7/31/2011

THE CASE FOR A FIDUCIARY RESPONSIBILTY OF FINANCIAL ADVISORS TO THEIR CLIENTS



HIGH-NET-WORTH INVESTORS DEMANDING MORE FROM PLANNERS



If financial planners want to make more inroads with high-net-worth (HNW) clients, they need to provide a broader and more integrated set of capabilities.


That is the bottom line of the Merrill Lynch Global Wealth Management and Capgemini World Wealth Report, released today, which argues that an enterprise value approach is especially critical in today’s environment because HNW clients expect their relationships with firms and advisers to create more sustained and broad value than before the global financial crisis (GFC).


Commenting on the findings of the report, Merrill Lynch Global Wealth management head John Thiel said that while an air of normality was returning to global financial markets, HNW investors had been deeply impacted by the effects of the GFC.


“Many high-net-worth clients have clearly rethought their investment and life goals and are now heavily weighing the amount of risk they are willing to assume in order to reach those goals,” he said.


Thiel said firms would need to bring the full force of their capabilities to bear to deliver an integrated response to the complex post-GFC needs of HNW investors.


The Merrill Lynch Capgemini research suggested that capital preservation had become more important to HNW investors, along with effective portfolio management.


Capgemini Global Financial Services head of sales and marketing, Jean Lassignardie, said that although HNW investors took on more calculated risk in search of better returns, at the end of 2010, they still held a significant amount of their assets in more conservative instruments such as fixed-income and cash and equivalents.


“Amid this mixture of trust and misgivings, firms and advisors must continually demonstrate their value and relevance to help HNWs meet their changing and complex needs,” Lassignardie said.


Mike Taylor
Money Management
June 23, 2011

SOLVENCY 101 - A COMMON SENSE PRIMER





How to calculate what you can really afford

Live within your means!


You've found the perfect sofa for your living room. You need a sofa, right? A person has to sit somewhere. But can you afford the new sofa? For many people, 'afford' means having room on the credit card. Unfortunately, there is a big difference between having the means to pay for something and being able to truly afford it.


In today's consumerist society, living within one's means can seem like a quaint, old-fashioned notion, like paying cash for everything. However, knowing your financial limits and living within them remains the primary secret to attaining wealth and financial security.


You can probably justify any purchase to yourself — if you really want it. By denying the limits of your income and expenses however, you can quickly find yourself in serious financial trouble, on the basis of just a few too many purchases that you erroneously thought you could afford.


Your TDS ratio


There is a simple way to calculate what you can afford - or how much you have available to spend — on a monthly basis. It's called the Total Debt Service ratio or TDS, as those in the financial-know like to say.


The rule of thumb for TDS is that all your monthly debt payments should be less than 40 per cent of your gross monthly income. This 40 per cent should include your housing costs (rent or mortgage payments), your car payments (leases or loans) and all the other credit payments you make each month - including credit cards (yes, those too!), lines of credit, student loans and other personal loans.


If you can keep your debt payments within 40 per cent of your income, then the remaining 60 per cent can be allotted to 'discretionary' spending — such as groceries, clothing, entertainment, transportation costs and your shopping habit.


Here is how to calculate your TDS ratio in three easy steps, so you can see how you're currently faring; either do it personally or with your spouse to determine a household figure.


Step one: your salary income


Check your pay statements to determine your gross monthly salary. This means what you earn in total each month, before deductions such as taxes and CPP are taken off. If you are calculating your household TDS, rather than just your own, then add your hubby's gross monthly salary as well.



Step two: add any other income


Now add any income that you receive on a regular, monthly basis. Maybe it's child support payments, investment income or cash from a part-time job. (Maybe trust fund payments or royalties from the songs you wrote for Beyoncé? Don't we all wish!)



• Step three: multiply by 0.40


Take your total income (step 1 + step 2) and multiply the total by 0.40. Voila! The result is your total debt service ratio — the maximum amount you can afford to spend on your monthly debts and expenses.


The upper limit


Suppose, for example, your TDS calculates to $1800. If you find you are actually spending less on your housing, loan payments and expenses - say $1500 a month - then congratulations frugal girl! Technically, you are living within your means. Just remember, that TDS calculation represents your upper limit.


On the other hand, if you are actually spending more than your TDS figure on monthly debt obligations, then your ability to afford the rest of your life probably feels severely constrained. Try to re-negotiate loan payments and make it a priority to pay down those debts and get your TDS back in line.


The other 60 per cent


The less you spend within your TDS ratio, the more disposable income you will have to enjoy each month. If your expenses and monthly obligations keep you at the 40 per cent limit, then you still have 60 per cent of your income for the business of daily living. By outlining a simple monthly budget of how much of that money has to go toward gas money, subway fare, groceries and other essentials, you can quickly estimate how much you have left each month to spend on fun stuff — like shopping (and SAVING, of course).


Your bottom line


Living within your means starts with knowing your means. With a credit card in hand, it's so tempting to make purchases and tell yourself you can afford it by cutting back in other areas. The trouble is, that kind of impulse spending often leads you to dipping into money that is earmarked for paying bills — and your finances quickly get messy. Know your limits and live well!


Golden Girl Finance 
July 26, 2011

Golden Girl Finance.ca is a free personal finance and education site for women.
Nothing contained herein is intended to provide personalized financial, legal or tax advice. Before implementing any financial strategy, you should obtain information and advice from your financial, legal and/or tax advisers who are fully aware of your individual circumstances.

7/30/2011

THE CASE FOR HIGH PERFORMANCE COACHING



David Beckham credits his career to Sir Alex Ferguson for giving him his start at Manchester United


The English midfielder completed 90 minutes against his old club Manchester United on Wednesday night as part of the MLS All-Star team. In addition to his fan allegiance to the reigning English champion, the shared history made it an emotional venture for the 36-year-old midfielder.


“Obviously, to play against Manchester United still with Sir Alex Ferguson as manager, still with some of the players I played with and the fans I played in front of for many years, is emotional,” Beckham said. “It's always going to be emotional coming up against Manchester United. It's always difficult as well.”


MLS quickly learned just how difficult playing the Red Devils can be. Two goals against the run of play in the first half paved the way for a comprehensive 4-0 win to the team still in preseason preparations.


Beckham wasn't surprised at the gap in the scoreline.


“If you play at that level you don't stop at one-, two-nil,” the midfielder said. “You want to work hard because you want to get your fitness. You're not playing at a club like Manchester United to go through the motions and just to win 1-0.”


That competitive mentality saw Man United win the Premier League season with perhaps a more functional than glitzy roster. It's the same sort of mentality the side used to win the 1999 treble, Beckham claims, and it starts in the youth teams.


“Any new player who comes into Manchester United, they feel that straight away,” the LA Galaxy Designated Player said. “That seems instilled into you from a very young age as a Manchester United youth team player and it carries on all the way through the team. It's [a] never-say-die attitude, is what Manchester United have.”


Shane Evans
Goal.com
July 28, 2011

7/24/2011

THE REVALUATION OF SOCIAL MEDIA


McKinsey Consulting looks at social technology as more than social media. They view “social technology” as a significant enhancement to collaboration and communication processes. An enhancement that changes everything a business does, not just marketing and advertising. What new value can be created by improving communications and collaboration? Everything!

In an In article titled “Using technology to improve workforce collaboration“ James Manyika, Kara Sprague and Lareina Yee writes: Raising the quality of these interactions is largely uncharted territory. Taking a systematic view, however, helps bring some of the key issues into focus. Our research suggests that improvements depend upon getting a better fix on who actually is doing the collaborating within companies, as well as understanding the details of how that interactive work is done. Just as important is deciding how to support interactions with technology—in particular, Web 2.0 tools such as social networks, wikis, and video. There is potential for sizeable gains from even modest improvements. Our survey research shows that at least 20 percent and as much as 50 percent of collaborative activity results in wasted effort.


To put this in better perspective consider what happens when organizations use social media solely as advertising and marketing channel. They are likely to initially get the markets attention and in doing so increase the cost of responding to said attention. Worse, the market takes notice then criticizes the brand or organization for terrible service, poor customer relations or “spamming” the market. Worse yet is that the organizations employee attitudes reflected in their online conversations produce a negative sentiment about the organization. These incidents are happening everywhere because organizations do not think systemically about social technology. Rather they think about marketing and advertising. That thinking represents devolution.


Revaluations are driven by efficiency, effectiveness and innovation. Devolution of social media are the results of doing things that reduce the value of communications. It’s time to create a revaluation of this thing being called social media. That can only happen when there is a revolution in thinking. That would require a revolution in “what” we believe.


Jay Deragon
The Relationship Economy
July 22, 2011

USING TECHNOLOGY TO IMPROVE WORKFORCE COLLABORATION



McKinsey & Company




Knowledge workers fuel innovation and growth, yet the nature of knowledge work remains poorly understood—as do the ways to improve its effectiveness. The heart of what knowledge workers do on the job is collaborate, which in the broadest terms means they interact to solve problems, serve customers, engage with partners, and nurture new ideas. Technology and workflow processes support knowledge worker success and are increasingly sources of comparative differentiation. Those able to use new technologies to reshape how they work are finding significant productivity gains. This article shares our research on how technology can improve the quality and output of knowledge workers.


Knowledge workers are growing in numbers. In some sectors of the economy, such as healthcare providers and education , they account for 75 percent of the workforce; in the United States, their wages total 18 percent of GDP. The nature of collaborative work ranges from high levels of abstract thinking on the part of scientists to building and maintaining professional contacts and information networks to more ground-level problem solving. Think of a buyer for a retail chain whose distributed web of contacts span fashion designers in Tokyo to experts on manufacturing in Brazil.


For companies, knowledge workers are expensive assets—earning a wage premium that ranges from 55 percent to 75 percent over the pay of workers who perform more basic production and transaction tasks. Yet there are wide variations in the performance of knowledge workers, as well as in their access to technologies that could improve it. Our research shows that the performance gap between top and bottom companies in collaboration-intense sectors is nine times that of production- or transaction-intense sectors.1 And that underscores what remains a significant challenge for corporations and national economics alike: how to improve the productivity of this prized and growing corps of workers (Exhibit 1).


Unfortunately, the productivity measures for collaboration workers are fuzzy at best. For production workers, productivity is readily measured in terms of units of output; for transaction workers, in operations per hour. But for knowledge workers, what might be thought of as collaboration productivity depends on the quality and quantity of interactions occurring. And it’s from these less-than-perfectly-understood interactions that companies and national economies derive important benefits. Consider the collaborative creative work needed to win an advertising campaign or the high levels of service needed to satisfy public citizens. Or, in a similar vein, the interplay between a company and its customers or partners that results in an innovative product.


Raising the quality of these interactions is largely uncharted territory. Taking a systematic view, however, helps bring some of the key issues into focus. Our research suggests that improvements depend upon getting a better fix on who actually is doing the collaborating within companies, as well as understanding the details of how that interactive work is done. Just as important is deciding how to support interactions with technology—in particular, Web 2.0 tools such as social networks, wikis, and video. There is potential for sizeable gains from even modest improvements. Our survey research shows that at least 20 percent and as much as 50 percent of collaborative activity results in wasted effort. And the sources of this waste—including poorly planned meetings, unproductive travel time, and the rising tide of redundant e-mail communications, just to name a few—are many and growing in knowledge-intense industries.


There are some companies that already are tackling aspects of this collaboration–technology nexus. Cisco Systems, for example, set out to improve interactions between its technology specialist sales teams and enterprise customers. Frequent travel and stepped-up job requirements had resulted in overstretched teams whose effectiveness had become diminished. Cisco tackled the problem by mandating the use of its own video technologies, as well as other collaboration tools. The plan was straightforward: reach more customers and business partners by shifting a large portion of in-person meetings to virtual interactions. Policy and governance changes ensured that technology use became part of daily workflows and not an added task. Over an 18-month period, the initiative saved Cisco more than $100 million in travel and business expenses and reduced the company’s carbon emissions by 24 million metric tons. Internal surveys showed that 78 percent of the targeted employees reported increased productivity and improved lifestyles without diminishing customer or partner satisfaction.


Similarly, P&G has also adopted Web-based technologies to forge better links with partners and customers and to improve the flow of ideas across corporate and regional boundaries. It also set up ideas markets to gather and filter offerings from across the company and signed on with crowd-sourcing network InnoCentive to tap external experts to solve specific problems. In addition, the company used a collaboration strategy to broaden its product offerings and get more of them to market at a faster pace. It set a target of raising the proportion of new products sourced from outside its walls to 50 percent, from 35 percent. Besides the savings P&G realized from nearly a thousand fewer business trips each month, the company met its goals of shorter product cycle times and greater product innovation from external sources.2


But most companies are only beginning to take these paths. That’s because, in many respects, raising the collaboration game differs from traditional ways of boosting productivity. In production and transaction work, technology use is often part of a broader campaign to reduce head counts and costs—steps that are familiar to most managers. In the collaboration setting, technology is used differently. It multiplies interactions and extends the reach of knowledge workers. That allows for the speedier product development found at P&G and improved partner and customer intimacy at Cisco. In general, this is new terrain for most managers.


IMPROVING COLLABORATION


The interactive graphic that accompanies this article provides a synthesis of our view on how organizations can improve collaboration. It draws upon our work with companies, non-profit organizations as well as our own research and that of outside sources. The graphic’s multilevel approach to improving collaboration is based on the following steps:


1) classify workers by their workflow profile – the daily activities they do to perform their job


2) match new technologies to the workflows to extend collaboration efforts, improve effectiveness, and reduce inefficiencies


The discussion that follows is both a guide to the interactive and an elaboration on the thinking behind it.


Defining knowledge workers and how they work


As a first step, companies should take a fresh look at their workers, classifying them by how they collaborate. We have identified 12 types of collaboration work (see the interactive exhibit, “Collaboration types and tools”). Each of these is broken down into the day-to-day interactive activities (or workflows) that comprise these work classes. Today most organizations segment their employees by their positions within the corporate hierarchy. They are identified by job titles that, in many cases, obscure the kind of work they actually do. Take the title of manager. Seen through a collaboration lens, this title is often applied to several different collaboration types: in some, a manager builds teams, develops team members’ expertise, sets objectives, and encourages results; in others, a manager is more of an administrator who repeatedly executes processes (such as monitoring the work of others) to a certain standard. Many companies also award the title of manager to the consultant collaboration type – individual contributors who convene or take part in virtual teams to solve problems. Thus, improving collaboration should start with understanding employee workflows to get a more refined view how their work gets done.


At the same time, functional groups—such as sales and marketing, finance, and strategy—within organizations often divide into an array of job classifications that multiply over time. Yet these classifications don’t reflect the interactive aspects of the work. In our experience, jobs within many functional organizations can be grouped into a small number of collaboration types that reflect such interactions. This simplifies the task of improving collaboration. Take the case of one sales organization, where work was splintered into 50 distinct roles. Using interaction requirements as our guide, we found these roles reflected three basic collaboration types: sales people, managers, and administrators. In most sales organizations, each type of sales job is distinct and siloed: employees doing telesales and enterprise sales are given distinct corporate job codes and internal classifications, because they may have somewhat different skill sets. But the process workflows of these jobs are essentially the same—employees receive sales plans or quotas from management, build account plans, and generate and act upon sales leads, etcetera.


Applying technologies


Improving employee collaboration also depends on selecting the technologies that support their interactions. Companies can best do this by 1) understanding the specific requirements of interactive tasks; 2) identifying which tasks create disproportionate value for the organization; and 3) determining the types of inefficiencies and wasted efforts that bog down many interactions.


Requirements. Even within a given group of collaboration workers, the required interactions and technology solutions may vary substantially. For example, collaboration between two individuals working together on an account plan is very different from that of several dozen individuals meeting to coalesce around a sales strategy. Collaboration work, we have found, varies over a dozen such dimensions—including the scope of the collaboration (number of parties involved), which way information is flowing among the participants, whether participants exchange information equally, and whether the interactions stretch across functional or corporate borders. We examine these dimensions when assigning technologies to collaboration workflows.


Value. Not all interactions are created equal. Some organizations will prioritize focus on collaboration types and even specific activities based on their relative contribution to the organization’s objectives. For Cisco, this means a strong focus on partner and customer intimacy. For P&G, it is about increasing access to new ideas and speed to market. Other common objectives for collaboration initiatives include better talent management, business agility, and a reduced carbon footprint. Imagine the economic benefits for organizations able to double the number of inspired employees or triple the volume of new product releases.


Waste. We have documented 10 types of collaboration waste (Exhibit 2). In the case of managers, for example, effective collaboration demands that the manager not only agrees on specific objectives but also that he /she can communicate how to achieve them. Those efforts can be undermined by divergence (for example, sending teams in different, conflicting directions), misunderstanding (for instance, gaps between the message communicated and the resulting execution), and under- or overcommunicating, as well as other types of flawed interactions.


Web technologies can diminish the wasted efforts. Take the case of “searching”: inefficiencies arise when a staffer is unclear about which colleague within the organization may be tapped for specific knowledge to solve a problem. One remedy is network mapping, a technology that plots work relationships among individuals, reducing search time by providing insights into the pools of knowledge within the company,


Meanwhile, as more of knowledge workers’ output involves digital content, other forms of waste multiply. Fact checking, annotations, and edits lead to handoffs and serial revisions that we term “interpretation” waste. Similarly, as this digital information often must serve audiences across distribution channels—printed documents, PowerPoint slides, and videos, for example—inefficiencies arise from “translation.” At times content is needlessly reworked or even distorted as it crosses channel boundaries. Collaboration technologies such as Google Docs, Adobe’s Acrobat.com, or Microsoft’s OfficeLive allow for coauthoring and co-editing content documents. Since parties are frequently tackling the same project at the same time, translation and interpretation waste is reduced.


From our research on workflows across a variety of companies we are able to arrive at benchmarks for the most effective way of performing a task. With that knowledge we can identify inefficient practices and select technologies with which to improve them.


MOVING FORWARD


Furthering collaboration excellence demands mind-sets and capabilities that are unfamiliar and sometimes even counterintuitive to many business managers. It requires trusting your collaboration workers to arrive at creative solutions rather than enforcing top-down policies. Business managers should allow time and provide forums for collaboration workers to brainstorm solutions to productivity problems. Corporate technology providers will need to provide tools that are flexible enough to enable experimentation, so that usage and adoption are widespread.3


While the broad gains from better workforce collaboration have been apparent for some time, the management approach and tools needed to capture the benefits at the company level have been missing. By using the methodology outlined here, companies can improve productivity among the growing ranks of their knowledge workers.


1 This was measured as the average earnings before income, taxes, depreciation and amortization per employee.


2 Larry Huston and Nabil Sakkab, “Connect and develop: Inside Proctor & Gamble’s new model for innovation,” Harvard Business Review, March 2006, Volume 84, Number 3, pp. 58–66.


3 Michael Chui, Andy Miller, and Roger P. Roberts, Six ways to make Web 2.0 work, September 2009.


Jacques Bughin, Michael Chui, and Andy Miller, How companies are benefiting from Web 2.0, September 2009.



James Manyika, Kara Sprague and Lareina Yee
McKinsey & Company
27 October 2009





PROFESSIONAL ENGINEERS - ARE STRAIGHT ARROWS



Definition


Engineer



From Wikipedia, the free encyclopedia


An engineer is a professional practitioner of engineering, concerned with applying scientific knowledge, mathematics and ingenuity to develop solutions for technical and practical problems. Engineers design materials, structures, machines and systems while considering the limitations imposed by practicality, safety and cost.[1][2] The word engineer is derived from the Latin root ingenium, meaning "cleverness".[3]


Engineers are grounded in applied sciences, and their work in research and development is distinct from the basic research focus of scientists.[2] The work of engineers forms the link between scientific discoveries and their subsequent applications to human needs.[1


Roles and expertise


Design


Engineers develop new technological solutions. During the engineering design process, the responsibilities of the engineer may include defining problems, conducting and narrowing research, analyzing criteria, finding and analyzing solutions, and making decisions. Much of an engineer's time is spent on researching, locating, applying, and transferring information.[4]


Engineers must weigh different design choices on their merits and choose the solution that best matches the requirements. Their crucial and unique task is to identify, understand, and interpret the constraints on a design in order to produce a successful result.


Analysis


Engineers apply techniques of engineering analysis in testing, production, or maintenance. Analytical engineers may supervise production in factories and elsewhere, determine the causes of a process failure, and test output to maintain quality. They also estimate the time and cost required to complete projects. Supervisory engineers are responsible for major components or entire projects. Engineering analysis involves the application of scientific analytic principles and processes to reveal the properties and state of the system, device or mechanism under study. Engineering analysis proceeds by separating the engineering design into the mechanisms of operation or failure, analysing or estimating each component of the operation or failure mechanism in isolation, and re-combining the components. They may analyse risk.[5][6][7][8]


Many engineers use computers to produce and analyze designs, to simulate and test how a machine, structure, or system operates, to generate specifications for parts, to monitor the quality of products, and to control the efficiency of processes.


Specialization


Most engineers specialize in one or more engineering disciplines.[1] Numerous specialties are recognized by professional societies, and each of the major branches of engineering has numerous subdivisions. Civil engineering, for example, includes structural and transportation engineering, and materials engineering includes ceramic, metallurgical, and polymer engineering. Engineers also may specialize in one industry, such as motor vehicles, or in one type of technology, such as turbines or semiconductor materials.[1]


Ethics


The Challenger disaster is held as a case study of engineering ethics.


Engineers have obligations to the public, their clients, employers and the profession. Many engineering societies have established codes of practice and codes of ethics to guide members and inform the public at large. Each engineering discipline and professional society maintains a code of ethics, which the members pledge to uphold. Depending on their specializations, engineers may also be governed by specific statute, whistleblowing, product liability laws, and often the principles of business ethics.[9][10][11]


Some graduates of engineering programs in North America may be recognized by the Iron Ring or Engineer's Ring, a ring made of iron or stainless steel that is worn on the little finger of the dominant hand. This tradition began in 1925 in Canada with The Ritual of the Calling of an Engineer, where the ring serves as a symbol and reminder of the engineer's obligations for the engineering profession. In 1972, the practice was adopted by several colleges in the United States including members of the Order of the Engineer.


Education


École centrale Paris, one of the oldest and most prestigious engineering schools in France


Most engineering programs involve a concentration of study in an engineering specialty, along with courses in both mathematics and the physical and life sciences. Many programs also include courses in general engineering. A design course, sometimes accompanied by a computer or laboratory class or both, is part of the curriculum of most programs. Often, general courses not directly related to engineering, such as those in the social sciences or humanities, also are required.


Graduate training is essential for engineering faculty positions and some research and development programs, but is not required for the majority of entry-level engineering jobs. Many experienced engineers obtain graduate degrees in engineering or business administration to learn new technology and broaden their education. Numerous high-level executives in government and industry began their careers as engineers.


Accreditation is the process by which engineering program are evaluated by an external body to determine if applicable standards are met. The Washington Accord serves as an international accreditation agreement for academic engineering degrees, recognizing the substantial equivalency in the standards set by many major national engineering bodies. In the United States, post-secondary degree programs in engineering are accredited by the Accreditation Board for Engineering and Technology. In much of Europe and the Commonwealth professional accreditation is provided by Engineering Institutions, such as the Institution of Civil Engineers,the Institution of Mechanical Engineers or the Institution of Engineering and Technology from the United Kingdom.


Regulation


In many countries, engineering tasks such as the design of bridges, electric power plants, and chemical plants, must be approved by a licensed engineer. Most commonly titled as Professional Engineer or Chartered Engineer, the status of professional licensing is often indicated with the use of post-nominal letters; PE or P.Eng is common in North America, Eur Ing in Europe, while CEng and IEng is used in the United Kingdom and CEng in much of the Commonwealth.


In the United States, licensure is generally attainable through combination of education, pre-examination (Fundamentals of Engineering exam), examination (Professional Engineering Exam),[12] and engineering experience (typically in the area of 5+ years). Each state tests and licenses Professional Engineers. Currently most states do not license by specific engineering discipline, but rather provide generalized licensure, and trust engineers to use professional judgement regarding their individual competencies; this is the favoured approach of the professional societies. Despite this, however, at least one of the examinations required by most states is actually focused on a particular discipline; candidates for licensure typically choose the category of examination which comes closest to their respective expertise.


In Canada, the profession in each province is governed by its own engineering association. For instance, in the Province of British Columbia an engineering graduate with four or more years of post graduate experience in an engineering-related field and passing exams in ethics and law will need to be registered by the Association for Professional Engineers and Geoscientists (APEGBC) [13] in order to become a Professional Engineer and be granted the professional designation of P.Eng allowing one to practice engineering.


In Continental Europe, Latin America, Turkey and elsewhere the title is limited by law to people with an engineering degree and the use of the title by others is illegal. In Italy, the title is limited to people who both hold an engineering degree and have passed a professional qualification examination (Esame di Stato). In Portugal, professional engineer titles and accredited engineering degrees are regulated and certified by the Ordem dos Engenheiros. In the Czech Republic, the title "engineer" (Ing.) is given to people with a (masters) degree in chemistry, technology or economics for historical and traditional reasons. In Greece, the academic title of "Diploma Engineer" is awarded after completion of the five-year engineering study course and the title of "Certified Engineer" is awarded after completion of the four-year course of engineering studies at a Technological Educational Institute (TEI).


Perception


The perception of engineering varies across countries and continents. In the United States, continental western Europe, eastern Europe, Asia, the Middle East, Latin American and Canada engineering and engineers are held in very high esteem. The perception and definition of engineering in some English speaking countries is confused. The contemporary British public perceive engineers as skilled or semi skilled maintenance workers but this is a recent development. British school children in the 1950s were brought up with stirring tales of 'the Victorian Engineers', chief amongst whom were the Brunels, the Stephensons, Telford and their contemporaries but now British people often incorrectly use the term 'Engineer' to describe Plumbers and Mechanics. British Gas refer to their gas repair mechanics as registered "professional engineers". In Canada, a 2002 study by the Ontario Society of Professional Engineers revealed that engineers are the third most respected professionals behind doctors and pharmacists.[14] In the Indian subcontinent, Russia and China, engineering is one of the most sought after undergraduate courses, inviting thousands of applicants to show their ability in highly competitive entrance examinations. In Egypt, the educational system makes engineering the second-most-respected profession in the country (after medicine); engineering colleges at Egyptian universities require extremely high marks on the General Certificate of Secondary Education (Arabic: الثانوية العامة‎ al-Thānawiyyah al-`Āmmah)—on the order of 97 or 98%—and are thus considered (with colleges of medicine, natural science, and pharmacy) to be among the "pinnacle colleges" (كليات القمة kullīyāt al-qimmah).


The definition of what engineering is varies across countries. In the UK "engineering" is defined as an industry sector consisting of employers and employees loosely termed as "engineers" who range from semi skilled trades to chartered engineers. In the US and Canada, engineering is defined as a regulated profession whose practice and practitioners are licensed and governed by law. In some English speaking countries engineering has been seen as a somewhat dry, uninteresting field in popular culture and has also been thought to be the domain of nerds.[15] For example, the cartoon character Dilbert is an engineer. In science fiction, engineers are often portrayed as highly knowledgeable and respectable individuals who understand the overwhelming future technologies often portrayed in the genre. Several Star Trek characters are engineers. One difficulty in increasing public awareness of the profession is that average people, in the typical run of ordinary life, do not ever have any personal dealings with engineers, even though they benefit from their work every day. By contrast, it is common to visit a doctor at least once a year, the chartered accountant at tax time, and, occasionally, even a lawyer.


In companies and other organizations in some English-speaking countries (UK) there is a tendency to undervalue people with advanced technological and scientific skills compared to celebrities, fashion practitioners, entertainers and managers. In his book The Mythical Man-Month,[16] Fred Brooks Jr says that managers think of senior people as "too valuable" for technical tasks, and that management jobs carry higher prestige. He tells how some laboratories, such as Bell Labs, abolish all job titles to overcome this problem: a professional employee is a "member of the technical staff." IBM maintain a dual ladder of advancement; the corresponding managerial and technical rungs are equivalent. Brooks recommends that structures need to be changed; the boss must give a great deal of attention to keeping his managers and his technical people as interchangeable as their talents allow.









7/23/2011

REWARDING FAILURE IN HIGH PLACES

I may live to see an uprising over the widening gap between rich and poor in North America


After all, that's the cause of the regime change this year in North Africa and the Middle East.

Westerners have no less an acute sense of fairness than Tunisians and Egyptians. A few of us don't get the $9.7 million (Canadian) severance payoff for top managers at Rupert Murdoch's late, scandal ridden News of the World. And in particular the $3.9 million golden parachute for Rebekah Brooks, who oversaw that paper's regime of spying and police bribery, and was arrested this week over those alleged improprieties.

Meanwhile, the 200 or so front line NOTW employees laid off with the paper's closure will be fortunate to collect on their pensions. Their fate is akin to the 1,200 employees of call-centre operator IQT Solutions in Oshawa and Quebec abruptly laid off this week.

Declaring their firm bankrupt, the IQT owners hightailed it to parts unknown without giving the affected workers proper notice, their last paycheques, or accumulated vacation and severance pay.

That's how it goes for the little people. But you have to wonder how much longer the cancer of excessive CEO pay will remain socially sustainable.


At some point, some of us will awaken to the fact that many of our social ills - including the American economy's stubborn refusal to recover - can be traced back to a 30-year stagnation in middle-class incomes.


The economy, stock market and executive pay have all increased by several multiples in that time. But between 1976 and 2009, median income for Canadians rose just 5.5 per cent - median pay for Standard & Poor's 500 CEOs jumpecl 35 per cent last year alone, to $8.4 million (U.S.).


The economy, inflation, the stock market and dividend payouts to pension funds and other institutional investors did not increase that much.


Nor, between 2009 and 2010, did CEOs become 35 per cent smarter or harder-working.


Pay for the average U.S. worker actually fell last year, after inflation. Not accounting for inflation, it rose a meagre 0.5 per cent. Americans are bracing for a forecast additional six million home foreclosures, having suffered the loss of about two million homes already since the Great Recession began in 2007.


The household debt of Canadians now surpasses that of the US., where consumer indebtedness remains at levels too high to allow for the usual consumer-led recovery that follows recessions.



No, we didn't entirely lose our sense of prudence. As tuition, housing, gasoline, food and other costs rose over the past three decades while middle-class incomes stagnated, Canada and the US. first became nations of two income earners. And when that didn't suffice, we began borrowing for essentials.


"We are feeling the deferred pain of 25 years of excess, as people try to rebuild their depleted savings;' is New York Times economics editor David Leonhardt's explanation for the current consumer strike.


But that's not the whole story.


Many of us did not engage in "excess;' yet are struggling to make ends meet. The real story is: Where did all the money go that has been generated by a North American economy that has greatly expanded since 1980?


And the answer is to be found in decades of outsourcing, offshoring, declining union membership and bargaining power, and productivity gains that have enabled employers to generate ever more revenue with steadily fewer employees.


What grates in this transformation is the sense of entitlement among the sole, conspicuous CEO beneficiaries of our New-and- Not -Improved-Econom~


In the erosion of the "social contract" between capital and labour dating from the end of World War II, we are not suffering equally. Indeed, we now reward failure in high places.


The shares of General Electric Co. have plunged in value by 60.8 per cent during the tenure of CEO Jeffrey Immelt, who was rewarded for this performance with $37.2 million in free stock in 2010. Shares in pfizer Inc., the world's largest drugmaker, have dropped in value by 481 per cent over the past decade. Yet CEO Jeffrey Kinder retired in December clutching a $34.4-million severance package.


Rex Tillerson was paid $88 million in 2010, a year in which shares ofhis company, ExxonMobil Corp., generated a 5.8 per cent negative return.


Shares of banking giant J.P. MorganChase & Co. inched up in value by 3.5 per cent last year, good enough for a 1,474 per cent hike in CEO Jamie Dimon's pay, to $20.8 million.


For the approximately17 million North Americans who are unemployed, the economy has not recovered. But use of corporate jets has picked up by 6.2 per cent. And 24,666 oflast year's flights were to West Palm Beach, Nantucket and the Hamptons, not known as hives of business activity.


We need to have an adult conversation about income distribution before we're forced into an unruly one. For now, the occupant of the corner office isn't ready. Asked about Goldman Sachs Group Inc.'s role in helping put the match to the Great Recession, CEO Lloyd Blankfein snapped that he is "doing God's work!'


Jamie Dimon regards his bank's eviction notices as an act of altruism. "Giving debt relief to people that really need it, that's what foreclosure is."



And Stephen Schwarzman, chairman and co-founder of private equity giant Blackstone Group, who has a net worth of $8 billion, balked over a rumoured Obama administration increase in taxes on private equity firms from a loophole-engineered 15 per cent to the traditional 35 per cent.


''It's like when Hitler invaded Poland;' Schwarzman said of the barbarian at his gate.


Decrying "short - termism" as central to the US. economic malaise, Sheila Bair, outgoing head of the Federal Deposit Insurance Corp. (FDIC), noted the failure to accept responsibility among directors and management of failed banks, who had neglected their fiduciary duties.


"The rationales the executives come up with to try to escape accountability for their actions never cease to amaze me;' Bair wrote in a recent Washington Post op-ed. "They blame, the failure of their institutions on market forces, on 'deadbeat borrowers,' on regulators, on space aliens.They will reach for any excuse to avoid responsibility."



A dialogue of the deaf would be one thing, but we're not even talking about our greatest social ill, the maldistribution of income in North America


Well short of a revolution, this dangerous imbalance could easily be corrected simply by restoring the system of progressive taxation to where it was in the booming 1950s and 1960s.


That's when leadership meant responsibility, not a hurried grasp for the brass ring, with the little guy paying for the consequences.


That, history teaches us, is a lousy business plan.


 
David Olive,
Toronto Star
Business
July 23, 2011













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7/08/2011

ORGANIC GROWTH - "DO THE OPPOSITE" - RICHARD BRANSON - THE VIRGIN GROUP



Do The Opposite



Business structures, models and cultures are being challenged by the crowd. Given the new world of transparency employees and customers are influencing market sentiment about any organization because of the fluidity of social media. These dynamics are forcing organizations to examine historical beliefs about what it takes today to run a successful business.


The very definition of “business structure, models and culture” is being redefined. These redefinitions eventually redefine how markets work and why they work. Thinking BIG is being replaced by thinking SMALL. The customer is no longer just a customer but instead a partner. Employees are no longer controlled and managed rather they are let loose to serve and do so in self managed groups. The office is no longer a physical address rather a virtual presence. Everything is changing and thus how we manage and what we believe must change.


The Opposite Works If Allowed


Richard Branson said: When my friends and I started the first Virgin business 40 years ago, we had no master plan – especially not one for a group of companies that by 2011 would number more than 400 businesses around the world and employ 50,000 people. Had we tried to plan for such a future, we would certainly have messed it up.


If there is a “right” way to develop your company’s culture, our experience shows that it should evolve organically. In 1970, my friends and I weren’t planning to do anything other than make some money and have a good time while doing something we loved. We loved listening to music, so we tried to sell records to other kids who wanted a fun place to hang out while deciding which ones to buy. We had no marketing plan or budget – our goals were simply to make enough money to pay the rent and our suppliers, and to have some cash left over at the end of the month.


Business owners often find it tough to learn how to handle success. When a business does well, many chief executives start to focus solely on increasing profits, no matter what the cost – leaving behind everything that originally made the business special. The founder usually moves to a big corner office on the top floor and never again sets foot in the factory. Employees who were integral to the company’s early success suddenly find they are the last to know what is happening, and their views are no longer valued or sought.


At Virgin, we have never had to struggle with the typical problems of big corporations, probably because we never really got big – we just diversified. Our growth was once described as “vertical disintegration” because our new businesses frequently appear to be tangential or even completely unrelated to our core mission. When Virgin was known for producing and selling records, for instance, we started up an airline.


If someone says, “That’s not the way a big company would do it,” take it as a compliment!


So future success is simple. Do The Opposite!



Jay Deragon

The Relationship Economy

July 8, 2011

7/01/2011

THE DEMONS IN KRUGMANOMICS



Nobel economist Paul Krugman is due to address the Economic Club of Toronto Wednesday on whether the United States has "mortgaged its future." If Mr. Krugman is true to form, he will tell
his audience that it has not mortgaged its future enough. What is desperately needed is more government borrowing and spending.



Mr. Krugman is a Nobel-winning trade-policy academic economist who, over the past couple of decades, has gone increasingly to the liberal dark side, as evidenced in his columns in The New York Times. What seems to have driven him completely over the edge is a combination of Bush Derangement Syndrome and an evangelical desire to prove that Reaganomics was a failure. He criticizes Barack Obama for not going far enough. He hates Republicans with a passion and is Keynesian to the core. Thus he can only interpret the failure of government stimulus as evidence of "cowardice" or ''lack of political will."


Like most liberal moralists, Mr. Krugman demonizes his opponents as not merely wicked and/or stupid/and or venal, but also "furious" because he is so right and they are so wrong. On election night 2008, he and his even more uncompromisingly liberal wife, Robin Wells, who is also a Princeton economist, had a party at which effigies of their enemies were burned. Salem, anyone?


Mr. Krugman constantly concocts conspiracies of the rich to grind the faces of the poor. He calls anti-Keynesians "The Pain Caucus." He is currently lashed to the mast of not one but two sinking ships, the USS Keynes and the USS Draconian Climate Policy.


Modem American conservatism, he has written, "is, in large part, a movement shaped by billionaires and their bank accounts, and assured paycheques for the ideologically loyal are an important part of the system. Scientists willing to deny the existence of man-made climate change, economists willing to declare that tax cuts for the rich are essential to growth, strategic thinkers willing to provide rationales for wars of choice, lawyers willing to provide defences of torture, all can count on support from a network of organizations that may seem independent on the surface but are largely financed by a handful of ultra-wealthy families:'


Maybe he should check out what causes the Rockefeller, Carnegie, Pew, Hewlett and Packard foundations are actually promoting. It certainly isn't climate change denial.




Mr.Krugmarn's Nobel Prize for work in international trade and economic geography was widely praised. Early in his career he was a fan of markets and free trade, and attacked "popular" economists such as John Kenneth Galbraith,


Paul Krugman's,affection for markets fell as he became obsessed with in equality, market instability and catastrophic climate change

Lester Thurow and Robert Reich, who catered to economic misconceptions beneath a cloak of liberal good intentions. However, that cloak in the end proved too attractive not to try on.

Mr. Krugman's affection for markets has declined as he has become obsessed with inequality, market instability and catastrophic climate change, He doesn't think consumers can be trusted to make the "right" choices any more, and has taken to the remarkably annoying habit of condemning free marketers as people who believe that people are always rational and markets perfect. Then again, straw men are easy to torch.

Mr. Krugman's take on the ongoing crisis is remarkable not merely for wishing to keep doing more of what has failed, but his blindness to the role of government policy in its creation. Fannie and Freddie? Mere bystanders who only decided to help blow up the system ''late in the game." Greece? It's all the euro's fault.

Anthropogenic global warming has become an article of religious faith for Mr. Krugman, which has required him to go through astonishing convolutions in the face of growing evidence of corruption. Climategate? A "fake scandal." Remember those emails about a "trick" to "hide the decline"? According to Mr. Krugman this was an "anomalous decline." Well, no. The decline was in actual temperature readings which failed to concur with the proxy data from tree rings. These had to be ''hidden'' because tree ring data were essential to the credibility of the poster child ''hockey stick" graph that presented the twentieth century as a thousand year anomaly. The decline had to be hidden because it exposed fake science,

The former free trader now thinks that carbon tariffs might not be such a bad idea, and since cap and trade represents an alleged "market solution" to the catastrophe-to-come, the conservatives who (successfully) opposed it are, in Mr. Krugman's view, hypocrites.

Mr. Krugman leans towards the global salvationist posturing of Lord Stern, whose climate review is a monument to perverted cost-benefit analysis. "Stern's moral argument for loving unborn generations as we love ourselves may be too strong;' Mr. Krugman has written, ''but there's a compelling case to be made that public policy should take a much longer view than private markets:'

The problem is that it doesn't.

The evil of Mr. Krugman's opponents is all embracing. He has written that
"[T]hose who insist that Ben Bernanke has blood on his hands tend to be more or less the same people who insist that the scientific consensus on climate reflects a vast leftist conspiracy." You see the connection? Leaving aside the blood libel, if you oppose further corruption of the monetary system you are clearly also a climate denier. And why doesn't America have universal public health care? Simple, it's due to "The legacy of slavery, America's original sin."

Once Mr. Krugman's intellectual inspiration was Adam Smith. Now it's Naomi Klein.

Peter Foster
Financial Pst
FP Comment
June 29, 2011














'INVESTING SHOULD BE BORING" - IF YOU WANT EXCITEMENT, GO TO LAS VEGAS



Successful investing should be
boring, which may explain why so many excitement-seeking investors suffer disappointing returns.



If you want excitement, go to Las Vegas.


If you want to be a rich crashing bore, read a little book self-published by
Edmonton-based wealth counsellor Marshall McAlister. It's titled The Brilliance of Boring Investing: An Academic Approach to Portfolio Design.


It begins with a quote from Nobel laureate Paul Samuelson: "Investing should be dull. It shouldn't be exciting." But there's a paradox, writes MeAlister: The portfolio process that requires less work from
investors can actually deliver the best long-term investment returns.


Boring doesn't mean lazy, he hastens to add. It requires discipline and a process, which is the true value of what financial advisors provide.


The kind of advisors I often meet at conferences sponsored by index fund maker DFA Canada, which is where I met McAlister last week. 


The featured speaker at the Toronto event was prolific U.S. author and money manager Larry Swedroe, who views investing very much like McAlister and DFA. St. Louis-based Buckingham Asset Management (BAM) is one of DFA's largest clients.


Swedroe's talk focused on his recently published The Quest for Alpha: The Holy Grail of Investing. "Alpha" refers to the goal of "adding value" by security selection, relative to "beta" or market returns delivered by index funds or ETFs.



I'm surprised he didn't title it The Futile Quest for Alpha since that's the book's main thrust. Like McAlister, he believes timing the market is impossible, forecasts are for the gullible, and stock-picking is a mug's game,


Both advocate the "boring" route of low-cost "asset class" investing, which means creating portfolios built on low - cost index mutual funds (like DFA's, tilted in favour of value and small-cap stocks) or enhanced or fundamental-index based exchange-traded funds.


Swedroe says there are two main theories about markets:


the conventional wisdom that they are inefficient so can be "beaten" versus modern portfolio theory's belief that markets are efficient and stocks priced roughly where they should be.


If markets are inefficient, the winning strategy would be to identify past "persistent alpha" and select managers with proven ability to add value through market timing and security selection.


Swedroe demolishes that school by reviewing the poor track records of actively managed mutual funds and venture-capital managers. Hedge funds are worse, he says, because they are illiquid, tax inefficient, lack transparency and offer no persistent outperformance beyond what might be randomly expected. The result is risk-adjusted returns similar to treasury bills.


But his most telling argument involves pension plans. If anything could beat the market, it should be them, since they pay lower fees than retail investors, use the world's top managers and hire gatekeepers to monitor and replace managers if performance lags.


Sadly, all their activity has been for naught: They'd be better off imitating Rip Van Winkle and doing nothing. Swedroe concludes markets are indeed efficient, so efforts to "beat" it are futile after fees, trading costs and tax drag,


Therefore, the winning strategy is the "boring" one of focusing on low-cost fund construction and tax-efficiency, tuning out the noise and sticking to a long-term plan.


Not everyone believes alpha fails to add value. "It is difficult for most investors, amateur or professional, to consistently produce alpha," concedes Bob Cable, director of ScotiaMcLeod's The Cable Group. But while difficult, it's not impossible. One way is to take advantage of seasonal patterns (such as "sell in May and go away"), a strategy Cable says is particularly pronounced in the Canadian market.


Both authors endorse the 'boring' route




Jonathan Chevreau,
Financial Post
June 29, 2011