Spend your money thoughtfully

Here are some helpful guidelines for evaluating and prioritizing how you spend your money, a good exercize for annual review.

Many people think about personal finance as an unemotional, detached pursuit, but it's really nothing of the sort. Money is a means to an end, and what you do with it is all about feelings and values. My wish for 2008 is that the luxuries we choose will fill our lives with warmth and that we will get the precious things that we yearn and work for.

2007 Requiem

Of the children born in 2007, we won't know for quite a while how their lives will turn out. Which ones will impact the world, which will live quiet, honorable lives, which will end in tragedy or fade away in disappointment.

But we can look back on those who passed away in 2007 and marvel at their gifts and ways they made a difference in the world. See this article in the LA Times for a list of notable people who died this year.

Among the major notables who passed from the scene this year, three of the most famous -- two masters of cinema and a genius of football -- died on the same day: July 30.

Golden Compass

This is a new movie based on the "Dark Materials" trilogy by Phillip Pullman. Here is a thoughtful review looking at his anti-God philosophy behind the books.

"In these books, Lyra discovers that Lord Asriel is mounting a war against God, and she meets a boy from our own world named Will, who acquires a knife that can cut through anything, including the barrier between universes. The knife even has a prophetic name, Æsahættr, which means "god-destroyer." By the end of the trilogy, God is dead, and Will and Lyra have reenacted the Fall in the Garden of Eden—but in doing so, they save the universe rather than destroy it.

"In Pullman's story, the God of the Bible is not really the Creator, but simply the first angel who emerged out of what Pullman calls "Dust." When other angels emerged, he lied and said he had created them—and he went on to set up churches in multiple universes, to assert his control over them. But now this angel, who is called "the Authority," is old and weak and faces a rebellion by angels and humans alike....

"Pullman says he's just a storyteller," continues Watkins. "I think he's really slippery at this point. Because it's all very well saying, 'It's just a story, just a fantasy, some of the characters say what I believe and some of them don't'—but in his Carnegie Medal speech, he said stories create the morality we live by.

"The trouble is, he blurs the line between fantasy and reality by giving interviews and talking about the Republic of Heaven in the world. And because he's got all of this anti-God rhetoric in the real world that is even stronger than what's in the book, I think he can't get away with saying, 'It's just a story and you can read into it whatever you like.' Because he does understand what he's saying."

The Smart Complexifier

Another great observation from Tom Peters in the same post I previously quoted on Trying Out Ideas. I bet you know some people like this, especially if you hang around academics!

Years ago, in my McKinsey days, one of my bosses was bemoaning the help we were getting from an "economic genius." He said, "Tom, consider a matrix. One axis boils down to 'simplifier' vs 'complexifier.' The other is 'smart' and 'dumb.' Thus we are dealing with a 2X2 matrix. The analyst-from-heaven is the 'smart simplifier.' The analyst-from hell is 'smart complexifier.' He is, in fact, worse that the 'dumb complexifier,' who you can simply ignore, and the 'dumb simplifier' who might actually be of help."

Trying Out Ideas

I love analyzing and conceptualizing and brainstorming...but have no use for them if they don't result in action. Let's try something, baby! If it works, multiply it; if it flops, move on.

And here we get some more insight into the value of flops - they can lead to great revisions. Tom Peters writing about MIT Media Lab guru Michael Schrage, author of Serious Play:

"You can't be a serious innovator unless you are ready and able to play. 'Serious play' is not an oxymoron; it is the essence of innovation." And, in turn, the heart of his serious play is ... fast prototyping: "Effective prototyping may be the most valuable core competence an innovative organization can hope to have." His intriguing connection, which makes all the sense in the world to me, is that true innovation comes not from the idea per se, though it guides the work, but from the "reaction to the prototype." In fact, in a surprising number of cases (the majority?) the collective responses to a host of fast prototypes reshape the original idea beyond recognition—or lead one down an entirely new path.

Defining Hard Work

From Seth Godin:

Sure, you're working long, but "long" and "hard" are now two different things. In the old days, we could measure how much grain someone harvested or how many pieces of steel he made. Hard work meant more work. But the past doesn't lead to the future. The future is not about time at all. The future is about work that's really and truly hard, not time-consuming. It's about the kind of work that requires us to push ourselves, not just punch the clock....

It's hard work to make difficult emotional decisions, such as quitting a job and setting out on your own. It's hard work to invent a new system, service, or process that's remarkable. It's hard work to tell your boss that he's being intellectually and emotionally lazy. It's easier to stand by and watch the company fade into oblivion. It's hard work to tell senior management to abandon something that it has been doing for a long time in favor of a new and apparently risky alternative. It's hard work to make good decisions with less than all of the data.

Today, working hard is about taking apparent risk. Not a crazy risk like betting the entire company on an untested product. No, an apparent risk: something that the competition (and your coworkers) believe is unsafe but that you realize is far more conservative than sticking with the status quo....

None of the people who are racking up amazing success stories and creating cool stuff are doing it just by working more hours than you are. And I hate to say it, but they're not smarter than you either. They're succeeding by doing hard work.

As the economy plods along, many of us are choosing to take the easy way out. We're going to work for the Man, letting him do the hard work while we work the long hours. We're going back to the future, to a definition of work that embraces the grindstone....

Hard work is about risk. It begins when you deal with the things that you'd rather not deal with: fear of failure, fear of standing out, fear of rejection. Hard work is about training yourself to leap over this barrier, tunnel under that barrier, drive through the other barrier. And, after you've done that, to do it again the next day.

Good Answer

Coming in at #4 on the Sports Illustrated list of 5 hardest-working athletes of all time, 49-year-old julio Franco of the Atlanta Braves tells the secret of his success:

4. Julio Franco: So maybe he can't get around on the fastball like he used to, but the man the Braves called up last week is 49 YEARS OLD. He's built like a Greek statue, and he can still take a ball to right field better than any of the Braves first basemen (other than Mark Teixiera.) I also like him because after Andy Van Slyke insinuated that Franco must be on steroids, Franco responded, "Tell him the steroid I'm on is Jesus of Nazareth."

Death by waiting

Technically, California supports capital punishment. In practice, it does not.

About 30 criminals a year are sentenced to death, but only one criminal a year is actually executed. The backlog is getting larger and larger and the wait is getting longer and longer. More prisoners die in California from old age than from execution.

The average wait for execution in the state is 17.2 years, twice the national figure. And the backlog is likely to grow, considering the trend: Thirty people have been on death row for more than 25 years, 119 for more than 20 years and 408 for more than a decade.

LA's formula for growth

Interesting background and outlook on LA's urban development

Los Angeles ran out of raw land more than 20 years ago and therefore had to move beyond the traditional suburban ideal of single-family homes on tree-lined streets. So it, along with older suburbs stretching from San Fernando to Westminster, is doing what cities have done throughout history -- building up instead of out to accommodate the housing needs of a growing population and an ever-changing set of construction and space requirements for businesses.

This isn't always pretty. But the end result is what L.A. needs to be -- a more urban city....

In the 1970s, when L.A.'s suburbs began sprouting, the city adopted, in 1974, an innovative general zoning plan that called for high-density development around 38 centers in the city, connected by transit, that would absorb most of the growing population. These centers would allow permanent preservation of the vast fields of single-family houses located between them.

The "centers concept," as it was called, was the brainchild of Calvin Hamilton, city planning director from 1964 to 1986. At a time when planning orthodoxy argued that cities had to be "mono-nuclear" -- built around one extremely dense center, like Manhattan -- L.A.'s plan was nothing less than revolutionary. Hamilton's visionary plan acknowledged that L.A. was "poly-nuclear" -- a place with many centers, of varying sizes, all of which had to be strengthened for the city to accommodate new growth.

A reasonable look at immigration issues

Here's a good article revealing the quandary of the American immigration problem: the need for both effective enforcement and realistic laws. If authorities begin enforcing current laws, businesses and the American economy are going to suffer.

But what if, instead of choking the economy, the no-match blitz only drives more of it underground? Some companies will fire their illegal workers and downsize or move. Others will fire and then rehire them -- more deviously or completely off the books. Shady labor contractors will proliferate. Identity theft will skyrocket. Employers who have tried to play by the rules -- asking to see workers' papers, filling out the required forms -- will suffer, while those who deliberately flout the law will thrive and multiply.

The unintended consequences: more underground hiring, more sub-market wages, more mistreatment of immigrants, less tax revenue (most immigrants with fake papers pay taxes -- $5 billion to $10 billion a year in Social Security taxes) and a less regulated, more dangerous workplace for everyone.

Whose fault will this be? Not the feds -- it's their job to enforce immigration law, a job they've neglected for far too long. Some of the blame will lie with Congress, which could have changed the law, making it possible for employers to legally hire the workers they need. But in the end, the mess will be of our own making -- we the skeptical public who signaled to policymakers in May and June that we didn't trust them to rewrite the immigration code.

We told them to enforce existing law without changes, and that's what we're about to get. The question is what we'll do when that doesn't work and whether we can learn from our mistake.

Long Term Results

are more important than short-term success. And there is no better way to learn over the long haul than trying new things and finding out what works and what doesn't.

Tom Peters' observes that the Miami Dolphins' loss in an exhibition game was an example of "failing forward fast," using it as an experimentation and learning experience for longer term growth:

While often credited for "fail forward fast," Peters actually heard it first from a Philadelphia high-tech executive two decades ago.

"I use it routinely," Peters said.

If Peters, who did some consulting with the late Bill Walsh, was coaching an NFL team, he would use it regularly before exhibitions.

"The whole damn purpose is to test stuff, try stuff," Peters said. "And whether you're shooting pool, playing golf or playing violin, the only way you learn is if you're screwing up. My major argument in the world of business is there's too much planning and too much talking, and not enough doing. The only way you grow, for God's sake, is go out and do it, and then correct quick."

So Peters endorses failure, calling it "not only normal but good," so long as that failure is achieved by trying something "with incredible vigor" and not through laziness. He endorses sticking employees in adverse situations, especially employees like Green, who trust the boss enough to understand — so long as you can recognize when an employee needs confidence and you can respond by creating a more favorable situation.

More is Better

The truth about the debate over global warming is that we all want MORE and we don't like the idea of limiting ourselves - or even worse, others telling us we can't have what we want. The real American Idol is consumption. Seth Godin gives ideas on how to market ecology:

"More has been around for thousands of years. Kings ate more than peasants. Winning armies had more weapons than losing ones. Elizabeth Taylor had more husbands than you.

"Car dealers are temples of more. The local Ford dealership lists four different models... by decreasing horsepower. Car magazines feature Bugattis, not Priuses on the cover. Restaurants usually serve more food (and more calories) than a normal person could and should eat.

"Is this some sort of character flaw? A defective meme in the system of mankind? Or is it an evil plot dreamed up by marketers?

"There's no doubt that marketers amplify this desire, but I'm certain it's been around a lot longer than Jell-O.

"One reason that the litter campaign of the 1960s worked so well is that 'not littering' didn't require doing less, it just required enough self control to hold on to your garbage for an hour or two. The achilles heel of the movement to limit carbon is the word 'limit.'

"It's a campaign about less, not more. Even worse, there's no orthodoxy. There's argument about whether x or y is a better approach. Argument about how much is enough. As long as there's wiggle room, our desire for more will trump peer pressure to do less. "Fight global warming" is a fine slogan, except it's meaningless. That's like dieters everywhere shouting, "eat less" while they stand in line to get bleu cheese dressing from the salad bar.

"As a marketer, my best advice is this: let's figure out how to turn this into a battle to do more, not less. Example one: require all new cars to have, right next to the speedometer, a mileage meter. And put the same number on an LCD display on the rear bumper. Once there's an arms race to see who can have the highest number, we're on the right track."

First to 100

NCAA Division I championship leaders (men's and women's):

1. UCLA 100
2. Stanford 93
3. USC 84
4. Okla. State 48
5. Arkansas 43
6. Louisiana State 40
7. Texas 39
8t. Michigan 32
8t. North Carolina 32
8t. Penn State 32

Preaching to the Choir

Interesting. It seems that you are more likely to get clients for your services among people who are already enthusiasts and who want to improve, rather than from among those who are the neediest for it.

How to apply this for your product?

"Most people in the US can't cook. So you would think that reaching out to the masses with entry-level cooking instruction would be a smart business move.

In fact, as the Food Network and cookbook publishers have demonstrated over and over again, you're way better off helping the perfect improve. You'll also sell a lot more management consulting to well run companies, high end stereos to people with good stereos and yes, church services to the already well behaved."

Educators Against Competition

Why am I not surprised that the college presidents mentioned in this USA Today article are against judging their schools' performance? Isn't that a basic tenet of modern education, that teachers and the educational process cannot be held up to evaluation of results?

A dozen college presidents have pledged to boycott a key component of the U.S. News & World Report college rankings because they say the popular rankings mislead prospective students and encourage gamesmanship.

The presidents — from a range of mostly smaller institutions including Dickinson College in Pennsylvania and Earlham College in Indiana — outlined their complaints in a letter dated Saturday to colleagues at other schools.

The letter says the dozen colleges have pledged to stop filling out the part of the survey in which colleges rate each other, which accounts for 25% of a college's ranking. The colleges say they also will no longer use the rankings in their own promotions and ask other schools to do the same.

Religious Interest Growing at US Universities

This report from the International herald Tribune, including some of their analyses:

Across the country, on secular campuses as varied as Colgate University, the University of Wisconsin and the University of California, Berkeley, chaplains, professors and administrators say students are drawn to religion and spirituality with more fervor than at any time they can remember.

More students are enrolling in religion courses, even majoring in religion; more are living in dormitories or houses where matters of faith and spirituality are a part of daily conversation; and discussion groups are being created for students to grapple with such questions as what happens after death, dozens of university officials said in interviews.

A survey of the spiritual lives of college students, the first of its kind, showed in 2004 that more than two-thirds of 112,000 freshmen surveyed said they prayed and that almost 80 percent believed in God.

Nearly half of the freshmen said they were seeking opportunities to grow spiritually, according to the survey by the Higher Education Research Institute at the University of California at Los Angeles.

Minimize or Maximize?

Seth Godin tells of an encounter with bad marketing, at the Indian Embassy when trying to get a visa. He lists many ways to improve the attractiveness and easiness of travelling to India, then notes:

"My takeaway was this: the people in that building were way too nice and way too smart to not know the many ways they could fix this process. The problem is that this bureaucracy, like most bureaucracies, has an attitude of minimizing, not maximizing. They want to minimize expense, not maximize benefit. There isn't a single person there who has as part of his job, "change systems to increase the satisfaction of people we deal with." Nobody who is charged with, "increase revenue opportunities for us and for the people we work with." Or even, "employ more people in Delhi."

"Same thing happens at my village zoning board, at most schools, at many churches and even, believe it or not, at most businesses. It's not that difficult, but it requires a very different mindset."

Is your organization focused on maximizing or minimizing?

World's Top Brands

What do the world's top brands have in common?

A lot of customers!

And one reason is that most of these companies provide good experiences - they do their jobs well and make customers happy. You know what you are going to get from Google, and they do it well! And they are providing a service that people want.

NEW YORK (Reuters) - Google Inc. has knocked Microsoft Corp. from its perch as the world's top-ranked brand, according to findings released on Monday.

The rankings, compiled by market research firm Millward Brown, also put Google ahead of well-established brands like General Electric Co., No. 2; Coca-Cola Co., No. 4; Wal-Mart Stores, No. 7; and IBM, No. 9.

Some key factors seen this year in building brand recognition ranged from corporate responsibility to serving customers in emerging markets like Brazil and India, according to the study.

The top-ranked brand from a non-U.S.-based company was China Mobile, which dropped a spot but still came in at No. 5.

The rankings were based on publicly available financial data along with primary research, including interviews with a million consumers worldwide, Millward Brown said.

For Google, which ranked No. 7 a year ago, the jump to the top underscores how quickly the Web search leader has become an everyday name. The company uses relatively little advertising, instead relying on word-of-mouth promotion.

By contrast, Microsoft's slide down to third place from first comes even as the software company has been rolling out its new Windows Vista operating system with a massive global marketing blitz.

Eileen Campbell, global chief executive of Millward Brown, said the rankings showed "a blend of good business leadership, responsible financial management and powerful marketing ... can be leveraged to create and grow corporate wealth."

Some of the other big movers on the list included Apple Inc.. which rose 13 spots to No. 16 and Starbucks Corp., which rose 13 spots to No. 35. Those losing ground in the brand rankings included Intel Corp., Home Depot Inc. and Dell Inc.

The Brand Formula

GREAT advice from Seth Godin:

What's a brand?

I think it is the product of two things:

[Prediction of what to expect] times [emotional power of that expectation].

If I encounter a brand and I don't know what it means or does, it has zero power. If I have an expectation of what an organization will do for me, but I don't care about that, no power.

Fedex is a powerful brand because you always get what you expect, and the relief you get from their consistency is high.

AT&T is a weak brand because you almost never get what you expect, because they do so many different things and because the value of what they create has little emotional resonance (it sure used to though, when they did one thing, they did it perfectly and they were the only ones who could connect you).

The dangers of brand ubiquity are then obvious. When your brand is lots of things (like AOL became) then the expectations were all over the place and the emotional resonance started to fade. If the predictability of your brand starts to erode its emotional power (a restaurant that becomes boring) then you need to become predictable in your joyous unpredictability!

If you want to grow a valuable brand, my advice is to keep awareness close to zero among the people you're not ready for yet, and build the most predictable, emotional experience you can among those that care about you.

Living with lies

From World magazine, questioning Americans' acquiescence to media bias. Worth asking ourselves, what lies goes unquestioned in my everyday world? How do they affect me? How should I respond?

"why in the world do we keep listening to our nation's major media? Why do the nation's big newspapers, radio and television networks, and wire services keep getting a pass—when day after day and night after night they keep hurling king-sized lies our way? Just to remind us how gullible we all tend to be, here's a short list of where the big media regularly get it not just slightly skewed but exactly backwards. Here are seven Big Lies we all are subjected to virtually all the time:
"