Archive for the ‘ Business ’ Category

If you didn’t have to make hard decisions you wouldn’t get paid so much

One of the managers at work comes across as pretty grumpy, he seems pretty anti social, is always on the phone and you get the impression work is causing him some major stress. Almost all managerial roles are stressful and the higher up you get in the chain the more so it is.

It annoys me a little when people complain about how easy CEO’s have it, how they get paid ‘ridiculous’ amounts of money and how all they do is sit around and make budget cuts. The reality is that managements job is to take something as abstract as choosing the direction for the company/team and make it a reality. Choosing the ‘right’ path is always difficult because often they are not given the full picture and you can never know which paths have ambushes and traps lying in wait beforehand.

The layman always has the benefit of hindsight when they complain about managerial decisions, the ‘obvious’ signs that were missed are only obvious after the occurence.

To make things worse often decisions don’t have a right answer, there usually only is a ‘lesser of two evils’. Plus there is always to pressure to make the decision in a timely manner.

That is why management get paid so much and get to sit around all day in a slick corner office. Because if the decisions they have to make were easy, everyone would do it (Which if you follow economics would drive up the supply of managers).

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Anyway, everyone does have the opportunity to make managerial decisions, its call starting your own business.

2013
01/22
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Galactic Trader

When I was a younger, my brother and I used to play Gazillionaire a lot. The game is simple, all you do is trade goods on different planets to make money.

I think in a little bit the game influenced my decision in what degree I chose to study.

These days, after playing faster than light, I feel like that it would be my calling. Being a galactic trader! owning my own ship, going to different worlds, living like a space nomad.

I think I was born a few centuries too early, but i’m still hopeful this kind of stuff will exist during my lifetime.

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It also could be because after playing these games (and reading books) I become slightly obsessed with the crazy ideas they suggest.

2012
12/07
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Business
Travel
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The existence of crappy things

There is a gigantic difference between an item that is of low quality and an item that is of the highest quality. As someone who programs on the odd occasion I can understand how stuff you create can sometime turn out badly even with the best intentions. But usually this is something that occurs as you learn how to actually create something that matches your idea of “quality”.

The thing is that this is something only rookies encounter, the whole idea of being an expert or a professional is that you are meant to have ironed out these problems.

So how is it that professionals and experts, keep creating stuff (I am specifically referencing electronic devices and software) that is below par. Surely these people take pride in what they do? And that upon seeing what they have created is garbage, realise that it needs more work?

There are a few possible explanations that I have come up with:

  • Effort vs profit. A high quality product costs heaps
  • Managerial pressure. Forced cost cutting
  • Systematic failure. Being forced to use incorrect people and tools
  • Lack of design understanding. Who really knows what people want?
  • Complexity problems. The bigger something gets, the harder it is to remedy problems

Blaming the problem on “idiots” is the easy way out. I prefer to believe the head designer knew what he was doing and was skilled but was stuck in a bad situation.

I still don’t know if these adequately explain it, most likely they all are contributing factors.

2012
11/21
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Business
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Work, Play and Rest

A weird skill I learned while at university was to be wary of rules/protocols that exist not for a logical or physical reason, but simply because someone “decided” on it.

One that I think about a fair bit is the 40 hour work week. I guess the reason behind it was that people should have the weekend off (Tradition) and that of the 5 working days the time should be split equally between work, play and rest. Maybe that sounded like a logical system (8 hours sleeping and an 8 Hour workday, which leaves 8 hours spare in a 24 hour day). However its not like 40 hours a week is the optimum level for human efficiency (or something).

When in school, we do to 30 hours a week. Maybe because it sounded logical that a child needs a lighter workload than adults. But Elite Athletes do something like 35 hours a week (Lance Armstrong mentioned that he rode 6 hours a day, assuming one day off a week), which is what gets me. The people who are pushing their bodies to the max are doing less work than the ordinary person. Not because they are inferior, but because they know how important rest is.

Employers don’t care about how rested their workforce is, if an employee isn’t rested it is his fault, not the bosses. So we eat into the time theoretically allocated to “play” so we can get enough sleep. Not only that but lunch breaks don’t count towards our 8 hours of working, so eating comes out of the “play” time also. Don’t forget commuting, that is also “play”.

What is left is a pitiful excuse of a work-life balance. And that is at the basic 40 hour week. It gets worse if you are trying to climb a corporate ladder or meet a deadline.

I work at a place that struggles to keep the employee level required to meet its labour requirements, so when I asked if I could cut back some hours I got death stared like there was something wrong with me.

I just don’t understand the need to follow the “full-time rule” that exists for no good reason at all.

2012
11/13
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Investment Banking

There is a reasonable amount of anger in our culture directed at Investment Bankers, the reason for this is that they are paid an incredible amount of money for what seems like a relatively easy job. For a while I couldn’t figure out why they earned what they did but Benjamin Graham came along with the simple explanation that made everything click.

Whenever a company needs to raise capital through equity (Issuing new shares on the share market) they go see an investment banker. The issue of new securities (shares) is a complex task, and rather than the company dealing with the process itself they outsource it to people who are more skilled at the job. The investment bankers will then buy a proportion of the stock from the owners at a fixed price (Underwriting). They then issue the new stock. If the shares are sold below the agreed upon price then the investment bank loses money, but mostly they make a profit.

This is the goldmine where investment banks source their profits. Everybody has heard of a company who made a killing on their early day’s of trading, guess who received the majority of those profits…

That is why Investment Banks have so much money, that is why a relatively easy job (In comparison to something like surgery) pay’s so incredibly well.

Note: Investment Banks are probably a necessary evil. For a company to issue new shares they have to release a prospectus which is hundreds of pages in length and they usually have to navigate a jungle of bureaucratic red tape. That means diverting a lot of effort from the company’s core activities, which almost all companies are unwilling to do.

2012
10/14
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The Market

I have mentioned that my recent trip to Thailand made me a better person and I would like to express the amazing realisation, almost epiphany, that I had while over there.

I have for a long time been a supporter of the invisible hand of the market, the idea that if we stop restricting the marketplace it will come to our rescue and turn society into utopia. Needless to say after our trip, my confidence in this idea has declined.

First I would like to note that I believe the stress caused by work in western societies is non-existent in Thailand. The workload required by employees there is significantly lower than in Australia for a couple of reasons.

  1. The low wages: everywhere seems to be overstaffed, the workload is spread out over many employees because labour is cheaper than technology in most cases.
  2. The culture: Because it is too hot to wear anything serious (Like a suit) the majority of people wear singlets and shorts. This encourages a relaxed workplace where employees can be often seen napping.

The best example of this we saw at a restaurant we were having breakfast at. We were sitting and watching five contractors replace the door, two of them were holding the door stable, one was holding the ladder for the fourth guy who was screwing the door back together. The last guy was sitting taking a break. Their job ran smoothly and was finished pretty quickly.

You can compare that to the situation in Australia, this 5 man job becomes a solo job where mr handyman has to balance himself on the ladder, hold the door in place and simultaneously screw it back together. His muscles are probably aching from trying to keep everything steady for an extended period of time; his phone is probably ringing off the hook because he is also the manager and he has overbooked himself.

After work the Australian probably goes home, opens a beer and sits in front of the television because he is too exhausted to do anything else, he then announces to his wife how much he hates his dead-end job. The 5 Thai guys will probably go to the bar after this job to have a break and they all are pretty happy.

The problem is that the Australian probably gets paid more than all the Thai guys combined. The live in what is relative poverty to us. We met these people who didn’t have a shower, rather they had a hose and a bucket. But they were normal people, not like beggars or people who messed up their own lives, it is just the way that many of these people live.

And that brought me to my conclusion, that important things (Like showers) are actually inefficient luxuries that the market will do its very best to rid itself of. Because someone spending extra on luxuries (Read: SHOWERS) can afford to be paid less. And that sucks, it makes me glad that the minimum wage here is as ridiculously high as it is, even if it means we have to do the workload of 5 people.

 

2012
09/15
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Business
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Being valuable rather than qualified

It seems the ‘local’ opinion of getting far in your career is to have as many bits of paper (Certifications) as possible. I have heard from more than a few people that they can’t move up in their career because they don’t have the relevant qualifications.

Conversely Steve Jobs never finished college, neither did Bill Gates, in spite of this they reached the top of the food chain.

In Job’s biography it mentions many apple employees who were ‘key personnel’. These people aren’t mentioned because they have the most qualifications, they are mentioned because they are valuable. It seems key personnel quitting it is a tragedy, it also seems that head-hunters always try to recruit them.

To emphasize how the capitalistic world views key employees vs regular employees a reference to ‘dressage‘ was made in one of my classes. I would like to highlight a quote from the Wikipedia article:

“At the peak of a dressage horse’s gymnastic development, the horse will respond smoothly to a skilled rider’s minimal aids. The rider will be relaxed and appear effort-free while the horse willingly performs the requested movement.”

The metaphor can be applied with executives (And valuable employees) being the riders while everyone else is expected to act like the horses. Internal strife within the company (Requesting pay raises) is akin to a horse being unwilling to perform the requested movements.

Anyway the point is that if a rider complains about something, his needs are catered for because he is trying to ‘focus’ on more important things (The movements to be made). If a horse complains it gets replaced (or corrected).

Conclusion, BE THE RIDER NOT THE HORSE. If you are valuable it doesn’t matter if you are lacking the stupid bit of paper, but if you aren’t then the qualification simply dictates the highest position you are suitable for.

2012
07/31
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The world in the palm of their hands

There is a reoccurring theme in a few of the books and documentaries I have recently finished, that is, famous and successful people tend to know each other before they make it big. Like Steve Jobs, growing up he knew a good number of the people who would eventually shape the technical world.

I theorise that this original network of talent allows the resources to solve difficult problems that most people would immediately give up on, giving successes that further raises the confidence of the whole group. The group pushes all members to be better, until members of the group of friends are individually successful.

2012
07/27
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Skills Gap

This is a bit obvious but there is a discussion of the ‘shortage’ of skilled labour in this down-turned economy. The idea is that employers are using computer algorithms to scan through the huge pile of resumes they receive, and none of the applicants fit their criteria.

This is caused by the expectation of hiring someone with experience, with the ability to ‘slot’ straight into their company and be productive from day one. However every company expects this, while no-one is willing to be the guy that trains graduates and fine-tune their skills.

Employers searching for staff are after the people who work for their competitors.

This I guess is a result of the casualisation of our workforce,the tendency to work in the same company for long periods of time is no longer and the return on investment in employee training is pretty low (Especially considering that competitors try to lure away your human resources and are often successful).

It is pretty interesting, if you don’t have the skills and experience (like a graduate) then you are one in the crowd fighting for the few positions in companies that train up new employees. BUT if you get in with the skills and experience then you are scarce and get to enjoy the many opportunities that exist for the industry.

2012
07/23
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The Entrepreneurial Thought Process

I always used to look upon people who called themselves entrepreneurs with envy, I could never envision the world’s exploitable business opportunities like they could and it would leave me feeling rather disappointed with myself. To reassure myself I could always find ways to optimise methods and systems, but that was mostly because I would see a human doing something that a computer or robot could do better.

However since the holiday period has begun I have started noticing things; like little niches that could be profitable enough for a business to exist. I think when the mind is not preoccupied with exams and class’s (Or work) the empty state of mind, free from stress, allows a perfect environment for abstract idea generation, such as recognising market opportunities.

There are other things too, I have been researching in other areas (Mostly IT stuff) and it has allowed an “integration” almost, of my thoughts. In particular realising where my skills can be applied to new areas. In general this research has acted as inspiration which has made all the difference.

So I think I need to do more of this stuff, I plan to read the news more often, read the business and investment magazines (And the technology ones also) to create a constant source of inspiration for myself.

Hopefully this will allow my google document of ideas to grow and maybe one day an idea in there will actually turn out to be a workable start-up.

2012
06/27
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