Wealth as a Life Scorecard

By Krishna, April 28, 2007

How do you measure your progress in life? How do you measure the extent of what you have achieved and what still remains to be done? What are your dreams? How far are you away from reaching them? What do you do if and when you reach them? What after that?

These are very tough questions to answer. Since many of us operate on auto-pilot for the most part of our life, we never get to sit down quietly and think about these fundamentals of life. But without doing that, we face the serious risk of choosing the wrong goal and remaining unsatisfied throughout our life.

Most people consciously or subconsciously use various scorecards to measure their progress. One of the most common metrics used is wealth – how much money, possessions or income one has. Other commonly used criteria are career growth, knowledge acquisition, popularity, power, influence, godliness, etc.

In my opinion, if happiness and satisfaction are the fundamental goals, there is nothing inherently wrong in choosing any of the above criteria as scorecards. The problems happen when they are chosen for the wrong reasons and used improperly. Let us consider the wealth scorecard because it is widely used and it is simple to relate to.

In general, it is very essential to have good financial goals. A person who does not manage money well will find it more difficult to manage other aspects of life, including health, family needs, education, etc. Having money is no guarantee of happiness, but lack of enough money for various needs is sure to cause distress and worries.

Companies provide greater financial benefits to those employees who have better education, skills and/or experience. The market (generally) rewards those who show greater business acumen and work harder to build good products and services. The more achievements a person has, the easier it is to reap financial benefits by leveraging them. The money scorecard provide a simple way to track all such accomplishments.

So far, there doesn’t seem to be anything wrong with this picture. Unfortunately, there are many ways people can misuse the money scorecard.

One mistake is to use wealth as a relative measure instead of an absolute measure. By that, I mean that people start comparing their wealth with others they perceive to be peers in various respects. If their wealth is not on par with their peers, people become terribly depressed.

This sort of comparison is very self-defeating for many reasons. First of all, one’s peers are not equal in all respects and do not have the same factors for success. The peers who have the right success factors working for them will always get ahead. And always some people will go behind – it is not their fault, that is the way it works when someone succeeds.

Secondly, wealth comparisons can be very tricky. Let’s assume that A and B are co-workers with the same income. However, B falsely informs A that he earns 30% more than her and proceeds with the consumption of high profile items like cars, real estate, etc. all the while running up huge debts (invisible to everyone). A feels totally left behind by the false knowledge given by B and his behavior, without knowing that she is actually much better placed financially than B.

If there is one thing that most people, even good people, are not very truthful about, it is their wealth. Some people lie to other people’s faces. Others do it indirectly by exhibiting behavior that conveys an impression of being rich. Most people are more insecure about than thankful for the wealth they have earned.

There is another interesting phenomenon. Even if two people earn the same money, their tastes may be totally different. For example, one person’s idea of spending is buying good clothes while another person’s idea is to buy the latest gadgets. Unfortunately, each person sees the other’s consumption as a threat and tries to imitate them, even if they have no need for that product.

If you notice a group of people, you will observe this trend happening quite often. Someone buys something – the others want to get the same or better thing. Someone goes on a trip – others quickly follow. Someone starts a hobby – soon the hobby shop is busy.

Try this experiment: Ask people to write down their expected hot ticket purchases for the next 6 months and then observe what they actually do. Usually, their list will be carefully thought out and will address their needs. Their actual purchases will be rash and will address their emotions.

Lastly, people are not really satisfied even if their peers are on the same wealth level. They want to get ahead. But when they get ahead, they find they have a new set of peers with whom they have to compete. The cycle never ends. If you are in this game, don’t worry – there is always someone ahead of you.

The second mistake that people do with wealth as a scorecard is to use wrong targets – either too low or too high. If you set low financial objectives, you will not challenge yourself to learn, improve and find greater opportunities. This causes problems during economic downturns or technological advances when the person finds himself left behind and unable even to meet his originally low wealth targets.

Secondly, factors like inflation, stock/real estates crashes or stagnation, etc. can destroy or constrain growth of wealth again resulting in financial difficulties. Many blue-collar workers are victims of trying to settle for a simple life when current economic trends have no sympathy for such a lifestyle. Simple rule: Ignore market realities at your own peril.

Other people are guilty of trying to achieve too much without a realistic plan to get there. Yes, it is possible to earn $x million dollars, but will everything fall into place? What about external factors like the economy, technology, political/legal situation or sheer luck? Do you have the skills and capability to reach that level?

Another question is: are you willing to do what it takes to get there? The more difficult the financial target, the more sacrifices you have to make. For example, a startup company fighting with fierce competitors may require the founders to work like crazy for several months or even years. Forget enough sleep, timely food, family time, meaningful relationships, etc. And maybe there is only failure at the end of all that. Are you willing to live with that? If you cannot accept the process or a different possible outcome, change your expected targets and live accordingly.

Conclusion: It is important to understand that wealth and monetary considerations play a significant role in our daily lives. They can be used as one measure of progress and also as a means to avoid unnecessary hardship that prevents one from achieving other goals. However, using wealth metrics incorrectly by wrongful comparisons and inappropriate targets can also be the cause of much frustration and tension. Recognize the pitfalls, avoid them and you will be happier.

Employees as Capital

By Krishna, April 28, 2007

This idea comes from Peter Drucker’s book, “Managing in the Next Society“. He says that in the Industrial Age, employees were treated as an expense, but in today’s Information Age, employees are knowledge workers and should be treated as capital investment.

Many companies today do talk about employees as “assets”. However, several factors still continue to promote the old thinking. Primary among them are accounting and budgeting. The company’s financial statements always reflect the salaries and benefits of employees as expenses. The tax code, which treats expenses and asset investments differently, also reinforces this way of thinking.

One sees the same behavior in customer service. Short-term thinking makes some businesses only count the direct dollars that a customer pays for the product or service. They do not count the additional benefits that a satisfied customer brings in free marketing or the costs of losing that customer. Like the previous example, the financial statements do not force one to think with a long-term vision.

Going back to the original premise, what is involved in treating employees as capital investment? Let us compare an employee you hire to a capital expenditure (like machines or enterprise software) you make: (Don’t extend the metaphor too far, such as treating employees like machines!)

  1. You would only buy the best machine you can afford. Similarly, you should hire the best employees you can afford.
  2. You would maintain the machines properly so that they can continue to work properly. Similarly, you should support the employees so that they can willingly do the best work they can.
  3. You would upgrade the machines with new parts and tools when available. Similarly, you should keep training your employees in new skills and technologies.
  4. You would use the right machine for the right task. Similarly, you would hire and use employees for the jobs that they are best suited for.
  5. Your expenses for the machine, like power, maintenance, etc. are primarily for your benefit – translated into increased or longer-term revenues. Similarly, any expenses for the employees should be not written off, but considered as an investment.

This concept is particularly important in the new economy powered by information and software. In the past, work (involving physical labor) was inherently limited by the limits of the human body. Maybe one worker was 2-3 times stronger or faster than another. Maybe.

But when we talk of “knowledge work”, there is a tremendous difference in the outputs of different persons in the order of many magnitudes. For example, in the creation of a software product, that means months of additional development effort, hundreds of more bugs and increased customer frustration (to the point of quitting) if you don’t pay attention to getting and retaining the right employees.

Companies that understand this concept are incredibly empowered. They don’t have to rely on expensive metrics collection and evaluation to drive the company forward, as each employee also has the same goal. If you look at many successful companies, you would find that they have achieved this.

It is a Different Time

By Krishna, April 26, 2007

We are constantly reminded by technology that the world has fundamentally changed since the time of our childhood. Everywhere you go, you see it – developments in medical science, incredible new gadgets and electronic equipment.

Yet, while we embrace most of the new things that help make our life better, most of us are very slow to understand the potential challenges in the business world caused by these changes. Like the following:

  1. The previous generation never had to cope with their technical knowledge becoming outdated every few months. You became an expert in .NET 2.0? Too bad, here comes 3.0!
  2. They never worried about competition from every single part of the globe – people in China, India, eastern Europe, etc. – highly skilled and hungry for success, after years of lagging behind the Western world.
  3. They never had a 24 x 7 world with cell phones, email, text messages, etc. that continuously interrupt and must be attended to. There is no real 9-to-5 job anymore.
  4. There was no information overload as the Internet is today with video on demand, podcasts and blog feeds, with anyone and their grandmother being able to post content regardless of its quality.
  5. The tools keep getting obsolete. The new ones keep getting more intelligent. Every job quickly becomes a McJob even as other currently non-existing professions open up.

These changes are pretty much irreversible unless Earth gets hit by a comet and the survivors go back to the Stone Age. We cannot live without many technological changes, especially those related to medicine. Who wants to die of small pox? Who wants to ride a horse from Boston to New York?

So, if you cannot beat the changes, you have to accept them and build up the skills necessary to survive in such a world.

Looking Forward

By Krishna, April 26, 2007

I was having a talk with a friend of mine recently and the discussion came around to different personalities in terms of how they view events. Basically, there are 2 types of persons:

  1. Forward-looking: This individual is always about the next task that has to be done. Their mentality is oriented towards action. Their behavior is more influenced by opportunities in the future than events in the past.
  2. Backward-looking: This person’s actions are determined by past experience and events. Their behavior is influenced by risk management. They are more conservative in predictions for the future and hence less passionate.

Every person has different elements of each behavior. People take risks in some cases. They also resist change for others. However, there is usually one pre-dominant tendency in a person which boils down to answering the question, “Am I willing to try?”

The forward-looking person is a pleasure to work with because they don’t get bogged down in a task. If something doesn’t work, they try some other approach. If someone doesn’t co-operate, they find another person. If they face failure, they dust it off and find something else to do.

Such persons always find something to keep them happy. They don’t sit around unhappy or worried. For them, life is full of promise, regardless of how old they are. They are true to the concept of “making lemonade when life gives them lemons”.

Should one adopt such an attitude? I think yes, because for one, you cannot change the past – not one decision, not one second. The past is also not a good indicator of the future, especially in our fast changing times. Every day brings new opportunities for happiness. Looking forward is a great way to enjoy life to the fullest.

Risk management has its place. One should benefit from experience and not repeat the mistakes of the past. There is also a need for conservative behavior in certain financial, legal and corporate situations. However, being always afraid and regretting brings no reward – only mental suffering and loss of valuable time.

Be happy. Dream of what you can do in the future. And run to embrace it.

Web Site Creation

By Krishna, April 23, 2007

How do you go about creating a personal website? Here are 5 quick considerations if you have plans to do so:

  1. Layout: How will the site look like? Fortunately, there are many examples of great looking websites that you can learn from. Take a look at http://www.csszengarden.com/. You don’t really need to know a lot of graphics design. 1-2 good images and good combination of colors can create a simple, but attractive web design.
  2. Navigation: Place the most important links so that visitors to the site can easily see it and navigate to it. Make it easy for users to access different parts of your system and also come back to the home page. Provide search capability. Google Custom Search is very easy to setup – just a matter of minutes.
  3. Content: Having substantial amount of content on your website can take a lot of time – months or even years. Start small and maintain a regular schedule to add content. Over time, you will see your website grow.
  4. Interactivity: Provide visitors a way to leave you feedback or contact you. Most hosting sites provide guestbook and contact form functionality. You could also build your own.
  5. Technology: You can easily create websites using graphics editors and not knowing much about the technology. In the long-term, it pays to learn about the various technologies (HTML, web programming, etc.) so that you can maintain and extend your website further.

Nowadays, there is an increasing trend by many people to start blogs as their personal website. This is a great idea because it is much easier to get started and publish content. You can also reach a much bigger audience.

Using Free Resources

By Krishna, April 22, 2007

The rise and success of the open source movement has provided a tremendous number of public resources. Wikipedia is an example of how open source has provided significant benefits to the general user audience. Today, open source is no longer limited to computer programs, but covers many other forms of media such as text, audio, video, etc. (See my previous article on Creative Commons.)

How does one take advantage of using such free resources?

  1. Locate the sources of open source content: There are many central repositories for obtaining such content, like the Free Software Directory, Creative Commons Search, Gutenberg Books, Librivox Audio, etc. Wikipedia has many sister projects like Wikiquote, Wiktionary, etc.
  2. Use search to locate content: Click Google Advanced Search – note the “Usage Rights” field where you can choose the right content. Yahoo has “Creative Commons Search” under its advanced search. Developers can use Krugle or Google Code Search. The idea behind using open source is to avoid re-inventing the wheel. Learn to search better to accomplish this objective.
  3. Understand licensing: Different open source licenses provide different rights and enforce certain restrictions. Based on your needs, you may need to choose the right license. For example, the GNU General Public License (GPL) forces you to publish your work as open source again, if you use GPL content. Most licenses operate under the copyright law of the country where the author is based.
  4. Include necessary attribution: Most licenses request that the user explain clearly who the original authors are and what license the work uses. Many people stumble at this step, because they fail to add the necessary copyright notices when they re-distribute a work.
  5. Use proprietary work as appropriate: “Free” doesn’t necessarily mean “better”. Sometimes proprietary software or content has benefits that existing open source cannot provide – including usability, customer support, total cost of ownership, etc. Or vice versa. You have to spend time evaluating all the pros and cons with respect to your situation and make a careful decision.

The last point is particularly important in business decisions. Many technical people are either adamantly for or against open source, mostly out of ignorance.

For example, someone hates Microsoft and always selects the competing open source product, without worrying about how the rest of the IT team may have to spend significant time learning a new technology/environment or how there may be integration problems. On the other hand, some manager always selects a proprietary solution without researching if an open source solution with good support is available. Keeping an open mind is very crucial in avoiding costly decisions.

The Browser Wars

By Krishna, April 21, 2007

Over the past few months, many of my contacts, including several non-technical users, have been switching over to Microsoft Internet Explorer 7.0 from version 6. I have been pleasantly surprised to note that many of them have adapted to the new interface easily even though there have been significant changes from the previous version.

Most of the non-technical users I deal with use Internet Explorer as IE is the default browser in the default operating system (Windows) they use. Based on my experience so far, although Firefox has much going for it, I don’t see significant number of non-technical users switching over. Fundamentally, this has to do with the common browsers reaching a certain level of maturity in terms of features, stability and performance.

The other fact is that most popular websites are much better designed now and cater to different browsers well. This means that users can do most common tasks on websites competently. For the general non-technical user, they would only be inclined to switch to a different browser if they cannot access a particular website on one browser. Most commercial sites cannot afford to behave that way in today’s competitive environment.

It is illuminating to observe the differences between how a technical person (like programmer or web designer) uses a browser and how a non-technical user does it. The non-technical person typically use very few features in a browser - mostly the address bar, the Back button, clicking links, filling forms and printing screens. The technical person, in contrast, configures browser options, installs toolbars and ad blockers, etc. – things that I have never (yes, never) seen a casual user doing by themselves.

The larger point in this discussion is that interesting technological arguments (like which browser is better) are becoming more irrelevant each day. Technology is really there to help people do what they want. The best technology is invisible - people use it and move on. As various technologies – operating systems, browsers, etc. - become more mature and do most of what people want, users rarely waste time on the technical specifications.

Computers (desktops and laptops) are a good example. Most new computers (including PCs and Mac’s) have features and performance that overshoot the needs of most users other than developers and gamers. Therefore, non-technical considerations (price, brand name, etc.) are increasingly becoming more of a factor.

Going back to the original topic, it is probably time to bury the debate on the browser wars. The end users already have.

Creative Commons

By Krishna, April 21, 2007

This is something I have been meaning to do for a long time. I just added a Creative Commons license for the content of this blog – “Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License“. The link leads to a simple description of the license - there is another link on the same page that leads to the full legal verbiage of the license.

Basically, if you write or publish anything in the United States, you are automatically entitled to the copyright of your work. Others may not copy or use your work, except under “fair use” doctrines, which provides limited use of copyright material without explicit permission.

The idea behind Creative Commons is that it provides an easy, accessible way for the general public to create a license for their creative works without the help of a lawyer. The license can be tailored to various considerations, such as if you are comfortable with someone copying and selling your work. You can choose your license through this simple interface here.

From the perspective of users of creative works (like articles, photos, etc.), Creative Commons makes it very convenient to consume and share good content. It removes the worry about violating someone’s copyright by over-extending fair use. Many sites, including Flickr, allow you to search for such content.

The best way to use Creative Commons content is to extend it further. For example, you could combine text and photos to create your own work and share it with friends or publish it for others.

There are also other documentation licenses, notably the GNU Free Documentation License used by Wikipedia. Here is a list of such licenses.

Avoiding Email Embarrassments

By Krishna, April 20, 2007

Sending email is easy. Perhaps too easy. I cannot begin to count the number of times I have hit the Send button and then wished there was some way of taking it back.

Since I have survived to talk about it, here are a few pointers based on personal experience on how to avoid some embarrassing situations:

  1. Take a breather, walk away and think about what you have just written from the receiver’s point of view. Was it the right tone? How will the person react? Will you achieve what you want to?
  2. Run a Spelling-and-Grammar check. Of course, all grammar mistakes do not get caught with the check, so go on the next point.
  3. Read the email from top to bottom. Carefully. Look at punctuation. Look at the meaning of the sentences.
  4. Check the email addresses – To, CC and BCC, if applicable. Sometimes you can be fooled by the right name, wrong email address.
  5. Did you attach the right file? The latest copy of that file from the right folder? Open it again and validate.

Pressing the “Publish” button on this post is equivalent to hitting “Send” on an email. So, as per Murphy’s Law, there must be something written above that is going to be wrong. :-) Nevertheless, here I go.

Links to ASP.NET, Usability, and Open Source

By Krishna, April 19, 2007

There was a time when you had to spend painful hours reading technical material. Microsoft has made that tremendously easy by putting up some great training videos for ASP.NET, Ajax and SQL Server 2005.

Get a cup of coffee, sit back, click the links and enjoy the videos.

Also, here’s Jeff Atwood’s synopsis of Jakob Nielsen’s new book “Prioritizing Web Usability“. I highly recommend reading this book as it contains details about each usability issue and how the researchers arrived at their conclusions.

Here is a good older article on some open source dogmas. I also recommend reading the book “The Success of Open Source” by Steven Weber. It analyzes the economics of open source and some of the legal and cultural issues.

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