Many young technology companies do very little to build the leadership skills of their people, relying on recruiting or being acquired to solve their future leadership needs; who can blame them - where’s the payback? In more established businesses and public sector organisations, entry-level technical, commercial and team leadership skills are taught, especially with some governments subsidizing industry training programmes. But what about developing senior management?

Promising managers are often sent to various executive education programmes, although less so in mid-size organisations, despite increasingly valuable and relevant programmes targeted at them.  But even in the most committed organisations, if there is no supportive context for the manager to move up to the next level, he or she may struggle to make the shift, and fail. In a podcast available from the London Business School, Doug Ready, Visiting Professor of Organisational Behaviour, discusses the challenges for managers making the move to executive status:

This transition is probably the most difficult for managers to make. The move from running a unit, geography or function to becoming part of a team running an entire group or organisation requires development of new skills and strengths. It requires a change in behaviour and the way you think about the business, which can sometimes mean making difficult decisions about people or projects you have worked closely with.

Exercising much higher levels of initiative, judgement and decision-making; bigger risks; dealing with shades of grey rather than absolutes of black and white; imperfect information; uncomfortable trade-offs; realpolitik; putting the whole enterprise ahead of the interests of their functional unit; initiating, not just implementing, tough decisions such as downsizing or reassigning.  The list goes on.  No wonder many struggle, or find the prospect so daunting they retreat into risk-aversion, bureaucracy and backside-covering.

The challenges for boards and CEOs (and central government agencies responsible for public sector skills) are to create an executive leadership development environment that will support the long term health of the organisation, and to maintain that through the ups and downs of the business cycle.

Governments, business theorists and business media are obsessed with innovation. Vast sums of money are expended on government-sponsored research. Something’s bound to pay off with a ground-breaking new technology that will increase jobs, wealth and foreign-exchange earnings, isn’t it? However, innovation is only the start of the process. We’ve got plenty of innovation, and we aren’t short of new businesses either.  As I wrote last year, the problem is creating better, larger businesses that can foot it internationally (with full overseas operations, not just exporting).

Last week’s Economist explores the same issue, reporting on those who question the fear of US companies being overwhelmed by technological innovation coming out of India and China.

So does the relative decline of America as a technology powerhouse really amount to a threat to its prosperity? Nonsense, insists Amar Bhidé of Columbia Business School. In “The Venturesome Economy”, a provocative new book, he explains why he thinks this gloomy thesis misunderstands innovation in several fundamental ways.

First, he argues that the obsession with the number of doctorates and technical graduates is misplaced because the “high-level” inventions and ideas such boffins come up with travel easily across national borders. Even if China spends a fortune to train more scientists, it cannot prevent America from capitalising on their inventions with better business models.

That points to his next insight, that the commercialisation, diffusion and use of inventions is of more value to companies and societies than the initial bright spark. America’s sophisticated marketing, distribution, sales and customer-service systems have long given it a decisive advantage over rivals, such as Japan in the 1980s, that began to catch up with its technological prowess. …

I’m an enthusiastic encourager of product and service design and development, and I disagree with Bhidé about the importance of technical graduates, I’ve argued for a shift to a more technology-competent leadership cadre,  However, if push comes to shove, I’d rather own a business with a great brand and business model ahead of great products. You can buy innovation:

… as GE’s Mr Immelt likes to say, his firm is not great at invention, but it is outstanding at “turning $50m businesses into billion-dollar businesses”.

In an otherwise serious article on addressing the current global finance mess, economist Willem Buiter writes in the Financial Times:

We have no longer just a crisis in the financial system.  We have gone even beyond the stage where there is a crisis of the financial system.  The western (north-Atlantic) financial system we knew has collapsed.  If I may paraphrase that great ensemble of Nobel prize- winning financial wizards, Monty Python’s Flying Circus:

“This financial system is no more! It has ceased to be! It’s expired and gone to meet its maker! It’s a stiff! Bereft of life, it rests in peace! If you hadn’t nailed it to the tax payer’s perch it’d be pushing up the daisies! Its metabolic processes are now ‘istory! It’s off the twig! It’s kicked the bucket, it’s shuffled off its mortal coil, run down the curtain and joined the bleedin’ choir indivisible!! THIS IS AN EX-FINANCIAL SYSTEM!!”

I get very irritated when I see the mainstream media uncritically reporting some agenda pusher’s assertion with the words “Research shows that ...”.  I’m not the only one.  Frank Furedi, writing in the UK’s Times Higher Education Supplement, sums it up neatly:

The status of research is not only exploited to prove the obvious, but also to validate the researcher’s political beliefs, lifestyle and prejudice.

I remember my university market research class being given two contrasting questionnaires which led you down a logic path to the last question on capital punishment, and a highly skewed result.  So the same sample of 20 students gave completely opposite results on two questionnaires asking essentially the same question.  It was a clever lesson that I’ve never forgotten.  Add to skewed questions the selection of small or biased samples and you can get pretty much any result you want. And some so-called researchers are not above losing some of their sample return sheets to suit their desired outcomes.

Even in otherwise respectable research, too many studies ask about future intentions.  On very short term intentions, such as who you will vote for next week, you might get a useful answer.  I say might, because research shows that (geddit?) people sometimes lie, some mischievously, some deviously, some to hide indecision, some to give what they think is a socially acceptable answer.  And many longer term intention surveys have no more value than my annual New Year resolutions.  Frankly, as economics writer Tim Harford argues much better than I can, the only truly compelling evidence is based on independent verifiable empirical data of what people have actually done, not what they say they might do.

Marketers, designers, politicians and journalists, remember to turn on your BS detector whenever you hear those words “research shows that ...”

“When you are up to your arse in alligators, it is difficult to remind yourself your initial objective was to drain the swamp.”

I’ve had 3 conversations in the last 2 days about making change happen with core business processes.  There’s so much noise going on, especially if it’s a problematic customer-facing process, that you spend all your time trying to put failures right and don’t have time to fix the root cause (product design, business process, skills, whatever). Likewise you’re pretty much guaranteed a failure if you put people onto the change project who aren’t ultimately responsible for the new process, who aren’t skilled and talented, who can’t make decisions on design and implementation, and who are tied up in doing their day jobs.

Here are 10 rules learned from running or helping several organisations to effect change in difficult circumstances:

1. The project team should be drawn from the best people in the organisation, the ones who will drive the new way, and will likely hold leadership roles in it. Don’t staff projects with your third-rate cast-offs. Don’t rely on contractors for roles that should be held by business experts.
2. The naval officer on site in the dockyard overseeing the construction of a new ship is ideally the officer who will be its first captain.   The best person to lead a change project is the person who will run the new process afterwards.  Failing that, get someone even more qualified and powerful, not less, to be your change agent.  Sitting on a governance committee is not enough.
3. The change leader and the change team must have been indoctrinated into the new way of thinking, and be passionate, effective advocates as well as good at their jobs.
4. Don’t treat change as an IT project, even if largely based around new IT systems.  It’s a business project.  The best businesses train their business managers in smart project management, process design and change management. These are not IT skills, they are business skills.  Having said that, good business-savvy IT people can make great business change people if you also follow rules 1, 2 and 3.
5. Be ambitious but realistic about what you can achieve with the money, time, resources and ownership support you have available to you. Despite knowing this, I too have sometimes fooled myself or been pressured into going ahead on over-ambitious projects without adequate resources, with predictable results.  Heroism, hope and luck are not reliable ingredients for success.
6. Give the change leader the power to decide, as far as possible, and have fast access to higher decision-makers when necessary.  There is no value-add and much cost from constantly briefing and waiting on uninvolved decision-makers.
7. Like any major change proposal, nothing will happen unless you dedicate resources (people, time, money)  to make the change happen.  Expecting people to design and implement a major change while doing their day jobs rarely works, especially when their core process is broken. Put your best operational people onto the change project; here’s where you can usefully deploy contractors - to fill in for them in the operational teams.
8. Avoid highly structured project management methodologies. I recommend a much more agile, lo-tech approach. Don’t try to specify everything before you start.  Have a high level “architectural” concept to guide you, but get going!
9. Keep the alligators at bay, but focus on the swamp draining. Don’t worry about dealing with the current stream of problems - that’s the job of the operational teams.  Put in place some holding plan, but concentrate your best resources on creating the new model that will work.  Get it working, put all new customers, and new transactions onto it, transfer all customers without problems onto it, and then, last, not first, deal with the problem backlog.
10. Notwithstanding rule 9, try to deliver value quickly, in chunks, rather than going for the big bang. Incremental success builds support.
11. Bonus rule: communicate, communicate, communicate; up, down, across, inward, outward.

In response to declining performance from eBay, Lance Wiggs has written a short analysis of what eBay is doing wrong compared to Trade Me, which dominates the New Zealand market.  Trade Me is something of a latter-day national icon in NZ, having been a textbook dot.com startup which made its young founder famous and very wealthy, has survived the transition to big corporate ownership with its reputation and customer loyalty intact, and continues to grow its usage, revenue and profitability.

Today eBay Australia has 1,113,647 listings located in Australia, eBay.com has 25.2m listings located in the USA while Trade Me has 1,255,082 listings in NZ. (That’s right, there are more actual listings on Trade Me than on eBay Australia.)

That’s 55 listings per 1000 Australians, 84 per 1000 US citizens and 305 listings per 1000 New Zealanders. That’s astonishing - 5.6 times difference between Nz and Australia, and 3.6 times between NZ and USA.

Now we do need to adjust for the critical difference - eBay charges listing fees while Trade Me does not. We used to say (and observe) that free listings sites attract 2 time the listings of non-free ones. That would still leave Trade Me at 152 listings per person - 2.8 times more than eBay Australia and 1.7 times more than eBay.com USA.

While comparisons between a small market and a large one are problematic (differences in levels of competition, granularity, etc), Lance examines several stark contrasts between eBay and Trade Me, eg. usability, use of advertising (Trade Me spends nothing while eBay spends a third of its margin), and so on.  But these differences, while important, are not the big issue.  To me, the most important difference Lance identifies is that eBay, which originally started as a personal auction service, has increasingly shifted its focus to serving the large businesses which use it as an online shop; in contrast, Trade Me has remained a web service focused on the individual trader, even though it has  some larger players using it.  eBay today is little different from Amazon and Yahoo, who do a better job as shops, and vulnerable to big traders simply doing their own thing at much less cost. Trade Me’s buyers are sellers too, and are easily attracted to Trade Me’s additional services which remain true to the Trade Me motif. Trade Me’s shoppers go there not just because they want to buy something, but also because they can and do easily sell their dining table, garden equipment, doll collection, car or house.

Many business start off serving one market but evolve to serving another over time.  Sometimes that’s a good thing.  But there’s a risk that pandering to your biggest customers over the short term means you lose what made you successful. It looks like eBay has fallen into that trap while Trade Me has avoided it.

Following my last post about branding, my attention was grabbed by a 007 movie on Sky tonight, with one of the modern era’s great branding statements. Woman or man, you all know what it stands for (and its meaning is gender dependent).

The name’s Bond. James Bond. Donovan. James Donovan

Oh, if only. Damn Ian Fleming.

Over on Business Pundit, author Jonathan Salem Baskin asserts that brands are dead.  It came as no surprise to learn that Baskin has written a book based on this ridiculous proposition, with a witty title: “Branding only works on cattle“, but that’s about all I liked. Here’s a typical assertion:

… brands are simply irrelevant in a world wherein people know that one airplane seat looks like another, different clothes and PCs are made in the same factories overseas, and that most companies expect customers to help themselves.

But airlines are not all the same. I prefer Star Alliance airlines to One World, except I’m not keen on Lufthansa; even the cut-price airlines differ in brand personality from each other.  People clearly are prepared to pay more for products with names they trust (ask HP or Ralph Lauren).  Even in self service businesses (and web-based services are the ultimate low-barrier-to-entry, anyone can look big market), people make choices - often based on brand reputation.

Baskin falls into the trap of confusing brands with logos and jingles. A brand is an abstract concept which captures what your market offer is all about, and why people choose your offer. A successful brand is built on reality. It’s generated by what your product is and isn’t, what you do and don’t do, how you do it and don’t do it, what your product does for customers and what it doesn’t do, by market endorsement, by how customers react to, and in some cases, take over your brand, giving it even more personality (think Harley Davidson).

Brands are dead? I don’t think so!

Sitting at a roadside table in the sunshine eating fish, the Vista Group pondered the parlous state of the Big 3 US auto makers:

• Getting his retaliation in first, Jack Yan had already written up his perspective, which essentially supports some form of federal bailout, with conditions attached to force reform.
• Mark Di Somma favoured Chapter 11 administration (reorganisation),  to take the creditor pressure off while the companies restructure themselves. Companies often manage such processes themselves.
• I, being somewhat cynical about the industry’s failed makeover attempts over the last 30 years, argued that Chapter 7 administration (ie. send in the receivers liquidators) is the only way to achieve the required level of change, effectively breaking up these giant companies into more nimble businesses, because they won’t do it to themselves. I’m not alone in this; Lance Wiggs has expressed similar sentiments.
• Natalie Fergusson didn’t have strong views on industry restructuring, but hoped that Hummers won’t be made anymore.

As usual, we failed to stay on topic, with diversions into well-meaning but crass attempts to serve ethnic customer groups, hitherto undiscovered programming gems on satellite TV, and how hard it is to write a pithy description of your own business. We suggested that Jack runs as the non-aligned, non-parochial candidate for Executive Mayor of Greater Wellington, if and when that miracle of local government reform ever happens. And Jack somehow managed to have his linguini ai frutti di mare made with chorizo sausage.

PS I forgot we also covered social network sites.

Want a simple tool to estimate  values on company shares you’re thinking of buying or selling? Want to see other people’s valuations on the same stock? Then head over to Valuecruncher, where you can see dozens (soon too be thousands) of valuations on major listed companies around the world.  You don’t need to be a financial genius, you simply put in your assumptions about revenue, operating margin, depreciation and capital expenditure, and voila! You have a share price valuation based on those assumptions. Easy as pie. You can play with someone else’s assumptions to create your own, save multiple valuations, and comment on valuations with the rest of the Valuecruncher community. The Valuecruncher team also publish their own valuations (which are carried by other financial services, so they are well-regarded) and you can play with those too.

Valuecruncher also nominates a “stock of the week”  to stimulate the Valuecruncher community and tap into “the wisdom of crowds”.  This week it’s GPS chipmaker Rakon. Try it - it’s fun and free.  Rowan Simpson has blogged about his effort.  Interestingly, with different sets of assumptions, his valuation and mine were very close.

You can also get the Valuecruncher team to do a more detailed valuation for a very affordable fee (compared to conventional company valuations); very handy for privately held or lightly traded companies needing some idea of their intrinsic value.

Disclosure:  Isambard Investments Ltd holds shares in Valuecruncher, one of our very few angel investments.

Yahoo has just announced that Jerry Yang is “stepping down” as CEO, but will stay on  the board as Chief Yahoo.  By my reckoning, after Yang’s astounding statement that Microsoft should still buy Yahoo, it’s taken the Yahoo board under a fortnight to put this in place. As these things go, that’s lightning-fast, so I suspect the knives were sharpened long beforehand. Yang’s faux pas was simply an heaven-sent opportunity for the boardroom coup to start.

Yesterday, I argued that your trainee intake should be one of the last things you cut, not one of the first. I also noted that culling contractors was a typical early step for companies facing difficulties, which to me begs some questions.  Several people have asked me what I meant.

My first questions would be - why did you hire the contractor (or consultant) in the first place, and what has changed that now obviates the need for the contractor?

• Specialist outside expertise to address a short-term need.  Presumably you still need that outside expertise, or was the project not really justified?
• Extra capacity to fill a short term need.  What is the cost and time needed to transfer the task to someone on the permanent payroll, including the cost of delayed realisation of the business benefits from the task? Will the permanent employee do as good a job, as quickly as the contractor? Again, was the need really justified?
• Inability to recruit a permanent employee? Why couldn’t you recruit someone? (Presumably not remuneration, since you’re prepared to pay contractor rates). If you can do without the contractor now, why were you recruiting at all?

Politicians seem to have a particular predilection for bagging contractors - as if contractors are by implication an expensive and undesirable resource.  However, I am a strong believer in utilising external resources, both for flexibility in workload capacity (I’ve had 2/3 of my workforce as contractors at times) and for specialist short term expertise.  I also believe in contracting out non-core activities, to keep the business simple.

However, despite my support for using contractors, I believe in treating them differently to employees; eg. they can come to team drinks on site, but not company briefings or company-sponsored social events (PS: unless in an interim senior leadership role). “Membership has its privileges,” to quote the Amex ads.  That will strike many people as harsh, but if it is not absolutely clear to both your contractors and your staff that contractors are not employees, you risk future grief and trouble. I usually impose a finite term on any individual contractor, especially when filling a recruitment gap, to avoid the potential for them effectively becoming just an expensive employee.  That term may be a few weeks or a year, depending on the need and context, eg. if a major strategic issue needs to be resolved before a permanent role can be scoped. I look askance at any extension of a contractor’s engagement.

But, returning to my main theme, simply saying “stop using contractors” is a mindless tactic. Of course you want to look after your permanent staff. Of course you’d cull your contractors if the job still needs to be done, and your freed-up permanent staff have the expertise to quickly take over and do the task,   But if not, you may need to keep those contractors, and you probably need to cull your permanent staff harder than you’re already doing.

Tough decisions to survive tough times. Not everyone can make them.

Many businesses facing tough times put a sinking lid on headcount, not replacing leavers, culling contractors (which begs a few questions), and halting new hires.  All standard stuff, but if you’re a mid-scale or larger employer, you should think carefully about that last one, if it means cutting out your new trainee intake.  When the economy picks up again, you’ll struggle to find the juniors you need. If you have a structured graduate intake which feeds into your entire career structure (especially the professions), you risk the long term future of your business if you do not maintain some level of new intake.

I remember one downturn in the IT industry in the mid 70s.  No graduate trainees were taken on for 3 years in the company where I worked.  That effectively destroyed the company’s previously very strong training capability (trainers, programmes and processes), but, more importantly, the company was missing 3  years of talent that would have become specialists, team leaders, project managers, sales people, etc just at the time when IT entered a phase of strong growth in the early 80s. Its graduate intake programme was never the same again. That wasn’t the only factor, but I believe it was a significant one in the long term malaise the company suffered thereafter.

Frankly there’s a lot more cost in keeping on one senior or mid level manager, compared to a few trainees. Yes, you need to make tough decisions to survive tough times, but your trainee intake should be one of the last things you cut, not one of the first, and in the full knowledge that you’re mortgaging your future.

I’m pleased to see my old colleagues at Fronde have achieved a return to group profitability in the first half of the current financial year, and cleared most of their bank debt.  Ian Clarke and his team have done well.

Disclosure: Isambard Investments Ltd owns Fronde shares.

My Vista lunchmate Jack Yan has just introduced me to the ideas of black libertarian scholar Dr Thomas Sowell, of Stanford University.  This quote rang a lot of bells for me:

“… the ignorance of Ph.D.s is still ignorance and high-IQ groupthink is still groupthink, which is the antithesis of real thinking.”

I’ll have to read this guy.

It’s time to wrap up the series “Private business exit: 16 questions to develop a plan“.  To recap, our 16 questions are:

1. Why are you selling?
2. What exactly does your business offer the world?
3. What are your goals and dreams - inside the business, outside the business and after the business?
4. How attractive is your business, and what’s wrong with it?
5. Who are your key people, customers, suppliers and partners, and are you vulnerable to their departure?
6. How do you make yourself unnecessary to the business?
7. Which buyer types should you target?
8. Who would want to buy it and why; who should, but doesn’t, and why not?
9. Should you sell gradually or all at once?
10. Should you sell to family and/or staff?
11. What should you do to improve your business attractiveness?
12. What should you do to be ready for sale?
13. How do you manage the sale process? Part I, Part II
14. What’s in a good sale agreement for you, and for your buyer?
15. How do you ensure a successful transfer?
16. How much should you be involved after the deal is done?

Let’s quickly answer those last 3 questions:

Sale agreements are usually very standard, with variations typically around the pricing formulas and the warranties. Make sure that the agreement is very clear on what is being sold and what is not; what is being guaranteed and what is not, what is in the price formula and what is not, what your role is after the deal and what it isn’t, etc. (Regular readers know that I’m an advocate of NOT thinking).  Make sure that any earn-out formula is based on simple-to-measure and easy-to-verify numbers; more disputes happen here than in any other area.  Try to keep any warranties (e.g. that you own all your intellectual property or that you have no tax liabilities) and any related price claw-back provisions simple, definable, measurable, and time-limited. Have a disputes procedure which can resolve any issues such as earn-out calculations without going to court. All of this will help to make the agreement better for you and your buyer. In short, keep the sale agreement simple, friendly and fair.

Ensuring a successful transfer is largely the buyer’s responsibility.  As a responsible seller, you’ll naturally do a good job of announcing the transfer and assisting as defined in the sale agreement, and not just because there’s an earn-out clause; but let the new owners take control - it’s in their interest to quickly reassure staff, suppliers and customers.  You may find that the new owners aren’t doing a good job on handover, and be tempted to step in, but be very careful; it’s not your business any more, and you may make matters worse, disrupting the new chain of command and possibly inviting a lawsuit from the new owners.

Your ongoing involvement after the deal depends on whether you’ve been contracted into the bargain - eg. a fixed period of time to ensure a successful handover, personal control to achieve the earn-out potential, or simply because you’ve agreed to carry on in the business.  Some selling executives stay on, and end up eventually running the enlarged operation. There are no hard rules.  Just do a great job if you do stay on.  If you’re not staying on, then enjoy the friendships you’ve made but, as in the previous paragraph, be careful about any involvement beyond that. In particular, there’s an unwritten rule to avoid making negative public comments on your former enterprise.  That unwritten code is usually followed by former senior executives in any enterprise, much to the annoyance of journalists. Move on to your next adventure.

I hope you’ve found this series useful. When I started it, I wrote that the best way to have a great business to sell is to have a great business. Actions you’d do to prepare your business for sale are often actions you should do anyway. These 16 questions and the ensuing discussion will help you formulate a business plan with successful exit in mind.

By the way, I’m always interested in good mid-size businesses to buy, and even if not, I do occasionally help out (as an adviser or director) when someone needs a hand to plan and execute a sale or acquisition. Contact me via Isambard. Meanwhile, here’s a bonus question for you.  What will you spend your money on? Will it be a new business or some little luxury?

Now here’s an interesting proposition.  Hyperion Power Generation Inc is planing to develop and sell community-scale nuclear power plants, with the first installed within 5 years.  Each plant can generate 25 megawatts of electricity and 70 megawatts of heat; enough for a small town (~20k homes). The ground-buried plant, about the size of a hot tub, is based on a proven standard design used in several research and military plants, using a small quantity of non-weapons grade fuel. Hyperion’s concept promises proven safety, no carbon emissions, no need for big transmission lines, low transmission losses, no visual pollution, high reliability, easy maintenance, and manageable transport and disposal.

None of which will be taken into account by the anti-nuclear power lobby.

A quick summary:

• Small -1.5 meters across, approx size of a residential “hot tub”
• Produces 70 MWt/25 MWe, enough to power 20,000 average American homes or the equivalent
• Buried underground out of sight and harm’s way
• Transportable by train, ship, truck
• Sealed module, never opened on site
• Enough power for 5+ years
• After 5 years, removed & refueled at original factory
• Uniquely safe, self-moderating using a natural chemical reaction discovered 50 years ago
• No mechanical parts in the core to malfunction
• Water not used as coolant; cannot go “supercritical” or get too hot
• No greenhouse gases or global warming emissions
• Think: Large Battery!

Ever used one of those retirement planning calculators?  Almost all of them ask your current age, your planned retirement age, and then look up a set of life tables to work how many years of retirement you need to fund, based on the remaining life expectancy for someone your age. You define the retirement income you’d like and it then tells you how big a lump sum you need, given average investment returns and inflation.  All very sensible, you’d think.  But  I suspect most people forget that these calculations are all based on averages, and the most misleading average of them all is life expectancy.

Let me explain, using myself as an example: age now, 56; expected age at death, 82. Let’s say I plan to retire at age 65 (I don’t); when I get to 65, my expected age at death is 83, ie. another year to fund. But if I make it to 83, my expected age at death is 90, so it’s 8 years more.  And so it goes on.  In other words, if I follow the usual retirement planning advice,  I may not have as much money as I need.

There are solutions, such as buying annuities or long life insurance, although these are not very common in my principal country of residence, largely because of a deep suspicion of the fees and overhead costs of the providers, and doubts about their longevity.  Self-funding is common, but most people don’t understand that the suggested amount is based on an average - the wrong average. (And who reads the small print in the calculator’s notes?) In any case, I’ve not seen a calculator which factors in the cost of an annuity, etc..

It’s not just retirement planning.  Businesses and governments misconstrue or misuse statistical methods in many applications.   People wrongly assume that averages equate to what they actually will experience. They’d be better off using percentiles.  In the dim and distant past, in the age of steam-driven computers, one of my specialities was “sizing”, using queueing theory to calculate  the size and speed of computer configurations to deliver the required performance of a set of tasks. In a very few years, the basis of contractual performance specifications for response times (between hitting Enter and getting the answer back on the screen) changed from average time to 90th percentile time.  Using a high percentile gives a much more effective definition of the response time experienced by most users, most of the time.

I don’t know what the appropriate life expectancy percentile should be for retirement planning, but it is not the 50th percentile for your current age.

By the way, chaps, one of the little known effects of us blokes surviving into old age is that we start to catch up to the life expectancy of women.  So you can feel smug in the knowledge that when you pop your clogs aged 101, She Who Must Be Obeyed is likely to follow you within a few weeks. If you believe in an afterlife, that might or might not be good news!

I should tell you that my family trust now owns shares in  both Apple and Microsoft.  Along with my Linux netbook, I reckon this proves I’m just a tech tart.

One can only shake one’s head in wonder.  In early 2008, Yahoo CEO Jerry Yang incensed many of his shareholders by rejecting a Microsoft takeover offer at US$33 per share.  Microsoft walked away from what seemed to many to be a badly overplayed hand by Yang.  Yahoo then tried to do a deal with Google, replacing Yahoo’s search engine with Google’s, in return for an estimated US$800m per year in advertising commissions.  The US authorities balked at that on anti-competition grounds, and Google has walked away, too.

So, now that Yahoo’s share price is under US$14, what does Jerry Yang say?

“The best thing for Microsoft to do is buy Yahoo.”

Unbelievable! How does this man keep his job?