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January 2014

The Value of Intellectual Property Alongside Products and People In Today's World...

A few weeks back, I talked a bit about a trend called the acquihire, where you acquire a company more for the talent in the company than the products they have or the revenue they'll bring to the table.

That underscores the fact that in a digital economy, there are sometimes items more valuable that current revenue or product line.

Today, I'm going to give you another type of acquisition, without a catchy name.  It's the acquisition that's completed solely for Intellectual Property, which can be then used in R&D or in today's increasing legal Google_motorolaworld, to protect a company against patent lawsuits.

Example - Google's acquisition of Motorola in 2012, and it's subsequent announced sale of Motorola to Lenovo this week.  Back in 2012, Google was facing a patent lawsuit hell at the hands of companies like Apple.  GigOM explains:

"Recall that one month before the acquisition, Google’s rivals — including Apple, Microsoft and BlackBerry — had snapped up a coveted patent portfolio at auction, giving them a new stick to pummel Google in a global and ever-sprawling legal battle over smartphones.

The deal, then, gave Google a chance to counter-attack or at least hold its ground thanks to Motorola’s intellectual property, which reportedly amounted to 17,000 issued patents and 7,500 applications. Google has never been a big booster of a patent system that awards patents for inventions like a “method of swinging on a swing” but, given the context, this was a case of if you can’t beat ‘em, join ‘em.

Or, as programmer Robert Eric Raymond put it at the time: This is Google telling Apple and Microsoft and Oracle “You want to play silly-buggers with junk patents? Bring it on; we’ll countersue you into oblivion.”

So Google paid 12.5B for Motorola, and the announced sale to Lenovo was for 2.9B.  Someone should be losing their job, right?  Not so fast.  The acquisition was completed in 2012 more for patents than people or products, and a closer look at the math indicates they didn't lose as much as you think.  More from Techcrunch:

Motorola Mobility is being sold to Lenovo, in a deal worth $2.91B. Google is divesting itself of the handset division it purchased for $12.5B in 2011, but it will keep some of the assets — including patents.

“Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures,” says Motorola Mobility CEO Dennis Woodside. “As part of its ongoing relationship with Google, Lenovo will receive a license to this rich portfolio of patents and other intellectual property. Additionally Lenovo will receive over 2,000 patent assets, as well as the Motorola Mobility brand and trademark portfolio.”

The article goes on to break down just how much Google is losing in the sale to Lenovo:

"Google sold off several aspects of its initial Motorola purchase including its cable box business. And it managed to leverage the patents — which Google valued at $5.5B — to at least some positive outcome. So, while the monetary ‘wins’ or ‘losses’ here are one for the bean counters to figure out, the strategic victories for Google may actually be fairly strong. According to some maths from analyst Benedict Evans, Google’s total outlay may have been closer to $7.15B than $12B — the divestitures, retention of patents and the sale price would cut the plain monetary loss down further to under $2B."

An acquisition of 2B to protect the android business and 80%+ market share in the smartphone industry?  Welcome to the acquisition solely executed for Intellectual Property.

What's a possible equivalent in your industry?


Is Your Kid On Track To Be a 40-Year Old Barista? Probably.

It's all glory over here at the Capitaist today, kids.  I made it out of the ATL on the way to Birmingham on Tuesday just in time - we still have employees at Kinetix who are stuck in traffic almost 24 hours later.

Me?  I gave up on the ice covered roads about 4pm, so I'm "remote" today from Exit #11 on Georgia I-20.  Stayed last night and I'm staying again tonight, because when you don't have slowplows or salt/sand trucks, 2 inches of black ice tends to mess with the program.

Oh, and here's a headline you don't want to see as a leader:

Atlanta mayor: 'A lot of people' still stuck on highways

"A lot" means you don't really know and there's not really a plan.  A cynic could say it's Katrina with SUVs. Ugh.

What I'm telling you is that I'm dealing with a lot of ____ today.

So today I'm pushing you over to a post I did at Fistful of Talent yesterday entitled, "5 Reasons Your Kid Will End Up Being a 40-Year Old Barista".  It's a good one.

Go check it out and comment.  It's all there: Avoiding Math and Science, giving them everything, private school tuition that makes no sense, helicoptering parents.  Boom.  Click here to get the post.

I'll be at Exit 11.  They left the light on for me.

Snow Days: It's a Problem of Motivation, Bob...

Capitalist Note - We actually have named a snow front in the south "Leon".  So I'm pulling this inclement weather policy out of the archives for all my people in the Southeastern United States.

Snow and your employees.  You either have the answer, or you don't.  If you don't have the answer, I'm here to give it to you.  Quick, fast and in a hurry...

You know the issue I'm talking about.  When there's a little snow (or if you live in the South, a hint of snow), employees start freaking out by asking the following questions:Snow_day

-are the offices going to be open tomorrow?
-are the offices going to be open tomorrow?
-are the offices going to be open tomorrow?
-are the offices going to be open tomorrow?

Damn, that's one question, isn't it?  It's just asked a thousand times during the same day.  If you didn't know better, you might think employees were looking for a freebie.  With that in mind, watch the following video (email subscribers click through for the video), then I'll be back to give you the inclement weather policy you need to box the equation in:

So here's the deal skippy.  Employees want you to make the call to close the office.  "I wouldn't say I've been missing it, Bob"...

If you're out there and you feel hostage to the whole "what are we going to tell employees about the snow" thing, try this policy on for size:

"<Insert your company name> has offices that are located in various geographic regions across the United States.  As a result, inclement weather may, on rare occasion, cause an office to be closed for a period of time to ensure the safety of our employees while traveling to and from work.

When inclement weather is such that the management staff, with the approval of the Executive Management Team, decides to close the office, the following compensation will be provided to you:

• If the office is closed for the entire day, hourly employees will receive their regular hourly wage for the hours the employee was scheduled to work that day.  Salaried employees receive their regular compensation.

• If the office is closed early or operates on a reduced schedule, hourly employees will receive their regular hourly wage for the hours the employee was scheduled to work on that day.  Thus, if an hourly employee is scheduled to work eight hours that day but is only able to work four hours due to the office closing early or opening late, the employee would still receive eight hours of regular pay for that day.  Salaried employees receive their regular compensation.

• Even if the office is closed to the general public for the entire day or operates on a reduced schedule, there may still be an operational need for some employees to report to work.  Hourly employees who are requested to work will be paid time and a half for the hours worked when the office was closed due to inclement weather, in addition to their hourly wage.  Any hours worked while the office was open will be paid at the regular hourly wage.  This only applies when the management staff, with the approval of the Executive Management Team, makes a decision to close the office to the general public or operate on a reduced schedule due to inclement weather. This is a rare occasion.

If the office is NOT closed but some employees are unable to report to work due to inclement weather, those employees may have the option of taking any accrued paid time available to them.  If no accrued time is available, the employee may take the day (or hours) as unpaid.

I took the liberty of highlighting the golden statement that takes the burden off of you.  It's not that you're mean, it's that the office is open.  If you don't feel safe traveling to the office, you don't have to - you can just burn some accrued time to cover the day off.

If you've struggled with how to address the whole bad weather thing, try this policy on for size.  Just use road closings as your guide for when to close the office, and it's done. No more hand-wringing...

It'll clear up a lot of things for you...and them. 

Probability HR Jobs Will be Lost to Robots in the Next 20 Years?

There's a great article over at The Economist related to robots/technology taking over more and more jobs we associate with people.  Business Insider broke down the probability that different jobs would be taken over by robots in the following graph:


So telemarketers are screwed - you probably knew that.  What has to be more suprising to you is that next on the list is a pretty white-collar profession - accounting and auditors.  The smarter technology gets, the more it can adapt on the fly and make good decisions based on scenarios involving natural language interaction, etc.

What about HR?  Will the robots be replacing HR pros left and right?

I've got good news and bad news.  If you dig into the article from The Economist, you'll find that the simplier the scenario and the more solutions are provided according to rules, the more a job can be automated.  I think that means that transactions in HR will be increasingly taken over by tech and ultimately by a smart robot that you love to hate.  Of course, you expect that, right?

What you didn't probably expect is that the next level of HR specialist - think comp and benefits - is probably going to be high on the probability chart you see above.  After all, if the work of accountants and auditors can be taken over by tech/a robot, why would comp and benefits be any different?

Safer in my eyes would be the role of the HR generalist - there's so much gray area in the work of a good HR generalist at any level that I would compare that favorably to a clergy member.  

It's that type of job.  Rejoice HR generalists!  

The 3rd Annual Tim Sackett Day Honors Kelly Dingee - One of My Favorite Talent Pros...

First up, you're wondering what Tim Sackett day is.  OK, I'll tell you.

Tim Sackett day happened for the first time two years ago. My shout out to Tim can be found here.  The whole damn thing was tongue in cheek because Tim was a quality HR pro with a decent blog who was Recruitdc_1constantly getting stiffed by those who create "Best Of" lists, awards in HR and all that stuff.  And he didn't like it.  So gave him max PR.

But then, a funny thing happened.  The HR community decided to honor an under-appreciated Talent pro last year on the 2nd annual Tim Sackett day - without a tongue in cheek.  Paul Hebert, one of the greats, was honored.

This year marks the 3rd annual Tim Sackett day and we're honoring someone who is truly great, but never asks for attention.  Master sourcer and FOT writer Kelly Dingee.

Congrats to Kelly, the honoree of the 3rd Annual Tim Sackett Day.

Here's 5 things I love about Kelly Dingee:

1. She's Deep.  No one knows more about sourcing candidates in America.  She's the best.

2. She's Kind. Talking to her is easy like Sunday morning.  (#lionelrichie) She has a unique way about making you feel good about the world.

3. She's a giver.  Almost ever post she does on FOT is full of gifts to those that want to get better at sourcing.

4. She doesn't go looking for fame. She''ll be embarrassed that Tim Sackett day is honoring her.

5. She's loyal. She works for a great company.  I've often thought about trying to steal her, but she's just too damn good, honest and all "do the right thing"-ish.  

Happy Tim Sackett day Kelly Dingee.  You're one of the best and you don't get your due.  Like biggie once said, if you don't know, now you know... HR

(Check out all the gifts Kelly has given the world at FOT by clicking here for her FOT library.)

How Fantasy Island and Getting Voted a Great Place to Work May Be Linked...

Did you see? The 2014 Fortune 100 Best Places to Work list is out. Without question, there are a lot of great companies on that list. Fantasy

So why do so many of us feel like a cynic when we read it? Jealousy? A longing to work at one of the great places? As talent pros, are we bracing for our boss to bring us the list and ask why our company wasn’t included?

Lucky for you, I've got my annual Cynic's Guide to Creating a Great Place to Work up at Workforce.com.  Five easy (or hard, depending on your point of view and budget) steps to becoming a GPTW.  Here's #5:

5.Do the Fantasy Island imitation when it comes to the Great Place to Work employee survey. You can’t become a great place to work until your employees are surveyed and confirm that your company is in fact freaking awesome. That means you have to prep your employees to expect the survey and find the right sweet spot between tampering/pressuring them and politely pointing out what a great survey response could mean. It’s like the Fantasy Island intro where Ricardo Montalbán tells the staff, “Smiles, everyone, smiles!” before the guests arrive. (FYI to millennials: click the link for video and use this for background).

Go get the rest of the five steps over at Workforce.com

How HR Leaders Can Become CEOs...

By now, most of you are aware that a former human resources leader has transcended the HR space to become CEO of a Fortune 100 company. And for the uninitiated (click here for a complete article on the move), Mary Barra, the former vice president of HR at General Motors Co. will become the automaker’s new CEO. 

Hope.  This gives hope that HR leaders can do anything they want, including being CEO someday, right? Screen Shot 2014-01-14 at 10.33.33 AM

Actually, it doesn't.  A deeper dive in the career path of Barra and some knowledge of succession planning at the major company level tells us that for all the good vibes PR this gives the HR function, HR leaders need to leave HR as soon as possible in order to aspire to the CEO seat.

I'm up over at Workforce.com with 5 things that the Mary Barra promotion to CEO tells any HR leader that aspires to be a CEO.  Here's the first two things from my list at Workforce.com, click on the link to get the rest:

1. Get the hell out of HR soon. Let’s be clear: One look at the Barra profile tells you her HR experience was part of a power rotation to learn the business, not a defining tag on her résumé. That should tell you what has always been the reality: You need to rotate elsewhere to be enough of a player to become the CEO of a company of any size and scale.

2. Deep subject matter expertise in an area core to the business is desired. Barra is an engineer at heart, an area that’s obviously core to GM’s business. Your company also has a similar heartbeat. If you have an undergrad that matches that heartbeat, you could do HR, take a rotation elsewhere and become a player in the race to become the boss. If your educational background doesn’t fit, you have no chance. But you could find a company that provides a better match and values your non-HR undergrad.

If you want to be a CEO, good for you.  Just understand you can't do from where you sit now as an HR leader.  You have to be brave enough to leave if you want to have your hat in the ring for the big job.

Hit Workforce.com for the full article!  Bonus reference to the movie "The Social Network" and Mark Zuckerberg's business cards at a young age.

Should Your Company Be Considering a Non-Tech "Acqui-Hire"?

Recruiting is tough.  Sometimes you need to be innovative.  

Think way outside the box - are there small, struggling companies out there with key talent your company could use?  What if they were small enough and you could take ALL the employees, rather than just a few?

Enter the Acqui-hire.  It's when you do an acquisition, but have absolutely no interest in the product or services of the company you are acquire.  You just want the talent - the employees.

Acqui-hires are becoming common in the tech industry. More from VentureBeat:

"An acqui-hire is when a larger, [presumably] thriving company scoops up a younger, [presumably] struggling company. The acquirer is generally not interested in the startup’s product — it wants a team of engineers with a history of working together.

Forty percent of companies in the study did not disclose any funding prior to acquisition. Twenty-one percent raised less than $1 million, and 25 percent raised between $1 million and $5 million. Eighty percent of acqui-hires occur before a startup raises its third round of funding.

When CB Insights looked into the alleged “Series A crunch” in 2012, it found that the average seed-funded startup needs 13 months to raise a follow-on round. That acqui-hires generally raised funding about 15 months before acquisition is therefore significant, because it is right around the time a startup may be coming to terms with the fact that it can’t raise more money and is running out of any funds it had.

The startup gets a more graceful exit than a failure, and the acquiring company overcomes the “dearth” of engineers."

So the question for you is this - are there small companies - think 5-10 total employees - that are flat from a growth perspective and struggling to make it that might be open to joining you?  If these companies are losing money or simply breaking even, would the founders consider joining your larger firm as a way out - especially if you provided employment opportunities for others they feel responsible for?

When you think about an acquisition, you probably automatically think it's out of your reach due to cost.  The reality is that founders of some young and struggling firms in your industry might be looking for a graceful way to close the doors, and it might cost a lot less than you think.  What if you paid the equivalent of high end contingency search fees (25-30% for all the positions you're briging over) to the founders and locked them in with a 1-2 year employment contract?  I guarantee you there are some very small firms in your industry that would be open to that.  But you have to ask and engage.  

You don't know until you ask.

I think the acqui-hire can work in industries outside of tech.  Based on the circumstances of the small company in question, it might cost you less than you think, and you might be up some great hires as a result.

Be creative. 

My Favorite Potential Factor at Our Company: Figures Things Out (Smart)...

Over at the company I own part of (Kinetix), we have potential factors instead of values.  They're designed to identify what we value most in talent and as such, should be our guides in how we hire, promote and reward, and at times, fire.

You can find all of our potential factors in an online document/handbook we call The Kinetix Code.

My favorite potential factor?  This one:

Figures Things Out (Smart) - Yeah, we said it. You’ve got to be smart and be able to figure things out on your own to work here. While we like high IQ’s, we also value street smarts. Our talent has an innate ability to take an incomplete request and figure out what would make the final product great. That involves knowing where to find the information, identifying when to ask for help, and how to create work product that makes others say, “damn.”

Take an incomplete request and don't be a victim.  Do something and be smart enough about business that what you did makes sense - hell, it's what we would have done!

Zappos and Holacracy: How to Negatively Recruit Against This Org Structure...

Every play the Zappos drinking game?  Every time an HR person talks about Zappos, you have to drink.

Get ready to drink a lot.

In case you missed it, Zappos is making the move to to an org structure called Holacracy.  Here's the definition of that org structure from my friend Paul Hebert at Fistful of Talent:

"Holacracy is an organization structure that seeks to replace the traditional, hierarchical organization structure with governing “circles” focused on specific work outputs—not titles or functions per se. Each circle operates autonomously and without job titles for its members. Members of circles (employees) can be part of multiple circles and can do different things depending on the focus of the specific circle."

Go read Paul's post, because it's a good one.  Then, read this post by William Tincup at FOT as well.  We like talking about this stuff.  I'm thinking of starting a blog called 99problemswithHolacracy, because we could fill that sucker up.  

But back to the point. You and I both know that if half the world went to something like holacracy, we'd pick off recruits like vultures.  Here's how you and I would negatively recruit against anyone that deploys this org structure:

1. You have no title.  How's that working out for you?  Tried to put your resume together lately?  Every month you remain without a meaningful title, your lifetime earnings are going down.

2. Managing people is the excepted path to greatness.  You don't have a path to that traditional view of greatness.  Tick, tock, my friends.  Lifetime earnings going down.  Tick. Tock.

3. You're tired of people who aren't as smart as you having the same voice in decisions.  Is this Russia Danny?  No.  I think you're smart too.  Better jump now, Danny.

4. You say tomato, I say committee.  Whether you call them teams, circles, whatever - the real name for the structure you have is "by committee".  Where are committees that handle management decisions strongest?  In government.  How is that working out? 

The ability to negative recruit against a holocracy basically comes down to whether you believe in the individual or the group/pack.

Last time I checked, we lived in America.  I choose the individual.