~Bennis

~Abraham Lincoln

After watching it, I heard several bits of advice that reminded me of Part 1 and Part 2 of the posts I just wrote about how to build your network. When you get to her example of casting a fishing rod into a new pond, I really was reminded of the information brokers termed in the Harvard Business Article I discussed.

In addition, she spoke to several elements of communication and connecting with people. Both of these really made a lot of sense because I just completed a Business Communications course at Georgia Tech that was taught by Joey Asher the founder of Speechworks. The essence of any speech is about connecting people and moving them in some direction. While she wrapped her conversation in a theme of social media and blogs, it is very applicable to any presentation you have to put on. When you watch, pay close attention to how many personal stories she gives you during her own presentation. Stories are better than any statistic, fact, or other evidence for getting your point across to people and getting them to buy in to what you are telling them. We hit this a lot in my Business Communications course, and she is a very effective communicator/presenter.

Take a sheet of paper and make three columns. The columns are titled name of contact, who introduced you to the contact, and to whom did you introduce the contact. Write all of the names of the most important people in your network. These people should be the people you rely on for expertise, advice, and inspiration. Make sure you think of the strength of yours ties, the resources you exchange with that person, etc when thinking about who to put down. Next, in the middle column write who introduced you to the contact. This will reveal the brokers in your network as we discussed in the first post. Lastly, in the right hand column write the name of someone you introduced to your key contact. This serves to show how you act as a broker.

The self-similarity principle says that if you’ve introduced yourself to your key contacts more than 65% of the time, your network is too inbred. This principle says that you choose people that resemble you in worldview, experience, etc. While it is easier to trust people that see things the way you do, this does not mean it is best for your network. However, you are less likely to challenge eachother’s ideas and it is efficient to work with people who share backgrounds. Nevertheless, the research shows that too much similarity restricts your access to discrepant information which is critical for creativity and problem solving. Over time, people will introduce contacts to one another and this will compound itself. I think of this as group-think.

This self-similarity principle can be best shown with an example. Columbia did a study on its executive MBA students at a business mixer. They instructed their students to meet as many different people as possible. Using electronic devices on them to record who they talked to and for how long, they were able to see who the students formed ties with. Sure enough, investment bankers connected with other investment bankers, marketing folks spoke with marketing folks, etc. They formed ties with others who were most like them!

How can we forge better connections?

The best networks are forged through high-stakes activities that connect you with others. Shared activities serve as the best way to find people for your network to avoid the self-similarity principle. Activities that evoke passion in participants and have something at stake are more likely to produce networks like our famous Paul Revere’s. Having something at stake provides opportunities for celebration and commiseration which generate strong bonds of loyalty. Shared activities will bring together diverse individuals around a common point of interest, instead of connecting similar individuals with shared backgrounds. In addition, shared activities break through people’s business roles of subordinate, relationship manager, finance genius, etc. People will move away from a superior-subordinate relationship to form a closer bond.

What should you do next?

Go for the brokers in your life! Look at your sheet and determine who your brokers are so you can start to find activities that bring you into contact with them. This will let you further develop those ties that you have. People listed multiple times in the center column are the important brokers in your life. Find your powerful brokers who will continue to share their diverse contacts so you can grow your network even stronger.

Research has shown that you can raise your level of information from what you know to who you know by creating your networks with trust, diversity, and brokerage. Creativity and insight are important but without an effective network, you may never spark your imagination or reinvent yourself. With web 2.0 inventions of facebook, twitter, linedin, and brazen careerist, we have the tools to make it even easier to not only find our brokers but also connect to their vast and diverse set of contacts.

I read a GREAT article thanks to a friend sharing the link. The article was published in the Harvard Business Review in December 2005, and I think it is an excellent short read. My review and notes are as follows:

If you were to ask a friend of yours who Paul Revere is, they would probably be able to recall the answer without difficulty or prodding. The real question is how many of your friends would be familiar with William Dawes? This is both a question in this article and it is brought up in The Tipping Point by Malcolm Gladwell. I am reading The Tipping Point now and will have a book review in the future. William Dawes and Paul Revere both rode out on the SAME night April 18, 1775 and sounded the alarm that the British were coming. Revere went north while Dawes headed south. Only Revere’s name continues to echo in history. Why is it that two men with similar educational backgrounds and social status would target towns with similar demographics but only Revere’s warnings were responded to?

Paul Revere was an information broker. An information broker plays a vital role in social networks. With technologies like facebook, twitter, brazen careerist, linked in, and others, I found this extremely intriguing. An information broker connects disparate groups of people. The reason Revere is so famous is that he himself was an information broker AND he got to each town’s information brokers. It was these people who then rallied the troops and pulled together all the disparate networks to bring everyone to bear arms against the British the next morning.

Now imagine that the information isn’t that the British are coming but about a new product or service. Got your attention? This is where I got excited and had flashbacks to my previous semester’s marketing course. When the information is not delivered to the right people, then our product or service will fail. Networks are the exact reason why some ideas become breakthroughs and others do not. This applies to whether you are a blog trying to capture some new viewers, or you have just come out with a new e-book that you would like to sell.

There are 3 advantages of a network:
Private Information
Acess to diverse skill sets
Power

1) Private Information – this is information that is gathered from personal contacts who can offer something unique that cannot be found in the public domain (ie: release date of a new product or service). Public information doesn’t give the competitive advantage like it once did. Therefore, private information can really give upper management an edge. However, this information typically is not verified by a third party so the value in it depends on how much trust exists in the network of relationships.

2) Access to a diverse array of skill sets – Expertise has gotten very specialized the last 15 years, but organizational, product, and marketing issues have become more interdisciplinary. This means that individual success is strongly tied to the ability to transcend natural skill limitations through others. You will be able to have a creative and unbiased view on issues through highly diverse network ties. A good example of this is Linus Pauling who is one of only two people to win a Nobel Prize in two different areas. He attributed his creative success to having diverse contacts. He said, “The best way to have a good idea is to have a lot of ideas.” That is exactly what having access to a diverse array of skill sets can do for us.

3) Power – Organizations are getting flatter and power is shifting in the information brokers that stand ready to adapt to organizational changes. For most people their personal networks tend to be highly clustered. Moreover, an individuals friends tend to be friends with eachother as well. This is where brokers come in to be extremely powerful. Brokers connect all the separate clusters. They are the glue that ties the subnetworks together and in turn, stimulate both collaboration and exploit arbitrage among what would be independent specialists.

Do you see these advantages in your own personal/professional networks? What other advantages or disadvantages do you see in your networks?

Sid’s Background

Sid Mashburn is an entrepreneur who opened Sid Mashburn Men’s Clothing in 2009 located on the west-end of downtown Atlanta.  Sid’s background includes working for Tommy Hilfiger Land’s End, J. Crew, and Polo.  In 2009, he appeared in GQ for being one of the 10 Most Stylish Men in America and was also featured in other articles on style in 2008.  In addition, his current store ranks one of the Top 100 Stores in America according to GQ.com.

He aims to offer authentic and high quality products while stressing the utmost in customer service.  When you walk into the store, they offer you a beverage.  Their staff takes a hands off approach allowing you to peruse their selection.  In addition, they have been groomed by Sid Mashburn himself to see his sense of style in order to sell men a proper wardrobe.

Sid stressed selling a great product with great service and a lot of passion.  Passion played throughout his talk, and he said “if you are not having fun 80% of the time, you need to refocus.”  I think this has a lot of truth.  Work consumes a large portion of our lives, and it is important that you have fun at what you do.  This does not mean that you have to love it all the time, but you definitely need to enjoy it significantly more than you don’t.

What is his secret to success?

• Customers
• The people who work in the store
• An energetic tailor
• Commitment to quality
• Integrity
• Following through
• Have fun!

Of the list, he did emphasize having the tailor was critical.  Tailors seem to be disappearing, and he said it was very difficult for him to find one with the skills and taste of quality that he sought.

What is the most important business concept you do?

The concept of “good, better, best.”  A previous mentor of Sid passed this concept of a good, better, best system onto him.  In his store, you will find products that fit each category based on the type of customer you are.  It reminded me of the concept of STP (Segment, Target, Position) in marketing.  In effect, Sid is segmenting the customers that come in and has products, in this case men’s clothing, that fit the needs and wants of different customer segments.  Whether the man that comes in is a high-rolling investment banker looking for a high quality blue pin-stripe or you are a casual white-collar man looking for some socks or a shirt with a quality that will last longer than msot, Sid Mashburn has you covered.  The products are designed with this system in mind.

What would you recommend for someone looking to be an entrepreneur like yourself?

Sid said that when he was younger he did not have the capital nor the experience to be successful as an entrepreneur.  Experience and capital are crucial for starting out as an entrepreneur.

What is a book you recommend?

He recommended reading Setting the Table by Danny Myer.  This stems from his deep respect for those who have worked in the restaurant industry.  The fast pace, high stress environment had many parallels to him of the fashion industry.

Photo Credit: Sid Mashburn
Yes in the photo that is Sid in front of his store front.

~Peter Drucker

I was going through some old binders of mine and I came across a good PDF my very first accounting professor gave us.  It lists all of the requirement to both take and to become a CPA.  Click here for the path to becoming a certified public accountant.

One thing to note: the work experience requirement is no longer 2 years in public accounting or 5 years in private industry.  It is one year in either as of July 2009.  They need more of you!

Before I go into detail about this study, I have to say that this is alarming and unacceptable. There is no excuse to not be informed about financial basics, and this study further warrants increased financial education.

According to the study by Hewitt Associates, employees will need approximately 15.7 times their final pay to retire when factoring in inflation and postretirement medical costs. This means that if your final salary before you retired was $100,000, you will need atleast $1,570,000 in retirement savings. Many people likely will find this target tough after having seen their retirement accounts decrease so much over the past two years.

Hewitt Associates has broken down the 15.7 times final pay into two components. First, 4.7 of the 15.7 is estimated to come from Social Security, leaving us to cover the remaining 11 times pay. Employees will have to come up with this 11 times pay through company-provided plans (401ks, IRAs, SEPs, etc) and personal savings. In addition, Hewitt found that of more than 2 million employees at 84 large U.S. companies, only 18% of them would meet this goal.

Their study claims that employees are projected to accumulate 13.3 times their final pay w/ Social Security, leaving a 2.4 times pay shortfall. However, if this were me, I would assume that Social Security will not be around. The only person/entity who will take care of you is YOU. To me, the short fall is 6.9 times pay (2.4 estimated + 4.7 from Social Security).

Hewitt recommends three steps for us to take in order to prevent this shortfall:
1. Start Savings
2. Regularly increase contribution rate
3. Work longer

Most people they found that setup retirement accounts at 3% contributions would stay at that level for 3 years or more because they would stop increasing contribution once they reached their company’s maximum match level. For most, that means stopping at 6% (3% from employees + 3% company match). Most financial experts call for a contribution level that is at double digits.

My take on all this is that we will all be working longer, and we all should regularly increase our contribution rates. I’ve actually done this twice this year. First to the level to get the match and second to bring my contribution just under double digits. I think more of us should setup an auto-escalation objective where every year we increase our contribution level until the point we are maximizing out our retirement accounts.

What steps do you think people should take to cover financial shortfalls in retirement, and what have you taken to make sure you will be ready for retirement?

To get more information about the study visit here.

For free resources to help you make sound financial decisions regardless of what stage of your life you are in please visit the 360 Degree of Financial Literacy by the American Institute of CPAs. This is a great free resource to help you get your finances in order, no matter how young or old you are.

~Albert Einstein