Month: August 2013

Because this is an article about business, and because I grew up in the 1980s, in the era of They Live, I had to include this pic.

The “Yes, I work for a living” Prologue

Because this is an article in which I criticize business culture, and to head off any cries of “Socialist!” hurled at me, here’s the obligatory “Yes, I am a businessman, in a real job, and I actually do work for a living” statement:

Yes, I am a businessman, in a real job, and I actually do work for a living.

You can go look at my resume — it’s my LinkedIn profile. It’s no ordinary profile, either; it’s noteworthy enough to have been in the top 1% most viewed last year:

And not only do I work — I can work in all sorts of places. There’s my rather nicely set-up home office:

I also set up shop at client offices, such as this one in Calgary:

As regular readers of this blog know, I even get work done in places like Tampa International Airport, as this photo from a recent post of mine shows:

And now, the main topic of this article.

The Tweet

Recently, a Business Insider piece by Henry Blodget suggested that McDonald’s could still be profitable by increasing their wages, not increasing their prices, and accepting lower profits (according to Blodget, operating profit would be reduced to a “mere” $5.5 billion). Blodget’s back-of-the-envelope math was based on some erroneous assumptions (for starters, McDonald’s spending on employees accounts for about 24% of its revenue, not 17%), and face it, nobody’s going to buy into the idea of reducing profit for the sake of paying employees more — at least the rank-and-file ones, anyways.

The article brought about a Twitter discussion that elicited a tweet from fellow IT consultant Daryl Tremblay that pretty sums up what the so-called “job creators” really think about job creation. Blodget made the radical (in some circles) suggestion that employees shouldn’t be treated like costs, and that’s when Tremblay chimed in:

Employees, Tremblay said in the tweet — and has been saying over and over again in subsequent tweets — “are costs. They don’t have a stake, they hold nothing. They trade their labor for money.”

If You’re Not an Owner, You’re a Cost

If you’ve ever taken an accounting course (I did, and at one of Canada’s best business schools t00; I figured that a technologist should know how to speak and relate to “the suits”), you probably know that on a balance sheet, this is correct. Your office building, equipment, furniture, and trademarks? They’re assets, that by virtue of being sellable, contribute money to the business. The people who come to your office building, use the equipment, sit in those chairs and do the work that make the company go? They’re liabilities.

Once again, if you took accounting, you know that I haven’t mentioned the final piece of the A = L + OE equation. A is “assets”, L is “liabilities”, and OE is owner’s equity. The equation says that once you take away the costs from the total value of the business, what you have left belongs to the owners. Included among the owners are shareholders.

The problem is that shareholders these days seem to think of the companies they invest in merely as “black boxes” that they put money into and magically have it multiplied. They’s not particularly interested in what the company does, or whether it even survives; only that it makes them rich without effort. This has led to the thinking that the best thing you can do for the company is maximize shareholder value — something described in Forbes as “the dumbest idea in the world”.This in turn, leads to:

• Installing — and gladly paying for — executive teams who believe that maxing out shareholder value is job 1. Unsurprisingly, companies focused on maximizing shareholder value tend to maximize executive salaries.
• Cost-cutting, and guess which costs are getting cut:

Eek! a cost! Cut it! CUT IT!
Creative Commons photo by “G.e.o.r.g.e.”. Click to see the original.

It turns out that the best possible investment you can make is to become the CEO of a publicly-traded company. It’s more than twice as good as simply having an S&P 500 portfolio and 127 times better than being a “cost”:

Graph from the Washington Post. Click to see the original.

A Little Real-World Example from Microsoft

Me in October 2010 at Microsoft Canada’s offices in Mississauga beside a giant Windows Phone 7 phone.

Back when I was a developer evangelist for Microsoft, I was one of the Windows Phone Champs, a hand-picked two or three dozen people from Microsoft’s worldwide ranks charged with getting developers interested in making apps for Microsoft’s then-new mobile phone. It wouldn’t be an easy job, as three years had passed since the introduction of the iPhone (and Steve Ballmer’s now-infamous dismissal of it):

Just before the launch, those of us in the Canadian arm of the company received an email from the then-CEO of Microsoft Canada, who said he was counting on our efforts. While it was implied that he wanted Windows Phone 7 Series (as it was called at the time) to make a big splash, and to get developers interested in building apps for it, and help the phone become a big success, that’s not what he wrote.

Instead, he specifically wrote that he wanted Microsoft share prices to go up as a result of Windows Phone’s introduction.

The Results

So while corporate profits and profit margins are way, way up:

Graph from Business Insider: Why Economic Growth is So Slow in 2013.

…wages, expressed as a fraction of the GDP, are way, way down…

Graph from Business Insider: Why Economic Growth is So Slow in 2013.

…labour’s slice of the corporate income pie is at its nadir, what with most of it going to owners and execs…

Graph from Business Insider: Why Economic Growth is So Slow in 2013.

…and employment is the lowest it’s been since around the end of the Carter administration. (Or, from a purely balance-sheet point of view, all those pesky “costs” and “input” have been cut. Nicely done!)

Graph from Business Insider: Why Economic Growth is So Slow in 2013.

For more, see Henry Blodget’s articles, This One Tweet Reveals What’s Wrong With American Business Culture And The Economy. and Why Economic Growth is So Slow in 2013.

What Now?

Given this reality, it may turn out that some of the best advice to follow comes from this unlikely place:

When I was a kid, both Cracked and MAD were paper magazines, and Cracked was often MAD’s lower-rent, not-as-good poor cousin. In their present-day online incarnations, Cracked is so much better than MAD.

One reason present-day Cracked is a worthwhile read is because every now and again, they publish an article with material that really should be covered in school. Perhaps not with Cracked’s sarcastic, adult-humour angle, but it should be covered anyways. One such article is David Wong’s 6 Harsh Truths That Will Make You a Better Person, and particularly truth number six:

The world only cares about what it can get from you.

If you don’t end up being a CEO or end up being able to live off being a shareholder, your best option in the short term is to take this harsh truth to heart and make sure that if you’re a cost, you’re one that people are willing to pay for.

In the long term, a good strategy would be to bring Peter Drucker’s mantra back to the business world: “There is only one valid definition of a business purpose: to create a customer.”

I’ll close with Alec Baldwin’s Oscar-winning scene from Glengarry Glenn Ross (a movie a cited in an earlier post of mine, New York City’s Most Entitled Food Truck Ex-Employee), as a reminder of what it’s like out there:

(This speech was merely a dress rehearsal for the much-publicized dressing-down he gave his kid in a phone message.)

Ouch.

That’s why the water from the fountain tastes like Labatt Blue.

Click the photo to see it at full size.

In honour of the 25th anniversary of The Simpsons, the T-shirt company Threadless asked a slew of artists to come up with new designs that you, the Threadless shopper, can vote on. Here are some of my favourites, which includes the muumuu Homer wore in the episode King-Size Homer (where he purposely gains a lot of weight to avoid the new exercise program at work, claim disability and work from home).

Update: Fair’s fair; if O’Connor gets a “Mopey Millennial” meme, Glass, Lewis & Co. get a “Scumbag Steve” meme, which appears near the end of this article.

The “Mopey Millennial” meme picture from Quickmeme. Click here to make your own.

The Failure to Tip, the Tweet-Shaming and the Firing

In The Awl, a New York-centric site devoted to long-form essays, there is an article with the I-know-you-want-to-click-me title of Millennial Fired for Tweet. I suspect that this was not the title that its author, Brendan O’Connor, gave the article; this suspicion is backed by the fact that the title of the page is I Got Fired for Tweeting. The difference between the two titles is a pretty good sign that the editors and O’Connor differ in opinion about the point of the story.

On Monday, July 22nd, O’Connor was still an employee of Milk Truck Grilled Cheese, a food truck known for gourmet grilled cheese sandwiches. He brought about the end of his stint in the mobile gastronomics sector when a group of customers placed an order that totalled about $170:

I asked some of the group as they were picking up their orders if they had intended to not tip. They hemmed and hawed and walked away.

Well. I could have not said anything. I could have made it a subtweet. I probably should have made it a subtweet. But I didn’t, because of some misguided notions about having “the courage of your convictions,” or whatever.

Shout out to the good people of Glass, Lewis & Co. for placing a $170 order and not leaving a tip. @glasslewis

— Brendan O’Connor (@OConnorB_) July 22, 2013

A couple of days afterwards, O’Connor got a call from the owner, who in turn had received a call from Glass, Lewis & Co., where concern about their being called out online was being expressed in places as high up as their head office in San Francisco. The owner apologized in the Twitter exchange below:

@glasslewis rgrding yest. tweet by an employee–it was flat out wrong. we do NOT in any way support or condone this behavior-our apologies.

— Milk Truck (@milktrucknyc) July 23, 2013

@milktrucknyc We appreciate it, and look forward to doing business with you again!

— Glass Lewis & Co. (@GlassLewis) July 24, 2013

…and in a move that isn’t all that surprising — except to O’Connor — the owner fired him. O’Connor writes:

And it was unfortunate but he was going to have to let me go. The company has a way of doing things and he thought I’d understood that. I had embarrassed him and the company and that was that.

…

What did I get out of this? Hmm. A “story,” maybe. A lesson about employers—at least in the food service industry—and what they think of workers advocating for themselves.

“Grilled Cheese: Gamified”

The first hint about O’Connor’s feelings about his former job is how he describes it at the end of the first paragraph: “Grilled cheese: gamified”.

In case you’re not familiar with the term gamification, it’s the injection of game elements — play, challenge, competition, rewards — into non-gaming situations in order to get positive results, such as increased interest and involvement, greater effort, camaraderie, and learning. The idea is that unlike life, the best games have clearly-defined goals, offer challenges, and provide incremental, fair rewards that are directly connected to effort, and these elements often motivate people to excel. It’s something that productive people have already internalized; gamification exposes it to everyone in an attempt to raise the average. If you’ve ever been in some kind of competition at work where the person who sells the most widgets or answers the most support questions gets some kind of bonus, and especially if there’s a ranking, points-scoring, or Xbox-style “achievements” system involved, you’ve seen gamification in action.

Gamification, when done right, is win-win for everyone. Unfortunately, many attempts at gamification at work are cynical, manipulative attempts to squeeze more value out of the employees, who — from a bottom-line balance-sheet point of view, anyway — are just more costs to be cut.

A special bonus based on social media reviews has some flaws: there’s always the chance you could provide excellent service to someone who doesn’t mention it on Facebook, or someone having a bad day might end up taking it out on you on Twitter for no good reason. Still, I think that it’s reasonable to offer a small, special reward to teams that do so well that people sing their praises. Not O’Connor; apparently to him, the idea of a special reward for doing your job superlatively is outright manipulation. While not all millennials subscribe to the “everyone gets a trophy” philosophy, the fact that O’Connor makes the iTunes card his first example of Milk Truck’s employee-unfriendliness speaks volumes. He might even think that he should get one just for showing up. Based on the way he tells the story, you’d think he was one of the harried salesmen from Glengarry Glen Ross:

The Courage of One’s Convictions, or Whatever

Image by Sara M Lyons – click to see the source.

Here’s the very first thing O’Connor writes about his decision to call out the non-tippers on Twitter:

Well. I could have not said anything. I could have made it a subtweet. I probably should have made it a subtweet. But I didn’t, because of some misguided notions about having “the courage of your convictions,” or whatever.

Let me take a moment to point out that nothing negates the high-minded phrase “courage of one’s convictions” — or any other similar phrase — like following it “or whatever”.

Go ahead, try tacking on “or whatever” to the end of your favourite quote: “‘Tis better to have loved and lost, or whatever.” “We shall never surrender, or whatever.” “Give me liberty, or whatever.” “Bitches leave, or whatever.”

Later on, the half-heartedness continues:

Obviously I knew it was a possibility that I’d get fired. I guess I had hoped that the owner would have my back if they complained, but that was a miscalculation. And the stakes weren’t too high, or I wouldn’t have done it: I’d been thinking about quitting and focussing on freelancing, so I had a luxury of speaking, and then tweeting, my mind.

He was thinking of leaving anyway, so at worst, getting fired would’ve moved his personal timetable forward a few weeks. The point, it would seem, is that he was denied his hard-earned share of the $34 tip (20% of $170, divided among the crew). Or whatever.

“Workers of the World, Whatever!”

Some parts of O’Connor’s article are so wrong that I have to respond with animated pictures.

When I read these paragraphs…

To be fair, maybe I’m not the best employee for a gamified grilled cheese truck. About a month earlier, I’d come into work on a Saturday and was told I’d need to work late the next day. (Our schedules are established on a weekly basis, so this was very late notice.) I believed this gave me some degree of leverage. So I started bargaining. If they needed me to stay late on Sunday with only 24 hours notice, surely it was only fair that they let me go early that night?

They weren’t too happy about this and my bargaining failed—they just found someone else to work late on Sunday. I suppose this is why ‘collective bargaining’ is a thing.

…my reaction was:

Collective bargaining is for things like asking for a living wage or demanding the right not to be fired because you can’t accept a last-minute request to work the next day. It’s not for guaranteeing a “yes” answer when you ask to leave the business short-staffed on Saturday night in exchange for taking another shift assigned at the last minute, nor is it for guaranteeing you that shift.

Brendan O’Connor’s Twitter profile photo, enlarged and lightened. Not helping his cause.

And then there’s this gem:

And also: If social media is going to be used in one way to monitor worker productivity, why can it not also be used to advocate for a more civil exchange between worker and consumer? And why wouldn’t a food service entity, while it’s judging employees on social media, also judge its customers? The business practice of running a restaurant is to cultivate great customers and spurn bad ones.

My reaction:

This reminds me of a story from 1990s, when Russia was about to open its first McDonald’s. During a training session, in which the future McDonald’s staff were being taught customer service, there was one trainee who was getting more and more upset as the trainer kept emphasizing how important it was to treat the customer as well. Having grown up accustomed to only Communism, he’d finally had enough and blurted out:

“Why should we be nice to them? We have the burgers!“

Yes, there is a social contract in which customers must provide some comity in exchange for a business’ hospitality, but what customers really exchange for service is money. Unless the customers are doing harm to the business or its employees, the business is poorly served by scolding customers it disagrees with, and that goes double for employees who don’t own the business and can’t properly speak on its behalf. Restaurants and food trucks live and die by word-of-mouth, especially in competition-dense places like New York City; people there have tens of thousands of places to choose where to eat. In such environments, bad service — or outright naming bad customers — can hurt a business badly.

In Conclusion, Whatever

I would argue that even though there is debate about tipping at restaurants where you’re not waited upon, such as fast food places and food trucks, Glass, Lewis’ employees committed a faux pas by not tipping on a big order. I would also state that it was a bad call for Glass, Lewis to not let O’Connor’s tweet go and take up the issue with Milk Truck — in the end, it just generated more bad publicity for them (it even gets mentioned in their Wikipedia entry). I’m sure that in light of the Twitter kerfuffle and news coverage, they’ve instructed their employees to not appear so stingy, especially with the negative PR Wall Street is facing in times when most people have it bad (a lot of it due to the finance industry) while they’re riding high on taxpayer-funded bailouts and outsourcing-fuelled profits.

Still, in this competition in the Ongoing Entitlement Olympics, O’Connor took the gold medal.

I’ll close with a video I posted back in June, which seems only appropriate right now:

Toronto alt-weekly paper The Grid has an article that makes the same point I’ve been making in conversations about Toronto’s mayor, Rob Ford, and the video allegedly showing His Worship smoking crack. While the video has not surfaced, both a reputable news organization and Gawker will attest to its existence, and there’s still too much suspicious evidence that Ford’s ties to drugs are a little too close for comfort.

In the article, appropriately titled The Photo That Gets More Incriminating All the Time, Edward Keenan explains who and what are in the now world-famous photo of the Mayor. While it warms the heart-cockles to see Ford making nice with minorities, there are a number of disturbing things in the photo, which I’ve taken the liberty of annotating. Consider:

• Anthony Smith, on the left, was gunned down in what appears to be a targeted killing. The guy who shot him “was offered and accepted a highly unusual plea deal to manslaughter before Crown discovery even took place”.
• Muhammad Khattak, in the red laces on the right, was shot on the same night as Smith, but survived. He was arrested in the Project Traveller drug raids that took place shortly after news of the video was announced and faces gang and drug-trafficking charges. He’s out on bail and awaiting trial.
• Monir Kassim, second from the right, was also arrested in Project Traveller and faces charges of gun- and drug-trafficking, illegal gun possession, theft and more. He too is out on bail and awaiting trial.
• A guy who doesn’t appear in the photo, but took it, Mohamed Siad, was also arrested in Project Traveller, charged with gun- and drug-trafficking and gang offences. While in Don Jail, he was stabbed, apparently because he provided the photo to the media and is believed to be the person who showed the “crack video” to the Star and Gawker.
• Even the inanimate objects in the photo are suspicious! The house, 15 Windsor Road, is known to the police for all sorts of druggy things, and was subject to a warrant in Project Traveller. One of its occupants is Fabio Basso, a “good friend” of Ford’s back in high school.

Read more in The Grid.

As for the most suspicious-looking photo foursome of all time? It’s these guys: