Category Archives: Accounting

Learning through Parody

(#18 of 27, revisiting “Generic Brand Video: In less than 3 minutes, every global corporate t.v. ad“)

Still funny, still true:

…and here’s another one spoofing a closely related genre of commercial:

(Oh, and someone ought to do a parody of the last 15 seconds of YouTube videos where the authors beg for clicks and follows. Enough of that already, College Humor.)

Gotta love the high quality, well crafted meta-humor.  Also, it serves a useful purpose: cultural advancement.

Parody Improves Art

Great parody demolishes a clichéd genre, forcing it to evolve or die off.

dr evil air quotes rightFor example, the Austin Powers movie series merciless tore apart a set of classic James Bond tropes and ultimately superseded them in popular imagination. That in turn contributed to a great deal of pivoting and now potential re-invention within the James Bond franchise. A well done lampoon can reinvigorate a classic.

As discussed previously (Keeping it Fresh: Why Variety and Novelty Matter in Education, Instructional Design, Leadership Development, and More) for art to remain relevant, it must periodically shed some of its formulaic tendencies. Biting satire provides an acid to dissolve longstanding decrepitude.

repetitive behavior perceptual spectrum

However, none of this improvement can happen until the makers of the art — or carriers of the culture — decide to self-criticize and improve.

Note too that parody is effective precisely because it is playful — or even better, when it’s done with a nod of admiration.

Criticism is most easily heard when it is delivered from a place of affection. With just a bit of warmth and flair, the satirist can aid their subject, if their subject is willing to listen.


Time sheets: It’s Not About a Salary, It’s All About Reality

There are people who dislike doing time sheets — filling out little grids of numbers which quantify the amount of time one has spent on given tasks, projects, activity types, client accounts, etc.    I am one of those people who dislikes doing time sheets — intensely —  though I have been known to use them very exactingly when (a) starting on a new job / type of project, as a way to calibrate my own sense of how long things take to do; or (b) when absolutely required by contract.

The act of completing a time sheet can feel tedious, especially if one is not  set up with a convenient real-time tracker such as a mobile app, a paper (yes, paper!) notepad, or even a set of Lego bricks.  Using your Sent Mail box in Outlook as an audit trail for how long you worked on a series of documents?   Yeah, been there, done that.  It’s both wearisome and worrying to be in a position of needing to reconstruct and quantify fleeting memories of hours spent working… or not really working… all the while having to discern the distorted temporal effects of hours spent with intense, productive Flow versus those dilated hours of torpid, lackadaisical sloth.

..and that’s a big part of the problem with time sheets:  Some time (and some efforts) are better spent than others!  Simply “logging your hours” doesn’t say anything about performance or results.

On the one hand, there’s a good reason many organizations use a system of salary-and-minimum-required-hours (paycheck and punch clock).  It simplifies planning, scales well, and is (sometimes, even) effective. The trouble is, an organization’s time sheet is often not as simple to use as a punch clock, and so that time sheet process creates friction and inefficiency.

My proposition:  If your organization uses time sheets as a way of measuring productivity, either get rid of them completely, or up the ante and do them really, really well:

  1. Make the time sheet process incredibly easy to use, with a state of the art user interface
  2. Set the system up so that people receive automated/instant feedback on their own productivity metrics

In other words, if the person is going to make the effort of both quantifying and qualifying how they spend their time, don’t add insult to injury of making the process feel unproductive and pointless.

On the second point, above:  By analyzing and synthesizing their input into a relevant statistics (E.g., % hours spent client facing,  # hours spent on average to move a project from stage A to stage B, etc.) — these can be done for the person themselves and/or with a a group benchmark to compare against… although be careful with the latter as it may lead to dysfunctional hyper competitive team dynamics if done without the right level of nuance and foresight.  Ultimately, this needs to be about instilling a sense of continuous improvement for the individual — people are deeply motivated by a sense of growth and mastery in their work —  as opposed to merely “scoring” or “grading” them.

There are literally thousands of time tracking systems out there….  and here’s my idea for a next generation user interface:


Imagine if something like that was your time sheet software.  You wouldn’t just be logging hours… you’d be seeing your progress as you logged them and have a sense of both purpose and accomplishment. 

(Yup, that’s right, it’s just a snapshot of the screen from a piece of gym equipment.  I’ve got a future blog post planned which will analyze the motivational differences between various visualization graphics used on LifeFitness™ cardio equipment… but for now, let’s just roll with this, okay?)

For a lot of companies, time sheets are here to stay… so let’s at least make those time sheets less annoying and more meaningful.

End-of-year Taxes and Tithing, aka, The time has come, A fact’s a fact, It doesn’t belong to us, Let’s give it back

We’re coming up to the end of the calendar year 2011 and many of us are closing our books.

In two more days it will be the end of the financial cycle for most individuals… and many corporations and partnerships, too.  Whatever quantity of  income we’ve earned — whether in the form of salaries, benefits, disbursements, fees, commissions, bonuses, tips, rents, interest, dividends —  that quantity will get recorded somewhere on our tax returns in a few month’s time… that is, for those of us who pay taxes… or for that matter, for those of us who had income (can’t assume anything anymore, these days).

Also, since it is now December 29, many of us (statistically speaking) have recently spent a portion of the above-mentioned quantity of money (and hopefully a relatively small portion thereof) on discretionary purchases for ourselves and the ones we love (assuming we are not alone this holiday season) … possibly in the name of some culturally sensitive, politically correct, socially appropriate seasonal celebration (enough disclaimers yet?).

So, given the reality of our mainstream tax cycle and given the widespread seasonal affective spending that our culture has ordered for us,  it’s no surprise that this is also the time of year where we see many requests from not-for-profit organizations to give tax-deductible charitable contributions.

That guy in the red velvet hat and white pom-pom may not be ringing a handbell outside the supermarket anymore, but there’s still 48 hours left to give in 2011.

So here are some end-of-year questions to consider…

1. How much of your gross/net income goes charitable contributions?

We’ve earned it… we’re spending some of it… but it doesn’t all belong to us.

The concept of tithing — giving back one-tenth of what we make — goes back as far as recorded human history.  If you’re a modern adherent to the 10% rule (or some variant, e.g. 5%… or maybe 20%) you’ve probably thought about where to put government taxes into the equation.

Do you give 10% of your gross income, or your net income after taxes?  What about itemized deductions?  Should you consider a portion of your taxes paid to the government — ie, the percentage of the government budget that goes to provide direct support to the needy — as a form of charity?  The answer to these questions may be influenced by a person’s cultural, religious, national or political background. For example, if a person lives in a European welfare state with a high individual taxation rate, statistically speaking they will give less in direct charitable contributions as compared to a person who lives in a  jurisdiction with lower taxation rate. A similar statistical discrepancy appears between people with liberal versus conservative political leanings within the same tax jurisdiction. Perhaps our view of the government’s role and efficacy in supporting the needy affects our own desire to give back? (Ah, the old individual responsibility vs. collective responsibility debate… a false dichotomy if there ever was one.)

Layer on top of this our individual financial situation — our income, our expenses, our assets, our debts — and it’s quickly apparent how difficult it is to apply a single “standard” of charitable giving for all people.. and we haven’t even touched the subject of what is considered a “worthy cause.”

Yes, giving charity can be complicated.

The best way to deal with this complexity is to establish a household budget for charitable giving… aka, a “Giving-Back Budget.”

Why Establish a Giving-Back Budget?

  1. Most importantly, by budgeting for charitable giving, it actually gets done.
  2. Also, by establishing a budget, we can prioritize the causes we wish to support.
  3. This allows us to more easily say “no” to the things that fall outside our budget.
  4. Finally, it also gives us something to measure by, when we decide to say “yes” and stretch our budget.

Some people go as far as establishing a separate bank account for themselves, designated for charitable giving. They regularly move funds into that account, so that those reserved funds won’t have a chance of getting spent on non-charitable expenses… just like payroll withholding.  Hey, the government figured out a long time ago that it was easier to transfer funds at the source, rather than send out a big guy carrying an axe to do their collections.  (Thankfully, we still have the phrase, “Hey dude, that’s totally in my bailiwick.” )  I haven’t gone that far myself, but for the past few years I’ve been keeping a spreadsheet on my past/current/future charitable gifts and it’s been quite helpful in keeping myself organized, giving-wise.

2. Have you reviewed your Giving-Back Budget lately?

Each one of us, at whatever scale we operate, is a philanthropist.

Each one of us has a responsibility to increase our net social worth by choosing to give back a portion of what we make… and the nice thing is, the more we give, the more we get… or more precisely,  the more we give, the more we become people who have the means to give well.

To be sure, there are also non-monetary ways to increase our net social worth… no, I’m not talking about that “gently used” clothing that we dumped into a steel bin next to a parking lot… I’m talking about doing things, such as volunteering our precious time to help a worthwhile organization. That’s a whole other Giving-Back calculus, which overlaps with the concept of Life Balance… and as the previously cited Charity Navigator link describes it; the giving of time and the giving of money to charitable causes are two highly correlated behaviors.

Giving-Back Budget Review Questions:

How much of what I earn will go towards my Giving-Back Budget this year? 

What is the shape of my Giving-Back Budget for this year?  i.e., What types of charities/causes are I supporting… and in what proportion?

How well am I doing towards this year’s Giving-Back Budget?  Do I need to make any end-of-year contributions, to balance it?

What does my target Giving-Back Budget look like for next year?

The nice thing about these questions is that, even if we can’t answer them satisfactorily in the next 48 hours, these questions can become part of another great seasonal tradition: The New Year’s Resolution.

(all right, Mr. Big Shot here is going back to the spreadsheet now…)

End Them, Don’t Mend Them: True Cost of PK-12 Education

End Them, Don’t Mend Them <FANTASTIC article on the true cost of public education (true immediate cost, which is vastly understated, and true long term cost, which is often ignored).

Hat tip to Glenn Warren / Stephen Dill, on this discussion.

Online Retail Equivalent to Same Store Sales

There’s a lot of talk this time of year about retail sales, consumer spending and what this means for The Economy.  With this talk comes statistics, and with these statistics come the classic metric of traditional retail, Same-Store Sales , or as I like to call it, Seam Sore Stales (Stale Sore Seams?  Stole Sears Mare?). 

Same-store sales is a simple but effective gauge of the financial health of a retailer — it indicates how a company is doing within its base of existing stores (1 year or older, by convention).  Sales results from newly opened locations during the reporting  period will not affect the same-stores sales number, which is good, because growth through new openings tends to cloud the picture for managers and investors who want to know how a retail chain is actually performing, all other factors aside. recently made its annual “best year of sales ever” press release and received numerous scathing critques from skeptical analysts (and maybe even some hopeful short sellers).   The problem with and other e-tailers is that they still enjoy the shroud of hype of opacity today as they did in the late 90’s.  There is nothing close to a sames-stores sales metric out there for e-tailers.   Online businesses routinely open “new locations” in the form of alternate websites (whether acquired or internally developed) as well as new sections of their websites that differ dramatically from their core product offering.  E-tailers do not typically break out these numbers for investors, let alone give visibility to key metrics of e-tailing health such as order size (or even revenue-per-customer), conversion rate (the e-tail equivalent to “revenues-per-square-foot”), customer retention rate (“loyalty”) or the like.  As a result, their weak performance (or outright mismanagement) can go undetected beneath a surface of selectively chosen numbers. 

While it would be nice to have something as simple to understand as same-store sales for online retail, the analogy unfortunately doesn’t work. Traditional retailers are “allowed” to offer new products within the walls of their stores and still have those dollars count towards same-store sales.  Without physical walls, it’s hard to decide where to draw the line of “new store” and “new product line” for e-tailers.   Yet, leaving aside semantics, there is a fundamental logic and rigor behind the same-store sales metric that makes it compelling for understanding traditional retailers, namely, “how well is this business doing in the areas that it has previously built out?”  Without this rigorous standard to stick with, it’s too easy for online retailers to get away with a whole lot of fluff and b.s. 

I once witnessed the perils of the choose-your-own-metric dot-com management style at an e-tailer’s company meeting, a few years ago.   This was a company that, according to a well-known retail veteran,  was “subsisting as the #2 or #3 player in a whole bunch of different categories,”  with “unstable leadership.”  As an observer, I initially thought they had promise.  But then, at the end-of-year company meeting, management made an announcement that annual sales were “up”…. well…, up…. WHEN YOU IGNORED those  product categories where their competition out-maneuvered them, and which they ultimately retreated from.  Yes, management insisted, not only were sales “up,” but they were “growing at an amazing rate.”   Yes, sales grow at an amazing rate when you ignore the part of your business that is just a few years old and dead, and focus only on the part that took off in recent months.  It’s ok guys.  Just fess up.  Your earlier store didn’t succeed, so you’ve decided to build a new store.  Time will tell if that new store does better.   However, lacking the discipline of a true same-store-sales -like metric to stick by, but having plenty of deep fear and insecurity, these folks perpetuated the image of the unscrupulous dot-con,  spinning their humble-but-still-decent story into an out-of-proportion blustering lie. Was it neccessary?  Probably not.  Did it cultivate employees trust in their leadership? Definitely not.  What it did do was prolong the inevitable decisions that would have to be made, to insure the health of the company and the protection of the venture backers’ considerable investment.

So where do we go from here?  I say, release the key metrics.  Tell us your conversion rates.  Tell us your average order size.  There’s no competitive issue — all the e-tail insiders know these numbers anyway

Barring that, at the very least, let’s get a breakdown by website (flagship site versus all the other stuff, including recent launches and acquisitions), or perhaps a little more granularity on those merchandise categories.  Not to pick on or anything (but this is what comes with the leadership territory), here is the merchandise-type breakdown of their Net Sales, in their last annual report (divided between the “North America” and “International” regions):

Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Electronics and other general merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Compare that against how they broke-out their “Cash-and-Equivalents” holdings:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Money market funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. government and agency securities . . . . . . . . . . . . . . . . . . .
Asset-backed securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government and agency securities . . . . . . . . . . . . . . . . .
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Seriously, I would gladly trade some of that detail on Amazon’s cash-equivalent securities, to get some info about, oh, I don’t know, let’s say… BOOK sales. Or maybe even a distinction between the “Electronics” and the “other” for starters.

This lopsided approach to what is important detail from an investor’s point of view is largely a function of SEC reporting requirements. When those requirements change, there will be some accountant fees and some bruised egos, but long term, we’ll see better-educated investors and improved management practices. And a lot less bluster.

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