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| Volume 7, Issue 4
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In This Issue:
 The man who owns the internet
6 ways to kill your credit score
7 net-worth killers
25 Dream vacation homes
 [Google’s] Top ten ways to show appreciation
Myths about millennials
 The 2 percent solution: Managing merit pay
 Lessons from Apple
Hail, shareholder!
 The kid who turned down $1 billion
 High-risk loans--from a nonprofit
The nightmare of too little sleep
 IBM's management games
Excuse me for doing my job
 Behavioral finance—benefiting from irrational investors
The key to managing stars? Think team
 The IT department as corporate snoop
 China's new weapon: Low executive pay
 Talking the walk
 Not so taxing?
[Controllers] Not cleared for takeoff [to CFO]
[Diversity] Gap analysis
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The man who owns the Internet
UPWARDLY MOBILE: Kevin Ham's kitchen-table business now inhabits the 27th floor of a skyscraper in Vancouver. |
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Kevin Ham is the most powerful dotcom mogul you've never heard of, reports Business 2.0 Magazine. Here's how the master of Web domains built a $300 million empire.
Kevin Ham leans forward, sits up tall, closes his eyes, and begins to type -- into the air. He's seated along the rear wall of a packed ballroom in Las Vegas's Venetian Hotel. Up front, an auctioneer is running through a list of Internet domain names, building excitement the same way he might if vintage cars were on the block. As names come up that interest Ham, he occasionally air-types. It's the ultimate gut check. Is the name one that people might enter directly into their Web browser, bypassing the search engine box entirely, as Ham wants? Is it better in plural or singular form? If it's a typo, is it a mistake a lot of people would make? Or does the name, like a stunning beachfront property, just feel like a winner? When Ham wants a domain, he leans over and quietly instructs an associate to bid on his behalf. He likes wedding names, so his guy lifts the white paddle and snags Weddingcatering.com for $10,000. Greeting.com is not nearly as good as the plural Greetings.com, but Ham grabs it anyway, for $350,000. Ham is a devout Christian, and he spends $31,000 to add Christianrock.com to his collection, which already includes God.com and Satan.com. When it's all over, Ham strolls to the table near the exit and writes a check for $650,000. It's a cheap afternoon. Just a few years ago, most of the guys bidding in this room had never laid eyes on one another. Indeed, they rarely left their home computers. Now they find themselves in a Vegas ballroom surrounded by deep-pocketed bankers, venture-backed startups, and other investors trying to get a piece of the action. And why not? In the past three years alone, the number of dotcom names has soared more than 130 percent to 66 million. Every two seconds, another joins the list. But the big money is in the aftermarket, where the most valuable names -- those that draw thousands of pageviews and throw off steady cash from Google's and Yahoo's pay-per-click ads -- are driving prices to dizzying heights. People who had the guts and foresight to sweep up names shed during the dotcom bust are now landlords of some of the most valuable real estate on the Web. The man at the top of this little-known hierarchy is Kevin Ham -- one of a handful of major-league "domainers" in the world and arguably the shrewdest and most ambitious of the lot. Even in a field filled with unusual career paths, Ham's stands out...
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6 Ways to Kill Your Credit Score
A low score means higher rates. Here's how you may be doing yourself harm.
Lenders, insurers, landlords and others will charge you more or flat-out reject you if you show up with a low FICO score. Here's how you may be doing yourself harm...
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7 Net-Worth Killers
Saving and spending aren't the only factors affecting your net worth. How you manage (or don't manage) your assets and liabilities can make a big difference, too.
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25 Dream Vacation Homes
Shangri-La really is for sale -- and so are these breathtaking getaways in Anguilla, Tuscany and France
...
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[Google s] Top Ten Ways to Show Appreciation
Attending an ad club event last week, I listened to a Google manager, Grady Burnett, describe his company and their corporate culture.
Sure, you've read about the free food, the fact that developers are enabled to spend twenty percent of their time on projects of their choice - many hallmarks of a
successful company that is making money. But he gave us ideas for simple employee motivation and
team building factors, too...
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Myths About Millennials
The majority of employees in our company are Millennials or Gen Xers. Some of us, like me, feel quite old some days when I look around at our employees.
On the other hand, I don't believe we have ever been guilty of not expecting the most and the best from our young employees because of their age. I actually remember being
twenty something. I was smart, capable, and competent and ready to set the world on fire. So are our employees. They are bright, competent, and capable of setting the
world on fire. Our employees may not have a lot of experience but they make up for it
in their willingness to try new things. They are wired, committed, and thoughtful about our products, our culture, our customers, and our future. They are also marrying and
starting families. We have, at least three babies on the way. Learn more about the myths that are often thought, but rarely true, about
Millennial employees...
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The 2 Percent Solution: Managing Merit Pay
Managing merit pay effectively contributes to creating a stronger workforce, and it enables businesses to reach their goals.
Certainly, merit increases are not a stand-alone solution, but when effectively deployed, they can be a valuable tool to help employees progress in their jobs and careers. Although seemingly small — in the ballpark of 2 percent — merit increases can contribute significantly to aligning pay with performance for the business and employees...
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Lessons from Apple
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What other companies can learn from California's master of innovation.
For a company that looked doomed a decade ago, it has been quite a comeback. Today Apple is literally an iconic company. Look at your iPod: the company name appears only
in the small print. Some of the power of its brand comes from the extraordinary story of a computer company rescued from near-collapse by its co-founder, Steve Jobs, who returned to Apple in 1997 after years of exile, reinvented it as a
consumer-electronics firm and is now taking it into the billion-unit-a-year mobile-phone industry (see article). But mostly Apple's zest comes from its reputation for inventiveness. In polls of
the world's most innovative firms it consistently ranks first. From its first computer in 1977 to the mouse-driven Macintosh in 1984, the iPod music-player in 2001 and
now the iPhone, which goes on sale in America this month, Apple has prospered by keeping just ahead of the times...
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Hail, shareholder!
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Activist shareholders are getting tough with boards and managers.
When historians of American corporate governance pick up their pens, Home Depot's annual shareholder meeting in 2006 will be seen as a pivotal moment. Bob Nardelli,
the retailer's boss, was the only director to show up. Large clocks were used to keep the utterances of talkative shareholders to a minimum. Mr Nardelli, whose
combative style earned the firm the nickname “Home Despot”, did not take questions. The whole event was over in less than 40 minutes.
This year's meeting, which took place on May 24th, was altogether different. Mr Nardelli had gone, having been ousted in January, largely as the result of shareholder pressure. So had the clocks. The new boss, Frank Blake, apologised for the previous meeting
and took questions. Almost every board member attended, new among them a founder of Relational Investors, an activist fund-manager which had been agitating for a
greater say in the company's strategy. The message was clear...
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High-Risk Loans--From a Nonprofit
Community funds are filling a gap.
Things were not looking good for Leo White. A longtime manufacturing executive, White was eager to acquire a Keene, New Hampshire, company called Bortech, which had
been making welders to repair heavy equipment since 1989. Revenue at the company had never topped $5 million, but White was convinced he could increase that number considerably. His local bank seemed to think so, too, and had promised him
a $500,000 loan backed by the Small Business Administration. But at the last minute, the bank backed out, and it looked as if the deal would fall through.
Then a friend introduced White to John Hamilton, who runs Vested for Growth, a program of the New Hampshire Community Loan Fund. Vested for Growth, a Concord-based
nonprofit, finances New Hampshire companies that cannot get funding from banks or private equity groups. Hamilton thought White had the management talent to lead Bortech. Using a combination of debt and royalty payments, he was able to arrange half a
million dollars in financing. Not long after, White had his company. "If John's organization hadn't stepped in, I thought I was out of luck," White says. White was just one innovative program away from falling into what is known as a capital gap...
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The Nightmare of Too Little Sleep
Blame the BlackBerry, blame the boss, blame the kids. A look at how busy professionals cope.
What he found instead were strung-out employees taking catnaps at their desks. "You're working way too hard, and it was never expected that you'd be tired, or get sick," says Greenleaf. "Most of the time, you're kind of there, but you're not." Feeling bored and
miserable, he quit after just seven months. Today, at the helm of Greenleaf Books, an Austin, Texas-based independent-press publishing company he launched in 1997, Greenleaf
makes sure all 25 of his employees know they can go home when they're too sleepy -- or come in late, or take the whole day off. "As long as they get the job done, it's fine,"
says Greenleaf, 31. As a result, staffers are generally well-rested and alert most of the time, he says -- though with seven pregnancies among them in less than a year,
including his own baby daughter born just weeks ago, they can expect more than a few sleepless nights ahead. Yet whether it's the result of overwork or a crying baby at
home, sleep deprivation isn't just an employee's problem...
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IBM's Management Games
No fooling around: Big Blue is promoting a video game that could change the way companies develop leaders and manage projects.
Thunder crashes, lightning flashes, and a camera zooms in on a shadowy, futuristic-looking, gray-and-black office. The camera follows a female avatar in slacks and a button-down shirt as she jogs from one cubicle to the next, up a spiral
staircase, and across a high gangplank as dramatic classical music plays in the background. This YouTube (GOOG) trailer could easily be a plug for a new shoot-'em-up video game, or a slasher flick. Instead, it's promoting a video game called
Innov8, which IBM (IBM) will start selling in September. Yes, IBM. The computer giant says it received dozens of calls from potential customers after showing the video clip at a recent conference for clients. Designed to help tech managers better understand
the roles of businesspeople, and vice versa, players go into a virtual business unit to test their hand at ventures such as redesigning a call center, opening a brokerage account, or processing an insurance claim. While IBM's research may be aimed at
helping to build its own consulting business, it comes at a time when there's a flurry of corporate experimentation in games. McKinsey & Co. is using video games to test recruits for leadership potential and assess their team-building style. Royal Philips Electronics (PHG) and Johnson
& Johnson (JNJ), meanwhile, are using multiplayer games to improve collaboration between far-flung divisions, as well as between managers and their overseas underlings...
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Excuse Me for Doing My Job
When you rise in an organization, the bad vibes can rise off other employees like steam in a Turkish bath. Here's how to deal with it.
The very first time I got promoted, the stakes weren't high. There were four customer service reps (average age: 20) in the department. Two people weren't interested in the newly created supervisor position, and my only rival for the job fell asleep at her
desk on a regular basis. So I got the nod, a fifty-cent-an-hour raise, and the cold shoulder from my sleepy rival, whom I was now supervising. My manager sent me off to a supervisory-training course where I sat like a stone, too shy to ask any questions
until the very last session. I finally murmured, "How do you deal with a co-worker who's resentful because I got promoted?" The instructor didn't have an answer for that one. But it happens—all the time. If you're a person who sets career goals and achieves
them, trust me, it will happen to you. Perhaps you've already been a victim of the "how dare you!" effect. That's the iciness directed your way when you do or get something that others feel you had no right to. As wonderful as it feels to be awarded a
promotion or a plum assignment, there are people who will like you a little less (or even a lot less) as a result. [Here's what to do about it]...
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Behavioral Finance—Benefiting from Irrational Investors
How "sleepy" or "awake" are you when it comes to your stock portfolio?
If you're like most people, you probably don't spend a great deal of time monitoring your investments. So when another company uses stock to acquire a firm in which you hold a stake, what do you do with the new shares you suddenly own of a company that you
never intended to buy in the first place? Logic suggests that you would be likely to sell those shares. But research by Associate Professor Malcolm Baker, Professor
Joshua Coval, and Harvard University professor Jeremy C. Stein shows that 80 percent of individual investors and 30 percent of institutional investors appear to be
more inertial than logical. They take the default option, passively accepting the shares offered as consideration in stock mergers and acquisitions. In "Corporate
Financing Decisions When Investors Take the Path of Least Resistance," a paper forthcoming in the Journal of Financial Economics, the authors argue that this sort of passive behavior can have a significant effect on how companies make strategic
financing decisions. It all fits under the heading of behavioral finance, the focus of Baker's research and the title of a second-year course he teaches at HBS. "At the foundation of finance is the idea that...
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The Key to Managing Stars? Think Team
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Firms that already have a large stable of high-performing individuals might have built a competitive advantage.
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What contributes to an individual's ability to remain a star? To what extent does past star performance predicate future star performance?
And to what extent does a key organizational factor—colleague quality—help or hinder the ability to sustain star performance?
SThe performance of stars is an important career matter for individuals as well as for managers who want to inspire, nurture, and recruit stars. A new study by Harvard Business School's Boris Groysberg and Linda-Eling Lee on star knowledge workers, specifically security analysts, addresses these questions. As they explain in a forthcoming article in the Journal of Organizational Behavior, it is true that a star's past performance indicates future performance—but the quality of colleagues in his or her organization also has a significant impact on the ability to maintain the highest quality output...
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The IT department as corporate snoop
As if we needed more proof that insiders are a seriously worse threat to your corporate jewels than any malicious hacker, a study released today says that one in
three of IT employees snoop through company systems and peek at confidential information such as private files, wage data, personal emails, and HR background.
The survey, which claims to reveal "the hidden scandal of IT staff snooping," is from Cyber-Ark Software, a company that, naturally specializes in password protection As if
that weren’t bad enough, the survey found that more than one-third of IT professionals admit they could still access their company’s network once they’d left their current
job, with no one to stop them...
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China's new weapon: Low executive pay
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Will globalization someday stick it to the man?
Excessive executive pay has been a hot-button issue in American politics for years, but worldwide factors could one day make it a liability on the balance sheet. As companies
in countries like China and India move away from performing behind-the-scenes functions, they're selling products and services under their own brand names directly
against U.S. and European counterparts. Since high-level executives and other white
collar professionals in Asian companies typically make less than their Western equivalents, these companies potentially will have a cost advantage.
How or even whether the differences in executive salary will impact the market remains unclear: multinational companies are hiring their own executives in these regions, too, after all. Nonetheless, the numbers are tough to ignore:
engineers aren't the only "talent" that costs less in developing markets. Executives cost a lot less, too. Shanghai's SunTech Holdings, for instance...
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Talking the Walk
Finance chiefs have always played an important role in communicating their company's performance to the investor community.
But as more institutional investors reveal a preference for speaking directly to company management and improving performance disclosure remains the foremost concern of the investment community, CFOs' active involvement in investor relations (IR) has
become more crucial. In a recent study conducted by Greenwich Associates, institutional investors named accessibility of senior management and credibility of the CFO as the
top factors in a successful corporate IR program -- and they asked for more frequent one-on-one meetings with senior management. Clearly, investor relations should be one of a CFO's top priorities. And the majority of finance chiefs at public companies are hearing a call to action....
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Not So Taxing?
The IRS's big push to collect underpaid corporate taxes is starting to come up dry.
When Mark Everson took office in 2003 as commissioner of the Internal Revenue Service, he promised that collecting underpaid corporate taxes would be a top priority, and backed it up by increasing the number of large corporate audits. Results were quickly realized, with additional recommended taxes doubling in fiscal 2005 compared with the previous year (see "Crackdown," January 2006). But now Syracuse University's Transactional Records Access Clearinghouse (TRAC) suggests the effort may have run out of steam...
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Not Cleared for Takeoff
Controllers who want to become CFOs need to put down their pencils and master soft skills.
Doug Duskin understands the importance of thinking outside the container. When he took over as vice president and controller of $1.2 billion pallet and container services company CHEP in 2004, Duskin tacked on some risk-management and treasury tasks
to his duties in order to lay the groundwork for a future CFO post. Unlike Duskin, however, most controllers don't have the luxury of tailoring their roles, and many are being overlooked for advancement in the finance department. Indeed, in the mad
rush to find the perfect CFO — one who combines financial know-how with strategic thinking, presentation skills, and leadership — controllers are often bypassed. According to a recent study by Korn Ferry International, controllers accounted
for a mere 4 percent of the 190 Fortune 500 CFOs (2006 list) hired externally. And while controllers may be perfectly qualified for a CFO position, says Chuck Eldridge, managing director of Korn Ferry's financial-officers practice, "corporations still think
of them as back-office systems, [Sarbox] gurus." So much so, he adds, that simply having the title "controller" can take someone out of the CFO running...
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[Diversity] Gap Analysis
Why diversity programs work better for women than for minorities.
Having finished a big presentation to the management of a Mexican resort, Oscar Munoz, the 47-year-old CFO of transportation giant CSX Corp., was passing through the pool area when he was interrupted by a white-American couple on vacation. "Can you take care of these?" the husband asked as he thrust wet, dirty towels into Munoz's hands.
Munoz, a Mexican-American, tells the story with a laugh — he even found an appropriate spot for the towels. As the finance chief for a $9.5 billion global company, he can afford to take a generous view of his mistaken identity. Still, he's not unaware
of the implications. "Everyone has images in their mind of what to expect from different groups," he says. For decades, companies have been trying to modify their own perceptions and expectations of underrepresented groups. Through diversity
programs, special recruiting efforts, and affinity groups, they have reached out to women and minorities in hopes of creating more parity in the upper ranks. But while women have made some progress, minorities have made little. That's particularly true in finance departments...
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