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Leveraging the Spirit of Giving to Do Good

29 Nov

Several months ago, one of my work assignments involved looking at “new trends in international development.” It was a large, difficult to structure task, but one which revealed a number of exciting and interesting organizations which are doing great things to try and improve the world in the places that need the most help.

I found that the simple ideas were often the most powerful. Kiva, an organization which allows users to provide small loans directly to entrepreneurs in the developing world, was an example of one of those ideas. By matching a face, name, and story to charitable donations, the “feel good” factor of giving to a cause is substantially increased.

A further extension of that idea, equally simple and powerful, was pointed out in a recent blog post by Guy Kawasaki. Gift certificates, essentially a charitable pledge, can be given to a friend or family member, who then decides which entrepreneur should receive the funding. Over time, that recipient repays the money that is lent to them, enabling the new user to invest in a new recipient.

What a wonderful way to build your user base and encourage a net increase in the amount of money being donated. Good work, Kiva.

Kiva Diagram 2

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Economic Weapon: "Oil to Hit $200 if Iran Attacked"

18 Nov

I woke up this morning to the fantastically eye-catching lead headline in the Arab News‘Oil to Hit $200 if Iran Attacked’.  Below it, a sub-headline reads “King Rejects Using Oil as a Weapon.”  The obvious disconnect between those two statements did not apparently dawn upon the kind editors of my morning newspaper, but drew me in to read more.

I discovered that they were, in fact, both accurate headlines.  I worry, however, that the press in the Western World will pay substantial heed to the threats delivered by Venezuelan President Hugo Chavez, and ignore the words of moderation, restraint, and stability from Saudi’s King Abdulla.  Great headlines are produced by the former, but my hope is that the latter prevails.

That said, if I were in the shoes of Chavez or Ahmadinejad, however, I would be aspiring to make sure a few more headlines like the one that appeared this morning reach the White House.

Owners vs. Operators: A Career Choice

9 Nov

One of the fundamental separations in the business world is between the owner and the operator. Owners have a fundamental role of identifying and valuing business opportunities, as well as setting a firm’s fundamental direction. Operators develop a strategy for achieving that direction, and ensure its execution. This is the separation that exists, for instance, in most public companies between the roles of the Board of Directors and the CEO. This distinction is of particularly relevance in job hunting because having one or the other as an aspiration should, in theory at least, influence a person’s career path.

This simple but powerful observation was courtesy of David Wong, a former colleague and fellow Georgetown alum who now works as an Analyst at a mid-market private equity firm in Boston. As I continue to explore career opportunities that will build off my experience as a management consultant but move me closer to my goal of working with small and medium businesses, I called David to get his perspective on whether working in private equity would a step in the right direction. His candid advice was powerful, clear, and refreshingly candid, something which can frankly be difficult to gain during a career search (after all, it is difficult to be impartial on something so personal).

Private Equity is About Being an Owner:

Private Equity is fundamentally about being the owner of a company. It requires being able to identify companies with promise to either be grown in size and value, or which could be restructured to release additional value from the existing business.

From David’s perspective, private equity is much more often a destination than a path to anything. Whereas consulting and investment banking are highly transient industries, with analysts and associates spending two or three years then departing for other opportunities, investing jobs tend to be long-term commitments to a particular business mindset.

Someone who moves into private equity (buyouts, to be more precise) looks at companies with proven business models and how to gain further value from them. While she might decide she wants to focus instead on identifying promising new business models and technologies, and therefore move into venture capital, she would still be doing so with an owners mindset. Similarly, she might decide that rather than worrying about individual companies, but instead on valuable industries, sectors, and types of investments, she might move to a hedge fund, but she would still be thinking like an owner.

David suggested that you could not take someone from any one of these careers and put them at the helm of a company or at the head of its strategy group and expect that he could be successful. Identifying the opportunity and actually executing against it requires fundamentally different skills and attitudes.

Career Paths for Operators:

David suggested that if my goal was to be a successful operator of a small / medium company, private equity would be only marginally helpful. While it would expose me to high growth businesses and how those companies achieve their success, my fundamental job would not be to understand how to replicate those successes on my own in the future.

As David pointed out, there is a fairly clear path from consulting into an operating role in a larger business. Many consultants move their way up the ranks of their firms until they discover a client who finds their advice indispensable and hires them to run an internal functional area (e.g. marketing, strategy, or operations).

What our conversation left fundamentally unanswered was how someone could best position himself for an operating role in a small or medium business.

The challenge for someone in strategy consulting is twofold. First, with only a few years experience, he is still inadequately experienced to run much of anything or be dropped into a COO-type position and be successful. Second, because consulting firms charge hefty prices for the privilege of their advice, clients are rarely small or medium businesses, limiting the networking and “watch-and-learn” opportunities.

Two ideal career path options for a strategy consultant with an eye towards being an effective operator would therefore seem to be either take an operating role directly (either literally in operations or in product development, sales, or marketing) in an industry of particular interest, or continue in an advisory position (as a consultant, either in a professional services firm or perhaps internally in a company with an internal strategy group).

Helpful Clarity, but Further Questions:

Whether anyone else will find the above helpful is of course an open question. I certainly found it to provide helpful structure to a question that is difficult to navigate.

It leaves open some deep questions for personal reflection. At the end of the day, do I want to be an operator or an owner? Does the challenge posed to an entrepreneur bridge both? Do any of the careers I described above (e.g. investing, industry operating roles, or strategy advisory) really prepare someone to be an entrepreneur, or does it all just come down to trial and error of starting a few companies and seeing what works?

Day One in Saudi Arabia

14 Aug

Al Faisaliah Tower, RiyadhMy first full day in Riyadh was quite an eye opener. Having arrived last night after dark, it was the first chance I had to see the city. Our office, located on an upper floor of the architecturally fascinating and beautiful Al-Faisaliah Tower, has a sweeping view over the city below, which reflects the bright sun from its white and tan color. The desert is just visible around the edge of the city.

After months of working with colleagues connected only via conference call, it is refreshing to have a team of coworkers here to call my team. Since we will live, work, eat, and travel together over the next three months, there will be plenty of opportunity for me to get tired of them, but right now, I couldn’t be happier with the guys who are here.

Ironically, the first time in my consulting career in which I have had to wear a suit to work every day is in a climate where it rarely drops below 105 degrees F during the day. Even tonight, while I sit and write this, it is nearly 95 degrees. Of course, life here exists in the form of short jaunt from one air conditioned building to another, so it almost doesn’t matter.

And heck, after three months enduring London’s wettest summer on record, seeing a forecast that looks like this simply makes you smile:

5 Day Forecast

Will Traffic Die, Once and For All?

14 Aug

Congestion ChargingThere are a number of reasons why I am extremely impressed by how well managed London is compared to most cities in the United States. One area, in particular, is in transportation. One of the most controversial of these, when first introduced, was the congestion charge. Drivers are charged £8 (approximately $16 USD) to enter downtown London in their personal cars. The effect is that driving to work becomes too expensive to do it every day, encouraging commuters to use public transportation. At the same time, with less traffic, buses move faster, taxis zip from place to place more efficiently, and the city becomes an entirely more pleasant place to be. In the words of economics, congestion charging corrects a market externality.

As the New York Times reports today (“U.S. Offers New York Million for Congestion Pricing“) there has been a major step forward in New York’s efforts to replicate this important piece of legislation. While the plan is somewhat different, I have the utmost hope that it succeeds, and further demonstrates that public transportation can be successful in places outside of Europe and Asia (in one or two US cities at least…).

The secretary of transportation announced this morning that the federal government will provide New York City with $354 million to implement congestion pricing, if the State Legislature acts by March 2008 to put in effect Mayor Michael R. Bloomberg’s proposal for charging traffic fees in Manhattan.

Mayor Bloomberg’s congestion pricing proposal has attracted the broad support of business, labor, environmental and transportation groups, but he has been less successful at swaying state and city lawmakers representing the boroughs outside of Manhattan…

Nonetheless, the substantial federal support for the project gives enormous leverage to the mayor as he continues to press for his proposal.

The mayor’s plan, unveiled in April, proposes to charge drivers $8 and trucks $21 a day to enter or leave Manhattan below 86th Street on weekdays during the workday. Those who drive only within the congestion zone would pay $4 a day for cars, $5.50 for trucks.

Well done, Mr. Bloomberg. Let’s hope that he succeeds. It would certainly make that eventual move to Manhattan seem all the more tantalizing.

Count Down to Riyadh

10 Aug

It’s Friday and on Monday morning, I am off to Riyadh for a three month assignment with work. It will be my first time in the region, but I am excited for what I am sure will prove to be a truly memorable experience.

I will be living on a compound with my fellow Monitor consultants, traveling frequently to different parts of the country, and enjoying the opportunity to see different cities in the region on the weekends (Thur and Fri… crazy).

Look here for updates on what it’s like living there.

That’s It. Next Stop: Canada

1 Aug

Vietnam War - Viet Cong Base after US AttackIt turns out all those people who said they were going to “move to Canada” if George Bush was elected for a second term weren’t kidding. ABC news reported yesterday that the number of Americans moving to Canada reached a 30 year high in 2006.

The number of U.S. citizens who moved to Canada last year hit a 30-year high, with a 20 percent increase over the previous year and almost double the number who moved in 2000.

In 2006, 10,942 Americans went to Canada, compared with 9,262 in 2005 and 5,828 in 2000, according to a survey by the Association for Canadian Studies.

Paul Kedrosky highlighted this article out today on his blog, but failed to point out one obvious connection: what was happening 30 years ago? The Vietnam war had justed reached its close, and an entire generation of Americans was fed up with its government and a war they deemed as unnecessary and detrimental to our society. Sound familiar?

It is, of course, negligent to fail to mention that before jumping to the conclusion that whole swaths of the country are moving north, remember that the border still booms in the opposite direction:

Of course, those numbers are still outweighed by the number of Canadians going the other way. Yet, that imbalance is shrinking. Last year, 23,913 Canadians moved to the United States, a significant decrease from 29,930 in 2005.