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Best content from the best source handpicked by Shyam. The source include The Harvard University, MIT, Mckinsey & Co, Wharton, Stanford,and other top educational institutions. domains include Cybersecurity, Machine learning, Deep Learning, Bigdata, Education, Information Technology, Management, others.

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    Valuing Influentials Means More than Just Counting Connections




    Online influentials who provide sole or “exclusive” influence over consumers are the most valuable to companies.

    Marketers who want to determine the value of a particular online influencer need to look beyond just the size of a person’s network connections.

    That’s the finding from research conducted by Zsolt Katona  , assistant professor at the Haas School of Business, UC Berkeley.

    Conventional wisdom, reflected by influence-ranking sites such as Klout  , is primarily to count the number of a person’s connections to assess his or her ability to influence others.

    But Katona’s research has discovered that determining the value of a particular influencer is more complex, and that finding the value of an influencer depends on several underlying factors in the network structure of that individual with the target set of consumers.

    The full paper, Competing for Influencers in a Social Network  , was presented at the Marketing Science conference in Istanbul. Its key findings:
    • Influentials who are most valuable to a company for a particular target consumer or set of consumers are those who provide sole or “exclusive” influence
    • In other words, the most valuable person influences consumers who are not influenced by any other influentials online. A company that wants to invest time or resources in cultivating an influential person online should focus on those where the target consumers are being influenced in that product/service arena only by that person and not by anyone else.
    • Often, though, an influencer does not have an exclusive relationship with a set of target consumers. In these “non exclusive” relationships, influencers who are most valuable are those where the sought after consumer/set of consumers has a very small set of additional competing influencers.
    •  Interestingly, the next most valuable influentials are those who influence target consumers who have a very high number of additional competing influencers. The least valuable influentials? Those who influence target consumers who have a middle range of additional competing influencers.
    As for what defines small, middle and high numbers, Katona says they depended on the specific parameters set up by his model, but for other real-world applications “small, medium and very high” need to be considered as relative, not objective, until further research determines what exactly the numbers are in a specific setting.

    The full paper provides the research methods explaining why and how these network configurations play out.

    For example, the paper explains why influentials in a non-exclusive influence over a set of consumers who have a very high number of additional competing influencers are more valuable than those who reach consumers with a middlerange of competing influencers. 

    The reason: if the target consumer has a high degree of additional competing influencers, a company will not need to invest as much money or resources to reach those consumers because they already have so many incoming connections informing them about all the options and they will buy the product that is best for them regardless of the firm’s efforts.

    What, then, are the practical implications of this study for social media marketers?
    The most important one is that firms should not just look at the number of connections an influential has when determining how many resources to devote to that person. Instead, they need to find out what the target consumer market’s relationship is to the influential by taking into account their connections with any other competing influencers.

    Although widely available customer-influence network analyses sites and services like Klout do not take into account competing influencers and this overall network structures of influentials, Katona says that some telecom firms are now analyzing the connections between their customers and their competitor’s customers on their own, and he says that it won’t be long until other firms begin doing these analyses as well.

    View at the original source

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    How Making Robots Captivates Kids' Imaginations

    Building robots inspires such passion in high school seniors Violet and Kjersti that they've begun mentoring younger robotics teams to teach STEM skills -- and save their school's robotics program.


      How Making Robots Captivates Kids' Imaginations (Transcript)

      Violet: I think school would be a lot more engaging if we were asked to solve complex problems. Building a robot and seeing it run and seeing it complete tasks is definitely more satisfying than any schoolwork I've ever done. Getting an A on the test, that's cool, but seeing something I have built with my own hands move is way more satisfying.
      So I'll try connecting a one-ten-nine. I'll put a jumper underneath.
      Man: Yeah, just don't overlap them, right? Start with three.
      Woodie: I think a reasonable way to think about robotics is birthing a machine that can be over there and do something that you either taught it to do, or that you're commanding it to do now. But something that you created that's apart from you that does your bidding.
      Violet: So do you guys know how to test a motor with a battery?
      Girl: Not really.
      Violet: Okay, here.
      So I grew up in a really geeky family. My dad is one of those super geeks. He always showed me sci-fi movies and so he's the one who kinda showed me into what robots are.
      Kjersti: You could do it like that, or you could do it to the top here, so that way the hub would be on the outside.
      It was something completely new for me. It was something that I'd never heard about before, especially heard about kids being able to do. And it was really hard, which was something that was exciting for me, a challenge.
      Woodie: One of the things that makes robotics an ideal thing for young people to do is that that child obeying the parent's command is a real thrill. When you first see someone build something and they get it together and then they wiggle the joystick. "Wow, it works, it works!"
      Violet: I think the fact that I'm kind of a stubborn person contributed to me being a good robotics engineer. When I see a problem, I wanna find a solution, I wanna figure it out. And if I run into a few failures on the way, I'm not gonna let that stand in my way. I'm gonna keep trying at it and keep going until I've found a solution.
      Kjersti: Just feel over all of the little cables back here to make sure that none of them are loose or sticking out a little bit. Drive train, make sure that none of the chains are off, 'cause that's a problem that we've encountered.
      Some of the ways that we've gotten better at building robotics are just in very simple mechanical ways, like being really good at constructing simple things and knowing which screws to use in which situation, so that things don't fall apart later on when you're using your robot. And then other things are very elegant designs. You have to see the problem in front of you and go through a bunch of different designs before you get to the one that looks the best and functions the best.
      Violet: So one of the main parts of the game for this year is, you have to lift these rings up to different pegs and put them on the pegs. We use pulleys that are controlled by a winch. The lift comes up.
      We use rectangular tubing here, along with your average drawer slides.
      The way this robot moves around is the drive train right here,
      There's a chain connecting each of the motor to the wheels,
      We have two motors for each side,
      We have an IR, infrared seeker,
      This is what we call the brick,
      And actually, brick is where all our programming goes, and it has wires going up to all the sensors.
      The brick talks to the motors and tells them to run essentially.
      I think that that's pretty much our robot.
      Violet: I would like you guys to do, in this extra meeting time that we have, is try to see how many challenges you can complete.
      After last year, I started just looking back, thinking back to all the effort I had put into robotics and all the time I spent doing it. And I realized how much I had changed, how much I had grown more confident in myself.
      Okay, so for how about right now, you start from over here? And drive up and try to balance on the bridge.
      I wanted to give that to other people, so that's why I started mentoring robotics students, trying to get people to understand why this is such a great thing.
      Kjersti: The first thing I said to myself when I decided I was gonna be a teacher was that I wasn't gonna give them any answers, and I wasn't gonna build the robot for them.
      Girl: Because one to six was not fast enough, right?
      Kjersti: Yes.
      I try to be better at guiding them towards an answer using their thought processes instead of my thought processes.
      Check the sensor cables, so just go over these guys. Just pretty much make sure everything is plugged in and then--
      I'm teaching them things, but more than that, I'm giving them a real problem to solve and I feel like I'm really giving them the skills to accomplish this certain problem.
      Man: All set?
      Announcer: Looks like we have the checking now, all the teams are set for match number six, here in Daly City.
      Woman: Controllers please.
      Woodie: There is a lot of failure in robotics work, but it's not total failure and you don't feel like a fool. When you're going through the loops, designing something, the first time you try it, it probably didn't work and what that teaches you is how to do the next loop to get better and better.
      Announcer: You have less than one minute left. Four-four-seven-five in danger of tipping over.
      Kjersti: Learning the art of failing is sort of a key aspect of robotics because if you don’t know how to recover from the failure, then you're not gonna be able to build a robot that encompasses all those failures and turns it into something beautiful that works really well at what it does.
      Announcer: Six-zero-zero-one is moving very fast, flipping to block.
      Woodie: If you follow textbooks only, you think there's a set of problems at the end of the chapter that have unique answers. That's very, very unlike real life. So learning about how to fail and bounce back is a fundamentally important thing to know about life. And learning that the people that come back and try again are the ones that are gonna get ahead.
      Announcer: And that's a match, great match everybody.
      All:
      Violet: I think that robotics would be really good for those kids who just think school's a waste of time. I know a lotta kids who are really smart, but get bad grades 'cause they just don't see the point, and with something like robots, it's so captivating and exciting and addicting, obviously, that I think it would engage people a lot more and make people more willing to put more effort into their schoolwork.

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  • 08/13/13--19:25: Snakes on the brain 08-14
  • Snakes on the brain


    Using unusual example, HGSE's Steven Seidel shows how blending arts with joyful learning breeds successful teaching



    Seidel_YYM_1_605
    “We all live at the intersection of art and learning, and there’s always more to learn,” Steven Seidel told a group of educators at the Harvard Graduate School of Education   (HGSE) on Thursday.
    Seidel, director of the Arts in Education   masters program at HGSE, spoke in Askwith Hall about the lack of passion-driven learning in so many schools, and called for learning approaches that focus on joy, allowing students to be inspired and supported in their desires. “Nothing without joy,” a quote from the Italian educator Loris Malaguzzi (1920-94), is a guiding principle that Seidel would inscribe atop the school entrances.
    There had been much joy on display the previous evening at the kickoff of the second annual  professional development program for educators and artists presented by the Silk Road Project   in collaboration with the HGSE. At the Farkas Hall event, Seidel engaged in a passion-driven discussion with renowned cellist and Silk Road Project founder Yo-Yo Ma about how the arts can enhance learning.
     The conversation was followed (or perhaps continued) with a crowd-delighting musical performance by the Silk Road Ensemble, under Ma’s artistic direction. Affiliated with Harvard, the Silk Road Project explores connections between the arts and academics. The ensemble has performed at many schools, supporting its goal of promoting arts and education.
    On Thursday morning, Seidel asked 100 educators who came to HGSE for a three-day program called “The Arts and Passion-Driven Learning” to “learn with and learn from each other” and be open to new approaches. 
     He asked the educators, the vast majority of whom were classroom teachers who’d come from many states and several countries, how they defined “passion-driven learning.” He cited answers they had offered in their program applications: One teacher defined it as “a strong emotional connection to the subject matter,” while others described it as “being inspired” and learning “based on an inner drive.” Seidel asked the audience to pair up and discuss how the arts could be used to engage students, make connections, build community, and work collaboratively.
    After a few minutes of paired discussion, Seidel asked another question: “What is worth studying?” When he listed whales and the French Revolution, nearly every head nodded. When he cited snakes, there was some hesitation.
    Seidel described the inspiring work of second-grade teacher Jenna Gampel, sitting near the front, who used a snake-centric curriculum to advance learning goals and engage students at the Conservatory Lab Charter School  in Brighton.
    Gampel defined clear learning objectives, explained Seidel, including helping students “make and record observations about snakes” and “draw scientific illustrations of snakes.” Seidel showed a slide of different drafts from one of Gampel’s students who carefully drew a detailed, lifelike drawing of an anaconda.
    Gampel’s second-graders created an illustrated book called “What Snake Am I?” The book included text, drawings, and observations from students. Gampel also integrated literacy, noted Seidel, by exploring “how you take myths and misconceptions [about snakes] and get to another place” based on real information. Few animals have been so mythologized as snakes, Seidel added.
    Gampel’s creatively engaged students went far beyond myth-busting, said Seidel. He showed a music video her students made with the help of a songwriter. Borrowing from pop sensation Lady Gaga’s hit song “Born This Way,” the second-graders created an anthem of snake acceptance, “Snakes Are Born This Way  ,” which the Askwith Hall audience watched in toe-tapping appreciation.
    As one student sings in the video, snakes “are part of the world; don’t judge snakes by their looks.” The YouTube video combined dance, song, performance, fashion (with lots of kids wearing Lady Gaga-like large sunglasses), music, and, of course, knowledge about snakes. The pure joy of learning that Seidel had described earlier was displayed in abundance.
    Seidel showed a second video, this of a songwriter engaged in the meticulous, back-and-forth collaboration with Gempel’s students to write the lyrics for “Snakes Are Born This Way.” 
    Like so many creative collaborations, writing lyrics with enthusiastic young students seemed equal parts exasperation and exhilaration, as lines were suggested and then tossed out or embraced by the kids and the songwriter.
     Gampel’s students learned something about how music is built from the ground up through a painstaking, disciplined, but often joyful process.
    As Seidel’s example showed, there’s lots of engagement, connection, community, and collaboration to be had by mixing the arts with even the unlikeliest of academic topics, such as herpetology. What’s needed, Seidel emphasized, is a more open-minded approach to integrating the arts into curricula.
    Seidel closed by citing educator David Hawkins, who viewed academic disciplines as “a richly interconnected network of ideas … taken from many passages of experience.” Education should thus never be “a long march” ordered from above going in a single direction to some pre-determined place, said Seidel.
    Better to have learners zigzagging across disciplines, following their passions and the need to connect, as when Gampel’s class learned about snakes, writing, music, dancing, and the creative process by making a music video about woefully underappreciated snakes.

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    PROJECT-BASED LEARNING From Coverage to "Uncoverage!"
    Image credit: iStockphoto
    Let's have an honest conversation on the issue of coverage. Whenever I work with teachers, I always hear the genuine concern about coverage of material. And it's true -- most teachers, based on structures beyond their control, are forced to cover a lot of material in the year.
    AP teachers must cover world history and chemistry content to prepare students for the AP tests, a series of exams that call not only for knowing a lot of content, but also its application. Non-AP teachers also face the same issue of covering many standards in a short year. I work with teachers to build great PBL projects that focus on deeper learning, and I always hear, "I have so much content to cover this year that I don't have time to do a PBL project." Again, this concern comes from a real place. I've experienced it both as a student in the classroom and teacher in AP and PBL classrooms. However, I have a few responses for this common concern.

    Starting the Conversation

    "How’s the coverage going for you?!?"

    The typical story here is this. We have a lot of material to cover, either because the pacing guide calls for it, or because we mapped out our year to cover that material. We prepare our students for an exam that will occur in a week or two. We are successful in preparing them for that exam through a variety of lessons, lectures and instructional activities. Most students pass the test, but after the weekend or even weeks later, they can't remember the content. They are then forced to relearn or review content later. Sometimes we must take up class time to do this. In general, coverage doesn't ensure that the learning "sticks" and may even take away from time that we need to teach other content and skills.

    "Do you really cover everything?!?"

    Most teachers who cling to the excuse of coverage aren't actually covering everything. Because students have different individual needs and the character of a classroom changes every year, teachers differentiate and make adjustments to meet those needs. This means that some standards or learning objectives may not be given the content they need. I was guilty of this when I taught world history. I just didn't have time to do it all. However, teachers still make good choices here. They look at the standardized or AP tests and pick the content they'll hit during that year to make sure students are prepared. If Gothic literature or specific texts are frequently on the AP literature exam, I make sure to pick those texts. Let's just honor that fact that we make good choices for our students and yet may not cover everything we want to or need to cover.
    I admit these questions are somewhat crass and could be perceived as rude. However, I am simply trying to elicit an honest conversation on coverage of material. My personal opinion is that we use this excuse of coverage as a crutch when we, as good teachers, are actually not as committed to it as we think.

    Covering Your Bases with PBL

    If you are concerned about coverage of material as you build your PBL projects, consider these few ideas to alleviate your fears. They will help you focus on "uncoverage" and steer you more effectively toward deeper learning.

    1. Pick the Major or "Meaty" Content and Skills

    Some of our standards are easily taught and assessed in a limited time frame, while other standards and learning objectives require a length of time. This is either because of what the pacing guide dictates or because our teaching experience has told us so. The "meatier" content and skills are a great place to aim for deeper learning. They take time because that's often part of deeper learning, so why not use a PBL project?

    2. PBL Projects Uncover Multiple Standards

    In addition to "meaty" standards, teachers have targeted multiple standards for a PBL project. A PBL project can have a single-disciplined or multi-disciplined focus. There is space for teaching and assessing multiple standards. In addition, you can use a PBL project to "spiral" in standards you may have already targeted for continued practice and assessment.

    3. PBL Projects Require Critical Thinking

    It we want the knowledge to "stick," then we must have students think critically with it. When designing a good PBL project, we make sure that it simply isn't regurgitation of knowledge. If I see a PBL project going this way, then it might be a design flaw. It could be a problem with the driving question, the rubric or a number of other factors. Design with critical thinking in mind, and make sure the PBL project demands it.
    There are of course other reasons that PBL projects work, and there is research to support it. I think we need to stop using the excuse of "coverage," first because it may not even be an honest excuse, and second because it isn't working. Let's do what's best for our students and focus on "uncoverage" by creating PBL projects and units that focus on deeper learning of the content, where students remember the material, think critically with it, and apply it in new contexts.
    What are your strategies to reframe the conversation of coverage to "uncoverage?"

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    Organs-on-chips evaluate therapies for lethal radiation exposure

    Wyss Institute’s goal is to improve America’s ability to respond to nuclear radiation incidents



    lung-chip-605

    team at the Wyss Institute for Biologically Inspired Engineering   at Harvard University has received a $5.6 million grant from the United States Food and Drug Administration (FDA) to use its organs-on-chips technology to test human physiological responses to radiation and evaluate drugs designed to counter those effects. The effort will also be supported by a team in the vascular biology program at Children’s Hospital Boston.
    The multiyear project will investigate whether organs-on-chips — tiny, microfluidic devices that are lined by living human cells and mimic complex organ physiology — can be used instead of animals to evaluate the efficacy and safety of medical treatments for radiation sickness, or acute radiation syndrome (ARS). Animal models often fail to accurately predict human responses, and human subjects cannot be tested with exposure to lethal radiation.
    ARS occurs when the body receives a high dose of radiation, usually over a short period of time. Symptoms range from loss of appetite, fatigue, fever, nausea, vomiting, and diarrhea to seizures, coma, and death. The project is part of the FDA’s Medical Countermeasures Initiative (MCMi), which it launched in 2010.
    “One of the fundamental goals of the MCMi is to ensure that we are prepared to respond effectively to acts of terrorism that may involve radiological or nuclear attacks, and to incidents such as the Fukushima nuclear disaster in Japan in 2011,” said Luciana Borio, head of the FDA program. “We have a lot to learn about the human physiological response to radiation, and are excited to explore the potential of the Wyss Institute’s novel human organs-on-chips in filling that knowledge gap in a safe and cost-effective way.”
    Combining microfabrication techniques with modern tissue engineering, lung-on-a-chip offers a new in vitro approach to drug screening by mimicking the complicated mechanical and biochemical behaviors of a human lung. This extended version of the video includes Wyss Institute findings when its researchers mimicked pulmonary edema-on-the-chip.
    Earlier this year the institute’s lung-on-a-chip received the 3Rs prize from the U.K.’s National Centre for the Replacement, Refinement, and Reduction of Animals in Research (NC3Rs). The award followed a landmark publication inScience Translational Medicine   demonstrating the team’s success using the lung on a chip to model human pulmonary edema (commonly known as fluid on the lungs) and to test potential new drug therapies under development.
    “We currently have over 10 different organs-on-chips in development, and are excited to work with the FDA to explore a new way to rapidly identify radiation countermeasures without having to rely on animal studies,” said Wyss Institute Founding Director Donald Ingber, who leads the organs-on-chips effort at the institute.
    The FDA-funded project will study three organs on chips. The three devices mimic the structure and physiology of human bone marrow, gut, and lung. These organ systems are the most susceptible to the toxic effects of radiation in humans, because of exposure to airborne particulates in the case of the lung, and extremely high cell turnover rates in the cases of the gut and bone marrow.
    “Our organs on chips enable us to investigate how specific human cell types and organ systems respond to radiation — something very difficult or impossible to mimic in animal studies,” said Wyss senior staff scientist Anthony Bahinski  , who is helping lead the project. The effects of radiation and organ-level responses to potential radiation therapies can be observed in real time; the microdevices, about the size of a memory stick, are made of a clear, flexible polymer and can be attached to sophisticated imaging equipment.
    The lung-on-a-chip re-creates the way the human lung physically expands and retracts when breathing, and the gut on a chip mimics the peristaltic motions of the gut. This ability to replicate the physical microenvironment of living organs enables the organs on chips to recapitulate functions with a fidelity not possible in conventional culture systems, and it represents a key advantage of these novel bioinspired microtechnologies.
    The bone marrow chip employs a unique approach to organ-chip design in which the team uses tissue engineering to form a whole bone with an intact marrow in vivo — and then surgically removes it and places it under microfluidic conditions in the laboratory. From there it can undergo testing in response to radiation and radiation therapies.
    “We should have a much better understanding of how our bones, intestines, and lungs respond physiologically to radiation and radiation therapies at the conclusion of this project,” Bahinski said.
    In addition to the FDA, the Wyss Institute acknowledges support that led to the development of the organs-on-chips technology from the Defense Advanced Research Projects Agency and the National Institutes of Health.


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    Are VCs losing interest in social? This study says yes

    Girl_with_computer_emerging_technologies_social_media
    VCs are cooling off their social media fervor. A new study out today surveyed hundreds of investors around the globe. VC’s in 11 out of 13 countries had less confidence in the social networking/new media sectors than last year. That dip was even more dramatic for the US, with VC’s ten percent less sure about social then they were in 2012.
    The National Venture Capital Association conducts the “Global Venture Capital Confidence Survey” every year with Deloitte.  They ask general partners at different sized firms from the Americas, Europe, the Middle East, and Asia Pacific how confident they feel about a ton of sectors — clean energy, mobile, cloud computing — and geographies — domestic economy, global economy, emerging markets. This year’s survey took place in May and June 2013 and 35 percent of the responses came from investors in the States.
    There’s a lot of interesting factoids to be found in the flood of numbers, but the stat about VCs losing confidence in social jumped out at me. It mirrors a trend others have noted: the social media bubble is quietly, slowly, timidly deflating. This latest NVCA report shows that confidence is still high in social media compared to other sectors — it’s just less high than it was last year.
    Social is not going out in a big pop, and it’s not disappearing anytime soon, but it’s also not what VC’s look to invest in first. CBInsights, a research company that studies VC investment trends, found that in the second quarter of 2013, social media companies got only two percent of VC Internet funding. They’re getting a much smaller piece of the puzzle now than they’ve seen in past years.
    So why isn’t social the hot kid on the block anymore? I have a few theories: Facebook’s IPO was a bust, the market has gotten saturated, and there’s perpetual questions over mobile monetization of social platforms.
    Facebook’s face flop of a public offering made people question whether its valuation was founded on real earning potential. Investors got nervous about social’s money-making potential. And given that Facebook is the biggest social beast of them all, investor anxiety may very well have informed decisions about funding smaller start-ups focused on social.
    The market has gotten saturated, some people are tired of social, and there’s a cultural pushback ranging from mocking social media job titles to compiling lists of how social is ruining your life. How many networks can a person possibly join?
    And as always, there’s the struggle to monetize social networks on mobile. Facebook andTwitter have gotten small pieces of the mobile ad pie, and Instagram has no mobile monetization plan. Granted, Facebook showed a possible turnaround with its recent earnings report, but it’s by no means out of the woods.
    As always looking forward, time will tell whether VC interest in social media picks back up again, or whether they’ve moved on to a new sector love. Last I heard, VCs were the Romeo to cloud computing and big data startups’ Juliet.
    [Image courtesy Wikimedia]

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  • 08/15/13--06:32: The idea maze 08-15

  • The idea maze
    The pop culture view of startups is that they’re all about coming up with a great product idea. After the eureka moment, the outcome is preordained. This neglects the years of toil that entrepreneurs endure, and also the fact that the vast majority of startups change over time, often dramatically.
    In response to this pop culture misconception, it has become popular in the startup community to say things like “execution is everything” and “ideas don’t matter”.
    But the reality is that ideas do matter, just not in the narrow sense in which startup ideas are popularly defined. Good startup ideas are well developed, multi-year plans that contemplate many possible paths according to how the world changes. Balaji Srinivasan   calls this the idea maze  :
    A good founder is capable of anticipating which turns lead to treasure and which lead to certain death. A bad founder is just running to the entrance of (say) the “movies/music/filesharing/P2P” maze or the “photosharing” maze without any sense for the history of the industry, the players in the maze, the casualties of the past, and the technologies that are likely to move walls and change assumptions.
    Imagine, for example, that you were thinking of starting Netflix back when it was founded in 1997. How would content providers, distribution channels, and competitors respond? How soon would technology develop to open a hidden door and let you distribute online instead of by mail? Or consider Dropbox in 2007. Dozens of cloud storage companies had been started before. What mistakes had they made? How would incumbents like Amazon and Google respond? How would new platforms like mobile affect you?
    When you’re starting out, it’s impossible to completely map out the idea maze. But there are some places you can look for help:
    1) History. If your idea has been tried before (and almost all good ideas have), you should figure out what the previous attempts did right and wrong. A lot of this knowledge exists only in the brains of practitioners, which is one of many reasons why “stealth mode” is a bad idea. The benefits of learning about the maze generally far outweigh the risks of having your idea stolen.
    2) Analogy. You can also build the maze by analogy to similar businesses. If you are building a “peer economy” company it can be useful to look at what Airbnb did right. If you are building a marketplace you should understand eBay’s beginnings. Etc.
    3) Theories. There are now decades of historical data on tech startups, and smart observers have sifted through to develop theories that generalize that data. Some of these theories come from academia (e.g. Clay Christensen) but increasingly they come from investors and entrepreneurs on blogs.
    4) Direct experience. A lot of good startup founders figure out the maze through direct experience, often at work. The key here is to put yourself in interesting mazes and give yourself time to figure it out.
    The metaphor of a maze also helps you think about competition. Competition from other startups is usually just a distraction. In all likelihood, they won’t take the same path, and the presence of others in your maze means you might be onto something. Your real competition – and what you should worry about – is the years you could waste going down the wrong path.


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    The bubble around talent and human capital management is too big

    After years of dealing with dreary HR software, like payroll systems and employee record management, it must be more tantalizing for corporations to think about talent management, or human capital management (HCM), fresh terms applied to innovative approaches around old business processes, sparking entire new software industries in the past several years, and with them, an unusually overwrought investment thesis.
    To begin with, the big enterprise software companies put the “capital” in human capital management when SAP purchased SuccessFactors in late 2011 for $3.4 billion, Oracle responded by acquiring Taleo in early 2012 for $1.9 billion, and IBM plucked Kenexa at the end of last year for $1.3 billion.
    The spindrift doesn’t end there. Workday, the darling of cloud-based HR software (and whose success may have provided some impetus for the aforementioned acquisitions), boasts a market cap of more than $12 billion, less than a year after its IPO. In May, Toronto-based Halogen Software  , another hot cloud-based HR software startup, raised $55 million in its IPO  , and now has a market cap of over $300 million. Santa Monica-based Cornerstone  , an unsung leader in HCM, has a market cap of $2.75 billion.
    Just this week, SilkRoad   (the HCM company, not the black market drug trafficking site  ), raised a Series D round of $16 million  , bringing the company’s total raised capital to $145 million. SilkRoad CEO John Shackleton says the latest round was bridge funding from existing investors, and that he’ll be seeking another $35 million from new investors in the next year or so. SilkRoad is also said to be considering an IPO, which Shackleton confirms, but he obviously won’t discuss timing.
    In other words, there is a limitless reservoir of capital helping fuel the reinvention of a very old software market, much of it being driven by the potential of social, analytics and mobile to change how we recruit, retain, train and manage talent.
    Most of this new breed of software is being run in the cloud. “It would be hard to find one [HCM product] that isn’t SaaS,” says Paul Hamerman, Forrester vice president and principal analyst of business applications. Forrester customer surveys show that HR and CRM are the top SaaS applications for the enterprise.
    The cloud makes it much easier for organizations to build off core HR systems (sometimes that’s just a payroll platform), adding components like performance management, learning management, employee onboarding, and recruitment software, as needed. In the past few years, the HCM vendors have been building or acquiring missing components in an attempt to build an integrated suite.
    Dr. Katherine Jones, senior manager and lead analyst at Bersin by Deloitte, compares this to ERP 20 years ago. “Best of breed didn’t work,” she says. “The integrated suite is what customers are interested in, and not just in theory.” Organizations want that holistic, analytical view of employees, with a unified data model, and that requires integration between HCM components.
    SilkRoad, which serves 1,700 small and medium-sized businesses (it counts L’Oreal, eBay, and Clear Channel Communications as customers), has such an integrated cloud suite, cobbled together through organic development and acquisitions, although most analysts, from Gartner to Forrester to Bersin to Constellation Research, ding the suite for its lack of harmony between components, an area that CEO Shackleton says is being addressed with Point, a front-end user interface. SilkRoad gets high marks from all of the same analysts for its flagship product, RedCarpet, which provides employee self-service onboarding (for example, enrolling in company health plans, and other administrata).
    But SilkRoad, like other talent management firms, is also trying to make its mark in the sub-strata of “social” HCM, especially in employee recruitment, one of the hottest areas of development  . Companies are “looking for people who have a job, but don’t have a resume on the street,” says Shackleton. The software’s two main functions include aggregating social network data to target skills and expertise, as well as helping companies build a brand on social networks that attracts talent.
    Even after an employee is hired, there’s data to share internally — introducing them to a workgroup team, sharing skills and capabilities that are documented not just in the hiring process, but from the data available on social networks, and matching them up with training opportunities. Shackleton says that as collaboration flourishes inside a company, informal org charts can even begin to emerge.
    Forrester’s Hamerman says that the social aspect isn’t all that far along, however, and the traditional vendors in particular have struggled here. Oracle, he points out, acquired SelectMinds  , even after purchasing Taleo, for this reason. There is, he adds, a new wave of vendors with social DNA, like JobVite  . LinkedIn Recruiter   also comes to mind.
    Bersin’s Jones says that the key HCM buying criteria has become user interface, and the degree to which users can exploit a suite’s analytics to get instant information, simply because those are the aspects that drive employee adoption.
    Unfortunately all of this excitement isn’t without peril and the usual market froth. The uneasy truth is that investment math just doesn’t add up. Consider that the market for HCM in 2013 will be $4 billion, according to IDC, not that much higher than SAP’s purchase price for SuccessFactors. Looking further, Gartner sizes the HCM market at $8.3 billion in 2014 and $8.8 billion in 2015. IDC predicts $11 billion in 2016… or slightly under Workday’s entire market cap.
    This feels like a bubble waiting to be popped.
    SAP spokesman Jim Dever responds that SuccessFactors is now managing all of the company’s cloud business — CRM, Financials, HCM — as well as Business ByDesign, SAP’s cloud suite for mid-sized organizations. Forrester’s Hamerman adds that SuccessFactors and Ariba make up 90% of SAP’s SaaS revenue. In other words, SAP acquired SuccessFactors for its cloud DNA and customer base, as much as its performance management software.
    NetSuite and Workday elected not to offer official comment on market size projections, and Oracle didn’t respond to my request for comment.
    SilkRoad claims its addressable market (companies up to 1,000 people) is more like $24 billion, and that very few of the main HCM players are going after such buyers. SilkRoad said it was going to pour much of last year’s $35 million of Series C funding into international expansion, and Shackleton says that in China, for example, one-third of the economy will come from entrepreneurial, private industry.
    Fine. $24 billion. $11 billion. Whatever it is, it’s simply not enough.

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    THE SHOCKING STATS ABOUT WHO'S REALLY STARTING COMPANIES IN AMERICA


    FULLY A THIRD OF VENTURE-BACKED COMPANIES THAT WENT PUBLIC BETWEEN 2006 AND 2012 HAD AT LEAST ONE IMMIGRANT FOUNDER AT THE HELM. ARIANNA HUFFINGTON AND OTHER PROMINENT ENTREPRENEURS ON WHY THE U.S. NEEDS TO GET CREATIVE ABOUT IMMIGRATION POLICY.

    What do Google’s Sergey Brin  , eBay’s Pierre Omidyar  , and Tesla Motors’sElon Musk all have in common? Each of these serial entrepreneurs who founded companies that have market caps in the tens or hundreds of billions--employing tens of thousands of workers--were born outside the U.S. From Yahoo to Facebook and LinkedIn, each of these innovative companies that have played such a large role in the U.S. economy had at least one founder that was born abroad and then emigrated to the United States.
    Immigrants today are more than twice as likely to found businesses as their native-born counterparts and are responsible for more than 25% of all new business creation and related job growth  . And while some of these immigrant-led businesses are next-generation startups and small businesses, many actually top the charts when it comes to America’s largest companies. 
    Currently, more than 40 percent of Fortune 500 companies   were founded by immigrants or the children of immigrants, according to a study by The Partnership for a New American Economy  , a group of governors and business leaders launched by New York City Mayor Michael Bloomberg and Australian media heavyweight Rupert Murdoch. 
    Yet today, more than 200 years after the U.S. declared independence and threw open its doors to immigrants looking for freedom and a chance to realize their potential, the land of opportunity has been inching its doors shut.
    A recent study   put out by the National Venture Capital Association (NVCA) found that venture-backed companies with at least one foreign-born founder are responsible for an increasing amount of IPOs and subsequent job creation.
     The study concluded that 33% of venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder   at the helm. The study also found that those public, venture-backed companies with at least one immigrant founder represent a market capitalization of $900 billion.
    These revenue-generating machines are an enormous boost to the U.S. economy--contributing to the GDP, paying taxes to help lower the U.S. debt, creating domestic jobs (immigrant-founded, venture-backed public companies employ approximately 600,000 people globally with the majority of jobs created in the U.S.) and helping to lift up the standard of living overall.
    When I asked Mark Heesen, president of NVCA, why immigration reform is so important not only altruistically for immigrants looking for opportunity but actually selfishly for the U.S. economy, he said: “As Congress debates comprehensive immigration reform, understanding the contributions of high-skilled, foreign-born entrepreneurs to our country is imperative to ensuring meaningful changes to our system. 
    These individuals have founded many of America’s most successful companies, keeping jobs, market value, and innovation here in the United States. Our policies must not only accept, but welcome the next generation of immigrant entrepreneurs who are making even greater strides in starting and growing amazing companies.”
    But let America’s immigrant entrepreneurs speak for themselves. From the Greek-born founder of The Huffington Post to the Romanian-born CTO of SAP turned founder of Tidemark, the six entrepreneurs below share one important thing: a unique perspective and way of seeing the world that only growing up on the outside can bring.

    CHRISTIAN GHEORGHE: ROMANIAN-BORN NYC LIMO DRIVER TURNED FOUNDER AND CEO OF TIDEMARK

    Christian Gheorghe, founder and CEO, Tidemark  , who was previously the CTO and SVP at SAP, immigrated to the U.S. from communist Romania with a master’s degree in computer science and mechanical engineering. To make ends meet--and learn English at the same time--Gheorghe took a job in NYC as a limo driver. But this highly educated and hardworking immigrant didn’t let language barriers or low-skilled jobs set him back--they only motivated him.
    "In retrospect, not knowing English when I first arrived at the modern version of Ellis Island--a brightly lit immigration room at JFK airport--was a blessing in disguise. Freedom, the first word I ever learned by listening to Pink Floyd records in communist Romania before escaping to America, was one of the few English words I did know and muttered to the immigration officer when he asked me, ‘Why are you here?’
    “I learned later what great things an open and benevolent American immigration policy can really do for oppressed people such as myself. One thing is for sure: At that moment, as the wall was coming down, I was given a chance to be free. Freedom, as it turns out, has shaped everything in my life since I was allowed to immigrate to America.
    “From learning how to drive a limo in NYC to make ends meet, to later writing software and starting companies to realize the vision I have for analytics for the many, a common thread emerges. The most amazing thing that America has given to me is the gift of freedom to build something from nothing, to find and work with teams of people that share common values, and to build and create value that matters,” says Gheorghe.

    IQRAM MAGDON-ISMAIL: ZIMBABWE-BORN, U.S. BRED, COFOUNDER OF VENMO

    Born in Zimbabwe to parents of Sri Lankan descent, Magdon-Ismail said his experience as an immigrant in the U.S. was very different from the experiences of his friends who immigrated to the U.S. and weren't lucky enough to become citizens.
    “I came to America when I was in the 7th grade. I feel very lucky to have become a U.S. citizen before I went to college--I was automatically granted citizenship when my mom became a citizen because I was under 18. Some of my friends in college didn't have citizenship status, and I found myself planning my career differently. I didn't require a special visa to stay and work in the U.S., whereas some of my college friends did. I knew after I graduated, the doors were wide open for me. 
    I was free to explore, and start my own company. Some of my friends were dependent on company sponsorship in order to stay in the U.S. This seems like a good position for companies with enough wherewithal to sponsor students, yet still represents a minor inequality because the spectrum of companies I could work for versus some of my friends was slightly different.
    “Venmo   welcomes immigrants. They bring unique insight to our company because of their diverse experiences. I was immersed in a very different environment growing up and going to school in Zimbabwe. My immigrant perspective helps Venmo consider different markets, and a lot of the social encounters I had outside the U.S. continue to inspire some of the innovation you see in our product today. Nowadays, companies like Venmo can quickly reach global audiences. We want people from everywhere in the world to join our team.
    “It would be nice if some of our immigration reform focused on helping international students pursue their dreams in America. I have met lots of bright students forced to leave the country because they didn’t have appropriate working status. America is the land of opportunity, and international students with lots of potential are like all other students that attend U.S. universities--we should do whatever we can to keep these amazing people here.”

    ARIANNA HUFFINGTON: GREEK-BORN, BRITISH-EDUCATED, AMERICAN MEDIA MAVEN

    Arianna Huffington, the Greek-born entrepreneur and founder of The Huffington Post  --which was sold to AOL for $315 million in 2011--brought with her the values her mother instilled in her when she was a young girl growing up in Greece as she immigrated to London and then the U.S., first moving to New York and later settling in California. 
    The ambitious socialite turned political candidate turned businesswoman and media maven now runs one of the most influential and well-read publications in the U.S.--a publication that has an entire section dedicated to the topic of immigration.
    “In the preamble to the Constitution, we are told that America is constantly moving toward a more perfect union, and the 40 million immigrants in the United States are a central part of that never-ending journey. Nowhere is that more evident than in our community of immigrant entrepreneurs.
    “When I was growing up in Athens, my mother would tell me, ‘Failure isn't the opposite of success; it's a stepping stone to success,’ and when I came to America, I was given many opportunities to fail my way to eventual success. But my story is just one of millions. And it falls to all of us--especially those of us who have come here and started businesses--to do whatever we can to make sure the same opportunities we've enjoyed are there for the immigrants of today and tomorrow.”

    RENAUD LAPLANCHE: FRENCH SAILING CHAMPION TURNED FOUNDER AND CEO OF LENDING CLUB

    Renaud Laplanche, the French-born serial entrepreneur who in addition to founding two successful companies also happens to be a two-time French sailing champion and an Ernst & Young Entrepreneur of the Year, initially came to the U.S. as part of a one-year assignment with the New York law firm Cleary Gottlieb. But halfway into the assignment, the entrepreneur left the firm to found TripleHop Technologies, a leading software firm that was acquired by Oracle in 2005. 
    But he didn’t stop there. In 2007, Laplanche founded Lending Club   because his perspective of consumer credit growing up in France was vastly different than consumer credit in the U.S.--and he wanted to bring a friendlier credit model to his new home in America.
    “My cultural background played a key role in the genesis of Lending Club. As an immigrant, I was not familiar with U.S. consumer credit and was shocked when I realized that credit card companies charge 18% interest rates. I was looking at this with a fresh pair of eyes because there is no such thing as credit cards in France, and consumer loans are a lot more affordable. I think most American consumers got used to the idea of paying high interest rates on credit cards, but for me it was something really new and that made me question the efficiency of the system and gave me the idea for Lending Club.”

    PETER WEIJMARSHAUSEN: DUTCH FOUNDER OF SHAPEWAYS

    Dutch-born Peter Weijmarshausen founded Shapeways   in 2007 within the Philips Electronics Lifestyle Incubator. Three years later, the immigrant entrepreneur left the incubator after securing venture funding for his 3-D printing marketplace, which is headquartered in New York. Now, Weijmarshausen is working to bring manufacturing back to the U.S., enabling a community where people can create, share, buy, and sell their own 3-D-printed designs.
    "A company is nothing without its people and, as it stands, the freedom for employees to work wherever best suits them is not always supported by international immigration laws. Shapeways was started in the Netherlands and, after three years, we decided to move our headquarters to New York, which presented me immediately with the challenge of immigrating to the United States. We're an international startup with a team still in the Netherlands and offices and a factory in New York. 
    The team has roots from all over the world, and in the end we've managed to work within the bounds of the existing processes. But making them easier and more flexible will help Shapeways and other companies grow and compete in an increasingly global economy and internationally expansive workplace, both of which have been enabled by new information technologies."

    PHIL JABER: FOUNDER OF PHILZ COFFEE

    Phil Jaber, the founder of the hugely popular Bay Area-based Philz Coffee  , says the values he grew up with in the Middle East are the same values that have led to his success in America. 
    With 13 coffee shops spanning San Francisco and the Bay Area, Philz employs roughly 300 people and single-handedly fuels many of area’s entrepreneurs, startup founders, and tech giants from Facebook--which has a Philz coffee shop at headquarters--to Virgin America--which serves Philz coffee on its flights.
    “I immigrated to the United States in the 1960s because I was looking for a better life. My older brother was already living in California and had opened his own business--so I moved out here and helped him around the shop. But from an early age, I knew I wanted to open my own business.
    “Running a business isn’t just about the money. To be successful in business, you must really love what you do and you must treat people well--whether they’re your team members or your customers. My business is all about word of mouth--one person tells another person and quickly word spreads. So it’s important to treat each person the way you would want to be treated--after all, we all come from under the canopy of heaven.” Canopy of Heaven is coincidentally the name of one of the flavorful brews of coffee at Philz.
    “Before opening my first shop, I visited more than 1,100 coffee shops to observe what worked and what didn’t work--I wanted to make sure that the culture and environment I was fostering at my coffee shop was a diverse, culture-rich, and welcoming one. From a young age growing up in Ramallah [on the West Bank], I learned how to live with and respect people of all cultures, and I wanted my coffee shops to reflect that. At Philz, we work to foster an environment that builds culture and community--an environment that helps people connect with each other.”
    As I sat with Phil at his 24th Street location in New York, it was clear that his coffee shops were hubs of connection, collaboration, and diversity, as he pointed out a group of tech entrepreneurs drinking coffee during a brainstorming session, introduced me to a local doctor, and smiled looking at the young couple dancing in line to the café music.
    “My heritage, culture, and family have played a big role in the way I run my shops,” Phil says, pulling out a laminated quote his father had written for him more than a decade ago that read: “Let the life I live speak for me."

    LET THEM IN.

    As Americans, we all have immigrant friends who have personally made our lives richer. And we’ve all heard their stories of going through the immigration process, of the lengthy and tiresome process of obtaining an H-1B visa and eventually becoming citizens. We’ve heard too many times their worried voices when discussing whether or not they’d be able to stay in the country if they wanted to quit their job and start their own business—the same risks we as citizens are encouraged to take--or what would happen if they got laid off and were out of a job for more than a month. Would they be sent back home?
    As the daughter of parents who emigrated from Iran and started their lives in the U.S. from scratch, literally bringing with them only two suitcases and the clothes on their back, I understand too well how much hardworking and educated immigrants like my parents really want to be here, how hard they will work to succeed, and how much our country will benefit as a result of letting them in.

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    Sustainability? Don’t Go It Alone


    At the recent Sustainable Brands conference, one message was clear: individual corporate sustainability efforts aren’t enough to halt climate change. The solution: collaborative partnerships — even between competitors.
    Sustainable Brands   hosted its seventh annual community gathering in Paradise Point, San Diego during the first week of June. A key theme, repeated at many presentations, was succinctly framed by Sally Uren, acting chief executive, Forum for the Future: “pioneering companies are hitting the limits of what they can do alone.”
    To address sustainability-related issues, these pioneers — and a growing number of other companies — are becoming more collaborative. Not merely with suppliers, but with competitors as well. The complexity of business problems connected with sustainability is demanding collective action. Below is a short list of some collective action efforts that, while not new, are gaining momentum in the corporate sector.
    1. Creating or participating in industry coalitions to set standards and organize solutions. 
    After creating a proprietary tool to gauge energy use across its many properties, Hilton Hotels realized that its procurement managers didn’t have enough information to effectively compare products with different levels of sustainability certification. 
    How should these buyers compare a product that has stringent green certifications but higher upfront costs with a similar product that has lower stringent certification and less upfront costs? 
    Hilton executives realized that the company couldn’t solve this type of complex issue on its own. So, the company worked with BSR to launch the Center for Sustainable Procurement   to conduct research and share information to help procurement managers (its own and others) make more informed purchasing decisions.
    2. Establishing strategic partnerships to address problems companies can’t tackle alone. The automotive industry, facing government mandates to develop more fuel-efficient cars and trucks, is seeing a rising number of strategic partnerships between rivals, as many automakers recognize that they can’t easily achieve alternative fuel car sales targets by acting alone. GM and Honda recently announced a partnership to develop hydrogen fuel cell technologies   that they expect to have in commercial production by 2020. Toyota and BMW have a similar joint R&D effort underway, as do Ford, Daimler and Renault-Nissan.
    3. Advancing public policies that promote sustainable societies. At the Sustainable Brands conference, Bill Shireman, president and CEO of Future 500, argued that companies should support public policies or make commitments to public advocacy groups like BICEP (Business for Innovative Climate and Energy Policy)   to advance societal goals that go beyond what any one company can do. 
    A recent post entitled Corporate Sustainability Is Not Sustainable   by Harvard Business School Professor Mike Toffel and Auden Schendler, vice president of sustainability at Aspen Skiing Company, makes a similar plea for companies to participate in these types of partnerships:
    The reality is that even if one company eliminates its carbon footprint entirely — as Microsoft admirably pledged to do — global warming roars on. That’s because the problem is too vast for any single business: [S]olving climate change means we must switch to mostly carbon-free energy sources by 2050 or find a way to affordably capture carbon dioxide emissions, both monumental tasks.
     Even several very large companies cannot, on their own, get us there. In fact, historically, no big environmental problem — from air and water pollution to acid rain or ozone depletion — has ever been solved by businesses volunteering to do the right thing.

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    Indian Transnationals Expected to Increase Their Global Footprint


    Multinational-law-firmAccording to a recent ranking of India’s most internationalized companies conducted by the Indian School of Business (ISB) and Brazilian business school Fundação Dom Cabral (FDC), Indian transnationals are likely to increase their overseas footprint in the coming years.
     “Despite the general dip in aggregate overseas FDI [foreign direct investment] in 2012 … top Indian transnational corporations [TNCs] continued their aggressive globalization march by showing double-digit growth in international revenue, assets and employees,” the study notes.
    Raveendra Chittoor , a professor of strategy at ISB and author of the study, says the extent of globalization “will only increase further as India becomes more integrated with the rest of the global economy and as Indian companies gain more confidence by acquiring experience in overseas markets.”
    Chittoor points out that unlike multinationals from developed countries — which typically set up green-field ventures overseas — Indian firms have become transnational primarily through acquisitions  . “This is because they are lagging [in their international operations] and if they take only the organic route, they will not be able to catch up fast.”
    The ISB-FDC study is based on the transnationality index (TNI) developed by the United Nations Conference on Trade and Development (UNCTAD). The TNI uses a combination of three measures to determine the degree of internationalization of companies — percentage of international assets, percentage of international revenues and percentage of foreign employees. The average of these three measures reflects the TNI of the firm.
    Chittoor says that the multidimensionality of the index takes into account the variation in the three indicators across industries and sectors. “For instance, many companies could simply be exporters generating foreign exchange, but not have any assets or employees overseas. The TNI, therefore, truly reflects the degree of internationalization of any organization.”
    According to the study which has been published in ISB Insight, the research quarterly of ISB, the top 10 Indian companies that have international assets more than $500 million “have a TNI of more than 50%.” This is comparable to that of the top transnational corporations from the developed countries. “However, the majority of the companies on our list are affiliated to business groups. This is a phenomenon unique to emerging economies,” says Chittoor, adding that research shows that “conditions in the emerging economies are more conducive for business groups to develop and prosper.”
    The study also suggests that India’s top transnational companies have a balanced presence in both developed and developing markets. This is in line with multinationals from other emerging markets. “These emerging market multinationals tend to internationalize faster and prefer higher risk entry modes such as acquisitions,” the study notes. “They follow unconventional internationalization paths, sometimes preferring to expand first into developed markets rather than into other developing economies. They display risk-taking behavior and do not hesitate to make large investments and resource commitments even in the initial phases of their international expansion.”
    But how do India’s top transnational firms compare with global multinationals? Chittoor points out that the world’s top 100 non-financial transnationals earned 83% of their revenues, owned 79% of their assets and employed 61% of their employees outside of their home country in 2011. In contrast, the top 15 Indian transnationals with assets of $500 million or more earned 75% of their total revenues from international operations, held 57% of their total assets overseas, and employed 20% of their total workforce abroad. Also, the average TNI score of 74% for the top 100 global TNCs is higher than the TNI score of all the Indian TNCs except for the state-owned petroleum firm ONGC Videsh, which holds the top rank with a TNI of 77%.
    “Our analysis indicates that while the proportion of international assets and revenues of top Indian TNCs is more or less similar to that of top global TNCs, when it comes to the number of foreign employees, the number for Indian companies is very low,” says Chittoor, adding that “We expect this gap to reduce as India becomes more integrated with the rest of the world.”


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    Consumer demand for gold up 53% in Q2 2013 led by strong growth in China and India



    The latest World Gold Council Gold Demand Trends report, which covers the period April-June 2013, highlights how recent falls in the gold price have generated significant increases in demand, most notably from consumers in China and India - by far the biggest markets for gold - compared with the same time last year.

    Globally, jewellery demand was up 37% in Q2 2013 to 576 tonnes (t) from 421t in the same quarter last year, reaching its highest level since Q3 2008. In China, demand was up 54% compared to a year ago; while in India demand increased by 51%. There were also significant increases in demand for gold jewellery in other parts of the world: the Middle East region was up by 33%, and in Turkey demand grew by 38%.

    Bar and coin investment grew by 78% globally compared to the same quarter last year, topping 500t in a quarter for the first time.  In China, demand for gold bars and coins surged 157% compared with the same quarter last year, while in India it jumped 116% to a record 122t. Taking jewellery demand and bar and coin investment together, global consumer demand totalled 1,083t in the quarter, 53% higher than a year ago.

    For the tenth consecutive quarter, central banks were net buyers of gold, purchasing 71t, which reinforces the trend that began in Q1 2011.  

    Demand in the technology sector was stable once again, totalling 104t, a rise of 1% on last year.

    Meanwhile gold held in gold-backed ETFs, which in 2012 accounted for just 6% of the world’s gold demand, fell by just over 400t, driven by hedge funds and other speculative investors continuing to exit their positions.  This was predominantly in the US.

    Overall, demand for gold in Q2 2013 was 856t, down 12% on a year ago.

    On the supply side, recycling fell 21% in the quarter while mine production was 4% higher than a year ago, at 732t. In total, supply was 6% lower than a year ago.

    Marcus Grubb, Managing Director, Investment at the World Gold Council commented: “The second quarter continued the trend that we saw in the first, of a rebalancing in the market, as gold coming onto the market from ETF sales met with a wave of demand for bars and coins, as well as jewellery. 

    This surge in bar and coin investment was a common theme in key markets around the world, and has been particularly prominent in the world’s biggest gold markets, India and China.  This shift from West to East has been further reinforced by recent data from the LBMA showing that in June the volume of gold transferred between accounts held by bullion clearers hit a second consecutive 12-year high, buoyed by strong Asian physical demand.

    “This quarter again demonstrates the unique diversity of global gold demand, as the self-balancing nature of the market apparent in the previous quarter was even more clearly in evidence. Across the decades, different sectors in the gold market have risen in prominence at different points in the global economic cycle and the current shifts are just part of the normal ebb and flow of what is an extremely liquid market.”

    The average gold price for the quarter was US$1,415/oz, down 12% on the same period last year.  In value terms, gold demand in Q2 2013 was US$39bn, down 23% compared to Q2 2012.

    The key findings of the report are as follows:

    • Consumer demand in China continued to show strong growth, totalling 276t in the second quarter, a rise of 87% compared to the same quarter last year, as investors used the lower gold price to buy in advance of expected future price rises. Jewellery demand in the quarter was 153t, up 54% on the same quarter last year, while bar and coin investment was 123t, up 157% on Q2 2012.

    • Consumers in India also showed continued strong appetite for gold, with recent government measures to curb demand having had little impact on the quarter’s figures. Consumer demand was 310t, up 71% on last year. Bar and coin investment rose 116%, while jewellery demand rose by 51%.

    • Bar and coin investment globally totalled 508t, a record figure, and a rise of 78% on the same quarter last year.

    • Central banks remained committed to gold. Although demand of 71t in Q2 2013 was below the record quarterly figure of 165t purchased the previous year, central banks have now been purchasers of gold for ten consecutive quarters.
    • There was a net outflow of 402t from ETFs in the quarter. This was more than counterbalanced by inflows into other forms of investment, such as the record 508t in bars and coins.

    Gold demand and supply statistics for Q2 2013

    • Second quarter gold demand of 856t (US$39bn) was down 12% compared with Q2 2012.

    • Demand for jewellery was 576t (US$26.2bn) in the quarter, up 37% on last year. This was the highest figure since Q3 2008, and the highest second quarter figure since Q2 2007.

    • The net outflow from ETFs was 402t (-US$18.3bn). However that was more than compensated by bar and coin investment, which saw inflows of 508t (US$23.1bn). Total investment demand, including OTC investment, totalled 257t (US$11.7bn).
    • Net central bank purchases totalled 71t (US$3.2bn), 57% down on what was a record-breaking quarter a year ago. Central banks have now been net purchasers of gold for ten consecutive quarters.

    • Demand in the technology sector was stable once again, totalling 104t, a rise of 1% on last year.

    • Mine production in the quarter was 4% higher than a year ago, at 732t. Recycling fell 21%, leading to a total supply that was 6% lower than a year ago.

    The Q2 2013 Gold Demand Trends report can be viewed at www.gold.org/media


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    ‘Hybrid’ Organizations a Difficult Bet for Entrepreneurs

     Hybrid organizations combine the social logic of a nonprofit with thecommercial logic of a for-profit business, but are very difficult to finance. So why would anyone want to form one? Julie Battilana and Matthew Leeinvestigate.

     
    Consider two organizations with the same noble purpose: to solve the problem of poor eyesight in developing countries. The first, the Centre for Vision in the Developing World  , follows a traditional nonprofit model, soliciting donations that fund the creation and distribution of specially designed eyeglasses that can be calibrated by the user to circumvent the need for an optometrist. 
    The second, VisionSpring  , follows a different approach, working to build a network of entrepreneurs who sell eyeglasses in their communities. Rather than raise funds through donations, it sustains itself primarily by the sale of the glasses themselves.
    VisionSpring is what organization scholars call a "hybrid" social venture, since it combines the social welfare logic of a nonprofit and the commercial logic of a for-profit business. When hybrids work, they can be a fantastically creative means of solving real-world problems in totally self-sustaining ways, harnessing the strengths of both for-profit and nonprofit models.
    But they are a difficult bet for entrepreneurs starting out in the field of business. Because hybrid social ventures fall into a gray area between business and charity, they aren't easily funded by venture capitalists on the one hand or philanthropic foundations on the other.
    “IT’S MUCH HARDER TO GET STARTED AND BE SUCCESSFUL IF YOU DON'T FIT INTO A WELL-DEFINED FORM THAT PEOPLE UNDERSTAND.” —MATTHEW LEE
    So what would make anyone want to create a hybrid organization? That is the question Harvard Business School Associate Professor Julie Battilana   and doctoral candidate Matthew Lee   ask in a new working paper, How the Zebra Got Its Stripes: Imprinting of Individuals and Hybrid Social Ventures.  
    "It's much harder to get started and be successful if you don't fit into a well-defined form that people understand," says Lee. "Creating a new hybrid is difficult to explain as a rational choice taking this limitation into account."
    Lee and Battilana sought other explanations for the existence of such "zebras," including the entrepreneur's family, education, and work background. "Knowing these social ventures are diverging from the more traditional commercial or nonprofit ventures, we wanted to understand what made their founders diverge," says Battilana.
    In order to gain that understanding, the researchers partnered with Echoing Green  , a nonprofit that funds social entrepreneurs through a highly competitive fellowship program. The organization agreed to facilitate research on the many early-stage social entrepreneurs who applied to the annual program. The researchers followed up with a survey that asked questions about their background and experience, ending up with more than 700 responses in their final sample.
    Some of what they found was to be anticipated. Sure enough, having a family member who worked in a for-profit firm as opposed to a nonprofit organization corresponded closely with an individual's tendency to incorporate a business logic into his or her venture.
    "When you are in a family background and you are socialized into that environment, you adopt certain ways of thinking and behaving and internalize certain values that are dominant in your environment," says Battilana.
    The same went for educational background. "When you are exposed to a certain type of content, you start internalizing it and taking it for granted," she says.
    The final factor, work experience, however, didn't play out as might be expected. Working for a few years in a commercial firm significantly increased the chances that an entrepreneur would create a hybrid social venture rather than a traditional nonprofit.
     But after that initial spike, the increase diminishes with each successive year. After 22 years working in a corporate environment, additional business experience actually makes an entrepreneur less likely to incorporate that experience into a social venture. (The researchers corrected for age in their analysis.)
    Lee and Battilana explain this finding by pointing out that as people stay in a certain type of organization for a number of years, they may become more rigid in their modes of thinking about organizational possibilities and less able to see connections between different modes. 
    When longtime businesspeople go on to start a social venture, they are consequently less likely to see how the for-profit and social welfare approaches can be combined. In this way, business experience may actually make them more likely to create a traditional charity, rather than a hybrid social venture.

    JUMP SOONER

    That's good news for those who are considering starting a hybrid social venture, an increasingly popular interest among her students, says Battilana.
    "Young people are getting more and more excited about these new forms of entrepreneurship, but they also realize it's quite complicated, so they think they need to get some for-profit experience to equip themselves," she says.
    According to the researchers' findings, however, they may not need as much corporate experience as they think.
    "Many people are asking themselves when they should jump from their corporate job to start the social venture they've been dreaming about. Our findings suggest that if you're working in business to get the business mindset, there may be a case for jumping sooner," says Lee. 

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    Start with yes: Survivorship the LIVESTRONG way

    At the beginning of a cruise ship getaway with his family, Doug Ulman wanted to be anonymous.  Ulman, the president and CEO of the LIVESTRONG Foundation, told everyone with him, “For this week, if anyone asks what I do, I’m a lawyer.  I just want a week of vacation.”

    But as soon as they got on the cruise ship in Florida, he broke his own rule.
    A couple in their 60s, sporting bright yellow LIVESTRONG t-shirts, had stepped onto an elevator with the Ulman clan.  For a few seconds, Ulman remained silent while his family watched to see what he would do.  Finally, he said to the couple, “Hey, thanks for wearing that t-shirt.”
    In the conversation that followed, Ulman discovered that the woman had survived breast cancer.  She, in turn, was ecstatic to learn of his affiliation with LIVESTRONG.  The small exchange between them built another piece of the community that Ulman has been nurturing for 12 years as the revered and internationally respected head of one of the largest cancer support organizations in the world.
    Advocating for people with cancer is both a professional and a personal mission for Ulman, who was diagnosed as a young adult 17 years ago.  At that time, he felt isolated and bewildered as he dealt with the emotional and physical difficulties of treatment. 
    “No matter who you are, no matter what your diagnosis, socioeconomic status, or level of education, you are immediately reduced to this level playing field with everybody else,” Ulman says about the moment of diagnosis.
    “When I was diagnosed, the clinical side was challenging, but that piece was less problematic for me than the psychosocial and practical piece,” he says.  “The real gap in that experience, personally, was not having other people to talk to who were my age, and who had cancer.”
    There was a distinct feeling of not knowing where to turn, recalls Ulman, now a three-time cancer survivor.  His response was to found, along with his family, the Ulman Cancer Fund for Young Adults to help other people his age navigate their cancer experiences and keep them moving steadily on the path of survivorship.
    Today, as he heads up LIVESTRONG, Ulman remains committed to empowering cancer survivors with useful knowledge and connections to a supportive network of people who have been there.  Standard medical care does not reach far enough to help people with the complications of insurance, transportation, employment, parenting, or fertility that can arise after a diagnosis of cancer.
    “No matter who you are, no matter what your diagnosis, socioeconomic status, or level of education, you are immediately reduced to this level playing field with everybody else,” Ulman says about the moment of diagnosis.  “You literally have no idea what to do.  Our organization is built around the notion that we help people now.  We aren’t looking for something that can help people five years from now.”
    Ulman draws a distinction here between advocacy and fundraising.  A money-making enterprise can give generously, usually to a researcher in a lab coat who might find a cure, but it doesn’t necessarily provide compassionate and caring assistance to a cancer patient suffering from anxiety over how to function at work after chemotherapy.  LIVESTRONG advocates for that person by creating tools, services and programs with cancer survivors not for them. 
    “We don’t exist to raise money,” Ulman says, “we exist to serve the needs of people with cancer.  If we ever lose that focus, we will end up way off course.”
    In the past few years, Ulman has been a stalwart leader of LIVESTRONG, not only through the cycling controversies surrounding the organization’s founder, Lance Armstrong, but also through an ongoing, massive overhaul of the national healthcare system, which has split some diehard LIVESTRONG supporters into clearly defined camps.  “It’s been brutal,” Ulman admits, “and it’s going to get harder before it gets easier.”
    Staying honest, upfront, and a little bit vulnerable in the face of such difficulties is the only way to keeping moving and to do whatever is best for people with cancer, according to Ulman.  It is the mentality of survivorship. 
    Ulman calls it optimism, the tenacious belief that anything is possible.  “That is by far the best way to operate,” he says.  “It also creates huge challenges because you end up going down too many paths sometimes.  But I like to start with the answer being yes.

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    The New CTO: Chief Transformation Officer


    In a recent article, I suggested that the role of the CIO needs to shift from Chief Information Officer to a Chief Innovation Officer, due to the massive, rapid, multiple technology-driven transformations that are occurring today. And, just as the CIO's role needs to change, so too does the CTO's—from Chief Technology Officer to Chief Transformation Officer. This fundamental shift is necessary to elevate the position's contribution and relevance.
    While the CIO has historically been focused on the technology needed to run the company, the CTO has been responsible for the technology integral to products being sold to customers or clients. However, over the next five years every business process is going to undergo a major transformation. 
    For example, IBM executives recently shared with me that over 40 percent of their profits are now coming from products and services that were impossible just a few short years ago. That reflects the transformative nature of business today as well as the speed of the transformation. This is just the beginning and someone has to lead that transformation.
    CTOs must embrace the role of Chief Transformation Officer. No longer will this position's relevance be tied to how well he or she can oversee the development of technology. In the near future, the CTO will need to oversee the transformation of every business process, including how you sell, market, communicate, collaborate, and innovate. 
    That means the CTO's role will shift from aligning technology to applying technology to accelerate business strategy, from communicating technology plans to the executive team to integrating a transformation imperative and applying the process to all executive-level planning. That's a huge shift.
    This also means that the CTO and CIO need to collaborate more closely. Because so much of the CIO's traditional responsibilities are now virtualized with nearly everything as a service (XaaS), the CIO is free to focus on innovation. Game-changing product and service innovations can be more easily identified when transformation is a business imperative. With the CTO focused on identifying how to use technology to transform processes, products, and services, the CIO can then use these insights to implement innovation.
    For example, the CTO of Amazon, with a role focused on identifying transformational tools, would see that 3D printing (additive manufacturing) has recently reached a turning point and is now being used to manufacture a wide range of products, from jet engine parts to human jaw bones. This turning point has already opened the door to a rapid revolution in customized and personalized manufacturing for companies of any size. 
    The CTO would make sure the CIO sees that a transformative turning point has been reached, and working together, with the CIO's new focus on innovation, they could craft a major opportunity by offering on-demand 3D printing services for any individual or company.
    Manufacturers of customized and personalized products would no longer have to own any manufacturing equipment thanks to Amazon. Instead, they would focus on designing a product and sending the CAD design to Amazon, who would manufacture it with one of their industrial strength 3D printers best suited for the design and then ship it directly to the customer.
    The Amazon strategy I described above has not happened — yet. But we all know that Amazon's cloud services have proven to be both profitable and disruptive. It's not hard to see how this new cloud-based manufacturing service would take Amazon to a whole new level.
    It's up to the Chief Transformation Officer to ensure that your company is the one that not only survives the inevitable transformation, but also thrives after it. Only then can you experience transformation not as disruption, but as ongoing opportunity that leads to lasting success.

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    Procedural Versus Strategic Approaches to Social Media


    Is your company’s social media team grounded in the culture of your organization? Younger, new employees are often strong in procedural understanding of social media tools, but they need to be guided by a strategic vision.

    Many companies turn to interns or freshly-minted college students to staff their social media efforts. But that’s a risk: because these inexperienced employees are not well versed in their new company’s organizational culture or strategy, it is often difficult for them to meet organizational objectives with social media initiatives.
    More dangerous, younger employees don’t know what they don’t know, which can be a recipe for disaster when companies hand these rookies a social media megaphone to speak on behalf of their company.
    I have taught social media to both undergraduate and graduate students since 2006. Undergraduate students typically have a strong procedural understanding of social media tools. They use social media frequently, employ a wide range of features, readily experiment with the newest social media platforms and are often savvy at integrating or separating content for separate audiences. Because of this sophisticated procedural understanding, most think they understand social media well when they begin class.
    Yet, this procedural understanding is not the same as understanding how to achieve business objectives with social media. By the end of the class, most undergraduate students comment how little they knew when they started and how much they still have left to learn. It is striking that many of these comments come from students who had already worked as social media interns at major companies.
    Graduate students, in contrast, tend to have a strongerstrategic understanding of social media. They start more slowly and skeptically than the undergraduate students, and are not as steeped in all the details of the latest cutting-edge platforms. The same might be said about the managers I have worked with as well.
    But while these older students and managers may initially struggle more with using the tools, particularly with learning the non-explicit or normative uses of tools like Twitter hashtags or trends, once they get over this initial learning hurdle they are quicker to envision the organizational opportunities enabled by social media. (It’s a vision that is often in stark contrast to many of the email- and meeting-dependent companies in which they work.) Graduate students often comment that social media training early in their MBA programs fundamentally changes the way they collaborate throughout their programs. They are also better able to recognize potential downsides and risks of these tools.
    Classes that include both types of students are often more effective than either one taught separately. Younger students benefit from the experience and pragmatic wisdom of the older students in thinking about the strengths, weaknesses, opportunities and threats of organizational applications of social media. The older students observe first-hand the procedural expertise of the younger students, leading them to quickly realize that social-media enabled organizations are not necessarily a nebulous future but an imminent reality.
    These differences have implications for how companies should think about, approach and staff their social media initiatives.
    Companies may find it easier and more effective to train existing managers about social media than to teach new hires about the strategic goals and direction of the company.
    Likewise, the most effective organizational social media initiatives may be partnerships between younger employees demonstrating and experimenting with social media technologies while more experienced employees harness that enthusiasm and those ideas to give them strategic direction. This brings together the best of both worlds, combining procedural and strategic know-how.
    One way to involve young social media-savvy employees is to obtain their aid in jump-starting social media initiatives. The main impediment to social media adoption in organizations is often critical mass — getting sufficient activity from employees to generate a sustainable community. Managers can harness younger employees’ facility with and willingness to use social tools to generate momentum and buy-in for new initiatives.

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    How to be an irresistible leader


    Can charisma be taught? 

    Harvard seems to think so. A new book on cultivating personal magnetism is required reading at the B-school.

    120919091333-mpw-all-stars-oprah-winfrey-monster
    FORTUNE -- What is it exactly that makes some people command far more respect and attention, even devotion, than their peers? And if you're not born with the kind of magnetism that compels people to admire and follow you, can you acquire it? "Charisma" comes from a Greek word that means "gift from the gods," which may explain why most of us assume you've either got it or you don't.
    John Neffinger and Matthew Kohut beg to differ. Co-founders of KNP Communications, a coaching firm with a client roster of high-powered executives, politicians, and media stars, the pair set out a few years ago to break charisma down to its component parts. "We studied the most compelling people to see how they pulled it off," they write. "From Oprah Winfrey to Ronald Reagan, from Dolly Parton to the Dalai Lama, we saw successful people using the same strategies over and over."
    Those strategies are spelled out in Compelling People: The Hidden Qualities That Make Us Influential. The book, which includes some material the authors have already taught as lecturers at a few top B-schools, is now required reading at Harvard, Columbia, and the McDonough School of Business at Georgetown.
    It turns out that the ineffable thing we call charisma has two primary elements, strength and warmth. Strength, by the authors' lights, is "a person's capacity to make things happen," while warmth is "the sense that a person shares our feelings, interests, and view of the world." Getting elected to public office usually takes both. For instance, the authors note, "George W. Bush ran in 2000 as a compassionate (warm) conservative (strong)."
    Sounds good, but there's a catch: Balancing the two qualities, which are fundamentally different or even opposed, is tricky. Warmth -- including friendliness, openness, and a disarmingly self-deprecating sense of humor -- may make you likeable, but it doesn't necessarily command respect, while strength alone can come across as icy or even scary. What we call charisma, magnetism, or executive presence is the knack of projecting both at once -- an ability, the authors observe, that is "so rare that we celebrate, elevate, and envy those who manage it."
    Not to worry. Compelling People goes into exhaustive detail about how to be -- or seem -- strong and warm at the same time, addressing everything from how and when to smile, to how to modulate your voice in given kinds of situations, to the specific eyelid-tensing technique behind Clint Eastwood's famous power stare.
    If you've never given much thought to basics like simply shaking hands, the book suggests you start. The key, apparently, is applying "conscious focus" to preparing the flexors and extensors in your fingers: "It is important that your handshake match that of the person you are greeting," whether it's bone-crushing or dead-fish, so "keep those hand muscles flexed as you go in, and you'll be ready for any grip strength you come across."
    Naturally for a couple of communications coaches, the authors offer remedies for habits of speech that undermine people's influence at work. One of these is "uptalk," that annoying Valley-girl intonation that makes every sentence turn up at the end like a question. It's a verbal tic that inadvertently signals "submissive approval seeking" and "creates the impression the speaker is uncertain about things that should not be in doubt" -- neither of which conveys strength (or warmth either, for that matter). Unfortunately, uptalk can be a tough habit to break. If you suspect it's holding you back, the authors recommend recording yourself and "forcing yourself to endure listening" to how uninspiring you sound.
    Although Compelling People aims to show you how to be your own charisma coach, the authors are careful to avoid leaving the impression that, once you've mastered all of their tricks, you're done. Cultivating one's own personal magnetism is a process that never ends, it seems.
    "Ronald Reagan had decades of professional acting experience before he brought his grandfatherly cowboy persona to the national stage," the book points out. "Even after years as a successful politician, Bill Clinton sought out every expert he could find to learn how to connect with people better. The best communicators are the ones who realize how much room they still have for improvement."
    Even President Obama, generally considered to score pretty high on charisma, could tweak a few of his mannerisms, according to the authors -- for example, a habit of speaking with his chin raised so that he is literally looking down his nose at his audience: "[Obama] has been guilty of wearing this expression on many occasions and, when he does, his demeanor goes from cool to cold." The takeaway: Unless you happen to already hold the most powerful job in the free world, try to keep your chin level while you're talking.

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    Development Communications in the Non-Profit Sector

    While having communications related positions in the non-profit sector is not something unheard of in the past, the rising value of development communications roles in the sector is a relatively new development. A simple look into job listings at non-profit organizations will most likely result in at least a handful of openings that involve communications roles.

    So, what exactly is development communications and what does it involve? According a report   from the World Bank, it is “communication that supports sustainable change in development operations by engaging key stakeholders.” Depending on the organization, the role itself can involve a number of different things. For the most part, the major responsibilities include materials development, public and press engagement, messaging, and in some cases, event planning and fundraising as well. 

    A development communications role involves creating materials such as newsletters, reports, marketing and donor materials etc. geared towards different target audiences. From customized materials to attract donors to videos and website content to engage the public, the range of materials may vary, but what is of growing importance in a communications role is the ability to use a multitude of communication tools to effectively tell an organization’s story

    Going hand in hand, a communications position (particularly a higher-level role) would also involve overseeing the strategic message of the organization as a whole and ensuring the delivery of a common message. In smaller or mid-sized non-profits that do not have an entire team, one can be found wearing multiple hats. Along with public and press engagement, some communications roles also involve engaging in fundraising activities, scheduling and event planning.

    With rapidly growing rates of information exchange as well as the tools to get the information across, the rise of development communications in the non-profit sector has as much to do on the technological end as it does on the evolving nature of NGOs and the public. The need to stay connected with the public, donors, peers and various other stakeholders continues to grow and also plays an important role in the overall well-being of an organization.

    So, what are some of the basic skills for someone interested in development communications? For starters, most job listings seem to specify a degree in Communications, Journalism or a related field. However, having knowledge in development related issue areas such as health, microfinance etc. in which the concerned organization focuses its work on is also as important.

     It also requires excellent written and verbal communication skills, along with copy editing skills. Being able to effectively write content that is catered to different audiences is a must. If you have samples to demonstrate your work, it will only make your case stronger. Expertise in social media applications and multimedia tools is expected. 

    Being proactive early on in this area by creating profiles and mastering the use of these tools could prove to be beneficial. There are a number of blogs and other online resources that can be used easily, many of which are free. Experts also suggest creating a blog where you can demonstrate your work readily.

    While basic proficiency on applications such as Powerpoint will be expected, having some design experience (Adobe Illustrator, Photoshop etc.) could also be very useful. A recent emerging trend that continues to be adopted by organizations is the use of infographics and data visualization to tell stories about specific issues and demonstrate an organization’s work (see infographics from the Gates Foundation and Amnesty International for examples).

    In smaller to mid-sized organizations, there may not be a complete team, which means that being flexible and willing to take up multiple projects is something one should be prepared to do. Lastly, getting experience through an internship or volunteer opportunity would be the best way to go about exploring the field and honing your skills.

    By: Kesang Chungyalpa 



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    Twitter sets new tweets per second record, explains why 143k simultaneous updates didn't make it stutter


    New Tweets per second record, and how!



    Recently, something remarkable happened on Twitter: On Saturday,August 3 in Japan, people watched an airing of Castle in the Sky  , and at one moment they took to Twitter so much that we hit a one-second peak of 143,199 Tweets per second. (August 2 at 7:21:50 PDT; August 3 at 11:21:50 JST)

    To give you some context of how that compares to typical numbers, we normally take in more than 500 million Tweets a day which means about 5,700 Tweets a second, on average. This particular spike was around 25 times greater than our steady state.
    During this spike, our users didn’t experience a blip on Twitter. That’s one of our goals: to make sure Twitter is always available no matter what is happening around the world.
    New Tweets per second (TPS) record: 143,199 TPS. Typical day: more than 500 million Tweets sent; average 5,700 TPS.
    Tweet  
    This goal felt unattainable three years ago, when the 2010 World Cup put Twitter squarely in the center of a real-time, global conversation. The influx of Tweets –– from every shot on goal, penalty kick and yellow or red card –– repeatedly took its toll and made Twitter unavailable for short periods of time. Engineering worked throughout the nights during this time, desperately trying to find and implement order-of-magnitudes of efficiency gains. Unfortunately, those gains were quickly swamped by Twitter’s rapid growth, and engineering had started to run out of low-hanging fruit to fix.

    After that experience, we determined we needed to step back. We then determined we needed to re-architect the site to support the continued growth of Twitter and to keep it running smoothly. Since then we’ve worked hard to make sure that the service is resilient to the world’s impulses. We’re now able to withstand events like Castle in the Sky viewings, the Super Bowl, and the global New Year’s Eve celebration. 

    This re-architecture has not only made the service more resilient when traffic spikes to record highs, but also provides a more flexible platform on which to build more features faster, including synchronizing direct messages across devices, Twitter cards that allow Tweets to become richer and contain more content, and a rich search experience that includes stories and users. And more features are coming.
    Below, we detail how we did this. We learned a lot. We changed our engineering organization. And, over the next few weeks, we’ll be publishing additional posts that go into more detail about some of the topics we cover here.

    Starting to re-architect

    After the 2010 World Cup dust settled, we surveyed the state of our engineering. Our findings:

    • We were running one of the world’s largest Ruby on Rails installations, and we had pushed it pretty far –– at the time, about 200 engineers were contributing to it and it had gotten Twitter through some explosive growth, both in terms of new users as well as the sheer amount of traffic that it was handling. 

    • This system was also monolithic where everything we did, from managing raw database and memcache connections through to rendering the site and presenting the public APIs, was in one codebase. Not only was it increasingly difficult for an engineer to be an expert in how it was put together, but also it was organizationally challenging for us to manage and parallelize our engineering team.

    • We had reached the limit of throughput on our storage systems –– we were relying on a MySQL storage system that was temporally sharded and had a single master. That system was having trouble ingesting tweets at the rate that they were showing up, and we were operationally having to create new databases at an ever increasing rate. We were experiencing read and write hot spots throughout our databases.

    • We were “throwing machines at the problem” instead of engineering thorough solutions –– our front-end Ruby machines were not handling the number of transactions per second that we thought was reasonable, given their horsepower. From previous experiences, we knew that those machines could do a lot more.

    • Finally, from a software standpoint, we found ourselves pushed into an “optimization corner” where we had started to trade off readability and flexibility of the codebase for performance and efficiency.

    We concluded that we needed to start a project to re-envision our system. We set three goals and challenges for ourselves:

    • We wanted big infrastructure wins in performance, efficiency, and reliability –– we wanted to improve the median latency that users experience on Twitter as well as bring in the outliers to give a uniform experience to Twitter. We wanted to reduce the number of machines needed to run Twitter by 10x. 

    • We also wanted to isolate failures across our infrastructure to prevent large outages –– this is especially important as the number of machines we use go up, because it means that the chance of any single machine failing is higher. Failures are also inevitable, so we wanted to have them happen in a much more controllable manner.

    • We wanted cleaner boundaries with “related” logic being in one place –– we felt the downsides of running our particular monolithic codebase, so we wanted to experiment with a loosely coupled services oriented model. Our goal was to encourage the best practices of encapsulation and modularity, but this time at the systems level rather than at the class, module, or package level.

    • Most importantly, we wanted to launch features faster. We wanted to be able to run small and empowered engineering teams that could make local decisions and ship user-facing changes, independent of other teams.

    We prototyped the building blocks for a proof

     of concept re-architecture. Not everything we tried worked and not everything we tried, in the end, met the above goals. But we were able to settle on a set of principles, tools, and an infrastructure that has gotten us to a much more desirable and reliable state today.

    The JVM vs the Ruby VM

    First, we evaluated our front-end serving tier across three dimensions: CPU, RAM, and network. Our Ruby-based machinery was being pushed to the limit on the CPU and RAM dimensions –– but we weren’t serving that many requests per machine nor were we coming close to saturating our network bandwidth. Our Rails servers, at the time, had to be effectively single threaded and handle only one request at a time. 

    Each Rails host was running a number of Unicorn processes to provide host-level concurrency, but the duplication there translated to wasteful resource utilization. When it came down to it, our Rails servers were only capable of serving 200 - 300 requests / sec / host.

    Twitter’s usage is always growing rapidly, and doing the math there, it would take a lot of machines to keep up with the growth curve.

    At the time, Twitter had experience deploying fairly large scale JVM-based services –– our search engine was written in Java, and our Streaming Api infrastructure as well as Flock, our social graph system, was written in Scala. We were enamored by the level of performance that the JVM gave us. It wasn’t going to be easy to get our performance, reliability, and efficiency goals out of the Ruby VM, so we embarked on writing code to be run on the JVM instead.

     We estimated that rewriting our codebase could get us > 10x performance improvement, on the same hardware –– and now, today, we push on the order of 10 - 20K requests / sec / host.

    There was a level of trust that we all had in the JVM. A lot of us had come from companies where we had experience working with, tuning, and operating large scale JVM installations. We were confident we could pull off a sea change for Twitter in the world of the JVM. Now, we had to decompose our architecture and figure out how these different services would interact.

    Programming model

    In Twitter’s Ruby systems, concurrency is managed at the process level: a single network request is queued up for a process to handle. That process is completely consumed until the network request is fulfilled. Adding to the complexity, architecturally, we were taking Twitter in the direction of having one service compose the responses of other services. Given that the Ruby process is single-threaded, Twitter’s “response time” would be additive and extremely sensitive to the variances in the back-end systems’ latencies. There were a few Ruby options that gave us concurrency; however, there wasn’t one standard way to do it across all the different VM options. The JVM had constructs and primitives that supported concurrency and would let us build a real concurrent programming platform.

    It became evident that we needed a single and uniform way to think about concurrency in our systems and, specifically, in the way we think about networking. As we all know, writing concurrent code (and concurrent networking code) is hard and can take many forms. In fact, we began to experience this. As we started to decompose the system into services, each team took slightly different approaches. For example, the failure semantics from clients to services didn’t interact well: we had no consistent back-pressure mechanism for servers to signal back to clients and we experienced “thundering herds” from clients aggressively retrying latent services. 

    These failure domains informed us of the importance of having a unified, and complementary, client and server library that would bundle in notions of connection pools, failover strategies, and load balancing. To help us all get in the same mindset, we put together both Futures and Finagle.

    Now, not only did we have a uniform way to do things, but we also baked into our core libraries everything that all our systems needed so we could get off the ground faster. And rather than worry too much about how each and every system operated, we could focus on the application and service interfaces.

    Independent systems

    The largest architectural change we made was to move from our monolithic Ruby application to one that is more services oriented. We focused first on creating Tweet, timeline, and user services –– our “core nouns”. This move afforded us cleaner abstraction boundaries and team-level ownership and independence. In our monolithic world, we either needed experts who understood the entire codebase or clear owners at the module or class level. Sadly, the codebase was getting too large to have global experts and, in practice, having clear owners at the module or class level wasn’t working. 

    Our codebase was becoming harder to maintain,

     and teams constantly spent time going on “archeology digs” to understand certain functionality. Or we’d organize “whale hunting expeditions” to try to understand large scale failures that occurred. At the end of the day, we’d spend more time on this than on shipping features, which we weren’t happy with.

    Our theory was, and still is, that a services oriented architecture allows us to develop the system in parallel –– we agree on networking RPC interfaces, and then go develop the system internals independently –– but, it also meant that the logic for each system was self-contained within itself. If we needed to change something about Tweets, we could make that change in one location, the Tweet service, and then that change would flow throughout our architecture.

     In practice, however, we find that not all teams plan for change in the same way: for example, a change in the Tweet service may require other services to do an update if the Tweet representation changed. On balance, though, this works out more times than not.
    This system architecture also mirrored the way we wanted, and now do, run the Twitter engineering organization. Engineering is set up with (mostly) self-contained teams that can run independently and very quickly. This means that we bias toward teams spinning up and running their own services that can call the back end systems. This has huge implications on operations, however.

    Storage

    Even if we broke apart our monolithic application into services, a huge bottleneck that remained was storage. Twitter, at the time, was storing tweets in a single master MySQL database. We had taken the strategy of storing data temporally –– each row in the database was a single tweet, we stored the tweets in order in the database, and when the database filled up we spun up another one and reconfigured the software to start populating the next database.

     This strategy had bought us some time, but, we were still having issues ingesting massive tweet spikes because they would all be serialized into a single database master so we were experiencing read load concentration on a small number of database machines. We needed a different partitioning strategy for Tweet storage.

    We took Gizzard, our framework to create sharded and fault-tolerant distributed databases, and applied it to tweets. We created T-Bird. In this case, Gizzard was fronting a series of MySQL databases –– every time a tweet comes into the system, Gizzard hashes it, and then chooses an appropriate database. Of course, this means we lose the ability to rely on MySQL for unique ID generation.

     Snowflake was born to solve that problem. Snowflake allows us to create an almost-guaranteed globally unique identifier. We rely on it to create new tweet IDs, at the tradeoff of no longer having “increment by 1” identifiers. Once we have an identifier, we can rely on Gizzard then to store it. 

    Assuming our hashing algorithm works and our tweets are close to uniformly distributed, we increase our throughput by the number of destination databases. Our reads are also then distributed across the entire cluster, rather than being pinned to the “most recent” database, allowing us to increase throughput there too.

    Observability and statistics

    We’ve traded our fragile monolithic application for a more robust and encapsulated, but also complex, services oriented application. We had to invest in tools to make managing this beast possible. Given the speed with which we were creating new services, we needed to make it incredibly easy to gather data on how well each service was doing. By default, we wanted to make data-driven decisions, so we needed to make it trivial and frictionless to get that data.

    As we were going to be spinning up more and more services in an increasingly large system, we had to make this easier for everybody. Our Runtime Systems team created two tools for engineering: Viz and Zipkin. Both of these tools are exposed and integrated with Finagle, so all services that are built using Finagle get access to them automatically.
    stats.timeFuture("request_latency_ms") {
    // dispatch to do work
    }
    The above code block is all that is needed for a service to report statistics into Viz. From there, anybody using Viz can write a query that will generate a timeseries and graph of interesting data like the 50th and 99th percentile of request_latency_ms.

    Runtime configuration and testing

    Finally, as we were putting this all together, we hit two seemingly unrelated snags: launches had to be coordinated across a series of different services, and we didn’t have a place to stage services that ran at “Twitter scale”. We could no longer rely on deployment as the vehicle to get new user-facing code out there, and coordination was going to be required across the application.

     In addition, given the relative size of Twitter, it was becoming difficult for us to run meaningful tests in a fully isolated environment. We had, relatively, no issues testing for correctness in our isolated systems –– we needed a way to test for large scale iterations. We embraced runtime configuration.

    We integrated a system we call Decider across all our services. It allows us to flip a single switch and have multiple systems across our infrastructure all react to that change in near-real time. This means software and multiple systems can go into production when teams are ready, but a particular feature doesn’t need to be “active”. Decider also allows us to have the flexibility to do binary and percentage based switching such as having a feature available for x% of traffic or users.

     We can deploy code in the fully “off” and safe setting, and then gradually turn it up and down until we are confident it’s operating correctly and systems can handle the new load. All this alleviates our need to do any coordination at the team level, and instead we can do it at runtime.

    Today

    Twitter is more performant, efficient and reliable than ever before. We’ve sped up the site incredibly across the 50th (p50) through 99th (p99) percentile distributions and the number of machines involved in serving the site itself has been decreased anywhere from 5x-12x. Over the last six months, Twitter has flirted with four 9s of availability.
    Twitter engineering is now set up to mimic our software stack. We have teams that are ready for long term ownership and to be experts on their part of the Twitter infrastructure. Those teams own their interfaces and their problem domains. Not every team at Twitter needs to worry about scaling Tweets, for example. Only a few teams –– those that are involved in the running of the Tweet subsystem (the Tweet service team, the storage team, the caching team, etc.) –– have to scale the writes and reads of Tweets, and the rest of Twitter engineering gets APIs to help them use it.

    Two goals drive us as we did all this work: Twitter should always be available for our users, and we should spend our time making Twitter more engaging, more useful and simply better for our users. Our systems and our engineering team now enable us to launch new features faster and in parallel. We can dedicate different teams to work on improvements simultaneously and have minimal logjams for when those features collide. 

    Services can be launched and deployed independently from each other (in the last week, for example, we had more than 50 deploys across all Twitter services), and we can defer putting everything together until we’re ready to make a new build for iOS or Android.


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    Great Leaders Who Make the Mix Work

    by Boris Groysberg and Katherine Connolly


    Artwork: Janet Echelman, Target Swooping Down...Bullseye!, 2001, hand-knotted nylon lace net, 140' x 140' x 90', Madrid, Spain

    Business leaders send a powerful message when they demonstrate a commitment to diversity and inclusion that goes beyond rhetoric. But how does diversity make its way to the top of a CEO’s agenda? To find out, we interviewed 24 CEOs from around the globe who ran companies and corporate divisions that had earned reputations for embracing people from all kinds of backgrounds.

     These executives represented a wide range of industries and regions, as well as different stages on the journey to creating an inclusive culture. Our goal was to understand not only why they had made diversity a strategic priority but also how they executed on their goals and what that meant to the organization and its practices.
    The CEOs we spoke with did not see diversity as a once-and-done initiative, nor did they hand off the responsibility for it to others. Rather, each of the 24, in his or her own way, approached inclusivity as a personal mission. When we asked these executives why advancing diversity in their organizations was so important to them, the aggregate answer was twofold: 
    They believed it was a business imperative because their companies needed it to stay competitive, and they believed it was a moral imperative because of their personal experiences and values. As Mikael Ohlsson of the Swedish home-products company IKEA put it, “My leadership on diversity is vision-driven from a business point of view and value-driven at the foundation.”
    These CEOs spoke forcefully about diversity as an advantage. Paul Block of the U.S. sweetener manufacturer Merisant pointed out, “People with different lifestyles and different backgrounds challenge each other more. Diversity creates dissent, and you need that. Without it, you’re not going to get any deep inquiry or breakthroughs.” Or, as Jonathan Broomberg of the South African insurer Discovery Health put it, diversity is “a source of creativity and innovation.”
    A diverse workforce also prevents an organization from becoming too insular and out of touch with its increasingly heterogeneous customer base. Many of the CEOs asserted that it is crucial for a company’s employees to reflect the people they serve. Brian Moynihan of Bank of America saw an important link to customer satisfaction: “When internal diversity and inclusion scores are strong, and employees feel valued, they will serve our customers better, and we’ll be better off as an organization.”
    The Role of Personal Experience

    A CEO’s commitment often arises from his or her own understanding of what it means to be an outsider. Take Andrea Jung of the personal-care-products firm Avon. (Note that Jung, like a number of other CEOs we talked with, has stepped down since our interview with her.) Describing her career, she said: “I was often the only woman or Asian sitting around a table of senior executives.
     I experienced plenty of meetings outside my organization with large groups of executives where people assumed that I couldn’t be the boss, even though I was.” MasterCard’s CEO, Ajay Banga—a Sikh from India who was hassled in the United States after 9/11—shared something similar: “My passion for diversity comes from the fact that I myself am diverse. There have been a hundred times when I have felt different from other people in the room or in the business. I have a turban and a full beard, and I run a global company—that’s not common.”
    Carlos Ghosn of Nissan Motor Company told us how bias had affected his own family. “My mother was one of eight children,” he said. “She used to be a very brilliant student, and when the time came to go to college, she wanted to become a doctor. Unfortunately, her mother had to explain to her that there was not enough money in the family, and that the money for college was going to the boys and the girls would instead have to marry.
     When I was a kid and my mother was telling me this story—without any bitterness, by the way, just matter-of-fact—I was outraged because it was my mother. After hearing that story, I said I would never do anything to hurt someone based on segregation.”
    To Ghosn, gender bias is a personal affront. “When I see that women do not have the same opportunities as men, it touches me in a personal way,” he said. “I think it’s some kind of refusal related to my sisters or to my daughters.”
    Even white male CEOs had stories to share. Kentucky native Jim Rogers of the electric-utility holding company Duke Energy felt like an outsider at the start of his career. “When I went to Washington to be a lawyer, I felt like I had to work harder, be better, and prove myself because I had a southern accent and came from a rural state,” he said. The self-awareness, insight, and empathy that Rogers and other chief executives acquired from personal experience have clearly shaped their attitudes toward diversity and inclusion and informed their priorities as leaders.
    Persistent Institutional Barriers
    The CEOs were generally disappointed with the lack of progress on diversity in the C-suite. While several women have risen through the ranks to become leaders of multibillion-dollar corporations, the statistics are grim overall. Only 4% of companies on the 2013 Fortune 500 list are led by female CEOs. As Banga acknowledged,
     “That’s more than what it used to be 20 years ago, but it’s nowhere near where it should be.” The disparity also persists in other senior leadership positions and on boards. Ken Frazier of Merck offered a harsher assessment: “I think that the progress of women in the last two decades has been so limited, so slow, so inadequate, that it would defy even the most skeptical people from 20 years ago.”
    We asked the CEOs what they perceived to be the greatest obstacles to women’s advancement in their own companies and industries. Although there’s no one truth about what holds women back, the leaders we spoke with offered candid views based on years of observation.
    If there’s a single barrier that affects all women, it’s exclusion from networks and conversations that open doors to further development and promotion, according to seven of the CEOs. Woods Staton of Arcos Dorados, the largest operator of McDonald’s restaurants in Latin America, defined the offending mechanism as “social cliquishness,” a pattern of interaction in which men seek out the company of other men and ignore women. 
    “The men come out of a meeting, hang out with each other, and then go out at night for drinks,” Staton explained. “It’s subtle discrimination, and it’s difficult to work around.” Barry Salzberg of the professional services firm Deloitte described this pattern as a tangible, negative consequence of “the old boys’ network.”
    Frazier went so far as to say, “I’m an African-American, and I’ve worked in the business world all my life, and I believe very strongly that whatever barriers race presents in the workforce, they pale in comparison to the barriers that women face when creating the close mentoring relationships that are necessary to be promoted.” We find that this kind of discrimination is often unintended, unconscious, and embedded in a company’s culture.
    The CEOs also reported that the contributions of women are often underappreciated. As an example, Jim Turley of Ernst & Young described an incident when he himself was called out: “I like to facilitate our board discussions by getting right into the more contentious points, and we were having a discussion around a particular topic. Three women on the board made individual comments that were similar in direction, which I didn’t respond to. 
    Not long after they spoke, a fourth person, who happened to be a man, made a comment in line with what the women had been saying, and I picked up on his comment. I said, ‘I think Jeff’s got it right,’ not even aware of what I had just done. To their great credit, the women didn’t embarrass me publicly. They pulled me to the side, and they said, ‘Jim, we know you didn’t mean for this to be the way it was received, but this is what happened.’ They played it back to me, and they said that that’s what happens to women throughout their careers. It was a learning moment for me.”
    Clearly, even leaders passionate about building inclusive cultures can inadvertently allow unconscious biases to shape their behavior.
    Five of the CEOs asserted that unexamined assumptions also constrained women’s chances to progress. As Frazier explained, “If a job requires a woman to travel a lot, sometimes people decide preemptively that she’s got a young child at home—this won’t be something she’s interested in.” 
    Double standards can also trip up women in line for promotions, as when characteristics prized in male leaders are viewed as negative qualities in women. “When men come into the environment and they’re tough, they’re perceived as strong business leaders,” said Block. “When women come in and they’re tough, it’s not always as valued.”
    Geographic immobility due to family constraints was another problem, mentioned by three of the CEOs. “People often require geographic mobility to get the appropriate amount of exposure to the various aspects of the business that they need to understand,” Randall Stephenson of AT&T noted. 
    “As managers mature, we observe that some female managers get to a place where they want to begin families or their spouse also works, which makes them less inclined to move and physically relocate their families.” Jung concurred: “In my experience, where part of career development and part of talent management was getting a ‘global passport’ stamped, one of the barriers for women could have been mobility. I saw that beyond the opportunity for the individual, we also had to try to create all of the opportunities necessary to make sure the whole family could in fact move.”
    Another three CEOs cited insufficient support for women who were rejoining the workforce after taking time off to raise children. Any organization that hopes to encourage women to succeed needs to address that, noted Rogers. “If a woman is pregnant and leaves, you have to have the flexibility to allow her to do that but not lose her place or her momentum,” he said.
    Unsurprisingly, five CEOs brought up barriers related to childbearing and child rearing, and six mentioned a lack of flexible work hours. They observed that the push-and-pull between work and family, though increasingly an issue for men too, remains predominantly a barrier for women. George Chavel of Sodexo North America drove home that point, asking, “Why should women have to be superhuman, have these reputations of ‘They can do it all,’ and make these major sacrifices, and men don’t have those kinds of expectations placed on them?”
    Do Women Lead Differently?
    Eight of the CEOs perceived a distinction between male and female leadership styles. Though social scientists may not agree with their take on things, the CEOs said that women were less political, less likely to define themselves by their careers, more collaborative, better listeners, more relationship-oriented, and more empathetic and reasonable. We also heard that women were more likely to focus on completing the job at hand and to neglect to position themselves for recognition or promotion, while men were more apt to seek attention.
    This tendency not to assert themselves could hold women back. George Halvorson of the California-based managed-care consortium Kaiser Permanente explained the problem this way: “There are cultural barriers, in that leaders who are looking for the next generation of leaders, for the people to promote, are less likely to see and understand the capable women that they have in their shop, probably because the male style tends to focus more on being in the spotlight, and the female style tends to focus more on bringing people together to get things done.
     The very thing that makes the best female leaders very successful also makes them less visible, and that’s an incredibly important distinction. A good leader knows to look for things that have gone really well and then drills down to find the person who really did it, as opposed to just looking for whoever has a lot of accolades and did the dance.”
    But some differences in leadership style can work to women’s advantage, said several CEOs. “When you’ve got a complex project involving multiple layers, you need a leader who is collaborative, and more often than not I have found that leader to be a woman,” said Halvorson.
    What Is an Inclusive Culture?
    Resoundingly, the CEOs agreed on what an inclusive culture meant for their organizations. They defined it as one in which employees can contribute to the success of the company as their authentic selves, while the organization respects and leverages their talents and gives them a sense of connectedness.
     “In an inclusive culture employees know that, irrespective of gender, race, creed, sexual orientation, and physical ability, you can fulfill your personal objectives by aligning them with the company’s, have a rich career, and be valued as an individual. You are valued for how you contribute to the business,” said David Thodey of Telstra, the Australian telecommunications firm. Brad Wilson of Blue Cross and Blue Shield of North Carolina described an inclusive workplace as “one where all who come with the professional skills sufficient to perform the requirements of the job feel welcome, supported, and rewarded, and are inspired to succeed based on their ability.” That’s similar to the point that John Rowe of Exelon, a U.S. energy producer and distributor, made when he noted that a culture of mutual respect helps his company address the complexities of its business. “A big organization needs only a few generals and a lot of sergeants,” he said. “The sergeants deserve respect too.”
    Some CEOs observed that the proof is not only in how individual employees feel about opportunities for growth but also in how teams operate and decisions are made. “In an inclusive culture, we create and support heterogeneous teams,” said Chavel. “They may take longer to make decisions than homogeneous teams, but it’s worth the investment because their decisions will be better informed.” 
    To these CEOs, inclusiveness is not merely a matter of the composition of the organization or of particular teams (though such metrics can be helpful); it also has to do with how people relate to one another. “Broad diversity is necessary, but if you just walk away after you have it, you may not get the outcomes you want,” said Steve Voigt of King Arthur Flour, a company where women account for three of eight board members and three of six senior executives. “You really have to manage it, grow it, and educate around it.”
    Practices That Make the Difference
    Turley drew an important distinction: “Diversity itself is about the mix of people you have, and creating an inclusive culture is about making that mix work.” We asked the CEOs which of their organizations’ practices had been most effective at harnessing diversity. Here’s what they told us:
    1. Measure diversity and inclusion. 
    The CEOs agreed that metrics are key because, as we know, what gets measured gets done. Bank of America, for example, puts questions about diversity and inclusiveness into its biannual employee engagement survey and compares the results for any team that gets at least seven responses against those of a normative group of companies. 
    “We’ve also built a diversity-and-inclusion index that tells us if people here feel they are treated fairly and to help us ensure that people of diverse backgrounds can succeed at Bank of America,” said Moynihan. “With this data, each team can have a dialogue to determine what we’re doing well and what we can improve to make Bank of America a better place to work.”
    2. Hold managers accountable. 
    Merck, Nissan, General Mills, Telstra, and ABB North America are among the many organizations that make diversity and inclusion goals part of their managers’ performance objectives. “Each of my direct reports has things that they’re going to do personally to help promote diversity, not things that they can assign to their team,” explained Moynihan. “I say, ‘What are you going to do to get involved?’ For example, they can mentor somebody individually or sponsor diversity events.” AT&T takes a different approach. “We benchmark diversity objectives at the senior levels of management, and we have regular meetings around my table about how we’re advancing,” said Stephenson. “A portion of our officers’ compensation is based on achieving those objectives.” Many CEOs also reported that managers who embraced diversity were more likely to be considered for promotion at their companies.
    In some organizations a favorable attitude toward diversity even determines whether an employee is viewed as a good fit for the organization. “We really have challenges when the leadership group is not diverse and they don’t get it. And so you have to educate them—and if they still don’t get it, I let them go,” said Tim Solso of the engine manufacturer Cummins. 
    He elaborated: “We hit a serious downturn in the second half of 2000 through the first half of 2003. I mean, we were on the brink as a company, but I didn’t back off on diversity. One of the senior officers basically said to another officer, ‘Why doesn’t Solso get off this diversity stuff? We need to save the company.’ I fired him. It was well known why he was fired. After that, people either got it or didn’t talk that way anymore.”
    3. Support flexible work arrangements. 
    Many of the CEOs reported that their organizations offered benefits that helped employees balance their professional and personal commitments—such as flexible hours, on-site child care, and onboarding support after a leave of absence. 
    Ken Powell of the U.S. food processor General Mills explained his company’s efforts this way: “I’ve had officers at General Mills say to me, ‘I realize that I’m one of several people who could be the brand manager for Cheerios, but I’m the only person who can be the mother to my children.’ While some of those women make the decision to leave the company—sometimes permanently—we’ve learned that we can retain many of them by providing greater flexibility during those hectic childbearing years.”
    At Sodexo North America, Chavel and his leadership team have made work/life balance a personal matter. “Although the job is 24/7, I try to send the message that I’m open and receptive to any kind of flexible arrangement,” Chavel said. “For example, I will end a meeting early to get to one of my sons’ athletic events or travel somewhere for a family commitment.”
    4. Recruit and promote from diverse pools of candidates. 
    Workforce diversity begins with the search for talent. At General Mills, Powell’s leadership team tracks metrics during and after the hiring process. “From the beginning, we’re looking at the composition of the pool of candidates that we interview on campus, because that’s an important early indicator,” Powell told us. “Then we look at the composition of the group of people we hire in any given year. We track the retention rate for different groups, such as women or African-Americans.
     Even interns. At what rate are they leaving? At what rate are they getting promoted? What percentage advances to each level in the company? Our metrics help us diagnose and understand what’s going on—enabling us to develop action plans to address any issues we see. It’s important, and that’s why I review those metrics myself on a quarterly basis.”
    Ghosn has taken a different approach at Nissan in Japan, where women are strikingly underrepresented in management ranks. “We’ve implemented quotas in hiring, particularly in the populations where there are fewer women—like engineering—and we make sure that in the succession plans of the company we always have a specific number of female candidates,” he explained. “This forces management to identify women in their own ranks or to hire more women. 
    So when it comes time for promotions, we have a diverse group of candidates from which we can choose. I believe quotas are a great way of advancing diversity, particularly when you have a long way to go and you don’t want to wait forever. After a company attains a certain level of diversity, I think quotas lose their effectiveness. But when you’re moving from 1% female managers to 5%, if you don’t enforce a quota, it’s going to take forever to reach that number.”
    Owing in part to this strategy, the representation of women in Nissan’s management has increased three times as fast as the average rate in Japan over the past decade.
    5. Provide leadership education. 
    Another key practice is providing leadership development opportunities for women at the lower levels of the organization, which tend to be more diverse. Broomberg described Discovery Health’s CEO Program like this: “It’s a brilliant two-year program which involves candidates in intensive internal and external training, significant exposure to senior executives, and travel to the U.S. to do a course at Duke.
     It includes external candidates and young candidates from previously disadvantaged backgrounds already in the company. It’s a big financial investment for us, but we’ve been able to add quite a lot of muscle to our recruitment capacity and also invest significantly in the more rapid advancement of existing internal candidates.”
    And Johnson & Johnson’s Bill Weldon noted that diversity training cannot be hived off from the rest of the operation. It has to be woven into the culture. “About 10 years ago one of the women’s leadership initiative programs was being held across the street, and I asked the people running it if I could go to the program,” he recalled. 
    “They said no. I asked why not, and they said I couldn’t go because I was a man. My response was that that may be the problem—you have to broaden it beyond women. We evolve and learn and grow to make sure we’re capturing not just the people involved but the views of the whole community.”
    Needless to say, companies should also offer their high-potential employees opportunities for external education and development. But according to Harvard Business School, only 23% of participants in executive education programs on the Boston campus in 2012 were women. Companies also need to invest in women-only leadership development programs and in educating both men and women about subtle gender biases and how they manifest themselves in firms.
    6. Sponsor employee resource groups and mentoring 
    programs. Several of the CEOs’ companies offered less structured professional development opportunities to various subgroups of employees. One approach is employee resource groups, or networks of employees who share an affiliation (such as women, ethnic minorities, or young professionals). 
    Angela Braly of the U.S. managed-care firm WellPoint underlined the importance of leveraging such groups in substantive ways. “I visit each group twice a year and give them real assignments,” she said. “I am very clear about my expectation that they will have a real impact on the business.”
    Companies must also invest in these groups, according to Banga. “Here at MasterCard we have many business resource groups, or BRGs,” he said. “We have women’s leadership networks, a YoPro group for young professionals, a group for employees of African descent, a pride community, a Latino community, and an ‘East’ community for Asian employees.
     Each BRG has a business sponsor, who’s normally a direct report of mine. We do a ton of things with them, from employee-networking events to multicultural summits to a women’s forum for which we get outside speakers as well as panels comprised of me and members of my board.”
    7. Offer quality role models. 
    It’s no surprise that diversity at the top promotes diversity throughout an organization. A varied array of leaders signals an organizational commitment to diversity and also provides emerging leaders with role models they can identify with. 
    Several of the CEOs, including those from Kaiser Permanente, Sodexo North America, King Arthur Flour, Duke Energy, and Cummins, said that putting women in leadership roles was key to attracting, retaining, and developing other female talent. Rogers described how Duke did this: “This historically has been a man’s industry. So, early on, we worked to move a woman into a plant manager position. That set an example.
     You have to be intentional and make sure you populate your organization with leaders who represent diversity. That creates an environment that allows those with diverse backgrounds to say, ‘If they can, I can.’ That is a very important feeling that needs to be embedded in the people in the company.”
    As for individualized employee development, many CEOs cited the importance of mentorship and sponsorship opportunities. Ohlsson explained IKEA’s unique approach to mentorship this way:
     “We have a grandfathering/grandmothering principle at IKEA—that is to say that a hiring boss has to have another manager say yes to a candidate before that person can be hired. Two people then share the responsibility for the development of that individual.” Such double sponsorship increases the likelihood that talented employees of any background will feel supported and stay with the company.
    But Halvorson warned against tokenism—the practice of putting people into jobs because of their classification, not their ability. “If you put someone in place who fits a certain category but doesn’t have the skill set needed to do the job, then you basically set the whole agenda back significantly,” he said. “My sense is to hire stars, and the constellation is far more effective if it’s a diverse constellation.”
    8. Make the chief diversity officer position count.
    As this relatively new role proliferates across industries, CEOs must decide how to maximize its effectiveness. At the time of his interview, Enrique Santacana of ABB North America had just received approval from the firm’s North America Executive Committee to create a chief diversity and inclusion officer position, reporting directly to him. “We want to make sure that people understand that it has full support from the top, and it’s not just a communications message that goes out there with no follow-up,” he explained. 
    “It institutionalizes the process and the intent, and it establishes a formal means by which we will develop programs as well as metrics, so that we can track our progress.”
    Lead by Example
    Once the vision of an inclusive culture has been articulated and best practices have been put in place, what is the CEO’s daily contribution to seeing that the vision becomes a reality? Nearly half the CEOs said their most important role was to set the tone for the organization’s culture by demonstrating a commitment to inclusion.
    Perhaps the most meaningful way to do that is by dedicating time to work personally on diversity and inclusion initiatives. A quarter of the CEOs we interviewed mentioned direct involvement with diversity programs, such as meeting regularly with employee resource groups and diversity councils. 
    Banga, Moynihan, and Thodey even chair diversity and inclusion councils themselves. By pointing the way, CEOs will help their organizations attract and develop the best, most diverse talent, giving them the edge they need to succeed.


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