2+2=5

Economics can mimic nature in many ways.  Just like when a storm comes thru.  Bad thunderstorms can knock down trees and power.  Increasing strength in storms can have bigger impacts, look at what is happening in the northeast over a week after that snowstorm.  Earthquakes can leverage more intense havoc that takes longer to recover from.  Recent examples here are Haiti and the tsunami's from the Japanese earthquake.

Economically what we have been  trying to recover from for 4 years is in the same category as an earthquake or tsunami, it is going to take some time and things aren't going to be the same.  So, I wasn't so surprised when I came across this article in the Harvard Business Review:

The 2008 Crash Left U.S. Firms Less Competitive

The 2008 stock-market crash and subsequent recession significantly damaged U.S. companies' competitiveness, according to a team led by Gulser Meric of Rowan University that examined the financial characteristics of 334 top U.S. firms. On average, the companies' return-on-assets ratio dropped from 6.45% in 2007 to 4.17% in 2009, their total-assets-turnover ratio fell from 1.437 to 1.294, and their return-on-equity ratio dropped from 16.8% to 10.22%. All are factors in competitiveness, the authors say.

Source: The Effects of the 2008 Stock Market Crash on the Managerial Behavior, Financial Characteristics and Competitiveness of Large U.S. Corporations http://www.highbeam.com/doc/1P3-2375364191.html

OK, so we had our knee's taken out and we need to invest to restore our competitiveness just like the Haitians and Japanese need to invest to rebuild from their natural disasters.  If we aren't doing this then how we will be able to compete effectively whenever a full recovery comes about.  But wait, if this what we should be doing, then why are corporations sitting on a ton of cash?

http://marketplace.publicradio.org/display/web/2011/08/17/pm-companies-sit-on-huge-reserves-of-cash/

There is some investment in capital, but, one would presume this type of revamping would require additional workforce, and that is not happening either.  So, we have the proverbial 2+2=5.  We take a hit, are not as competitive, we should be investing and are not, and wonder why things don't seem right ???

Ugh, Truley You Jest, SMB's Unprepared for Disaster?

Symantec SMB DR Preparedness Report

This is most disturbing.  The world economy is in the dumps and everyone says it's the SMBs that will drive growth.  It is a well documented fact that 50% of any businesses that suffers a major data loss event go bankrupt.  Just look around right now, one doesn't have to blink an eye these days and see some kind of Nature on display going on.  The Japan earthquake, hurricane damage in the northeast with more storms on the way.  Fires in the south, we are in very active times and all the statistics say we are due for more.

Next fact, if you have anything to do with computers, have you really not heard of the Cloud?  How much easier can it be than to sign up for some cloud based backup to get your data off premise, even if you only do it on a daily basis, only a days worth of change is lost. 

The one the gets me the most, Carbonite.  Any trekkers out there remember the first season where Kirk bluffed an alien with this fictitious material?  Don't misread this as an endorsement for this product.  My comment here is that cloud backup has become so mainstream that you see TV commercials on it and it ties into one of the most successful science fiction brands out there.

Anyone listening out there or do I have to do a Vulcan mind meld for you to understand what needs to be done ???

Brains Over Brawn

I found this from the Harvard Business Review Daily Stat. Not a real leap of deductive reasoning which states on average, the higher the IQ, the more money you make. However, what I found very interesting here was the quantification of this study. If we can increase the IQ of the top 5% by 1 point, per capita GDP goes up $468. Wow, I love metrics like this. I often use the quote of you can have your own opinions but not your own facts. Just imagine what we could do if we were able to increase the IQ of our elected officials even ½ point? But that is fodder for another blog entry.

There are other statistics in this report as well. As one who firmly believes in continued education and keep pushing the mental envelope, this is great to see. I would emphasize in this stressed times, others will look to education and revitalization of the mind as way for all of us to work our way out of the economic mess we have created for ourselves. All ships rise on high tide, the more we all learn and enhance our own cognitive skills, it will raise the level of our society. In the last few years I have attained my MBA degree and PMP certification. It's never too late to start, and with tempests that we live in, you can never be too prepared.

OK, here's an update. No sooner do I post this thought, then another item came in once again from the HBR Daily Stat:

Schooling Increases Your IQ Year by Year

School not only gives students specific skills, it also increases their intelligence. One year of formal schooling between age 10 and 20 raises an individual's IQ score by 2.9 to 3.5 points, on average, say Torberg Falch of the Norwegian University of Science and Technology and Sofia Sandgren Massih of Uppsala University in Sweden. So 4 to 5 additional years of schooling increases IQ scores by about one standard deviation, a sizable effect, the authors say.

Source: The Effect of Education on Cognitive Ability http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1874548

This also means we have do everything we can to keep improving our education system and support our institutions of higher education. Keep this in mind when we think about paying for the past by cutting too much of the future.

Murphy in the Cloud, Losing a lot of Diamonds

The 10 Worst Cloud Outages (and What We Can Learn From Them)

First off my apologies to the Beatles, but after reading this article, sarcasm is duly needed here. It permeates the authors writing style and anyone involved in this field cannot but chuckle as these examples are portrayed in ironic detail.

I learned two new technical terms here as well, Amazon-d and Nutso. They definitely will become part of my lexicon. I found this article a great read, I hope you enjoy it as much as I did.

However, this just shows "The Cloud" does not excuse us from applying the same basic principles as if we were running these services in house. While there was some mention about fines paid to customers, generally speaking there was no mention about breach of Service Level Agreements (SLA). With in house IT shops we are keen on Business Continuity have these in-place for all internal customers. A key lesson was doing the due-diligence of how these suppliers were handling their own internal processes. If you are going to outsource your IT and wash your hands of the dirty work, better make sure that the people you outsource to are willing to get their hands dirty. Actually, they have to get even dirtier because they are appealing to a much larger customer set. If they fail, it isn't just one shop that goes thud, a lot do, and as noted, it tends to get some really dicey publicity.

So, as the old adage says, if it seems to good to be true, it probably is. Unless of course, you make it really the deal you want and really can fly in the clouds and assure your business at the same time.

Ken

So Much For Superstition ...

How many times with your back up against the wall you have some buddy of yours give the "Good Luck" sarcastic pat on the back. Besides the "Yea right" response you give as they walk away chuckling under their breath, up to now, all that might have done is raise the stress or blood pressure level a bit.

But go figure, someone went and did a study and actually there is something to this. Now, maybe not the sarcastic shot from your friend, but someone who honestly wishes you luck, start looking at this in a different light. Many times we says "Thanks, I'm going to need it". Well, here it is ...

http://www.psychologicalscience.org/index.php/news/releases/keep-your-fingers-crossed-how-superstition-improves-performance.html

How To Solve the Countries Unemployment Problem

Here is a slide from a recent article on the cost of downtime. The post title is a hotlink to the full article. This number may be shocking to some of you, but as time goes on, it isn't going to get any better.

Now, for simple resource budgeting I always used an average of $100k for a fully burdened staff. That number not only included the salary, but benefits, space, computing resource, education, and whatever else happened to come into play.

So, here's an idea, every company could hire one person to attack the downtime problem. That not only would reduce this number, but also generate additional business because that would drag with it investment in hardware and software solutions.

Talk about a win-win solution?

Ken

Oh, Say It Ain't So for My Cup of Joe ...

I came across this article in the Harvard Business Review:

Caffeine Cuts Men's Ability to Collaborate Under Stress

When it comes to collaboration on stressful tasks, caffeine impairs men's performance but boosts woman's, according to research led by Lindsay St. Claire of the University of Bristol in the UK. The researchers say their laboratory study raises the question of whether men "fight or flee" while women "tend and befriend" under stress, and whether caffeine somehow intensifies those behaviors. They also ask whether coffee at business meetings might have the effect of sabotaging collaboration. 80% of the world's population consumes caffeine daily.

Source: Interactive Effects of Caffeine Consumption and Stressful Circumstances on Components of Stress

What can I say, does this mean when times get tough, don't bring in any more coffee? I used to say that Coffee, Cigarettes, and TV were the three great evils in the world. Items which destoryed your mind without you being aware of it. Of course, TV is the worst. But, as I have gained more experience, that morning cup of coffee is just something that now I would be hard pressed to do without. However, I have become spoiled as my cousin runs a gourmet coffee shop and keeps sending me samples, what can be said, I'm in.

But, coffee is a business staple. Show me a business that does not supply free coffee? Not only that, when the stress is on and everyone starts camping out in a war room, show me one that doesn't always have a pot of coffee on the table?

So, take this to heart, and as hard as it may be, next time you have the all hands on deck type of event, tell the men to leave their coffee back in their office. This just could be the secret to a more productive and productive solution to the problem.

Who would have thought ???

Ken

Right on Track

I came across this article and just couldn't help bringing a smile to my face.

http://www.computerworld.com/s/article/print/352225/Should_you_get_an_MBA_?taxonomyName=Management+and+Careers&taxonomyId=14

Education has been a theme throughout many of the items I have discussed previously. So, just great to see ComputerWorld step up and bring it right to the forefront. I have a lot of history in IT related experience and always wanted to get my MBA. Once I moved from being a technologist and into Management, my work ever increasingly became less about technology and more about business. However, when one is working 50+ hours a week and traveling, getting one's MBA is not the easiest thing in the world to get.

So, once I had real time on my hands, this was the first thing I did and I say many times over, amazing what I accomplished by instinct and tuition without having this excellent background. To all who see this, all I can say is even if you are not able to find a way to get the MBA, if you are in Management and have evolved there from a technology background, take as many classes as you can. If you are at conference, don't be afraid to sit in on some business related sessions. The people in there don't bite.

If what you learn after you know it all that counts, imagine what learning what you don't know will do for you !!!