Summation
with Auren Hoffman
Month of June, 2001

Summation Push

Auren Hoffman's Summation Push for June, 2001

This issue:

* The Value of People

* Solving the Traffic Problem: The World Would be a Better Place if we All Used Turn Signals

* Dee Hock's Management Rules

* BOOK REVIEW: Memos from the Chairman (by Ace Greenberg)

* Reader Responses

* Friends of Auren: Khalid Azim

* Summation Push Pick Links

* Hoffman Reading List

 

 

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on your career...

THE VALUE OF PEOPLE

Ever hear of sport called baseball?  

Baseball involves a bat and glove and is generally accompanied by a spherical red object called a "hot dog" and a translucent beverage called "beer" (not to be consumed while operating a metal box with four wheels called "Ford Bronco").  

In baseball, players are compensated according to their expected performance.

If you're really, really good -- you can make $40 million/year. If you're not all that great, barely carrying your own weight, you probably earn only $1 million/year. That's a 40X difference in compensation -- the difference between being a franchise player and being an average achiever.

Let's apply this compensation model to the work world:

You have an administrative assistant who's not doing a great job, just 9-5, who doesn't really care -- makes $30,000/year.

On the other hand, you have the best administrative assistant since sliced bread -- totally organized, really dedicated, etc. -- and, of course, you pay that person a 40X difference on $30K -- or $1.2 million/year. Right?

Of course not, that's not the way it works. But maybe it should.

You're probably thinking -- "Hey Auren, the workplace is not like baseball!"

And you're right -- there are a lot of differences between the workplace and baseball. The main differences is that in the workplace, it's not appropriate to walk around in tight pants, spit, and scratch yourself all day. But I digress...

But there are some commonalities to baseball within our workplace. Think about salespeople.

In your organization you might have some salespeople making $50,000 while other salespeople are making $500,000. That's a 10X difference -- not as large as 40X but still very significant. Why do we pay salespeople this way? Because like baseball, sales is very measurable.

As companies start to be more sophisticated in measuring results, we are going to start to see results-oriented compensation to administrative assistants, accountants, programmers, teachers, marketers, etc.

An "A" player in an organization often times can produce the same results as three "B" players. And three "B" players can be produce what nine "C" players can achieve. So this means we should potentially have a 9X difference in compensation b/w the mediocre and the great.

Summation: Expect to see a compensation revolution happen over the next 10 years as we start to put more value on our human assets.

(What are your thoughts?  Write auren@summation.net)

 

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RANDOM THOUGHT: Why do all umbrellas fall apart? Can't someone invent an umbrella that can withstand serious rains?

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on the commute...

SOLVING THE TRAFFIC PROBLEM THE WORLD WOULD BE A BETTER PLACE IF WE ALL USED TURN SIGNALS


by Auren Hoffman

The world would be a better place if we all used turn signals all the time.

Ever get in the left lane behind a car only to find out three feet from the busy intersection that the car wants to turn right? No signal, no warning, just stopping. Since the right lane is moving briskly, you're now stuck waiting for five minutes or more while the car attempts an impossible turn.

I hate that.

A call to all motorists -- if you happen to want to turn, try to signal at least 10 seconds before you get to the point where you want to turn. That way, other cars can adjust accordingly.

Is that too much to ask?

Lyphon Broderick, professor at Collatson University, conducted a study on urban traffic and found that traffic could flow easier by as much as 30%. 30%! That means that we could get from point A to point B in a congested city like San Francisco potentially 30% faster if we just all used turn signals all the time. Of course Lyphon Broderick doesn't exist (neither does Collatson University for that matter, which was entirely made up) -- but that's beside the point.

Summation: Do your fellow human car drivers a favor, use turn signals.

(Thoughts on any of these?  Write auren@summation.net)

 

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on management ...

DEE HOCK'S MANAGEMENT RULES

 

Last month I gave Dee Hock a call. Many of you may know Dee as the revolutionary that grew the credit card industry. He was the CEO of VISA International from almost its inception until the mid 1980s.

Dee Hock's guide to being a good manager:

Priority One -- manage yourself

Priority Two -- manage those that have authority over you -- bosses, regulators, supervisors, government, etc.

Priority Three -- manage your peers

Priority Four -- manage downward (only after completing the first three priorities)

This is an interesting perspective on managing -- but it has a lot of merits.

(What do you like?  Write auren@summation.net)

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on management books ...

BOOK REVIEW:


Memos from the Chairman
by Ace Greenberg

Ace Greenberg, the famous Chairman of Bear Stearns, shares with us two decades of internal memos he has written to his employees. The memos, always humorous and always topical, discuss saving money, customer service, and the latest management fad of the month. Throughout the book, Greenberg takes advice from his fictitious advisor Haimchinkel Malintz Anaynikal.

This book is a little bit wacky, but it has some really valuable insights to a CEO or a CEO-in-training. I highly recommend this book.

(To see more book reviews, check out the Hoffman Reading List at  http://www.summation.net/reading.html)

 

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RANDOM THOUGHT:

How much more would you pay for a flight from San Francisco to New York that was two hours faster?

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READER RESPONSES:

Regarding the commentary on "Is Athletics in Education a Good Thing", Steve Wright writes:

"Thanks for the information - being a father of 5 girls (11, 9, 9, 6 and 7 months) this gives me some hope. My wife (UCLA 78 and I (UMass 76) run our own press relations business out of our home. Neither of us were academic stand outs, but we both were and, I guess, are athletic. Our 4 older girls are all good athletes and do well in school. But they will probably never be 4.0 or even 3.5 students. Does this "dumb down" where ever they will attend? What I think you are seeing here is not a preference for athletics over academics but a trend toward finding students who have passions and talents in an area beyond bubble test taking. Let's face it, University's are in the business to sustain their legacy the more athletics, actors, successful business people a university graduates the more endowment money comes their way. How many PhD's start a dot com? Not many. In summary, this news does not surprise me - it gives me hope - If you want to get really worked up you should look into getting into private schools in Northern California. Enjoy your stuff - keep it coming"

Regarding Auren's Top 10 movies of all time, Ed Mohebi writes:

"How can you have a top ten movie list without:

Mr.. smith goes to Washington
5 easy pieces
Blade Runner
Sound of Music
Saving Private Ryan
????"

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FRIENDS OF AUREN

 

[this section updates you an interesting person that is a member of Auren Inc]

 

Khalid Azim, Vice President, Morgan Stanley Dean Witter

 

Khalid is a technology banker at Morgan Stanley Dean Witter in the Investment Banking division out of Menlo Park, California and is now moving back to New York City. His previous investment banking experience at MSDW comes in the Debt Capital Markets area. He served as the Asian Bank Capital Product Manager and worked in both Hong Kong and New York.

However, Khalid doesn't have your typical banker background. I first met Khalid at a Council of Foreign Relations event in the Fall (he and I are both term members of CFR). He served as an officer in the U.S. Navy on a fast attack nuclear-powered submarine and a surface ship. He was also selected as a White House Fellow for the 1999-2000 class (which is a huge honor).

 

 

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THIS WEEK'S SUMMATION PUSH PICK LINKS:

 

* Yahoo News Alerts (http://alerts.yahoo.com/) -- track a news topic and get automatic email notification when it appears in print.
* Strategy.com News Alerts (https://home.strategy.com/PortalHome.asp) -- like Yahoo alerts but only for public companies (and the site is very slow)
* Bounty City (http://www.bountycity.com/) -- Bounty Systems teamed up with ForutuneCity to create a site that is the destination for pay-for-services. Right now they have a $100,000 reward if you refer a CTO!
* What am I reading? The Hoffman Reading List (http://www.summation.net/reading.html)

NOTE: Auren Hoffman works for BridgePath.com but the opinions expressed herein are solely those of Mr. Hoffman.

NOTE: You may reprint in full or in part (for free) with permission from author.

Auren Hoffman's bio can be found at:

(http://www.bridgepath.com/about/management.html/)

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