the number of companies facilitating domain purchases.

To combat this issue a law suit was filed with a Los Angeles court Monday against Network Solutions, LLC, one of the many domain facilitation sites (networksolutions.com). The importance of this lawsuit is extremely prominent in protecting businesses and consumers involved in online business development. As someone who owns more than ten domains and has experienced the aforementioned problem, let me tell you, this is huge.

Here's how it works:

For the purpose of this argument, let's say I am a apparel designer in Florida who realizes the potential to grow my business through the outlet of e-commerce. I put together my online business strategy, hire a couple of designers, and begin to create what will soon be my online presence. Using a domain facilitator I search and scour through thirty possible domain names but decide to come back and purchase after I speak with a marketing consultant to get some ideas on which domains have the most marketability. During this gap of time the domain facilitator has accessed its search analytics and notices that I, as well as others, have been searching for possible domains. In turn they purchase the domains, making them unavailable to me upon my eager arrival to get up and running online. At this point I am either forced to search for another, likely less appealing domain, or purchase my first choice at a much higher price. The domain facilitator has just manipulated me to increase its profit margins.

Many companies who do this defend their actions by stating that they are helping the consumer by ensuring domains are available when their customers return to purchase. Don't be fooled. This is a cover for their blatant misuse of search data. I commend them for developing a strategy that allows for higher profits, but they've gone about it the wrong manner. There is a better solution, which I will outline below, to both increase company profits AND provide value and honest service to consumers. Now Network Solutions and others will likely deflate their profits in a vigorous class action law suit that in my opinion could have easily been avoided.

My Solution:

Surely it would be nice to have some more insurance that my domains would be available upon my return to purchase, but as the buyer I should have the option to obtain that insurance. What Network Solutions and other companies should do is develop an option to purchase domain insurance for a nominal fee that reserves the domain for a period of time. This both opens a new stream of revenue for Network Solutions and the like while also preserving the rights of the consumers.

As the competition for domains increases and more and more businesses establish themselves online it will be more and more important to have ethical standard for businesses and consumers to follow and understand. Especially when it comes to private data.

Tips for buying domains:

1. Use a reputable site - I use GoDaddy (godaddy.com) because they not only have a great reputation, but also offer a full suite of domain and hosting services.
2. Be alert of suspicious behavior - If you're domains keep disappearing before you can purchase them, consider investigation the company you're working with.
3. Report suspicious behavior - Visit RNS Domain Fraud and know how to handle potential misuse.
   

How Collaboration Can Enhance R&D

Source: http://hbswk.hbs.edu/item/5750.html

Alan MacCormarck, a professor in the Harvard School of Business, conducted research with a team on how collaboration is changing the way Research and Development takes place in today’s businesses. He explains to readers that while traditionally companies gained competitive advantages through internal research and patented intellectual property, global collaboration and partnered development is becoming a more effective means of gaining those oh-so desired competitive advantages.

MacCormack points out that one reason for collaboration is product complexity. Cars now send maintenance data to dealerships and sneakers have microchips in them. His point being that it’s just too hard for one firm to master all these technologies under one roof. From an economic perspective one can easily see that what’s going on here is specialization. Rather than trying to do everything, firms are now partnering and each focuses on what it does best. Brilliant!

While this seems like such a logical way to operate in a flattened world, businesses struggle to collaborate effectively. This stems primarily from an ideology that innovation collaboration is about lowering costs. MacCormack explains that many firms adopt what is called a “production outsourcing” mindset to collaboration. In other words, firms choose to focus on lowering costs and forgo other potential opportunities. “Production and innovation are different activities. While the former seeks to replicate an existing product at lower costs, the latter seeks to discover something entirely new and valuable.” However, if done properly, the cost benefits to innovation collaboration can be huge. Researchers were quick to note it is one of the main benefits.

There are other benefits that go beyond cost reduction. “Collaboration can help to shorten development lead times and increase capacity; it can facilitate access to skills, capabilities, and intellectual property that a firm does not possess internally; and it can allow a firm to acquire relationships and knowledge in a part of the world where it has no experience,” MacCormack says.

Innovation collaboration is a big transition for most businesses, but companies like Boeing and Microsoft are having great success at it. What you get out of innovation collaboration is efficiency and savings, but it’s important to note the irony that those most concerned with saving money often have a hard time actually doing it. Letting the cost savings come as an added benefit is the key to success at this method. It's interesting because we can see how the variables in the globalization equation are interacting. With the vast amounts of technology available, along with increasingly complicated business models and legal systems, it’s insanely difficult for a firm to develop every facet of a complex product and the world is adjusting to that by understanding we have to work together to continue to be successful.

Track Back: http://grantdeken.blogspot.com/2008/02/how-collaboration-can-enhance-r.html

Globalization does my work for me!

What if I could click a button and have someone else write this post for me? Believe it or not, some people are now given this luxury in the workplace. “OOF,” which stands for Office of the Future, is the result of years of flattening and globalization and companies like Pfizer and other major corporations are taking advantage of it. many other people are focusing on globalization and their wheels are turning too.

As the result of a major financial crisis in 2005, Pfizer had to create ways to work more effectively while also reducing costs. Senior director of Organizational Effectiveness Jordan Cohen, who at the time was reading Thomas Friedman’s “The World is Flat,” decided to take advantage of globalization and convergence. After some research he found that employees were spending 20% to 40% of their time on tasks that could be done by someone else. Who did he call? The companies Friedman mentions in Chapter two of his book (The World is Flat, 2005)!

This scenario is as real as it gets when we’re talking about outsourcing and globalization. What’s more fascinating are the initial results and the struggles that occurred. At first things went poorly. Assignments were often flawed with typos or incorrectly analyzed data. The problem stemmed from both sides of the world. Pfizer employees were communicating ineffectively and Indian firms found it difficult to tackle the multi-step projects and were unorganized. As a result the process had to be reorganized and tweaked to work effectively. Office Tiger, the Indian firm working with Pfizer, decided it would create teams that would tackle certain assignments, and the work would be passed around. Speculation by Cohen and others circled management meetings as people discussed the high number of “handoffs” for outsourced projects.

Fortunately after minor adjustments the pilot took off and the program grew to two-hundred Pfizer employees. The benefits for Pfizer are huge. The amount of time to complete projects is cut close to half, while savings are huge. “Pfizer pays $15 to $35 per worker hour, far less than they would pay the McKinseys of the world, whose rates typically start at $215 per hour.”

Globalization is an unbelievably significant opportunity for businesses. This article is significant in showing how globalization can be helpful to your operations and employee effectiveness. But information outsourcing isn’t without its own flaws. The convergence of technology and collaboration has been available for years, but even in 2008 it can still be a struggle to effectively integrate these tools and processes into your business. This was clearly seen as Pfizer struggled to identify an effective process for outsourcing menial tasks. However Cohen notes that after the kinks had been worked out things we’re significantly more efficient. “It’s kind of amazing,” he said. “I wonder what [our employees] used to do.”

Source from Fast Company February 2008 Issue.

Track Back: http://grantdeken.blogspot.com/2008/02/123do-my-work.html