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April 2012

FAKE EMAIL: Mark Zuckerberg Reaches Out to Sandberg for Input on the Instagram Deal....

Facebook Chief Operating Officer Sheryl Sandberg stated in an interview that she “walk[s] out of this office every day at 5:30 so I’m home for dinner with my kids at 6.”.  We're waiting for the following past email to surface from Mark Zuckerberg to cause a big work/life balance stink:


From:   Mark Zuckerberg
To:     Sheryl Sandberg
Date:   04/11/2012 7:50 PM
Subject:  I'm Going To Buy Instagram for 1B Large

Sheryl -

I'm going to buy Instagram for 1B large.  Signing the papers when I meet their team tonight.  Speak now or forever hold your peace.  Sorry I haven't brought anyone in on this, but I wanted to work through it on my own.  Because I am... #C..E..O.. you know the rest...

Call or email if you have concerns.  Doing the deal in two hours at Caribou Coffee.



I know, that's mean... To think that leaving the office at a reasonable time could ever keep you out of the loop, right?  Full support of work/life balance from KD, and my biggest reaction to the news of her leaving at 5:30 every night is that "ballers ball".  Meaning - people who perform can do anything they want.  I'm more concerned that one of your non-performers, who can never seem to get anything done and repeatedly frustrates his manager by leaving at 5:02 every day, is going to use the Sandberg news as rationalization for the elevator dinging at that time daily.

Ballers ball.  Performers with kids can do anything they want.  9 to 5ers will never be cruising email or industry sites on nights or weekends, mainly because there's no passion there. Doesn't matter if they have kids or not.

9 to 5ers leave at 5 and probably don't see the email from Zuck.  Ballers always see the email.

Bribes, Ethics, Global Business and Culture That Is Not Your Own...

By now, you may have seen the news that Wal Mart has been implicated in a bribery scandal related to growing their business in Mexico.  The charge, which is likely correct, is that they had to bribe countless officials in our neighbor to the south to get permits and other legal checklist items complete in months rather than years.

For shame, Wal-Mart - have you no moral compass? Bribe

Hold on - what's that?  Mexico might be a country where bribes aren't only considered, they're expected?

Who to hate then?  Wal-Mart or a culture that mandates bribes at the governing level?  Hate the player or the game?

It's easy to pile on Wal-Mart - they've always been an easy target.  Shutting down millions of mom and pop stores of all kinds.  Paying their people - well, not much.  Now they're taking all that money and bribing their way into other countries.  

But if that's the expected way of doing business, what's the solution?  Not to compete globally?  

Holmann Jenkins of the Wall Street Journal set the stage earlier this week for why developing countries are problematic when it comes to bribery:

"Conor Cruise O'Brien, the late Irish diplomat, once explained the alarming arithmetic of a certain kind of corruption for poor countries.

Take the agriculture minister who approves the import of $20 million in tractors his country can't use and that will rust in the fields. He does so in order to receive a $200,000 bribe from the tractor salesman. Had he simply been paid $200,000 to render an honest decision not to import the tractors, his country would have been $19.8 million better off."

Jenkins went on to say that due to this reality, a few foreign governments, most notably Singapore, pay their government officials high six to seven figure salaries - all in the name of making them less susceptible to corruption.  Of course, in the example above, the government official bought something the country didn't need.

Think about Mexico for a second.  You think Mexican citizens don't need more access to low priced food and goods and a world-class distribution system?

To be sure, Wal-Mart might be running afoul of a law called the Foreign Corrupt Practices Act, which prohibits U.S. companies operating overseas from bribing local government officials. But the law has a spotty history.

Only twice in its 35-year history has the Justice Department brought a company to court — and in both cases, the government lost. The department also has a decidedly mixed record when it comes to prosecuting individuals under the law.  The reason for that is probably due to the reality - it's tough to prove, and more importantly, when you look under the covers, it's accepted as a normal cost of doing business in the countries in question.  It's a marketing cost in those countries - everyone expects it.

Which puts you, the talent pro, in a tough spot if you're sending people off globally to do business. Figure out how the handshakes and introductions work first.

Then get busy figuring out the guidance you're going to give your people regarding graft.

You can say that "we'll never bribe anyone".  But that's your culture, not theirs.  And you're a vistor in their country.  If you're taking the time to learn all the soft culture stuff and follow their norms in those areas, why wouldn't you wrestle with whether bribes are in your best interests and part of their culture?

Your BMI is 35: Should You Pay More For Healthcare?

My son had a baseball tournament this weekend.  On both Saturday and Sunday, I made the choice to go to a park and get a run in while all the other folks packed up and went to lunch between games.  I still got something to eat, I just decided to use the time to get some exercise while there was maximum supervision (read: free babysitting) around to watch the kids.

I didn't really want to get the run in.  I still did.  My point?  I tried.  Once it's done, they can't take it Bmi-calculator away from you.  Whether I'm 170 pounds or 270, the fact that I got some exercise and do it consistently (run/walk - who cares?  Just get the heart rate up) matters.

Here's why it's on my mind.  It really doesn't matter who owns healthcare - employers or the government - because the issue is the same.  Most of the healthcare issues we face as a country are self-inflicted.  Check out this line of thought and stats from a recent column by Geoff Colvin at Fortune:

"At the beginning of the 20th century, the top causes of death in the US were communicable diseases - flu, tuberculosis - curses that could strike any of us.  Today, the top causes are mostly the result of the way we live - coronary artery disease, hypertension, diabetes and some cancers.  We spend 50% of our health care costs on diseases caused mostly by the way we behave.

If Americans behaved just a little differently, our health care costs could settle down to the sustainable growth rate that matches the economic growth.  We don't need a nation of triathletes.  We just need to smoke and drink less, walk a little more, eat a few more vegatables and lose some weight.  More than 90% of Type 2 diabetes, 80% of coronary artery disease, 70% of stroke, and 70% of colon cancer are potentially preventable by that combination of moderate behavior changes, reports Harvard epidemiologist Walter Willett."

My friend Dawn Burke had a post up recently on Fistful of Talent called "This HR Fatty wants to give someone a fat lip", where she rightfully blasts a company's announced decision not to hire anyone over a BMI of 35. 

I agree with her - that's stupid.  Lots of very talented people have weight problems, and if you start eliminating those people from working for your company with an imperfect measure like BMI, you've played yourself.

But - based on the data above, which is certainly accurate, why should everyone pay the same for healthcare?  Why is that a right?  More from Colvin:

"Why don't we act healthier?  Part of it is economic - we bear ever less of the costs of our unhealthy behavior.  In 1960 we paid 56% of our personal health care costs out of our own pockets, in 2010 we paid 14%."

You're kidding me, right?  No wonder people don't care.  

I'm not saying that only people who are thin deserve a right to pay less for heathcare, I'm saying that people who try ought to pay less.  You've got a BMI of 35+ but there's an improving trend in all the wellness stats (blood pressure, blood glucose, resting heart rate - help me out here wellness types...)?  You should pay less, regardless of your BMI, or what the world thinks about how you look.  You're controlling what you can, perhaps within a god-given genetic profile.  

But... You're very overweight and don't even TRY to talk care of yourself?  The same wellness stats point to a 5-year trend that indicates you've got a high probability of exploding on Thursday?  Why wouldn't you pay more?

I don't get it.  It's a basic accountability factor, and we won't reverse the trend related to healthcare costs until people who don't try (and then end up high risk) have to pay more.  Lots more.

And that issue is the same whether ObamaCare becomes a reality - or not.

Public Flogging of Those Who Don't Display Your Company's Values...

I'm pretty much on the record as saying that most company's values/mission/core values statements are awful.  It's not that the values are bad (after all, who could argue with putting the value of integrity or high communication culture on the brochure?), it's that they are either 1) non-actionable, or worse yet, 2) inconsistent with how people get rewarded in your company.

If you're going to have value statements that truly shape your culture, you better be ready to hire, reward/promote and, of course, fire according to those values.  If you don't hire/reward/fire according to the values you have, one of two things is true:

1.  You're promoting values that aren't real inside your culture, or Family values

2.  You don't really have any values that drive how results get delivered.

Jack and Suzy Welch would take that a step further.  They think that if you can get to the point where you fire someone because they didn't deliver results in a fashion consistent with the values of your company, you ought to publically say why you fired that person.  Read on:

"soft culture matters as much as hard numbers. And if your company's culture is to mean anything, you have to hang -- publicly -- those in your midst who would destroy it. It's a grim image, we know. But the fact is, creating a healthy, high-integrity organizational culture is not puppies and rainbows. And yet, for some reason, too many leaders think a company's values can be relegated to a five-minute conversation between HR and a new employee. Or they think culture is about picking which words -- do we "honor" our customers or "respect" them? -- to engrave on a plaque in the lobby. What nonsense."

Ninety percent of the time, managers give these people a big fat pass. "I know Jim can be a real jerk," they say, "but I just need him until the economy stabilizes." Or "Sure, Sally's attitude upsets everyone, but I've spoken to her. I think she's going to come around."

Actually, all Jim and Sally are doing is sending a big fat message to every other employee: Our company's values are a joke. And the only antidote is that Jim and Sally need to be sent home, and not with the usual "They want to spend more time with their families" BS out of the lawyers and HR, but with the truth. "Jim and Sally had great numbers," everyone needs to be told, "but they didn't demonstrate the values of this company." We guarantee that such a public "diss play," to put it more politely, will have more impact than a hundred "Our values really, really matter!" speeches by the CEO."

Once you've determined that someone has the skills to do the job, hire based on what you value/need most in the behavioral DNA of a candidate.  Once they're in and performing at an acceptable level, reward and fire with the values/behavioral DNA holding as much influence as raw performance itself.

It's the only way to ensure the values/behavioral DNA you put on the brochure really matter.  Telling people in a broad fashion why a bad actor was let go is a way to take that a step further.

Remember, it's not slander if it's true.

Don't Lie: Your Employment Brand and the Concept of a Real EVP...

Thoughts from the road...

There are a lot of people talking about the best way to pump on their employment brand these days as they prepare for the recovery, which either has started, is getting ready to start or is still a couple of years away depending on your point of view... Talent anarchy

Here's the deal about your employment brand - you can't make it up and make it what you want it to be.  Like your culture, it already exists.  Can you move it over time?  Sure, with some hard work. But back to today...

The backbone of your current employment brand really rests in something called the EVP (employer value proposition).  The EVP is an employee’s perspective on “what’s in it for me to work here?” and an employer’s demonstrated promise to its employees. Key components of an EVP may include: Compensation, Benefits, Affiliation, Career Prospects and Work Content.

I know, that's boring.  But here's what really matters - start talking to your leadership team about your company's EVP, and they'll start telling you what they want the EVP to be, or what they believe it to be. Which doesn't matter much.  To accurately assess an EVP, you've got to do a bunch of interviews with people inside and outside of your company - current and past employees, candidates who didn't get the job, etc.

What they say your EVP is.... what your EVP is.  Not what you want your employment brand to be.

The real promise of figuring out your EVP is there's gold in what you hear.  You'll hear a bunch of stuff that's disheartening for sure - people laugh at what you think the employment brand is - but.... you'll hear things that they really value about working at your company that could be great cornerstones of an employment brand.

BUT - you have to be brave enough to tell the world what you heard in the EVP work.  Example - we're not a family at all here.  We're a culture that values real performance and the people who think and act differently have a career path that happens in their first two years.  Meanwhile, we ignore average performers.  Or maybe everyone here operates in a culture of brutal honesty - as a result, you see a lot of directness and even venting that everyone accepts and encourages - and no one gets their feelings hurt for long (I plugged the talent anarchy photo in above - Joe and Jason seem to be venting).

Is that what you want to say to the world?  I don't know.  But for some of you, it's what your EVP is.  

Subsequently, it's your real employment brand.  You ought to find a way to leverage it.

Great Performance: Now Requiring More Than Making More Donuts....

Here's a taste of what I'm talking about to a Performance Management client related to where the bar should be for the highest level of performance, regardless of the goal they're trying to achieve.  I call them anchors...

Performance that crushes the expectation gets to the following level:

--The Machine.  Consistently delivered work in scope and ahead of deadline, showed capability to take on more work than projected as a result.

--Oscar Nominee.  Work product was of the highest quality and generally blew people away.  Peers and Customers very vocal in a positive way.  He/She looked very different from others related to quality of work in this goal.

--Idea Depot. Generated a number of alternative, original solutions rather than simply refining the ideas of others, and actively experimented with those ideas without being asked.

--Need for Speed. Passion for area of expertise drove need for knowledge acquisition in the goal area, which occurred inside and outside of work hours.  Attempts to innovate naturally followed. 

Does your performance have to hit all of these things to be graded out at the highest level?  No.  But, if you want to start trying to change the conversation about what great performance looks like, you have to move away from getting a bunch of stuff done (#1) and start talking about great quality AND innovation and a thirst for personal development related to the goal in question.

Can you say 2 out of 4 of these statements apply to the team member in the goal area?  Probably not great performance.  3 of 4?  Yes - great performance.   4 of 4?  Absolutely great performance...

For $30, I Can Expose Every Employee In Your Fortune 500 Company to a Facebook Ad.

Seriously - I can use Facebook ads, and for $30, expose every employee at a major Fortune 500 on Facebook to an ad of my choosing?

That's pretty compelling - as well as pretty scary.  Got the following email below from a friend of the Capitalist.  The email was sent by VoiceOfUs.org regarding Apple's efforts to improve working conditions in contract factories overseas.  They're not happy, and instead of the usual methods, they're determined to exert pressure by going straight to the source - Apple employees.  

Take a read at the email text and ponder the opportunity/threat this creates to a Fortune 500 for a mere $30:

"Apple’s report is finally out -- and it confirms that the factory workers who make your iGadgets are illegally overworked, underpaid and subject to routine health and safety violations. Apple is admitting this is a serious problem, and we have won promises from Apple to address many of these issues. This is a big deal.

But here’s the problem: Apple, a company that is known for its ability to change its production process overnight, is claiming it will take FIFTEEN MONTHS to end illegal overtime in its suppliers’ factories, while ensuring that the factory workers who make iPhones and more can afford to feed their families and have safe working conditions.

If all of this sounds familiar, it is because way back in 2006 Apple conducted a nearly identical investigation, with very similar findings and a very similar promise: to “enforce weekly overtime limits set by Apple’s Code of Conduct.” But as soon as people stopped paying attention, Apple’s suppliers went right back to excessive overtime and dangerous working conditions.

This time, we aren’t letting Apple forget.

We want to build a countdown website that displays how many days are left to the day Apple has promised to end these terrible working conditions. But that’s not all. We want to regularly run Facebook ads that link to the site to every Apple employee in the US, reminding them of their promise and asking them what progress they’ve made. And these ads will be all the more powerful because they’ll be paid for by Apple consumers -- and going directly to Apple employees:

Yes, I will give $60, enough for every Apple employee in the US to see a Facebook ad twice.

Yes, I will give $30, enough for every Apple employee in the US to see the Facebook ad once.

Yes, I will give $10, because ten is a nice, round number and I can’t afford $30 but still want to help :-)

Our collective pressure has been enormously successful so far -- all the more incredible when you realize we are going toe-to-toe with the largest corporation in the world. In fact, in the time it takes you to read this email, Apple will have earned more new revenue than SumOfUs.org has spent in our entire existence. Apple has over 60,000 full-time employees; we have three. We are run on a shoestring budget (we don’t even have an office!) against a corporate behemoth that has some of the best PR people in the world, who would love nothing more than to grind this story into dust.

We're David to Apple's Goliath, but right now we're winning. While it won't be easy, if we can keep up public and media pressure for another 15 months to make sure that Apple actually keeps its promises.

Apple engineers and other professionals are deeply proud of working at Apple -- and they don’t want to (sic) the company to be seen as hurting factory workers, breaking the law, or breaking promises. Through this microsite and these Facebook ads, Apple customers like us can make sure that these promises are water cooler conversation at Apple HQ -- and that Apple’s executives feel pressure internally to keep their promises.

Click here to donate to fund the next phase of this campaign: A countdown website and Facebook ads, from consumers like you, aimed directly at Apple employees.

Let’s be clear: Apple hasn’t promised to fix everything wrong at Foxconn and its other suppliers. In some areas (like a living wage), it hasn’t even proposed a concrete solution yet. And, frankly, the 15 month time frame is far too long -- after all, when was the last time someone told you that you are breaking (sic) law but it’s ok if you keep breaking it for the next 15 months for your own convenience?

But the fact remains that if Apple actually implements the changes it has promised, even if it takes longer than it should and doesn’t go as far as we’d like, then pressure from consumers like you will have improved the lives of hundreds of thousands of workers. Let’s keep that pressure up until we see real results."

Wow.  Interesting and compelling.  And by the way, I can't help but think of the Anne Hathaway line at :50 of the new Batman movie trailer that appears below when I read that email:

"There's a storm coming, Mr. Wayne," she says. "You and your friends better batten down the hatches. Because when it hits you're all going to wonder how you ever thought you could live so large and leave so little for the rest of us."

WINNER TAKES ALL: Supreme Court to Determine if Pharma Reps Should Be Classified as "Exempt"...

They call it the Supreme Court for a reason, right?  It's supreme.  It's the "decider".

And the Supreme Court has one coming up that all of you should be interested in.  It's deciding whether Love-and-Other-Drugs pharma reps - those well dressed, good looking professionals who come in the doctor's office peddling their wares when you are there looking haggered, sick and generally untouchable - should be classified as exempt, or whether they in fact deserve overtime pay.

More on what's being decided in the case from the US Supreme Courts' blog (they've got a pretty good one):

"On April 16, the Court will hear arguments in Christopher v. SmithKline Beecham Corp. The Justices will decide, once and for all, whether pharmaceutical sales representatives (PSRs) are “outside salesmen” and thus exempted from overtime-pay requirements of the Fair Labor Standards Act of 1938 (FLSA) The decision will also settle a circuit split between the Second and Ninth Circuits:  the former held that PSRs are not outside salesmen and thus are not exempted from the FLSA’s requirement that they be paid overtime wages, while the Ninth Circuit (in this case) unanimously reached the contrary conclusion. This will be an interesting case with wide-ranging ramifications for the pharmaceutical industry and the ninety thousand people nationwide employed as PSRs."

More on the work duties and who the pharma reps are selling to:

"To understand the typical duties of a PSR, it is necessary to understand the concept of an “ultimate user” in pharmaceutical lingo. An “ultimate user” is the patient who actually takes the prescribed medicine. Under the Controlled Substances Act of 1970, no one, including drug manufacturers, can dispense prescription medicine without a physician’s authorization. Because the drug manufacturers cannot sell their prescription medications directly to the public, they sell the medications to distributors or retail pharmacies, who then dispense the medications to an “ultimate user” who presents a proper physician’s authorization.

Within this framework, Glaxo employs PSRs to make calls on physicians. At a call, the PSRs will typically present information and samples to the physician and attempt to convince the physician to prescribe their employer’s pharmaceuticals instead of the competition’s.

PSRs work almost entirely outside of Glaxo’s offices. Most of a PSR’s time is spent traveling to physicians’ offices within a specified geographic region. A PSR will ordinarily make eight to ten physician calls per day, usually between 8:30 a.m. and 5:00 p.m.  When not making physician calls, PSRs will study Glaxo products and relevant disease states. They will prepare new presentation modules, respond to phone calls and e-mails, generate reports, and attend evening and weekend seminars. These tasks are typically performed outside of customary business hours.

Of critical importance to this case is the fact that PSRs cannot sell samples, take orders for any medications, or negotiate drug prices or contracts with physicians or users. Instead, they can only try to convince physicians to prescribe Glaxo products instead of its competitors’ products."

Now, what the court is trying to decide:

"There are two issues before the Court.  The first is whether it owes deference to the Department of Labor’s interpretation of its regulations. The second is whether PSRs are outside salesmen when they cannot legally sell prescription drugs, but instead can only encourage physicians to prescribe their employer’s drugs.

In both the Second Circuit and this case, the Secretary of Labor filed an amicusbrief in support of the PSRs. However, the courts in each of those cases split on whether the Secretary’s interpretation of the Department’s regulations warranted deference:  the Second Circuit held that it did, while the Ninth Circuit held that it did not."

Interesting stuff.  Here's how they are currently comped according to the details on the USSC blog:

"For their services, PSRs receive two types of payment: salary and incentive-based compensation. Glaxo aims to have its PSRs receive seventy-five percent of their payment as salary and twenty-five percent as incentive-based compensation. However, the amount of incentive-based compensation a PSR can receive is unlimited. In general, a PSR’s incentive-based compensation is calculated by measuring the increase of Glaxo’s market share for a particular drug within the PSR’s territory."

For a deeper dive on what pharma reps make, see this breakdown over at Recruitingblogs.com. Basically, pharma rep comp differs by company (makes sense - what primary product lines are they selling), but a good rule of thumb is salary of 60-70K and total comp of 90-110K.

Sound like an hourly job to you?   I'm also wondering aloud if the objection is that they aren't true outside sales professionals, they're still marketing professionals who have discretion about when/where/how they do their jobs, right?  The world has gone insane.  Pharma reps who make 100K are now before the Supreme Court with a 50/50 shot at getting overtime.

If that's the case and the court decides in favor of the reps, then if I'm a comp professional, I'm turning the model upside down.  Incentive pay goes away (and along with it, the ability to double your base) and I'm paying an hourly rate that factors in OT and reduces total comp to 85-90% of what I'm currently paying.

You know - just good enough to keep the talent in the job - but there's no way if the pharma industry loses the case that they're simply going to increase their talent comp structure by 15-20%.

And that, my friends, is what people who file and drive these cases don't understand.  The attorneys win again, and 90,000 pharma reps end up with a decreased ability to earn.  Nice.

The Top 5 Reasons You Hire Externally Instead of Promoting From Within...

You hire externally instead of promoting from within a lot.  Here are my top 5 reasons why that happens:

1.  Development of Internal Talent for the next step is HARD.

2.  #1 + you have a business to run.  It's hard to find time to develop talent.

3.  #1 + the Internal Talent doesn't know what it wants.

4.  You need some fresh ideas.  Things feel stale, and it's a great way to shake things up.

5.  Did I mention development of Internal Talent for the next step is HARD?  Too bad, it's big enough I'll list it again.  

So, you hire externally for more $$ and hope for the best.  A new study indicates what you have already experienced many, many times.  Going outside doesn't always work out.  More from Knowledge at Wharton:

"According to Wharton management professor Matthew Bidwell, "external hires" get significantly lower performance evaluations for their first two years on the job than do internal workers who are promoted into similar jobs. They also have higher exit rates, and they are paid "substantially more." About 18% to 20% more. On the plus side for these external hires, if they stay beyond two years, they get promoted faster than do those who are promoted internally.

"Most jobs are entered into through a variety of different routes, sometimes by being hired from the outside and sometimes by moving up from inside the firm," says Bidwell. "I was curious as to what the effect of these different routes would be" on an individual's job performance. His research is presented in a paper titled, "Paying More to Get Less: The Effects of External Hiring versus Internal Mobility."

"Although external hires are paid quite a bit more than employees promoted into similar jobs, "this is not a free lunch for the external hires," he says. "There is a much greater risk of being let go during those first few years, mainly because they may not develop the necessary skills and thus will not perform as well as expected. Then, too, they might decide to leave voluntarily."

Moment of clarity from the research: Those who are willing to take the risk to jump companies reap the rewards.  Make no doubt about it, there's risk.  Not everyone's willing to accept it, but those who are get the cash.  By the way, I've always said that the percentage increase it takes to rip a talented person from a job and company they're happy with is 20%.  Nice to see that confirmed by research.  Here's more on the "tipping point":

While doing his research, Bidwell noted one particular difference between the external hires and those already in the company who are being promoted. "People hired into the job from the outside often have more education and experience [than internal candidates], which is probably some of the reason they are being paid more," he says. "When you know less about the person you are hiring, you tend to be more rigorous about the things you can see" -- such as education and experience levels listed on a person's CV, or what Bidwell calls "externally observable attributes." And yet "education and experience are reasonably weak signals of how good somebody will be on the job, he notes.

Which means that if you're going to hire from the outside, go ahead and buy the degrees and past titles. But you better dig in like crazy and figure out what the person has actually done, and what they'll do for you when you bring them in that's different than what would happen if you promoted from within.

Last note - isn't an external hire's ability to come in and get results in a brand new culture related to what's in their behavioral DNA?  Seems like we all would be well-advised to find a tool that could help us understand how likely the person is to come in to our company and be aggressive and assertive to make things happen in a way that was consistent with our culture (to the extent those things can match up).

Go ahead and make that external hire.  Just make sure you evaluate and understand the probability that they're going to add value and action equal to 20% of their annual salary.