Business

Retail Tests Personality

January 27th, 2009 | No Comments | Source: Wall Street Journal

Right now, 16% of all US retail hiring processes involve pre-screening job applicants with an online personality test created by Unicru, which was acquired recently by Massachusetts-based Kronos, Inc.

whoknowstherightanswer 300x199 Retail Tests PersonalityKronos processed 10 million tests in 2008 alone, assessing things like self-control, adaptability and friendliness in an effort to weed out applicants poorly suited to retail work before the interview phase.

The test requires applicants to agree or disagree with 130 statements like, “you have to give up on some things that you start,” and “any trouble you have is your own fault.”

Many companies believe the test is effective. For example Kristopher Arnes, a Best Buy executive told the Wall Street Journal that Kronos’ automated screening process saves 250,000 to 300,000 hours in HR costs per year.

Whole Foods Market dropped the test however, finding that sunny personalities don’t necessarily translate into knowing how much cumin and allspice to throw into the couscous. 

Meanwhile, a whole subculture of cheating has bloomed around the test. Applicants often share answers and test-taking strategies, use answer sheets found online or even have a friend, presumably one with a pleasant disposition, take the test for them.

But Kronos isn’t worried about that, or if they are they aren’t saying. For one thing they claim, there’s been no drop-off in their tool’s performance when it comes to employee turnover, sales performance and what have you.

And Kronos executives don’t give much credence to those online answer sheets. “The way in which the answers relate to the job requirements is…not obvious,” test developer David Scarborough told the Journal.

They better hope not.

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Corporate Jets for Sale

January 23rd, 2009 | No Comments | Source: Economist

Remember when the CEOs of GM, Ford and Chrysler flew corporate jets to Washington to beg for a bailout?

After receiving a righteous whuppin’ by politicians, bloggers and YouTubers, the group returned for a second go a month later in cars.

howsbusiness 201x300 Corporate Jets for SaleThe fiasco was a killer for business-jet industry which had hoped the CEOs would defend the craft as time-savers.

They “didn’t have the guts to defend their actions,” Michael Boyd told the Economist.

No seriously, the aviation consultant does know the jets are a smidge unpopular these days. 

“Right up there with Saddam Hussein,” was the way Boyd put it.

In fact, many companies appear to have decided to rid themselves of their jets altogether. The US automakers, Time Warner, AT&T and Citigroup have put their jets up for sale and other companies cancelled orders for new ones. 

As a result, UBS reports a 62% increase year-over-year in the number of second-hand corporate jets on the market—that’s the highest number since the statistic was introduced.

“The market is dead,” states the UBS report in one particularly gloomy passage. Elsewhere, the report describes current affairs as “possibly the worst market since 1970.”

Surprisingly, not everyone agrees. The Economist cites a JPMorgan analysis of asking prices for used jets—they actually rose 3.4% in November.

To Jonathan Breeze, Jet Republic’s CEO, that means some firms don’t really want to sell their jets at all. They put their jets on the block for an unreasonably high price, assuring there will be no buyers. This way they appear to be in touch with the times while the top dogs gallivant around as usual.

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Siemens Dirty Rotten Scoundrels

January 14th, 2009 | No Comments | Source: Economist

The First Annual Bernie Madoff Award for Global Business Chutzpah goes to Siemens, Europe’s largest engineering firm which just copped a plea to bribery and corruption charges involving public officials and politicians on 4 continents.

businesstool 300x199 Siemens Dirty Rotten ScoundrelsThe multinational agreed to pay $800 million worth of fines in America and another $540 million in Germany. That was in addition to the $280 million it coughed up to settle an earlier, similar charge.

But the size of the fines wouldn’t have, by itself, put Siemens over the top for the Madoff Award. It was the perverse sense of openness with which the process unfolded, as if people throughout the organization knew and accepted this was the way to do business.

According to the Economist, Siemens set up in full view 3 “cash desks” in its offices. Everyone knew employees could tote empty suitcases there and have them filled with cash to be used in paying off public officials for awarding contracts to Siemens.

Managers could pull out as much as $1.3 million at a time in support of efforts to secure contracts for the company’s telecoms-equipment division, according to the US Department of Justice.

Between 2001 and 2004, nearly $67 million was withdrawn in those suitcases, and all tolled according to Justice, Siemens paid foreign officials $805 million over a 6-year period.

No questions were asked, little documentation was required and managers needing money could approve their own requests.

Until 1999 Siemens actually claimed tax deductions for the bribes, booking them as “useful expenditure.”

“There was no complex financial structuring such as you would find among drug smugglers or money launderers,” Mark Pieth, chairman of OECD’s working group on bribery told the Economist. “People felt confident they were doing nothing wrong.”

Now that’s chutzpah!

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Jangled Nerves, not Jingoism

January 5th, 2009 | No Comments | Source: Washington Post

In that thoroughly modern moment of desperation when your computer has frozen tighter than the credit market and it needs to be fixed like right now so you’ve dialed tech support, few things are as absurdly frustrating as an unintelligible foreign voice on the other end of the line.

But that happens quite frequently because companies can save 50-70% on call center costs by outsourcing the function to places like Bangalore and Manila.

phoneinacan 300x169 Jangled Nerves, not JingoismNow Dell is offering an alternative. For $99 per year, new computer buyers can purchase a service package which comes with technical support based in North America, guaranteed.

And your call will be answered in 2 minutes or less.

Sans upgrade though, you’re likely to get someone from the Philippines, India or some other place that has a contract to provide technical support for Dell.

“We’ve heard from customers that it’s hard to understand a particular accent and that they couldn’t understand the instructions they were getting,” Dell spokesman Bob Kaufman told the Washington Post. “This (new plan) illustrates Dell’s commitment to customer choice.”

Lyn Kramer, who operates a call-center consulting business isn’t buying that, however. “Most people in the customer service world believe that if you have sold me a product, then support for that product should be free,” she told the Post.

Meanwhile Sharmila Rudrappa, a native of Bangalore and professor of sociology at UT Austin added the issue had nothing to do with racism.

“When things go haywire, you want assurance, you want familiarity, you want someone to hold your hand and say it’s OK…you don’t want…to have to work at understanding the person at the other end of the line.”

And since when did the accents of Nashville, Boston, and Nova Scotia become so easy to understand?

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Italy Bails Out Parmesan Cheese

December 19th, 2008 | No Comments | Source: Wall Street Journal

While US lawmakers are busy bailing out banks, insurance giants and we’ll see about car companies, the Italians have rushed to bail out Parmesan cheese makers.

What’s next, buffalo mozzarella?

And how could it come to this for the iconic pasta-topper when demand remains strong in Italy and abroad?

safefornow 200x300 Italy Bails Out Parmesan CheeseIt’s simple. Producers can’t cover their costs.

Marco Iemmi and his 7 employees for example produce 15 thousand 77-pound Parmesan wheels a year. Last year he sold them at 7.4 Euros per kilogram, but he spent 8 Euros per kilo to produce them.

“It’s a tragic situation,” Iemmi told the Wall Street Journal. “I’ll have to close up shop unless things improve.”

So thank heavens for the Italian government which announced it will subsidize Parmesan makers by purchasing 100,000 wheels and donating them to charity.

Most Italians on ‘Strada Principale’ support the bailout.

“Parmigiano is almost indispensable,” Antonio Piermani told the Journal. The Rome wine-bar owner buys 3 kilos per month and swears that any substitute “would compromise the taste of the dish.”

Italy’s cheese crisis is the product of a fragmented producer sector. The world’s supply of Parmesan comes from about 400 tiny, family-owned businesses located near Parma in northern Italy. They understand economies of scale, but refuse to consolidate.

“We have an ancient mind-set,” Iemmi explained. “Each one of us wants to take care of his own little business.”

Meaning producers have no leverage with wholesalers, and not even the Pope would dare to mess with the meticulous Parmesan production process that has remained unchanged for several hundred years.

There’s even price competition, at least in Italy where 80% of the world’s Parmesan is consumed. Grana Padano, another grated cheese has a similar taste and costs less to produce.

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Momma Bears Prowl Chuck E. Cheese’s

December 17th, 2008 | No Comments | Source: Wall Street Journal

Chuck E. Cheese’s says it’s a place “where a kid can be a kid” and who can argue, but it’s also a place where adults get arrested for battery and disorderly conduct more often than you think.

chuck e cheeses Momma Bears Prowl Chuck E. CheesesThe Chuck E. Cheese’s Brookfield Wisconsin franchise for example has prompted more calls to the police than any other restaurant in town, 2 years running.

Cops have had to break up at least 12 fights there since January, 2007 including a 40-person melee that spilled onto the stage reserved for the singing chicken and life-sized mouse!

“There’s a biker bar down the street, and we rarely get calls there,” local police Captain Timothy Imler deadpanned to the Wall Street Journal.

Imler blames the conflagrations on loud noise, crowded interiors and all the emotion wrapped up in children’s birthday parties these days. Oh and alcohol is served at most venues, and then there’s the phenomenon psychologists call the “momma bear instinct.”

dontmesswithjohnny 200x300 Momma Bears Prowl Chuck E. CheesesApparently when kids scope out the place they think “child’s play” and they’re off to the races. But adults for whatever reason see danger in all directions, like it’s the Serengeti or something. So they go into all-out child protection mode.

Like when someone cuts the line for Whack-a-Mole, for example.

“It’s part of protective parenting,” Frank Farley told the Journal. The Temple University psychologist added, “it is part of the species—all species, in fact…we do it all the time.”

To Chuck E. Cheese’s parent company, CEC Entertainment, this is no laughing matter. Some of its 538 locations have decided to halt alcohol sales, for example. There’s at least one store that posts armed security guards and the Milwaukee store has a dress code that bans gang-style apparel, not to mention knives, screwdrivers and glass cutters.

It’s “like something out of a Quentin Tarantino film,” Milwaukee Alderman Tony Zielinski told the Journal.

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Iran’s Dirty Little Secret

December 12th, 2008 | No Comments | Source: Boston Globe

Right now in Iran, a powerful, tube-like drilling tool is being used to expose new sources of oil, the nation’s economic lifeblood.

The device was developed in America, which seems a bit counterproductive since the US government is pretty sure Iran funnels oil profits to terrorists.

iraniandirtybomb1 300x248 Irans Dirty Little SecretBut there’s something else about that driller. It’s powered by a radioactive chemical that could fuel a dirty-bomb big enough to spread radiation across several city blocks, according to experts interviewed by the Boston Globe.

The tool was developed by Schlumberger, a multinational oil services company with development labs in Texas and Connecticut, a CEO in Houston and a corporate registration in the Caribbean.

The actual location is the Netherlands Antilles, that well-known hub of international finance.

US embargoes prevent US companies from transferring just about everything to Iran, but legal loopholes allow multinationals to bypass the sanctions. It’s that simple. In fact no one believes Schlumberger violated any laws.

And the practice isn’t isolated, according to Victor Comras, an international trade specialist. Comras told the Globe that “a number of companies subject to US law have devised structures that allow them to circumvent US regulations.”

As a result, “it is getting harder and harder to make sanctions effective,” Michael Lynch told the Globe. The oil market analyst added, “it has gotten to the point where keeping the technology away from [Iran and other countries under sanctions] is almost impossible.”

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Facebook Punts on Stock Sale

December 10th, 2008 | No Comments | Source: Valleywag, Wall Street Journal

Facebook has decided it will not allow employees to sell shares in the privately held company after all. At least not now.

“After carefully considering the current environment, we’ve decided to establish an open-ended timetable for an employee stock sale program,” company officials told the Wall Street Journal.

iwassoclose 300x199 Facebook Punts on Stock SaleFacebook CEO Mark Zuckerberg had announced the unusual plan in August. It would have permitted employees to sell $900,000 worth of their vested shares at a $4 billion valuation according to the Journal.

The program had been trumpeted as a revolutionary way for a company to reward employees without sacrificing its exit strategy.

But Facebook encountered unexpected trouble lining up investors to fund the plan at the $4 billion valuation.

In 2007, Microsoft acquired 1.6% of Facebook for $240 million, thus valuing the company at $15 billion but that deal was for preferred stock and included an ad sharing arrangement. Now many are questioning Facebook’s revenue model and the Great Economic Crisis of 2008 hasn’t helped, either.

Which left it up to Zook to submit this Debbie-downer of an email, “I’m writing this note to let you know some bad news. Despite a lot of work, we have not been able to finalize a plan for the employee stock sale we announced in August.”

That had to hurt, since the company has stated recently that it does not plan an IPO anytime soon.  Of course, Facebook’s 800 employees are still drawing paychecks, and these days that’s not half bad.

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Intel Inside Health Care

December 1st, 2008 | No Comments | Source: Washington Post

Big Tech is pushing into health care, believing it has what the industry needs to deal with spiraling costs, lousy service and quality problems. Or maybe it’s just bellying up to get a slice of the $2.5 trillion pie.

Google jumped in with a personal health record and a totally cool flu tracker. Microsoft is piloting its own personal health record with Cleveland Clinic. Apple has iPhone aps that help physicians access drug information and play bingo during Grand Rounds.

intel Intel Inside Health CareThose Big Tech entries created quite a splash, but as for Intel’s first health care gambit, well not so much. That would be the Mobile Clinical Assistant, Intel’s tablet PC that supports point-of-care documentation, order entry and practice management for physicians.  

The MCA is marketed by Motion Computing. It is a solid, useful product but so far it hasn’t prompted the addition of extra shifts back where the chips get made, so now Intel is rolling out Health Guide, a personal health record allowing patients and providers to co-manage chronic conditions like high blood pressure, diabetes, COPD and heart failure. 
 
Health Guide combines an in-home patient device and an online interface that permits clinicians to monitor patients and manage care remotely. The system enables vital sign collection, patient reminders, surveys, video conferencing and educational content. It is being piloted in the US and Europe. 
 
“Intel believes the personal healthcare marketplace is a multibillion dollar green field opportunity,” said Eric Dishman, global director of product research and innovation at Intel’s Digital Health Group. 

It’s late, but what the heck. Come join the party!

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Facing the Music

November 26th, 2008 | No Comments | Source: Wall Street Journal

Facebook chief executive Mark Zuckerberg wants his company to focus on growing user base rather than revenues, but former Twitter CEO Jack Dorsey will attest that strategy doesn’t always work even in good times and these aren’t good times.

facebook Facing the MusicAnd no matter what the 24 year-old may say publicly, Zuckerberg and his COO and new BFF Sheryl Sandberg know the time has come to focus on revenue and prove once and for all their business deserves its astronomical valuation.

If they can, that is.

It’s not like Facebook hasn’t tried already. The Palo Alto-based company claims for example that in the last 2 years, 70 of the top 100 US advertisers have run ads on its site. But according to comScore, that has translated into a modest 1.1% share of US online display ad views.

By contrast, News Corp.’s Fox Interactive Media Unit, which owns MySpace, captured 15.9% of display-ad views in the same period.

So now Facebook is introducing a new revenue scheme called “engagement ads.” These things appear on the main log-on screen and encourage users to do something on the ad, like commenting on a TV show trailer or adding movies to a favorites list.

Completed actions are then shared with friends along with the implied recommendation.

The scheme may or may not work, but when Nashville resident Heather Watson came across an engagement ad for Bravo TV’s “Project Runway,” she clicked “not attending” which erased the ad from view. These ads “detract from the [Facebook] experience,” she scoffed to the Wall Street Journal.

And the Great Economic Crisis of 2008 isn’t going to help Facebook any. eMarketer predicts in fact that ad growth on the Internet will drop from 17% this year to 14.5% on 2009, and social-networking site ads are likely to be hit hardest because there’s no good way to assess effectiveness of these ads.

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