Managing Creativity

Any reasonably successful business requires tremendous amount of creativity from all stake holders. Adapt to customer requirements, present products to consumers in appealing ways, designing innovative products, optimize algorithms, streamline business processes.. the uses of creativity is never ending.

Easy to stiffle creativity. But how can one improve one's creativity and that of one's team? I find the following four factors extremely important:

Private Space - A private undisturbed space is central to get the creative juices going. I have seen programmers, working on difficult problems take their laptops to the nearest Starbucks and work from there to prevent disruptions at work. While private offices for every employees though desirable may not be feasible. In this case at lest ample number of comon private spaces where employees can work undisturbed would help.

Encouragement - Encourage members to present their ideas or views without critical comments. Ideas at birth are fragile. It is easily killed by a few well intentioned critical words from another and might reduces creativity in the future.

Value creativity - Valuing members' creativity further encourages more creativity from all. Various rewards may be offered for members who come up with innovative solutions.

Appreciate Diversity - People are diverse, in their upbringing, education, influences, belief etc. A diverse workplace encourages creativity. We should allow (as much as possible) free expression, and show mutual respect, to allow free flow of thoughts and ideas.

Performance appraisals often place a lot on an employee who works "hard" or "getting the numbers" or "meeting targets". It is surprising how creativity is rarely a significant criteria in performance appraisals.

Does Regulation Solve the Corporate Ills?

The media says the US banks have all gone bankrupt..

Which industry is not "bankrupt" at some point or the other ? At any time, for any industry, its health is a matter of degree. While the business is good, no one complains. Executives take more risk. Sooner or later, "business as it is done" becomes unsustainable, and the house of cards come crashing down.

Will regulation help to prevent future collapse in any industry? I do not think so. If regulation is passed to make lending standards in banks better, the collapse of the future will in all probability not come from that particular issue. But some other part of the chain becomes the next weak point. It crashes at the weakest link.

As an investor, how can one keep one's portfolio safe from volatility as much as possible, but at the same time earning a "reasonable" rate of return?

As a company executive, when does one say, enough is enough, lets scale down our appetite for risk?

All tips welcome!

Yahoo for Sale! What went wrong?

Some milestones of Yahoo!:

2004:
Yahoo! upgrades the email account capacity from 4MB to 1GB to compete with Google.
Yahoo! introduces better AJAX interface to email
Yahoo! launches its own search engine technology.
Yahoo! announces it will practice paid inclusion for its search service.
Yahoo! launches beta version of its video search engine.


2005:
Yahoo! announces interoperability with MS Messenger and Yahoo Messenger.
Yahoo! launches Yahoo! Music
Yahoo! launches blogging and social networking service Yahoo!360
Yahoo! acquires photo sharing service Flickr
Yahoo! acquires widget engine Konfabulator
Yahoo! acquires del.icio.us.

2007:
Yahoo! releases new version of Yahoo!Mail allowing messages to mobile phones
Yahoo! Mail provides unlimited storage.

2008:
Microsoft offers to buy Yahoo! Yahoo rejects offer
Yahoo in Talks with News Corporation and Google on possible mergers.

Yesterday:
Yahoo! CEO Jerry Yang says company is ready for sale!

So where did yahoo go wrong in all these years?

1. Biting More than Yahoo! can Chew
Yahoo! announced a large number of services in 2004/2005. New interfaces to its email, new search technology, new acquisitions, new social networking, etc. All of these services added up to a lot of development work for Yahoo, which it could not handle. This resulted in sacrificing quality for quantity. Google, on the other hand grew slowly, perfecting each new service gradually over time (even with betas extending to years).

2. If you break for lunch, you are lunch.
The quote by Jerry Yang summarizes Yahoo!'s state today, ironically. Yahoo! had underestimated the competition. Yahoo was forced to upgrade both its email and search service once Google came along with alternate better services. The company was slow in developing new technologies, probably because of trying to do too many things at the same time.

3. Forgetting the Customer
Many of Yahoo! services were not designed for ease of use, or did they keep customer usability needs in mind. in 2004, Yahoo! attempted to gain more revenues at the expense of customer dissatisfaction by placing paid listings as the top search results.
The Yahoo! Maps did not tolerate misspelling of street names, town names etc, to work correctly. The Yahoo landing page was quite cluttered with too many links and services. All of these and others served to alienate the users, and forcing users to find better competing services.

Generational Differences in the Workplace

“Each generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it” - George Orwell

Any organization today cannot function effectively without managers understanding their employees and vice versa. Motivational factors vary from employee to employee. What are employees looking for at work? What kind of values do they have? What modes of communications do they prefer? All these are interesting issues to be investigated to get the most out of a person (or employee).

A number of approaches to understanding workers have been investigated and used historically. Some involve analyzing workers by birth-sign, graphology, birth order, psychological tests etc. Ranging from science to pseudoscience. They have provided varying degrees of success. It is surprising how many organizations still follow some of these methods which have never been proven scientifically.

However one very effective way of understanding employees in the context of the American workplace is to look at the age of an employee and understand the influences of the environment in which he grew up. The workers of each generation faced unique challenges, grew up in various economical climates, family systems, cultures etc. All of these help shape the worker in his future life.

There has been a lot of research on this topic. Various names have been coined for people of each generation. Here is a generally accepted list of generations used in America.

Traditionalists born 1922 - 1943
Baby Boomers born 1946-1964
Generation X born 1964- 1979
Cold Generation Y born 1981 - 1984
Millennials born 1980 - 2000

Each generation of people have interesting unique characteristics. Understanding the characteristics of each generation of workers helps the manager work more effectively with them. They grew up in different family structures. Attitudes towards money, authority, institutions, personal beliefs were different. All of these and many more factors shape the person. The views, expectations of their job, of their world is hence vastly different. What are the unique issues with each generation? What are their expectations from a job? What motivates them ?

The following series of posts attempts to answer those questions. Studying the characteristics of each generation goes a long way at resolving and avoiding conflicts, getting the best out of your people, managers and workers alike.

A declining Euro ?

The question of where the global currency exchange rates are headed for is one which has a more than casual interest to most corporates these days. The exchange rates between the American dollar and the European Euro is especially interesting, which are indicative of the two of the larger global economies.

Arguments for a weaker Euro:

- Currently the Euro is fairly overvalued relative to the US dollar based on purchasing power parity (PPP). The tendency is for the PPP to equalize in an efficient marketplace, bringing down the value of the Euro.

- The Euro is at an all time high now versus the dollar.

- With less developed countries joining EU in the future, the union will have to undertake more infrastructure and services development work in the newer countries to bring it up to par with the rest of EU, thus weakening the EU economy in general and hence the Euro.

- There are already reports indicating EU is already n the lowest growth periods in its history. Is it going towards a recession?


Arguments for a falling US Dollar

- The economic crises in the USA, related to mortgages, credit card industry are far from over, this could result in the Fed reducing interest rates further.

- There may be a policy decision to let the dollar fall in value to encourage more exports and discourage imports, considering the trade deficit the US is currently in.

- As the Euro gains more popularity, forex reserves held by countries may shift more to Euros instead of Dollars, which could strengthen the Euro.

On the whole I feel, the natural tendency may be for the Euro to gain further against the dollar on a shorter time frame. However the EU central banks may intervene to lower the value of the Euro, for their own reasons. For one a weaker Euro will encourage more exports from EU, and may be better for the EU economy. It would also encourage more foreign direct investment in EU.

Management Issues Today

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