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May 2009

Stick to the basics – in health and business

When news first broke of the H1N1 virus, stories included images of people wearing respiratory masks in crowded public places. Residents of big cities rushed to get supplies, only to discover empty shelves.

Before people began to panic, the Centers for Disease Control and Prevention (CDC) delivered a simple message – stick to the basics to stay healthy:

  • 13098873-848x566_handwashingSneeze and cough into your sleeve, or use a tissue.

  • Wash your hands often with soap and water, especially after you cough or sneeze. Alcohol-based hand cleaners also are effective.

  • Avoid touching your eyes, nose or mouth. Germs spread that way.

  • Stay home if you’re sick and limit contact with others to keep from infecting them.

This isn’t complicated, just easy health precautions to follow every day. Sometimes it takes a worldwide health alert to remind us that the teachers were right when they drilled home the common sense personal hygiene techniques we learned in kindergarten.

This same thing can happen at the office. We get busy – or admit it, we’re swamped – and then suddenly there’s an issue… or a crisis… because someone forgot to follow the basic principles that keep the company going.

My advice: Remember to always follow the standard operating procedures. Whether you’re hiring a new employee or launching an amazing product, stick to the process in place. We’ve all read stories about companies that didn’t run their “standard” background check and then had to deal with inappropriate or criminal behavior on the clock. 

Ensure employees are aware of your company’s policies and procedures by including the information in their initial orientation and making it part of an annual review process. Discuss your guidelines with vendors and partners so everyone knows what’s acceptable and the extent of your boundaries.

And just like washing your hands or covering when you cough, these basic steps can protect your company’s health and future.

All the world's a stage

51710368 Sure, Bill said it first and he probably didn’t mean it in marketing terms, but he was right.

Today’s consumers want more from the service industry than ever before.  They call it many different things – better customer service, being customer focused, etc. but what they are all hungering more than just getting good service. 

They want an experience. 

Experiential marketing has been talked about for years and some savvy marketers have been delivering it. 

For example, women who are going to have their first baby don’t just want to have a baby.  They want to have their baby in a luxuriously appointed suite, with soft music playing in the background.  They want to be able to surround themselves with family and friends and have a comfortable place for Dad to rest. 

In addition, they want their nurse to be someone nurturing and as excited as they are about their new bundle of joy.  When they are ready to leave the hospital, they would like to be handed a high-end diaper bag filled with free goodies and a CD of the music they listened to during labor as a memento of the experience.

So, how do you build this experience for your clientele?  According to The Experience Economy by B. Joseph Pine II and James Gilmore, you can think about it as though you were staging a play. 

They believe that it’s the companies that provide carefully themed and choreographed experiences that will win, while those that don’t will become a commodity and devalued.

The caution about this is simple.  Don’t let your marketing materials get ahead of you.  Never promise what you’re not ready to deliver.

The stage is set….are you ready to step out into the light?

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Top 10 Things You Need to Know About Digital Natives

Who are Digital Natives?
Digital Natives, a term coined by Marc Prensky in 2001, refers to anyone born after 1980. By age 20,Blog Digital Natives will spend 20,000 hours online. Everyone else, including your humble narrator, is classified as a Digital Immigrant. Even though we, as Digital Immigrants, created the current technological environment, we consistently cede ground to Digital Natives. Their takeover of the entire digital landscape is manifest destiny. Thankfully, they seem to know what they are doing. Before the transformation is complete, it might be wise to understand what motivates this new digital ruling class.

10) Transparency
As Digital Immigrants, we are wary of thieves, idiots and con artists. We never lay all of our cards on the table at the first meeting. We get to know you, we find out about you, then we trust you and tell you about ourselves. It is a slow process, but one which avoids inadvertent entanglement with a disreputable partner. Digital Natives lay everything out for the world to see. They are radically transparent. From blogs, LinkedIn, Facebook, YouTube and myriad other sites kept from prying eyes of those over 35, anything you (and the rest of the world) want to know about a savvy Digital Native is out there. The Natives want you to know as much as possible about them before they meet you. Throwing everything online allows digital vetting. If the Digital Native is a thief, a scammer, a liar or even just an idiot, the harsh voice of the digital vox populi, so the theory goes, will surely expose these warts. Placing everything online has the risk of alienating potential contacts that may not like your views on politics, religion et cetera. Online exposure also attracts the matches who are attracted to this 21st century curriculum vitae.

9) Play in Their Work and Work in Their Play
Digital natives want jobs that are fun ... not necessarily jobs which everyone sees as fun, but jobs which they find personally enriching. They are more amenable to working longer hours for lower wages if they do something they love. Working at something they love, they tend to excel, often expanding their jobs into new areas which they themselves discover. In play, Digital Natives are drawn toward social activities involving large diverse groups. They often see activities as forums for learning and fostering their networks. While open salesmenship is rare, they come with questions and ideas which Digital Immigrants avoid discussing outside of a signed non-disclosure agreement. Natives key in on being a valuable part of an enriching community, at work and at play.

8) Quantity over Quality - Speed over Accuracy
That is not to say Digital Natives do not care about quality or accuracy. Having been weaned on spin doctors, Digital Natives are actuely aware every source comes with its own bias. Digital Natives  constantly receive information from dozens of sources, including text messages, e-mails, phone calls blogs, social networks and even archaic media such as television. They process information an inch deep and a mile wide, until they find what they seek. Digital Natives often scan, sift and digest more news in an hour than Digital Immigrants process in a week. Receiving as much information, as quickly as possible, from the most reliable sources, Digital Natives are confident in their abilities to separate fact from fiction.

7) Say No to Negativity

As a lawyer, this has been the hardest aspect of Digital Natives for me to understand. From a young age, my siblings, friends and schoolmates assisted my development by sarcastically deriding any perceived error. I quickly discerned the rhyme and meter of this dance and am able to differentiate bullying, constructive criticism and fear of new ideas. This skill I honed to a razor's edge in law school and the subsequent practice of law. Bringing my adroit verbal rapier to bear on Digital Natives however, yielded  unexpected results. They were raised in a different age. Not better. Not worse. Just different. I never received a participant trophy when I was young. If I had, I would have hid it from anyone whose opinion I valued. Conversely, most Digital Natives were raised on constant positive reinforcement. Negativity was viewed ... negatively. Far from making them whiny and lazy, this background has made them open and collaborative. Saying "no" is anathema without providing an alternative solution. Ideas are no criticized, but instead repeatedly stripped down and built up until they either stand on their own or fail. As a result of this process, even ideas which lead to failure are seen as a positive.

6) Failure is a Gift
Digital Immigrants wore failure as a scarlet letter, going to lengths to avoid it or pin it on someone else. Digital Natives view failures as merit badges, things they need to discover before they eventually reach their goals. They know failures teach them things no one else knows, giving them an advantage over any unschooled competition. The most remarkable Digital Natives share stories of their unique failures within trusted groups, not as a form of commiseration, but as a form of advanced learning, giving and receiving gifts not available from any other source at any price.

5) Create or Die
Content is the new commodity. To Digital Natives, it determines who you are and what options you have. Whether it is YouTube videos, ebooks, blog posts, tweets or a string of successful startups, your reputation and your worth are judged by what you have created. While someone with an extensive scholarly background may have the chops to take a company to the next level, to a Digital Native, they are at a competitive disadvantage with a high school dropout who has successfully replicated the implementation at four other companies. Digital Natives are more concerned with their ideas taking root, than in actually receiving compensation for the idea. If they come to an impasse with their idea, they put it out for the world, with the hope that others add and subtract from the idea until it becomes viable. Creating content brings people of a like mind together. The more ideas you have, the more opportunities you have to stand on the shoulders of giants and see your ideas through to fruition. 

4) Technological Bulimia
Aware that the amount of valuable information available to them far outstrips their ability to process all of it in a thousand lifetimes, Digital Natives are constantly on the lookout for the latest technology to assist them in processing ideas more quickly. They crave technology not for technology's sake, but as a tool to assist them in getting from point A to point B better, faster cheaper and easier.

3) Collaboration as a Culture
Collaboration outside of one's business was anathema to many Digital Immigrants. "I worked hard, and paid my dues to obtain this information. Why should I give it away for free?" Digital Natives see things differently. "If I give one valuable piece of information to five intelligent people, I will probably receive at least three pieces of valuable information in return." Sure, there are those who try to take advantage of the system, always taking and never giving, but with the speed of information transmission, these individuals are quickly discovered and cut off from future collaboration.

2) Follow Leaders of Trusted Tribes
Digital Natives are more blind to stereotypes than Digital Immigrants. Ignoring borders, language, age and culture, Digital Natives flock to influencers capable of providing the best information at any given time. As a shortcut to determining who is the most trusted influencer, Digital Natives look at who else is looking to a particular individual for advice. In this case, it is quality over quantity of followers. Ashton Kutcher and Sean Combs each have over one million followers on Twitter. Despite their followings, however, they are less influential in that arena than people like Pete Cashmore or Michael Arrington. Despite having fewer followers, the latter two individuals have influential followers and are, therefore exponentially influential. Discovering who a Digital Native trusts provides a wealth of information about who they are and where they are going.

1) Balance

The Holy Grail for a Digital Native contains a balance of friends, family, work and play. If you find a way to help them achieve this balance, or better yet combine these goals, you will see what Digital Natives can truly acheive.

Digital Natives are not "slackers." Just the opposite. Most work long hours for little pay when pursuing an activity they love. The key is finding out what there is for them to love about you and your company. Understanding their goals, and incorporating them into your business strategy, may translate what you previously dismissed as a liability, into one of your company's most valuable assets.

Brett Trout

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Who me? Defensive!

Groucho MarxGroucho Marx via last.fm

You're in a meeting and a team member points out an error you made in a recent report. Instantly, you feel your face flushing. Your stomach knots up. Your mind starts to race. What you do next - and say next - says a lot about:

  • how you see yourself
  • how open you are to learning and improving
  • how others will ultimately see you

Get defensive when someone is critical or trying to give you feedback, and it's like shooting yourself in the foot. Get upset with messengers delivering messages - whether they're flattering or not - and soon the messages will dry up.

  • People will give you less and less feedback. Pretty soon you're operating with a self-perception that's flawed because it's not aligned with how others see you.
  • Then your blind spots start to multiply. Eventually you'll get in trouble because you're operating with pieces of important information missing.

Most people don't enjoy giving even truthful and helpful feedback to a defensive person. It's not easy or fun. So they just don't.

If you know you're guilty of being defensive, change all that. (And hey, we all can be defensive at times, depending on how invested we are in whatever is at stake.)

When someone says something that makes you bristle, instantly think to yourself,

  • "Wow, if there's even an element of truth in what they're saying, I need to know it. I could be making a problem for myself, and others, and this could be a way out. What am I doing to get this feedback? What can I learn from this feedback."

Be curious. Sincerely curious. Like a scientist might be with a science experiment. If you can switch from:

  • being defensive to being curious
  • focusing on your own feelings to focusing on the other person's perspective,

a calmness will settle over you. The racing thoughts will slow down. The strong emotions will subside. Your ears will open up and you'll be able to listen for any nuggets of truth in what's being said.

It all starts with your frame of mind. Is your mindset open or closed? Don't be like Groucho Marx who supposedly said, "People say I don't take criticism very well, but I say, 'What the hell do they know?' "

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Failure to Communicate

A lot has been said and is written about active listening. Being a successful sales person is predicated on how well you listen. So why are so few people good at it? I was fortunate to have spent a fair amount of time being formally trained on how to be a better listener at The Improv Olympic (I.O. Chicago)

Good listening is the key to building great relationships both personally and professionally. But it takes effort

Keith Rosen of the All Business Blog says "To listen actively and thoroughly takes concentration, hard work, patience, the ability to interpret other people's ideas and summarize them, as well as the ability to identify nonverbal communication such as body language. Listening is a both complex process and a learned skill; it requires a conscious intellectual and emotional effort."3077872464_59648e7080

Here are a few things Keith suggests in order to become a more effective listener;

  1. Encourage silence to show you are actively listening. Many salespeople only wait a split second to respond to a client's comments or questions. Instead, get in the habit of waiting a minimum of three to four seconds before responding. Even count to yourself to ensure that enough time has elapsed. This conscious pause will make the person feel heard and comfortable enough to talk more, since your pause demonstrates that you have a sincere interest in what they are saying. Although many salespeople find the conscious effort to stay quiet challenging, silence creates the space that will motivate your client to share additional information. It also gives you enough time to respond thoughtfully and intelligently to your client's specific needs. Besides, look at the words: SILENT and LISTEN. Notice that each word shares the exact same letters.
  2. Never interrupt while the client is speaking. Obviously, what we were taught as children still applies. Enough said.
  3. Be present. Listen with an open mind (without filters or judgment). Focus on what the client is saying (or trying to say) instead of being concerned with closing a sale. This shows that you have a genuine interest in helping them, not just yourself. Otherwise, you run the risk of missing subtle nuances or inferences that could make or stall the sale.
  4. Make the client feel heard. This goes beyond simply becoming a better listener. It involves ensuring that the person to whom you are listening actually feels heard. To make someone feel heard, clarify what the client has said during the conversation. Rephrase their comments or questions in your own words in order to ensure that you not only heard but understood them. 
  5. Resist the temptation to rebut. As human beings we have a natural tendency to resist any new information that conflicts with what we believe. Often enough, when we hear someone saying something with which we might disagree, we immediately begin formulating a rebuttal in our mind to obscure the message that we are receiving. And if we are focused on creating a rebuttal, we are not listening. Remember that you can always rebut later, after you have heard the whole message and had time to think about it.

An old friend of mine told me one time that you can't learn anything if you're always the one talking. Becoming a better and more active listener will not only improve you personal and professional relationships, it will soon lead to more sales.

"Look at me, Mommy!"

Cover of "Good to Great"Cover of Good to Great

Where's your attention as a leader? On yourself or on those you're leading? Though all of us need affirmation and acknowledgment to some extent -- to bolster our confidence and to let us know that we're on track -- some leaders are downright needy. Wasn't it the extreme need for attention and personal gain that put so many so-called corporate leaders behind bars within the last year or so?

The need for attention is one of the factors that Jim Collins found separated good leaders from great leaders in his Good to Great research. Remember the pattern that Collins discovered that he called The Window and the Mirror? Great leaders are inherently humble, Collins found, and they focus their attention...in other words, they look out the "window" (outside themselves)... to give credit for good things that happen. On the other hand, they switch their attention internally when things go poorly, taking responsibility themselves for what's happened.

Where's your attention as a leader? Do you see yourself as the center of your own story at work, or is your attention on those who are helping you make that story a reality, day-to-day? Supposedly Jack Welch said this about the people of GE, before becoming their CEO, "they spent too much time with their face to the boss and their ass to the customer." That's not good. To GE's credit, Welch got them to turn their attention in the right direction!

Where's your attention as a leader? Great leaders pay attention to those they serve and in the process, they learn how to better serve those they lead.

  • During the Civil War, the story goes that President Lincoln would often wander among the Union soldiers after a formal review, exchanging stories, listening to their concerns, expressing his appreciation for their valor and courage. He often worked late into the night so that during the day he could be accessible to the mothers and wives and average citizens who came to him to petition him with their personal tragedies.
  • Robert Stephens, founder of The Geek Squad, tells how he decided to integrate off-hours game-playing into the training curriculum by paying attention to how the technicians were chatting and swapping repair tips on their own time. It wasn't about what interested Stephens; it was about paying attention to what interested his employees.

As leaders, we don't have to ask people to pay attention to us -- our employees, our customers, other stakeholders. They will pay attention to us as leaders -- and affirm and acknowledge what we're doing -- if we pay attention to their passions, interests, and needs.

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Real Ownerhsip or Psychic Ownership: What Works?

12675916_thl There is a lot of interest in sharing ownership with the employees of a company.  The belief is that sharing ownership increases the performance of a company.  I say maybe.

Why?  I believe that there has to be a high level of psychic ownership that goes hand in hand with real ownership.  Even better, the psychic ownership should precede the act of real ownership.

You can call an employee an owner, but if they have no means to give input, never see their input influence the company, do not understand the finances of the company, and have no idea how the ownership value in increased - it is a dead end street.

There are many companies where the employees have strong psychic ownership.  If you were to visit one, you would swear that they were owners.  The world of business forgets far to easily that the power of the mind and emotions will dominate the "facts".  Employees have to believe and feel they are owners before real ownership can make a difference. 

This is a current debate in the employee ownership world.  To see more on the debate go to this Linkedin discussion.

Mistakes to Avoid When Selling Your Business

Selling a business for most owners is a once in a lifetime event.Blog

The owner is very experienced in running the business, but is typically a novice in selling a business, which can lead to critical mistakes. Mistakes most owners cannot afford when the business represents a majority of the owner's net worth.

Given those parameters, here are some thoughts to assist you through the process.

1. A business is only worth what a willing buyer will pay for it. There are plenty of valuation formulas, but the market is the reality test.

2. Clean up your balance sheet and check it for hidden values.

3. Market your business. The more potential buyers, the more likely you will get your asking price.

4. Confidentially. Do not make it public information - that you are For Sale. Bad things will usually happen. The competition will use it against you, employees will look for other employment, your vendors may leave you, et cetera. The biggest risks in selling a business is the risk that the business will deteriorate while the management is focused on the selling process. The owner will not have time to manage his business as he did in the past. The selling process is very time-consuming, with management focused on negotiating with buyers and dealing with the attorneys, accountants and other professionals who may be involved in the process. Investigate any potential buyer; speak with other individuals who have sold to this buyer. What is the buyer's reputation for keeping his word? 

5. Tax Avoidance. Check with your accountant for the best way to structure the sale. Allocation of the sale price can produce major tax savings, C Corporations have the possibility of double taxes, stock or asset sale. Remember, it is not what you sell if for, it is what you get to keep!

6. Seller Financing. Most banks will require it and the SBA will in most cases demand it.  If you are going to be a bank for the buyer, you should require collateral securing the debt or personal guarantees by at least two separate parties. And your approval to be their banker is required. 

7. Be very careful about taking stock.

8. Earn-Outs.  In these economic times, Earn-Outs are often part of the terms and conditions for a sale.   The earn-out concept is often very useful in bridging the gap between what a starry-eyed owner thinks his business is worth and what a buyer is willing to pay given the risks involved.  Owners will have to make a business decision on this one.  If the buyer is well financed and has a good business plan, this could be very lucrative for you.

9. Buyers are always smarter than the seller thinks they are.  Never try to hide anything about your business. The buyer will find it, the trust will be lost and the deal will be killed.

10. Be prepared to sign at least two agreements:  a)A Non-Compete Agreement and b) A Transition Agreement, defining how you and the buyer will work together, your responsibilities, compensation, et cetera after to sale.

11. Hire professionals to help you.

- Steve Sink

Networking: It's a natural

City of Des MoinesImage via Wikipedia

The first few times I heard or read the word “networking” it sounded so stuffy, so forced. I pictured myself standing in a semi-crowded room, business card in hand, suit pressed, elevator speech primed.

No thanks, right? Sure, events like these have their purpose (picture a job fair), and real connections do happen, but social networking isn’t about a bunch of suits meeting at a given time, at a given venue, on a given day.

It’s organic. It’s natural.

Whether at work, school, church, a restaurant, tavern, coffee shop or grocery store, it’s about building relationships, day-to-day, in the course of your customary comings and goings.

It’s relating to people, not solely because he or she can help you grow your career or business, but because you are genuinely interested in building each other up…while identifying those in your circles or circles of influence that you want to impact and vice versa.

I’ve identified a number of guys and gals in Greater Des Moines that fit the bill. They're fresh. They're diverse. They're young and old. They're businesspeople and young professionals. They’re movers and shakers, entrepreneurs, go getters.

They conduct business with integrity. They care.

Are they interested in growing their businesses, their careers? Sure. Who isn’t? But one thing they really have in common is a genuine desire to share in the lives and passions of other people.

I know more than a few of these folks plan to attend the next BYOB Gathering hosted by Jeff Garrison of JCG Consulting and the crew at McLellan Marketing Group. There will be no program, no agenda, no speakers…just a bunch of really neat people chatting over a few cold beverages.

So if you’re ready for some serious grassroots networking, get May 28 marked off on your calendars now and show up from 5 to 7 p.m. at McLellan Marketing Group, 1430 Locust St., Des Moines. And don’t forget to bring a few bottles of your favorite beverage. Coolers will be provided.

Like the invitation says, “If you’re doing business in Central Iowa, you’re going to want to be there.”

- Todd Razor

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Tracking hashtags on Twitter

Twitter Hashtags in Google ReaderImage by Search Engine People Blog via Flickr

If you're new to Twitter, you may be wondering what all those strange words are preceded by the # symbol. These are called hashtags - basically, it is a method for adding context to your Twitter updates. Similar, in concept, to tagging videos on YouTube or photos on Flickr.

On the right-hand side of your Twitter screen, you'll notice an area called trending topics. These change every day and can reflect upswings in stories being covered in the media, or even Twitter-specific events, such as the popular #followfriday meme.

Every Friday, certain Twitter users will give shout-outs to some of their favorite "tweeps," making it easier for their followers to discover other interesting people on the social network. They tag these updates with the #followfriday hashtag.

The # symbol makes all the data easier to aggregate and track. There are even Web properties solely devoted to tracking and defining hashtags, such as Des Moines' own WTHashtag.com. This site is built upon wiki technology, making it easy for visitors to create their own definition entries for certain hashtags.

Here's one I created: #CarpeDM - use this hashtag any time you're sharing news about something cool, new or innovative happening here in the Des Moines metro area.

So, why would a business be interested in any of this? Let's say that your organization has an entrenched interest in food production and safety, and you want to listen for what's being said on Twitter about the swine flu outbreak. You can easily review real-time chatter by searching for #swineflu on search.twitter.com, or pull trending graphs from services like WTHashtag or Twist.

Listening leads to business intelligence, competitive advantage and new opportunities, so remember to fine-tune your radar to include Twitter hashtags.

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Have you ever had to rent equipment?

Rental sign There are many different reasons that you may need to rent equipment. Often times a construction worker needs to rent a Bobcat or a tiller. A landscaper may need to rent a mower or a chainsaw. Painters may need to rent some scaffolding or spray equipment.  Photographers or film makers may rent camera equipment or lighting. An event planner may rent signage or furniture for a booth display. 

As you can see, there are an array of companies that will need to rent equipment or property every once in a while.

Renting equipment can be cost effective compared with purchasing a piece of equipment that you may only use two or three times in a year.  However, you might want to make sure that you have the proper insurance to cover the equipment in the event of a loss.

A common error I see - particularly in the construction industry - is that this industry will often carry general liability only. While it is the business owner’s choice if they do not want to cover their own tools, here are some things they might want to think of if they are renting someone else’s equipment:

  • What is the cost to insure the equipment?
  • What are the chances of loss?
  • Do you have enough funds to replace the equipment if the equipment is damaged?

If you answered no to No. 3 then you might want to consult with your insurance agent prior to renting any equipment to ensure that you have the proper coverage.

If you are a company that rents equipment to others – to better protect your interest, I suggest that you:

  • Pre-qualify your customers – make sure that they are familiar with your equipment
  • Attach safety labels, warnings and equipment instructions/manuals
  • Inspect equipment before each rental and make sure that all of your equipment is properly maintained
  • Use a standard rental agreement that protects your interests - a properly written and correctly used agreement will help protect your company in the event of an accident or injury during the rental period

Just because you have an insurance policy doesn’t mean that you have the right coverage for all losses. We are entering into a busy time of year for many businesses so I suggest that you review your coverages with your agent to ensure that you have what you need.

Does Your Project Have a Fan Club?

Fans Last month, I was in Milwaukee teaching a business analysis class for the University of Wisconsin-Milwaukee.

Of course, any self-respecting social media participant (blogger, Twitterer, et cetera) couldn't really claim a trip to Milwaukee unless he spent some time with the indomitable (in a warm teddy bear kind of way) Phil Gerbyshak.  And even better (if that's possible) is spending time with Phil AND his girlfriend, Ellen Winters.

To say that Ellen is a great singer would be like telling da Vinci that the Mona Lisa is a "cute drawing."  She is utterly amazing with the vocals in multiple genres, especially jazz.  I've already almost worn out her latest CD.  Besides performing, Ellen also teaches music in both Chicago and Milwaukee.  She shared with me that one of the things she tells her students is to appreciate those who CAN'T sing (like me), because every performer eventually will need fans.  To paraphrase her comments, "For every one of us who is able to perform well, we need the other nine to come to our concerts and buy our CD's."

So true.

And her comments apply to project management as well.  A lot of project managers just plow through the scope and schedule of their project without much regard to those who need to support it... financially, socially and psychologically.  If a project manager is supposed to spend 90 percent of his time communicating, then a substantial portion of the communication should be building the fan base.  Just because somebody isn't sharing the stage with you does not make them any less important to the success of your performance.

Ask yourself the following:

  1. Do you know who is impacted (and who just thinks they are impacted) by your project?  What is their vested interest?  Make a list of the top 20 people who need to be excited about your project.
  2. How are you answering the WIIFM (What's In It For Me) question?  Do you know the value proposition your are bringing to those not on your project team?  Check your project charter or business case; this should be addressed.  If it isn't, add it.
  3. How are you building excitement for your project?  Are you holding lunch-n-learns?  Do you have a Web site or a newsletter or a blog or a Facebook page or a Twitter account?  Have you unveiled a prototype so people can visualize what you are doing?
  4. Are you living it?  Are you spending all your time trying to get others excited, but maybe you're not feeling it yourself?  People have a strong BS-o-meter and if the person at the top isn't excited, others won't be either.
  5. Are you creating fans or evangelists?  Are the people you're trying to excite going to turn around and excite others or does the passion wane quickly?

Sure, you can ask all of the basic start up questions that are required to begin a project.  But as Ellen deftly pointed out, you can be the best performer in the world, but if nobody is there to "buy it"... does your performance really matter?

Get Customers' Attention by Doing Old Things a New Way

Anyone who flies frequently can likely recite the flight attendant's safety briefing by heart. Despite warnings from the purser about how important it is or pleas from the cockpit to put down your reading material, most of us just zone out. A few months ago, an airline passenger caught a Southwest flight attendant on his camera phone turning the tired old spiel into a clever rap.

Think of all the ways companies, Customer Service Representatives and sales people approach you with bland, been-there-done-that phrases which customers shrug off like an airline safety briefing:

  • "Did you find everything you needed?"
  • "Anything else I can do for you today?"
  • "Can I help you find anything?"
  • "Do you need a fitting room?"
  • "Are you finding everything okay?"

Sometimes, you must choose NOT to do what the customer expects. Perhaps it's time to think through all of your customer touch-points and consider opportunities to catch the customer's attention by doing old things a new and different way!

Is it time to own up to offshore bank accounts?

The penalties for failing to tell the Treasury about offshore bank accounts are ugly: the greater of $10,000 or 50 percent of the account balance for each year the account goes unreported.  The penalties can wipe out your accounts in a hurry.  They can also assert criminal penalties if they are in a bad mood.

The IRS has scored some well-publicized victories in its battle against offshore tax evasion.  Offshore bankingBlog secrecy seems to be crumbling.  It might just be a matter of time before the IRS catches up with those Cayman Island bank accounts.

Now the IRS is offering a deal.  It's not exactly "get out of jail free" -- it's more like "get out of jail at a tremendous discount."  The deal: if you self-report under the IRS program, they will not prosecute you, and they will assert a maximum total penalty of 20 percent.  They will also require you to pay tax, with interest and penalties, on any unreported income.  For a hypothetical $1 million account, the taxes and penalties under the amnesty would be $386,000; if they catch you, they would exceed $2.3 million, not counting the legal fees you'll have if they try to send you to prison.

Florida tax attorney Peter Pappas says the IRS offer is a good deal:

If you have owned a foreign bank account in the past five years and have not disclosed it to the IRS, we urge you to take advantage of the IRS’s voluntary disclosure program. If you do not do so and the U.S. discovers your non-compliance on its own, you can expect it to assess the full amount of penalties and seriously consider criminal prosecution.

The Treasury considers accounts on offshore internet gambling sites to be offshore bank accounts; if you are going to gamble, don't gamble that the IRS will miss your account.  Folks wanting to bring their offshore accounts in from the cold should contact a good tax lawyer to get the process started.

Link: IRS offshore amnesty FAQ.

Add value and save time? Talk about win-win!

Sunrise shown in time lapse. The motions of S...Image via Wikipedia

24 lousy hours.

That's all we get.  And yet, we are constantly pushing and being pushed to deliver more.  I've yet to meet a business person who wouldn't love to have more time. 

So when I discover a tool that helps me add more value AND save time -- that's worthy of some celebration. That's how I feel about Zemanta

Zemanta is a free tool that allows you to enhance your e-mails and blog posts by finding related images, Web and blog links, and tags. With the Zemanta Firefox extension (other browsers are available) incorporating these suggestions into your e-mail or post just requires a single click.

Basically, here's how it works. As you type in your compose window, along the right side are the images and article/blog post suggestions, updating and customizing as you compose.

Zemanta    You can see in this screen shot, the photos as they're sorted and presented.  There are small arrows below the photos that allow you to flip through all of their suggestions.  Below that are the relevant blog post and article suggestions (click on the photo to enlarge it).

You can also search for a specific words or phrases and alter the results.

Below the composition window, technorati tag suggestions and links appear.  If you want to add either to your work, again you just click once.

Picture 21 What this plug in allows you to do, in a nanosecond, is add images that you know are safe to use and additional content for your readers (click on the image to see a larger version).

The other huge benefit from using Zemanta is that when you add any content (images, posts, tags or links) Zemanta does two things.  First, it puts a little text icon at the bottom of your post and two, it adds your content to their library so that others can link to you just as easily as you just linked to them!

Literally, in just 2-3 minutes, I've added the time-lapse photo of the sun rise, added the link to technorati and Zemanta, chose three articles/blog posts (see below) to add even more content to this post and used their tag suggestions.  

On the Zemanta site, they have a demo for you to watch and very simple instructions for downloading and getting started.  I swear...I can't believe I did all of this manually before.

Huge hat tip to Mike Sansone for introducing me to this time and value Godsend!

Reblog this post [with Zemanta]

Prepare Like a Winner

The motivational experts remind us that to perform like a winner, you have to prepare like a winner. This is important for personal fitness, extending from the weekend-warrior out to win the annual neighborhood softball competition to an experienced athlete participating in the Hy-Vee Triathlon.

12172697-849x566_prepare Medical professionals also embrace this mantra when caring for their patients. Prior to beginning an operation, the surgical team takes all necessary steps to be prepared: researching new medical findings about the procedure, confirming the patient's medical history, running diagnostic tests and securing the proper instruments and medications to match the patient’s physical needs.

Business success depends on similar tactics. Before embarking on a new initiative or service line, make sure you’re ready:

  • Research – Look at what’s already available, what the competition is doing and why the latest similar product failed (or succeeded). Take these factors into account before you begin.

  • Confirm the facts – A general report shows you’re losing market share and wants to know how you’ll react. Before making sweeping changes, validate the numbers. It’s easier to spend a fraction of your budget on market research than to overhaul your entire division, only to learn the transformation wasn’t necessary.

  • Test the watersHenry Ford said, “If I’d asked people what they want they would have said a faster horse,” but I argue that it’s important to poll your customers to completely understand their needs and preferences. Consider focus groups or other methods to evaluate your ideas.

  • Gather your resources – You’ll need ample time and talent to succeed. Build a diverse team that works well together and isn’t afraid to challenge the status quo, or the company’s business plan, if it will better the project.

So, when preparing for a race, a personal wellness plan or your next business adventure, build in time for preparation. The up-front investment increases your chance of winning and can make the whole experience more enjoyable.

Social Networking Yourself Into Identity Theft

Identity Thieves Getting Smarter
Identity thieves are savvy. They learned long ago that obvious grabs for your personal information garnerBlog far fewer suckers than a more subtle grift. One of the more recent inventive schemes is abusing social networks by turning the scam into a game. According to PC World's blog, scammers are now leveraging your friends to learn answers to your online security questions. 

The Game
The scam involves a game which asks you to post your "Twitter Porn Name." Your Twitter porn name, according to the rules, includes combinations of your first pet's name, your mother's maiden name and the street you grew up on. Not surprisingly, this information likely contains the answers to the security questions needed to access one or more of your online accounts.

The Scam

With this information, scammers can, posing as you, contact various these various Web sites and indicate they have forgotten your login information. When presented with your security questions, the scammer uses your Twitter porn name information to gain access to your account. According to What the Trend, the scam can also be used to scare people into visiting another Web site for more information about the scam, thereby increasing ad revenue for the site.

The Solution
Social media is designed to be a fast-paced exchange of ideas. Scammers exploit this feature to their advantage. Do not get caught up in the moment. Always think before you respond. Be wary of any request you receive for personal information, even if the request comes from a trusted friend. Although most requests are likely genuine, it only takes a single scam to cost you thousands of dollars and years of headaches.

Brett Trout

Brain Drain Solutions Part 3: Provide Value

 Okay, I get it!  Brain drain is such a derogatory phrase. It hurts our feelings; it insinuates that those of us who are staying don't have a brain. What else do you call it when pools of your best-educated minds leave their contained space for a large cesspool?  Some other suggestions: heart dart, hand scram or a worker diaspora. Call it whatever you want, but in order to deal with the problem we have to address it; not cover it up, deny it, or runaway from it. Research shows that young people are leaving Iowa and the Midwest because No. 1, they can't find a job in their related field, or No. 2, the job doesn't pay enough.

Most would assume pay matters because this is a selfish materialistic generation. Those who believe thatBlog haven’t studied this generation.  A collective goal orientated generation such as the millennials aren’t looking to run in the rat race, what they are looking for is value. Oftentimes value is manifested by what we make. The young professional has a sense that if I have X skill set its exchange value should be Y. 

"Tell us something we don’t know.” Sure everyone wants more money, however, are we looking at why more money is desired?  Possibly for some businesses, the abilities to pay lower salaries and wages is what attracts them to locate in Iowa in the first place. For the young professional, more money is wanted because there is a higher debt load, a realization of a cost of living fallacy and a greater sense of expectancy. More is being asked of today’s worker than ever before, so if that’s the case either pay me what I feel I’m valued or I go elsewhere.

For those of us that have stayed in or relocated to Iowa, we have seen the value elsewhere. One of Iowa’s chief commodities is its people. If you ask many non-natives why we chose to stay here, usually it was because of someone we met. Consider the number of foreigners who are here because of marriage, sorority, or extended family. Bingo! you have the very piece of value that trumps money: meaningful relationships. The reason mentoring, internships and apprenticeships work so well is that they create an opportunity to build relationships.

The more a business can create an environment where the worker feels that he or she belongs and contributes to a greater cause, the more likely the he or she will stay. The more a worker’s contribution is seen as essential and valued as such, the worker will stay. When worker’s skill set X is exchanged for value Y, the workers will come. If Y is not money, then what is Y?  What are businesses doing to create meaningful professional relationships?

Quality of life improvements are only important in so much as they help build relationships; they are not end pieces, but rather tools. People don’t move in droves to LA, Denver, Atlanta, or New York because of their natural geological features. They move because they believe there are opportunities that will lead to relationships. Iowa is doing its part and it's starting to pay some dividends.  Our national press has increased, Iowa cities are popping up on rankings after rankings, Iowa is becoming quite a regional film Mecca. Now business must just follow suit... A daunting task made easier when young professionals do their part to solve the brain drain issue…

Do Candidates Lie?

Do job candidates lie? Maybe not all of them, but many do.

When I worked as a recruiter at Keith Lamb and Associates in Chicago we had a saying: All Candidates Exaggerate. The real saying was All Candidates Lie, but I always found that to be a little strong. Clearly I understand that what candidates are doing is trying to paint a very colorful picture of themselves in order to be selected for a certain position. The difficult part for an executive recruiter is to investigate what is absolute measurable truth and what is poetic license. I've always thought how refreshing it would be for a candidate to be completely candid and straight forward rather than always attempting to justify the hiccups on his or her resume.

So thanks to Steve Roesler at All Things Workplace who shared this hilarious application/resume on a recent blog post. Like Steve mentions in his post, I haven't the slightest idea of the original source, truth, or accuracy of the article below. But you have to appreciate both the honesty and humor of the applicant.

And as far as embellishing on your resume, not only can it damage your credibility, it can also cost you. When Ronald Zarrella, CEO at Bausch & Lomb, falsely claimed to have a masters degree in business administration from NYU, he lost his promised $1.1 million year-end bonus.

A recent article published on Yahoo states that in fact over 53 percent of those surveyed by the Society for Human Resource Managers lie on their resume.

In the recruiting business (just like in sales) the goal should always be to fit a round peg into a round hole. If you have to grease up the sides and force it in with a sledge hammer it may very well come back to haunt you...it can cost you time, reputation and money.



Welcome Scrutiny – It Can Help You Improve

12127356-566x849_scrutiny Health care is a hot topic. It doesn’t matter if it’s Democrats or Republicans; local, state or national politicians – seems like everyone has an idea to improve the national health-care system.

While it’s not always easy to receive such scrutiny, the ongoing focus has its advantages. Today hospitals, health systems, insurers and medical professionals are working together to achieve innovative advancements and develop new ways to serve patients and their families.

One example is the Accountable Care Organization model, often called an ACO. It’s an idea that combines the efforts of doctors and hospitals to provide higher value and control costs.

I won’t bore you with the details, but think of an ACO as a virtual team approach to health-care improvement. When someone is seriously ill, they often receive help in numerous settings – from the doctor, at the hospital or in a skilled nursing facility – and it isn’t always easy to coordinate all the efforts. Right now, each medical entity is reimbursed for its isolated contribution to a patient’s care, which doesn’t take into account the person’s entire medical experience, or even the patient’s outcome.

But with an ACO, instead of holding a doctor or hospital solely responsible for a patient’s care, their efforts are combined. This shared accountability leads to greater care coordination and lower costs for medical care – a true win for everyone involved.

Now, consider your organization and the different departments or locations involved in shared projects. Are they rewarded (or penalized) individually for their small piece of the pie, or does the entire group work together, sharing ideas and resources, to meet the final goals and deadlines? Even teams driving toward a shared goal can suffer if they aren’t meeting regularly to discuss their progress and assess action items.

I encourage you to welcome outside feedback (when appropriate), seek experts to analyze your work and be open to new concepts. The process might be painful, but you can end up with a host of great ideas that’ll guide your organization to new heights.

Here Be Dragons

It's said that often -- on the edges of medieval maps -- was penciled the warning: "Here be dragons." Do the edges of your "maps" hold the fear of dragons?

Probably. If we're honest, most of us will admit that the fear of stepping beyond the boundaries of theBlog known -- our comfort zone -- can be pretty frightening sometimes. We come by it honestly. The primitive part of our brain, the amygdala, equates change with the unknown. And then it reacts to the unknown with caution and fear. That's not all bad. It's helped us survive for eons.

However, as leaders, we have to be willing to step into uncharted waters, scared or not. To take risks. Even great leaders feel fear. Some are even brave enough to admit it.

Like Andy Grove, admired executive at Intel. When told, in the early lean and mean days of Intel, that he'd have to become director of operations when all he knew was engineering, he admitted, "I was scared to death. It was terrifying. I literally had nightmares."  Yikes! Sounds like "here be dragons" to me. By stepping off the edges of his engineer-map into the unknown realm of leadership, Grove faced the waiting dragons. And the rest is history.

A few of us were lucky enough to have early successes in finding our way into the unknown. It was thrust upon us and we became early believers. Richard Branson, for example, of Virgin Airlines. When he was four years old, his mom stopped the car a few miles from their house and told him to find his way home across the fields. He did. She made it a fun adventure and he relished the role of dragon-slayer.

Most of us have to be convinced, as leaders, that we can slay dragons. Consider Christopher Logue's poem. A dialogue between a leader and those being led:

    Come to the edge.

    We might fall.

    Come to the edge.

    It is too high.

    Come to the edge.

    And they came,

    and he pushed,

    and they flew.

Trust: Is it Broken in Your company?

3662009_thl Trust is something that we cherish and work hard to maintain in our personal lives.  Once trust is broken, it is very hard for a relationship to go back to the way it was before.  If it does get broken, we look to ministers, close friends, marriage counselors and psychologists to help us get through this violation of trust.  Trust is evaluated on a daily basis.

In business, we violate trust like eating candy, and this was before the financial meltdown that we are living through right now.  I believe that trust in business has never been so low.

There has been a steady stream of examples where we have lost trust - the stock market, banks, the auto industry, executive compensation, spending tax payers money on parties, financial consultants and identity theft.  Adding a little icing to this broken-trust cake, is the fact that millions of American workers have been laid off with little or no warning and with total disregard to the value they have produced in the past.  Then we all sit and wonder how could this happen.

It is easy to point the finger at executives, supervisors, board of directors and many others to why trust is broken.  The problem is that we do not point the finger at ourselves.  Trust is built one relationship at a time and then roles up into organizational trust.  Please understand that I totally agree that those who have power have a higher responsibility to maintain trust, but it does not give those who do have power a free pass to violate the trust.

If the business world spent 1/100th of the effort on building trust like we do at home, we would see a dramatic change in this world.  Trust comes from faith and right now we all need to have faith in each other if we want to change the world for the better. 

The Forced Sale

Don’t make the mistake of thinking that just because you are not currently ready to retire that you haveBlog plenty of time to prepare your business for sale. 

As a business intermediary, I have been involved in a number of transactions (and potential transactions) where the business owner wanted to sell, or in some instances, was forced to exit the business earlier than expected.  In fact, retirement is NOT the number one reason why businesses sell.  Here is a list of the most common reasons why owners sell (or otherwise discontinue) their businesses:

  • Burn-out (this is the number one reason for selling)
  • Health issues
  • Personal diversification
  • Retirement/semi-retirement
  • Death
  • Divorce/partner disputes
  • Business growing too fast
  • Second generation not up to the task
  • Loss of market share

Owners, who are forced to sell, relinquish most of any control they might have had in a negotiation.  The end result of this situation…the owner is forced into accepting unfavorable terms, conditions, pricing and a possibly unanticipated life style.

- Steve Sink

Grassroots networking

It’s no big secret. The ways in which we communicate are evolving.Blog

As advances in technology, especially those related to mobile connectivity and the Web, continue, the sheer number of contacts we are able to make and maintain on a daily basis will grow as well.

Case in point: Social media applications alone allow us to connect daily with dozens, hundreds, even thousands of people.

But for those of us who rely on these applications every day, becoming increasingly dependent on mobile devices and the Web to stay in touch, have things already changed so dramatically that the quality of our communication suffers?

Fellow blogger Cory Garrison, in his recent “The Rule of 10” post, wrote that “talking to 10 people in your industry who have an influence on growing your business” is a good thing.

That doesn’t include a tweet, status update or voice mail.  It means genuinely engaging in dialogue totally removed from the sometimes impersonal feel of electronic communication.

Breaking it down to the most basic level: genuine, face-to-face, sit-down-cup-of-coffee-or-beer connections will ultimately trump other forms of social networking.

The genesis of giant networks is one on one.  Mano a mano.

Maybe you are already using a grassroots approach to social networking, taking advantage of Facebook and the like only as a supplement to more personalized contact.

The end result of these efforts could be a more positive outcome for your friendships, career, business and brand.

See you in the news!

-Todd Razor

Coordination Takes More Than a Prayer

Prayer_room Our church has recently been going through a great experience in the form of a 24x7 prayer room.  The concept is really quite simple:  We've designated a couple of rooms in our ministry center that are solely dedicated to prayer, and we have people staffed in hour-long increments to do nothing more than pray while they are in there.  This is not our first time doing this, and each time it improves on many levels.

You may be thinking, "WHOA?  Why are church issues being discussed on a business site?"  Just hold your grail; I'm getting there.  Besides the observation that project management can be a religious experience, the prayer room has provided some excellent lessons on project staffing:

  1. Know the scope of staffing - our prayer room runs for just over 11 days.  Hence, we have a blocked in 270-hour period to fill with resources.  On your projects, let both the resource and their supervisor know the approximate dates they will be needed so they can manage workloads more easily.

  2. Document the need - we have a single sign-up sheet (i.e., one version of the truth) that stays right outside the prayer room and allows everybody to know when they have signed up to staff the room.  In projects, using a tool like MS Project can provide you with reports such as "Who Does What When?" to give you that needed look-ahead.  The key is communicating and setting expectations to avoid surprises.

  3. Have backup - We have one "on call" person for every 24 hours of prayer to handle no-shows and other issues.  In your projects, identify your resources who may be no-shows and develop a contingency plan in case they "sleep through" their assigned task.

  4. Handle logistics - This is our first prayer room in our new ministry center, so one logistic that needed to be addressed was building security, making sure our members could access the building and they were safe the whole time they were in the room.  Do your project resources have the right materials, supplies, equipment, hardware, software, and travel logistics to complete their assigned tasks?

  5. Match skills to tasks - While this isn't a huge issue for our church, since prayer requires a functioning mind, a willing spirit, and the ability to stay awake between 2 and 3 in the morning, it does become a larger issue for your project tasks.  Ensure you have the right people assigned to the right task at the right time.. and do this during planning rather than execution.

  6. Learn and improve - Like I said, this isn't our first time out with this exercise.  Each time, we keep track of lessons learned to make the next experience even better.  Track what went well in your projects to improve it the next time out.  With each project, the staffing challenges should diminish as you learn how to manage them better.

Follow these simple guidelines and you should have people where you want them when you want them.  If not, you may find yourself in need of a more active prayer life in order to get your projects done.

Carpe Factum!

Are you a gambler?

Gamble 2 If you are a business owner who chooses not to be insured, then I would say you are a gambler. You are rolling the dice - gambling with the risk that nothing will happen.

  • No one will fall on your property and injure themselves
  • The space you are renting will not get damaged or catch on fire
  • No one will break into your business and steal anything.
  • Flooding will not occur and shut your business down for a month or more
  • And none of the work you performed will breakdown and/or cause injury.

I am sure you get the point now.

However, I continually see businesses like auto repair shops, IT consultants, construction workers, in-home caregivers and other home-based businesses that do not carry insurance. Many of these businesses run a huge risk of liability should they be sued. 

Not to mention the loss that the business owner will sustain should a loss occur. Without insurance then you are simply self-insured.

Now there is nothing wrong with being self-insured. Some companies can afford to do that. However, most start up companies or companies that have only been in business for a couple of years or so cannot.

Many business owners started their business because it was their dream.

So why risk your dream?

Make sure that you are protecting your business with the proper insurance policy. The benefits outweigh the cost.

Customers: Prize or Nuisance?

My wife and I just returned from a quick weekend trip. I had two contrasting experiences that became an important Customer Service lesson.

On Thursday night, we walked into a Gap outlet store. It was my birthday and I'd received a gift card fromBlog the chain, so we figured we'd use it. After shopping for about a half-hour, we headed to the counter with a few items to purchase. The store manager was standing off to the side of the checkout counter training a new employee. She saw us standing there and got on her little intercom headset.

"Travis, can you come to the front and check out some customers please?," she said into the microphone. She didn't try to hide it. She said it rather loudly with just a hint of annoyance in her voice. After about 30 seconds of standing there continuing her training and not even acknowledging our presence, she finally grunted in frustration and came over to the counter, took our merchandise and began to check us out without making so much as eye contact with us.

I felt like a nuisance. I almost apologized for being in her way. Ironically, as we walked past the manager and new employee on the way out the door, we overheard her say, "Make sure you take care of the customer. You know, make them feel special."

On our getaway, we stopped by another merchant. We'd called ahead to see if they were open. It was the end of the day. They asked when we could be there and agreed to stay until we got there. They greeted us and introduced themselves, making small talk as we browsed. We never felt rushed. It was as if we were considered friends waiting to happen. I felt prized. On our way out the door of the establishment I noticed the floor mat. It read, "If we don't take of our customers, someone else will."

Do customers walk away from their experience with you, or your company, feeling like a prize or a nuisance?

How far away is wearable social technology?

Every day I think more and more about the emergence of wearable social technology. To most people, this may conjure up such silly images as the Scrolling LED Belt Buckle. (Now imagine if you could hack it with an always-on Wi-Fi connection and access to your Twitter feed!)

But seriously, we're just now seeing practical applications of this in a very early form. Take Tweetup Badges, for instance. These ID cards have QR codes on the back which, when scanned by a mobile device with a QR reader application, launch a Web address or SMS message.

Okay, so let's say you're at a social event. You meet someone, you scan their badge, and suddenly their Twitter profile (and feed) launches in your mobile web browser. Rich Drake, Founder of Tweetup Badges, explains the benefit of this technology below:

Admittedly, we're still a long ways off from the concept of wearable social technology achieving maturity and mainstream acceptance. The above scenario assumes that:

  1. Everyone at the event participates in some form of social network like Twitter.
  2. These people all have QR badges or mobile devices able to read QR codes. Or both.  

Events like this do exist today, in the form of tweetups and tech conferences. The interface between a human with mobile device and a human with scannable badge exchanging some form of digital information isn't so different than the concept behind Poken, which has already launched in Japan and Europe.

Over time, this interface will become more seamless and invisible. Very soon, mobile devices will have face recognition software coupled with a ubiquitous social network (like Facebook). You'll be able to scan someone's face (simply by getting them in the viewfinder of your phone camera) and the device will fetch that person's public social network profile information. In essence, your face becomes the QR code.

Beyond that, the device itself will evolve past mobile phones, and may come embedded in a pair of eyeglasses, or even a contact lens.

Today, we interact with social networks in a very limited fashion - the computer or mobile screen. Imagine the possibilities when we become unshackled from those machines and our lens into layers upon layers of information is our own eyes.

Nathan T. Wright

Legislature stimulates C corporations with a kick in the teeth

As Iowa businesses struggle with one of the worst years in decades, the Iowa legislature decided they need to suffer a bit more.  They have reached into the pockets of both profitable and money-losing C corporations.

Loss carrybacks yanked.  With SF 483, the legislature took away the ability of C corporations to carryBlog back Net Operating Losses to get refunds of Iowa taxes paid in profitable years. An example:

Bob Corporation makes $200,000 in Iowa-source taxable income in 2008, its first tax year. It pays Iowa tax of $17,500. Like with so many businesses, things go bad in 2009 and Bob loses $200,000. Between the two years, Bob has no income. Bob Corporation throws in the towel and closes the business after 2009.

Until SF 483, Bob Corp. could carry the 2009 loss back to 2008 and recover the taxes paid. It's a fair result - no income for two years, and no tax. Under the proposed change, Bob Corp. would never recover the 2008 tax. The 2009 loss could only be carried forward - a useless privilege when the business closes.

Estimated tax requirements increased.  Before this year, Iowa corporations could avoid penalties for estimated tax underpayments by paying in 90 percent of their tax liability through quarterly payments, with the rest due with their tax return.  SF 478 raises the 90 percent requirement to 100 percent, starting with yesterday's first quarter estimated tax payment for 2009. 

So whether your C corporation makes or loses money in 2009, the legislature has found a way into your pockets.  

Not all of the news is bad, but the good news comes from the IRS, not Iowa.  The IRS has made it easier for taxpayers with 2008 net operating losses to qualify for a five-year carryback period by removing a requirement to elect the carryback with the original 2008 return. 

So the IRS is more compassionate to money-losing corporations than the Iowa General Assembly.  Way to go, legislators.

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