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December 2009

Social media: Past, present and future

Commodore 64Image by unloveablesteve via Flickr

Thanks to Jared Bernstein over at Catchfire Media for his ruminative roundup of “The Decade in Social Media.”

Jared’s timely post brought to mind that I didn’t purchase my first personal computer until 2001 and my first cell phone until the following year.

And now that he’s got me feeling all nostalgic, I want to share my take on the social-media space and the rapid evolution of computer hardware and software, the Internet and the mobile devices that have over the last 10 years transformed our lives.

I find it fascinating how various social media, especially applications like Facebook, Twitter and LinkedIn, have evolved into such enormous hubs for aggregating information, marketing products and services, sharing thoughts and opinions, and breaking news.

Almost sounds like your typical newspaper, huh? That’s a different story.

And that list doesn’t include all the opportunities social media afford people to meet others, build and maintain connections, reconnect with old friends and acquaintances, and communicate seamlessly over great distances.

With sites such as YouTube, as Jared mentioned, media lovers have never had easier and more inexpensive access to photos and videos than they do today.

“I remember reading an article 15 years ago in a computer magazine that said streaming video would never be larger than a postage stamp and never more than 15 frames-per-second,” Jared recalls.

Other than DVDs – I’m a huge fan of home theater – I don't watch a lot of television. When I do, it’s almost always online, on sites like YouTube and www.nbc.com. Ten years ago, I probably never would have imagined watching my favorite shows, movie clips and comedy routines – past and present – on demand, on my own laptop, almost anywhere.

For context, let’s look back a few more years.

My introduction to source code in the late 1980s was brutal. Can you imagine a 9-year-old boy in today’s society spending hours and hours to correctly input into his Commodore 64 all the data necessary to play a game like Tank Attack?

I don’t think so.

Now imagine how laborious it would be to program a contemporary game like Call of Duty Modern Warfare 2 on your PlayStation 3. Considering that that game’s Nov. 10 release was hailed as the "biggest entertainment launch of all time,” it’s safe to say that the gaming community is pretty happy we’re no longer running on an 8-bit home computer.

Now back to Jared’s question. Where will social media go in the next decade?

What I've really been mulling over recently is the overall social impact of social media on society.
How has their exponential growth changed the way people communicate with each other? We are now able to connect with hundreds of people virtually simultaneously. How has that, in any way, shape or form, cheapened the conversation? What will be the ultimate effect of the social media phenomenon on younger generations? In what ways will corporations, small-business owners and entrepreneurs continue using and developing social media to increase brand awareness, build their businesses and advance their careers?

What is this all going to look like five years from now?

- Todd Razor

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S.M.A.R.T. Moves for Success

Rarely does the scoreboard tell the whole story. In fact, the outcome of many evenly matched athletic events often is decided by one opponent competing just a little bit better than the other - a phenomenon commonly referred to as a competitive advantage. 
The competitive advantage also is what separates a good company from a great one.     
Attaining the competitive advantage in sports and business relies on the ability to continually move performance to higher levels. Successful coaches and business leaders understand that winning requires a strategy of carefully planning, setting and reaching hundreds of small goals.
I recommend revisiting your short- and long-term goals and evaluating them based on the S.M.A.R.T. criteria:

  • Specific
  • Measurable
  • Attainable
  • Reasonable
  • Timely

S.M.A.R.T. goals will keep you and your team focused and on the right path to success. Stay competitive by analyzing each opportunity and identifying what it takes to move your business ahead.

Write it down!

93536960 Most marketers will enter 2010 at a huge disadvantage. What is it? 

They don’t have a written marketing plan.  (I know...I wish it was more earth-shattering too!)

It’s one of those things we all know we should do. And yet, we don’t.  My theory for why professionals who know better still break this cardinal rule is because the task feels daunting.

And done completely, it can be.  And should be.  But rather than not do anything at all -- why not at least practice marketing plan lite?  Here’s what you need to do:
  • Identify your top three audiences and rank them in importance.
  • Identify 3-4 different marketing tactics that you are going to create/continue to talk to these audiences. Don’t choose passive tools that you don’t control.
  • Decide when you are going to launch/deliver each of these tactics.
  • Figure a ball park cost to create each of these tactics so you have an approximate budget.
Now put it all in a spreadsheet/calendar so you know what to do when.  Voila, the lazy man’s marketing plan.

Is there a lot missing?  Sure.  But at least you have a game plan.  And that game plan (if followed) will give you a significant leg up on most of your competitors because they won't have even bothered to go this far.

Now share that document with your entire team, boss, employees etc. so there’s some accountability.  Next step -- roll up your sleeves and start putting the plan into action. 

I know it sounds simple....but actually take action on this and you'll leave your competition in the dust!

Happy New Year!

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New Fines for Bloggers

Fines for Blog Reviews?
The Federal Trade Commission (FTC) has issued new guidelines (16 CFR Part 255), which have put advertisers, bloggers and other online publishers into a panic. The new guidelines took effect Dec. 1, 2009. They prohibit blog reviews that fail to disclose materialstockade connections between sellers and bloggers. Theoretically, under the new guidelines, a blogger could be fined $10,000 for failing to disclose that he or she received a free copy of a book reviewed for a blog post. As receipt of a free review is standard in the industry, the guidelines have bloggers justifiably concerned.

The Guidelines
The FTC does not have the power to make laws. What it does have is the power to enforce the very broad Section 5 of the FTC Act. In short, Section 5 of the FTC Act makes it illegal to involve oneself in any unfair or deceptive trade practices. The new guidelines state that the FTC will now begin pursuing certain endorsements and testimonials. On the testimonial side, “results not typical” will no longer be enough. You will have to state what the typical results actually are. Of greater concern to bloggers is the endorsement side of the new guidelines. The FTC will now be taking a much closer look at any social-media advertising messages, which consumers are likely to believe reflects the opinions, beliefs, findings or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.

Endorser/Seller Connections
The portion of the new guidelines that has bloggers up in arms is 16 CFR Section 255.5. If there is a connection between and endorser of a product and a seller of that product, and the connection is not reasonably expected by the audience, the connection must be fully disclosed. But what constitutes “connection,” “reasonable expectation” and “full disclosure”?

What long-time bloggers think are reasonable expectations, what their readers think are reasonable expectations and what the FTC thinks those readers think are reasonable expectations may very well be three different things. Bloggers take for granted that everyone knows the book they reviewed was a free copy. They assume everyone understands that when readers click on the picture of the book and get sent to Amazon to buy it, that the blogger receives a small percentage of that sale. It might surprise you, but most people don’t know that. What matters is your audience. If you write a blog about marketing for marketers, there is a good chance your readers understand these dynamics. If you write a blog about what happened on The View yesterday, your readers might not be aware of the compensation you receive in the form of freebies and affiliate links.

Fears Overblown
The FTC has come out and stated that fears over the new guidelines are overblown. The FTC states publicly that advertisers and bloggers are in no immediate danger of being sued or fined over the new guidelines. The FTC will focus on the most egregious violators first. Before suing anyone, the FTC will send a cease and desist letter. Violators who ignore that cease and desist letter, however, might be well-advised to compile a large sum of expendable cash and engage a good lawyer with lots of federal courtroom experience.

So Am I Good Until I Get the Cease and Desist Letter?
While the FTC states it has not present plans to bring federal lawsuits over inadvertent violations of the new guidelines, you do not want to be the focus of an FTC investigation. Once you come up on the FTC’s radar, you might be on it for quite some time. A more immediate concern might be state Attorney General enforcing soon-to-be state adopted versions of the new guidelines, often called “tiny FTCs.” These tiny FTCs mirror the federal guidelines, but often allow for state Attorney General or even private enforcement. Being on the business end of a tiny FTC lawsuit will likely cost your company far more than a federal FTC fine.

What to Do
Read the new guidelines, read the examples provided therein and do not try pushing the envelope, at least until the scope of enforcement becomes clearer. Did you get a free copy of the book you are reviewing? Disclose it. Did you get a free MP3 player that you reviewed and honestly liked? Send the free one back to the sponsor and go out and buy one. Do you get paid through affiliate links? Disclose it on every page, in clear language that does not require scrolling or clicking to read.

Follow and Adapt
Over the next year, a clearer picture will develop as to how the FTC and courts interpret the new guidelines and how Section 5 of the FTC Act applies to bloggers. Until that time, bloggers are strongly cautioned not to make themselves a test case. While the rest of us bloggers will certainly appreciate the clarity your sacrifice will bring to interpreting the new guidelines, we are all going to miss you.

Brett Trout

5 intangible skills that YPs need in a Job

DF-SC-82-04968Image by US Army Korea - IMCOM via Flickr

In my last post we looked at five mostly tangible areas that if young professionals paid more attention to, would land them a job. However, while getting a job may seem like an exact science, it its far from it. It's not just have a good resume, friendly references and a strong interview. It also requires skills that just can't be searched on Wikipedia.

In December, I moderated a workforce readiness panel geared toward Millennials and afterward I asked two of the panels human resource executives, Susan Bunz of Pioneer Hi-Bred International Inc. and Jenifer Owenson of Ankeny Community Schools, about their thoughts on necessary skills at work.

1. Integrity: I touched on this as one of the three planks of leadership, but human resources is looking for people who will not be problems later on. If you cause problems, whether it's with the customer, client, colleague or chief, It costs the company money. Ultimately, if the company has reason not to trust you, why would they risk investing a lot of dough hiring you? A business will go to great lengths to ensure they hire someone with integrity. Beyond a background check, they may Google your name, search for photos of you on Facebook, read your tweets and even pull your credit score. These measures you may feel are unfair to your privacy, but for the investment they are making in employing you, they want to make sure they are not making a mistake. 

2. Confidence: If you are lucky enough to score an interview make sure you exude confidence, but caution, as there is a fine line between confidence and arrogance. A confident employee means he or she will be efficient, customers and clients will be satisfied and the employee will contribute to a positive environment. However, when an employee is arrogant he will make mistakes, clients will feel disrespected and the work environment feels poisoned. In the interview they are looking for someone who strikes that right balance of assurance without cockiness.

3. Critical Thinking is one of the areas that HR is most concerned that millennials don't seem to have enough. Your employer can train you to do the specific job you were hired for, but being able to think on your feet, use deduction, and inference are invaluable skills. Many Millennials understand the science of work and can follow the formula, but the challenge is being able to understand the art of work and recognizing how how the aspects flow together.

4. Written Communication Skills: In the millennial world of text messaging and 140 character conversations, brevity is now par. Abbreviations and small words may be efficient, however, HR executives are concerned that young professionals lack basic writing skills to be effective in the workplace. This goes past the margin of syntax and grammar; it also includes command of the English language beyond the same overused 10,000 words. Words have meanings and the more we use them will sometimes help the reader clearly understand what you, the writer, is thinking. Also worth mentioning is that though we all may feel like our ideas are fresh when they barely meet (or miss) deadline, remember it's still embarrassing to read several typos that could have been proofed, or worse yet have your letter be read by an unintended audience, because you forgot to change the salutation.

5. Oral Communication Skills: It seems like everyone hated their high school speech class, afraid that they would freeze up on stage and be embarrassed for life. Ironically, the world is full of great speakers who can't get anything done and poor orators who have accomplished much. So what gives? Forget about the words. Communication has more to do with our non-verbals than anything else. Our tone, timing, body language and facial expression say more than the actual words we speak. It's not about memorizing big phrases or saying something that will one day be quoted and etched in stone. It's more about connecting to your audience whether that's an audience of one or 1,000. It's about providing stellar customer service, keeping your colleagues in the loop and responding to your boss's call.

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Sales, Multiple Stakeholders, and Relevancy

Several years ago I co-presented at a conference with a Vice President at an insurance company. She had been referred to me by her former mentor and boss, a vice president of another insurance company. She and I developed a respect for each others' expertise which led to some consulting work with her company.

The management of this project was delegated to a department manager.  In my first phone conversation with this person I was trying to show my excitement and enthusiasm when I said something to the effect of, "You are going to like working with our firm because we are different."

In a very unenthusiastic tone she responded, "Everybody says that."

After getting over feeling like an idiot, I started pondering the issue.  I had been hired by her boss who was very confident in my ability to bring some needed expertise which would have a positive impact on the project.  I also knew that my staff was better trained and more thorough than our competition.  So why did I get such an unenthusiastic, cynical response?

In a word, RELEVANCY.

Although we had already contracted for the business, the lesson was not lost.  In many sales situations, there are multiple stakeholders each of whom may have varying perspectives and criteria that need to be addressed by your proposed solutions.

In the example above, the project manager had different concerns than the vice president.    She had to answer directly for the cost of the project and the project time line as well as the ultimate results.  Had she been part of the decision to hire our firm, we may not have gotten the contract because we had not addressed those concerns.  Without our knowledge, she may have torpedoed our chances.

Take away this lesson.  Even when you are dealing with the top decision maker, you must not only discuss what impact your product or service will have on the prospect, you must also discuss who will be impacted and how? 

You must request to meet with anyone that will influence the buying before you propose a specific product or service.

Doing this will ...

  1. Help you uncover new and important needs and decision making criteria
  2. Help you to find ways to demonstrate more benefit and value provided by your product or service
  3. Help you to more appropriately price your product or service

This can also help prevent spending time putting together proposals that fall flat and sometimes don't even get you a return phone call after you follow up.

Finally, asking the right questions can feel uncomfortable.  Build the "other stakeholder" conversation into your sales process and then practice having it before attempting it in a real sales situation.  When you have learned how to do it right and have practiced well, it will increase your closing ratio and likely the size of your average sell.  Additionally, it will reduce a lot of the anxiety that goes with proposing a solution because you will be more confident that you are hitting the mark.

Santa Blog

Santa Clause on skies in Adelboden, SwitzerlandImage via Wikipedia

Dear Santa,

I am grateful for your organization’s intrepid spreading of holiday cheer, but it is apparent that you have not read recent blogs.

For example, it does not appear that you read about safeguarding your business trade secrets. Without contract language in place, employees who are dissatisfied with a holiday bonus of sugarplums, might walk off the job with a copy of the “nice list” or the secrets to reindeer aviation. If a competitor sets up shop at the South Pole, you have some ability to minimize [s]elfish measures by your staff.

How are you protecting confidential information? I would hate to have my prior wish for parachute pants or glitter headbands fall into the wrong hands.  If you don’t have methods of protecting information, business secrets may be purloined.  Although you want to avoid litigation, it is easier to make your case if you have systems in place. (See Nick v. Ebenezer, 2 N. Pole Rptr 23 and Herbie ex. rel. Santa v. Grinch, 4 N. Pole Rptr. 111).

Additionally, mall “santas” appear to be infringing on your territory. If you are working with the “santas", you may consider the protection of a non-compete, non-solicitation, or especially (wink) non-disclosure agreement. If you aren’t working with these ersatz santas, it may be too late to benefit from the intellectual property protection otherwise afforded to your red-suited, rosy-cheeked image and your toy production and distribution process.

Clearly, your current business structure does not appear to have a succession plan. As you approach another century mark in business, you may consider the inevitable conflict between Dave Claus and Mrs. Claus if you retire or fall off a roof. If you plan to sell the business to Mike Clause, get things in writing to avoid an elf walk out or reindeer guidance confusion. A smooth transition is more likely if ownership and management transitions are defined and styled to avoid disputes, taxes and regulatory interference.

A business that has existed successfully for such a long time should be hesitant to change the nature of what it does and anxious to protect its essence. Please deliver this message to all the old businesses who want to fortify a solid “shop”.

On a personal note, I appreciate the new gloves, and the best book for business owners . . . but next year . . . playoff tickets?

-Christine Branstad

Bend, Don't Break

Yale Medical School Coat of ArmsImage via Wikipedia

"Resilient people are like trees bending in the wind," said Steven Southwick, professor of psychiatry at Yale University School of Medicine. "They bounce back."

Do you bounce back when life throws you a curve ball or a co-worker throws you under the bus?

Resiliency is an extremely important quality to have as a leader, or really, for anyone living in the 21st century. Things are changing all the time. Our complex lives are teeming with surprises-waiting-to-happen. We've got to be able to refrain the unexpected and difficult situations in our lives in the most positive terms possible.

Some of us are naturally more resilient than others. But like most behaviors, resiliency can be learned, cultivated and mastered.

How resilient are you?

  • Are you able to adapt quickly to new developments? Or do you cling to what was, even when it has clearly gone away?
  • Are you a learner, always curious, asking questions? Or do you miss the lessons in everyday situations?
  • Can you find humor in even the toughest situations and laugh at yourself? Or is your mood dependent on the conditions of the day?
  • Are you pretty optimistic, believing that setbacks are just that -- setbacks? Or do you see temporary dilemmas as permanent difficulties?
  • Are you comfortable with ambiguity and uncertainty? Or do you find it hard to sometimes be trusting and sometimes cautious, to sometimes take charge and to sometimes take orders?

If you couldn't answer yes to most of those questions, you might want to check out The Resiliency Advantage by Al Siebert. Dr. Siebert gives tips for learning to be more resilient, like:

  1. Surround yourself with resources: people, tools, information links. You are not alone!
  2. Learn to have fun. (Okay, even more fun than you're now having.) Resilient people do.
  3. Pick your battles. Focus on what you can change and let go of what you can't.

Being closed to change and possibilities makes us brittle; being open to change -- resilient -- lets us bend.

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Work: The Means or the End?

87791632  This time of year gives us pause to evaluate what life has given us and what more do we want from life.

When we evaluate life we have to evaluate work, since this is where most of our time is spent.  How do you evaluate your work - is it the means or the end?  The end, meaning it consumes your life and negatively impacts all other life activities or...The means, meaning work feeds a full and balanced life.

We can choose the answer ourselves, but the culture of our company plays heavily on this choice.  A company that supports a culture where it is a priority for employees to attend the ball game, music recital or visit the sick family or friend in the hospital, will get back ten times more effort from their employees.  The saying "the more you give the more you live" is so true.

There are many companies that support the scrooge mentality that work is first no matter what.  The rest of your life is captive to the demands of work and there are no alternatives.  Work is the end and when the ghosts of Christmas come calling, these companies will suffer in the end.

To put it in perspective, a year from now, five years from now, ten or twenty years from now, what will you remember?  The fact that you missed a half day or full day from work or the fact you missed the ball game, music recital, or failed to visit the sick family or friend.  What will be your answer when the ghosts of Christmas call on you?  The means or the end?

Selling your business? Get that premium price

{{en|Iowa, showing counties, large cities, and...Image via Wikipedia

If you are thinking of selling your business here are some tips to get that premium price.

1.  Determine who in the marketplace would satisfy the critical criteria that has been identified as what it is that you do that is "best in class" in relation to your competition.
2.  Seek a company that has been successful with their strategic acquisitions and set out all the reasons why your business is a "perfect fit" for their strategic appetite.
3.  Determine their financial capacity and previous deal pricing/multiples paid for previous acquisitions to ensure that they would have the capacity to pay the price for your business.
4.  Make sure that your company's culture would  be good fit with their culture including the way they go to market, develop their human capital (grow it vs. buy it), reward success, et cetera.
5. Select the No. 1 potential acquirer and offer that company the opportunity to buy your business.
6.  Finally, the personality test:  If they don't like you or you do not like them, move on. They will never buy from you and you will not sell it to them.

Good selling!

- Steve Sink

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Local blogger starts discussion on moderated comments

Free Speech MachineImage by Transguyjay via Flickr

A recent post in the blogosphere is giving IowaBiz a chance to clarify and reinforce its policy on moderated comments.

We are thankful for this opportunity and hope today’s IowaBiz post generates an even more frank and honest discussion on an important topic.

In the past, all comments on IowaBiz were immediately posted to the site without moderation. However, an abundance of offensive spam this year led us to begin reviewing the comments before allowing them to go live.

It’s true. Publishing all comments without any filtration would give more of our readers an opportunity to “enhance their love life.” But the feedback we’ve been getting is more geared to keeping the 10X penis enlargement ads and other garbage off of our professional business blog.

Readers, rest assured. All genuine comments have been and will continue to be posted in their original form. It has been and continues to be our intention to garner as much feedback as possible and to generate ongoing conversations in the broader community.

I’d like to give a big thanks to the dedicated team of business professionals that do such an amazing job of providing fresh, timely and relevant content on this site each day. IowaBiz would also like to thank you, our readers, for your continued support and thoughtful analysis of the subjects presented here.

Feel free to chime in.

- Todd Razor
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Bonds do more than get you out of jail

Jail We have had quite a roller coaster year and many industries have been affected by our economy. I am sure many of you will agree that the construction industry has been hit pretty hard. Some of the changes in that industry that I am seeing are an increase in the use of bonds.

Many of us think of bonds as a way to balance out our investment portfolios. Stock values go down – bond values go up. Some may have had to post bonds to get out of jail.

However, in the insurance arena, bonds can be used to ensure that construction projects are completed on time and that the contractor pays all of the suppliers and workers involved in the project.

These types of bonds are called surety bonds. There are three main types of surety bonds for contractors:

  • Bid Bonds – these essentially say that the contractor will perform the work at the agreed price in the contract and will provide the additional performance and payment bonds. (These bonds are commonly seen in the public sector)
  • Performance Bonds – protects the owner from financial loss in case the contractor fails to complete the project.
  • Payment Bonds – assures that the contractor will pay all subcontractors and suppliers related to the job.

Now, you might be thinking everyone should use these bonds and in some cases they should.

However, qualifying for these bonds is not always easy and a smaller contractor can lose out on a job because of it.

There are many other industries that use bonds as well: Mortgage Brokers, Home Health Care, Janitorial, Auto Dealers, Tax Preparers, Public Officials and more.

Bonds have a broad spectrum of coverage. As we discussed, in the construction industry they are mainly used to protect against a contractor that does not fulfill their contractual obligation and/or goes bankrupt before a project is completed.

In other industries they can assure compliance with state regulations, protect against fraudulent acts and employee dishonesty.

On a positive note, they provide credibility for a business owner. The important thing to remember is to measure the risk with the need of the bond.  So when you are asked to provide a bond, make sure you consult with your insurance agent for more information.

Just Like Lights on the Christmas Tree...

Christmas_tree_lights At the Johnson household, we like our Christmas traditions.  Put up the tree Thanksgiving weekend (at least once the turkey and stuffing have settled and we can bend over again).  Caroling sometime in December (preferably on key).  Children's program at church (cute factor).  Listen to Karen Carpenter and The Blenders at least 347 times.  Pizza on Christmas Eve (and NO mushrooms... fungus - ICK).  Open presents Christmas morning (because, let's face it, those people who tell their kids Santa comes on Christmas Eve are just plain wrong).  Oh, and the big one... let my wife put up the Christmas lights on the tree.

You see, she's very meticulous about lights on the tree.  I've tried doing it a couple of years, and it's never up to her very high standards of how a Christmas tree SHOULD look:  always start at the bottom and move up, and clear lights embedded so that no cubic inch is without some kind of light source.  OK, so that might be an exaggeration, but I've learned after 17 Christmas seasons together to just stay out of her way when it's time to put lights on the tree.  (There will be plenty of time for me to hang my collection of Harley-Davidson Hallmark ornaments later.)

But she has a great project manager mindset when it comes to installing lights:  bottom-up and transparency.  Start at the bottom and keep it all visible.  How does this relate to project management?  Recently, my good friend Kevin Brady, across the pond in UK-based Clarety Consulting, held a conference call with my Drake project management students so they could grill him on his vast project experience in multiple countries and large scale initiatives.  Kevin blogged about it on his site recently, and his emphasis on transparency and bottom-up management make great sense:

Transparency Management is the management of project stakeholders (sponsors, customers, project team) through the accurate communication of project performance metrics. In other words, accurate “Status Reporting”. If you gather detailed facts on where a project is doing well, where it is failing and who is responsible and accountable for the successes and failures, you have all the ammunition to mould, steer and direct a project toward project success. The first version of the UK National Lottery website was developed using this approach, and the project was delivered on budget, to time and meet the quality expectations of the client. When Transparency Management is working well it’s a joy to manage a project.

Bottom-up participation is a key component necessary to make Transparency Management work effectively. In its simplest form Bottom-up participation is about obtaining “project buy-in” and in it’s more complicated form it is the making sure that all product related tasks are estimated by the resources assigned to deliver them. Without this you are effectively running a “Top Down Project” where you are directing people to do things they may, or may not, agree with, and we all know what happens to projects where this is the order of the day.

So the next time you want to build a project, start and the bottom and keep all the lights clear.  Trust me, all your days will be "merry and bright," and there will be a much greater probability of "peace on earth, good will toward man."

Merry Christmas and Carpe Factum!

The Friendly Skies are Listening

SALT LAKE CITY, UT - APRIL 15: A Continental ...Image by Getty Images via Daylife

I am a loyal customer of United Airlines. More than 300,000 lifetime miles flown in the "friendly skies" does not qualify me as a uber-road warrior, but I can safely say that I've paid my dues. Through the years my friends at United have provided me with both positive and negative examples on the customer service front. I've tried to be objective and honest when dishing out critiques, and I will certainly do the same with my props. Today, I have to give United a thumbs up because, to their credit, they are listening.

Last week, I flew from Des Moines to Salt Lake City. Weather was bearing down on the Midwest and I prepared for a long day of delays. Sure enough, we were late getting out of Des Moines but I was assured the folks at United would automatically book me on the next flight out of Denver to Salt Lake. As soon as I got to the Denver airport, I went to the Red Carpet Club to double check my connection.

"You do want to go to Salt Lake City today, don't you?" the agent at the desk asked me. "Because they have you booked on tomorrow's flight." It was a simple correction and I had my boarding pass for the next flight out.

Sitting down in the Red Carpet Club to work on my laptop, I pulled up Facebook and updated my status:

Made it to Denver. Missed connection. United rebooked me on a flight TOMORROW, but got it straightened out. Working at the airport.
I didn't think anything of it until the following morning when I found an e-mail from United in my inbox:

Dear Tom:

Please accept my personal apologies for the delay and misconnection when you flew from Denver to Salt Lake City.

You were inconvenienced and this runs counter to our team efforts to run a great airline.  To assure you of our intentions to improve your next trip with us, I'm depositing 9,000 miles into your Mileage Plus account.


       Nancy Castro
       Manager Customer Solutions
       Customer Relations
United Airlines is listening to social media, and they are responding. Kudos to Nancy Castro and the team at United. Well done!

Are you listening to what your customers are saying in social media?

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More changes on the way for Facebook Fan Pages

Facebook, Inc.Image via Wikipedia

If you administer a Facebook Page for your business or organization, you may want to take note of a few changes coming around the corner.

Content width: Facebook is changing the width of the content area underneath the tabs to 560 pixels wide from 760 pixels. This will have implications for you if you've done any custom HTML or FBML designs. If any of them are wider than 560 pixels, they may appear truncated or cut off.

Say goodbye to Boxes: "Boxes" are little areas and tabs that allowed you to build out and integrate custom content into your Facebook Pages. If you're currently using them, be aware that they will soon be disappearing. In my opinion the Boxes were hard to manage and clunky, so I'm glad to see Facebook streamlining how custom content is created.

E-mail addresses: In early 2010, Facebook will launch the ability for Facebook Pages to collect e-mail addresses from fans on an opt-in basis. This has huge implications for marketers - currently, you can reach fans through the Page itself, but every company would love to have e-mail addresses to go with it. Ideally you'll be able to achieve some crossover between your Facebook communications with your e-mail marketing initiatives.

These changes once again show that Facebook is always on the move in terms of improving and tweaking the social network. What do you think of the upcoming moves?

Nathan T. Wright is the founder of Lava Row, a social media education, consulting and strategy firm based in Des Moines' East Village.
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Make sure you can take that year-end deduction

Fuckin' taxesImage by blmurch via Flickr

When you're spending money to get a tax deduction for your business by the end of the year, you might as well make sure the deduction will hold up when your friendly neighborhood IRS agent comes calling. 

If you're a cash-basis taxpayer - if you aren't sure, check your business tax return or your 1040 schedule C or schedule F - you will need to show that you spent the money to claim the expense this year.  Some things to remember:

  • A credit card is as good as cash.  Better, even, because if you incur a business expense before the end of the year, you have your credit card statement to prove it.
  • If you mail a check for a business expense, the check needs to be in the mail and postmarked in 2009 to be a deductible 2009 expense.  If it's a big check, maybe you should spend a few bucks extra to send it Certified Mail so you can document the postmark.
  •  If you receive a check in the mail, it's taxable the day you receive it, even if you don't deposit it.
  • There is no "close is good enough" rule for cash basis taxpayers.  Just because you could have paid a bill doesn't get you a deduction if you didn't pay it before year-end.
  • Don't overdo it.  If you prepay expenses more than a year out, you don't get the deduction until the year to which the payment applies.

If you are an accrual-basis taxpayer, your big year-end issues come from related-party payments.   For example, a C corporation can only deduct payments to an over-50 percent owner if the payment is made before year-end.  If you and a family member both own stock, you combine your ownership to see if you own over 50 percent. For C corporation personal service corporations -- doctors, lawyers, consultants, and accountants -- that pay all of their earnings out as salary, this is a critical issue; any earnings left at year-end get taxed at a flat 35 percent federal rate.  S corporations and partnerships are related to all of their owners for purposes of taking deductions.  They are also related to anybody in the owner's family up to kissing cousins, more or less, including ancestors, lineal descendants, spouse and siblings.

If you are looking for a deduction from buying equipment or fixed assets -- say, a Section 179 deduction or a bonus depreciation deduction -- make sure that your asset isn't just purchased, but placed in service too, before year-end.  It doesn't count if it's sitting on the dock in the packing cases

For more year-end planning information, check out the Tax Update Blog's year-end planning series of posts.  Be sure to involve your tax pro in your year-end planning -- when it's time to do the return, it's too late.

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Being a good neighbor is good marketing!

87548959 When the economy gets tight, many businesses pull in, almost withdrawing from the world.

To hold expenses, they stop volunteering, they stop recruiting for talent (even when you aren't hiring, you should always be recruiting), they stop thanking their best customers and often times, they stop being a good neighbor.

A good neighbor is there, willing to share what they have.  A good neighbor sees you working on something and comes over to help.  A good neighbor wants to get other neighbors to help too.

And those are the neighbors we tell everyone about.  They're the ones we help in return.  They're the ones we love.

The same is true in business.  Let me give you an example.  Steve and Meg Shearer, owners of The Chocolate Storybook, are good neighbors.  They go out of their way to support local schools by creating very generous fundraisers.   And it's not just schools they support.  To encourage people to buy local, they created a local coupon book -- featuring Des Moines' best local businesses.

Why would they bother?  Because it's smart marketing.  Let me show you the math. 

One of the schools benefiting from their generosity is my daughter's high school.  The drama boosters are raising money with Chocolate Storybook's help.  In my 15 years of business, I've never bought anything from them.  We've sent clients chocolates before...but for whatever reason, they weren't the company we purchased it from. 

I knew of them, knew of their quality.  So I had absolutely no negative connotation.  But I also didn't have a compelling reason to change my buying habits.

Until the fundraiser...they'd made $0 from me.  Then, they got involved at our school.  With no ads, no mailers, no cold calls or Facebook messaging...they earned my business.  Yes, they had to share some of their profits.  But for that short-term investment, they're making some long term gains.

Guess where the McLellan Marketing Group's holiday gifts for 2009 are coming from.  Guess where I bought all my out of town relatives' gifts from.  Guess who is now my provider of choice.  Right -- my good neighbor.

And...I am telling everyone I know how incredible they are being.  If you stop by our office, some of their delicious popcorn will be ready for the sampling.

Multiply that by many families and business owners.  I know that Chocolate Storybook earned many new customers as a result of the one fundraiser.  So let's say my company spent around $1,500 this year.  And out of this newly created relationship, we continue to spend between $1-3,000/year for the next 5 years.  That's $15K from me.  On the conservative side, let's say they only get that sort of long-term return from two other new customers.  That's $45K over the next 5 years. 

That's smart marketing and a heckuva ROI.

Why?  Because good neighbors are the ones we want to help in return.  And if that's not enough, think about this.  Which customer do you think is more sticky?  Me or someone who shopped there because they saw an ad or got a mailer?

If you want to earn customers who hold you in high regard and come with built in loyalty -- as you work on your 2010 marketing plan -- ask yourself this question.  Who could we help this year?  What do we have that we could share?  How can we make a difference?

That's not just feel good stuff.  It's smart marketing.

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Weathering Change: Four Steps for Success

It can be tough to stick with your outdoor exercise program when the seasons change and temperatures drop. Cold weather and less daylight may work against your fitness schedule, but it’s important to stay active throughout the year. 9087826-866x554_jogging in snow with dog
Before you put away the running shoes, remember that successful winter-time workouts simply require a little planning and safety precautions, including:

  • Layering your clothes
  • Protecting your extremities
  • Remembering sunscreen
  • Drinking plenty of fluids
  • Paying attention to the wind chill

Changes in your professional environment also require planning to avoid setbacks. Change can instill fear among employees – which can lead to an unpleasant workplace, worrying and decreased productivity. Steven Warrilow , a change management expert, offers four comprehensive steps to successfully implement change. 

  1. Clarity in all areas – fully understanding the business need, specifics, benefits and impact of the change.
  2. Consistent leadership – convince employees that the change is necessary and lead them through it. Address the emotional impacts of the change but do not gloss over the truths.
  3. Constant communication – make sure your message is clear, accurate, timely and open to feedback.
  4. Capability and resources – translate your vision into actionable steps.

Change in the workplace is inevitable. As a leader, you must continually strive to understand and convey the need for change while proactively preparing for it.

5 underrated areas that YPs need for a job

Job-interview2 This past week I moderated a workforce readiness panel geared toward Millennials soon to enter the workforce. The panel answered a series of questions to help assist these Millennials understand the reality of what human resource officers are looking for in employees. I sat down with two of panelists afterward, Susan Bunz of Pioneer Hybrid and Jenifer Owenson of Ankeny Community Schools. I asked them a series of questions and compiled the answers into two themed groups. In this post, I will focus on that first theme, "Five underrated areas that young professionals need for a job."

1. G.P.A. : Many young professionals don't believe their grades matter, reasoning that grades do not reflect how smart you are. There's some truth to that theory, however, grades do reflect your ability to follow directions and how hard you work, which is a huge plus for an employer. An absent G.P.A. on a young professional's resume would raise flags. Maybe you have something to hide. If you had a 4.0 wouldn't you flaunt it?

2. Work History: HR professionals understand that times are different and workers of today do not display the same sense of loyalty as the previous generation of workers. However, commitment matters and if you hop around from job to job there better be a more compelling reason than "my boss and I had differences." A big red flag is gaps in workplace employment, the HR executives are wondering "what happened there, did they get fired? Are they to undesirable to hire?"

3. Internships: Beyond the work skills that are acquired while participating in an internship, the biggest benefit is the relationships that are built. Not only do you have a better understanding of the culture, style, and jargon of a particular business, but you've also made valuable connections that can benefit you later as references or better yet the job itself. Some businesses look at internships as six-week-long interviews. Perform well and there might be a long-term position in your future.

4. Volunteerism: Millennials may have a lack of job experience and older Millennials and young Xers may suffer from the work-history dilemma mentioned above. So another area that young professionals can take seriously is their volunteer history. Many high schools, colleges and YP groups have numerous volunteer opportunities available. Whether it's at church, in school or in the community, these activities not only help you build different skills, but also show commitment, professionalism, work ethic, employee/peer relationship and camaraderie.

5. Leadership: Many young professionals have an incomplete idea of what leadership means, it's not just being in charge. For the Gen Xer, that may be some relief in that statement and for the Millennial, some disappointment. Yet, in reality, leadership has more to do with initiative, confidence and integrity.  Have you demonstrated those characteristics academically, professionally or socially? Can that be verified on your transcripts, your work history, internships or community service? If so, then you are on the right track to getting the job you want

The next YP blog post will tackle "Five intangible skills that young professionals need for a job."

Virtual Parenting

What the Fork?

Video games harbor potential dangers to children. So do forks. The reason forks do not grab as many headlines is two-fold. First, all adults understand forks and ridicule those who use them to self-inflict injury. Second, parents, at least responsible parents, do not allow their children unsupervised access to forks until the children have demonstrated proficiency and responsibility with the utensil.  

Of Video Games and Virtual Worlds

Most parents are at least familiar with the concept of video games. Children play them against the computer, or against someone else in the room. Some video games allow children to play against people across the street or across the globe. The largest of these games create massive online environments for players to explore. These "virtual worlds" generate billions in revenue, some even allowing millions of people to play simultaneously. Each virtual world has its own set of rules and etiquette. Anonymous players create characters for themselves, and interact online with another anonymous characters. Communities gravitate around common interests, such as role-playing, first person shooters, real-time strategy, sports, social interaction, as well as many others. Two of the most popular virtual worlds are Second Life and World of Warcraft. 

What Are The Dangers?

Video games come with handy parental ratings to indicate how much blood, drugs and sex the child will encounter in the game. But what about virtual worlds? Players have sued, propositioned and even killed other players in real life as a result of events which took place in virtual worlds. What the media fails to report however, is that these incidents are incredibly rare. The Federal Trade Commission (FTC) has just released a report entitled Virtual Worlds and Kids: Mapping the Risks. Surprisingly, the report found very little sex or violence in virtual worlds accessed by minors.  

Why Are Virtual Worlds So Safe?

Most parents have little exposure to virtual worlds and legislators are often even more clueless. So why then are virtual worlds so safe? One reason kids are exposed to far less sex and violence in virtual worlds as compared to the rest of the internet is greed. Virtual worlds are for profit ventures. Main stream media constantly lurks for that one incident it can use to leverage every parent's fear of the unknown. As detailed in the FTC report however, virtual worlds invoke terms of service, age-screening, age segregation and community policing to prevent the exploitation of children. While it is not impossible for children to circumvent these security measures, there are far easier ways for children to access inappropriate content online, than through a virtual world.

In Loco Parentis

So if virtual worlds have their own screening system in place everything is good right? Wrong. Even though your child may not be exposed to sex, drugs and violence in a virtual world, they will be exposed to adults behaving like adults. The complex character interactions in virtual worlds are no substitute for parental instruction. Just like with a fork, it is your duty as a parent to investigate the games and environments your child frequents online to ensure that your child demonstrates the proficiency and responsibility to avoid trouble. Better yet, why not actually take a couple hours out of your week and join your child online. At worst, simply listening intently to your child describe to you an activity he or she loves will bring you closer together.  At best, you may create some indelible memories with your child. 

Brett Trout

How to Compensate Your Sales Reps

Business owners and managers who are about to hire their first sales person (or their second or third, the first one or two having failed) often ask, "How should we compensate a sales person?  Should they be on full commission, a draw against commission, a base or base plus commission?"

What they are really asking is, "How do I structure compensation to sufficiently balance motivating the sales person to sell and minimizing the investment at risk if they fail?"  However, this is the wrong question.

Bigstockphoto_Us_Dollar_Symbol_-_Button_5027155 The right question is, "How do I structure my company to set the sales people up for success rather than failure?"  Compensation is only one piece of this structure.

  1. Brand Marketing/Lead Generation--Is there an ongoing, successful brand marketing and lead generation system in place or will the sales person need to create brand awareness and prospect for leads purely through cold calling and networking?
  2. Lead Nurturing--Is there a structured lead nurturing process for those leads that are not yet ready to buy or will the sales person be required to manage that on their own?  Note that without a system, most leads will be lost.
  3. Sales Process--Is there a sales process, or "sales funnel," in order to consistently replicate success?
  4. Sales Management--Is there a qualified person to support and encourage the sales person while holding them accountable for the right activities or will you go down the "need self starter with personal leadership skills" path?
  5. Customer Relationship Management System--Is there a quality electronic system in place to help the sales person manage leads, customers relationships and their activity?
  6. Sales Training--Will the sales person receive initial and ongoing sales training or again, will you go down the "need self starter with personal leadership skills" path?
  7. Job Description and Administrative Support--Will the sales person be required to spend a significant amount of time with non-revenue generating activities or will they be free to focus on sales most of the time?

In a nutshell, by putting those items above in place and continually improving in those areas, you will establish a steadier and more predictable sales pipeline which will allow you to successfully use a low base plus compensation, draw against commission or full commission structure.

There are four other non-corporate considerations to mention as well. 

  1. How long is the sales cycle?
  2. Is the sales simple, complicated or complex?
  3. What is the dollar amount of the average sale?
  4. What caliber of individual (such as education and business acumen) do you need to relate to your prospects?

Like everything in business, determining sales compensation is a blend of art and science.  Answering good questions will help you narrow your options and then you must make a decision based upon your intuition and experience and that of others.

IowaBiz readers can get a simple scoring tool to evaluate these areas by sending me an email request.

This is Your Brain on E-Mail

Digsby Chat WindowImage by Jeff Hester via Flickr

If the medium is the message, what does that say about new survey results that found nearly 60 percent of respondents check their e-mail when they're answering the call of nature?

- Michelle Masterson, Channel Web

Are you part of that 60 percent?

Does this description of the average corporate worker from John Freeman sound like you?

"The average corporate worker now receives upwards of 200 e-mails per day. The flood of messages is ceaseless and follows us everywhere. We check e-mail in transit; we check it in the bath. We check it before bed and upon waking up. We check it even midconversation, blithely assuming no one will notice. We no longer make our own to-do list. E-mail does."

John Freeman, in his newly released book, The Tyranny of Email, says it's only going to get worse...and he's worried. He wrote his book in an attempt to slow things down for a moment so we can look at the enormous shift in space and time that e-mail has effected, how e-mail has changed our lives, our cultures and our workplaces, as well as our psychological well-being.

He's right when he says that at one time only doctors, plumbers and maybe volunteer firefighters were constantly on call. Not now. Now, if you're on e-mail, you're on call in a sense, 24/7. Think about it. Has anyone ever sent you an e-mail and when you didn't respond in an hour or so they sent you another e-mail asking you if you got the first e-mail?

How 'bout you? Have you done that? Yep, I thought so.

He equates our keyboards with a "messaging conveyor belt - with no break time." He uses the analogy of our connection to our cell phones, instant messaging, Facebook, text messages and all the other networking channels as "an ambulance trying to cross a busy intersection at rush hour."

Why is he worried about this phenomenon? Because the sheer volume is overwhelming and stressful. And because e-mail is so sterile. It's devoid of the richness of a face-to-face conversation and even that of a phone call. It's static. Disembodied. It has none of the hand gestures, verbal tones, inflections or facial expressions that we rely on to encode and decode the most important messages of our lives - with family, friends, and co-workers.

Three of his best suggestions?

  • Don't send any more e-mails than you really need to. Eighty percent of corporate e-mail problems, he says, are caused by 1 percent of workers. Don't be part of that 1 percent.
  • Don't check e-mail first thing in the morning or late at night. Take back your life. Check e-mail twice a day. Yes, you CAN do this!
  • Send good e-mails. Use subject lines. Then stop, if they convey your message. Keep e-mails short.

Put down that Blackberry for a moment. Think about it. What can you do to make e-mail a tool but not a tyrant?

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Company for Sale?

87516295The economy is slowing coming back.  People are beginning to realize that the values that existed before the crisis will not be seen again for some time.  The new values of homes, businesses and the stock market are not going to be over inflated as before.

Business owners that were thinking of selling their companies are starting to test the waters again.  The value of their businesses may not be what they once were and the values are based on a new market reality.  Owners are realizing that it is time to move forward.

When looking at the impact of our financial crisis and how it impacted everyone's net worth, employee ownership is one of the best ways to transfer ownership of a business.  One employee ownership methods for transitioning ownership of a business is an ESOP (Employee Stock Ownership Plan).  The following is a short list of the benefits of using an ESOP as a strategy for selling a business:

  • Owners of C corporations can realize significant tax savings if they sell at least 30 percent of the company to the ESOP.
  • S corporations that are 100 percent ESOP pay no corporate tax (providing certain state laws).
  • The equity of the business is spread broadly to all employee owners.
  • An ESOP is a qualified retirement plan that is governed by the DOL & IRS (giving some comfort to employee owners that there are rules to play by).
  • ESOP companies, with participatory cultures, will out perform their non-ESOP competitors
  • Employee owners have greater control over the value of their accounts in an ESOP as compared to an IRA or 401k.
  • The owner gets the satisfaction of sharing future equity with the employees who helped build the business.

Any business owner that is considering selling his or her business would be amiss to not evaluate if an ESOP would work for them.  There are many more benefits than those listed above and there are disadvantages that need to be considered.  An ESOP can provide benefits to the owner, the business and the current and future employees.

Drivers for Sellers and Buyers

In the process of negotiating,  the difference between a "fair sale price" and the final sale price will be drivenBlog by many issues. Many of these drivers will be used, by each side,  to tip the scale to their advantage. Some of these are:

Factors that will favor the seller (higher sale price)
> Plentiful third-party financing
> Superior negotiating skills
> Lower-risk business
> High growth business
> Highly motivated buyer
> Tax structure favors buyer
> Financing structure favors buyer


Factors that will favor the buyer (lower sale price)

> Third-party financing is scarce
> Superior negotiating skills
> Business risks are High
> Growth is low
> Seller does not have to sell
> Tax structure favors seller
> Financing structure favors seller

Feel free to call me if I can be of assistance to you.

- Steve Sink

Protect your customers

Online shopping This is the busiest time of year for most retail businesses. What this means for many retailers is thousands of credit card transactions being completed at their stores, over the phone and online. Having their computers, phone and Web sites up and running securely is very important to the retailer right now.

In 2008, it was discovered that the retailer Forever 21 had 99,000 credit cards compromised between 2004 and 2007. 

That same year, Advanced Auto Parts also discovered that they had approximately 56,000 customers information stolen information from old data between December 2001 and December 2004. This information was found to not be encrypted and thought to have been deleted – but it wasn’t.

I have discussed employee dishonesty and e-risk in a couple of my past blogs and while these issues are important for a retail business owner, professional liability for Web site developers, computer programmers and consultants is equally important.

There are many situations that can occur to cause this profession to be sued.

  • A businesses website goes down and causes a business to lose income
  • Software that was installed causes a businesses network to crash
  • Breaches of security (firewalls, encryptions, et cetera) – a computer tech forgets to reset the firewall after installing new equipment or software.
  • A business is sued for copyright and trademark issues after they launch their new Web site and logo.

The list goes on and on, but I think you get the point. Having the right liability policy in place can protect against these issues and more depending upon your exposure.  If you are a retail business owner, make sure you are discussing your cyber risk with your agent. If you are in the computer industry, make sure you do the same.

The mistake you don’t want to make is relying on someone else to have coverage for your business.

If the Project Doesn't Fit, You Must Quit

Hope_ministries One of the great things about teaching the project management elective in the MBA program at Drake is the opportunity to introduce my students to real life field work in project management.  Specifically, I team my students with a local not-for-profit every year.  Their job is to create a business case and a project plan/charter for their clients.  My goal as a professor is to find a single not-for-profit which has multiple projects.  By doing so, my students must go beyond looking at the project to which they were assigned, and also look at other teams' projects as well.  In short, they learn a thing or two about managing a portfolio of projects for a given organization.

This year, we were fortunate enough to serve Hope Ministries' Bargain Center located in Pleasant Hill.  We had teams reviewing every aspect of their business, from accepting donations, to retail product flow, to retail space design, and many other issues.  It's a win for both the students and the organization.  And selecting a not-for-profit allows the students to get a taste of the triple constraint on steroids:  they never have enough resources or time, and they always have an abundance of tasks to be completed.

The challenge at the end of the class is getting all of the student teams to communicate with each other to figure out how all of the projects fit together.  Invariably, each semester, there is one project which doesn't seem to "fit" with the others (insert the Sesame Street song, "One of these things is not like the others").

Oj I like to use the Johnny Cochran approach in the O.J Trial:  "If the glove doesn't fit, you must acquit."  However, in this case, it's the project that doesn't fit with the rest of them.  Saying it doesn't fit is not saying you will never do the project.  It's simply saying that right now, there's a project that does not fit with the current portfolio.

So how do you make the selection to determine what "fits"?  ProjectSmart, a UK-based blog, recommends having a project firing squad (OK, a little macabre on the metaphor front), but I like the idea:

  • Know your current portfolio - what else are you working on and what needs your emphasis and attention right now?
  • Well-defined selection process - eenie-meenie-minie-mo is not a selection process.  Figure out how potential projects will be scored and weighted.
  • Identify the decision-makers - don't wait until the last second to figure out who has accountability for what lives and what dies.
  • Make a decision - as they so eloquently put it, "the worst decision is indecision."  Don't be wishy-washy.

For the sake of academia, all projects survived (at least through the presentation).  What Hope Ministries does with the project recommendations... well that's ultimately up to them... but I am very thankful they let us play in their sandbox for a semester.

Carpe Factum!

You are the "They" to Whom You Refer

Kicking TelevisionImage by dhammza via Flickr

I ordered a television on the phone last week. I found it online, called to place the order for a local in-store pickup at Sears. The ordering process was pretty slick. But when I went to the store to pick up the television, things started to fall apart.

I went to the electronics department and asked the sales associate. "You've got to go to merchandise pick up. 'They' handle those orders," I was told. So, I went to the merchandise pick up and entered my information in the kiosk. The computer didn't have my information, so I was told by the kiosk that an associate would help me and my name was placed on a queue on the computer screen. I had a seat and waited a few minutes. I looked back at the screen and my name had not been moved to the "completed" list. Something was very wrong.

When the associate came out to help another customer, I interrupted and asked about my order. "'They' have been having problems with the computers all morning. It must not have come through. Go to the sales floor. 'They' have better access to the system than we do. 'They' will look up your order number."

Back at the electronics department I was informed that "they" often have problems with the system. To the sales associate's credit, he apologized and assured me that "one way or another you're going home with a television today." The phoned-in order was never resolved in my visit. I had to purchase the television in the store and then call "them" on the 800 number to cancel my original order.

A common response of human nature is to distance ourselves from responsibility and point blame at another person or entity. It happens in customer service all the time. To the customer, however, you are the "they" to whom you refer. As far as I was concerned, my issue was with Sears. The CSR on the phone, the people in IT, the guy in merchandise pick-up and the sales associate were all "Sears" in my eyes. I don't care where the problem lies or who dropped the ball, I want "Sears" to make it right.

World-class customer service operations understand the subtle difference between "they" and "we" in the customer's experience.

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How Bit.ly is fighting Twitter spam

Bitly-logo The microblogging social network Twitter has become infested with spam over the past year, directly alongside its meteoric rise in popularity. While Twitter is staying busy trying to fight this never-ending war, Bit.ly (a popular URL shortener service) is joining the battle.

Bit.ly is the most frequently used link shortener on Twitter. It makes up more than 75 percent of all shortened links, according to this TechCrunch article, meaning that it is frequently abused by spammers attempting to push Twitter users off to malicious Web sites loaded with malware and spyware.

Yesterday, Bit.ly announced that the service is partnering with VeriSign's iDefense, Websense Threatseeker Cloud and Sophos to beef up their ability to detect spam behind shortened links. This is in addition to some of their existing security features. For instance, you can add a + symbol behind any bit.ly link to preview it or make use of their Firefox preview plug-in.

There's another tool you can use to fight spam and that's called common sense. Just like we learned what the red flags for e-mail spam 10 years ago, we're now being taught the same lesson on social networks. Don't click on strange links from senders that you don't know. And if you receive a message saying "Is this you? [LINK]" - don't click on it.

What do you think about Bit.ly's announcement? Will this make a dent in Twitter spam or will the spammers evolve to leverage new ways to prey upon internet users?

Nathan T. Wright is the founder of Lava Row, a social media education, consulting and strategy firm based in Des Moines' East Village.
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S corporations: no basis, no loss

The Internal Revenue ServiceImage by Martin Haesemeyer via Flickr

S corporations are popular for many good reasons.  One of them is the ability to deduct corporate losses on the owners' 1040s.  It's been a rough year for a lot of folks and many taxpayers are looking forward to a nice tax refund from their 2009 business losses.  If you are one of them, make sure you don't lose your loss deduction for lack of basis in your S corporation.

A taxpayer's initial basis in an S corporation is the amount paid for the stock. It is increased by capital contributions and by undistributed income of the S corporation. It is reduced by distributions of S corporation earnings and by S corporation losses.

A taxpayer can also deduct losses of an S corporation to the extent of taxpayer loans to the S corporation. The loans have to be loans made by the taxpayer; guarantees of debt do not work.

EXAMPLE: Wally starts an S corporation. He contributes $10,000 to the corporation in exchange for 100% of its stock. The corporation borrows $5,000 from Wally and $50,000 from the bank, guaranteed by Wally. The S corporation loses $20,000 in its first year. Wally can deduct $15,000 of losses this year, based on his $10,000 cash contribution and his $5,000 personal loan. The guarantee from the bank does nothing to enable Wally to deduct losses.

LESSON: Wally could have borrowed the bank loan personally and loaned it to the company; this "back-to-back" loan would have given him enough basis to deduct the remaining $5,000 S corporation loss.

Taxpayers need to be careful in dealing with S corporation basis. A few points to keep in mind:

  • The basis is determined on the last day of the S corporation's tax year. This means that the taxpayer needs to project taxable income before year end to determine whether additional loans or capital contributions to the corporation are called for.
  • Taxpayers also need to pay careful attention to how year-end basis contributions are structured. If a shareholder borrows money from one S corporation and loans it to the money-losing corporation to get basis, the money-losing corporation shouldn't send the money right back where it came from; the IRS will disregard all of the transfers.
  • If you loan money to your S corporation to enable you to deduct losses, you may trigger taxable income if you repay the loan before the corporation earns back the losses you deducted -- even if you renew the loan before the end of the year.

Basis is only one hurdle S corporation shareholders need to clear before they can deduct losses.  Taxpayers also need to be "at-risk" for their basis and the losses can't be "passive" under the "passive activity" rules.  It's time to project your year end income and visit your tax pro to make sure you can deduct those 2009 tax losses.

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