40 posts categorized "economics"

April 05, 2013

This Outsourced Life

According to Quartz, experts predict that 40% of America's workforce will be freelancers by 2020.

Of course, this is barring the government doing anything to compensate for this trend by -- for instance -- barring companies from hiring contract workers instead of part-time employees, or by forcing them to hire a greater percentage of their worforce as full-time. This would be a collossal mistake. In fact, the current trend toward freelancing is largely representative of the market's adjustment to government mandates on employers. 

How? Let's take a look.

Now that the U.S. Supreme Court has upheld the Affordable Care Act (A.K.A. "Obamacare"), when in full effect, every person will be required to have "health insurance." How they are mandated to pay for that insurance is quite a tangled web, but the end result is that it becomes more expensive to keep a full-time staff onhand. Companies under 50 employees have to think long and hard about the implications of growing beyond 50 employees in a manner commensurate with the risk they're willing to take, simply because they're opening themselves up to higher expenses in penalties or fees.

So what do they do? They have a few options available.

  • They can just not hire that 50th employee and have everyone else work longer hours
  • They can reduce the number of full-time employees and rely on a number of part-time employees (I've heard fast food restaurants already do this)
  • They can farm out much of their work to contractors instead of employees
  • They can hire the extra employees and assume the associated costs

There is nothing "ideal" about any of these scenarios. Each one has an associated benefit and a cost. And here's another newsflash for people who want to tell the companies which one of them they have to pick: You don't know all of their businesses, and therefore you don't know which one they can afford to do and which one they can't. 

When economists talk about the cost of labor, it tends to make workers seem like a commodity. And in economic terms, they may be, but we risk desensitizing ourselves to the very uniquely human needs, hopes and dreams that go along with the people who are affected by these policies. However, this applies both to the workers as well as the people who own and manage the companies that this affects. 

Attempts to demonize companies for doing the best they can under the macroeconomic climate they probably had no hand in creating may win votes for certain politicians, but it is counterproductive to the goals of reaching full employment and increasing prosperity for the whole of the people. 

Postscript:
It's also important to consider the other effects of the increased cost of living such mandates require. This started long ago, but the new law now requires younger people to subsidize the cost of insuring older people, and healthier people to subsidize the care for less healthy people, average families can ill-afford to have only one working parent, which means two-parent families also have to outsource the raising and caring for their children, irrespective of what they would otherwise be capable of doing if only these requirements were never handed down from the rulers on Mount Washington.

October 07, 2011

What is Ford?

 

I've been actively considering a new car purchase for about a month now. Back when I was only anticipating this time to come, I considered Ford a strong candidate for a new car. First of all, their cars have simply improved. As far as quality goes, they've come a long way since S&P downgraded its credit to "junk" status in 2006. The "Bold Moves" campaign, while not one of their more memorable, gave us a glimpse into their advertising and PR push they've been doing since then, up to their very wise hiring of former Crayonista Scott Monty in 2008 and their use of Dirty Jobs frontman, Mike Rowe, as their spokesperson.

They made me a believer.

Consequently, I've been looking for an excuse to buy a Ford since they turned down the auto bailout to make their own way, so when their recent campaign to spotlight the testimonies of Ford owners who were critical of those who took the bailout, it really resonated with me.

Though no one at Ford will confirm it, some reports say that the White House put pressure on Ford to remove the ads. That bothers me. It bothers me a lot. But Ford's response, and the information that's come to light since then bothers me, too.

The focus of the ads is a moral one. The people giving their testimony clearly favor Ford on moral grounds.

Ford didn't take the money. The other guys did.

Implied in this treatment is a moral case for making your own way and not asking the taxpayers to foot their bill. That may make some people uncomfortable, but it was exactly what I was thinking. And the ads were popular, so I wasn't the only one.

Now... I did remember that they were right in the mix of the Congressional hearings during the bailout talks about the auto industry being "too big to fail," but when they withdrew, I wanted to believe they had second thoughts because they knew they shouldn't be asking in the first place. The cost for such assistance was too high.

As it turns out, though, they made the decision for business reasons. They supported the bailout in principle, which is to say, morally. They just thought their chances for success were better if they didn't accept the bailout. They supported it for their rivals getting it.

So why would they run ads that celebrate their "principled stand" when it wasn't anything more than the same self-interest that their competitors were using in their case?

I still need to get a car... And I can no longer select Ford on principle. There is no principle to defind. Consequently, I'll buy a Ford only if they have the best car for what I'm willing to spend. 

February 03, 2011

Call Your Game. Play to Win.

Mike-tomlin At the recent AFC Championship game between the New York Jets and the Pittsburgh Steelers, near the end of the game, the Steelers clung to a narrow lead and faced 3rd down with 6 yards to go. The Jets were out of timeouts, but there were 2 minutes left in the game. Should the Steelers not convert in that situation, the Jets would be hard-pressed to march down the field on the NFL's best defense to score the touchdown they would need to win and advance to the Super Bowl. Conventional wisdom (as articulated by the announcers of the game) was to run the ball, eat as much time off the clock as possible, punt and let the Jets try its hand against that stout defense with just over a minute left to play.

It was a pretty good bet, all things considered, but a risk either way. Their punter had a kick nearly blocked earlier in the game, and quite frankly, he hadn't exactly been booming his kicks since he joined the team earlier in the season when their original punter was injured. A long punt return -- even for a score (which was the ruin of several Steelers games last season) -- wasn't out of the question.

A first down, on the other hand, would enable the Steelers to safely kneel down on the ball, and the Jets would be powerless to stop the clock. A first down meant the game would be over, but it was unlikely that the Steelers could get a first down by running the ball, since the Jets were stacking up to stop the run. An incomplete pass would stop the clock. For all intents and purposes, it would have been a free time out for the Jets. 

The Steelers quarterback, Ben Roethlisberger, was not having a picture-perfect game, having barely completed half of his passes on the evening. It was no sure thing that he'd complete a pass or have the presence of mind to take a sack instead of making a risky throw against a very good defense. 

But when it came time to decide what to do at that critical moment, Steelers coach Mike Tomlin didn't hesitate. He did not vacillate. "Call your game, BA," he said to his offensive coordinator, Bruce Arians, who called a pass play that, in conjunction with some improvisation by the offense on the field, picked up a first down that sealed the game for the Steelers.

Had the pass been intercepted, or left enough time on the clock for the Jets to run down the field and score, Steelers fans around the world may still be calling for the head of Tomlin. Had the Steelers run the ball, punted and left the game to the defense, no matter what the outcome was, sports pundits would openly wonder if Tomlin lacked the guts to risk losing in order to put the game away.

Now, we have a tendency to measure success based on outcomes, and as such, it's easy to look at that game in hindsight, knowing full well the Steelers are going to their 3rd Super Bowl in 6 years and say that it was a smart move. Gutsy, even. But there's something the certainty of hindsight that makes us forget the loneliness of leadership.

Having observed Tomlin in action, I feel like I know enough to say that, had they let that 24-point lead they once had slip away to defeat, he would have simply said, "That was my decision. If you want to blame someone, blame me. I don't apologize for it. I'd do it again in the same situation." And he'd have plenty of evidence from his team's capabilities to supply such confidence, regardless of the outcome. But evidence doesn't necessarily stop the critics. That's what makes them critics.

A fond farewell

I bring this up today because I've recently decided to say goodbye to my friends and colleagues at Click Here and The Richards Group, with whom I've been fortunate to work with for nearly 7 years, to offer my user experience (UX) skills to the bright folks at Slingshot.

Though sad to leave the place I've spent so many days and nights and leave the good friends and good people who've toiled with me in rain, sleet, snow and sunshine at Click Here, I'm very excited about the opportunity that lies before me -- an opportunity to go for the win, not just for myself, but for my family, my new employer, their clients and their customers related to the projects I'll be working on with my new friends and colleagues at Slingshot.

How do you save the world? One project at a time.

In a recent conversation with a friend and project manager, Joe Wilson (this one, not that one) I expressed my philosophy on business and user experience that frames everything I do, and why I care and take my job very seriously.

In short, I enjoy helping good people and good businesses succeed for the right reasons, for their wealth brings higher employment and individual prosperity, and with that, a better opportunity to not only reduce poverty, but also help those who need assistance, voluntarily. 

"You're trying to save the world," Joe exclaimed.

"Yeah," I told him, "I am," without really reflecting on just how silly it sounded.

Because for man, this is impossible. I know this. Only God has that kind of power. However, that knowledge does not aleive us of our responsibility to our part. To make strides to his purpose, sometimes you need to pass when conventional wisdom says you should run. You have to take risks. You have to play to win, even if it means stepping away from the environment to which you've been accustomed to venture out onto a new playing field and a new strategy that you hadn't originally envisioned.

For one reason or another, that time has come for me.

I extend sincerest best wishes to the entire Click Here organization and everyone I've been blessed to work with over the last 7 years. I cannot express enough gratitude for what you all mean to me.

But I also look forward to the future with great hope and anticipation. Fasten your safety belts, folks. No matter what happens, we're in for a fun ride. - Cam Beck

 

December 30, 2010

Love Thy Customers: Advice for the Next Decade

"You know what the first rule of flying is? ... Love. You can learn all the math in the 'Verse, but you take a boat in the air that you don't love, she'll shake you off just as sure as a turn of the worlds. Love keeps her in the air when she oughta fall down, tells you she's hurtin' before she keels. Makes her a home." - Malcom Reynolds, Serenity (2005)

10 There's a scene in the sci-fi classic movie, Serenity, where, after a successful heist perpetrated against the evil Alliance, the crew's captain Mal takes the booty back to the job's sponsors, Fanty and Mingo, to give them their 25% commission and (hopefully) get another job. 

"Well our end is forty, precious," says Fanty. One gets the sense that there was soon going to be a major fight when the dueling parties were distracted by an even more entertaining brawl.

Can you imagine a world without trust?

You're at the checkout counter of the grocery store. You need some ingredients for apple crisp. The clerk, who has been eyeballing you for your entire visit, refuses to put the groceries in the bag until he's seen the money. You refuse to show the money until you're sure he'll let you out of the store with them.

But back up. Because before you get to the checkout, you have to inspect all of the fruit. You want to make sure they're not old, rotten mush. You also need to inspect the bags of sugar to make sure they aren't filled with sawdust. The grocer doesn't want you to open the bags, out of fear that you'll replace his sugar with sawdust. So you'd leave without buying, because you don't trust that beady-eyed grocer.

But back up. Because you can't leave your house anyway to go to the grocery store out of fear that you'll get mugged by the ruffians that patrol the neighborhood. You've never seen them, but you're sure they're there. Anyway, the grocer could never have opened a store in the first place, because no one would trust him with a loan. You get your groceries from a garden out back, which is decimated with insects, because you don't have anyone to sell you pesticides.

Successful, sustained commerce depends on a lot of things. We talk a lot about them in the course of our work. Some of them have value, some of them are hogwash. ROI. CPM. Engagement. Usability engineering. Experience. Product, Price, Place, Promotion. Branding. Income statements, balance sheets, cash flow. Social Media. Customers service.

We go to school, conferences and seminars to understand or execute them better. We send wads of cash to Amazon and Barnes and Noble to gobble up Seth Godin's books. And there's nothing wrong with ANY of that. Why would I begrudge anyone from getting better at the technical aspects of their jobs?

But what if we need something more elemental than all of that?

What if our deepest problem isn't whether we know how to calculate return on investment and successfully predict the future. Specifically, what if our deepest problem is that we don't love our neighbors well? And if that is true, what can we do about it?

What's more, how do we encourage each other to love others better? It seems a little self-serving. For when we say to our neighbors, "Love your neighbor," we're including ourselves in that group. We're saying to them, "Love us better." But as a man in the business of talking to others in business, my advice to all those who wish to be successful is this:

Love your customers better.

Thinking over the last decade, we've seen the likes of Enron, WorldCom, Bernie Madoff, Lehman Brothers -- the entire banking and investment industry -- industries run by "the best and the brightest," who went to the "best" schools run multi-billion dollar businesses into the ground as they sought to enrich themselves. It isn't a question of whether they knew how to do math. It was that they loved themselves more than they loved their neighbors.

Why is love so important to commerce?

  • You don't rob someone you love.
  • You don't try to swindle someone you love.
  • You don't overcharge someone you love.
  • You keep your promises to someone you love.

The apostle Paul tells us in 1 Corinthians 13 what love is and just how important it is. Let's look at what he says, particularly about knowledge or the ability to tell the future:

"And if I have prophetic powers, and understand all mysteries and all knowledge, and if I have all faith, so as to remove mountains, but have not love, I am nothing. If I give away all I have, and if I deliver up my body to be burned, but have not love, I gain nothing."

He continues.

"Love never ends. As for prophecies, they will pass away; as for tongues, they will cease; as for knowledge, it will pass away… So now faith, hope, and love abide, these three; but the greatest of these is love."

When you look at the last decade through the lens of improving technologies and products that change the way we communicate, it superficially appears to be a much different environment than in decades past. Could you have imagined Facebook and Twitter a decade ago? Could you have predicted its adoption?

What's more, people who are so inclined have more sophisticated methods to take advantage of/steal from others -- through economics or politics -- and that fosters an abiding suspicion of business, whether the suspicion is well founded in any particular instance or not.

But sometimes you have to take a step back from the pounding you're taking and get back to the basics. None of the things we do in business and marketing makes a difference if we have not love. What's most important to you? What do you want to accomplish? You want to see economic recovery? Then love thy customers. When you do that purely, the circumstances that follow apart from that don't even matter.

- Cam Beck

November 12, 2010

A Brilliant Defense

This is, perhaps, one of the best defenses of private enterprise I've seen. Very happy that these videos, recorded in 1979, were not lost to antiquity. The only question now is if they will be lost to apathy.

 

 

 

 

 

Your honor... The defense rests. - Cam Beck

October 15, 2010

Thirsty for Help

AoC-BuyNow3 How often do you stop and consider how fortunate we are?

I don't mean to brag. But I take a shower every morning.

This practice has great benefits, not just for me, but for those around me.

I have to confess, though, that sometimes I stand in there a few extra minutes in the morning to wash the cobwebs out of my brain -- past the point that is necessary to get clean.

Take a moment to feel the weight of this: Unsafe water and poor sanitation cause 80% of all diseases.

There are two easy and rewarding ways to combat this problem:

  1. Increase prosperity
  2. Charitible giving

Now you can do both at the same time.

This year, Drew McLellan and Gavin Heaton led the march to publish The Age of Conversation 3. It is full of the useful insights of over 100 authors (including yours truly) to help you do your part to increase prosperity.

However, neither we, the authors, nor Drew and Gavin, the coordinators and editors, make a dime off of it. All profits go straight to charity:water, which brings clean drinking water to developing nations.

Here's are all the ways you can help:

The step-by-step is as follows:

  1. Buy the Book and ask others buy the book. If you work in an agency or another business that gives books as gifts, get your company to purchase multiple copies and give them out as year end gifts. This is the #1 call to action, because this is where we want to see the most impact. NOTE: Please buy 1 copy at a time because Amazon counts bulk orders once, and please use these affiliate links, which will help us in tracking sales. Remember, all the proceeds from the book sales and referrals will go to charity water:
  2. Twitter Commentary - Join the AOC authors as we give a Bum Rush play-by-play on Twitter. We also ask that everyone saying anything about the Bum Rush to use the code #aoc3 so that it can be picked up by What The Hashtag.
  3. Trackback or Comment on the post that Gavin will leave here today, so that everyone can follow the conversation and help promote exposure on social sites (Digg, StumbleUpon, Del.icio.us, etc.)
  4. Digg the posts listed here and send emails and shouts to friends requesting Diggs.
  5. Stumble the posts listed and tell friends to do the same.
  6. Bookmark your posts on Del.icio.us
  7. Don’t forget Facebook – Make sure to become a Fan of AoC3 and to contribute to our wall
  8. Send an Old Fashioned email to your friends about the Bum Rush for AoC.

- Cam Beck

 

August 27, 2010

Beware the People Weeping

When President Lincoln was assassinated by the actor John Wilkes Booth in 1865, Herman Melville wrote a poem called "The Martyr," based on the atmosphere and mood of the people of his day. The observations contained therein, however, are prophetic for all peoples of all times, when they feel they have been wronged but have recourse for severe retribution.

There is sobbing of the strong,
And a pall upon the land;
But the People in their weeping
Bare the iron hand:
Beware the People weeping
When they bare the iron hand.

In his famous Second Inaugural Address, given while the rebel army was on its heels but still in te fight, Lincoln made his intent to be merciful clear (and in doing so, perhaps, sowing seeds of hope in the Confederate soldiers' minds that the Union might offer terms for surrender that allowed them to live in dignity and honor after the war's conclusion):

With malice toward none; with charity for all; with firmness in the right, as God gives us to see the right, let us strive on to finish the work we are in; to bind up the nation's wounds; to care for him who shall have borne the battle, and for his widow, and his orphan -- to do all which may acheve and cherish a just, and a lasting peace, among ourselves, and with all nations.

Melville not only acknowledged this intent, he led with it. Melville's opening stanza brilliantly contrasted Lincoln's magnanimity and his assassin's (which was not limited to Booth alone) bitterness:

Good Friday was the day
Of the prodigy and crime,
When they killed him in his pity,
When they killed him in his prime
Of clemency and calm--
When with yearning he was filled
To redeem the evil-willed,
And, though conqueror, be kind;
But they killed him in his kindness,
In their madness and their blindness,
And they killed him from behind.

Take notice of how he says "they killed him in his kindness." Not "he." 

It's clear that Melville knew that the entire South would be blamed for Booth's actions, and the vacuum left in Lincoln's place lacked his pity. It was filled with the iron fist of empowered retribution. 

In the aftermath of the assassination, measures were taken to deal harshly with the southern states that were in rebellion.

Take heed. That posture threatens us today.

Everyone seems to entertain, if not harbor, a paralyzing anger of fear about something. 

Business has taken a pretty big hit over the last few years given the state of the economy. Accusations of malfeasance and unfairness have motivated the peddlars of victimhood to rally the people (to the extent they needed them) to call for the consolidation of power that gave them control over the outputs of their professions: Pharmaceutical companies. Health care. Wall Street. Walmart. You name it.

We live in interesting times. The actions we take may affect us for the next hundred years, just like happened in the aftermath of the Civil War and Reconstruction, when the people sought the "iron fist" rather than mercy after their captain had been murdered.

We seem to see it as a paradox similar to Thomas Jefferson's outlook on slavery in his day, "We have the wolf by the ear, and we can neither hold him, nor safely let him go."

I might suggest an alternative outlook to Jefferson's. This one belonged to Booker T. Washington:

"There are two ways of exerting ones' strength: one is pushing down, the other is pulling up."

Just so. The power to create is the power to help. The power to help is the power to change. 

By contrast, the power to destroy requires no creativity at all. All it requires is an iron fist. 

Instead of seeking ways to punish, repress and destroy, we ought to, like Lincoln and Washington, be seeking ways to create and to help. Sometimes things work our way, sometimes they don't. 

But helping others through the sweat of your own brow (not demanding the sweat of others, which is the very definition of slavery), regardless of how they treat you, is always a winning formula for success. - Cam Beck

February 24, 2010

Why this iPad Won't Kill the Kindle Platform (and how it could)

Apple-iPad-001

Many have already voiced glowing praise or strong disapproval of Apple's recently announced iPad.  Some proponents, such as Leo Laporte, call it a "Kindle Killer." Skeptics and haters call it "The next Apple Cube."

These judgments are premature, however. Whatever "magic" Apple has in store for the future, there's nothing in the first generation iPad that changes the market dynamics so completely that it will disrupt Amazon's economics with the Kindle solely as an eReader.

People who buy eReaders are typically going to take reading seriously. The advantages that they bring are best realized by certain types of people:

  • Heavy readers who want to enjoy the improved economics that eBooks bring
  • Heavy readers who want to conserve physical space
  • Anyone who travels frequently and likes to read on trips

With these audiences, the iPad falls short for a number of reasons:

1. Nearly twice the cost of entry
The starting price for the iPad is $499. For the Kindle, it's $259. By way of example, assume the average eBook price is $10, with its hard-copy counterparts costing twice that. A Kindle owner must purchase 26 books before breaking even. An iPad owner would need to purchase 50. 

So for the heavy reader, the economics are hard to justify. For the casual or occasional reader, they are nearly impossible -- if they're going to use the iPad over the Kindle simply as an eReader.

2. Back-lit display
The e-Ink technology that drives most eReaders today has some limitations, but it minimizes eye strain compared to back-lit displays, such as what the iPad has. For heavy readers, this is a significant drawback. It means they can't read as much without their eyes getting tired. It may still be viable for those who are not heavy readers, but in that case, the economics make even less sense solely as an eReader, and except by virtue of wide market distribution, Apple's bookstore cannot promise much revenue to publishers, making the marketplace less attractive (especially as a closed system, as it likely will be).

At least the format is open-source anyway, so they don't have to reformat their books specifically for the iPad.

3. Shorter battery Life
10 hours is a lot of time to be reading. And the standby time the iPad promises is remarkable, but a back-lit display capable of showing full-color images, videos and applications comes at a price. With wireless off, the Kindle can go at least two weeks without a charge, so there's no reason to be tethered to a power source for travelers.

Marketing Differences

Because the iPad does a lot of things, it's hard to describe it using terms that are clear and understandable by a lot of people. The tagline for the iPad is "A magical and revolutionary product at an unbelievable price."

What's the frame of reference? It's a "product?" So is a refrigerator. And oatmeal. And manure. 

It's almost as if Apple believes an entire category can be created by adding abstract and glowing adjectives.

Plus, because the iPad does a lot of things, making promises about how many books it holds would undermine its uses as something other than just an eReader. And it is much more than just an eReader. It's a "product" that CAN be used as an eReader. Among other things.

The Kindle, by contrast, says it's a "reading device" and promises simply that it will hold 1,500 books. In other words, more than you'll read over the next five years.

That's much more concrete than "16GB," which is how much storage the entry-level iPad promises.

So, as an eReader, Amazon's Kindle enjoys the advantage of being able to be explicitly sold as an eReader.

Apple Raises the Bar for User Experience

Apple has done some things well. Even as an eReader iPad works in some important respects. The prevailing question is whether it works sufficiently for the consumer at their prices.

1. Intimacy
Though not flawless, the experience of reading a book on the iPad looks to be more intimate than with the Kindle. The page-turning metaphor is direct and closely resembles the experience of actually turning a page of a book. Along with the ability to deliver deeper content through color and multimedia (which is impossible with either the Kindle or a physical book), motivated publishers have the capability to engage consumers like never before possible.

2. Usability
The touch-screen interface allows Apple to dispense with the metaphors that drag down the Kindle. That makes interactions more direct and gives publishers and app developers more flexibility on how they choose to deliver their content. As such, students can hope that Apple's platform makes it easier to consume nonlinear books than the Kindle does. And since anyone with an iPod or iPhone is already familiar with the iTunes interface, assuming the experience of purchasing a book rises at least to that level of usability, there's very little reason to believe the experience would be any more difficult on the iPad than the Kindle.

3. Flexibility
The iPad does a lot of little things well, and it looks like it can be used to specialize or converge however its owner intends. It can be a personal assistant. It can be a gaming device. It can be used to stream music or movies (with the right app and know-how) from a media server. It can be used as a netbook computer (especially with the optional keyboard). It can be used as a home automation control pad. Or it can be used as all of these things.

The beauty and the curse is that the consumer controls what it will be used for.

The problem is that convincing the masses that something that CAN be used in such ways SHOULD be used in such ways relies on heavy, repetitive marketing, positive word-of-mouth, or consumers themselves having the imagination for its divergent possible uses. Oh, plus they must be willing to risk at least $500 on the prospects -- with no guarantee of success.

Here's where it gets exciting

I don't know how the mass marketplace will respond, or how much Apple is willing to reduce its margin to gain a wide penetration for the iPad if at first it does not take off.

But even if it doesn't, if Amazon is smart, they won't take this lying down. Nor will Sony or any other manufacturers of either popular eReaders or tablets. If it's successful, the iPad may either drive down the costs of pure eReaders and/or inspire the development of better interactions.

If that happens, people will be more willing to adopt the platform, the cost of reading will decrease, and publishers will be forced to participate in this space and -- hopefully -- embrace the efficiencies it represents for their entire industry.

Whether the iPad brings Apple financial success or not, Amazon will need to improve its interface (which is already very good for linear reading) and technology. The iPad (and -- perhaps more importantly -- the responses it will engender from rival tablet makers) will likely change users' expectation about how they should interact with books.

Even if Apple doesn't sell as many as they hope, I would still count the iPad a success if it resulted in widespread adoption and use of electronic readers in general. - Cam Beck

November 19, 2009

The Value of Y-O-U

Value_based_fees Recently I read Value-Based Fees: How to Charge and Get What You're Worth by Alan Weiss. I've coveted this book since I wrote Innovation by the Hour last year. After I worked through my rather large (and growing) stack of reading material, I finally was able to get my hands (and eyes) on it, and I am glad I did! (Thanks to Lisa for the recommendation).

Many, if not most, people in service industries bill for time and material. This is problematic in industries whose output includes ideas, for who is to say when (or on whose dime) ideas were generated? Who owns the idea formed in an employee's head if it never sees the light of day?

Weiss argues that the problem is far more pernicious. Many of the headaches involved in consultancy or agency relationships stem from a systemic flaw in their billing methods. Weiss says it plainly: It's "simply crazy" for consultants to base fees on time and materials. When you sell value and do your job correctly, you maximize your margin while ensuring the client feels like they got a bargain.

That is the definition of a "good deal."

The book is well-written, memorable, and at times shockingly honest. Weiss says he's glad his accountant hasn't read his books, because he'd pay a lot more if he had to pay for value, not for time and materials.

He also practices what he preaches. The Kindle version of the book, which obviously does not require printing or distribution fees, is still $32, which is much more than typical new releases sell for on the Kindle, and not much less than the printed version, brand new. This is because Weiss is selling an idea and techniques to implement it, not paper and ink.

That idea in the book is worth the same regardless of the method in which it's distributed. And if you're currently billing by time and material, at $32 or $100, it really is a bargain.

The Supply and Demand of You
Weiss claims that "There is no law of supply of demand in the consulting profession." What he's referring to is that the fees you charge should have nothing to do with your supply of hours in a day, week, month or year.

However, as Weiss himself iterates elsewhere, there is only one person in the universe who is the product of your education, skills and experience. The supply of you is exactly one.

The question, then, is what is the demand for that product? It depends on what value you mutually establish.

  • What are the client's business objectives?
  • How will success be measured?
  • What results can you deliver against these objectives and metrics?

You, as a product, may be of significant value to a client, regardless of how much time you need to spend on a project, as long as you are willing to believe in your value enough to make yourself accountable to actual, measurable results. Do the work necessary to educate the client and establish agreement on what your goals are.

Then you can both come away confident that you've been successful at meeting those goals. The client will feel like they got a bargain, and you will come away knowing you've been adequately compensated for your expertise.

Pick up the book today. You'll be glad you did. - Cam Beck

November 09, 2009

Have a Solemn "Freedom Appreciation Day"

Berlin-Memorial_to_the_Victims_of_the_Wall-1982


For the East-bloc countries and those bordering them, there was a long buildup to November 9, 1989 -- now recognized as the day the Berlin Wall fell. Those of us living in West Berlin were abuzz with anticipation because the cries for freedom began to crack the Iron Curtain.

Still, if you'll pardon the pun, nothing was set in stone. In February of that same year, Chris Gueffroy and Christian Guadian, believing the standing order to shoot those who tried to escape had been lifted, made an attempt to breech the wall. Guadian was captured, and Gueffroy was shot dead. The border guards fired 10 bullets into his chest.

In March, an electrical engineer named Winfried Freudenberg and his wife, Sabine attempted to build a balloon to carry them both across the wall, but when a student reported them to the police before balloon was ready, the Freudenbergs decided to send just Winfried across. The police did not attempt to shoot at Winfried as he crossed, because they feared causing an explosion, since the balloon was filled with natural gas.

The balloon crashed in West Berlin, and Winfried died instantly.

In the course of the Berlin Wall's existence, official records indicate 171 people died trying to escape to freedom, including 18 year old Peter Fetcher, who bled to death after being shot in 1962. You can imagine the impact seeing a grave marker dedicated to him had on me, a 15 year old high school student.

How could they not know it would come to this?

BerlinXWall Three days into the wall's construction, East German guard Conrad Schumann, seeing his opportunity to experience freedom coming to an end, famously abandoned his rifle and darted to the West. Now free, he settled in Bavaria and lived a long life separated from his former friends, colleagues and family, but never felt at ease about the entire experience. Said Schumann, "Only since 9 November 1989 have I felt truly free." Sadly, he hanged himself in 1998.

The grass is always greener on the outside of the prison bars, but as the tragic case of Conrad Schumann shows us, being outside of them doesn't guarantee happiness.

The curse of freedom is still superior to the blessings of compulsion

In history we have seen plenty of formidable walls. However, in most cases, they were constructed to keep enemies out and to protect their own citizens and property. Until the Berlin Wall, they were never meant to keep entire peoples prisoners in their own countries.

But in the years since reunification, the people of the East have discovered that freedom isn't easy, and it certainly isn't free. The blessing of freedom is that people may succeed as far as their abilities, will, and not a small amount of luck allow them. However, success is not guaranteed. It's assured, in fact, that some efforts will fail -- and fail miserably. And sometimes it's hard to recover from failure.

Not only that, but there are plenty of fraudulent peddlers, hooligans and ne'er-do-wells willing to separate a fool and his money. Having once been separated of one's life savings, it's natural to be skeptical of one's own judgment -- or the system that doesn't protect ourselves from it.

Without the symbolic -- but tangible -- manifestation of oppression that the Berlin Wall gave us, I fear we may be blind to the invisible barriers erected right before our unseeing eyes.

Yes, being free means we can go from place to place without fear of being shot in the chest and be left to die in a puddle of our own blood.

But that's only part of it.

Freedom also means we may risk everything -- dedicate all of the time we spent learning how to do something and the money we've accumulated in our lives -- for a chance to provide something of value to others -- even if our motivations are self-serving. We have the freedom to succeed, yes. But comparable social reciprocation means that we cannot compel others to keep us from failing. That would infringe on their freedom.

Or so goes the theory. Recent events show us that even countries we consider to be bastions of freedom may contradict the values they claim to aspire to.

What will we do about it? Are we so dedicated to the proposition of freedom that we are willing to face whatever consequences come in its pursuit?

The good news is that we probably don't face the same risks that Chris Gueffroy, Winfried Freudenberg and Peter Fetcher faced.

The bad news is that we still may be compelled to keep others from failing under penalty of imprisonment (try to not pay your taxes that are paying for the bailouts if you doubt me).

But, unlike Conrad Schumann, we have nowhere to run.

Our best hope, then, is to guard the gates of freedom so that we are the place everyone wants to escape to. We must jealously protect our freedoms, which means we must know history well enough to recognize when they might be in jeopardy.

Today, the anniversary of the fall of the Berlin Wall, is as good a day as any to remind ourselves of that. But instead of wishing you a happy "Freedom Appreciation Day" just to give you another reason to celebrate with fireworks and barbecue, let me wish you a solemn one, instead -- so that we never forget our awesome responsibility. - Cam Beck