February 2006 Edition
In This Issue:
February is the month of love and romance; therefore it’s fitting the Innovation e-Review’s first anniversary occurs this month. It’s hard to believe, but we’ve been coming at ya for a solid year now, and because of that we’re going to surprise you and suggest that we break out our fav (virtual) adult beverage and make a toast to you, our readers. Thank you for taking the time out of your busy schedule to read our newsletter, and a special thanks to those of you who have written or called us to voice your bouquets and brickbats. It has truly been our pleasure, and (long pause whilst we take a swig of champagne) we thank you from the bottom of our hearts. Here’s to year number two and beyond (another long pause while we savor that virtual Dom Perignon. Hey, as long as we’re drinking virtually, we might as well go for the good stuff)!!
February is about more than our first anniversary, though, it's about school vacations, cheap candy, overpriced roses and, especially, longer days and the feeling that spring will soon be sprung upon us. It gives us the shivers just thinking about driving home from work without our headlights on, but, then again, we’re easily amused, and, yes, we know that you already knew that.
Now regarding our first anniversary, the arbiters of taste (the Misses Post, Manners et al) tell us that the “traditional” first anniversary gift is paper and the “modern” alternative is clocks. Since we have plenty o’ STLC stationary on hand (how many letters do you write anymore?), and we’re of the firm belief that clocks (particularly alarm clocks, but that’s another article) are an instrument of the devil, please don’t rush off to Tiffany in search of an appropriate offering, because we want your presence, not your presents. Yes, you can be part of our exciting anniversary celebration without even opening your wallet! Just sit back, relax and read the newsletter. No flowers, no candy, no card and no jewelry required, just a few minutes of your time, and, OK, your funnybone too.
Of course, now that you have mentioned presents (oh, *we* mentioned them? Really?), there is one teensy, tiny gift that we would like from ya’ll. Those of you who are regular readers have probably guessed already, for we’ve asked for it before, but, hey, we’re not proud (as if you didn’t know that already), so we’ll ask again. Yes, the gift we would like is feedback, from you, our treasured readers. If you’re ever inclined, please, don’t be shy, drop us a line and let us know how you’re doing, what suggestions you have or what you fancy/revile about the Innovation e-Review. Now, of course we love reading raves just as much as the next person (actually, probably more, how pitiable is that?), but what we would really like is story suggestions, constructive criticism, un-constructive criticism, bouquets, brickbats, bald faced lies, you send it, we’ll read it.
We’ll end our welcome and tell you that we have all kinds of great stuff in store for you this issue. Jeong Oh is writing on corporations, Marian Berda is bringing you an article on protecting your computer from the nasties and we’re just bursting with news and views, and that’s no ruse (all together now: groan).
So, let’s have one final toast and enjoy a long pull of that delicious D. Perignon bubbly, shall we?
Happy Anniversary to us, and cheers to all of you-
by Jeong Oh
Strategic Alliance 101
In keeping with the tradition of our anniversary theme, this month’s article will look at strategic alliances and how to avoid an eventual divestiture. The statistics on the success rate of an alliance is grim, with the average alliance lasting only about seven years. Additionally, almost 80% of joint ventures ultimately end in a sale! If a sale is the long-term plan, then an alliance can be a good acquisition or divestiture, however, if your goal is to keep the business partnership together, read on for some tips on how to create a successful and long-term alliance.
This article is a summary of a Harvard Business Review article titled “Is your Strategic Alliance Really a Sale?” The authors Joel Bleeke and David Ernst provide insight into their experiences with more than 200 alliances that are in different phases, from initial negotiations through the termination of an alliance.
Bleeke and David’s research shows that alliances most often fall into one of six categories based on the probable outcome of the alliance. Knowing which path an alliance is on is critical to each partner’s mental and financial health, because being taken by surprise by a partner is never mentally or financially easy. The authors contend that being a seller after an alliance puts the seller at a disadvantage because the seller does not capture the full value for their business.
Collisions between competitors- This type of alliance almost always fails and should be avoided. Even though the alliance may create short-term synergies by combining products and markets for long term success this type of alliance usually ends up in conflict when one business wished to expand into new geographic or product opportunities.
Alliances of the Weak- This is another type of alliance that should be avoided because combining the competencies of two or more weak companies usually results in the weak growing weaker. As the authors put it succinctly, “if you can’t succeed on your own, an alliance with another weak company won’t make things better.” Research indicates that this type of alliance usually begins when weak companies align to compete in scale-intensive businesses. However, when things are not working out, neither partner possesses the capital, management resources, or flexibility to reach out and lend a hand. The problem lies in that the demand for needed capital does not meet the ability of weak partners to invest, and are too busy trying fix its core business to focus more attention on the alliance.
Disguised Sales- This alliance involves the marriage of strong companies with weak companies usually resulting in a sale of the weak company. This is a risky type of alliance, but, if properly managed, can benefit both parties. For the weak company the strategy for an alliance requires “divestiture thinking,” not “alliance thinking.” The authors recommend several approaches for weak companies that are somewhat intuitive. First, sellers should seek alliance partners that would be the best buyers in the future. The buyers should be more of a potential competitor rather than equal partners, because competitors are most capable of maximizing the synergy. Second, sellers should be aware that the longer the partnership the more likely that the bargaining power of the seller will be diminished. Therefore, the weaker company should negotiate explicit sale terms at the outset to ensure fair value.
Bootstrap Alliances- A high failure rate alliance that is often tried but ends up in an acquisition of the weak by the strong. This alliance occurs when a weak company joins with a stronger company and attempts to use the partnership to improve its competencies and capabilities. When this type of alliance does work, the partnership evolves into an alliance of equals or the partners dissolve after the weak partner can stand to compete on its own. Some of the suggestions offered by the authors for this kind of alliance include:
understanding that this type of alliance is daunting task; requires a systematic learning program; a partner with the right skills that is willing to teach and will not become an acquirer; a long-term strategy; an clearly defined exit strategy to ensure full value of the company in case of a sale; designing an alliance around a series of skill-building milestones.
Evolution to a Sale- Similar to alliance of complementary equals, these alliances begin with two strong and comparable partners, but eventually competitive tension and shift in bargaining power results in an eventual sale. Most so than not, these alliance ends up providing value to both parties and can last a long time. In the beginning, it will be difficult to predict who will but out whom, but there are usually clues as to who is providing more value to the partnership and the partner who puts more on the table will eventually be the buyer. Here are some suggestions for this kind of alliance. First, the partners should willing to devise a formula for dividing up the future value of the partnership. Second, keep a clear record of the contributions made and the value provided and reviewed regularly. Finally, be clear and frank about each partner’s strategic intent. So that the initial structure should reflect the strategic outcome.
Alliance of Complementary Equal- This is the alliance that will provide a lasting partnership. As the name suggests, it involves two strong and comparable partners and both usually remain strong over time. These alliances are born out of true collaboration where partners build on each other’s capabilities and often the partners have different product, geographic, or functional strengths. For example, if both partners hold important key patents on which the partnership relies on, their bargaining power remains relatively equal. This type of alliance also requires overcoming challenges such as being flexible, maintaining the balance of contribution, clarify leadership roles, and a carefully thought out exit strategy.
In summary, the article provides some critical issues for deciding whether to join an alliance and offer ways to avoid unsuccessful partnerships. The fact that most joint venture ultimately end up in a sale by one of the partners should offer incentives for businesses to carefully examine whether it should maintain the strengths and contributions in balance or to accept that the balance will eventually shift thereby recognizing an unanticipated sale of the business.
Business Development Spotlight
by Jeong Oh
Business Development Spotlight
Sometimes in the course of writing articles for the Innovation e-Review, we bandy about terms such as “partnership” or “LLC” and it occurred to us recently that some of our readers may not be completely familiar with these terms and definitions and that we should offer a little primer on definitions for you, our readers, and, true confessions here, for us, your writers. Even though we have studied all of this in school, since filing papers for businesses isn’t the regular (or even occasionally) job for any of us, we thought an all around refresher course would be applicable for all of us. We also thought this might help to hone the thoughts of anyone considering starting a business, and wondering about the benefits and drawbacks of each option.
When reading this keep in mind that it’s a very basic introduction to the different types of business types available to persons starting up New York based businesses and should not be construed as business advice or the “last word” on types of businesses. If you’re thinking about starting a business and have specific questions, please feel free to give me a call or send me an email and I would be happy to discuss your specific questions or concerns.
Primer on Business Choice of Entity in New York
(This article is a modified version of a presentation given during NYSBA CLE on “Forming and Advising A New Business Entity” by Anne Reynolds Copps on October, 1995)
This article is primer on the forms of business organization tha t are generally available in New York. The article is intended to provide a summary of the types of the organization and relevant sections of the law that can be referred to if readers want more information. The Governor’s Office of Regulatory Reform and the Department of State has implemented electronic filing for simple (fill in the blanks) certificates of incorporation for business corporations and articles of organization for limited liability companies. The online forms may be accessed and completed at the Governor’s Office of Regulatory Reform website at . For more information on incorporating your business in New York please visit,
Sole Proprietorship- General Business Law
A sole proprietorship is a business owned and operated by a single person, is the simplest form of ownership and is usually used when first starting a business. In a sole proprietorship business, the owner is entitled to all the profits and is responsible for all of the debts. There is unlimited liability for acts of employees and obligations of the business, meaning that the owner is completely liable for what employees do (or don’t do) and for any and all debts the business takes on.
No filings or other formalities with the state or the feds are required to create a sole proprietorship, but if the owner plans on using a trade name or an assumed name, a certificate must be filed in the County in which the business is located. The certificate must contain the name of the business, the business address and the name and address of the owner. Failure to file is a misdemeanor. A copy of the certificate must be displayed at the business site. A sole proprietor may not use “and Company” or “& Co.”
- Few formalities required
- Nominal fee
- Owner can make decisions and take action without formalities
- Avoids potential double taxation of corporate format
- Unlimited personal liability
- Terminates on the death of the owner and becomes part of owners estate
- Equity capital is limited to the resources of the owner
- Total business profits are taxable to the owner and may place him/her in a higher tax bracket thereby reducing funds available as retained earnings
- Starting a business
- Financing the business personally or using personal assets.
- One who desires a low cost business organization
Should possess low tort risk
General Partnership- N.Y. Partnership Law Section
A general partnership is an association of two or more persons who carry on as co-owners and each partner has unlimited liability. Each partner is entitled to participate in the management of the business of the partnership. The general partnership can be formed without a written agreement, buy it is a good idea to have one.
The only formality required is that a certificate be filed with the County Clerk in each County in which the partnership will be doing business. The certificate must contain the name and address of the partnership and of each partner. The failure to file such a certificate is a misdemeanor.
A partner who wishes to end his partnership must notify creditors if the business continues to operate. Failure to do so may result in the withdrawing partner being liable for additional debt.
- Joint control over business
- Minimal legal requirements for formation
- Informal decision making
- Contribution can be in the form of cash, property or services
- Unlimited liability for partnership debt and other obligations
- Partnership interests are not freely transferable.
- Dissolves upon death, bankruptcy or withdrawal of a partner
- Each partner may obligate the partnership and thereby the other partners.
- Useful for expanding a sole proprietor who is bringing in a new investor.
- Helpful for tow or more persons seeking a simple, low cost organization of a low risk business and who are using personal assets.
Corporation- Business Corporation Law Section
The corporation is a legal entity with a separate existence from its stockholders (who are also the owners). A corporation is formed by the filing of a certificate of incorporation with the state in which the owners want to incorporate. The corporation has perpetual duration, meaning it will be an entity until it is specifically dissolved as an entity (and, yes, there are more papers to file with the state for a dissolution). Interests in the corporation are freely transferable by those individuals who hold the rights to those interests. The shareholders have limited liability unless the corporate “veil” can be pierced. This could occur in closely held corporation where the shareholders co-mingle corporate and personal funds or failed to pay employee withholdings or sales tax. Corporations can be “public” or “private”. Public corporations are required to file information about sales, profits, expenses, salaries, bonuses, etc., with the Securities and Exchange Commission (SEC), a federal department that monitors business activities. Public corporations typically have stock that is for sale on a stock exchange, such as the New York Stock Exchange (NYSE) or the NASDEC exchange. Other countries, and even cities, have their own stock exchanges.
Capital funds for a corporation can be raised buy selling shares of stock, the mechanics of the corporation are quite formal, especially in a publicly traded entity. Shareholders elect directors who set policy and appoint officers who operate the affairs of the corporation.
The corporation is taxed as an entity. There may be a double tax if profits are distributed to shareholders as dividends, since dividends are taxable as income to the shareholders.
The S corporation is similar to a C corporation except that it achieves “pass through” tax treatment (generally, no income tax at the corporate level) if the s corporation and its shareholders meet certain eligibility requirements.
- Liability of owners is limited to the capital contribution used to purchase shares
- Perpetual existence
- Interest easily transferable
- Centralized management
- Corporation can own property
- Can obtain capital by selling additional shares
- Formation is costly and technical
- Operation is highly formalized
- Double taxation on profits
- Risk of business is high
- Reduce personal liability
- Need additional capital as business progresses
Limited Liability Partnership- Limited Liability Company Law Section 1203
A limited liability partnership is a general partnership which has registered as a limited liability partnership. In New York, only professional firms may become a limited liability partnership.
Partners of a limited liability partnership are protected against tort liability for actions or omissions of other partners committed in the course of the partnership business. This includes malpractice claims. Nevertheless, partners remain liable for actions of employers under their direct supervisions and control.
There are technical forms which must be filed with the Department of State. Biennial filings must also be made. The term “Profession Limited Liability Company” or “LLC” or “PLLC” must appear in the name of the business.
- Limited liability of partners Formalities are less sophisticated than corporation
- Decisions are made by owners
- Avoids double taxation
- Riskier partners are exposed to liabilities on their own
- Professional firms that wish to reduce the risk of personal liability
Limited Liability Companies- LLC Section 203
This type of entity offers limited liability to the owners. It can have centralized management similar to corporations or decentralized like a partnership. A limited liability company is formed by executing Articles of Organization and an operating agreement. The Articles must be filed with the Department of State. Capital contributions may be in the form of cash, property or services.
- Limited liability for owners- not personally liable for debts or obligations
- Avoid double taxation
- Costly and technical
- Technical operation to meet tax requirements
- New law- so no precedent on “piercing the veil”; right of minority owners; uncertain securities issues
- Reduce double taxation and avoid personal liability
by Marian Berda
This month we’re going to explore the ways in which your privacy can be breached by both scrupulous and unscrupulous entities, and how you can protect yourself from becoming a victim of cybercrime. We have included clear instructions for how to rid yourself of spyware, cookies and more.
Internet users beware
When you are surfing the web you may think that you are anonymous, but there are a variety of ways that information about you and your activities can be collected without your knowledge or consent. The Internet connects a vast number of computers, computer programs and staggering amounts of information over an unregulated global network. Most Internet users are concerned about tracking and profiling that takes places, but few users actually use the readily available technology to protect their privacy. Internet privacy is not a technical issue, but a social, legal and economic issue and the technology was developed to serve these purposes. To better protect your Internet privacy, you need a basic understanding of how websites gather and use your information.
Prior to 1994, the Internet was a federally funded initiative used exclusively for research projects, and commercial activities were prohibited. Once the Internet was privatized in April 1994, the mainstream popularity of the Internet quickly gained momentum and gave birth to entirely new uses of the technology that is often referred to as the “commodity” Internet. Since that time, Internet software has become more sophisticated and has become adept at delivering gathered information about the consumer (you) back to any website. For example, Internet browsers have been enhanced to pass along additional information that is referred to as “browser chatter”. Not only does it pass along information about the browser and its capabilities, but also non-technical information such as the previous visited site, including the actual search and search engine used, if applicable.
Commercial websites collect customer information so they know the habits and interests who frequently visit their website. Their Web server logs record the Internet address of the computer used to access their website but those logs are not (yet?) able to isolate the actual person who accesses the site. For example, in a multi person household, the same computer may be used by difference family members and the web server isn’t able to tell who is who, so the commercial websites must rely on other techniques to gather information on customers behavior.
One way they do this is by the use of “cookies”. A cookie is a small test file that the website writes to your hard drive when a user visits a website. Cookie files are extremely small and contain no more than 255 characters and 4k of disk space. The cookie file itself may contain a variety of information including the name of the website that owns the cookie, where on the website the user visited, a unique identifier that is assigned to your computer, passwords, usernames and credit card information that was used on a form.
Cookies were originally intended to benefit the user by remembering information such as log ins and passwords, thus freeing the user from logging in and entering a password each time they visited a website. Cookies also enable websites to customize news and services based on customer profiles.
For instance, an online vendor may use cookie technology to obtain and remember information such as credit card number, billing address, shipping address, etc., so the consumer doesn’t have to type the same information in each time they want to purchase something from a website. Cookies are also used to trace user activity (such as which items for sale are most looked at, which people looked at both children ’s and adult items, etc., etc.) so that web designers and marketing types can determine the success of a catalog, item or webpage. The most successful webpage designs can then be promulgated throughout the site or used to avoid help the consumer reduce the number of unnecessary clicks.
It didn’t take long for marketers to see that cookies could also be used for advertising purposes. Since cookies can be matched to the interest and browsing habits of the user, they became a natural tool for targeting advertisements to individual users. Unfortunately there is a flaw in the cookie protocol and has been exploited by businesses that call themselves, “ network advertisers”, and, as a result, today many websites, especially those that contain “free” information (such as the MSN, CNN, MSNBC websites and their ilk) contain banner ads. These ads are controlled by a small number of companies that are middlemen between the website and the advertiser. The banner ads are actually sent by the network advertiser and not the website itself. Most importantly, banner ads may also set and read cookies. By placing banner ads and the corresponding cookies on thousand of WebPages, the advertising companies are able to collect data about your web habits over time. You now are not simply identified uniquely on a single webpage, but wherever you go on the web.
Advertisers are getting closer to being about to identify you, and your corresponding web history, by setting up the WebPages so that you create an identity and personalize the website to your taste. These “my” sites (such as My Yahoo) make it easy for you to customize a website based on your personal preferences and information. However, they also make it easy for marketers to track your every move, for when you log on to your “personalized” website; you are creating an identity that corresponds to a single person and not to a single computer.
Spyware is commonly thought of as software that’s downloaded on to a PC without clearly disclosing all of its functions or obtaining permission from the computer’s owner. In a short period of time, spyware has grown into one of the four biggest “malware” (malicious software) threats to computers worldwide. (with viruses, Trojans and worms being the other three). It typically slips onto a person’s computer unnoticed because it’ s an add-on that comes with other popular applications such as file-sharing software or browser security vulnerabilities.
So what is so dangerous about spyware? Well, it is configured to start whenever you boot your computer up and runs constantly so it can track your every keystroke. Spyware can bring system performance to a slow crawl because it steals your system resources and your Internet bandwidth, which slows your computer down and can cause slower network performance for other computers on the network. It can also cause your system to become unstable and crash.
However, spyware is more than an inconvenience, it invades your privacy. Spyware programs collect all date and send it back to its maker, and it’ s usually information that can be used for advertising/marketing analysis. Undoubtedly, there is the potential for spyware programs to gather almost any information stored on your computer, including financial/credit care information and personal ID information . This personal information can then be used for the purpose of identity theft and span to you and those in your e-mail address book.
And if you don’t think that is bad enough, a newer way to infest computers, called a “bot net” has been developed. A bot net is a group of computers that have been infected with “agent” or “bot ” (short for “robot”) software that works together to launch attacks on other computers. These bot nets have started focusing more and more on installing spyware programs on the targeted victim computers. Those most common are Bargain Buddy, GAIN, b3d projector, Gator, n-Case, SaveNow, Search Toolbar, Webhancer, Search Assistant, etc. Most spyware comes when consumers install “free” content or software, such as the “Download these smiley face icons!” type of advertisements. Even “reputable” sites such as MSN or Excite have spyware on their “free” downloads, often masked in such ways as “Try a new wallpaper!” or “Free screensavers”. The bottom line: be very, very wary of “free” software, for it usually comes at a big cost.
So, when you’re sitting at your computer surfing the Net, sending e-mail messages and participating in online forums, it’s easy to be lured into thinking that your activities are private. Be aware that in any step along the way, your online messages could be intercepted and your activities monitored by numerous entities while you’re journeying through the vast, untamed world of cyberspace. There are a few simple steps that you can take toward protecting your privacy while you are online and while these steps will not give you “ultimate” protection, they will allow you to opt out of some common ways that data can be collected.
So, to help our dear readers, we have compiled a set of simple instructions that you can use to help protect your privacy. But, you are asking, are the instructions really simple? Do I have to be a software engineer to use these steps? Yes, the instructions are very simple, and just about anyone can follow them, and we should know, because we had Liz follow the instructions and eliminate her cookies and temporary internet files. And, really, if *she* can do it, so can you.
Control Those Cookies
The main way that your behavior is monitored as you surf the Internet is through cookies, especially those set by network advertisers. You can use your browser settings to either reject all cookies or to present each cookie to you and if you want to accept it.
Set your browser settings.
Start Internet Explorer; choose Internet Options from the Tools menu.
Click the “Privacy” tab on the menu selection
Adjust the slider to select a privacy setting for the Internet Zone. Please Note: If privacy setting is high, you may not be able to access a webpage. If a privacy setting is low, all cookies will be enabled.
To override cookie setting on any website, select “Edit” button to manually type the Internet address (URL) that you will to always allow or always deny.
5. When settings have been adjusted, click “Ok”.
Delete your Cookies/Temporary Internet Files Often
1. Start Internet Explorer, choose Internet Options from the Tools menu.
2. Click the “General” tab on the menu selection
3. Under temporary Internet files, select “Delete Cookies” and then “Delete Files”.
Please Note: When you delete cookies, you will be deleting all “saved password” files, so be sure that you have written down all your Internet passwords for sites such as eBay, LL Bean, etc., etc...
Please Note: Many viruses are attached to temporary Internet files, so it’s very important to periodically delete these files.
4. Select settings and use the slider to allocate amount of disk space to use for temporary Internet files folder. This file should be small --- 1mb is plenty.
5. Remember that cookies are able to gather sites visited on the Internet. Days to keep pages in history may be as little as 10 days. If you have websites that you frequently visit, the history will still complete URL or save the URL as a favorite.
6. When settings have been adjusted, click “Ok”.
Install a “Cookie Cutter”
A cookie cutter program allows you to select which cookies you wish to accept and that automatically rejects the others. This means that you can store the useful cookies for sites your bank or your subscription service, but not the ones from network advertisers or sites you do not wish to develop a customer relationship.
Install and Update Virus Protection, Spyware software and Windows Updates.
Undoubtedly, an important way to protect your compute, the data on your computer and your privacy is to install and keep up-to-date virus and spyware software. There are many virus protection and spyware software products on the market to purchase, with the top two virus software being Norton (by Symantec) and McAfee products. Paid anti-spyware software includes Webroot Spy Sweeper, and X-Cleaner Deluxe. For moderate protection at no cost try Microsoft’s Defender (in beta test), Spybot, and Adware.
Since Microsoft products are particularly vulnerable to infiltration, it is extremely important to keep your Windows Updates installed and updated frequently. To turn on windows updates, follow the instructions below.
From the start menu, select the Control Panel and then “Systems”.
Click on “Automatic Updates” on the Systems Properties page.
1. Be sure that “Automatic (recommended) radio button is selected and your computer is turned on the time indicated. I would recommend “Every day” updates for ultimate critical patches installation.
2. Click “Ok”, when you complete your desired settings.
You may also manually run Windows Updates by selecting “Tools” from the menu “ Windows Updates” in Internet Explorer. Follow the directions to run and install all critical updates.
Carefully scrutinize any service that requires data from you. News sites often have a button beside an article that says “E-mail this article.” You may wish to send the article to a friend, but, in doing so, you are giving your friend’s e-mail address to the website. Some of the e-mailed articles are sent with advertising and can set cookies when the mail message is opened. Instead, you may send your friend the URL of the article to a private e-mail message.
On the low-tech side, those who wish to maintain some anonymity can register for a free web based e-mail account using fictitious information and then use that address for contact with potentially invasive services. This has become so popular that some services now refuse to accept new users whose e-mail accounts end with domains such as yahoo.com, msn.com
Limit Information Revealed
You may set up Internet Explorer to limit the amount of information you reveal when you on the Internet.
Set Your Profile
In Internet Explorer, choose Internet Options from the Tools menu.
Click the “Content” tab of the Internet Options selection.
Click on “My Profile”.
Use the different tabs to enter only the information that you’re willing to reveal on the websites you visit. Please Note: It is a great place your secondary email address. You may monitor email on the “other” email address and keep your private email address--- private.
Select “Ok”, when you complete the desired selections.
We hope that this article has helped you to realize that in our “modern age” the ancient craft of information gathering and analysis has become a high tech affair and that the information gatherers, whether they be legitimate businesses whose websites we visit or nefarious characters desperately trying to steal credit card information, have a myriad ways in which they can find out about us and our internet habits.
We cannot help but give information to strangers as we go through our personal and professional routines (think shopping, browsing, having something repaired, etc.), and we cannot help but leave a cyber trail as we go through our on-line routines (checking our personal email remotely, checking our mutual funds/checking account balance/credit card statement, checking the CNN site for news during the day, etc., etc.) so we must be ever vigilant about what sites get information about us and our habits.
Unfortunately, we also cannot expect to have absolute control over our personal data on line or in real life, so we must develop a system of cyber checks and balances to ensure we aren’t giving out too much information. For example, in real life (as opposed to the cyber world) you would not give the mechanic who puts your snow tires on each year your social security number, but by paying with a check you give them access to your address, phone number and banking institution. You certainly don’t want to have to carry cash around all the time, you want the convenience of paying with a check, so you give the garage some of your personal information, and you expect the garage won’t do anything with that info, save for sending you a holiday card, advertising flyer or the like.
But in cyberspace you don’t have the luxury of looking your mechanic in the eye when you hand her your check, so you must be extra careful about what sort of information you give out and to whom you give that information. And that extra dose of caution must give rise to new patterns of behavior in your personal and professional life. You and your family members must learn to ask certain questions before giving out information and to develop a new kind of “cyber common sense” that known as “privacy literacy”. Like other types of literacy, once learned it becomes almost second nature, but during the learning process can be frustrating at times.
We hope this article has helped to introduce you to the big, bad world of internet privacy. We would like to run future articles on cyber privacy, and would welcome any suggestions or items to include.
Last month we covered interview questions, so the inevitable next step is the selection process itself. Because the hiring process is a very commodious topic, covering everything from winnowing down your candidates to references to salary negotiations, we’re going to cover it in several installments and not in just one month, which to our longtime readers, should be no surprise. Of course, our longtime readers already realize that we’re far too verbose to cover all that material in one little article, don’t you? In fact, we’re so verbose that we can’t even cover discussing the candidates in one article! No, we managed only to get through the “no” process when we hit the 2000 word wall, which is our limit for an article. Heck, we want you all to read this stuff, not just snicker at our loquaciousness (which is, we realize, cheap and easy entertainment, but we were always the class clown, and you know the class clown’s motto: any attention is good attention. Don’t you pity my husband?).
Let’s pretend that you and the hiring team have completed the interviews, what’s next? Well, you should schedule a team meeting ASAP, and be prepared for it to be a long one. Hashing out who goes to the next stage – and who doesn’t – can be time consuming and stressful (especially if there are internal candidates), so we suggest booking a comfy conference room and bringing food, especially sugar, caffeine, carbs and salt (hey, be glad we didn’ t suggest more-adult-than-just-caffeine adult beverages). In addition to feeding the troops, ensure that your attendees have a couple of hours free, you have copies of all the resumes and the job description available and the stage is set for honesty and openness.
And for that stage setting, we must turn to you, our team leader. As we have intoned in previous installments, for the team hiring process to work, the team leader must be committed to all phases of the process, but especially at decision time. There is never a more appropriate time to model good leadership behaviors (and you know what they are) than when a critical decision has to be made. You, as the team leader must be open and upfront in your dealings, especially during the selection process, or the whole team will feel like they’ve been set up, and will badmouth both you and the process in perpetuity (or at least until another leader lets them down). Since we know you don’t want to be the cause of any (more) organizational angst, we recommend that you be the model of fairness, open-mindedness, truthfulness, inclusion and objectivity and guide your team towards the same.
“Wait,” you’re saying, “there are a bunch of people we interviewed that I would never hire! What if the team wants to hire them? How am I going to be open-minded and truthful at the same time?” Valid questions, grasshoppers, and we will attempt to answer them and a few more you probably don’t even know you have yet.
At this point we’ll go into one of our “steps to success” formats (regular readers are no doubt weary of the format by now, but, trust us, it helps us to be more organized and less verbose, both of which you want very much, whether you know it or not). So, like it or lump it, here are the steps to the hiring team decision-making process.
Think about the meeting outcomes and processes beforehand. (And please note: in this case “beforehand” does not mean ten minutes before the meeting commences, it means enough lead time to plan refreshments, agenda, goals and next steps.) The goal of this meeting is to pare down the candidate list and decide on next steps, so plan accordingly. Winnowing down candidates takes time and patience, but once the team members are comfortable, the meeting actually moves along quite briskly. We suggest you have a list of the candidates handy so you can check each one off as they are discussed. A whiteboard is also a great tool, as it’s an oversized reminder to the team of what they are here to discuss, and a visual prop that will help all of you remember the individual candidates.
Identify in your mind, a team member who is well respected by the other team members (if you don’t know who that is, shame on you, resolve to learn those kind of nuances and ask around so you look like you’ve got a clue at this meeting) because we will show you how to use that person to your advantage a few paragraphs down.
We’ve already told you that a successful meeting requires appropriate space, food, copies of the resumes, job description and any other pertinent job info you have, so, consider yourself forewarned; don’t skimp on this one, as it’s important for the meeting itself, but also for the team members. Everyone likes to feel special, and being part of a team that is provided with good food, an appropriate place to meet, adequate time for the meeting, etc., makes team members feel important. Those who feel important are more apt to be open and, yes, even bold when stating their opinions. And don’t think we need to remind you that you asked these people to be part of this hiring team because you wanted their opinions and thoughts, *especially* the bold opinions and thoughts.
Set the stage for forthright and open communication by nipping any controversy in t he bud, especially as it relates to internal candidates. Bluntly state that what is said in this room, stays in this room and that you will be personally disappointed in anyone who violates that dictum, so much so that it will be on their annual performance appraisal. After the confidentiality speech is over, launch right into your expectations of honesty, the practice of good listening skills and openmindedness in all communications. By stating your expectations about the thorny topics of confidentiality and honesty up front, you mitigate some of the nervousness that team members are bound to be feeling. A nervousness that is always made more acute by the presence of internal candidates (because team members worry a great deal about “judging” their co-workers, especially those at the same organizational level as the team member), so be prepared for that.
It can’t be said enough that the most important thing you can do in the “ open communication” arena is to model the behavior yourself, so take the plunge, and be the leader you know you need to be.
Please don’t mistake “open communication” for a license to dominate the meeting with your thoughts on and perceptions of the candidates. Remember: when a leader speaks first, workers are usually loathe to disagree. Start the meeting with some harmless small talk about the weather, the latest episode of Lost (just don’t compare the team to the Others or anything) or some other innocuous topic and get the troops loosened up a bit.
Then, once everyone has had a chuckle or two at the expense of someone much more rich and famous than all of you combined, make your move. Get into the meat of the meating (sorry, could not resist) by going over confidentiality, good listening skills, honesty, etc., and turn to that respected team member and say “So, Pat, how are you feeling? Are you ready to discuss the candidates?” Note that you have not jarringly asked, “So, who do you want to hire?”, but have started with a “soft” opening, asking how they’re feeling, and if they are ready to discuss the candidates. That will give a person the ability to segue nicely into the beginnings of the discussion without just coming out and planting their flag firmly. In all likelihood you will have to ask a few follow up questions to get the candidates discussion jump-started, but don’t worry, that’s absolutely typical. In this instance, we advise starting with the negative, because it’s highly likely there is at least one totally inappropriate candidate on which the entire team will agree. Consider saying something like, “So, Pat, is there anyone you no longer want to consider for this position?” You can bet your sweet bippy there are a *lot* of people ole Pat doesn’t want to consider, and this gives Pat the ability to say “Well, yes, I thought that three of them should not be considered further; John, Paul and Ringo, in my opinion, should be told “no”.”
After a remark like this, the deluge usually commences, with the entire team talking at once, even those folks who previously had nary a word to say. When this happens consider it a good sign, and take a moment out to pat yourself on the proverbial back, for you have obviously done a great job making people feel comfortable, and 90% of having a successful hiring team is making people feel comfortable with speaking their minds. All the yakking, however, can cause a problem in that if everyone is talking, no one is listening, so call the meeting back to order and start the ball rolling on the discussion.
Once you have again restored order, and permitted everyone to have a quick laugh at the expense of John, Paul and Ringo, go around the room and ask each person to name any more definite “no” candid ates. It’s important not to spend too much time on the rejectees, but you must at least allow people to have a giggle or two over the worst of the lot.
And lest you think we’re being mean, we do apologize, for we do not want to app ear mean. But we do think that hiring teams need to feel a strong sense of shared purpose, and having a snicker or two at the expense of a candidate who gave a less-than-stellar answer or somehow or other behaved inappropriately for a job interview is, in our opinion, a harmless bit of team bonding. Now if it gets too nasty or if the group is excessively focused on beating a dead candidate, you have to step in and stop the carnage before the nicer members of the team start to feel uncomfortable. What is the right time? Well, it’s difficult to say, but we suggest that when *you* start to feel a bit queasy it may be too late, so stop it before you start to feel uncomfortable and you should be all set.
So, once the team bonding over the hapless discarded candidates is over, you can get back to business, which is to finish discussing all the rejected candidates. Since you have now established that John, Paul and Ringo are all in the “no” pile, keep going by prodding the team to throw out other “no” candidates. This process is actually quite painless, until, that is, you get to a candidate who a team member does not think is a “no”. Once that happens you have to shift gears quickly and make sure that the team knows that there is no longer a unanimous agreement about the rejectees. Call a time out and say “Hey, Hazel is not a definite “no”, because I just heard Warren say that she was a “maybe”.
The next round has to be handled with a bit of finesse, for the subsequent discussions will not usually end with a unanimous decision. Since the “maybe” ice has been broken, take a moment to call a halt to things and say “OK, where are we? Have we gone though all the definite “no” folks?” If the answer is no, keep going till you are there. If the answer is yes, it’s time to shift into third gear.
Once all the “no” candidates are out of the way it’s time to move on to the next steps, but before we do that we want to stop here and lay a bit of leadership philosophy on you. We really do apologize if we sound cavalier about rejecting people, but when you’ve done it as often as we have, well, it becomes easy to detach the candidate from the person. We haven’t forgotten that the person is going to feel sad and depressed about being rejected, but, frankly, as a leader in your organization, you have to be able to separate your work self from your personal-feelings self, and be dispassionate about these things. We realize that the ability to be so objective is not a universally admired trait; but because you are reading this newsletter, we have to assume that unless you’re: a. my mom or: b. reading this because some someone is forcing you to learn about human resources, you are a leader in your organization who wants to learn how to be a better leader, and that part of being that better leader is focusing on the end result (a great new employee!) rather than the carnage along the way (the rejected candidates and their feelings). OK, we feel better now, because we really do not want you to think we are an emotionless ‘bot.
Now comes the part when you get to discuss the good candidates! Yes, dissing the rejectees is fun, but culling out the best candidates for next steps is the reason you are paid the big bucks. We suggest that you announce to the group that we are now moving on to the “yes” candidates, and even call a quick bathroom break. Now only will people appreciate your thoughtfulness in thinking about their physical comfort (hey, haven’t you had a boss who’s a bloody camel? Was it fun?), physically moving away from the room after completing the discussion of the “no” candidates helps to subtly reinforce that when we come back, the discussion will take on a different tone.
Next month we’ll cover the “yes” candidates, and, if we don’t again become too long-winded for our own good, possibly even the “maybes”.
Thinking of suing Steverino cuz of his Ipod caused your hearing loss? There are some who think you’ll soon have a great deal of company… Now if he could only learn to clone money…
Emory Takes on Biotech Co and Former Executive
Emory University, and licensing partner Microbe Guard, Inc. filed a patent infringement suit last month against Nova BioGenetics and former executive vice president and director of business development Timothy Moses. Emory is alleging that three patents held by the University, licensed to only Microbe Guard, are being infringed by three of Nova’s products and that the ex-executive allowed the infringement to take place.
Court Rules Against Student in Inventor Dispute
A federal appeals court, sitting en banc, has decided that a former Columbia Student did not contribute enough to the development of a treatment for glaucoma to be listed as a co-inventor on the patent. The court explained that to have a claim of co-inventorship, each inventor must have contributed to the idea of the invention and that by merely conducting experiments previously run by Laszlo Bito, the patent holder for the invention, Fredric A. Stern did not contribute enough.
Legislatively Created Rocket Dockets for IP Cases, Good?
Many attorneys say no. A proposal is circulating Congress right now, chaired by California Representative Darrell Issa, that if passed would lead to the creation of specialized trial courts for intellectual property cases in hopes to speed up the decision process in IP law cases. Although the proposal only calls for a two year trial period, many attorneys are warning that it’s a badly conceived idea.