Best Demonstrated Practices

“Best practices” – another way to say “I have no idea what I’m doing so I’ll copy someone else.”

Or as Dilbert puts it:

Source

It’s not me, it’s you

I hope I never receive one of these (HT: J Zhang):

Wall Street Blues

I’ve been sharing a lot of these posts (along with my oh-so-witty commentary) through my Google Reader feed (why haven’t you subscribed yet?), but a recent question posed to me by Lester about what has been going on in Wall Street has inspired me to make this — a list of blog posts/news articles/comics/commentary from the past week and a half about the chaos going down in the financial world:

The Nation’s Financial Industry Gripped by Fear – Not a pleasant article to come to work first thing in the morning on Monday to read, but a good summary of what happened that weekend — aka the fall of Lehman Brothers and Merrill Lynch, two of the oldest investment banks on Wall Street.

"Things change a lot in this business." – Megan McArdle waxes philosophical about her first post-MBA interviews with investment banks.

A New Beginning – Greg Mankiw on Intro to Economics enrollment: "I would like to thank all my friends on Wall Street for doing so much to spark interest in economic issues. You have gone beyond the call of duty, and your timing could not have been better."

Top Five Lehman Brothers souvenirs to grab on your way out: Funny and irreverent — especially this "must have": "Operating principles cube – A must-have desk accessory with helpful pieces of advice and guidance. Includes top Lehman operating principle: Demonstrating smart risk management"

"Smart investors should buy this stock": Hilarious (that is, unless you actually owned Merrill/Lehman/AIG stock) coverage of very poor investment advice provided by some of the world’s largest and most well-regarded financial magazines.

Ok, Raise Your Hand if you’re completed $&%^$! – Owned

Too Few Regulations? No, Just Ineffective Ones – Tyler Cowen of Marginal Revolutions gives his take on what went wrong. Short answer: no political party is to blame, as the problems started years ago, and rested not in the amount of regulation, but in the type of regulation that took place.

"My Wealth will go on": Sinfest at it’s best

The Financial Crisis, LOLCat edition – Answering the very important question, how would LOLCats explain how the financial crisis went down? "Bank: OH NOES!  WE WERE COUNTIN ON UR PAYIN US"

How Wall Street’s woes will hurt the next President – Megan McArdle points out that the cost of these bailouts means that the next President won’t be able to increase spending or cut taxes as much as they’d like.

Foresight? – "Thanks goodness we bailed out Bear Stearns back in March if we hadn’t we might have lost Fannie Mae and Freddie Mac, Lehman Brothers, Merrill Lynch and who knows what else.  Oh wait…"

The US credit rating under fire? – "Scary to think that two committees of eight or so underpaid analysts at S&P and Moody’s could destroy the world’s economy with a penstroke."

US Treasury yield drops to basically 0 – Translation: putting all of your money under your mattress might start to make sense soon…

Megan McArdle – explains that there is nothing Bush or Clinton or anyone probably could have reasonably done to avert this.

How the two candidates are responding to this crisis: Not very well, e.g.: "JOHN MCCAIN’s message: We’re in this mess because a bunch of Wall Street hot shots got us into it, but they won’t dare to pull that stuff when I’m in the White House, because I survived five years in a POW camp."

Blocking short-selling is stupid – Blocking short-selling is stupid

Where do we go from here? – David Brooks: "It all sounds great, like buying a house with no money down…"

Glass-Steagall’s repeal is not to blame: So, no, you can’t blame the Clinton administration.

The New "Business" Strategy? – Ay caramba

The End of the Independent Investment Bank – Goldman Sachs and Morgan Stanley, the “two last men standing,” ideologically throw in the towel and become fully regulated banks

What should we do? – Calculated Risk makes a calculation on what can/should be done. Their best plan sounds like a long shot to me.

Liquidity trap? – Paul Krugman educates us on what the Fed traditionally does, and why he thinks the Fed is powerless now. Tyler Cowen has a different take.

Guest post on Freakonomics blog explains the whole thing

Image source (S&P500 Financial Sector Index)

Employer social networking

Did you read my post on the pitfalls of having Social Networking profiles while maintaining a profession identity and think, “Ben’s just exaggerating”?

Think again (HT: Christine), a CareerBuilder.com survey found that over 20% of employers do look (and an additional 10% will start looking soon) for the social networking profiles of jobseekers, and, in fact, 1/3 of employers have found information which caused them to drop a job candidate.

But, as I mentioned before, instead of thinking of this as a reason to restrict access to your Facebook account to only those who know your magic 52-digit password, think of it as an opportunity to put your best foot forward. After all, 1/4 of employers found information on social networks which helped convince them to hire a candidate.

So, what to do? First step, clean out your profile pages of:

• Drug/alcohol use: Yes, it’s cool that you drank your weight in beer at that keg party, but that’s really not what your employer wants to see
• Inappropriate photos: Unless you’re interviewing for a position as a pornstar or a mafia enforcer, leave out those “compromising” pictures
• Examples of poor communication: “I’s am can communicateding really goodly” and other less dramatic examples of poor spelling and bad grammar don’t reflect well on your attention to detail or your ability to communicate with your coworkers, clients, and superiors
• Bad-mouthing people at work: It doesn’t matter how bad the boss or how obnoxious the coworker, bad-mouthing them on a public forum reflects very poorly on you and your professionalism.
• Evidence that you misrepresented yourself on your resume: Writing on your resume that you have an MBA from Harvard doesn’t make it true, especially if your Facebook profile says you’re a high school dropout.
• Confidential information about past employers: This is not only stupid, but illegal.

Second step? Add some information to present a “more balanced” view of you online:

• “Compatible” interests: Nobody expects you to be super-interested in everything your employer (current or prospective) does, but you should be able to show some baseline level of enthusiasm for the job that you’re trying to land.
• “Professional” photos: As much as employers would deny it, a lot about a first impression is visual. So, while you don’t need to take down all the pictures of you from your trip to Cancun, you should definitely make sure there are pictures of you up there looking sharp and presentable.
• Depth of thought: Want your employer to think you’re smart and goal-oriented? Put something on there that makes them believe it. Link to interesting and thought-provoking articles or blogs. Include quotes which convey your personality the way you want to be thought of.
• Evidence that your resume is accurate: It never hurts to befriend real coworkers or classmates, or join online communities/groups which reflect the accomplishments on your resume.
• Get Linkedin: I used to think that LinkedIn was just Facebook, but for a slightly older demographic. But then, I read Guy Kawasaki’s great list of ten ways to use LinkedIn, and then watched consultants at my firm use it to get access to interviews and sources of information which I had thought inaccessible, and then got a number of requests for job interviews from prospective employers through it. So, yes, it’s real.

Image source

Goodwill hunting, the financial crisis sequel

A while back I posted about something called “goodwill” — an accounting term which means very little but, by accounting standard practice, shows up on corporate financial statements. If you can’t tell by my tone of voice, I don’t put a lot of stock in the concept of "goodwill".

Much to my dismay, I discover that, in light of the current financial crisis, that regulators are now thinking about letting banks pretend that "goodwill" actually means something (HT: A. Garvin):

Under the proposal issued this week, the regulators would permit buyers of banks and thrifts to count some of the goodwill toward meeting their regulatory capital requirements.

In other words, something which has no material value whatsoever now suddenly counts for something.

Let me give you an analogy for how insane this would be if it goes through. Let’s say I wanted to buy a house and you’re my friendly neighborhood banker who’s helping me take out a mortgage to buy it with:

YOU: So, did you like the place?
ME: This place was awesome!
YOU: So, how much is the place?
ME: $400,000.
YOU: Ok, well, we’ll need a $100,000 down payment…
ME: Sounds good, except for one thing.
YOU: What?
ME: I don’t have that much cash. But don’t worry, I can give you this hug which I think is worth $400,000! Would that be all right?
YOU: Sure!

Now, correct me if I’m wrong, but didn’t the current crisis start because of something tantamount to trading something (houses) for nothing (the promises of subprime borrowers to pay)?

What are you saying again?

More for that consulting dictionary, from an old gem by Lifehacker (HT: Sophia)

Let’s think out of the box: Really means, "Can you creatively anemic people please come up with something?" The person who says, "Let’s think out of the box" is usually desperate for a new idea and surrounded by people who are not known for generating ideas. So the phrase is actually an announcement that says, "I’m in trouble."

I need someone who can hit the ground running: Really means, "I am screwed." Because no one can hit the ground running. You need to at least assess what race you’re in and who else is running.

Do you have the bandwidth? Note that bandwidth is not time. It is something else. If you ask someone "Do you have time?" you mean, "Am I a priority?" If you ask someone "Do you have bandwidth" you mean, "You seem like your brain is fried. Can you pull yourself together to do this for me?"

Let’s hit a home run: "I’m desperate to look good. Even though the odds of a home run are slim, I’m banking on one because it’s the only thing that’ll save me." Something for all your sports fans to remember: If you have a bunch of solid hitters you don’t need a bunch of home runs.

You and I are not on the same page: "Get on my page. Your page is misguided." No one ever says, "We’re not on the same page, so let me work really hard to understand your point of view. If you want to understand someone else, you say, "Can you tell me more about how you’re thinking."

I’m calling to touch base: "I want something from you but I can’t say it up front." Or "I am worried that you are lost and I’m sniffing around for signs to confirm my hunch." Or "I’m calling because you micromanage me."

Let’s run the numbers and see how they look: "I know they look bad on first blush. But the true use of Excel is to keep changing the formulas until you find a format that makes the numbers look good."

My plate is full: "Help I’m drowning," or "I would kill myself before I’d work on your project."

Let’s close the loop: "Let me make sure I’m not going to get into trouble for this one."

Let’s touch base next week: "I don’t want to talk to you now," or "You are on a short leash and you need to report back to me."

Keep this on your radar: "This will come back to bite you. or me."

Beware the ides of Merrill

If you didn’t know any better, you’d think this was scripted.

First, we saw the collapse of Bear Stearns. Then, we witnessed the implosion of Fannie and Freddie Mac.

And now, while Lehman burns, Merrill Lynch fiddles and hopes that Bank of America will buy them.

Let’s hope this is one movie that doesn’t have a sequel.

Say my name

One thing I don’t think I’ll ever get used to is calling superiors — whether they be primary investigators, friends of people in my parent’s generation, or management — by their first name.

I understand that when my boss tells me to call him Jim, it’s heartfelt and kind. It’s signaling his approachability, and his willingness and desire to engage in a genuine conversation with me.

“Please, Ben, we’re equals; tell me what you think.”

It’s a very American/Western sentiment — this notion that everyone is equal. That things like experience and talent and position are not obstacles to our great innate equality.

But I can’t help but shake the feeling that it’s awkward and disrespectful. I wonder if this is a product of my more conservative upbringing, and I wonder also if it’s a common practice in another country (with more of a conservative culture around “respect”) — say Japan.

What does everyone else think?

Image Credit

Is it that simple?

Wow, I can be a manager too!

Source

They’re watching

As promised, here is some (additional) advice to the countless people out there searching for jobs (esp. those in the consulting industry). To a lot of you this might be obvious, but it’s so important that I’m going to underscore it again.

Think of that Sting song — every firm that you apply to will be watching you. This watching comes in two forms, both of which you need to be aware of:

1. Big Brother The firms you apply to will be checking your online presence — meaning, they will be looking at your Facebook account, your MySpace account, any associated blogs, your LinkedIn account, etc.
2. Every interaction you have with the firm up until the moment you are hired (and sometimes even after) will be scrutinized and (at least at my firm) recorded so that the firm will have a good repository of information on your motivations and behavior.

While some of you will (naturally) respond by attempting to restrict all such access to your personal life, let me suggest an alternative approach:

1. Instead of thinking this as an invasion of your privacy, think of this, instead, as an opportunity to put your best foot forward. Instead of clamping down on access to your Facebook/MySpace account, clean the account of less "savory" material and then present a selective slice of your profile — showcase what you would want a recruiter to see: interests and books which reflect your depth of intelligence, quotes which suggest depth of thought, etc. And, this is a perfect time to revamp your LinkedIn profile — get recommendations, show off connections, etc.
2. There’s little you can do that’s proactively good about the fact that a lot of these firms are recording and observing every detail of your every interaction with them, except to be aware. Too many people don’t put their best foot forward (e.g. saying stupid things while tipsy on the company dollar) — long story short: DON’T BE ONE OF THOSE PEOPLE.