Biden 2016?

Although the next presidential election isn't until Nov. 2016, curiosity of who will throw their name in election, is on everyone's mind. Including my own. Last week, Vice President Joe Biden visited South Carolina to discuss infrastructure investment. The topic changed, of course, to will Joe Biden run for the presidency.

During a quick stop in Columbia, Dick Harpootlian, former Democratic Party chairman in South Carolina said to Biden, "You need to run." Biden's response, "We'll talk."

Colleen McCain Nelson of the Wall Street Journal wrote, "Mr. Biden has taken no overt steps toward building a national campaign machinery, and few people expect him to run. Nonetheless, Mr. Biden in recent weeks has fanned the will-he-or-won’t-he conversation by suggesting that he’s still considering a bid and by scheduling trips to three states that hold the earliest presidential nominating contests."

Biden remains noncommittal on the subject of putting in a bid for presidency.  Trips to Iowa, South Carolina and New Hampshire to promote the administration's agenda inevitability turned to private conversations about the next presidential campaign.

Mr. Biden has described the presidential race as “wide open,” and may very well wait till summer to make a decision.

Could Biden be waiting to see if Hillary Clinton will run?  Most believe that since Mrs. Clinton dominates the polls over her competitors that if by off chance she doesn't run, Biden will.

Colleen McCain Nelson of the Wall Street Journal wrote, "Beyond that public declaration, the vice president said little privately during his trips to Iowa and South Carolina that suggested he was ready to run. Democrats in those states, as well as in New Hampshire, say they’ve seen no evidence of organizing efforts by Biden emissaries, and many supporters say no one from the vice president’s circle has even hinted that local officials might want to hold off on committing to other candidates."

This summer promises an exciting time. Who will run, or not for the Democratic party's presidential nomination?

Dish Network CEO Exchange, Clayton for Ergen

Joe Clayton, the president and CEO of Douglas County-based satellite TV company Dish Network Corp., retires at the end of March, and will also leave the Dish's board of directors.  Dish Network, founder and chairman Charlie Ergen will be the returning CEO.

"Over the last four years, Joe's leadership has been instrumental to Dish as we have worked to engineer a fundamental transformation of our business," Ergen.

Wall Street Journal reporter, Shalini Ramachandran, wrote, "Mr. Ergen, the company’s mercurial, 61-year-old founder, stepped away from the CEO role nearly four years ago. As chairman he helped game out Dish’s major strategic moves, including investments to enter the wireless business and a recent plunge into streaming TV.

Now, as he assumes day-to-day control once again, Mr. Ergen faces the challenge of capitalizing on those bold bets by finding revenue growth that can counterbalance stagnation in Dish’s core pay-TV business. Dish reported Monday that it lost 79,000 subscribers last year, with 63,000 shed in the fourth quarter as it battled major TV programmers in carriage fee disputes.

By some measures, the U.S. wireless industry is already mature: The number of U.S. wireless subscriber connections, including cellphones and tablets, amounts to more than the entire U.S. population, according to CTIA, the wireless industry trade association.

But in an interview, Mr. Ergen said he views the industry as “relatively in its infancy” and sees a world of wireless-enabled devices beyond tablets and smartphones, from refrigerators to cars to smartwatches – that will “lead to tremendous growth.”"

Connect & Collaborate - Production Devices to Desserts

 

Manufacturing is making a return to the United States. Colorado companies not only embrace the change, but lead the way. This week we talk with the leaders of two companies that handle production, of two very different products.

Randy Schrader, President of Applied Control and Steve Fabos, CEO of Steven Roberts Original Desserts join us for a Pro-Business Colorado Edition of Connect & Collaborate with guest host Dave Tabor of CACI.

Applied Control produces process automation and controls for various industries, including oil and gas, refineries and power plants in several surrounding states. With just 17 employees in 1996, Applied Control has grown to 140 employees today. Schrader tells us about what he's learned working in a high demand service industry.

Steven Roberts Original Desserts creates bakery items and specialty desserts for a number of restaurants and other chains, while making each treat look like a custom order. With a production facility in Aurora, and another newly acquired facility designated to handle gluten free and organic foods, SROriginals continues to grow. 

Steven Fabos shares about the concept development process, and what goes into creating beautiful and delicious desserts for the masses.

Listen Saturday at 1:00 PM on 710 KNUS –  Please let us know what you think of our program, either by commenting here or on Facebook at Connect & Collaborate with ICOSA or join the discussion on Twitter @ICOSAMagazine.

Podcast links will be available the Monday after our air date. Check back for updates if you missed the broadcast.

Apple's Auto Ambition

Reports over the last couple weeks show growing evidence that Apple is gearing up to create an electric vehicle. Apple has already hired more than 60 former Tesla employees. Tesla Motors CEO Elon Musk says Apple has been offering his engineers a 60% salary increase and $250k signing bonuses.

Apple has also recruited Johann Jungwirth away from his position as head of Mercedes-Benz’s Silicon Valley R&D unit.

According to a new report from Tim Higgins of Bloomberg, the company’s car team is planning to launch the electric vehicle by 2020.

Higgins adds that the company has additionally hired former engineers of Panasonic Corporation, Johnson Controls Inc, LG Electronics Inc., A123 Systems and others.

The Bloomberg report speculates Apple is speedily designing an electric vehicle that can be marketed to the masses - a car with a range of over 200 miles on a single charge and a price tag of less than $40,000.

Barclays said in a research note that the electric car market is worth $16 billion a year, and will grow to $71 billion by 2021.

Apple has plenty of cash on hand after several consecutive quarters of very high profits. They would be wise in diversifying and investing in the future. While some analysts deride this strategy by pointing to low margins in electric vehicles, Apple's bigger play could be the use of connected cars as a platform, similar to the iPhone and the Appstore.

Though connected cars make up less than 10% of auto sales today, their share is expected to skyrocket to 80% by 2020.

A even larger opportunity exists with the advent of self-driving technology. Think about all the hours people spend driving their cars. What is that time worth? What else could people be doing with that time? The answers to these questions could be worth trillions of dollars.

With Google, Uber, and traditional car manufacturers working on autonomous driving vehicles, it could very well become a reality by as soon as 2020. Reuters says it has learned from industry sources that Apple’s secret project involves self-driving electric cars.

In 2021, will people be listening to Tesla's Slacker Radio, Google Play Music, or Apple's iTunes Radio?

Seizing the Day

As posted on Fix the Debt: We celebrated President’s Day on Monday, a time for reflecting on the power of presidents to lead the way and shape the debate. We need that kind of leadership now as important decisions regarding the federal budget are about to be made.

President Obama’s recent budget proposal provides some good examples to follow, but also has more to be desired in other areas.

On the positive side, the president should be lauded for paying for all new initiatives in the budget. Some proposals, like universal preschool, have offsets explicitly linked to them while others are not specifically paired with a pay-for, but savings are identified elsewhere that could cover the costs. Congress should follow this example of abiding by “pay-as-you-go” (PAYGO) principles as new policies are considered.

In addition, the budget includes some deficit reduction beyond the savings to be used to pay for new initiatives. However,the budget only saves about half of what the White House claims, roughly $930 billion. While the savings are significant, much more will be required. Contrary to what a White House spokesman said, the budget does not meet the targets set by Simpson-Bowles.

The budget also misses an opportunity to seriously address the longer-term fiscal challenges. It claims to stabilize the debt at about 74% of the economy, but that relies on some assumptions that may be optimistic. Even if the assumptions hold up, debt will remain well above the historical average of about 40% of GDP. Fix the Debt, and others, faulted the budget for failing to adequately address the drivers of the debt going forward and not drawing attention to the need to bring the debt down.

In a Wall Street Journal column, Grep Ip asks if it is time to start thinking about instituting more aggressive deficit reduction now that the economy is improving. The president should be leading the discussion instead of avoiding it.

Colorado small business leader and Fix the Debt citizen-activist Jeff Wasden shares the wisdom of some past presidents in the Colorado Statesman. He writes that “President Obama needs to devote part of his final years as POTUS to reducing the burden of debt on this and future generations.”

We need leadership from the top. This week we are highlighting examples of presidential leadership on fiscal issues on our Facebook page. Make sure youfollow us.

See the president’s budget in charts.

Check out highlights of the president’s budget.

Counter Trade: Let’s Swap Lunches

Counter Trade, Barter

COUNTER TRADE SIMPLIFIED

Remember grade school days, when another student’s lunch looked better than yours, so you swapped?

It still happens today in international trade.

I have read estimates stating that as much as 5% to 20% of world trade falls into the category of counter trade, although the exact numbers are hard to verify. What exactly constitutes counter trade?

While several forms of counter trade exist, in its most basic form it is exchanging goods for goods, commonly called bartering. Likely, one or both parties do not have access to the other party's currency. When both parties have merchandise the other wants to use or to sell, they may mutually agree upon an exchange of goods.

COUNTER TRADE: UNINTENDED CONSEQUENCES

After the exchange, both parties should have the ability to use or sell the goods acquired. If they don't, they may find some unexpected consequences. A popular story involves an aircraft manufacturer. They received an order from a country that did not share their currency but offered to exchange canned ham for the aircraft. The seller agreed.

When the canned ham arrived at the port of importation, U.S. customs officials would not approve the ham for sale in the country. The manufacturer of the aircraft negotiated with the customs agency to release the goods with the condition that they would not sell the goods. Responsibility for determining the final use for the large quantity of canned ham fell to the staff in the company's cafeteria.

COUNTER TRADE: COMPLICATED

Counter trade becomes complicated when more than two parties and more than two countries are involved. A hypothetical example of a three-way trade would be one involving a shipment of oil from Venezuela. The purchaser in Germany offers to pay for the oil with medical equipment. The Venezuelan oil producer does not need medical equipment, so they find a distributor in the United States who takes the medical equipment and pays for it with automobiles, which the party in Venezuela can use. The shipment of oil goes to the party in Germany who sends medical equipment to the party in the United States who sends automobiles to the party in Venezuela and everyone lives happily ever after. Obviously, such a transaction has complications and has potential for things to go wrong.

Stop Pretending to Be Rational at Work

At times, English can be an illogical, irrational and downright confusing language. Just look at all the homographs and heteronyms that crop up throughout the lexicon. A homograph is two or more words that are spelled the same but have different meanings. A heteronym is a homograph that is also pronounced differently. For example:

• Is it hard for a big bear to bear a small bear?
• He wound the bandage securely around the wound.
• On this farm we produce produce.
• The dump was so full that it had to refuse more refuse.
• The soldier decided to desert his dessert in the desert.

We humans like to think we’re logical, rational, accurate and consistent in most of what we do. But the fact is we are not, in large part because of the way our brain works. We live and work in a world of self-generated beliefs that remain largely untested. We adopt those beliefs based on conclusions inferred from what we observe in the present and our past experiences. In the workplace, our ability to achieve the results we want is impeded by the feeling that our beliefs are the truth, the truth is obvious, and our beliefs are based on real data.

However, and this is where the brain so often gets in the way, we select the data about our truths based on what we want and expect to see and to prove ourselves right. We select the data that supports our beliefs and assumptions about the way the world works, and we actively screen out data that contradicts it.  As a result, we go around pretending that we are logical, rational, accurate, consistent at work, when most of the time we are anything but.

This self-deception shows up in many different ways that do not serve us well. For example, in meetings we tend to suppress opposing points of view, especially if they challenge or threaten the status quo. We limit the sources of data that inform our decision-making. We rush to consensus, thinking that quick action is more important than taking the time to consider multiple perspectives.

The human brain also has a bias for going with what’s familiar. Instead of seeking out new data, we tend to lean heavily on the past when looking to solve today’s or tomorrow’s problems. And the more success we’ve had from doing things a certain way, the stronger our belief that sticking with the same approach will eventually prevail.

Another common irrational behavior is the assumption that others think and see the world the same way we do.  If you doubt this, try a simple test the next time you present a new idea at a meeting. Afterwards, meet individually with three people and ask them to explain back to you what you said. Even though all three heard the same presentation, chances are you will get three very different answers.

Fortunately, instead of just tolerating our irrational behaviors, we can actually take advantage of them by understanding how we think, make decisions and translate them into actions in the workplace. It starts with my favorite subject – getting clear on winning.

Define winning for your organization and what it will take to get there. Talk about it constantly. Winning may be foremost on your mind (it should be!), but never assume it is for others. And never assume others definition of winning remains aligned to yours.  Keeping everyone else focused on winning is one of your most important tasks as a leader.

Make winning visual by painting a picture of what it looks like in your organization. Humans are very visual creatures, and putting graphic reminders all over your workplace will help keep people focused on the goal. Recognize the tendencies that cause people to lose focus on winning: distractions, too many “top priorities” or “urgent” projects, leaning on assumptions versus hard data, jumping to conclusions based on what has worked in the past, running boring meetings with no agendas or clear decisions, lack of accountability… Then diligently test the assumptions behind all these behaviors.

Most of all, never assume that people see things the same way.  Model the right behavior by exposing your thinking process. For example, “Here’s how I see this issue and here’s why. How do you see it?” Encourage others to do the same, and make sure to get different perspectives out on the table and discussed. 

The fact that there is no egg in eggplant, no ham in hamburger, and no pine or apple in pineapple makes the English language full of interesting quirks. In the workplace, however, our behavioral quirks do not support winning. So understand how the brain works, leave the homographs and heteronyms to the linguists, and keep your organization focused on winning!

Call to action: For the next 30 days, commit to one new technique for keeping employees focused on winning.

Japan's Economy is Coming Out of Recession

It's looking as if Japan's recent recession has officially ended, according to the latest headlines reporting gross domestic product (GDP) growth.  After two straight quarters of economic contraction, Japan's 2014 Q4 saw 2.2 percent annualized growth. While the news sounds positive, the numbers are disappointing to analysts that were expecting growth closer to 3.7 percent - a rather large difference.

After the data's release, Japanese Economic Minister Akira Amari told reporters that the economy was on track for a recovery with signs consumer sentiment is picking up.

But analysts pointed to the weak rebound in consumption and capital expenditure as worrying signs to the outlook.

"These are somewhat disappointing figures," said Takeshi Minami, chief economist at Norinchukin Research Institute. "The situation remains weak and companies are clearly postponing investments."

Reuters goes on to report that this rebound from recession will allow the Bank of Japan (BoJ) to hold off on expanding monetary stimulus for now even as slumping oil prices push inflation further away from its 2 percent target.

"The BoJ is expected to keep monetary policy unchanged for a while to see the impact from the latest easing," said Taro Saito, director of economic research at NLI Research Institute.

Today's data release will be one of the key factors that the BoJ will be considering at the two-day rate review ending on Wednesday. It is widely set to maintain the current pace of asset purchases in its quantitative easing (monetary stimulus) program.

Connect & Collaborate - Hope House

Teen mothers face tough odds, which make raising their children and getting ahead increasingly difficult.  Sixty-seven percent will live in poverty, often homeless or in abusive situations. With focused assistance, teen moms can beat those odds with focused assistance from Hope House of Colorado.

Hope House of Colorado started as a residential program for teen moms who would otherwise be homeless, and has expanded to provide self-sufficiency programs including GED and mentoring programs, and early childhood education. Hope House also helps the young moms to find internships and job training, so they can find jobs that provide for a young family.

Lisa Steven, Founder and CEO of Hope House Colorado joins us to share how the program started, and evolved to have the capacity to meet the many needs of young mothers and their children. By empowering these young women with the skills and knowledge to help them break the cycle of poverty, Hope House is changing lives for the better.

Danielle Trujillo is a teen mom currently in the Hope House program, and will share her experience in the internship program, as well as her plans to complete her paralegal education and raise her daughter.

Also joining the conversation is Hope House Career Partner, Rebecca Kersting of CAP Logistics. Career Partners help by offering internships and work experience to Hope House moms, which get them started on a successful career path.

Please listen Saturday at 1:00 PM on 710 KNUS and learn about this important organization, and consider if your business can help as a Career Partner.

For more information on the Career Partner program, contact Hope House of Colorado.

Why You Need to Become a Prisoner On The Road To Business Freedom

Want freedom? First, you must become a prisoner to your business, which is why most business owners never achieve freedom.

Research published in Harvard Business Review reveals something very telling about the way we work; we're too busy to follow the rules. And ironically, that has a profound impact on whether we will ever stop being so busy.

Don't Kid Yourself, You're a Hostage

Almost every founder, CEO and business owner I know is a hostage to their business. I was through six businesses until I learned to move from hostage to prisoner. Six months as a hostage can have more lasting negative effects on someone than years in prison. Why? A hostage is not in control of anything, the rules are always changing, others seem to be calling all the shots, all we can do is react, and worst of all, a hostage never knows when it will all end. Welcome to owning or running a business. But it doesn't have to be that way.

Want Freedom? Become A Prisoner

In Simple Rules for a Complex World, Donald Sull and Kathleen M. Eisenhardt make my case on why we need to become prisoners if we truly want freedom. They found that companies that flourish through hard times, do so because they are following a few, simple rules while others are flailing around with what I call the Random Hope strategy of business. It makes sense. A prisoner has a few simple rules they need to follow, and most importantly, they know when it will all be over. It's difficult for a hostage to be encouraged and have hope because the future is a big unknown.

Just a Few Specific Rules

Simple Rules says the fewer the rules, the better. Here are my four simple business rules, which I published in my first book, Making Money Is Killing Your Business. We call them the Four Building Blocks of success:

1) A Big Why

Your Big Why is something you can never check off as completed; being a lifelong learner, being a great mom, giving back to business owners, solving poverty. A Big Why motivates a business owner to filter daily decisions through how they help solve problems and create freedom.

2) A Strategic Plan (not a business plan)

A Strategic Plan will keep you clear about where you want to end up three years, twelve months or three months from now, and will motivate you to figure out the one or two things you need to do this month to obtain the freedom you've described.

3) Freedom Mapping

This is where the rubber meets the road. Everyone in our business (especially the founder or CEO) needs to get the brilliance out of their head and onto a piece of paper so others can do it. There have been many copies of famous paintings, like the Mona Lisa, that were so good that art experts couldn't tell the difference. If Da Vinci can find someone to paint the Mona Lisa for him, you can find someone to train to be better than you.

4) Outside Eyes

You can do the above three on your own, or you can get help and accelerate the whole process exponentially. I was an 18-20 handicap in golf for twenty years. Then I got a coach and in two years I was a two. I can't imagine how much time and money I wasted doing it myself. I'm talking to you, Mr. Rugged Individualist.

I'll Get To That Tomorrow...

Here's the kick in the head. You can go an entire forty-five year career and never do any of these four simple things, and most founders do just that. They don't know why they are in business, how they plan to use their business to accomplish that, or how to create the Freedom Maps to get them off the treadmill. And they aren't about to ask for Outside Eyes to accelerate the process.

Choose

Founders and CEOs who employ the Random Hope strategy of business will never get off the treadmill. Those that create a very few, measurable, specific rules, and follow them slavishly, can create a business that makes money when they are not around. He who makes the rules wins. What are your few simple rules? How are they ensuring you will experience freedom? If you have them, and follow them carefully, who knows, you even might get out early for good behavior. Article as seen on Inc.com

Vital for Colorado Chairman: "Don’t Let Anti-Science Extremists Destroy Denver’s Economy"

This week, the competing campaigns of environmental activists and industry advocates have been heating up surrounding issues of natural gas development.

Activists are pushing for a moratorium on fracking in the city of Denver, even though most of the state's development projects are well outside of Denver's city limits. The area around the Denver International Airport is one of the few areas in the city limits with any active wells leased out to oil and gas companies.

"Don't Frack Denver" activists say they want to stop the threat of expanding fracking within the city where it could affect their quality of life. They launched their effort on Tuesday by delivering a letter to Mayor Hancock and holding a news conference outside the City and County Building.

Industry advocates say this environmental effort is misguided and is essentially equivalent to "declaring war on Denver's economy."

Vital for Colorado, a leading pro-industry business advocacy group, has issued a news release statement in response, referring to the activists as "anti-science extremists."

"Groups that peddle fear, instead of facts, are out to hurt Colorado's economy and out to reduce the tax base that supports our schools, parks and libraries," said Peter Moore, the group's board chairman.

The oil and gas industry has been a boon for Denver’s economy in recent years. The industry makes up about 20 percent of downtown Denver’s office space, or about 4.5 million of the 22.3 million square feet of available space, according to the Denver Business Journal.

A Hancock spokeswoman said he understood the activist coalition's concerns, but she said he wouldn't consider backing any local action until a state oil and gas task force looking at regulatory issues publishes its recommendations. Those are due Feb. 27.

“Mayor Hancock hears their concerns loud and clear and will continue to work toward a shared goal of preserving our environment and quality of life here in Denver. The Mayor is keeping a keen eye on this issue, and eagerly anticipates the recommendations from the Governor’s Oil and Gas Task Force before any action would be considered on a municipal level. Understanding the Task Force is working on a responsible balance, the Mayor asks for the community and stakeholders to remain patient and allow a thoughtful process to take place.”

Councilman Chris Herndon, who represents northeast Denver, echoed Hancock's comments.

A moratorium effort may be lacking an actual legal footing given that recent state court rulings have overturned other cities' fracking bans.

Fracking, or hydraulic fracturing, involves injecting water, sand and chemicals under high pressure to break up rocks deep underground, thereby releasing oil and gas. The industry says it has been safe for six decades and is subject to intense federal and state regulations that keep it from harming the environment.

Logo

Overall, the oil and gas industry recently contributed $29 billion to Colorado’s economy and helped support more than 100,000 good-paying jobs.

“The oil and gas industry, like any industry, is not perfect, but it operates under some of the most stringent regulations in the country,” Moore said. “It’s been one of the brightest spots in our economy. The facts — and science – are on the side of industry.”

Vital for Colorado is a broad coalition of business and civic leaders formed to support responsible energy development.  More than 35,000 Coloradans, businesses, civic leaders and trade organizations have signed its pro-energy pledge. For more information, go to www.vitalforcolorado.com

Letter of Credit Documents: How does a Bank Define “Official”?

official documents, letters of credit, certificates, weight certificate, inspection certificate, UCP 600, beneficiary

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Documents: Official or Unofficial?

On occasion, a letter of credit will require presentation of an “Official Weight Certificate,” or some other “official” document. Could the definition of an official document provoke a debate? An equally intriguing question emerges, "What would constitute an 'unofficial' document?"

Requests for official documents often appear in letters of credit, which cover shipments of agriculture products. The letters of credit will ask for official weight certificates or official inspection certificates. What makes a document official? If issued by a government agency, would that fit the definition of official?

Uniform Customs and Practices ("UCP")

The UCP states that a bank can accept any document as long as it complies with the terms of the Letter of Credit and is not issued by the beneficiary, which seems to allow the bank a great deal of latitude.

It would appear, then, that the beneficiary can’t issue an official document. Does that mean a bank considers beneficiary’s documents, well, unofficial?

Where can we look to find the answer? Once again, we look to the UCP, “Terms such as ‘first class’, ‘well known’, ‘qualified’, ‘independent’, ‘official’, ‘competent’, or ‘local’ used to describe the issuer of a document allow any issuer except the beneficiary to issue that document" (Article 3).

Connect & Collaborate - Mining Interests

The mining industry is essential to the Colorado economy, and economies all around the world. In our state alone, mining contributes more than $8 billion each year, and 73,000 related jobs. In Africa, it is estimated the Democratic Republic of Congo holds  $24 trillion in untapped mineral deposits, including ores, cobalt, diamonds, gold and copper. That figure is equal to the combined GDP of the United States and Europe.

These resources and the jobs associated with them, are critical to the world economy, and that's why it matters to the Colorado Business Roundtable. The COBRT is committed to supporting business and organizations that foster the growth of those businesses.

The Colorado Mining Association is one such group. Stuart Sanderson, president of CMA, joins us to talk about the upcoming National Mining Conference, held jointly with the SME Annual Conference and Expo, February 15-18th at the Colorado Convention Center.

Sanderson also shares that the mining industry is in a period of transition and consolidation, where some sectors are not as robust as others. The National Mining Conference is essential, to provide forums to build relationships within the mining community.

Later, Emmanuel Weyi, president of Groupe Weyi International joins us to discuss his work in Africa. Groupe Weyi supports mining in the Congo, working to ensure fair wages and safe conditions in an area plagued with corruption.

As mentioned above, the Congo is so rich with resources, everyone wants their piece of it, and many resort to unethical practices to get a share. Weyi feels strongly that the best way he can make a difference, is to return to his home land as president. He is currently running unopposed in the 2016 election for the Presidency of the Democratic Republic of Congo. Listen in as we discuss his experience in Africa, in business, and his platform for improving lives in the Congo.

Listen Saturday at 1:00 PM on 710 KNUS –  Please let us know what you think of our program, either by commenting here or on Facebook at Connect & Collaborate with ICOSA or join the discussion on Twitter @ICOSAMagazine.

The 3 Critical Questions That Free You Up to Stop Managing

These three questions, along with The 50% Rule, will free up your time and get you off the management treadmill.

In a July 2014 Inc. article I made this statement, which I've used for a long time: The art of leadership is to know how few decisions the leader should make. In the comments section, mserra65 said, "I'd like to know what those few decisions are!" It's a great question that deserves an answer.

What Are the Few Decisions A Leader Should Make?

Leaders will relentlessly pursue taking themselves out of the equation, and instead build a culture that engages other people to make decisions. Ricardo Semler is perhaps the greatest modern example of a business leader. He is materially involved every day in a billion dollar corporation of which he is the majority owner. But Semler celebrated his 10th anniversary of not making a decision--eleven years ago. That's tremendous leadership.

Ask Three Questions Here are three questions that can help you move from: - manager (solving and deciding) to - leader (training others to solve and decide)

1. Before making a decision, ask yourself, "Is this the highest and best use of my time?" There are so many people who could decide better if we just stopped deciding for them. Train others to decide, and then get out of the way as fast as you can. And with your free time, go do something that no one else can do. You'd be surprised how useful you could be by getting out of the way.

2. Before deciding, ask yourself, "Who is responsible to actually carry out this decision?" Give them the decision to make. If they don't know how to decide, don't do it for them; train them to do it, then get out of the way. Those who are most involved in carrying out the decision have the most at stake and will almost always make a better decision than "the boss". Discuss with them the required result and the resources available to accomplish it, and then let them figure what is needed to get it done. They will own the decision and if something goes wrong, they will fix it instead of blaming you.

3. If the first two questions don't get you out of the way, ask yourself, "Who else will be impacted by this decision?" Some people aren't directly involved in carrying out a decision, but will definitely be impacted by the decision, and how it is implemented. Give them a voice. They may not make the decision, but their input could be invaluable in arriving at the right one.

The Leader's Goal For Others: Creating Ownership

When you solve and decide, all that is left is to delegate the task. But when you train others to solve and decide, you are delegating responsibility. This is critical because when we delegate tasks, people feel used ("put that nut on that bolt"). But when we delegate responsibility ("make a great washing machine"), people take ownership, and that is the most powerful motivator in business. Giving people their brains back and unleashing them to make decisions is key to them taking ownership, and the key to moving you from manager to leader.

The Leader's Goal For Themselves: The 50% Rule

A great in-the-trenches metric to know you're leading is The 50% Rule. I encourage every leader to eventually have 50% of their time unscheduled, and unavailable to be pulled into a crisis. The second part of that is key, otherwise your time is scheduled by crises. Even owners of very small businesses need to aspire to this because it is the key to them getting off the treadmill.

A Day a Week, a Week a Month, a Month a Year

The result? I have nothing scheduled on Mondays or Fridays, and have the last week of every month with nothing on the schedule. And I have a month a year to goof off or envision the future, usually a combination of both. That is 75% of the work year where I'm not in a position to make a decision that others could make better than me. This year I didn't take the month off, which put me down to only 63% out-of-the-way. Next year we're heading to Italy for a month.

I'm no Ricardo Semler yet, but I do have it as my goal to regularly not make decisions. What do I do instead? Ask questions, create vision, train, be creative, innovate, guide, make others successful, serve--in other words, lead.

Commit To These Three Questions

Management (solving and deciding) is a tiring treadmill. Leading (training others to solve and decide) is freeing and therefore, invigorating. Do you want to enjoy your business and focus on that which is the highest and best use of your time? Use these three questions every day to train others to solve and decide, and then get out of the way.

That's leadership.

Article as seen on Inc.com

Terms in a Flaky Transaction, Fraudulent Transactions

If It Sounds too Good to be True . . .

Once in a while someone comes up with a transaction that appears to be too good to be true. But instead of asking the right questions and determining the credibility of all parties, greed takes over and naive victims lose a lot of money.

Since the perpetrators of these schemes tend to use the same terminology repeatedly, these terms should raise caution flags. So for the benefit of the readers, an alphabetical list, compiled from numerous sources including the ICC Commercial Crime Services and my bulky file of transaction copies accumulated over the years, follows below. While the terms individually may not cause concern, if more than one of these terms appears in a financial proposal, adhere to caution as the rule.

Terms that Raise Red Flags

• Bank co-coordinator or bank co-ordinates
• Bank hard copy
• Bank to bank transaction
• Certified bank invoice
• Class A Bank
• Closing bank, cutting bank, designated bank, fiduciary bank
• CUSIP
• Cutting house
• Discounted letter of credit
• Divisible, assignable and transferable letter of credit
• Fresh cut paper
• Good, clean and non-criminal origin
• ICC 3032 London Short Form
• ICC 3039 London Long Form, or 3039 Format for Standby Letters of Credit
• Irrevocable bank purchase order
• Key tested telex or KTT
• Live prime bank instruments
• Master collateral commitment
• Non-circumvention, non-disclosure
• One-Year letters of credit
• One year one day
• Ten years one day
• Prime bank debenture, guarantee, instruments, and notes
• Prime World Bank or Top Bank
• Ready willing and able
• Roll programme
• Seasoned paper
• Soft probe
• Top world prime banks
• Transaction tranches of tens of millions of dollars
• Window time
• Zero coupon letters of credit

Does anyone care to add to the list? Not every one of these terms constitutes a sure sign of fraud. However, they should raise caution flags and cause one to investigate the credibility of the parties in the transaction.

Amazingly, in spite of the many alerts to these scams, they still exist. Apparently a sufficient supply of naive and greedy individuals, who fall for the scams, keeps them circulating. And this lesson doesn’t even consider the scams perpetrated by letters allegedly coming from Nigeria. Nigeria is worthy of a separate blog of its own.

One Learned Skill Contributes to Success More Than Any Other

The CEOs of the fastest-growing companies in America have a single, learned attribute that makes them more successful than anyone else. You can learn it too.

For decades while helping founders build their businesses, we have told them the number one attribute of success is Speed of Execution, which is the practical outcome of being willing to take risks. Entrepreneurs and founders who exhibit Speed of Execution are able to do so because they move on an idea without having enough information to know for certain the idea will work. While others are researching and doing case studies, they are already turning the idea into reality. They can do this because they have learned by experience that the only way to perfect an idea is with movement, not planning.

Planning never creates movement, but movement can create a great plan.

The Data Is In--Moving Fast Works

New research confirms this is the path to success. Gallup, which built the popular StrengthsFinder assessment, recently developed an online version specifically for entrepreneurs--the Entrepreneurial StrengthsFinder evaluation. They invited the founders of the 2014 Inc. 500 fastest growing companies to take the assessment, and discovered that the number one attribute, shared by a whopping 85 percent of the founders, was the willingness to take risks.

Our Beliefs Determine Our Behavior

Risk-taking is the belief system, the mindset. Speed of Execution is the practical outcome of that belief system. Risk takers believe that moving quickly with all the information will work better than trying to get it all figured out before you move. They understand that you don't get comprehensive information in an ivory tower, but from experience. Those who move on an idea quickly in the trenches, always get information not available by analysis.

The number one indicator of success in an early stage business is not how good your product is, or how smart your marketing is, or your uniqueness, or your funding, or any of those traditional ideas of what makes for success. The number one indicator of success in early stage business is simply Speed of Execution. Get an idea and get moving on it. You will find out if it's a good idea or not much more quickly and reliably by moving on it than by musing on it.

Steering Your Business

How do you steer a ship? The logical answer is with a wheel and a rudder--that's wrong. The intuitive answer is, "Get it moving." Movement steers a business in the same way. Moving the rudder on a ship dead in the water does nothing to change the direction. Only movement will affect change.

Planning is your rudder. I would never advocate putting a boat in the water without a rudder. But most people are sitting around building hand-carved, silver inlaid, 100 foot tall rudders to stick on the back of their 12 foot dinghies, and wondering why their idea sinks before its launched. Get a simple piece of metal (a basic idea), stick it on the back of your boat, and get out of the harbor.

Move Fast. Break Things.

The faster you move, the less rudder you need. Bill Hewlett famously said, "When I talk to business schools occasionally, the professor of management is devastated when I say we didn't have any plans when we started. We were just opportunistic. Here we were, with about $500 in capital, trying whatever someone thought we might be able to do. So we got into this thing not by design but because it worked out that way."

For HP, considered by most to be the founders of Silicon Valley, movement created the plan. For the first ten years of Facebook's existence, Mark Zuckerberg echoed Bill Hewlett, and led the company with the mantra, "Move Fast. Break Things. If you're not breaking things, you're not moving fast enough."

Stop thinking. Stop planning. Your plan, like Bill Hewlett's, will form as you move, not while you're reading case studies. Get a nice little rudder, stick it on the back of your business, and get moving as quickly as you can. It's counter-logical, but to the most successful entrepreneurs in the world, it's very intuitive.

Implement now. Perfect as you go.

Article as seen on Inc.com

Connect & Collaborate - Business Perspectives

 

We started off the new year by introducing you to our partners with the Colorado Business Roundtable.  Our goal is to introduce you to great business leaders, and groups that advocate for sound public policy and a thriving Colorado economy.

If you've been listening each week, you know Jeff Wasden, President of the COBRT and his goals for businesses in Colorado. You've also heard from Dave Tabor, co-host of our Pro-Business Colorado feature.  This week, tune in to hear more about Dave's background in business, and his work with the Colorado Association of Commerce and Industry.

We have one more special guest, Mark Crowley, KNUS Digital Director who is instrumental in helping us bring you Connect & Collaborate with ICOSA.  Mark shares the story of how his first career lead to his second career at KNUS. It gives him great perspective for his work, and the businesses he serves.

Together we discuss different approaches to business, how unique career paths lead to fulfilling careers, and the importance of sharing our experiences and learning from others. It will be a fun, and interesting conversation.

Join us Saturday at 1:00 PM on 710 KNUS –  Please let us know what you think of our program, either by commenting here or on Facebook at Connect & Collaborate with ICOSA or join the discussion on Twitter @ICOSAMagazine.

"Incoterms®: How can She Ship by Rail from Korea to Vancouver?"

Incoterms®, letter of credit, transferable, ICC 500, Uniform Customs and Practices for Documentary Credits, Free Carrier (FCA), Free on Board (FOB), customs clearance

 Letter of Credit Payment

Martha, a U.S. wholesaler of sporting goods, closed a sale to a customer in Toronto, Canada. She requested the Toronto company to open a letter of credit in her favor. She also instructed them to designate the letter of credit as transferable, enabling Martha to transfer her rights to the letter of credit to another party.

Upon receipt of the letter of credit issued by a bank in Toronto, Martha requested our bank to transfer it to the supplier in Korea. The rules for transferring a letter of credit exist in the ICC Brochure 600, Uniform Customs and Practices for Documentary Credits, Article 38. It states that the transferring bank can transfer the letter of credit only on the terms and conditions specified in the original letter of credit, with only a few specifically identified exceptions.

A Contradiction with the Incoterm® Rule

The letter of credit required presentation of a rail waybill showing goods shipped from Vancouver to Toronto. The Incoterms® rule, Free Carrier (FCA) Vancouver, required the beneficiary of the letter of credit to place the goods on the rail car in Vancouver with freight payable by the buyer, as agreed to by Martha and her customer in Vancouver.

When we asked about the Incoterms® rules, Martha replied that the supplier in Korea had agreed to the Incoterms® rule, Free on Board (FOB) Korea for her purchase. We explained that we could only transfer the letter of credit with the FCA Vancouver Incoterms® rule, which would make the supplier in Korea responsible for all risks and costs (including customs clearance in Canada) to place the goods on the rail car in Vancouver, whereas the FOB Korea term only required them to put the goods on board a ship at a Korean port. We assumed the supplier would likely find this unacceptable.

The Inability to Agree on the Incoterm® Rule Killed the Deal

Apparently Martha’s enthusiasm to close the deal clouded her judgment of the practicality of the transaction. She adamantly insisted we transfer the letter of credit with the FCA term. While we could technically prepare the transfer, we knew it wouldn’t work until the supplier amended the original letter of credit to read FOB Korea, or her Korean supplier agreed to accept the term FCA Vancouver. Her attempts proved unsuccessful and the deal died on the vine.

In her case, the transferable letter of credit would only work if all parties agreed to the same Incoterms® rule. Since the rules for transferring letters of credit are rigid and do not allow for changing the original terms, she should have considered other payment terms. In Martha’s case, since she apparently did not have the capital or the ability to absorb risk inherent with other payment terms, she could not find a solution to make the terms of the transferable letter of credit workable.

Wind-powered freighters

To make ships more eco-efficient, engineers have been working with alternative fuels. A Norwegian engineer is currently pursuing a new approach: With VindskipTM, he has designed a cargo ship that is powered by wind and gas. Software developed by Fraunhofer researchers will ensure an optimum use of the available wind energy at any time.

International shipping is transporting 90 percent of all goods on earth. Running on heavy fuel oil freighters contribute to pollution. The International Maritime Organization (IMO) wants to reduce the environmental impact of ocean liners. One of the measures: Starting from 2020, ships will only be allowed to use fuel containing maximum 0.1 percent sulfur in their fuel in certain areas. However, the higher-quality fuel with less sulfur is more expensive than the heavy fuel oil which is currently used. Shipping companies are thus facing a major challenge in reducing their fuel costs while complying with the emission guidelines.

A new way of reducing fuel consumption, emissions and bunker expenses is being pursued by the Norwegian engineer Terje Lade, managing director of the company Lade AS: With VindskipTM he has designed a type of ship that does not use heavy fuel oil but utilizes wind for propulsion. The highlight: The hull of the freighter serves as a wing sail. On the high seas, VindskipTM will benefit from free-blowing wind making it very energy efficient. For low-wind passages, in order to maneuver the ship on the open sea while also maintaining a constant speed, it is equipped with an environmentally friendly and cost-effective propulsion machinery running on liquefied natural gas (LNG). With the combination of wind and liquefied natural gas as an alternative fuel to heavy fuel oil, the fuel consumption is estimated to be only 60 percent of a reference ship on average. Carbone dioxide emissions are reduced by 80 percent, according to calculations by the Norwegian company.

 

The hull of the cargo ship VindskipTM acts as a large wing sail. © LADE AS

Weather routing module determines the optimal course

For efficient operation, it is critical that the available wind energy is used in the best possible way. In order to calculate the optimal sailing route, researchers from Fraunhofer Center for Maritime Logistics and Services CML, a division of Fraunhofer Institute for Material Flow and Logistics IML, have developed a customized weather routing module for VindskipTM. Considering meteorological data the software for the new ship type uses a navigation algorithm to calculate a route with the optimum angle to the wind for maximum effect of the design. “With our weather routing module the best route can be calculated in order to consume as little fuel as possible. As a result costs are reduced. After all, bunker expenses account for the largest part of the total costs in the shipping industry,” says Laura Walther, researcher at CML in Hamburg. For the complex calculations, the researcher and her team apply numerous parameters, such as aero- and hydrodynamic data as well as weather forecasts from the meteorological services, such as wind speed and wave height.

So how is it possible that the VindskipTM is being pulled forward? “At angles close to headwind the wind generates a force in the ship’s direction. The ship is pulled forward. Since the hull is shaped like a symmetrical air foil, the oblique wind on the opposite side – leeward – has to travel a longer distance. This causes a vacuum that pulls the ship forward,” explains VindskipTM patent-holder Lade. This makes the freighter move at speeds of up to 18 to 19 knots, hence just as fast as conventionally powered ships. Due to its very low fuel consumption, Vindskip™ can utilize liquefied natural gas (LNG) as fuel and still be capable – in the worst case – of 70 days of steaming between bunkering. Thus, it can meet all of today’s and tomorrow’s challenges with regards to fuel economy and emission control.

Wind-tunnel tests completed successfully

The researchers from CML are continually developing the weather routing tool further; the first version has been available since mid-December 2014. By the end of January 2015, the software will be handed over to the company Lade AS. Ship types that are particularly relevant to the VindskipTM-design, for which the weather routing module is developed, are ships like car and truck carriers, big ferries, container ships and LNG carriers. Terje Lade forecasts that the freighter will set sail as soon as 2019. First, the ship model has to pass numerous tests in a marine research model tank – also called a towing tank by experts. Tests in wind tunnels have already been completed successfully.

Source: http://www.fraunhofer.de/en/press/research-news/2015/january/wind-powered-freighters.html

The European Union Attempts Quantitative Easing

After many hints and delays, the EU is announcing a quantitative easing program: €60 billion (~$70 billion) per month for at least 19 months. Will it work? As is the new conventional wisdom: when everything else fails to make economies grow, make new money and buy government bonds.

To reach this point, the president of the European Central Bank (ECB), Mario Draghi, has fought quite the political chess match. Bloomberg has an in-depth story on his journey.

Now the big question - the $1.3 trillion question - is if quantitative easing could help the European Union avoid the vicious deflationary situation it's currently facing.

Most economists agree that such quantitative easing initiatives have helped other major economies such as those in the US, the UK, and Japan to avoid recession - and perhaps even apocalyptic depression.

The challenges are different this time, however, because of the EU's unique makeup of 19 nations. The rules have different interpretations and perspectives vary depending on which country you ask.

For countries like Germany, Austria, Luxembourg, and the Netherlands, there remain large concerns over QE; Will it undermine government reform efforts? Will their tax payers be on the hook for insolvent countries like Greece?

Given the historical memory of horrendous hyperinflation, Germans are unsurprisingly hesitant of increasing the currency in circulation. "ARE the ECB's bankers making our money kaputt?”  reads a fearful headline from Bild, Germany's top selling newspaper.

It is clear, though, that most other options are all expired, so the EU is actually doing it.

They're attempting Q€.

The news is being greeted with mixed reviews. Many experts say the policy will help, though less so than in other large economies like the UK and the US. Some say the ECB is acting too late.  Others say the economic situation is different in Europe and the results will be unpredictable.

While at first the market reactions were exactly what the ECB wanted, the trend has reversed in the last two days. After the initial desired drop in EUR/USD (which would be helpful for exporters), the price has begun to rise again - currently it's back up to 1.14.

Financial blogs like ZeroHedge are pointing out that, "more troubling though - and the entire raison d'etre of Q€ (according to officials) - forward inflation expectations are now dramatically lower than pre Q€ levels..."

That's bad news for Mario Draghi and for Europeans facing risk of deflation - risk of declining prices, profits, incomes, employment levels, and increasing the burden of debt.

Is this trend reversal just temporary volatility before returning to a path more indicative of economic growth? Or is the European Central Bank's strategy fundamentally flawed?

It's challenging to balance optimistic visions of what could be with sober views of what is actually happening. Only time will tell.

Feel free to contact the writer and editor responsible for this story, Keenan Brugh, at [email protected]