In the end, we spend a good deal of our putative computing time trying to learn new tricks–and that’s not always easy for some of us old dogs. In my case, for example, I’m limited by the fact that I have only a finite (and steadily decreasing, apparently) number of functioning brain cells. It’s obvious that the reason it’s difficult to learn new technology is that our brains are cluttered with old technology.

For example, I still know how to program a VCR. I will never again program a VCR. I may never again even see a VCR. I simply don’t need to know this, and yet I do know it. Why is this still taking up space in my brain? Similarly, I remember perfectly well how to test and replace a vacuum tube. Do I need to know that? Of course not! Why would I want a vacuum tube? And where would I find one of those tube-testing stations that for years were standard in every drugstore and hardware emporium in America?

There’s almost no end to the list of technology-related stuff I still recall but for which I now have absolutely no use. I still remember how to change a typewriter ribbon; double-clutch a car; tune the antenna on a CB radio; thread a reel-to-reel tape recorder; place a tone arm on a vinyl record without scratching it; retouch a film negative; use a cassette tape-equipped answering machine; rebuild a carburetor; use a slide-rule to calculate the volume of a room; copy a document using a “wet” photocopier; and adjust the hue, tone, and contrast on a color television set. In the meantime, I can’t for the life of me remember how to add a network connection in Windows XP without looking it up each time. All of these skills of dubious value are using up brain cells; frankly, I’m in no position to be wasting them.

Of course, my brain is also full of obsolete and irrelevant (but amazingly persistent) facts related specifically to older computers; naturally, these serve only to confuse me when I’m dealing with newer systems: Why should I be expected to recall how to insert an em dash in Microsoft Word when I still know the embedded dot-codes we used to invoke formatting in WordStar? How am I supposed to burn CDs and DVDs when I can still remember how to connect and search a Commodore 1530 tape drive? Why is it that I can remember exactly how to set an environment variable in a DOS batch file, but I have to consult a manual in order to invoke a simple Office macro?

Why should I be expected to remember how to connect my laptop’s modem, when the last real modem I used came with an acoustic coupler? And how can I be expected to remember which one of my four hard drives contains a specific application when I still vividly remember “notching” the reverse side of single-sided diskettes so that we could save data on both sides? This technique worked roughly 90% of the time, which meant that there was a one-in-10 chance that when you went to look for it, your Lotus 1-2-3 spreadsheet would have been reduced to random ASCII characters.

Then again, there was already a one-in-10 chance of that happening, apparently based either on your proximity to any large magnets or on the phase of the moon. Hmmm . . . so, does that mean that, considered together, there was actually a one in five chance, overall, of your spreadsheet self-destructing? Rats. I guess I’ll have to go dig out my slide rule, because I can’t remember how to use this fancy new calculator they gave me.

Integrity is a big word. Commentators routinely bemoan the absence of integrity, whether in the form of CEOs’ and political leaders’ shortcomings, celebrities’ moral lapses, or the media’s repeated violations of public sensibilities. Few who use the term “integrity” define what they mean. Most speak only about the space left when integrity is missing in action. Without it, any decision is incomplete and more likely to fail.

First, decisions made with integrity are whole. A building has structural integrity when all necessary supporting components are present, solid, and connected, from the foundation to the roof. An important decision requires similar attention if it is to stand and endure. The foundation stones for all significant decisions are our values. A decision is whole and sound when we’ve done the homework and understand what is involved.

Second, decisions made with integrity are coherent. Coherence comes when the reasons we give for our decision actually align with the decision itself. Coherence is not accidental. We create it. When we deliberately integrate our beliefs and actions, we walk our talk. There is more to good decision-making than facing difficult situations with courage, acting with resolve, and believing that doing so is sufficient.

Finally, good decisions are transparent. Without direct, on-the-level communication, integrity suffers. Accountability and trust rest on openness and honesty. When we speak directly and candidly to others about our decision and its impact, we become accountable for our choice. Integrity requires telling the truth, including the hard parts.

It is difficult to achieve integrity in decision-making by ourselves. Reflection and careful consideration benefit from different perspectives. Our challenging, important choices become more solid and complete when we engage others. Even when we can, or must, make a decision alone, our action reaches beyond us. Consulting others can strengthen the decision and increase the chances of successful implementation.

In some cases, the idea may even lead to tremendous value. However, there is generally a huge amount of transformation between the idea generated in an event and its realization. At a more sophisticated level, innovation is more than an event and becomes part of a process. That is, the organization has a structure in place to define problems, generate and evaluate ideas, and develop action plans to implement those ideas. The result is a realistic, deliverable solution based on an organizational problem. However, the problem with both of these is that innovation is reactionary and discrete. It only occurs when someone decides it is time to innovate.

Innovation as a capability, however, creates exponential value. In the innovation-as-capability world, people innovate not only to solve the problems that are presented to them, but in everything they do. They continuously or even radically improve their products, processes, and organization. Innovation as a capability is comprised of the five components that make up all capabilities:

Strategy and Customers. A strategy is needed to decide when, where, and how innovation will be used within the organization. Some companies use innovation when in crisis mode only. “We have a major customer who is threatening to leave us if we cannot get him his shipment today. What are we going to do?” Of course this level of reactive innovation does little to differentiate a company from the competition, and just delays the sinking of the ship. Innovation must be pervasive and perpetual: everyone, everywhere, all of the time. Innovation must be seen as the key currency within the company.

Measures and Performance. Innovation, as with any capability, needs to be measurable. But what is being measured? Should innovation be measured in a negative way, such as scapegoating for failure to solve a complex problem? Or should innovation be a core measure, one which determines career progression and compensation for everyone in the company? What kind of measures are used? Are they focused on business outcomes and results?

Process. Is innovation random and subject to divine intervention, or is there a standard model used for targeting, generating, and selecting innovative ideas? Is divergent thinking encouraged before converging on best ideas? Is the physical environment stale, businesslike, and siloed, or is it conducive to innovative thinking and collaboration?

People. Is the culture one of “praying that it will work,” or is it one that values innovation and deems it necessary for success? Is innovation viewed skeptically as “phony-creative,” or is innovation done without thinking about it? Is innovation led by the “last one to step back,” or is everyone accountable? Are innovation skills regarded as being the property of a select few who show curiosity, or are innovation skills valued above all others within the organization?

Technology. Are groupware tools used to help enable collaboration among employees, customers, and suppliers? Are decisions made based on gut feel, or are they supported by real data? Are ideas lost in the ether of the organization, or are they maintained in idea banks to facilitate the capture and dissemination of innovative thinking?

Dog Day Afternoon is probably the best single film on negotiating that you can watch. Millions have seen a very young Al Pacino and Charles Durning turn in virtuoso performances as captor and cop in this classic film. Based on the true story of a bank robbery that turned into a hostage situation, the film shows the local police team trying hard to resolve the situation but fumbling a bit. Then the FBI team moves quickly into action and negotiates with skill and training. The events were re-created with incredible accuracy.

Each of the six basic principles of negotiating is clearly demonstrated in this film. Here is a friendly guide through the negotiation without ruining the film.

Prepare: You’ll notice right away that the robbers are unprepared for the hostage situation. They came to rob a bank, not to take hostages. In fact, one of the team members bails out immediately in a comic lesson about the importance of building a solid team that is fully prepared. Note how the police immediately and throughout the film try to gather information about the man holding the hostages. They use all the resources of the state to find out who they are negotiating against. Within hours, the cops find out things that shocked the man’s mother and his wife.

Set goals and limits: The police set limits before they ever start talking. Their goal is to get the hostages out safely. When a hostage is hurt, they find out how the injury happened. If it was an accident, they continue the negotiation. If it was an execution, they make a frontal assault on the site. Through it all, they never forget their goal, even though they appear willing to do so as far as the captors know.

Listen and clarify communications: This is a constant. Note in the barber shop that someone is always in the background wearing headphones. That officer is monitoring all the communications both ways to be sure that they are clear. He does not speak, but he is an integral member of the negotiating team. Most audience members would not notice. Also, note the body language of the FBI agent when he first meets Pacino’s character. The agent conveys authority and confidence, unlike the local policemen.

Push the pause button: The police have a firm hold on the pause button. One officer’s sole job is to observe everyone’s emotional state. This officer keeps a check on emotions and removes officers before the strain of the situation overcomes them.

Close: The authorities keep the goal constantly in mind. Notice how many times the police try to close this negotiation. You can watch this film more than once. Each time, you will notice something new about the way the skills in this book apply to this type of high-stakes negotiation. It is fun to note something new with each viewing.

Dog Day Afternoon is so instructive that it is shown at the FBI training school for hostage negotiators in Quantico, Virginia.

GT Solar (SOLR) provides manufacturing equipment and services for the production of photovoltaic, wafers, cells and modules, and poly silicon worldwide. While we normally avoid solar companies because the entire sector has been hyped for quite some time, GT Solar is interesting both from a valuation standpoint as well as the fact that respected value investment firm Oaktree Capital Management owns more than 5% of the shares.

GigaMedia (GIGM) is engaged in the growing business of providing gaming software and services to the online gaming industry in China, Taiwan, Hong Kong, and Macau. The company’s solid balance sheet and valuation of sightly less than 1x enterprise value to trailing revenue make GigaMedia worthy of consideration.

Synopsys (SNPS) provides electronic design automation (EDA) software and related services to semiconductor companies worldwide. The EDA segment remains one of the most attractive places in the semiconductor value chain, and Synopsys is a leader in the space. The company derives a large portion of revenue from recurring software subscription fees, improving the steadiness and predictability of the business. High-quality tech companies such as Synopsys rarely trade cheaply enough to appear on a ‘magic formula’ screen, which is why we take note of it here.

Lorillard (LO) lacks a key attribute of a great business — an ability to reinvest FCF at high rates of return. As a domestic-only tobacco maker, Lorillard operates in a slowly but steadily declining market. This puts the company in cash harvest mode despite the modest growth exhibited by Newport in recent years. Lorillard may continue outperforming the rest of the tobacco industry for quite some time to come, but that’s not saying much considering the challenges facing U.S.-centric tobacco companies.

Hewlett-Packard (HPQ) needs no introduction. The recent trading price implies a current earnings yield of roughly 11%, quite respectable for this industry leader. Respected value-oriented fund managers Steve Mandel of Lone Pine and Dan Loeb of Third Point initiated positions in Hewlett-Packard during the second quarter.

1. Arrange the items in order of difficulty, placing easier items first, to avoid discouraging participants unnecessarily.
2. Construct each item so that it is independent of all other items. A series of items in which the correct answer to the first item becomes the condition for answering the next item can prevent the measure from providing an accurate reflection of the student’s knowledge or skills.
3. Avoid constructing items by taking quotes directly from a handout, overhead transparency, or book. Direct quotes tend to encourage memorization rather than understanding, and quotations taken out of context tend to be ambiguous.
4. Avoid trick questions. The intent of a test is to determine the skills, knowledge, and attitudes of the participants, not to cause them to mark an item incorrectly.
5. Avoid negatives, especially double negatives. Such items take considerably longer to read and are often misinterpreted. If negative words must be used, underline or italicize the word or phrase to call attention to it.
6. Avoid providing clues to items in previous or subsequent items.
7. Use a variety of types of items in the test rather than limiting items to only one type. If the measure is lengthy, variety can add interest. When a variety of types of items are employed, group the items by item type so participants do not have to constantly shift response patterns or reread instructions.

This program falls into the defined contribution retirement category because the law defines, or limits, how much you can contribute to your 401(k) plan as a percentage of your income. The plan sponsor — your employer — must make sure your contributions comply with the law and the specific plan. In 1999, for example, the maximum amount you were allowed to defer from your income for the 401(k) plan was $10,000 or 25 percent of your pay, whichever is less, per year.

Some employers encourage you to participate in the plan by matching a part of your contributions, usually as a flat amount of, say, 25 cents for each $1 you contribute. An employer’s match isn’t taxable to you as current income, and the government allows earnings on this match to accumulate tax-deferred.

In a 401(k) plan, your employer selects a number of investment vehicles from which you can choose. The employer may use a single mutual fund “family” with a choice of five or six funds or multiple fund families with as many as 50 choices. The choice of funds can range from very conservative investments, such as guaranteed interest contracts, up to more speculative and risky aggressive growth funds. Some companies let you choose which stocks you invest in, and many companies offer company stock as a choice in the program.

At all times, you are 100 percent vested in the part of the contribution that is your own deferred money. That money belongs to you. You can take it with you when you leave that job, but you’ll need to transfer it to another retirement plan or rollover IRA. Otherwise, you’ll have to pay income taxes and penalties on the money, because that money was intended for your retirement.

In the case of those businesses whose shares are publicly quoted, the success with which organizations manage their intellectual capital is increasingly mirrored in their market values, values that are often many times the book values of enterprises. Bridging the gap between these two values provides one motivation for seeking to account for intellectual capital.

Another motivation for seeking to account for intellectual capital is the need to manage intellectual capital successfully. Given the importance of managing intellectual capital successfully, accounting is being challenged to develop new approaches to performance measurement that capture the quality of management evident in the context of intellectual capital.

Stewart (1997) has suggested several tools for measuring intellectual capital. Value is defined by the buyer, not the seller. A company, therefore, is worth what the stock market says: price per share x total number of shares outstanding = market value; what the company as a whole is worth. One measure of intellectual capital is the difference between its market value and its book equity. The assumption is that everything left in the market value after accounting for the fixed assets must be intangible assets. If Microsoft is worth 100 billion dollars, and its book value is 10 billion dollars, then its intellectual capital is 90 billion dollars.

Three components of intellectual capital can be identified. Human capital is the first component, consisting of the know-how, capabilities, skills and expertise of human members of an organization. Relational capital is the second component, consisting of any connection that people outside the organization have with it, together with customer loyalty, market share, the level of backorders, and so forth. Structural capital embraces the remaining component of intellectual capital, including both systems and networks, and cultures and values, together with elements of intellectual property such as patents, copyrights, trademarks, and so forth.

To begin intellectual capital accounting necessitates an acceptance that it is possible to include within the same financial statement objective measures of value, as in the case of tangible assets for which there are historical expenditures. Intangible assets such as goodwill are already problematic in accounting. For example, in the UK, only purchased goodwill can be reported in the accounts of the business that acquires it.

If goodwill continues to prove problematic for financial accounting and reporting, intellectual capital as the new goodwill serves to multiply the difficulties involved. Intellectual capital assumes many more forms than does goodwill, and while both concepts are ultimately open-ended, several years of thinking about intellectual capital have confirmed its greater breadth and depth.

One consequence of this, according to Roslender and Fincham (2001), is that we might now think in terms of degrees of intangibility, so that while brands, patents and know-how still count as intangible assets, customer data, distribution channels and employee qualification profiles are more intangible. Off the scale are such assets as employee commitment, organizational culture and corporate values, yet it is just such assets that ensure that some businesses exhibit impressive market-to-book value ratios.

Get rid of that paper! Shuffling and reshuffling paper from pile to pile or file to file wastes time and keeps you from focusing on what needs to get done. Find a gigantic wastebasket and fill it up. The larger the wastebasket, the more you will use it. Throwing things away then becomes an art.

Enjoy! Files should not be an obstacle course. Put your most often reviewed files at the front of the cabinet. Here is a test to see if your current filing system works. Within two minutes, can you retrieve any paper you need? Go. If you failed the test you are wasting time searching through your files.

Never clear off your desk by randomly throwing things in a drawer. Gotcha! You will eventually have to go through that drawer. Instead, create a logical system for storing these items in your desk. A picture or two on your desk is probably not distracting, but limit pictures to a special few. The more pictures on your desk, the more distractions and interruptions you invite.

Organize your desktop! If you are right-handed, make sure the phone is located on the left side of your desk. You want to keep the right side of the desk (and your right hand) free to take notes. Just the opposite for lefties. Right-handed people should place the calculator on the right side of their desk.

Ditto the above for southpaws, the proud but under-represented! Avoid glass desktops. They glare and are hard to keep clean. You don’t need to spend valuable time wiping off fingerprints.

So, it is worth pointing out how different things might be if the financial world were female.

Finance professors Brad Barber and Terrance Odean have found that women’s risk-adjusted returns beat those of men by an average of about one percentage point annually. In short, women trade less frequently, hold less volatile portfolios and expect lower returns than men do.

On the other hand, in the testosterone-poisoned sandbox of the male investor, the most important thing is beating the other guy; the second most important: bragging about it. The long term is somebody else’s problem, and asking for advice is an admission of inferiority. Worrying about risk is for sissies. Leverage is good, since it raises returns — while the market goes up. Is it any wonder the male-dominated world of Wall Street has boomed and busted every few years for more than two centuries?

Women, by contrast, put safety first. Even after controlling for age, income and marital status, women are more inclined than men to wear seat belts, avoid cigarette smoking, floss and brush their teeth and get their blood pressure checked. They even have been shown to be 40% less prone than men to run yellow traffic lights.

Women are less afflicted than men by overconfidence, or the delusion that they know more than they really do. And they’re more likely than men to attribute success to factors outside themselves, like luck or fate.

In 2001, a survey of financial analysts and investment advisers found that women felt it was much more important than men did to avoid incurring large losses, falling below a target rate of return and acting on incomplete information. In short, women are more risk-averse than men. And they shy away from uncertainty: Asked whether having ambiguous information would reduce their confidence and raise their perception of risk, 92% of the women said yes, versus just 69% of the men.

“There’s a general emotional difference between men and women as they perceive and take risks,” said Jennifer Lerner, a psychologist at Harvard University’s John F. Kennedy School of Government.

Negative events like natural disasters, terrorist attacks or a financial crisis usually make men more angry than fearful. Women, on the other hand, tend to feel more fearful than angry.

Those differing emotions lead to divergent viewpoints. Seen through what Prof. Lerner calls “a lens of anger,” the world seems more certain, more amenable to our control and less risky. Viewed through a lens of fear, however, the world appears full of uncertainty, beyond our control and rife with risk.

The results of a nationwide survey of hundreds of investors conducted in March, just days after the Dow bottomed at 6547, show how anger and fear in the minds of men and women can affect their financial decisions. Men were far more likely than women to say they were “more angry than fearful” about the financial crisis. And one in eight men, but only one in every 40 women, had “made riskier investments looking for long-term growth” in the previous week. Female investors were twice as likely to expect the return on stocks over the coming year to be zero or negative and to think stocks will return 5% or less per year over the next 10 years.

“The women were more concerned but took fewer actions,” said psychologist Ellen Peters of the University of Oregon, who co-directed the survey. “They were also more pessimistic — or realistic? — about what to expect from the market.”

Stocks are up 35% since March, so the women’s fears haven’t yet come to pass. But their inaction already looks wise. And their realism can’t hurt, either. “The essential traits and qualities of the male,” H.L. Mencken once wrote, “are at the same time the hall-marks of the numskull. … Women, in fact, are the supreme realists of the race.”

Memo to men: Your household’s investment portfolio will be less risky and more diversified if your wife helps manage it. She will share in what comes out of that portfolio down the road; shouldn’t she share in what goes into it? Chances are, her ideas and emotions will complement yours, and you will both end up wealthier. At least one of you will end up wiser.

by Jason Zweig