Belgian Tax Watchdogs Tracking Facebook, Netlog Updates

NEW YORK - APRIL 15:  Citizens, many of them h...

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From Robin Wauters on TechCrunch: Belgian Tax Watchdogs Tracking Facebook, Netlog Updates:

 

"Not entirely unexpected, but still weird to see it confirmed and acknowledged: the federal tax administration in Belgium, my home country, is keeping tabs on citizens (article in Dutch) via their Facebook and Netlog profiles and their activities on eBay and other social networking sites."

 

Most people really don’t realize how much information they are leaking online.  I spoke with a VC recently who monitors which entrepreneurs other VCs are linking to on LinkedIn; he said that gives him insight into which entrepreneurs are now actively raising capital.

 

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Synching Team Mindsets through Creative Invention

The health newsletter of Dr. Weil has an interesting piece on how musician’s brain waves synchronize when they play songs together (“Musicians’ Brain Waves Are Also in Tune“). A researcher at the Max Planck Institute looked at electrical activity in the brains of pairs of guitarists and found that two regions of the mind show high degrees of brainwave synchronization when they play an improvised song together.

I’m a jazz/rock musician (guitar, drums, keys, a bit of bass and vocals) who long ago decided I’d be more productive applying my creativity to business collaboration and marketing. In other words, I wasn’t even close to the brilliance some of my friends displayed as musicians, and opted for a business career plus a classic-rock band of mid-life guys in in my basement instead. But I’ve been continually fascinated by replicating the creative environment and satisfaction of music in business environments.

“In the Groove”

A takeaway from the study, in my opinion, is that creative, right-brain thinking creates an alignment of invention and emotion that makes it fun for people to work together and to create new, breakthrough ideas. I’ve only dabbled in classical music and the fine arts, but my hunch is that the more real-time improvisational the art, and the less structured the roles, the greater potential for mental alignment. Jazz works this way, group improvisational comedy, probably dance, and even high-performance tennis doubles.

Happy Hours as Invention Opportunities

A way to leverage this is to find a time each week for people to set aside their pressing to-do’s, and just brainstorm about business opportunities. In one of my businesses, we made this the Friday afternoon pizza hour. The really good ideas for business improvements and new products came also exclusively via these sessions – it was the only time where people had permission to think outside their roles, stop worrying about their obligations or speaking out of turn, and pose a zany theory to see where it led. One person was assigned to capture the notes (today I would commit them live to a Wiki, chat board, or feature-request log, and if you’re really ambitious in a distributed company, you could try having people contribute in a Twitter feed). The drinks usually associated with happy hours are completely optional (and probably not permissible in many businesses). Jelly beans work fine.

Team Productivity Enhancers – What Works…

Three other discussion threads in the same vein:

– I’ve read reports comparing team productivity in two scenarios. In both, a team is given an important business challenge to resolve. In scenario one, a team is told to go off individually, spend an hour or more researching the issue and coming up with ideas, and bringing them to the table at the next meeting. In scenario two, the team is asked to work on the problem only in group meetings. The findings about which created greater results were, that while the individually-prepared team gave “good” responses to the problem more consistently, the team only interacting in groups created breakthrough solutions that addressed more fundamental issues or new opportunities. They were able to think beyond the initial problem and invent a vision. This didn’t occur 100% of the time, so you are taking a bit of a chance with group brainstorming, but where you are creating new ideas without a driving deadline, this approach is much more effective.

– There has been a lot of talk about how Google gives their employees 20% free time to brainstorm and create/test new inventions (see the NY Times and Fast Company). Empowering people to not only create ideas, but to develop them is powerful. And, it’s relatively easy in the software industry, where the cost of pilot production and posting something to the Web is small. However, based on experience at another major West Coast software corporation, it can get out of hand. Too many individuals can start posting too many ideas for the company to manage; creating redundant projects and unsanctioned competition between divisions and executives; and spinning off lots of unprofitable activities. A few techniques allow you to balance innovation, entrepreneurship and directional control in these situations:

  1. First, document all ideas somewhere. The mere fact that someone’s idea is being recorded gives the mind positive reinforcement, and individuals/teams start taking more time to explore more ideas.
  2. Second, have a prioritization process for the ideas. I think it’s too much for any individual to have complete discretion to pursue any ideas. The best approach is to have the inventor/evangelist need to demonstrate the business case for the idea before spending more than a few hours on it. This teaches engineers and other technical types to think about ROI as a prime organizational driver. The education takes time but is well worth it for organizational productivity – again, aligning people in the same mindset. For other companies with a more time-pressed or hierarchical style, I’ve experienced monthly meetings for the entire department (or if small enough, the entire company) where the best ideas submitted that month are highlighted, the creator is given a small award/reward, and management commits to reporting back in 4 weeks on exactly what they will do with the idea.

– Third, there’s an interesting trend toward crowd-sourcing invention, where the vast resources of talented people on the internet are encouraged to contribute en masse to projects, ranging from highly-technical R&D and licensing projects (e.g. the company Nine Sigma), to online resources such as Wikipedia type databases of cost-saving solutions for small businesses. There’s the potential to rethink business invention and the consulting industry through crowd-sourcing. A colleague of mine, David Gusick, is pursuing this path at Extreme Collaboration.

“Have a Nice Day” – By Creating Something with Others

If all of the above is time much to absorb for your hectic business day, I leave you with this “stop and smell the roses” thought from Dr. Weil in his newsletter blurb above: “To my mind, [the Max Planck Institute] study highlights one of the great joys of playing music, one voiced by many musicians: a sense of self-transcendence. Playing music together creates a rare chance to step outside of ourselves and our small concerns and join our minds wholeheartedly with others in creating something no individual could make alone. Seen in this light, creating beautiful music is simply a wonderful byproduct of a larger reward – connecting deeply with other human beings.”

When the worlds of business and music collide.

When the worlds of business and music collide.

The Unique Role of Strategic Advisory Boards

Business advisory boards fill a unique role in strategy and implementation, whether your company is crafting a new product line, identifying cost-cutting measures, pursuing mergers and partnerships, or changing the mix of staff skill-sets. Private equity and venture capital firms especially the ROI of applying specialized executive talent to rev-up progress at an operating company, typically through a 100-day plan.

My conversations with growing (and struggling…) businesses, investment firms, lawyers, consultants and individual executives suggest that advisory boards are powerful, long-term strategic tools if you invest in managing them well. However, many firms don’t know where to find outstanding board members or relegate them to two-to-four meetings a year and a few phone calls. And, online advice about creating these boards is surprisingly generic (the highest-ranked advice-oriented links about ” strategic advisory boards, how to create” on Google are at AllBusiness.com and at Stengel Solutions).

Over several blog posts, I propose ways to use advisory boards better and interview leaders in this area.

Advisory Boards Are Not Your Usual “Boards” or “Consultants”

Strategic advisory boards are unique business support system. I define them as:

  1. Non-employee teams serving senior management
  2. With extensive experience and special expertise in sectors / functions that affect a business
  3. Meeting together over years, though they can and should focus on urgent business decisions over the course of several months for the best impact
  4. Compensated

They differ from:

  • Boards of Directors, or fiduciary boards, which take on the responsibility and liability of being responsible for the financial well-being of a company’s shareholders and for evaluating the chief executive. Boards of Directors are required for public companies, but they often are populated with influential individuals with powerful connections or access to investors, rather than industry specialists. BoDs also are expensive to staff, costing five-to six-figures per member per year, to offset the increasing amounts of time and risk fiduciary board members take on. For public companies with divisions that need strategic help, or private companies that need broader business input without being evaluated on a management hire/fire criterion, strategic advisory boards are more valuable.
  • Consultancies, whose pyramid-like team structure and billing rates make them suitable for critical projects of one to several months requiring deep analysis, but less so for ongoing guidance about growth opportunities and trouble spots.
  • “Friends of the firm,” a category in which I include advisors who aren’t compensated for their input. Usually these relationships are developed ad hoc, based on chance meetings or existing relationships, where the company’s leader or evangelist convinces the businessperson to lend their name and be on a few phone calls in exchange for light cache. Though these individuals may receive an Advisor title on the web site, without careful selection of a group of complementary skillsets and a commitment to exploring issues at length with the firm, they usually have limited impact.

Achieving an Effective Board

High level considerations when building an effective and worthwhile strategic advisory board include:

  • Compensation model. I found, through my prior business Circle of Experts, that a modest amount of cash goes a long way in getting the attention of potential advisors, and a little equity on top (a fraction of a percent) keeps their minds engaged even when not attending meetings. The total cost of many advisory boards, meeting regularly, helping with multiple decisions in detail, can be less than that of a single senior employee and less than 1-2% of equity for a start-up.
  • Information sharing. Too many advisory boards meet semi-annually, and beyond that are contacted individually by phone. That’s because the company’s management team has a lot on their plate and lose track of the time investment needed to support the board. Anyone who has been in a consulting field realizes how critical an understanding of a business’s culture, it’s operating metrics, and competitive context is to making effective decisions. Therefore, advisory boards can benefit from a light “information portal” where they can read a summary of relevant news and data, post ideas for discussion online immediately or in-person at the next meeting, and track results of programs.
  • Evolution. For strategic advisory boards, some members will prove useful advisors over years, while others will be a best fit for specific projects. Both members and the company should explicitly discuss how their needs change and set 6 to 12 month reviews of their relationship. This makes it easier to switch to a looser “stay in touch” commitment , while introducing new talent.
  • Facilitation. Good advisory boards are comprised of a range of personalities, experiences that interact with management to come up with new solutions. But this isn’t easy. Think about staffing a consulting team where each member worked at a different firm, in a different location, put in an “all members are equal” starting situation. Instead, effective boards explicitly establish and regularly refine their rules of engagement, including scope of responsibility (for example, is management open to the board proposing new programs or highlighting company problems that management hasn’t put on the agenda), conflict resolution (including the acceptance of vigorous debate and approaches to re recognize and address personality conflicts), meeting agendas and between-meeting time commitments. This facilitation itself takes a special skillset and experience base.
  • Commitment. All of the above point to a shared commitment to exchanging information, researching opportunities, and improving process that has to occur during and between meetings. The board needs to be thought of as a strategic weapon, focused on top-of-mind questions, rather than a “nice to have on the website” marketing tool to be worth creating. In turn, some members will want to contribute even more time to your business, for example, editing a investment prospective or QAing a major implementation plan.

Next… Managing Board Dynamics

In an upcoming post on this topic, I’ll be interviewing Dr. Robert Fisher, board member of the Science and Technology Corporation at University of New Mexico, Founder of the Center for Medical Democracy (a consortia of leading advisors on healthcare policy) and CEO of Fisher Leadership Strategy about his experience making boards work.

New York Events: Best Practices of Venture Capitalists in Identifying Investment Opportunities

I’m starting to release the findings from the large research study I’ve been leading on “Best Practices of Venture Capitalists and Private Equity Firms in Identifying Private Company Investment Opportunities”. My colleagues from Evalueserve and I have interviewed over 100 venture capitalists and private equity investors for this study.

I have two speaking engagements coming up in New York where I’ll be discussing our findings. I hope that you can attend! Of course, I welcome feedback/discussion.

Feb. 19, 6:30pm: Israeli Business Forum
1500 Broadway, 12th Floor, New York, NY

Feb. 24, 6:30pm: MIT Enterprise Forum,
100 Park Avenue, 24th Floor, New York, NY

Among the issues I’ll discuss:
– How are you positioning yourself to become a company`s preferred investor?
– In the current tough climate, how can you lower your deal origination costs?
– What does research on deal-origination indicate are the primary sources of deal flow for institutional investors?
– What are you doing to identify companies that might be interested in being approached?
– What are the earmarks of a potential investment opportunity?
– How are you systematically identifying industries/situations in which you may be able to create new companies, rather than find existing companies?
– How do you increase your inflow of useful referrals?
– What is the best way to make warm cold calls?

I have attached the draft slides below:

High ROI Initiatives for the New Obama Administration

I have a number of friends/acquaintances who are involved in various ways in the incoming Obama administration. I wrote to them roughly the following note:

I realize that everyone you know is now deluging you with their advice on how the country should be run, in the hopes that you could get their ideas to the right ears. I wanted to take the liberty to share with you also three ideas which would have no significant marginal cost, and would be of great value in addressing the current economic crisis. I also realize that you and the rest of the transition team have undoubtedly thought of these ideas; I am adding in my vote that these are initiatives with high returns on political and financial capital.

1) Increase immigration by people with capital. There are approximately 2.2 million vacant homes in America. There are far more than 2.2m families in the world who want to move to the US and hope that their child grows up to be President. These immigrants will create economic activity and fill those vacant homes. This fact should allow the administration to override the forces that oppose immigration.

2) Radically simplify the tax code. I’m sure you’ve seen the estimates that the cost of compliance with the 67,204 pages of US tax law is equal to 10 to 24% of total tax revenues. Worse, the cost of compliance is effectively a regressive tax. With the right tax structure, you can increase (or keep flat) government revenues, while simultaneously increasing corporate profits and creating jobs. I realize that many people will oppose a flat tax, but even if you simply introduced a progressive tax with no deductions, exemptions, etc., you would make compliance dramatically more efficient. The big obstacle to reforming the tax code is that every politician has a pet interest that the existing tax code subsidizes. The current air of crisis may create a unique opportunity to get politicians aligned that fundamental reform is necessary….which it is.

3) Promote healthy eating. This is great for the environment, saves money, and promotes health…particularly for lower-income urban residents who tend to eat unhealthy diets. There are non-coercive and money-saving measures that the government can take to promote healthy eating. The easiest way to address our health-care crisis (the elephant in the economic room) is to promote people being healthy, and improving their diet is by far the simplest way to do that.

Can Comcast Scale Social Media Customer Engagement?

Authentic social media engagement has the power to transform brands that have a declining reputation for customer service. Microsoft, led by Robert Scoble and the Channel 9 team, reversed their image as a company out of touch with its developers. Dell, spurred on by the public complaints of A-list bloggers like Jeff Jarvis (here’s a recent post with links to the highlights of that story), has now become a case study for excellent corporate social media engagement.

One of the most entries into the field is Comcast. As my business partner Jay Deragon points out in his blog, Comcast customer satisfaction is in the dumps.

But Comcast is stepping out into social media, dealing with customers directly to cut through clunky corporate processes where possible, as Carter Smith (another biz partner of mine) details on his blog. If you’re active on Twitter, you may have seen @ComcastCares doing their thing.

Now I have no doubt that Comcast can start reversing their reputation for customer service, and that social media will be a key component in that strategy. But I do have to wonder about a couple of things:

Scalability – While Twitter has exploded in popularity, it is still very much an early adopter tool at this point. I asked Frank Eliason if what they’re currently doing on Twitter will be sustainable. He said he thinks so, but admitted, "The difficulty is having one voice with others assisting." If it were straightforward to replicate the customer service experience of dealing with someone like Frank vs. the typical customer service agent you get when you call in, Comcast wouldn’t be in the situation they are in the first place. Once people start realizing they can bypass the clunky phone process with a tweet to @ComcastCares, will Comcast be able to maintain the quality of experience there as it gets to be more than two or three people can handle?

The Digital Divide – Sure, Comcast is an ISP and a lot of their customers are online. But what about those who aren’t? Or what about those who are online, but not on Twitter? Not a blogger? How does Comcast engaging in social media improve the customer service experience for those customers? And if Comcast starts giving preferential treatment to bloggers and Twitterers, they run the risk of being accused of simply oiling the squeaky wheel. Do they really want to improve the customer experience, or just improve their visible reputation for customer experience?

Social media is a powerful tool for engaging customers and improving a company’s reputation. But a social media initiative undertaken for PR purposes can’t stand on its own — it has to be an integral part of more comprehensive changes at the company. Improving the experience of your company for bloggers and Twitterers is great, but if you don’t improve it for all your customers, it’s a house of cards.

Is Comcast prepared to make that kind of full organizational commitment? It will be interesting to watch.