Thought Leadership

Gartner 2010 Survey on IT Spending

2010-01-19T22:36:00.000-05:00

2010 Gartner IT Spend Survey Results

Happy New Year!! Below are the summary bullets taken from a January 19th CNBC interview on the 2010 Gartner Survey on IT spending. Click the above title to watch the interview.

CIO Agenda Survey Results

CNBC Interview with Mark McDonald, Gartner Executive Programs Head of Research
January 19, 2010

1500 CIO’s responded which represented $120 billion in corporate and public sector IT spend
CIO’s reported that 2010 is a transitional year from recession to recovery
CIO's are shifting focus on IT on cost cutting efficiencies (2009) to driving productivity (2010)
Gartner see's a shift in tech market towards lighter weight technologies that are based upon internet services

By the numbers:

Overall budgets were cut 8%+ in 2009 vs 2008
IT Budgets fell to 2005 levels last year
Spending flat for 2010 only rising 1.3% from 2009
2010 seen as another tough year
53% of those interviewed see stabilization in 2010
6% expect growth coming in 2010

CIO's report a transition of IT away from a heavyweight "owner-operated" maintenance based approach to a more services agile based approach

CIO's retooling their IT organizations to be able to deliver solutions much faster to capture opportunities as the economy recovers

Strong CIO investment interest in: virtualization technologies, cloud computing and web2.0 which are technologies that are more agile and adaptive then traditional datacenter solutions

CIO’s are looking to take advantage of modernizing their datacenters after last years consolidation and cost cutting initiatives

Gartner see’s a whole new environment of tech spending opening up in a place it has never been before:

Shift from backoffice automation and front end sales and service to a mid-office area of competing social networks
Whole new mid office area where there are social competing technologies have the ability to transform organizations creating new sources of competitive advantage.

See you in the trenches - vmsteveo

Why Changing the CEO May Not Change the Company

2009-12-05T08:11:00.003-05:00

How much of a difference should investors expect when General Motors—or any company—brings in a new chief executive? Not much.

This past week, GM's chief executive officer, Frederick "Fritz" Henderson, stepped down under pressure from the company's board. His defenestration follows the announcement earlier this fall that Kenneth Lewis will be exiting as CEO of Bank of America.

It seems obvious that getting the right boss in place ought to make all the difference in the world. Think of Steve Jobs parachuting back into Apple and powering it to record profits, or Alan Mulally steering Ford Motor through Detroit's collapse, or James Dimon navigating J.P. Morgan Chase through the financial crisis.

Management is important, which is why Warren Buffett puts such stock in the character of the people who run the companies he invests in. But management isn't nearly as important as many investors think, which is why Benjamin Graham, Mr. Buffett's mentor, paid so little attention to it. In fact, Mr. Graham seldom bothered to meet the managers of the companies he invested in, partly because he felt they would tell him only what they wished him to hear and partly because he didn't want his judgments of business value to be influenced by impressions of personal character.

If you took the CEOs with the best track records and brought them in to run the businesses with the worst performance, how often would those companies become more profitable? According to economist Antoinette Schoar of Massachusetts Institute of Technology's Sloan School of Management, who has studied the effects of hundreds of management changes, the answer is roughly 60%. That isn't much better than the flip of a coin.

"Some people," Prof. Schoar says, "may have this almost blind belief that the manager at the top changes everything. Our results show that managers do matter, but they don't change everything."

Since the 1970s, several other studies have measured what happens when companies bring in new bosses. Most of the findings have been consistent: Changes in leadership account for roughly 10% of the variance in corporate profitability on average.
As Mr. Buffett likes to say, "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

But something else is going on here, says Princeton University psychologist Daniel Kahneman, who won the Nobel prize in economics in 2002. "We believe that people with certain characteristics will produce certain consequences," he says. "But we're wrong, because there is way, way more luck involved in determining success than we're prone to think."
The real force in corporate performance isn't the boss, but regression to the mean: Periods of good returns are highly likely to be followed by poor results, and vice versa. High returns attract fierce new competition, driving down future profits; low returns leave the survivors with fewer rivals, leading to better results down the road.

Most researchers agree that a company's results are determined less by its CEO than by its industry and the economy—which, in turn, are shaped by a host of factors that most CEOs can't control, like the price of raw materials, the value of the dollar, interest rates and inflation, bursts of technological innovation and so on.

In short, good management can't solve all problems, while some problems can get solved even without good management.

Plus, a company will be much more inclined to replace the CEO after a run of bad losses—and to bring him in from a firm that has been on a hot streak. That leads to an illusion: "You change the CEO," Dr. Kahneman says, "then performance reverts to the mean, and you attribute the improvement to the new guy."

Furthermore, the hot profits at the new CEO's former company are likely to cool off—by regression to the mean alone. When investors see that, they will mistakenly conclude that he is such a good boss that his old company can no longer thrive without him.

These beliefs tend to be temporary; the rave reviews for incoming bosses C. Michael Armstrong (from Hughes Electronics to AT&T, 1997), Carly Fiorina (Lucent to Hewlett-Packard, 1999) and John Thain (NYSE Euronext to Merrill Lynch, 2007) didn't last.

Some of GM's bonds jumped roughly 5% the day after Mr. Henderson resigned. But he didn't cause GM's woes, and whoever succeeds him might not be able to cure them. The odds tend to be against investors who bet that great new management can solve bad old problems.

- Adapted from The Intelligent Investor, Decmber 4, 2009

See you in the trenches - vmsteveo

11 Ways To Be The Biggest Loser

2009-11-24T22:54:00.006-05:00

Happy Thanksgiving!! Every thanksgiving it's the same conversation over the menu with the family chef... "Absolutely Mom, serving biscuits, stuffing, sweet and mashed potatoes make perfect sense, why wouldn't it?" If I run 10 miles each day for a week I should be even-steveo.

I thought I would share the post below as I am sure you are battling the same mind over mid-section dilemma. This post has nothing to do with physically overeating however it does have everything to do with the maniacal ways we mentally overeat with repsect to how we run our business. Don't get stuck in these trenches.

11 Ways To Be The Biggest Loser

1. Quit Taking Risks
It doesn’t take long for things to grind to a halt if you simply reduce risk to zero.

2. Be Inflexible
Inflexibility is one of the fastest ways to lose both customers and employees. That’s what happened at Coke for years as company leaders came to think of the drink and the green bottle as a single unit.

3. Isolate Yourself
Isolating yourself is fun. If possible, build your own Taj Mahal in the corner office.

4. Assume Infallability
To start, never admit a mistake. If you assume infallibility, then you can blame others for whatever goes wrong. Letters to shareholders are wonderful examples of this.

5. Leave Folks Wondering If They Got a Fair Deal
Play the game close to the foul line and it’s easy.

6. Dont Take Time To Think
When you make a decision without taking time to think, you’ll enjoy the gravity of bankruptcy combined with the thrill of a carjacking.

7. Rely on Experts and Outside Consultants
Top to bottom, your people will feel trusted and valuable. Plus, having consultants on board allows you to take your eye off the real business.

8. Love Your Bureaucracy
If you want to get nothing done, make sure administrative concerns come first.

9. Send Mixed Messages
It’s so boring when you say the same thing over and over.

10. Fear Tomorrow
Chicken Little is one smart bird. By staying focused on looming failure, you can almost guarantee it.

11. Lose Your Passion for Work & Life
Bonus item! Forget about the pursuit of happiness. Your keywords here: Be realistic.

—Adapted from The Ten Commandments for BusinessFailure, Donald R. Keough, Portfolio. Executive Leadership Vol.24 No.12 Dec. 2009

See you in the trenches - vmsteveo

3 Reasons To Uncover Customers’ Needs

2009-11-17T08:58:00.003-05:00

If it’s important to be user-friendly, and if the highest form of user friendliness is user-centric, then why aren’t you doing it? That’s the challenge posed by Dev Patnaik and Robert Becker, cofounders of Jump Associates. They do “need-finding,” which is part of their user-based business design. Patnaik and Becker offer three reasons to uncover your customers’ needs:

1. Needs outlast solutions. If you focus on a solution, you’ll constantly try to improve that solution. But if you focus on a need, you’ll be open to looking beyond a particular solution and inventing a better one. Cassette tapes, compact discs and MP3s are a series of solutions developed to satisfy the need for portable music.

2. Needs suggest a road map for product development. Exploring needs will give you an idea of what new products should be developed. Even if the capabilities aren’t there yet, you can plan for hiring the necessary talent and making the necessary investments.

3. Addressing needs prevents workarounds. People get so used to compensating for design flaws that they aren’t even aware of what they’re doing. Procter & Gamble had to visit customers’ homes to see them unconsciously wiping drips from bottles of laundry detergent. The company redesigned the spout to catch drips. Similarly, neither OXO nor its customers realized that conventional measuring cups force you to raise the cup to eye level so you can read its measurements. OXO cups now let you look straight down to see the quantity. To start moving toward user-friendly designs, ask “who” and “what” questions,
including:

Who uses something like this now?
Who wants one?
Who told someone else to buy it?
Who installs it?
Who pays for it?
Who sells it?
Who fixes it?
What’s not working?
What do you want?
What’s missing?
What patterns do you see?
What opportunities are there?
What could be better?

—Adapted from “Outside In,” Damien Kernahan, Fast Thinking. – Execleadership.com Vol. 24, No. 10 Oct 2009

See you in the trenches – vmsteveo

Being President...

2009-08-17T08:13:00.003-04:00

I understand that President Obama has only two years to do everything he wants to accomplish in his Presidency as it might be over in 4... and of course, you spend the final two years running for re-election... but quit spending money at a pace we might never recover.

When Reagan was President... the Democrats complained about spending money... Now that the Democrats are in power, the Republicans are complaining about spending... So... why are we spending so much money... both sides know not to spend... The President is hoping to equalize many inequalities in two years.... the free enterprise system doesn't work that way... there will always be some do's and some don't.... I am not saying we should not figure out a better system, but we need to keep that in mind.. We should be spending our money in helping people be successful and not helping them when they are not....

VDC-OS au Paul Maritz

2008-12-02T14:44:00.009-05:00

Leadership comes in many shapes and sizes. I especially enjoy tracking those mavericks that tend to buck the trend of mediocrity and blast through with insight and innovation. One leader on this path that is near and dear to my heart (and wallet) is my boss and President & CEO of VMware.

Meet Paul Maritz who was recently featured on the cover of Redmond Magazine entitled “Maritz vs. Microsoft”. In the below article Paul describes his vision of the Virtual Data Center Operating System (VCD-OS) and how it will change IT Administration forever.

See you in the trenches - vmsteveo

Redmondmag.com

Feature Cover Story: Back to the (Virtual) Future

With the upcoming Virtual Datacenter Operating System, new VMware CEO Paul Maritz wants to virtualize every bit and byte of your data center.
by Keith Ward December 2008

Not content to sit on its technology lead in the virtualization market, VMware Inc. has ambitious plans to push its products further onto the razor's edge. The twist, however, is that it plans to do so by turning the clock back to the days of Henry Ford, the Model-T and assembly-line manufacturing.

As strange as that sounds, it's not a contradiction. At its annual VMworld conference held in September, company officials laid out their vision, making the Virtual Datacenter Operating System (VDC-OS) its cornerstone. If everything works out the way VMware envisions, it could forever change the way IT administrators manage their networks.

When it comes to IT management, there tends to be "a lot of heavy lifting," says Bogomil Balkansky, VMware's senior director of product marketing. "Whatever operation you need to perform, it still tends to be a very manual, very custom, one-step-at-a-time process," he says.

Back to the Future
Not so with VDC-OS, which Balkansky describes as something out of that era when "Henry Ford introduced automation to the manufacturing world."

Balkansky continues the analogy, saying, "We're transitioning from swinging hammers to pushing buttons. The focus becomes what needs to happen, not spending the majority of your time executing it and making it happen. Ford introduced speed and efficiency and predictability to the [manufacturing] process." Those same elements characterize VDC-OS, he says.

The first step toward understanding VDC-OS is to properly define the term. It's not a product, but rather a category of software-a generic term for a flexible, agile data center. "Just like 'operating system' is a category no one owns, [VDC-OS] is a category," Balkansky says. "The brand name continues to be VMware Virtual Infrastructure [VI]." Balkansky compares it to the "operating system" being the category and Windows and Linux being brands within the category. "VDC-OS is the category, VI is the product," Balkansky says.

The paradigm shift will occur when an admin sets parameters for an application, and VDC-OS does the rest, Balkansky explains. "The sys admin world will be changed. To deploy an application, [the sys admin] will specify the service levels the application requires for availability, security, scalability. [Whether an application] needs five-nines availability or security, it needs to scale to this point. Then the infrastructure that supports and runs the application will interpret policies, execute and guarantee service levels and do it at the lowest total cost of ownership [TCO]. TCO is really a parameter in VDC-OS."

At Your vService
VDC-OS is complicated, but the thumbnail sketch looks like this: It's an umbrella operating system with two primary focuses-apps and infrastructure-to which VMware has added a small "v" at the beginning: Application vServices and Infrastructure vServices. Each of these areas is further broken down into sub-categories. Tying it all together is vCenter, the new name for VirtualCenter, VI's management tool.

Application vServices includes three key areas of enhanced functionality:

Availability: VMware says this will be achieved primarily through VMware Fault Tolerance, which makes a duplicate copy of a virtual machine (VM) on a separate physical server.

Security: VMware announced VMsafe last February, which will be delivered in future versions of VI. VMsafe provides APIs for third-party security vendors to write programs for VMs created by ESX. It'll allow those programs to go deeper inside VMs and detect more malware than in the past.
Scalability: While no new products were announced in this area, VMs will scale up in capacity with the ability to use double-up to eight-the number of virtual CPUs (vCPUs), as well as quadruple the amount of RAM they can use (up to 256GB).

Infrastructure vServices also has three main components:

vCompute: The main upgrade here is VMDirectPath, which allows devices like a physical network interface card to directly access a VM, cutting down on processing overhead.

vStorage: Storage is a promising area with a number of new offerings, starting with vStorage. Much like VMsafe, vStorage provides APIs for storage vendors to hook into VI and integrate their products more directly. vStorage Thin Provisioning saves storage space by allocating storage on an as-needed basis, rather than setting aside a block of storage space which may or may not get used. vStorage Linked Clones is another space-saving technology that shares common OS images in storage, avoiding a duplication of that information for each VM.

vNetwork: The most excitement in networking surrounds virtual distributed switches. One of the biggest VMworld announcements involved the Cisco Nexus 1000V switch, Cisco Systems Inc.'s first-ever virtual switch. Expect other vendors to come out with similar products quickly.

On the management side, the biggest update to vCenter, other than the name change, is the integration of AppSpeed, the fruits of the B-hive Networks acquisition. A VMworld demo showed its ability to monitor VMs at a level far deeper than formerly available with vCenter.

Architecture vs. Marketecture
Although VDC-OS is an ambitious undertaking, the announced goals aren't groundbreaking. In fact, some believe it's as much a marketing campaign as anything else. "I think [VMware CEO] Paul Maritz understands IT technology on a large scale and has articulated their IT strategy better," says Burton Group Senior Analyst Chris Wolf, a virtualization specialist. "VDC-OS allows them to group all this together under a common message."

Wolf believes the new message is less technology-focused, and he says that's a good thing. "The problem was they weren't tying their solutions back to applications and back to the user. IT decision-makers worry about [issues like], 'How do I solve this problem?'"

Rachel Chalmers, research director for infrastructure management for the analyst firm The 451
Group, agrees that much of VDC-OS is about re-branding rather than new technology. "VDC-OS is partly marketecture and signals a changing of the guard," Chalmers says, from former CEO Diane Greene to Maritz. "Greene was always very careful to say that the hypervisor is not an OS."

Maritz doesn't have those same concerns, she says: "Maritz described the new raft of releases, the new roadmap, as an OS. It's just a different way of framing the conversation." Chalmers adds that VDC-OS contains "no radical departures from the roadmap. It's exactly what you would have expected from a VI announcement."

Independent consultant Edward Haletky, a VMware specialist who has written a book on ESX, says, "VDC-OS is a concept. It's a different way of looking at the existing VMware product line. The interesting part is that it has split off the concept of compute resources, networking resources and so forth. For example, vCompute is ESX. vStorage is SRM [VMware's Site Recovery Manager]. vNetwork is a distributed virtual switch. They've announced all these products [before] -- it's just another way of organizing them."

The difference, Haletky continues, "is in layering; putting the hypervisor below all these layers. VDC-OS is everything above the hardware." He also believes that it's VMware's way of minimizing the hypervisor, which has become commoditized. "Microsoft has been touting that its hypervisor is free," he explains. "[VMware is] downplaying the hypervisor's role in all this. Virtualization is not just the hypervisor anymore. It gives a new view of the way VMware's going to design and architect things in the future."

Q&A
By Ed Scannell

2009 should be an interesting year for Paul Maritz. Hired to replace VMware Inc. CEO and co-founder Diane Greene earlier this year, it will be Maritz's job over the next 12 months to keep Microsoft from tearing away a huge hunk of VMware's share of the virtualization market. Microsoft has made it abundantly clear that it intends to compete hard in this space, but if anyone has the resume to carry it off, it's Maritz. He worked for Microsoft from 1986 to 2000, and as a result, few have a thicker playbook than Maritz on the product strategies and corporate culture of Redmond. Maritz sat down with Redmond Editor Ed Scannell to assess the challenges he faces competing against his old company, VMware's new partnership with Cisco Systems Inc. and why he doesn't want to own the cloud.

Q: How important is it for VMware to own a piece of the cloud as part of your overall strategy?

A: Well, our whole strategy actually is to not own the cloud going forward, but instead to enable interoperation between clouds and a corporation's internal infrastructure in the cloud. As we help our internal customers become more efficient -- and they often characterize efficiency and flexibility as becoming more cloud-like internally -- what that really involves is finding a way to abstract the application loads from the underlying infrastructure. As we increasingly separate those two, it opens up the opportunity for them to use the infrastructure either from inside the firewall or outside the firewall in someone's cloud. Our primary contribution is to enable internal IT customers to make business decisions about whether to employ external cloud resources or not. It's not a black-or-white issue for them whether they should migrate from what they're doing now and into somebody's cloud. That can essentially be a tactical decision they can make based upon business needs going forward.

But in so doing, we also enable a degree of interoperability between clouds. One of the problems with the cloud strategies put forward by Amazon, Google, Microsoft and others is that they likely will be incompatible.

Q: What are some of the technical problems with moving internal and external virtual machines (VMs) around and ensuring consistency between users and various service providers?

A: It's clearly a set of technical and standards-based issues you have to work through. The good news is we think that the kinds of things we need to get done -- for example, make apps run more efficiently in a virtualized environment -- are exactly the same things [companies] did to allow more interoperability with the cloud. Specifically, one of the sub-components of the vCloud strategy is the vApplication strategy. So the notion about how you describe an application in such a way that it can run efficiently, be provisioned efficiently and have a service-level agreement associated with it in an independent application infrastructure is an important one. We see the vApplication standard important both for internal as well as external use.

Q: Your relationship with Cisco is an interesting one. Talk about that relationship and the virtualized switching infrastructure you hope to create.

A: That's about blending the virtual and physical worlds and making it easier for network managers to manage things. There's a dimension of the network that needs to be virtualized. In other words, how do you handle traffic between virtual machines? At some point those virtual machines also have to communicate out into the physical world. So you have to mange the interaction with the physical networking world. What Cisco will do is basically insert into our virtualization layer a reimplementation of the basic virtual-switching software that we have. We've encouraged them to do this because we believe that our layer should be a true platform where you can plug things into and out of it. So what they've done is plugged into our platform a virtual software switch that looks-from a management perspective-just like a physical Cisco switch. So a network admin can manage their network in a uniform way and do so independently of whether it's physical or virtual.

What things can you take from Microsoft's playbook-which you know so well-to help you compete better against them?I certainly have a great deal of respect for Microsoft and take them very seriously, but I'm not overawed by them. When you're competing against Microsoft, you have to be firmly convinced of your value proposition and then execute based on that. You do have to realize they can afford to make more mistakes than you. But if you set your sights on a truly differentiated value proposition, and you execute well, you'll do very well.

Q: You've made ESXi free. Are we going to see similarly competitive price drops for VMware infrastructure?

A: We're in a competitive environment, and we know we have to respond accordingly. We're not going to stick our heads in the sand. Our intent is to stay ahead on functionality.

Q: Are you comfortable with the technology to where you can tell users to virtualize everything, including mission-critical apps like ERP and CRM? Or are we at the point where some of that is still coming down the road?

A: We have many large customers who are still on the journey, which will time out in the next 12 to 18 months. Our goal is to get to a 100 percent virtualized environment. The only reason some of them may not get there completely is they have stuff still running on IBM mainframes.
How important do you think a standardized software stack being put in place for virtualization would be? What things are you doing to make that happen?That's the essence of our Virtual Datacenter OS vision-by extensive use of virtualization and related technologies, our customers can completely decouple the provisioning and running of their application environment from the underlying infrastructure. They can get close to their nirvana, which is to be able to treat all their compute resources as a single giant computer in which they flexibly provision applications for their users.

Admins as Button Pushers
An important part of that design is vApplication (vApp), which enables multitier apps to be configured, deployed and managed as a single unit. Leveraging open virtual machine format (OVF), which allows virtual appliances to be run on disparate hypervisors, vApp promises to further simplify virtualization. VMware's Balkansky goes back to the assembly line analogy: "It's how manufacturing happens nowadays; you push some buttons and the product comes out the other end."

For instance, consider a typical three-tier architecture for an application such as Oracle Customer Relationship Management (CRM). It consists of a Web server, application server and database.
"Instead of managing each tier separately, you can bundle them, move and manage them together, and assign policies to the whole instead of individual parts," Balkansky says. That involves combining multiple VMs. Using OVF, admins can specify policies for availability, security and other parameters and extend the OVF schema to define their own requirements. "It's a production line for IT, [in which administrators] automate all of these tasks in IT, and produce high quality," Balkansky says.

Security Concerns
That's a good thing, but the downside comes in increased security risk. VDC-OS has the potential of increasing vulnerabilities, which puts it at a disadvantage in the current era of HIPAA, Sarbanes-Oxley and other regulatory standards, especially when considering its central role as part of VMware's "cloud computing" strategy. Wolf says, "security is a huge problem for a lot of organizations. VMsafe should be the first product with a reliable security stack acceptable to security auditors. [VMware is] the first vendor to deliver that framework. Security auditors need to accept the [cloud computing] architecture as a security boundary, or none of this matters."

Haletky, who owns AstroArch Consulting Inc. and does a lot of virtual security work with clients, believes that without proper security measures, VDC-OS won't get off the ground. "Everyone's going to get their hands on the VMsafe APIs. More APIs means more chances to hurt a system. They have to properly secure the system, and how they'll be implemented is a major concern." That means a team effort, Haletky says. "It's not really VMware's problem in a lot of ways. They've opened it up, [so it becomes] the vendor's problem -- how do they secure it? Security's [often] an afterthought. And as long as it's an afterthought, it's a weakness."

Security in the virtual realm requires a new way of thinking, Haletky continues. "It has to change at the mindset layer for the security professional. It can't just end where hardware ends; it has to end where virtualization ends, which means ending with VMs."

The Cisco Factor: Network Virtualization Gets Real
By Tom Valovic

VMware's Virtual Datacenter Operating System (VDC-OS) is an architectural framework where storage, network and compute core elements are all virtualized as resource pools. The idea is to create the ability to optimize interaction between domains by making the pools transparent to each other. So the network, for example, gets visibility into the virtualized base of servers, which enables them to work together harmoniously in the process of moving VMs around dynamically.

To make this a reality sometime next year, VMware Inc. is working with key strategic partners on capabilities related to storage and networking aspects. To optimize network resources to better support virtualized environments for its customers, VMware's primary partner is Cisco Systems Inc., which also has a small ownership stake in the company.

A new Cisco product called the Nexus 1000V, announced at VMworld, is a key part of this collaboration. At the show, Ed Bugnion, CTO of Cisco's Server Access and Virtualization Business Unit, described the Nexus 1000V as "the first third-party ESX switch" and Cisco's "first software switch," with the latter being a significant milestone for the networking giant. Why? Simply because in the next-generation data center, moving features and functionality to software is an important step toward creating truly virtualized environments where there's full transparency between different resource pools.

Zeus Kerravala, senior vice president with the analyst firm Yankee Group Research Inc., sees Cisco doing more of this going forward. "Down the road, the network will be the orchestrator of virtual services [and to that end] Cisco is moving more towards being a software company. It's rapidly changing from a hardware and network company to a software and IT company. And to be a strategic vendor, they need to be more 'IT relevant' than they have been in the past."

So will VMware work with other network partners besides Cisco to do this? Kerravala doesn't think so. "Who else is in a position to build something like this?" he says.

The Nexus 1000V, integrated into VDC-OS, will be available next year. In the meantime, there will likely be other similar collaborative projects between the two companies, as yet unspecified. But for now, both companies expect that the new functionality afforded via Nexus will improve security, policy enforcement, scalability in VMware environments and management capabilities for VMs overall.

Another critical area of collaboration for the two companies centers on VMware Virtual Desktop Infrastructure (VDI) solutions. A critical element in any VDI deployment is the communications link, whether affected locally with a LAN or between enterprises over a WAN link. But if a WAN is involved, latency issues are more challenging, and application delivery solutions can be implemented to improve performance. Cisco is currently offering products to address these types of performance issues for both VDI and cloud computing, including Cisco Wide Area Application Services (WAAS) and the Application Control Engine (ACE).

Deadline Pressures
VMware has set an aggressive timetable to have all the pieces of VDC-OS in place by the end of next year. Balkansky says that although VMware hasn't publicly announced a release schedule, it's committed to the 2009 timeframe.

The 451 Group's Chalmers is less sure. "This is the VI roadmap. They can't ship all of it. If they do 80 percent of it, they'll be doing well. Storage vMotion has been very, very difficult to develop [and] Network vMotion is a level of complexity even beyond that," she says.

Wolf says that it's in VMware's best interest to hit those 2009 deadlines. "I have no doubt about them [hitting their shipping dates]," he says. "They have a small window of time to establish themselves as dominant in the market. They have to move extremely quickly; if they move slowly, it plays right into Microsoft's hands."

In Microsoft's Sights
Indeed, Microsoft itself has been rushing virtualization products to market; witness Hyper-V, System Center Virtual Machine Manager 2008 (VMM 2008) and the standalone Hyper-V Server, three major products out in the first 10 months of this year. Given how serious Microsoft and other companies like Citrix Systems Inc., Virtual Iron Software Inc., Red Hat Inc., Parallels Inc., Novell, Sun Microsystems Inc., Hewlett-Packard Co. and others are about the emerging virtualization space, sitting still amounts to falling behind.

VMware still has a substantial technology lead, however, and it seems intent on not just keeping that lead but extending it.

"VMware is promoting a stack, including parts where Microsoft historically hasn't gone in the past-in server storage, network infrastructure [and so on]," Wolf says. One question following VMware's announcements, in Wolf's mind, is: "How much will Microsoft chase VMware or go down its own path? In terms of features, VMware is still ahead of its competitors."

That's been Chalmers' experience as well. "When we talk to end users, VMware is still their default choice," she says. "It's not just features and functionality that are so far ahead. Skill sets are overwhelmingly [built] around VMware."

Haletky says the VDC-OS concept puts more distance between VMware and the competition, now and in the future. "I think VMware's widening the gap, and they already have a wide gap," he explains. "No Storage vMotion [for Microsoft] -- Hyper-V doesn't have VMotion," a technology for moving VMs from one physical host to another with no downtime. "Distributed Resource Scheduling (DRS) -- no one has that, other than VMware," he adds.

Haletky says that when the new features of VDC-OS are included, the chasm will grow even more: "When you add in fault tolerance, distributed virtual switches and VMsafe, I think it's just going to get wider."
Keith Ward is editor of Virtualization Review magazine. You can contact Keith about "Back to the (Virtual) Future" at kward@1105media.com.

Cloud Computing - A well done perspective on its evolution

2008-11-11T13:06:00.011-05:00

Randy Newman said it best...

"Want some whiskey in your water?
Sugar in your tea?
What's all these crazy questions they're askin me?
This is the craziest party that could ever be
Don't turn on the lights 'cause I dont want to see..."

Companies like Amazon, Google, Cisco and VMWARE are leading the charge in this new space of cloud computing. What is it you ask? It's the next evolution in IT that is being adopted by major technology companies across the globe. The following article gives a good summation of its history and future from the "end point's" or device perspective.

On the periphery
Oct 23rd 2008
From The Economist print edition

The cloud’s communications with its clients will become ever more intelligent and interactive

IT WILL take something with a lot more bang to replace a medium that is thousands of years old. That was the prevailing reaction when Amazon last November announced the launch of Kindle, an electronic book reader the size of a paperback that can store more than 200 volumes. Yet by the end of this year Amazon will have sold nearly 380,000 Kindles, says Mark Mahaney, an analyst with Citigroup, a bank. “Turns out the Kindle is becoming the iPod of the book world,” he recently wrote in a note to clients, in a reference to Apple’s iconic music player.

It is certainly not the Kindle’s looks that explain its success. Compared with the iPod, its design looks very last century. Software and battery life, too, leave a lot to be desired. The chief attraction of the device is the ease with which it can be used to buy books and other content. Equipped with a mobile-phone modem, the Kindle can simply pull new reading material out of the air. Users do not even have to have a wireless service contract. “Our vision is to have every book that has ever been in print available in less than 60 seconds,” explains Jeff Bezos, Amazon’s boss.

It remains to be seen whether the Kindle will become a cultural phenomenon like the iPod, of which around 160m have been sold so far. Amazon, for its part, is downplaying the Kindle’s success and will not confirm any sales estimates. But it is safe to say that, once the next generation of wireless networks is up and running, hundreds of millions of devices will come, like the Kindle, with built-in radio connectivity (see chart 5). Digital cameras will automatically upload pictures. Smart meters will send readings of how much electricity a house consumes. All kinds of sensors will be able to send messages, even things like dipsticks when tanks of liquid are low.

The relationship of these devices to cloud computing may not be obvious. But if huge data centres and applications make up the cloud itself, then all the hardware and software through which it connects and communicates with the real world are its periphery. In IT speak, this is known as the “front end” or “client side”.

As the Kindle and other examples show, this layer does not have much to do with the user interface or client device of old. It will do a lot of computing itself. It will come in all shapes and sizes, depending on what the user wants to do. And it will not just distribute information, as the web does, but collect it as well. The analogy that springs to mind here is a theatre performance with audience participation: the electronic cloud will adapt to whatever it engulfs.

As you like it
Just like computing itself, the dominant user interface has evolved continually. In the days of the mainframe, when computers and their peripherals filled entire rooms, people communicated with these machines first via punch cards and then via green-glowing monitors, which were simply dumb terminals. Only with the rise of personal computers did the user interface become more intelligent, responsive and graphical.

The first version of the web was thus a brief step backward. To be sure, browsers brought colour and graphics to the hitherto text-based internet, but they were as dumb as the mainframe terminal. This has changed only in recent years. A bundle of web-development techniques dubbed AJAX and multimedia software such as Adobe’s Flash and Microsoft’s Silverlight now allow programmers to write what are called “rich internet applications” (RIA).

Whatever the buzzword, the principle is much the same. Servers no longer dish up simple hypertext markup language (HTML), the web’s early lingua franca. Increasingly, web pages are bona fide pieces of software that are executed in the browser. Users of Web 2.0 sites who venture into menu items such as “view source” in their browsers can sometimes see thousands of lines of code.

In recent months the browser has become even more of a platform for other programs, akin to an operating system such as Windows. The main driver of this trend is Google, with its huge strength in distribution that can only gain from more and more software being offered as a service. In May 2007 the Silicon Valley firm launched Gears, a program that allows web applications to be used offline, and in September this year it released a new browser called Chrome. Its most important feature is that it can execute several sophisticated web applications at once.

Although for now the internet browser will remain the main vehicle for people to interact with the cloud, other forms are coming to the fore. One is the “widget”, a snippet of code that often lives on a PC’s desktop and allows the user to get a quick personalised view of a set of data. The idea is that a salesperson, for instance, should not have to fire up an entire application for customer-relationship management to find out which leads to follow up.

More importantly, there is now a greater variety of hardware through which to access the cloud. Already, desktop and laptop computers are starting to lose their monopoly for surfing the web as smaller devices such as smart mobile phones and various forms of portable computers start to compete with them.

Asus, a Taiwanese computer-maker, started the trend when it launched a small, cheap laptop called “Eee” a year ago. Now there are dozens of these devices. Gartner reckons that 5.2m of these “mini-notebooks” will be sold this year, 8m next and as many as 50m in 2012.

Perhaps the best indicator of things to come is Intel, a huge chipmaker. It made a fortune selling processors for servers, personal computers and laptops. In June the firm launched a new line of chips called Atom, designed to power what it calls “netbooks” and “mobile internet devices” (MIDs), mainly intended for surfing the web. Intel is also the driving force behind WiMAX, a technology for wireless broadband access to the internet. It wants to put a WiMAX radio chip into as many devices as possible, from portable computers to specialised gadgets such as the Kindle.

Apple’s iPhone and its App Store, which allows iPhone and iPod owners to download applications, also provide a foretaste of how important wireless devices will be for the cloud. Apple launched App Store only in July. Two months later it had already tallied 100m downloads, meaning that it took off much faster than Apple’s highly successful iTunes music store. Many of the programs on offer connect to the cloud, including news feeds, multi-player games and a service that keeps track of the latest polls for America’s presidential election.

You can take it with you
The plethora of devices wirelessly connected to the internet will speed up a shift that is already under way: from a “device-centric” to an “information-centric” world, in the words of VMware’s Paul Maritz. Up in the cloud there will be a body of data for each individual that will accompany them through life, he explains, and it will not be tied to any particular device, as it is today.
Again, what will make this possible is virtualisation—this time of client devices, not servers. With the help of software from VMware and others, some firms have already virtualised their employees’ desktop computers, which allows them to be managed centrally. Operating systems and applications will no longer run only on the employee’s PC but on a virtual machine in a data centre that can be accessed remotely, theoretically from any PC in the world. Sooner or later mobile devices will also become virtualised. Users will be able to use their applications and data on whichever gadget they have at hand.

Yet the cloud’s interface is designed not merely to provide information but to gather it as well. The future belongs to services that respond in real time to information provided either by their users or by non-human sensors, predicts Tim O’Reilly, the founder of O’Reilly Media, a publisher of technology books who coined the term “Web 2.0”. Such “live applications”, he says, will get better the more data they are able to collect—and there will be plenty as the cloud expands.

One of the first examples of such a service was Google. What originally put the search service ahead of the competition when it was launched a decade ago was its way of harvesting the information provided by web users in linking to other sites: the more links point to a page, the more useful it must be. These days most links are generated by computers, so the original form of this “page rank” algorithm has long since been scrapped. But Google’s approach is still the same: mining information provided by web users, such as their search histories, to provide more relevant search results and more effective and targeted advertising.

The direct link to users also allows firms such as Google continuously to improve their interface, something traditional software-makers were not able to do. At any given time Google is running dozens of tests to optimise the look and feel of its offerings. This makes web applications far less technology-driven and much more user-oriented, says IBM’s Mr Wladawsky-Berger. “They are much more inspired by what goes on in the real world.”

A raft of start-ups is also trying to build a business by observing its users, in effect turning them into human sensors. One is Wesabe (in which Mr O’Reilly has invested). At first sight it looks much like any personal-finance site that allows users to see their bank account and credit-card information in one place. But behind the scenes the service is also sifting through its members’ anonymised data to find patterns and to offer recommendations for future transactions based, for instance, on how much a particular customer regularly spends in a supermarket. Wireless devices, too, will increasingly become sensors that feed into the cloud and adapt to new information.

Nokia, for its part, is planning to build all kinds of sensors into mobile phones to monitor things like movement, barometric pressure or even the owner’s health, which many experts expect to become a big new trend. Sensors could also be used to record people’s activities, creating what some already term a “lifelog”—raising all kinds of privacy concerns.

As wireless technology gets better and cheaper, more and more different kinds of objects will connect directly to the cloud. SAP, the German software-maker, has launched a research project called “The Internet of Things” to see what can be done with the resulting information. As part of that project, an initiative called the “Future Factory” is now under way to investigate how intelligent tags can make manufacturing more adaptive and efficient.

More and more data get you only so far, however. In the end, Google’s search results and its text-based online advertisements are relevant to users only because the firm has devised clever ways to sift through them, says Hal Varian, the firm’s chief economist. The big challenge of the cloud will be to connect the myriad data in it and make them profitable.

See you in the trenches - vmsteveo

In Search Of A Good Cab

2008-10-20T19:26:00.005-04:00

by vmsteveo

While watching Wall St. Crisis and enjoying a 2006 Hyman Hill Cabernet ($11), I thought I would escape from my leadership research and archiving studies and talk about another topic near and dear to my heart. Wine. Finding a good, inexpensive wine is like going after the Holy Grail at Total Wine or any other discount wine store of your liking. A friend of mine who's father grew up during The Great Depression would drive 20 miles to save $.05 on a can of tuna fish. Hmmm, with gas prices these days I think that can of tuna would have doubled but then again, I completely understand its all about the mission. Either way regardless of the drive, finding that good bottle of wine at a great price is, well priceless. Keeping with the theme of my previous bullitized posts, here are a few pointers when looking for that diamond in the rough:

Introduce yourself to the wine steward or shop owner - Whether its at a fine restaurant or at a discount wine shop, introduce yourself to them. Let them know where you've been and what you are specifically looking for. Let them know if this is a special occasion or an evening where you want to hang with your peeps around the TV. Most importantly, tell them you don't want to spend too much money.

Go online and research value wines - There are great wines that are under $30 online. Just make sure you are looking at a reputable rating service. As a plug for my techie hommies Amazon.com is jumping into the wine selling business. With 81 million active customers Amazon might just be the one place to go for wine variety and good prices. Other websites include Winespectator.com, Wine.com and Redwinebuzz.com. Either way there is no substitute for striking up a conversation with a friendly wine expert to enlighten you with the latest tastes and trends at the locale wine bar or discount shop.

Here are a few good ones I have had a chance to taste:

B V Cabernet Rutherford 2005
Wine Spectator Rating: 88
Price: $27
California

Bishop's Peak Rock Solid Red Paso Robles 2004
Wine Spectator Rating: 87
Price: $12
California

J. Lohr Cabernet Paso Robles Seven Oaks 2004
Wine Spectator Rating: 87
Price: $15
California

Alamos Malbec Mendoza Seleccion 2007
Wine Spectator Rating: 90
Price: $15
Argentina

Fratelli Pighin Collio Pinot Grigio 2007
Wine Spectator Rating: NA
Price: $14
Italy

Serving Wine
Some food for thought or should I say wine for thought... Allow any wine to breathe at least 20-40 minutes either in a nice decanter or if you don't have one, slowly pour into a glass pitcher then after 20-40 minutes, pour it back in the bottle. Slightly chill reds and leave whites outside of the fridge at least 10 minutes before serving.

So here's the challenge. Most of the "bargain wines" never reach the shelf of your local Sam's Club or grocery store. Why? Because the good ones are usually snapped up by restaurants looking to sell these extraordinary wines at a huge profit. If you do find them, pick up a few for parties, gifts, etc. If all else fails, walk in to the shop without any expectations other than price, what you are in the mood for (aka red or white) and what you definitely want to stay away from and chances are you will walk away with a real find. One final note, if you do buy online, stay away from the counterfeits especially with the high end wines and if you do find that diamond in the rough we hope you will share with a quick reply...

See you in the trenches - vmsteveo

Buy American. I Am.

2008-10-18T09:05:00.003-04:00

By WARREN E. BUFFETT
Published: October 16, 2008
New York Times, page A33

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.

See you in the trenches - vmsteveo

The Careful Critic: How Artful Executives Tell Someone He’s/She's Wrong

2008-10-14T16:49:00.005-04:00

Adapted from www.execleadership.com

Here's a nice tidbit that can be used in any situation at any level of leadership....

The careful critic: How artful executives tell someone he’s wrong

No one likes to be told he’s wrong. But shrewd executives know how to deliver sharp criticism without cutting thin skin. Some guidelines:

Speak to the person’s agenda
Say nothing until you determine how your negative comments affect the individual’s self-interest. Everyone wants to be promoted, keep people off his back, get rich and be perceived as a leader. So express your opinion in terms of how his approach will interfere with his goal.

Example: “That’s CJ’s pet department. We’ll never hear the end of it if his people get upset and complain.”

Indirect ploys
If presenting your case directly strikes you as unwise, tactless or potentially ineffective, try the following:

Ask for clarification - Let the individual work through the flaws by including them in an “If I’ve got this straight …” summary.
Solicit questions - Tell someone something and you question his competence. Get him to think of it himself and there’s no problem. Just keep your voice neutral.
Fill in the picture - Anyone can make faulty decisions if he has limited knowledge of the situation.
Shift the blame - When the individual is “never wrong,” state the negatives in terms of the other parties involved. Example: “That customer is touchy.”

See you in the trenches - vmsteveo

2008-10-10T13:16:00.003-04:00

Pat Bagley, Salt Lake Tribune, Utah

Visit Pat's site

See you in the trenches - vmsteveo

Debunking the “No ROI in Virtual Desktop Computing” Myth

2008-10-09T14:43:00.003-04:00

Debunking the “No ROI in Virtual Desktop Computing” Myth
By Julian Weinstock
published: Tuesday, August 26 2008

Virtualization has been the hottest topic dominating the technology headlines in the last year, whether it is about server virtualization initiatives or benefits, or about new developments around virtual desktop computing. In fact, Gartner expects virtualization to be the highest-impact trend in IT infrastructure through 2012.

The leading edge of that trend is server virtualization, but virtual desktop infrastructure (VDI) is rapidly catching up based on its promise to reduce the complexity and cost of enterprise desktops, and change the way we work, However, as is the case with many emerging trends, VDI economics is still subject to different assumptions and interpretations.

The early returns hold that there is no ROI in desktop virtualization. It's a wrong, but understandable, assumption.

Server virtualization, which has already gained significant market traction, offers compelling ROI based on server consolidation. The higher degree of asset (server) utilization translates directly into considerable reductions in server capital investment (CAPEX), but has only marginal impact, if any, on the operational management costs (OPEX). The success of server virtualization has created the expectation that VDI would provide similar ROI, based on CAPEX savings. However, as some VDI skeptics have noted, this is not the case.

The skeptics' argument that there is no ROI in VDI is based on a back-of-the-envelope cost calculation along the following lines: $400-$500 per desktop investment is required for server, storage, network and other data center costs to set up the VDI infrastructure, and $100-$200 is needed for a thin client or other access device. The total cost of $500-$700 per client is too close to the cost of a rich client to provide compelling ROI for VDI, even if the useful lifetime of VDI is longer than the typical three years of distributed, rich desktops.

The fallacy of this argument is simple: the challenge with enterprise desktops today is not the acquisition costs but the total cost of ownership (TCO), according to Gartner, IDC and other leading industry analysts. Acquisition costs, which have been tracking a declining trend for a long time, represent less than 20% of enterprise desktop TCO. However, desktop management costs are rising faster than acquisition costs are declining, and represent more than 80% of the TCO. So, even if VDI did reduce desktop acquisition costs, it would be meaningless when the TCO is defined predominately by the management costs.

As the skeptics correctly point out, VDI does not reduce the acquisition costs. However, it does slash the management costs quite significantly-and this considerably reduces desktop TCO.

Management matters

VDI promises a number of benefits to the enterprise, including enhanced (physical) security and better regulatory compliance; higher availability and built-in business continuity -- with the desktop available anytime, anywhere, on any device; increased business agility -- with the ability to provision or move a desktop with a click of a button; reduced power consumption; and remarkably better manageability. Of these benefits, better manageability has the greatest impact on reducing the cost and complexity of the desktop and, therefore, the highest impact on TCO.

Enterprise desktop TCO numbers vary but, in general, industry analysts peg the cost at $3,400 - $5,900/desktop/year, depending on the extent of management, and the type of the client device. About half of the TCO is attributed to direct IT cost of managing the lifecycle of the desktop, and the other half is attributed to indirect costs associated with lost user productivity. The high management cost is driven primarily by the distributed and heterogeneous nature of enterprise desktops and the inseparable coupling of the desktop image to both a user and a physical device (and its device drivers). The majority of direct costs stem from two labor-intensive management activities: helpdesk services and IMAC (installation, moves, adds and changes). The rest come from more automated activities such as security and compliance monitoring, asset inventory, and software distribution, patches and updates.

VDI Saves 15-25% Over Traditional Desktop Environment

VDI is a centralized, homogeneous and device-independent model, with the desktop image completely abstracted from and independent of the underlying device or infrastructure. This architecture is inherently more manageable and, in fact, it can effectively reduce the top two cost line items (helpdesk and IMAC) by more than 50% each. Software distribution, patches and update components of the TCO can also be reduced by employing the pooled desktop option of VDI. Even though, to capture these gains, upfront capital investment and on-going operational expenses for the VDI infrastructure is required, in total, VDI can reduce desktop TCO by about
15%-25%.

This is quite a compelling proposition, especially when extended to thousands or tens of thousands of desktops, but it is not without challenges of its own. Acquiring and operating VDI infrastructure (server farm, storage array, network gear, virtualization platform, etc.) of any meaningful size introduces a new dimension of complexity and cost, placing VDI economics out of reach of many organizations, both large and small.

Extending the ROI Benefits of VDI

Imagine another computing model that could capture the desktop management savings and reduce OPEX without any upfront investment in infrastructure, and even without the burden and expense of operating the infrastructure. Similar to the SaaS model, whereby the infrastructure is owned and operated by a third-party and provided as a subscription service, the VDI infrastructure could be owned and operated by a third-party and provided as a service on a subscription basis.

Such a desktop as a service (DaaS) model already exists and is radically changing the economics of VDI. It enables enterprises to capture the benefits of VDI without having to own and operate the VDI infrastructure. This transforms CAPEX to OPEX and can save enterprises another 10% over internally deployed VDI, effectively saving 25%-35% over traditional desktop practices.

As you can see, the skeptics are partially right: VDI does not result in clear CAPEX savings like server virtualization does. But, let's not ignore the savings it does deliver in desktop manageability and operational expenses. That ROI is considerable, and it can be made even more dramatic by consuming VDI as a service.

See you in the trenches - vmsteveo

Fall of Freddie Mac and Fannie Mae

2008-10-08T20:37:00.005-04:00

Source: www.execleadership.com Vol. 23 No. 10 October 2008
— Adapted from “At Freddie Mac, Chief Discarded
Warning Signs,” Charles Duhigg, The New York Times.

You probably know the pride and thrill of playing with OPM—other people’s money. Chances are, though, you wouldn’t abdicate your responsibility to those people, ignore advice and muse aloud about your own situation while losing all their money. You wouldn’t do that. It’s the opposite of leadership.

Welcome to the world of Freddie Mac and its former CEO, Richard Syron, who lost his No. 1 spot recently as the government seized control of mortgage giants Freddie Mac and Fannie Mae, taking direct control.

• Starting in mid-2004, Syron’s chief risk officer began warning him the company was buying too many bad home loans.

• That officer and others also warned that underwriting standards were becoming too shoddy.

• Syron said the company couldn’t afford to turn away riskier loans.

• Many former top executives at Freddie Mac, plus other stakeholders, report Syron ignored recommendations that might have averted the crisis. Freddie Mac said there was “little to nothing” it could have done.

• “If I had better foresight, maybe I could have improved things a little bit,” Syron remarked. “But frankly, if I had perfect foresight, I would never have taken this job.”

• Syron commented that shareholders, regulators and Congress wanted different things, and blamed Congress for making him buy bad loans. “Sure, it’s hard to deal with the pressures of Congress,” noted a former colleague. “That’s why executives get paid so much.” Syron’s compensation equaled more than $38 million since 2003.

• His former counterpart at Fannie Mae, Daniel Mudd, said the two mortgage giants were victims of circumstance.

• At a conference this spring, Syron defiantly dismissed advice to raise cash. “This company will bow to no one,” he declared. He then delayed a stock sale as the price of borrowing skyrocketed.

• A like-minded former Freddie Mac official sounded surprised that taxpayers demanded more oversight of their money. He says he expected a government bailout. “But we didn’t expect it would come at the cost of a new regulator who now has the power to burrow into our business
forever.”

• The capper comes from Syron himself: “I’ve had four other jobs as CEO and I came out of them all pretty well.”

Have you hugged your B players today?

2008-10-08T20:16:00.015-04:00

Article from www.Execleadership.com
— Adapted from “Let’s Hear It for B Players,” Thomas
DeLong and Vineeta Vijayaraghavan, Harvard Business
Publishing, www.harvardbusiness.com.

Flashy A players often steal the scene, but in a weak economy, and especially during a retrenchment, you need the stability, knowledge and long view of your B players—the steady
performers who don’t need instant gratification or the limelight. Yet many leaders often ignore B players, focusing instead on volatile A players. The risk is that overlooked B players may leave, taking knowledge with them.

First, recognize who they are. B players tend to be:

Former A players - These highly skilled professionals hop off the fast track to raise a family or deal with a life crisis. They’ll keep doing A work if you let them do it more slowly, on their own terms.

Straight shooters - Blessedly honest, they ask tough questions that you’ll ignore at your own peril.

Go-to managers - These employees compensate for average skills with a profound understanding of company processes. They stay focused, quietly getting down to business while your A players continue to jockey for attention and advancement.

Once you’ve identified B players, keep them happy:

Accept that they’re not as driven as you are. Ask what they want from their careers and do your best to provide the conditions to help them achieve it.

Give them your time. Make sure it would never even occur to them that you might be ignoring them.

Reward them in small but meaningful ways. B players are promoted relatively infrequently, so
thank them in other ways. Tickets to a show of their choosing, dinner for two, even a handwritten note can help them feel valued.

Offer them career choices. Training, coaching and sideways promotions all can invigorate an employee’s gradual development.

See you in the trenches - vmsteveo

401k Shock

2008-10-07T14:08:00.004-04:00

See you in the toilet - vmsteveo

Jack Welch Sees a ‘Bathtub’ U-Shaped Recession

2008-10-07T13:46:00.004-04:00

source: www.chiefexecutive.net
By JP Donion

We’re in a recession and I don’t see a V-shaped recovery--more like a bathtub U-shaped recovery which will last deep into the second half of 2009 before we start to come out of it,” said former GE CEO Jack Welch speaking at the World Business Forum in New York City. In a 40 minute on stage conversation with The Wall Street Journal’s Alan Murray at Radio City Music Hall before 4500 attendees, the man who led GE for over 20 years said that “the fourth quarter of this year and the first half of 2009 will be brutal.” But he added that there is an opportunity for business leaders amid the bad news. “Take care of your best people. Put a little pot of money aside for them because some of your best people—the top 20 percent of talent—will likely miss their numbers, but this is not a time to lose your best soldiers. You will need them when for the next fight when you emerge on the other side.” Welch opined that amidst the chaos competitors with cash will come poaching for the best people among companies that are struggling or laying off people. He advised CEOs to cut costs immediately and “get it over with sooner rather than later.”

Welch attributed the current financial meltdown to many causes, saying money was essentially free and that interest rates were negative causing many to “roll the dice not once but many times.” He compared those responsible to suspects on Agatha Christie’s “Murder On the Orient Express,” where every character on the train had a motive to game the system and share the blame. Switching metaphors, he added that the situation was comparable to people going to Las Vegas but gambling with their neighbors money, not their own. “It’s a crazy system when the only penalty for losing is getting a cut in your bonus instead of one on the head.”

Welch recalled “one of my worst decisions” in the 1980s when GE acquired the investment house Kidder Peabody. “We didn’t own this outfit more than seven days when I had several guys in my office proposing a $400 million deal using GE’s balance sheet as leverage.” He recalls being so apoplectic that he “nearly lost my teeth.” If earnings “seem too good to be true, it’s because they are,” he added.

Murray asked Welch about the failure of leadership during the current crisis. Certainly there is enough blame to go around Welch agreed, but it extends beyond mortgage lenders and those who created instruments where risk was disaggregated from the asset. Members of Congress who encouraged Fannie Mae and Freddie Mac to use the U.S. Treasury as a piggy bank were also contributors to the problem, he believes. However, Welch is encouraged by the actions of Fed chairman Ben Bernanke and Treasury secretary Hank Paulson, who “didn’t let ideology get in the way.” “We’re damn lucky we have these guys,” he added. “The deal isn’t perfect but we must act now.” In addition, Welch praised New York Senator Chuck Schumer for making the connection between the need to shore up the financial system as the best way to help main street. Had Japan had a Bernanke and Paulson during that country’s financial crisis in the early 1990s, he said, it would not have been as protracted as it ultimately proved to be.

The former GE chief, himself generously compensated said he had no problem with imposing limits on compensation or separation on CEOs as part of the anticipated bailout package of concerned financial institutions.

Pressed on his political views, Welch said the U.S. system works best under divided government pointing to the years in which President Reagan battled a Democrat controlled Congress and when President Clinton had to contend with a Republican Congress led by Newt Gingrich. Asked why he supported John McCain over rival Barack Obama, Welch shook his head, his voice rising with the broad “As” in his Boston accent becoming broader still. “I don’t think you can be a businessman and support someone who wants to increase taxes in a recession and who want to unionize America. I believe in jobs and creating businesses—you can tax fat cats like me all you want—but when you tax small and medium business owners you will kill of jobs. Also, we can’t have a President who is in the pocket of the unions.”

Welch identified the pending Employee Free Choice Act (EFCA) as the single greatest hazard facing business leaders today apart from the credit crisis. Under EFCA, an employer is duty bound to recognize one—or many—unions which have obtained authorization cards from 50 percent plus 1 of the workers in any given bargaining unit. At no point in the process will the National Labor Relations Board organize and oversee any election for unit members to determine whether employees actually want union representation. “If business leaders are not aware of this terrible piece of legislation, they should be. It would hurt us dramatically in our ability to be competitive globally. Think about it,” he added, “When was the last time you heard a CEO say, ‘I wish we had a union.’ ”

Welch sidestepped questions about how his successor Jeff Immelt was performing at the helm of GE, saying he was responding to many challenges and operating in a different environment. He praised Immelt’s eco-imagination strategy saying it isn’t necessary for business leaders to believe in whether global climate change was real or not because there is a market for green products and services that ought to be served.

Asked by a World Business Forum audience member what his definition of CSR (corporate social responsibility) is, he replied dismissively, “Winning!”

“Get serious! When you win you get money. If you don’t win you don’t have anything to ‘give back’ to anyone. What did the dot coms do for CSR; they burned the office furniture to stay warm.

Seel you in the trenches - vmsteveo

October is the best month of the year...

2008-10-06T06:52:00.002-04:00

I love hot weather. I love coming home from work and enjoying daylight until 8:30pm. I love summers... but there is something special about October.

One: The weather. Its not warm or cold. Its that perfect sweatshirt weather. The air is clean. The sky is clear...

Two: Football. I know, men like football, but football in September is almost like pre-season. Its not until the temperature starts to fall... does it really seem to be football weather.

Three: Baseball. Baseball playoffs. Its the best part of baseball. Its when the games really mean something. winners stay... losers go home.

Four: Golfing. You mean more talk about professional sports. NO. I am talking golf trips. Where men and women plan their last horray and enjoy a weekend or extended week in a nice location playing fall golf.

Five: Halloween. One of the best holidays that are commercialized. Its so simple.. that is can not get out of hand.

Six: Firepits. What is better than sitting outside on a 50 degree night around a fire place or pit....

I could go on and on and on... but for me... this is the perfect time of year. Going away on a golf trip (Thurs - Sun)... golfing each day. Watching Football on Thursday night, baseball on Friday and Saturday night, hanging with some friends.... Life is good.

Come join my October club....

CNBC Interview with Warren Buffet

2008-10-02T16:47:00.001-04:00

Adapted from a post by Alan Crippen
Audio recording at http://www.cnbc.com/id/26867866

On September 24th, Warren Buffet was interviewed via telephone on CNBC's Squalk Box regarding his $5 billion investment in Goldman Sachs. The full transcript of their conversation is posted below which gives insight of a leaders decision making prowess in these uncertain times. Since then, on October 1st, Warren Buffett had announced that he invested another $3 billion in General Electric. Talk about a guy with Sach!! So is he insane or a savvy opportunist? Read on...

BECKY QUICK: We know you get all kinds of deals, all kinds of people who come knocking asking you to jump in. You've said no to everything to this point. Why is this the right deal at the right time?

WARREN BUFFETT: Well, I can't tell you it's exactly the right time. I don't try to time things, but I do try to price things. And I've got a formula that says bet on brains, and bet of them when it's the right type of deal. And in this case, there's no better firm on Wall Street. We've done business with them for years, with Goldman, and the price was
right, the terms were right, the people were right. I decided to write a check.

BECKY: Does the backdrop of the Federal government potentially getting involved with
a massive bailout plan for Wall Street, does that have anything to do with this deal?

BUFFETT: Well, I would say this. If I didn't think the government was going to act, I
would not be doing anything this week. I might be trying to undo things this week. I am, to some extent, betting on the fact that the government will do the rational thing here and act promptly. It would be a mistake to be buying anything now if the government was going to walk away from the Paulson proposal.

BECKY: Why would that be a mistake? Because the institutions would collapse, or because you could get a better price?

BUFFETT: Well, there's just no telling what would happen. Last week we were at the brink of something that would have made anything that's happened in financial history look pale. We were very, very close to a system that was totally dysfunctional and would have not only gummed up the financial markets, but gummed up the economy in a way that would take us years and years to repair. We've got enough problems to deal with anyway. I'm not saying the Paulson plan eliminates those problems. But it was absolutely, and is absolutely necessary, in my view, to really avoid going over the precipice.

CARL QUINTANILLA: Warren, we can almost hear you measuring your words as you speak, because what we're talking about has such gravity. There are people out there who either don't, or are unwilling, to acknowledge what exactly, how serious the situation was last week. And I'm hearing you say is that, was it the most frightening experience you've had in your lifetime, in terms of evaluating where this economy stands?

BUFFETT: Yeah, well, both the economy and the financial markets, but there're so intertwined that what happens, they're joined at the hip. And it doesn't pay to get into horror stories in terms of naming institutions or anything. But I will tell you that the market could not have, in my view, could not have taken another week like what was developing last week. And setting forth the Paulson plan, it was the last thing, I think, that Hank Paulson wanted to do. there's no Plan B for this.

BECKY: Warren, you mentioned that Wall Street could not have taken another week like that. But what does that mean to the American taxpayer who's sitting at home saying, 'Why is this my problem?'

BUFFETT: Yeah, well, it's everybody's problem. Unfortunately, the economy is a little like a bathtub. You can't have cold water in the front and hot water in the back. And what was happening on Wall Street was going to immerse that bathtub very, very quickly in terms of business. Look, right now business is having trouble throughout the economy. But a collapse of the kind of institutions that were threatened last week, and their inability to fund, would have caused industry and retail and everything else to grind to something close to a halt. It was, and still is, a very, very dangerous situation. No plan is going to be perfect, but thanks heavens that Paulson had the imagination to step up with something that is of the scope that can really do something about it. And what he did with the money market funds, that was not an idea that I had, but as soon as I heard about it, that was an important stroke. Because the money, pulling out of the money market funds and going to Treasuries, and driving Treasury yields down to zero. That -- a few more days of that and people would have been reading about lots and lots of troubles.

JOE KERNEN: People listen, Warren, when you speak. And I don't know if you watched the hearings yesterday ...

BUFFETT: I got to watch some of them.

JOE: But when the more dire it looked, in terms of communicating, with some of these Senators, the three-month or one-month bill, again, started acting similar to what was happening on Thursday. Now we averted that disaster on Thursday, but it's already been three or four days. It's almost as if these guys already forgot about the position that we were in. Do you think that accounted -- we're still susceptible to that happening again if it looked like they're not going to go through with this?

BUFFETT: No, it would get worse. Last week will look like Nirvana (laughs) if they don't do something. I think they will. I understand where they're very mad about what's happened in the past, but this isn't the time to vent your spleen about that. This is the time to do something that gets this country back on the right track. What you have, Joe, you have all the major institutions in the world trying to deleverage. And we want them to deleverage, but they're trying to deleverage at the same time. Well, if huge institutions are trying to deleverage, you need someone in the world that's willing to leverage up. And there's no one that can leverage up except the United States government. And what they're talking about is leveraging up to the tune of 700 billion, to in effect, offset the deleveraging that's going on through all the financial institutions. And I might add, if they do it right, and I think they will do it reasonably right, they won't do it perfectly right, I think they'll make a lot of money. Because if they don't -- they shouldn't buy these debt instruments at what the institutions paid. They shouldn't buy them at what they're carrying, what the carrying value is, necessarily. They should buy them at the kind of prices that are available in the market. People who are buying these instruments in the market are expecting to make 15 to 20 percent on those instruments. If the government makes anything over its cost of borrowing, this deal will come out with a profit. And I would bet it will come out with a profit, actually.

BECKY: Are you buying instruments like these in the market?

BUFFETT: Well, I don't want to leverage up. No one wants to leverage up in this thing. So, if I could buy a hundred billion of these kinds of instruments at today's prices, and borrow non-recourse 90 billion, which I can't, but if I could do that, I would do that with the expectation of significant profit.

JOE: But the government can do that. You can't. And that's why the private sector can't, even you, can't save the system.

BUFFETT: I can't come close to it. But they have the ability to borrow. They can borrow much cheaper than I can borrow. They can borrow unlimited. They don't have covenants. They don't have -- I mean, they are in the ideal position. So, for example, if I were hiring advisers, as I talked about doing to buy these things, I would tell those advisers, 'Look it! People are buying these instruments to make 15 percent. So if you're going to charge me any fees, I'm going to defer those fees until I get rid of these instruments later on. If I don't make at least ten percent on my assets, you know, your fee goes down the drain. Because it should be a lead-pipe cinch to make 10 percent at the kind of prices that exist now. I wouldn't try to write that into the legislation. I don't think you should -- I think they should punish, in many cases, the people -- I would think they might insist on the directors of the institutions that participate in this program waiving all director's fees for a couple of years. They should, maybe, eliminate bonues. They may wish to do some of those things. I don't think you should try to write it into the instrument, though. I think that gets so damn complicated and ties people's hands. But if I were administering the program, I think I'd be fairly tough about some of those things, and I'd make sure that the advisers earned me a return that was well above my cost of borrowing before they got paid a dime.

BECKY: Would you administer the program?

JOE: Yeah, can you be on the oversight board? (Buffett laughs.) Can you be on the oversight board?

BUFFETT: I'd love to administer (laughs). I'd love to administer it for nothing, but I would really love to administer and get some kind of an override in terms of the profits, which is naturally the way Wall Street thinks. No, it's not my game to do that, but I will tell you that the buyers of the instruments these days are going to do better than the sellers. And the big buyer, if they -- they shouldn't pay any attention to the cost of these instruments to the selling institutions. They shouldn't pay any attention to the carrying value. In fact, one thing you might do, is if someone wants to sell a hundred billion of these instruments to the Treasury, let them sell two or three billion in the market and then have the Treasury match that, for what they pay. You don't want the Treasury to be a patsy. But I'll tell you, with Hank Paulson on top of it, you couldn't have any better guy to do that. The important thing is that if this program extends into the next administration is to have somebody in the next administration that has similar market savvy.

CARL QUINTANILLA: Separate from the bailout, Warren, people obviously this morning want to look at the Goldman deal, I guess on top of Mitsubishi-Morgan, which happened yesterday and wasn't nearly as popular, at least from a market point of view. But they want to point to you as the 'canary in the coal mine.' Is that fair? Do you have a problem with that?

WARREN BUFFETT: Well, as long as the canary lives, I'm fine. (Laughs.)

CARL: I'm guessing you're going to live. At least, you're guessing you're going to live?

BUFFETT: Yeah, I think so. (Laughs.) This is, you know, from our standpoint, we've had a lot of cash. And we now are seeing things that, you know, give us a chance to use that cash sensibly. And this was a five billion dollar opportunity to, I think, deploy cash sensibly. I understand, incidentally, that there will be another five billion. In other words, they mentioned 2-1/2 billion, but I think they're going to allocate it down to five billion additional. So Goldman will have ten billion, I believe, of new money coming in.

BECKY: In that capital offering. In the release, they said 2-1/2 billion (of common stock would be offered in addition to Buffett's investment.) You're saying you understand it's five billion?

BUFFETT: Yeah, I think they have quite an outpouring of orders, so I think -- They'll be allocating it down, but I think from all over the world. So I think there will be five billion of additional common stock sold. That will be determined and announced, I believe, before the opening.

JOE: How much do you know about AIG and their books right now, Warren?

BUFFETT: Well, I think I know a fair amount, but I don't think anybody knew what they needed to know, including the management. The troubles there were in the subsidiary, AIG Financial Products, and they had hundreds of thousands, I'm sure, hundreds and thousands of derivative contracts. And I think that top management did not have their mind around what was involved with those contracts. And you can do a lot of damage on Wall Street with a pen and a piece of paper.

JOE: How many of those units are going to end up under the Berkshire umbrella?

BUFFETT: Well, we would have an interest in a couple of 'em. And actually over that weekend I expressed an interest in one or two, but the pressures were such, and the hole was deep enough, that they simply couldn't get it worked out. And some of those units, most of those units, I believe, will be for sale over the next year or two. And we would be interested in a couple of them. I think they'll probably do a pretty intelligent job of selling them, which means we won't be as good a buyer.

BECKY: You know, Warren, we've been trying to figure out -- I have to admit that I was shocked when I heard the news yesterday about this deal with Goldman, because you haven't put any money into an investment bank since 1987, Salomon. And that was a deal you had to get personally involved with later in 1991 when you went to run the company for almost a year. It was a very difficult experience. I'm shocked that you would get back in with another investment bank. Why do it?

BUFFETT: (Laughs.) Well, the pain has worn off. That won't be happening with Goldman, but I -- That was a very unfortunate experience, and it was actually caused by just a couple of people out of a workforce of 8000 that got the company into big trouble. And I had the help of a lot of people at Salomon in getting out of it. But I don't think this experience will be similar. Goldman has been extremely well run. My experience with Goldman goes back, when I was nine or ten years old my parents took me back to the New York World's Fair, and by an odd chance I got to sit down with Sidney Weinberg, who was the dean of Wall Street then, and he talked to me as if I was a grown-up for 45 minutes. I've never forgotten the experience. Gus Levy (who later ran Goldman in the 1970s) was a good friend of mine when I worked in Wall Street. In 1955, we only had four wires to Wall Street firms and one of them was to Goldman Sachs and Gus was on the other end of the phone. So I've had a long experience with Goldman and they've done a lot of things for me recently.

JOE: I just assume you know what was going on at all of these firms because I know everybody probably came to you and you made your decisions one-by-one on what to do. When you look at the way some of these assets were marked, could you tell that, for example, Lehman still wasn't facing reality and perhaps Merrill Lynch was more in the real world?

BUFFETT: Well, I think that turned out to be the case. I was approached on Lehman back in, I think, maybe it was April or March. But the first round of financing when they raised the four billion, and, yeah, it looked to me like it was pretty unrealistic where they were marking things. I feel good about the Goldman marks, incidentally, that's one of the discussions I've had. And -- You can be pretty fanciful in marking positions in Wall Street, particularly when things aren't trading. The one thing you want to make sure, when the Treasury is buying things, is the marks they have don't make any difference. Like I said, it wouldn't be a bad idea, if you're buying ten billion of a security and you're the Treasury, to have them sell five-hundred million, or something like that into the market, so you find out what the real market price is and then buy the other 9-1/2 billion at that price. I really think, I really think the Treasury will make -- I think they'll pay back the 700 billion and make a considerable amount of money, if they approach it in that manner. But I don't believe in trying to write that into some legislation. I think it gets so unworkable. I think you have a smart person in charge, and have them treat it like it's their own money, and the taxpayers' money, in terms of behavior, and I think it will work out very well. I think it's not comparable to the RTC.

CARL: A lot of people who are watching us Warren, and even people who have just started watching us over the past week or two, look at the stock market every day and are confused. They want to use it as a metric for how we're doing, or at least the progress we're making on big issues. I'm guessing you don't think it's reflective of anything that's based in reality right now?

BUFFETT: Well, the stock market in the short -- my old boss Ben Graham said that in the short-run the stock market is a voting machine, in the long-run it's a weighing machine. As a voting machine, it responds to people's emotions. There's no literacy test for voting. You vote according to how much money you have, not according to how smart you (are.) So the stock market does some very silly things in the short-run. Over the long-run, it behaves quite rationally. And, you know, five years from now, ten years from now, we'll look back on this period and we'll see that you could have made some extraordinary buys. That doesn't mean it won't get more extraordinary a week or a month from now. I have no idea what the stock market is going to do next month or six months from now. I do know that the American economy, over a period of time, will do very well, and people who own a piece of it will do well. But they shouldn't own it on leverage. That's what people have learned in this period, that you've got to be able to play out your hand and it's a big mistake to let somebody else be in a position where they can sell you out.

BECKY: Warren, when you first invested back in '87 in Salomon, I believe your partner, Charile Munger, was not as enthusiastic about the idea as you were. Is that true?

BUFFETT: That's true. Of course, he's never as enthusiastic about my ideas as I am. But I would say he was even less enthusiastic. (Laughs.)

BECKY: How does he feel about the Goldman deal?

BUFFETT: Well, I'm glad you asked because I, (laughs), didn't tell him about it until after it was done. (Laughs.)

CARL: How rude!

BUFFETT: (Laughs.) Yeah, it is kind of rude. But Charlie's wife had a bad fall and he's (inaudible) and I called him last night about an hour after I committed it, or something, and I called kinda like a little boy ... (laughs) ... bringing into the house something he was a little worried about. But, Charlie's all for it. (Laughs.)

BECKY: He's all for it.

BUFFETT: Yeah. Now I'm really worried.

BECKY: Uh-oh. For the last nine months, Berkshire has spent a lot of that cash it's been hoarding over the last several years.

BUFFETT: That's right.

BECKY: I was trying to figure it out. I think it's about 24 billion dollars you've spent in the last nine months?

BUFFETT: Yeah, we've spent a lot of money. The money, the money we've spent, you know, we've found things we like to do. It's nice to have a lot of money, but you don't want to keep it around forever. I prefer buying things. Otherwise it's a little like saving up sex for your old age. (Laughs.) At some point, you've got to use it. (Laughter.)

JOE: Uh-oh.

BECKY: Twenty-four billion dollars. Is that a right guess and how much cash do you have left?

BUFFETT: You know, it would be 6-1/2 for the Mars deal, there's five for this, there's five for Constellation, there's a couple of other things. So, yeah, your addition is fine, Becky.

BECKY: How much cash do you have left?

BUFFETT: Well, I've got enough. (Laughs.) I don't really look at it every day. I look for opportunities every day, and then if I find opportunities, I see if I've got enough cash around to take care of them.

JOE: Well, by my calculation, if you lever that up thirty times, Warren, you can really get serious here. (Laughter.) Maybe you don't want to do that, I don't know. (Laughter.) What about, how are we going to deal with this looming 50 -- we just had (New York State Insurance Commissioner) Eric Dinallo on, I don't know if you were watching, Mr. Buffett. He talked about, he can, maybe New York and his unit can look at the twelve billion, or trillion, jeez, we've got to add a T. I'm finally getting used to Bs, now we have to add a T. But what we are going to do with that 50 trillion and how, having that still around, all these credit default swaps, how serious is that, and how are we going to unwind it and deal with it?

BUFFETT: Yeah, well, it goes beyond credit default swaps into all forms of derivatives. But the derivative genie got out of the bottle, and it's a huge genie, and it will never get back into the bottle. It is a terribly tough problem because they are not homogeneous items. It's one thing to have a clearing house for the futures in Chicago, or something, and every morning have everybody post to market and that's a very efficient system. It's very hard to do that with derivatives where you can derivatives based on the New Zealand money supply or the number of babies born in Japan, and all kinds of things as the variables. And they're often very complicated. I applaud Dinallo. He is an outstanding insurance comimssioner. But getting regulation around the entire derivatives market is really tough. I've thought a lot about it. But it's important. Derivatives have been an important part of the problem in financial markets. And they continue to be part of it. And in AIG's case -- AIG would be doing fine now, I think, if they'd never heard of the word derivative.

BECKY QUICK: Mr. Buffett, the front page of the Wall Street Journal and other media organizations around the globe have been picking this up, your move yesterday into Goldman Sachs, as a vote of confidence in the banking institutions across the globe. Is that fair?

BUFFETT: Well, I'm not buying a cross-section of banking institutions. But I certainly have confidence in Goldman. And you can say it's a vote of confidence in the Congress to do the right thing with something that's being debated before them right now.

CARL QUINTANILLA: You know, Warren, some might say, 'OK, we know Buffett is a pure capitalist. he's in this to make money and nothing else.' But also you're a philanthropist, you have interests in seeing the country do well over time. Some might say he's doing this, he's timed this to help get the package through. Is there anything -- is that even close to reality?

BUFFETT: No. I timed this because Goldman Sachs yesterday came up with something that made sense to me. I'm not brave enough, to try and influence the Congress. The other way around, they influence me. And I am betting on the Congress doing the right thing for the American public by passing this bill and not trying to doctor it up with a hundred things that, you know, emotionally they feel should be on the bill but as a practical matter will gum things up.

CARL: When do you think, Warren -- I don't know if you even have an answer to this question -- When is the absolute deadline by which you think this needs to happen? Is it this weekend? Can you be that specific? Or if this thing were to bleed into next week, or if they had to reconvene a special session, would that be disastrous?

BUFFETT: Well, I think anything that makes it look like it's in doubt is what causes the problem. So if they said on Friday we're absolutely having a vote on Monday, or something of the sort, I don't think that would be a problem. But if they went home on Friday and there was doubt about whether they were going to do something on Monday, I think you'd see some things you don't want to see in the markets and they would have some effects on the economy.

JOE: You were watching yesterday, and I don't know, maybe I don't know the ways of Washington. Maybe they say one thing and maybe they're really planning -- you know, they have to look good for their constituents. But I wasn't convinced they really understood the seriousness of the situation, Warren, and that was after they said, look, Greenspan says we need this, Volcker says we need this, Bernanke, Paulson. Now we have you. I don't know. Do you think they get it?

BUFFETT: Well, I think they will get it. I think enough of them will get it. You know, it's not like Pearl Harbor where you could look at what happened with your own eyes and decide you had to do something that day. But this is sort of an economic Pearl Harbor we're going through. And I think most of them will get it. And I do believe they will do what's right for the country. They may vent their spleen a little bit by getting mad about the people that brought us into that, and I don't blame them for that. I might do that privately, too. But in the end, you know, Republican, Democrat, I think they've got the interest of the country at heart and I think they will do the right thing. But I hope they do it soon. (Laughs.)

BECKY: Warren, how long were you talking to Goldman Sachs and how significantly did they have to change the terms of the deal to get you interested?

BUFFETT: Well, what they -- they had talked with me -- almost every financial institution has talked with me, that you read about, over the past few weeks. But, but, they were serious yesterday about doing something. They said, in effect said, 'What would you do? What would Berkshire do? And I laid out something. And they said, 'That makes sense to us.' And we had a deal. It doesn't take long.

JOE: You were kidding Becky when you said that you did this just 'cause you knew we were going to ask you when you were going to do something in financials again and you wanted to have an answer.

BUFFETT: Joe, Joe, I was not -- you know, I was trembling with the thought of you asking me again, 'When are you finally going to do something?' (Laughs.) So this was definitely an attempt to get you off my back.

JOE: It was a cheap way, a mere five billion, so you'd have something to show us this time.

BUFFETT: That's right. I mean, your withering questioning is just too tough for me. (Laughs.)

BECKY: You know, you mentioned earlier, in the grand scheme of things, it's going to matter who the next Treasury Secretary is going to be. Are there names of people you think would be sound in either administration.

BUFFETT: Becky, if I were running things, Republican or Democrat, I would ask Hank to stay on. I mean, you don't get talent like that very often in any administrative job. And the guy pays an enormous price to do it. He's probably sleeping three or four hours a night. He knows the market. He's got the interests of the country at heart. So I think if I were either Barack Obama or John McCain and found myself in the White House in January, I would go down there and say, 'Hank, do me a favor, stick around another year.'

CARL: And Warren, if you believe, as a lot of people do, that we are in for several years of this unwinding process, the government's going to play a huge role. If you were called to do something on the public side, would you do it?

BUFFETT: Well, I would certainly be glad to help in any way that I could. You know, I would be looked at as having conflicts-of-interest, I'm sure. But anytime I can be helpful on something -- For example, in terms of what you might do with institutions that participated in this program, I think the Treasury can, they can lay down some terms for these people. I don't think they should be in the legislation, but I think -- And if anybody wants my opinion on it, I'd be glad to help them out.

BECKY: Warren, if ...

BUFFETT: They can make money on this deal. I can tell you this. I would love to have 700-billion at Treasury rates to be able to buy fixed-income securities now that they're in distress. There's a lot of money to be made.

JOE: It's just that, you know, they want these details, Warren. They said -- Paulson says there's the hold-to-maturity price and there's the firesale price. We're going to go somewhere in between, get a much better price but still leave enough for the people that are buying it to make some money. That can be done in principle? There's a way to do that, do you think?

BUFFETT: I think what I would be looking for -- I heard that hold-to-maturity price. I'm not as excited about that. I basically like a market, or something very close to a market-related price. And there are ways to determine that and I don't think that Uncle Sam should be in the business of paying somebody a whole lot more than it's worth in the market today. And if the guy that bought it doesn't like it, he doesn't have to sell it, and it was his problem, he bought it in the first place. I think a market price will enable people to be leveraged. The problem they have now is that some of the institutions, they're loaded with this stuff, they're having trouble funding, and they're worried about being able to sell a ton of it. But take the Merrill Lynch deal. Merrill Lynch had to take back 75 percent of the sales price. Well, they didn't want to take back that 75 percent. I would let 'em sell it for the same price, but I'd pay them the whole thing in cash. So they'd be a lot better off if they could have sold the whole thing at that same price but gotten paid a hundred percent in cash instead of having to take back 75 percent. And I see the government fulfilling that kind of a function.

JOE: All the outrage we're seeing in these comments from viewers, and obviously the senators are hearing from constituents. If we take your word for it, that the government could even break-even, or only lose 50 billion, that 700 billion dollar number is out there in the public, and people think that we're spending that.

BUFFETT: Yeah, they think that, yeah.

JOE: It seems crucially important to get the point across that, in your view, we could, the government could actually end up making money and saving the taxpayer from much worse, a much worse outcome if we didn't do this.

BUFFETT: The government is getting 700 billion worth of assets, assuming they spend the 700 billion, they're getting 700 billion of assets at what I regard as attractive prices. And they've got the staying power to hold those things. If I could get 700 billion, if I could borrow 700 billion on the government's terms and buy these assets I'd be doing it myself. But unfortunately I'm tapped out. (Laughs.)

BECKY: And yet, Warren, Mayor Mike Bloomberg, I heard him making comments this morning, and he's someone I know you've spoken very highly of ..

BUFFETT: I admire him.

BECKY: You admire him. he says this morning we should not be giving a blank check to have something passed in the dead of night. How dire is this situation?

BUFFETT: Well, I'm sure we didn't want to go to war on December 7, 1941, maybe, in the dead of night, or whenever we did it, in the middle of the afternoon actually. But there are time when events force timetables on you, and force action, and you have to be -- You know, it's just like in my business. I might like to think over buying something for a month, I'm not that type anyway. But in the end, if somebody offers me something that makes sense, I better decide whether to act or not. And if it makes sense to me, I usually don't attach unnecessary conditions, you know. It would be nice to have the luxury of thinking about this for three months. But I will tell you, if you think about this for three months, you're going to have a situation where -- If you think about it for three weeks, you're going to be facing a situation that's far different, and far more difficult, than if you do something now.

See you in the trenches - vmsteveo

How to Gauge Your Followers

2008-10-02T13:01:00.006-04:00

Executive Leadership, Vol. 23, No. 8, August 2008
Execleadership.com
Followership, Barbara Kellerman, Harvard Business School Press

Never underestimate the importance of followers. Here's a quick way to estimate your followers' potential so that together, you can get the most done:

Isolates are completely unengaged. They don't know or care who's in charge or what happens. By default their alienation will reinforce the status quo.
Bystanders watch but don't act. They deliberately choose to stand to the side. Like the inaction of isolates, their neutrality tacitly supports the status quo.
Participants engage in some way. They choose to make a particular, small contribution, maybe as a first step. They care enough to act.
Activists feel strongly about their mission or their leaders and plunge in to help the cause. Whether they're for or against the status quo, they work hard.
Diehards literally are ready to die for an idea or a leader. They identify completely with the mission and are ready to take large risks for it. The mission drives who they are and what they do.

Bottom line: Rate your isolates and bystanders a 1. They wont help you at all. Score participants a 2, activists a 3, and Diehards a 4. Then spend up to 90% of your time and effort on 3s and 4s. They will make or break you.

See you in the trenches - vmsteveo

Loyalty: more than a quaint notion

2008-09-08T08:11:00.005-04:00

Executive Leadership Vol. 23 September 2008
ExecLeadership.com

Not everybody is ready to step up, so congratulations. Here are a few guiding principles on building loyalty and trust:

Leave your ego in the parking lot. Yes, you need self confidence, but a leader’s job is not about empowering yourself. It’s about doing that for everyone around you.

Grow antennae, not horns. Think about meetings this way: You’re going in there to find out what’s messed up and how to fix it.

Show maturity. Leaders exhibit a good sense of timing, think before they act and put themselves in other people’s shoes.

Build trust. If you don’t follow through on your promises, or if you appear to mock people when you’re just joking around, you will have a hard time winning their loyalty. Mistrust is reversible, but it might take a while.

Give away glory. If you have ever been tagged as a narcissist, now is the time to lose that label. Take every scrap of blame on yourself and give away all the glory. This is not merely so you can act like a sponge and soak up bad news. It should also poke you to question and improve your processes, which will be really hard at first, before it becomes really fun - when your team starts winning.

Keep learning. Making yourself comfortable at one skill level is not an option. Don’t foist onto someone else the responsibility for operations you don’t understand. Constantly ask what will work better.

- Adapted from “Building Blocks of Leadership,”
Ken Bradford, The Leaders Course,
www.leaderscourse.com

See you in the trenches - vmsteveo

Leadership & Self-Deception - getting out of the box

2008-09-05T07:19:00.009-04:00

So the kids are back to school and I am back on track with the book reviews. I apologize to our readers that haven’t had much fresh content lately and I promise that will change in the coming last months of 2008 and well into 2009. On with the review….

Leadership & Self Deception, getting out of the box
by the authors of The Arbinger Institute

review by vmsteveo

What a jerk! How can he be so selfish? Does he realize how much of a problem he is causing? How can she say I am non-committed when I am the one doing all the work? If he goes over my head one more time!!...

Leadership and Self-Deception is yet another paradigm shift into understanding a problem that your coworkers, employees, direct reports, boss, spouse and kids all know that you have. The problem is you don’t have any idea what it is or how to fix it. After all, how can you fix something that you are unaware you have? Confused? Read on Kemo Sabe!

Leadership & Self-Deception, Getting Out of the Box teaches you to understand self deception behaviors that come as a result of betraying an action or feeling that you know is the right thing to do.

Example: You have a new born child, its 2 AM and she starts to cry. Your thought is to get up and tend to your new born to allow your spouse to get some needed rest (I might have been here a few times in my life). You now are faced with two choices:

1. Honor the action and tend to your newborn
2. Betray the action even though you know it’s the right thing to do and fake that you are sleeping nudging your spouse to get out of bed to tend to your newborn (oh yea, I’ve been there).

If we honor the action we are outside of the box of self-deception and allowing ourselves to run true to our thoughts, actions, and feelings. If however we choose to self-betray, a slew of repercussions and self justifying behavior occurs. Welcome to “The Box” of self-deception. Thoughts literally domino on how you perceive the other person based upon your own betrayal:

Lack of commitment
Lack of engagement
Trouble maker
Conflict
Lack of motivation
Stress
Poor teamwork
Backbiting
Misalignment
Lack of trust
Lack of accountability
Communication problems

The interesting concept here is your investment in justifying your decision not to honor the action which creates the above issues. These issues you created project upon you from the other parties’ perspective. Instead of the intended person or party being the one with the above problems, not honoring your action has a completely opposite effect as you are now percieved as the one with the above issues. Hence we have self-deception. Think about it. These aren’t truly or at least aren’t as drastic as you now perceive the other person to be and actually werent there at all until the point you decided to betray yourself. You’re in the box! Your reality is now completely sku’d based upon your inability to honor what you knew was the right thing to do in the first place.

Do you think the other person had any investment in you or your decision at that moment of you honoring or betraying an action? No, of course not! If you honored the decision you were doing it because it was the right thing to do. But what is the investment of the other person if you self-betray the action? Hint, look at the above list.

The author gives both personal and business examples that clarify this concept of recognizing when you are inside the box of self deception and how to get out. They also explain that we carry boxes with us and apply as necessary to specific situations which indicate that we can be inside and outside of the box depending on the situation at that moment. The good news is there is always a way out of the box but it takes a commitment to honor those actions that you know are true.

In summary, when outside of the box, decisions to do the right thing are easy and perceptions of situations and people remain clear. Stress is taken away because you are honoring what you know is the right thing to do vs. supporting a decision of self betrayal.

See you in the trenches - vmsteveo

Olympics

2008-08-23T09:57:00.003-04:00

Its almost over.... I think I have watched one competition in every event... Badminton, Ping Pong, Synchronized Swimming, Synchronized Diving, Swimming, Softball, Baseball, Boxing, Track and Field, Diving, Wrestling, Horse Jumping, and the list goes on and on...

Michael Phelps... what can you say. He was the main story of the Olympics. 8 golds and 7 world records. Long distance, short distance, team events... he did it all. he is the great Olympian, in my opinion.

24 hour coverage over 4 or 5 channels... amazing... no matter what time it was... Olympics were on.

The opening ceremony was incredible... the best ever.. of course, it cost some ridiculous amount of money... so no "free" country could ever spend that amount...

I would give the Olympics coverage a 7 out of 10 rating... not to bad... Bob Costas... best ever...

We need change... We need change....

2008-08-19T08:06:00.002-04:00

That is all I hear from the candidates. "We need change" or "I am the change agent" or "Organize for Change". This is what confuses me... Why spend another 4 years of dealing with change. Why doesn't a candidate just announce that he or she is not going to change everything, but just fix what is broken. Fixing is different from Changing.

Changing to me is just an excuse for failing down the road. We live in a free country. The best country in the world... so major change is not required. YES, we have problems... but changing this and changing that will only delay producing good results. FIX, FIX, FIX. I cannot say it enough.

When go to vote this November... try choosing a candidate that you think will fix the country and not change it. McCain or Obama.... I think we need a change of candidates.....

A Push for Q2 Close

2008-06-12T18:12:00.004-04:00

As Q2 quickly comes to a close, I am sure most of you are being asked to push it to the limit to close out yet another quarter (weren’t we just closing Q1?). From one hard driver to another I thought you would enjoy the following to encourage you to swing for the fences for the remainder of Q2 and eliminate all potential Bill Buckner moments.

Red Sox Win World Series
It took 86 years, included insufferable losses to the hated New York Yankees and monumental gaffes seemingly replayed constantly, but the Fenway Park faithful finally danced in the streets when their beloved Boston Red Sox won the 2004 World Series in a sweep of the St. Louis Cardinals. Manny Ramirez, David Ortiz, Curt Schilling, et al., ended the agony that tormented Ted Williams, Carl Yastrzemski, Luis Tiant, et al.

Ripken breaks record
On Sept. 6, 1995, with President Clinton in attendance, Oriole Park at Camden Yards rocked when native son Cal Ripken Jr. broke the ironman record of 2,130 consecutive games played set by the Iron Horse, Lou Gehrig. With a home run for good measure, and a midgame romp around the field, Ripken helped restore luster to a sport torn apart by the 1994-95 players strike and subsequent owners lockout. The streak of 2.632 consecutive games played ran from May 30, 1982 to Sept. 19, 1998. Ripken entered the Hall of Fame on July 29, 2007.

Tiger wins first Masters
In the Deep South, at a club whose members do not look like him, on a hallowed course where legends Jones, Hogan, Nicklaus and Palmer carved out shots for history, Tiger Woods earned a victory “for the ages” in winning the green jacket in 1997 at The Masters in Augusta, Ga. The game of golf has not looked the same since.

Villanova upsets Georgetown
The No. 1-seeded Georgetown Hoyas were overwhelming favorites to successfully defend their 1984 NCAA men’s basketball title when they met No. 8-seeded Villanova on April Fools’ Day. The Hoyas’ senior superstar center, Patrick Ewing, only months later would become the first pick of the NBA draft. But Ed Pinckney, Dwayne McClain, Harold Pressley, Harold Jensen, Gary McLain and teammates hit 79% of their shots, including 90% in the second half, under the direction of animated coach Rollie Massimino. The Wildcats won 66-64.

N.C. State upsets Houston
Jim Valvano in a daze, trying to find someone to hug, is as unforgettable an image as Lorenzo Charles, moments earlier, dunking after grabbing Dereck Whittenburg’s desperation heave to give North Carolina State the 1983 NCAA men’s basketball title. How improbable was it? N.C. State was the first champion with 10 losses, had lost six of eight in one stretch of the regular season and only qualified for the NCAA tournament by winning the ACC tournament. But the Wolfpack never gave up.

Nicklaus, at 46, wins ’86 Masters
He had missed the cut in three of seven tournaments, withdrew from another and hadn’t won a tournament in two years. His last major title was in 1980. But with an 18th (and final) major in sight, the Golden Bear sank a 12-foot putt for eagle at No. 15 in the final round. That brought a smile even to the stoic Nicklaus, whose son Jack was his caddie. “It’s about the only television event (that) when I see it come on television, I actually stop and watch a little bit of it,” Nicklaus says.

Doug Flutie’s Hail Mary pass
Six seconds to go. Forty-eight yards to a touchdown. Team trailing 45-41 at Miami’s Orange Bowl. That’s what faced the 5-9 quarterback for Boston College on Nov. 23, 1984, when he scrambled and tossed up a prayer. Three receivers and three defenders begin converging toward the end zone, with BC’s Gerard Phelan snagging the catch, cradling the ball as if it were “my firstborn.” Flutie won the Heisman Trophy, and played professionally in the USFL, CFL and NFL until retiring in 2006.

Kirk Gibson walk-off homer
Two outs, bottom of the ninth, man on first for the Los Angeles Dodgers, future Hall of Famer Dennis Eckersley on the mound for the Oakland Athletics. Gibson, soon to be named NL MVP, is summoned to pinch-hit despite hamstring and knee problems. He works the count to 3-2. Jack Buck makes the TV call: “Gibson swings, and a fly ball to deep right field. This is gonna be a home run! Unbelievable! A home run for Gibson! And the Dodgers have won the game 5-4. I don’t believe what I just saw. I don’t believe what I just saw.” Gibson’s only at-bat of the Series sends the Dodgers on their way to winning the championship.

U.S. women win ’99 World Cup
Before 90,185 at the Rose Bowl, the largest crowd to witness a women’s sporting event, Brandi Chastain beats China goalkeeper Gao Hong for a 5-4 edge in penalty kicks to break the overtime tie and give the USA the soccer title after two hours of play under a broiling sun. Chastain flings off her white uniform jersey, sparkling confetti envelops the field, U.S. players hug and dance and the Chinese graciously applaud the victors. TV ratings were 2 points higher than for the ’99 NBA Finals.

Bill Buckner error
If only Boston relievers could have held the 5-3 advantage with two outs in the bottom of the 10th inning of Game 6, the 1986 World Series would have been over and the Red Sox would have had their first title since 1918. But Calvin Schiraldi gave up three consecutive singles to make it 5-4. Bob Stanley relieved and threw a wild pitch, allowing in the tying run. Few remember all that. What is remembered: Mookie Wilson’s soft grounder down the first-base line that went underneath the glove and through the legs of sore-ankled Buckner, allowing Ray Knight to score the winning run for the New York Mets, who go on to win and take Game 7. Thus are born endless references to having a “Bill Buckner moment.”

Christian Laettner jumper sends Duke into ’92 NCAA Final Four
Grant Hill throws the ball three-quarters of the way upcourt. Laettner, at the free throw line, makes the catch, pivots, takes one dribble, fakes right to clear his defender, spins left and shoots the fadeaway — all in less than 2.1 seconds to beat the final buzzer. The 17-foot jumper caps an overtime thriller as Duke beats Kentucky 104-103 in the East Regional final and goes on to successfully defend its ’91 NCAA title.

Armstrong wins seven consecutive Tours de France
In 1996, Lance Armstrong was the top-ranked cyclist in the world when he was diagnosed with testicular cancer that had spread to his brain and lungs. Aggressive chemotherapy worked, and in 1999 he began his Tour de France title run that ended in 2005 only by retirement.

Gretzky sets NHL scoring record
The Great One, who holds virtually every major offensive record in the NHL, became the all-time leading scorer Oct. 15, 1989, passing Gordie Howe’s 1,850 points as a member of the Los Angeles Kings. Gretzky played nine more seasons, ending with 2,857 points in a 20-year NHL playing career. Gretzky was the leading scorer in 10 seasons, nine times was the MVP and twice the playoff MVP and made 18 consecutive All-Star Game appearances. (Adapted from Glory, Heartbreak, Infamy USA Today 6/11/2007)

See you in the trenches - vmsteveo

Bring on the Criticism

2008-06-02T12:00:00.003-04:00

Bring on the Criticism

Being a lightning rod for criticism has its advantages. Just ask Wal-Mart President and CEO Lee Scott, who says criticism has led to new business opportunities. When people criticized the company for not providing adequate health care for its employees, Scott and other managers tried countering with facts, such as the percentage of employees with insurance.

Then a consultant pointed out how much energy they were spending rebutting accusations. Instead, why not focus on what would help employeeswith their health insurance? Not only did Lee’s team find ways to improve employee health care plans, they realized that many of their customers probably wanted a less expensive way to get health care, too.

So Wal-Mart set up in-store clinics that offer standard treatments and services for low, fixed prices of $19 to $59. The company plans to open several hundred more clinics.
ExecLeadership.com — Adapted from “Criticism May Produce Innovation, Wal-Mart CEO Scott Says,” Margaret Steen, Stanford GSB News.

See you in the trenches - vmsteveo

John Wooden Preseason Letter To the TEAM July 26, 1970

2008-05-22T10:53:00.002-04:00

"Your race or religion will have no bearing on my judgment, but your ability and how it works into my philosophy of TEAM PLAY very definitely will.

FURTHERMORE, your personal conduct and adherence to STANDARDS that I make undoubtedly will be taken into consideration, either consciously or subconsciously."

Coach John Wooden

See you in the trenches - vmsteveo

George Washington's 7 Habits

2008-05-12T23:35:00.000-04:00

George Washington’s ‘7 habits’

Who are we to argue with the assertion that America’s greatest leader was its first? It’s all true: George Washington ran two major start-ups—the army and the presidency—in addition to his farm and other businesses. Not to mention the Constitutional Convention, which he chaired.

In a nutshell, here’s how Washington worked:

He adapted. When he saw that his tobacco crop wasn’t making the grade, he tried something new, exchanging high-status tobacco for more diversified crops, including alfalfa, buckwheat and hemp.

He guarded the troops. Even without modern-day knowledge of germs and sanitation, Washington kept a sharp-eye out to ensure strict sanitation in army latrines. He also threatened
his men with court-martial for any unsanitary behavior.

He valued intelligence. He always sent scouts to observe and report on the enemy, eventually developing a network of spies.

He deferred to experts. Washington’s artillery commander, Henry Knox, had little experience but knew the history of heavy weapons. Knox added an artillery company to every brigade of infantry, an innovation that made the army more formidable.

He went with the flow. Washington wanted the French fleet, headed by Rochambeau, to help him take back New York. Instead, Rochambeau ignored him and sailed south to Yorktown, eventually winning the war. Washington basically said: OK.

He believed. In 1783, with a desperate, unpaid army on his hands, Washington so believed a turnaround was possible that he convinced his officers of it.

He gave second chances. President Washington named as ambassador to France an out-of-control smart aleck. The president had to discipline his ambassador but also expressed the
“fullest confidence” in his ability to improve. He did.

—Article from Executive Leadership and adapted from George Washington on Leadership,
Richard Brookhiser, Basic Books.

See you in the trenches - vmsteveo

The Perfect Salesforce – The Six Best Practices of the Worlds Best Sales Teams

2008-05-11T00:43:00.003-04:00

The Perfect Salesforce – The Six Best Practices of the Worlds Best Sales Teams
By Derek Gatehouse
review by vmsteveo

Great! Another book about selling I thought to myself as I finished up the forward section of the book. More formulas, advice, stories etc. But as I cruised through the first few chapters, I found that this book was not about selling advice but more of applying selling advice to build a selling engine... interesting angle and exactly the thought provoking material we look for.

Gatehouse takes a contrarian view with sales training and processes to enable salespeople to become more effective. He found that finding and growing a sales force is more of a people issue than a process or methodology issue. He explains that methodologies are inflexible for the average sales person to track and keep score. But if you want the top performers to be attracted to your organization, focus on the people, not the process.

In the Perfect Sales Force, Gatehouse explains in detail the six best practices for building the perfect salespeople to fit your environment. The first three are specifically based on hiring pointers and the remaining three are best practice sections which explain the management involved once you create the team.

The typical specifications for the perfect sales people are as follows:

1. Self starter
2. Strong Communication Skills
3. Team Player
4. Highly Motivated

Do these look familiar? That’s because these are typical and can fit for any job description with any title. Gatehouse displaces the generic traits and deep dives into a framework of 10 selling talents. Out of the ten, six are constant and never changing and the remaining four depend on the sales situation and type, more to come to explain…

The Perfect Sales Force formula is a culmination of understanding the following traits:

1. Natural talent or ability
2. Training as a performance enhancement
3. External variables or conditions that effect performance

The formula includes the following “true” performance influencers that if the right conditions are created, can allow your salespeople to flourish. The author parallels this with the right environment for seeds to grow and flourish. They are:

1. Compensation plan – Good soil
2. Quota – Water
3. Sales training – Air
4. Immediate management - Sunlight

So on to the six best practices which take up the remaining sections of the book:

#1 Understanding of the ten selling talents

1. Work ethic – Quality vs. quantity
2. Tolerance – High vs. low
3. Persuasion – Adviser vs. pleaser
4. Executive rapport – High vs. low
5. Need – Create vs. established
6. Explanation – obvious vs. concept

Preferences

7. Sales cycle – Long vs. short
8. The solution – Unique vs. commodity
9. Products – Many vs. few
10.Decision makers – Many vs. few

Always needed

1. Good speaker
2. Good listener

#2 Sorting Sales Stages for Talent

Within this best practice the author asks the question, have you ever had an outstanding salesperson that was a horrible prospector? Have you ever had a great prospector that generated lots of leads but could never seem to close them? How about your top producers who are always late with their weekly reports, hate paperwork, etc? Sound familiar?

Sorting the sales stages enables you to understand the requirements of both new and existing clients and the necessary talents needed for both. Most of the time you will find top performers are only the top in one to two of the total sales stages.

#3 Talents Based Hiring Process

This is a two step approach in which the first step encourages to specifically and exactly know which talents are needed to sell specific to your organization. This would be based upon your market, its sales cycle, and what you sell.

Step two is the questioning, analysis, and probing you do to fully understand the talent of the candidate.

Structure your questions around the talent needed and listen for common patterns of behavior. It is imperative that the candidate is not made aware of the talent needed as this would sku the results. Sample questions are provided within this section.

#4 The Pay Plan & Quota

Two lessons here…

1. Provide clear parameters
2. Treat them right

Part 1 - Quota
Quota is defined as the results that a properly cast individual can regularly accomplish with reasonable effort. Let’s break this down a bit more:

“results” meaning monetary or non-monetary
“properly cast individual” meaning the right person for the job
“regularly” meaning vibrancy of quota attainment
“with reasonable effort” meaning that with extra effort the salesperson will surpass quota

Some sales managers believe that quota is a positive motivator, however

1. Quota is more often perceived as negative
2. Based annually which is way too long of a time frame
3. If there is a bonus attached to the new annual quota, reaching the goal becomes increasing uncertain since quota is raised to a new level becoming less attainable each year.

Part 2 - Pay Plan
Keep it positive, immediate and certain (PIC). When developing a pay plan Gatehouse urges you to begin with the most positive pay plan you can offer your salespeople and then make it fit within management. Components of the pay plan are as follows:

1. Base salary – not a performance influencer
2. Commission – performance influencer in which the author believes that every position should have a commission component
3. Short Term Incentives – spot bonus or additional compensation within 90 days

The author gives examples of sliding scale pay plans that fit his PIC model.

#5 Sales Behavior Training

Sales training seems to have the least impact on overall performance however to improve sales training effectiveness implement these three best practices:

1. Building of rapport – Mirroring and bonding with different personality types based upon salespersons talents/expertise.

2. Discussion of the solution – Describes how you sell and the best way to do it. For this type of training the author highly recommends SPIN selling.

3. The advising process – The authors contradictory findings for this portion of sales training is that customers do not want to be asked what to do but rather be told what to do.

Sales Training Delivery Parameters:

1. Classroom – Listen and learn
2. Role play – Do, practice
3. Field training – The missing link as the author puts it. Have the trainer accompany the salesperson on a call to help bring the trainee through the process

#6 Results Based Management

“The manager’s primary job is to get those in her charge to produce results.” Even though the right pay plans, training, sales type, etc from the previous 5 disciplines have all been implemented, there is still a significant need to address the human side of your team, hence the sales manager. The sales team still needs encouragement, guidance, feedback, arbitration, praise, reprimands, and support. The right sales managers with maintain equilibrium.

So who do we select as the best managers? The best sales managers are pare salesperson, part disciplinarian, part friend, part boss, part trainer, part mentor, and part psychologist. They are at once a respected colleague and a down to earth member of the group. Listed are sales manager qualities:

1. Empathy
2. Diplomacy
3. Leadership
4. Amiableness
5. Humility (lack of ego)
6. Fearlessness

The sales manager’s critical daily activities:

1. Enforce results, manage activities
2. Develop strengths, not weaknesses

Summary

The author summarizes by saying “if you have invested the effort and indeed built a high performance vehicle – an autonomous growth machine – then let it run”. The last sections of the book contain a great case study, worksheets, and a helpful website you can access additional information (www.theperfectsalesforce.com) you can use to help build your perfect sales force.

So what’s your #1 strategy for building the ultimate sales force? I would enjoy hearing your comments.

See you in the trenches - vmsteveo

Trailer Park - Never - Not me.... well, maybe....

2008-05-07T13:33:00.003-04:00

Just a quick story...

I recently went to visit a friend that lives in a Trailer Park... I was concerned, since I have never been in a trailer, what to expect or how was I going to react. This was the first time I had visited my friend.

WOW... that is all I can say. Once I entered the trailer (which was a double wide one), I could never tell that I was in one. It was a two-bedroom, two-bathroom unit and it also contained a dining room, full kitchen, living room, etc. All the items that you would expect in a one-level dwelling or apartment. I was impressed and the cost was so reasonable, it made complete sense for him to grab a trailer vs. paying a much higher cost for a house. it also had a deck connected to it as well... which came in handy when we were drinking a few beers together.

Here is a white collar professional who was clearly thinking outside of the box.

Two Quick Lessons Learned:
1) Include all options in making big decisions
2) Don't discriminate people or places

Excerpts from Coach John Wooden To His Team

2008-05-05T07:17:00.004-04:00

Born October 14th, 1910, Coach John Wooden is one of the most thought provoking and inspirational people in sports. I received this from a friend and wanted to share. I would enjoy hearing your feedback.

DO NOT CAUSE YOUR OWN FAILURE
1969 Preseason Letter to the Team

“Recorded history shows us that the underlying reason for the failure of every civilization or cause has been a breakdown from within, and I deeply believe that most potentially great teams that did not measure up to what seemed possible and logical failed to do so because of friction in one way or another from within. Let us not be victimized in such a manner”.

HOT TO INFLUENCE THE FUTURE
1972 Preseason Letter to the Team (following his eighth national title)

“I must caution you that you cannot live in the past. The 1971-1972 season is now history, and we must look toward the future. The past cannot change what is to come. The work that you do each and every day is the only true way to improve and prepare yourself for what is to come. You cannot change the past, and you can influence the future ONLY BY WHAT YOU DO TODAY”.

Adapted from excerpts on http://www.coachjohnwooden.com/

See you in the trenches - vmsteveo

Executive Coaching

2008-05-03T22:28:00.002-04:00

12 traits you need at the top

Executive coach Debra Benton urges her CEO clients to pay special attention to these traits:

1. Attitude - Good leaders stay positive and do not waver.
2. Tenacity - Nothing is ever accomplished with just one letter, one telephone call or one request.
3. Risk tolerance - Mistakes help you and others learn.
4. Active honesty - Carelessness with facts kills your credibility.
5. Prudence - Thinking before you speak helps build your purpose.
6. Originality - People like to sense that with you they are breaking new ground.
7. Modesty - It’s better to have other people recognize your ability than to point it out yourself.
8. Style - It’s not about your clothes, but about what you do while you are in your clothes.
9. Willingness to admit mistakes - If you are error-free, you are probably effort-free.
10. Downward loyalty - Leaders protect their people.
11. Straightforwardness - People support what is simple and direct.
12. Inquisitiveness - Curiosity leads any organization into new areas.

Executive Leadership, May 2008 — Adapted from How to Think Like a CEO, Debra Benton, Warner

See you in the trenches - vmsteveo

Stories of Excellence

2008-05-02T18:59:00.009-04:00

Yankees pitcher imitates his mentor

Model yourself on the people you hope to become. For the New York Yankees’ ace closer Mariano Rivera, that person was Chico Heron, the scout who in 1990 spotted something in a 20-year old kid from Panama who threw only 85 mph.

Rivera, in return, saw a mentor in Heron. “I loved that man,” Rivera says. “He used to tell me to work hard, be committed, be respectful, trust what you have and trust the Lord, be able to do it in tough situations. And he was always, constantly encouraging me to just do it, don’t give up.”

These traits will take anybody far, but they made Rivera the kind of closer who causes batters to curl up and die. Now he’s trying to instill the same air of invincibility in younger players.

Some of these characteristics:

Caring - Rivera “cares about helping people, period,” says the Yanks’ general manager. Until Heron died last November, Rivera was able to call on him anytime, for anything. Now Rivera stands ready to help his teammates, which has elevated him to the same level of influence as captain Derek Jeter. The watchword: “If you need something, ask Mo.”

Curiosity - When a reliever was called up from the minors last fall, Rivera startled him by asking a ton of questions about the AAA team. Rivera wanted to get a handle on the Yankees’ prospects, to gather intelligence.

Strategic Advice - Another new reliever, Joba Chamberlain, was spooked by Rivera’s accomplishments (“He’s won and lost some of the biggest games in the history of baseball”) and unable to duplicate the veteran’s cutter pitch, but he calmed down as Rivera continued to coach
him. He learned to pay attention in the early innings, watching for hitters’ strengths and weaknesses. He also learned by watching Rivera at work, how he’d muster all his resources.

Perspective - Rivera keeps a cool head, win or lose. “You have to know how to control your emotions,” he says. “If you don’t control your emotions, your emotions will control your acts, and that’s not good.”

—Execleadership.com, May 2008 - Adapted from “Rivera’s a Closer With an Open
Heart,” Tyler Kepner, The New York Times.

See you in the trenches - vmsteveo

Take The Time To Take Time Off

2008-04-30T22:36:00.006-04:00

Take The Time to Take Time Off
By vmstevo

Mountainous terrain of greens and browns jaggedly approach the ocean. Dark blue water that bleeds turquoise as the twin screws kick in. Headed west out from Los Suenos marina passing ancient volcanic structures emerging out of the water like huge titans, teeming with foliage and wildlife. Two hours out, the Captain releases the outriggers as Mainor and Alberto finish the bait prep of rigged ballyhoo, blue runners and split tail mullet. 78 degrees, a fair wind from the South, massive rolling waves we mull over as we troll the Pacific. A shock of broken dialect excites even those still sleepy from the night before as they are awakened by a 130lb Sailfish, in the boat, pictures taken, released, repeat.

Fourteen sailfish and a dorado later, the Captain signals it’s time to head back. Cocktails in hand, forward looking to marinating poolside as we survived to fish yet another day. Complete relaxation, reset and highly recommended.

See you in the trenches - vmsteveo

Are You Too Trusting?

2008-04-28T19:41:00.007-04:00

Are You Too Trusting?

To succeed in business - especially at the executive level - it's imperative that you are able to discern whom you can trust and whom you can't. Watch out for people with the six most dangerous character flaws:

1. People who rarely do what they say they will do.
2. People who push their work on to you.
3. People who are late and dont apologize.
4. People who tell you "I am too busy."
5. People who reject your ideas out of hand.
6. People who won't let you off the hook when you're in a jam.

Source: Executive Leadership; Staying Street Smart in an Internet Age, Mark H.McCormack, Viking (Penguin)

See you in the trenches - vmsteveo

The Speed of Trust - The One Thing That Changes Everything

2008-04-26T21:13:00.007-04:00

The Speed of Trust – The One Thing That Changes Everything
By Stephen M.R. Covey with Rebecca R. Merrill
review by vmsteveo

This is a shout out to all you Covey freaks! Stephen M.R. Covey is following in his fathers footsteps with his first book "The Speed of Trust". If you don’t know who Stephen M.R. Covey is, he was the "Green and Clean" son from his fathers book "The Seven Habits of Highly Effective People". That great story of his sons stewardship of the family yard and his trials and tribulations with self management and accountability has stuck with me for the past 17 years!

Anyway, Stephen M.R. Covey hit a home run dialing into one of the most important yet overlooked aspects of any personal or business relationship, trust. Covey sets the stage with an abundance of data citing various publications that point toward an ever growing lack of trust in today's society from corporate scandals to broken personal relationships and everything in between. He begins by simply breaking the cause and effect of trust down to the essence of a mathematical formula:

Covey explains when trust is non-existent, speed of the transaction goes down and costs go up.

6Trust = 6Speed 5Cost

In comparison, when trust is present, speed of the transaction goes up and costs go down.

5Trust = 5Speed 6Cost

He continues to explain that a well thought out strategy (S) is important as well as the method of execution (E) which equals the end goal or result (R):

S x E = R

Add the multiple of trust (T) and the "true" result can vary greatly depending on if it’s a trust tax (low or no trust) or a trust dividend (high trust). Coveys formula is expanded by a trust multiple:

(S x E)+/-T = R

For example, if your business plan has a go to market strategy rating of 10 (on a scale from 1-10) and your method of execution a 10 the result equals 100:

(Strategy (10) X Execution (10)) = 100

But, if we take into consideration the lack of trust, then we have to include a trust tax of 40:

(Strategy (10) X Execution (10)) - Trust Tax (40) = 60

In comparison, if the relationship has a positive trust factor, then we have a trust dividend of 20:

(Strategy (10) X Execution (10)) + Trust Div (20) = 120

Definitions of the trust multiples are explained in detail and can be inserted into the above equations.

Next, Stephen explains the 5 waves of trust:

Self – The confidence we have in ourselves. Under the Self wave there are 4 Cores on Credibility:
1. Integrity – Walking your talk
2. Intent – Our motives, agendas and resulting behavior
3. Capabilities – talents, skill sets
4. Results – Track record, performance

Relationship – Creating “trust accounts” with others. This section beaks out 13 chapters for the following behaviors that drive successful relationships:

Behavior #1: Talk Straight – Be honest
Behavior #2: Demonstrate Respect – Care for others
Behavior #3: Create Transparency – Tell the truth in a way people can verify
Behavior #4: Right Wrongs – Make things right when your wrong
Behavior #5: Show Loyalty – Give credit freely
Behavior #6: Deliver Results – Establish a track record
Behavior #7: Get Better – Continuously improve
Behavior #8: Confront Reality – Address the tough stuff directly
Behavior #9: Clarify Expectations – Disclose and reveal expectations
Behavior #10: Practice Accountability – Hold yourself accountable
Behavior #11: Listen First – Listen before you speak
Behavior #12: Keep Commitments – Say what you do, then do what you say
Behavior #13: Extend Trust – Demonstrate a propensity to trust

Organizational – Spanning trust across all kinds of organizations, non profit, governmental
Market – Your company brand being trustworthy
Societal – Creating trust for society at large

In summary, The Speed of Trust is packed with great advice on increasing trust on a personal and organizational level. Like most of the Covey books, this one comes equipped with worksheets, matrices and exercises to enable you to determine and improve your trust factor.

So I leave you with one thought provoking question: What can you do today to increase your personal and professional trust factor? I would enjoy hearing your comments.

See you in the trenches - vmsteveo

Life Balance

2008-04-26T09:07:00.002-04:00

Everyone always talks about the balancing act between family and work... I decided, since I have been very busy, to see where my time goes... Here is what it looked like:

Midnight - 4:30a: Sleeping
4:30a - 5:00a: Shower and Dressed
5:00a - 5:30a: Commute to office
5:30a - 4:30p: Work
4:30p - 5:00p: Commute to home
5:00p-5:30p: Get settled at home and get out of work clothes
5:30p - 6:30p: Cook and Eat Dinner
6:30p - 7:30p: Walk outside, chat with neighbors
7:30p - 9:00p: Work while sitting with Wife
9:00p -11:00p: Watch TV with wife
11:00p - 12:00a: Sleep

By the end of the day, the only balance I hope for is that I am still standing on my feet.

And... I am the lucky one as my kids are much older and do not need a lot of my time. So hear I sit... instead of being with my wife and kids, I blog. Funny isn't it. Well, I would like to write more, but my wife is calling me and asking me to go to the store with her, run some errands, visit the parents, cut the grass, clean the cars.... I wish it was Monday.....

the dip - Seth Godin

2008-04-24T23:41:00.010-04:00

The Dip – A Little Book That Teaches You When To Quit (And When To Stick)
By Seth Godin

book review by vmsteveo

“the dip” is definitely my kind of read as it’s a smaller book in size compared to your average business book and is only eighty-eight pages. However, don’t let this fool you as it is packed with great advice about when to throw in the towel and when to suck it up and press on with that one endeavor or endeavors you are having second thoughts about. As I have said in some of my past reviews I am from the school of thought that says work hard and your efforts will be recognized and rewarded. This ideal would be true if you were the only one who believed this, but….your not. Enter the dip or the barrier to entry to anything worthwhile and where most people give up. It’s the area or cycle of an endeavor where things get really, really, really tough for most to say “screw it, I’m outta here!” or to settle into mediocrity. Only a mere few push through this “dip” and come out the other end as extraordinary.

The concept of the dip comes into play after the honeymoon or newness of the endeavor (ie new job, workout regime) passes and you truly begin to understand the complexity and quality of the work that needs to be achieved by you to get through the dip. The reality of the dip is the guys and gals that have gone through the dip and are at the top are betting on your failure through the dip, in fact they count on it. There are tough obstacles that they set up that only the few can hurdle and accomplish. They know you are going to quit which allows them to remain number one for a longer period of time.

Think about it. My local YMCA in Davidson can’t possibly hold the number of members that they sign up during a given year. If all of them showed up, guess what? No one would be able to get to the equipment. It would be chaos. It’s sad to say, but they are betting on a good chunk of those members will quit soon after they sign up. Now if the majority quits, who benefits? First and foremost, the YMCA profits from members that have paid their fees and don’t use the facility but also the remaining members benefit from easy access to the equipment and lower membership fees, right? What a concept!!!

Let’s face it; everyone has been through the dip and quit mid way through it. It can be a sucky place to be if you let it get the best of you or an area filled with opportunity as you lean into the dip with everything you’ve got. I am convinced that those people that choose not to let the dip get the best of them end up on the other side as extraordinary.

Next Seth sizes up what scenarios within the curve to stick with and those to run like hell in the opposite direction:

The dip is a situation to evaluate and determine if the work involved to go through the dip is worth the prize on the other side. A good place to be.

The Cul de Sac as the French define as “dead-end” reflects an endeavor that is neither moving forward or backward. Get out, leave, reevaluate, and redefine.

The Cliff is a scenario where you are so afraid of quitting this endeavor that it overpowers any judgment you might have. This scenario screams, run like hell in the opposite direction. Bad.

The problem with the Cul de Sac and the Cliff is that they both lead to one thing… failure. Quit immediately if you sense one of your endeavors are in either of these two categories. So in summary, the safest place to be is the dip.

So you’ve made the conscious decision that a given endeavor is worth the dip that you must go through to be extraordinary, now what? How do you level set yourself to get through the dip knowing it’s going to be very long and hard journey?

To answer, this should be easy as you have already made the decision that the benefits of the other side far outweigh the pain of the dip. That commitment/decision to yourself will help you along the way. Once you make the commitment, stick to it, do it with vigor, enthusiasm, and a little bit of anger and never, never, ever give up.

Finally Seth gives us three questions to ask yourself in the event you are thinking about quitting any endeavor:

Am I panicing?
Who am I trying to influence?
What sort of measurable progress am I making?

So I ask you:

Which endeavors will you remove to make your remaining endeavors extraordinary?
Which endeavor will you pursue until you are #1?

I would enjoy hearing your comments.

See you in the trenches - vmsteveo

Blackberry Tips...

2008-04-11T09:30:00.002-04:00

Yes, I have heard them all... Crackberry, the Other Ball and Chain, and Addictberry.... all I know is that it can cause a marriage to fall apart or save it....

Here are some more good tips...

U - for going through unread messages one at a time
Alt I - for looking at incoming messages only
Alt O - for looking at outgoing messages only

While typing an email...
Hold down a letter and it makes it a CAPITAL Letter
Hit the space bar twice and it makes a period.

And do not forget the AutoText feature... where you can create shortcuts for words.

I love my blackberry... Do I love it better than my wife... no... but a close second.

Blackberry Tip for Message Scrolling

2008-04-09T00:06:00.007-04:00

Every leader can use a Blackberry tip every now and then. This one is painfully obvious but one I overlooked to the point of almost accidentally throwing my device out the damn window....

Have you ever tried to get back to the top or most recent messages through scrolling and scrolling that stupid mouse wheel until you had a blister on your thumb? Well I found out from an engineer two magical commands that will get you to the top and the bottom of your message stack:

Press "T" to get you to the top or Home
Press "B" to get you to the bottom or End

Pretty damn simple, but the simple as we know is usually overruled trying to make things more complicated.

See you in the trenches - vmsteveo

Change The Way You See Everything Through Asset-Based Thinking

2008-03-30T19:44:00.009-04:00

Change The Way You See Everything Through Asset-Based Thinking
by Kathryn D. Cramer, Ph.D & Hank Wasiak
book review by vmsteveo

Change the Way You See Everything is a collection of three thought provoking sections that encourage its readers to change their perspective from deficit-based to asset-based thinking. The book takes the reader past the proverbial glass half-full, positive thinking techniques and gives them a step by step, easy to follow guide with end of chapter go-do’s that can stimulate even the most determined pessimists. Before we get into discussing the book, let's define asset and deficit based thinking:

Deficit-Based Thinking (DBT) – “Concentrates on personal gaps and weaknesses, what is bothersome and irritating about others, and what is not working , problematic and holding us back.”

Asset-Based Thinking (ABT) – “Equips you with a special way of viewing everyday life that yield maximum returns on your investment of attention and effort.”

Section I, Change the Way You See Yourself, teaches to be less critical of the self through identifying and expanding your successes, positive experiences, and what makes you at peace; leaving perceived faults, non supportive people and negative experiences behind you.

Section II, Change the Way You See Other People encourages readers to set aside personal biases of other people by knocking it down a gear and taking a deep breath to search for the truth within that person. This can greatly change your understanding of what matters most to that co-worker, client or opponent.

Section III, Change the Way You See Situations coaches the reader to take a stressful situation and analyzing it in slow motion. I especially like the Laws of Attraction as it explains the importance of projecting outward your commitment, support and dedication to the person or task at hand. Doing the opposite can kill a sale or permanently damage a relationship.

Change the Way You See Everything includes exercises at the end of each section and has an area to jot down your thoughts. This book also comes equipped with detachable 3x5 cards with Asset-Based phrases used to remind you of what matters most and to get away from dwelling on those negative thoughts that seem to creep in every now and then. Lastly, the authors leave you with several sources to continue your deep dive into Asset Based Thinking. I leave you with one righteous, thought provoking quote from the book:

“In everyone’s life, at some time, our inner fire goes out. It is then burst into flame by an encounter with another human being. We should all be thankful for those people who rekindle the human spirit.”
- Albert Schweitzer

See you in the trenches - vmsteveo

Things you can do with your clients....

2008-03-28T06:41:00.002-04:00

Relationships sell. I know, I know... great service is important, but we do business with people we like. So what's out there to do to help solidify those relationships...

One: Baseball game (but you better have good seats). 2+ hours with a client in a relaxed atmosphere.

Two: Golfing - hint... if you are both weak golfers then - skip it. If you are the weak golfer (very weak) - skip it. Other than that... play...

Three: Dinner with the Spouses - this can work really well or really bad. The spouse's will need to like each other, if not, then its crash and burn time.

Four: Conference - Sponsor your client to go to the conference on the technology that you provide.... this really could be a win-win. The clients learns and hopefully you get a big project out of it.

Pick one... try it... and report back.
If you have already tried one - let me know your thoughts....

FIGHT THE MARYLAND TECH TAX

2008-03-26T20:02:00.003-04:00

Maryland IT Companies are in the fight of their life... This tax could force companies out of the state or seriously effect their survival...

Maryland’s Computer Services Tax www.fightthetechtax.com
Tech Council of Maryland leading the fight to repeal

During the November 2007 special session the Maryland General Assembly enacted legislation to expand the state’s sales tax to computer services. Effective July 1, 2008, Maryland’s 6 percent sales tax will apply to computer services, including:

Computer facilities management and operation; Custom programming; Computer system planning and design that integrate computer hardware, software, and communication technologies; Computer disaster recovery; Data processing, storage and recovery; and Hardware or software installation, maintenance, and repair.

To view enacted language, click here.

This new law hurts businesses of all sizes and industries throughout the state. It creates a business climate and tax structure for Maryland businesses that is less competitive with other states. Only a handful of other states tax computer services. The technology industry is part of the economy that Maryland should be trying to grow, not discourage. Click here to learn what you can do to help us repeal the computer services sales tax.

Talking Points
Maryland spends millions of dollars annually to attract and expand technology companies. Computer service companies employ 68,000 Marylanders, with an annual payroll of $5.2 billion, paying wages nearly twice the statewide average. Imposing a sales tax on these activities will jeopardize these jobs.

Taxing computer services makes Maryland's business climate and tax structure less competitive with other states, including Virginia. Only a handful of other states tax computer services.
Maryland businesses will pay the majority of this $200 million computer services sales tax. The recent special session resulted in more than $800 million in new business taxes.
Expanding the sales tax to computer services hurts small and growing companies. Large companies hire employees to perform many of the services outlined in the bill. Small businesses are more likely to hire outside companies to perform these services, and, therefore, would be more likely to pay the proposed sales tax.

Maryland-based companies with multi-year computer support contracts will have to bear an unanticipated 6 percent reduction in revenues.

This new tax on computer services could jeopardize BRAC jobs that would have relocated to Maryland. Maryland-based subcontractors will face a 6 percent price disadvantage when bidding to participate on federal contracts.

There is a reason most states do not attempt to impose a sales tax on services. It is very difficult to administer. Applying the sales tax to computer services is confusing for Maryland businesses and has proven to be legally problematic in states with similar laws.

How to Become CEO, The Rules of Rising to the Top of Any Organization

2008-03-25T10:37:00.002-04:00

How to Become CEO – The Rules of Rising to the Top of Any Organization
By Jeffery J. Fox
book review by vmsteveo

This book might be common knowledge for some but I have to say I laughed at myself while reading some of the chapters as I firmly believed in implementing some of the “don’ts” as “do’s” into my own recipe for success as I climbed my own ladder and wondered why I wasn’t getting anywhere.

How to Become CEO – The Rules of Rising to The Top of Any Organization is segmented into seventy-five one to two page chapters that are easy to absorb and implement even for those people who don’t have the time to read a book from beginning to end. These short chapters, or “commandments” as the author describes them, can be applied on and off the corporate playing field. I took the liberty of organizing the chapters of this book into three sub-categories marked as “Corporate”, “Job”, and “Personal” perspectives. I selected twelve (of seventy-five) chapters for this review that provoke thought and ideas you can weave into your own plan as you ascend to the top of your profession.

Corporate Perspective

Chapter 28 - Be Visible, Practice WACADAD
This chapter discusses the old adage “Words are cheap and deeds are dear”. The author challenges you to ask your company “What are the big issues that need to be solved?” and go solve them. Striving to help out with the heavy lifting gives you a chance to promote your personal brand to different divisions of the organization.

Chapter 31 - Never Surprise Your Boss
Whether with good news or bad, never surprise your boss. They have enough to be surprised about within the responsibilities that they have to manage on a daily basis. The good boss is not that interested in your surprise party but more interested with your progress on the tasks you were asked to complete. Never surprising your boss perceives you as predictable, trustworthy and therefore a candidate for promotion.

Chapter 32 - Make Your Boss Look Good and Your Bosses Boss Look Even Better
The fastest way to promotion is the ripple effects of making everyone look good two to three layers up the food chain. Also identify any pitfalls to your boss that he might unknowingly fall into as this will hurt your ability to move up the ladder. Always over communicate and inform.

Chapter 56 - Stay Out of Office Politics
I always hated office politics, but I also confused OP with the work required to promote my own brand to upper management. The first one needs to be avoided at all costs and the second one implemented at all costs. When it comes to office politics, the author urges you to be the last to know and spend your time creating and accomplishing instead.

Job Perspective

Chapter 27 - Don’t Hide an Elephant
As soon as a problem arises, identify it and inform your superiors. “The “hiders” always get burned, regardless of complicity. The discoverers are always safe, regardless of complicity.” Obvious but often overlooked.

Chapter 4 - Get And Keep Customers
This is one of the toughest (and visible) jobs for any organization to accomplish. The author explains that it is imperative that you find and keep current and future customers as they provide the ideas for new products and applications as well as a line of site into your competitors.

Chapter 62 - Become a Member of the Shouldn’t Have Club
I read this title to several people that responded with the same word, “What?” In this chapter the author urges us to take chances, there are no super stars in the non-doers club (I should have done that or I could have done that). It’s a boring place to be. Instead, take some risks, be a doer and get a little scraped up. Be the one that says “Gee, I shouldn’t have done that”, as there will be ten other times when the results prove that your decisions were correct.

Chapter 74 - To Teach Is To Learn and Lead
Take every chance available to present to a new hire or group to educate them on what you do. “Good preparation and practice will produce a good presentation. A good presentation will earn you a company-wide reputation as an expert in your job.”

Self Perspective

Chapter 35 – Add One Big Thing to Your Life Each Year
To be at the top of any organization you need to broaden your life experiences. Train for a marathon, learn to rock climb, master French cuisine, anything. Make a list and keep to it!

Chapter 5 – Keep Physically Fit
This is another obvious one but hard to keep. Discipline plays a huge role with exercise and eating right (eat to live not live to eat). Remember that if you can stick with exercising and eating right for 21 days, it will become a habit. It gives you energy to plow thorough a tough work week, to coach your child’s soccer team, volunteer at the local soup kitchen, or to have the energy to play with your kids.

Chapter 6 – Do something hard and lonely
This is a shout out to the Spartan. Do things others are reluctant to do and do it alone. Ideas would be getting your graduate degree, writing book reviews, or studying real estate. Anything, but do it alone. “All great and successful athletes remember the endless hours of seemingly unrewarded toil. So do corporate presidents.”

Chapter 9 – Keep and Use a Special Idea Notebook
Use it to brainstorm. I keep mine by the bed so if I wake with an idea, I can get the essence of it down on paper so that I don’t forget the idea in the morning. I also use it for those once in a lifetime hysterical situations that you always seem to forget soon after they happen. The point is, when you write things down, you commit to them. They can become a part of your daily or monthly “to-do list” that gets you closer to your goals. “Good ideas always have their time. When they do, commit them to action via your “to-do” list.

This book helped me better separate the lines of personal brand building vs. getting stuck in the mud within corporate politics. I liked the easy read as it sparked new ideas and rejuvenated old ones that were left unimplemented. I also found that especially reviewing the “obvious” chapters made them that much more “obvious” and easier to make permanent within my own plans to ascend to the top.

See you in the trenches - vmsteveo

After rough start, Bob McKillop is at home at little Davidson

2008-03-25T10:20:00.000-04:00

This is a very inspirational article for any level of management and comes directly from my home town.

See you in the trenches - vmsteveo

After rough start, Bob McKillop is at home at little Davidson
By MIKE CRANSTON, AP Sports Writer Mar 19, 2:07 pm EDT

DAVIDSON, N.C. (AP)—Bob McKillop arrived 19 years ago from New York and planned a short stay. He thought it would take about four years to turn around the Davidson basketball program. Then he’d move on to that bigger coaching job he was convinced he deserved.
“Arrogant, abrasive, cocky high school coach,” McKillop said in describing himself then. “Thought he could come in and wave a magic wand, not realizing the challenges of Division I basketball.”
McKillop, who starred at Hofstra before becoming a decorated high school coach on Long Island, saw his plan shattered when Davidson went 4-24, 10-19 and 11-17 his first three seasons.
His job on the line, McKillop realized he had to change.

I had to get brought to my knees with a very humbling experience before I learned what the real importance in coaching is,” McKillop said. “That’s teaching young men to be responsible, to be accountable and to work as a team.”

While he stubbornly clings to his New York accent, every other part of that young and grating coach is gone, as the 57-year-old McKillop prepares to lead Davidson (26-6) against Gonzaga on Friday in the first round of the NCAA tournament.

Now 337-224 in 19 seasons, McKillop has not only turned Davidson into a mid-major power, he’s become a fixture and father figure at this tiny liberal arts college. He lives in a house that sits across the street from campus in this quaint town 20 miles north of Charlotte. You can sometimes see him chatting with neighbors on the sidewalk. Both of his sons have played for him, including Brendan, a freshman on this year’s team.

“When I came, Bob was still learning about the culture at Davidson and it’s not an easy task,” said athletic director Jim Murphy, who arrived as McKillop started his seventh season in 1995. “But I think each year he assimilated a greater sense of the community and a greater feeling for the intricacies of the Davidson College community.” McKillop has led the Wildcats to four straight 20-win seasons and three straight NCAA tournaments, but this year’s team is his best.
Davidson has won 22 straight games, the longest streak in the nation. Seeded 10th in the Midwest Region, the Wildcats have their best chance to win their first NCAA tournament game since Lefty Driesell put this school on the basketball map with two Elite Eight appearances in the 1960s.

“He’s done a great job there,” said Driesell, still considered royalty around town. “I love his team. I think he could win a couple of games in the NCAA and I’m pulling for them.”
Like Driesell, McKillop has overcome rigid academic standards at this school of 1,700 students with a unique recruiting philosophy. Davidson’s roster has players from Canada, France, England, Turkey and Nigeria.

But McKillop didn’t have to venture far to get the best player to wear a Wildcats uniform in decades. McKillop eagerly went after Charlotte’s Stephen Curry when the big schools shied away because of his size. Curry, the son of former NBA player Dell Curry, has since grown four inches to 6-foot-3. With a lightning-quick release, the sophomore has scored 1,533 points in less than two seasons under McKillop’s guidance. “You see his decision-making has improved quite significantly,” said McKillop, who clearly relishes coaching such a talented player. “His defense, his rebounding have improved significantly.” But Curry isn’t immune from McKillop’s demanding style. Neither is senior point guard Jason Richards, who leads the country in assists per game.

The self-proclaimed “tough guy from Queens” gets on everybody. Thomas Sander caught McKillop’s wrath at practice on Monday, when the senior forward was sluggish after staying up most of the night before finishing a paper. “He came up to me afterward and said, ‘Thomas, I’m not that kind of coach. I’m going to be on you no matter what time of the year it is. If you want a different coach, go someplace else,”’ Sander said.

“I said, ‘Coach, I’m a senior. Where am I going to go?”’ It’s clear McKillop no longer plans to go elsewhere. “There is no doubt in my mind that Bob could be very successful at any number of Division I college basketball programs,” Murphy said. “It’s just a question of how much would he enjoy his success at those programs. I’ve heard him say, ‘How many Division I coaches can say they’ve raised three children in the same house?”’

A house that allows McKillop to walk to work, while running into excited residents who think Davidson can become this year’s big NCAA tournament surprise. “Sometimes when you put your eyes on your next job rather than put your eyes on what’s in front of you, which is your team, you fall into that trap very easily,” McKillop said. “I’ve been fortunate that my family has been afforded the opportunity to grow up here.”

Let's Virtualize Political Leaders

2008-03-25T06:09:00.000-04:00

Virtualization is the new word in technology... everyone is using it.. .except politicians. I would like to virtualize them. Can you really believe them... One does something and the other one says they did it on purpose. Some one on their staff says something about the other candidate and they say we do not carry that opinion and then fire the person only to hire that person in a different capacity.

We need to be ruled by leaders - 1 term, 4 years and the process needs to change. no parties... just a list of people who are running... limited amount to spend on the election and make it government funded so it can be controlled... meaning that the government needs to write the checks this way no one cheats....

My two cents.... - this is not government funded....

What makes a great channel program?

2008-01-13T08:46:00.000-05:00

One thing that I have come to be an expert on is technology manufacturer channel programs. I have seen to many not to be considered an expert. I have worked with large, medium, and small ones... I have worked with hardware, software, and services ones... and even ones outside the tech industry.

What do you think makes a great one? profit margins, tech support, marketing programs, client protection, partnering mentality, or even some SE funding. I would like to hear your thoughts before I tell you mine....

Also, what companies do you feel meet that definition?

Stelar....

Welcome 2008

2008-01-06T07:56:00.000-05:00

I am not sure if everyone would agree... but I expect 2008 to be an exciting year... of course, a little crazy with the elections, housing crunch, and threat of recession. But, being the optimist that I am and one that makes money being in the technology industry, I expect changes in technology to spur strong growth, especially in the Virtualization (Server, Desktop, and Storage) market.

I have said this all along... CIO has 4 choices with Virtualization... one - he completed a virtualization project already; two - he is about to start one; three - he is in the middle of one; or four - he is looking for a job. For the first time, companies like VMware, Citrix, and Microsoft have developed virtual server applications for the industry; so you can expect competition will breed excitement. With storage costs coming down and innovation happening so fast, keep your eyes on NetApp, Lefthand, and a slew of other enterprise storage players.

What else will be big in 2008? Only time will tell.