The veteran activist shareholder Carl Icahn has finally started to write on his own personal weblog.  An early February launch was followed by several months of silence, which perplexed many (including yours truly).  However, the wait is over, with The Icahn Report posting several previously prepared invectives on boards, CEOs and poison pills, to mention a few.  It’s all classic Icahn, and worth reading, even if it is very USA-centric. Enjoy.

I was going to write something to mark the passing of Yves Saint Laurent, one of the world’s great designers (and a genuine brand name, not some artificial creation). To paraphrase Pierre Berge, YSL’s partner (in every sense), Coco Chanel gave women freedom, but YSL gave them power. However, my Vista chum Jack Yan has written something far better than I could, so over to you, Jack.

Two conversations yesterday about how to drive change drew me to observe that any change agent often has to deal with and manage several constituencies:

• The early enthusiasts: eager proponents and advocates, but who want you to fire everyone else who doesn’t ‘get it’ straight away.
• The nervous approvers: They need selling on the rationale, and are nervous about the change, but consultation, communication, confidence, consistency, and constancy of purpose will bring them aboard. They get very anxious when others don’t ‘get it’, and expect massive efforts to keep everyone happy, especially those who have yet to ‘get it’.
• The passive acceptors: They bitch and moan like everyone else but, as the change gets embedded, just accept it and forget about it.
• The late zealots: They fight the change tooth and nail, but as they see things start to work, they become its most ardent enthusiasts, and stop worrying about those who have yet to see the light.
• The smart leavers: These don’t like the change, but often can understand its rationale. However, it’s not for them, and they move themselves on to new jobs (where they often adopt new ways anyhow). You remain on good terms with them.
• The persistent nay-sayers: These are the ones who hate the change, and constantly bemoan it. They’ll never be converted, yet they stay on, becoming increasingly bitter and twisted, undermining everything and everyone, and constantly demanding your attention to their grievance.

It’s important to figure out which constituency someone is in, and manage them accordingly. If you’ve got a persistent nay-sayer who can’t be turned into a late zealot, try to turn them into a smart leaver. Otherwise, put them out of their misery - get them out as fairly, humanely and quickly as possible. The success and well-being of the team, the change and the business is more important than wasting time and energy on a cause you can’t win. It’s like removing a sticking plaster - a quick rip in less painful in the end.

(Actually, the original analogy was waxing your bikini-line, but that might not get through some people’s reader filters.)

Wednesday’s editorial in The Independent Financial Review focused on my proposal to get rid of public holidays and replace them with additional annual leave. Unfortunately the editorial doesn’t seem to be online, but (update) thanks to DPF, I’ve reproduced the text of the editorial below. It largely reiterates my original article, with some additional supportive comment from editor Nick Stride and top blogger David Farrar.

The IFR finishes by wondering how the trade union movement will react to the idea, and coyly presumes that it “will embrace with open arms a concept that would deliver greater output and more freedom“.  Let’s see if any politicians will run with the idea.

IFR editorial:

Now, here’s a thought.

Jim Donovan, a blogger, proposes we do away with public holidays altogether.

There are 10 statutory holidays, and these 10 days would be added to worker’s annual leave entitlement - 20 days, in most cases.

At present, when employees want to take annual leave, it must be agreed in advance with their employer.

The new legislation would specify a certain number of days - Donovan suggests five - which the employee can nominate in advance, and which the employer is required to grant.

To prevent gaming behaviour, those days once nominated would have to be taken off, unless the employer agreed otherwise.

One advantage, says Donovan, is the economy, businesses and consumers would gain several trading days a year.

Another is employees would gain more days they could take off when it suited them, rather than when the calendar mandates they must. So families could organise reunions at a time when peak fares and holiday traffic were no hindrance.

Of course, there are issues.

Donovan points out there would have to be exemptions for essential services, but says he’d keep the list short.

In an economy made up of small businesses, some would have problems covering for key staff taking certain days off as by right.

Some might not be able to open at all. But there would be fewer of these days than are lost at present through mandatory closing.

And some will argue, as they do now, the spiritual significance of Easter and Christmas would be diminished if those days were simply trading days like any other.

But the force of this argument is dissipating as the population becomes more multicultural, and secular.

Those who celebrate Christmas as a religious day, or as a secular holiday, could simply specify it as one of their mandatory days off.

What’s more, as blogger David Farrar points out, Donovan’s regime would be far more friendly to adherents of religions other than Christianity. Muslims, Hindus, Buddhists, etc, would be able to specify their own religious holidays as mandatory days off.

It’ll be interesting to see how the Council of Trade Unions reacts to the idea. It presumably will embrace with open arms a concept that would deliver greater output and more freedom.

It’s Good Friday and, as in every year in recent memory, the perennial debate arises regarding shopping and other commercial activities on certain public holidays (assuming you’re in a part of the world where they are prohibited). The usual arguments are trotted out by the pro-restriction lobby: it’s one day families can all rely on to get together, it’s a mark of respect to our religious and cultural heritage, it’s one day that sporting and cultural festival organisers can rely on (attracting crowds they otherwise wouldn’t get). That’s fine for those people who want to put aside those particular days for the things they want to do; but why, ask the pro-liberalisation lobby - usually business groups wanting to trade on those days - should everyone else be captive to those special interest groups’ demands, especially when the vast majority actually take no part in the special events on those holidays? The pro-restriction lobby then trots out pieties against crass commercialism and abuse of workers’ rights.

I have a radical alternative which I reckon will appeal to nearly everyone (other than the would-be regulators of my life). Get rid of public holidays altogether, and in return increase annual leave entitlements by the same number of days. Say you currently get 20 days annual leave and 10 public holidays; instead you’d get 30 days annual leave, to take whenever you like.

To cater for the people who want to fix certain dates for religious or cultural activities, you could allow them to nominate up to, say, 5 days a year where they can definitely take time off (i.e. the employer has no choice). To avoid gaming, once nominated those days MUST be taken, unless the employer and employee otherwise both agree. Of course you’d have to allow for essential services, but I’d keep it a very short list.

Small firms would still implement mid-winter and mid-summer close-downs where everyone takes a break together. Most people would still take their primary religious festivals off. The economy, businesses and consumers would effectively gain several days trading a year. And here’s the greatest advantage - ordinary workers would be free to take more days off when they and their employer agree, not when someone else outside the relationship says they should. For example, families could organise get-togethers when it suited them - and avoid the peak fares and traffic jams of the most popular days.

Just think:

• 20 days annual leave plus the odd day when some bigwig says you must; or
• 30 days annual leave when you want.

I’d bet that most people and businesses would prefer the latter. And think of the administrative simplicity. Unfortunately, too many vested interests love the petty power, anti-competitiveness and big-noting associated with public holidays.

Update. This article’s certainly attracted some interest. Apart from the comments here, have a look at:

• David Farrar
• Owld Grumbleton
• The Hive
• The Independent Financial Review editorial
• I’ll add others as I find them.

Despite my feeble attempt to create a theme for this month’s Vista Group lunch, it somehow degenerated into a discussion of famous put-downs and how bad taste jokes seem to quickly follow any news of others’ misfortunes. I was reminded that the correct term for this is schadenfreude, not gesundheit. (No, I am not posting any links to Heather Mills joke pages.)

However, we did have one useful outcome - we met Natalie Ferguson, another Wellington-based entrepreneur and business blogger. Natalie’s web-design business, Decisive Flow, makes simplicity and usability hallmarks of the work she and her team do for for clients around the world.

One of our group, Lucire magazine publisher Jack Yan, is anally-retentive passionate about character fonts and was very complimentary about the design of Natalie’s blog site. The rest of us agreed it looked lovely, but also focused on the content. Natalie, who co-founded PlanHQ before focusing on her current business, writes about the day-to-day joys and frustrations of her business life, plus anything else that grabs her attention.

The other highlight of the lunch was the look on Mark Di Somma’s face when I told him the unexpected news that a company, at whose planning conference we are both presenting next week, has chosen to be technology-free for the day. No PowerPoint! Good - someone else has to completely rework their presentation and rely primarily on the power of the spoken word. Is there a word for enjoying the misfortune of others having to share in yours?

In a presentation (below) at TED2007, educationalist and tech pioneer Alan Kay brings together two interests of mine, education and technology. I’ve written before about the importance of pre-teens understanding basic mathematics and algebra as a key indicator of general career success and as a prerequisite to increase the likelihood of teenagers engaging with with technical subjects at school. The trick is using tools and learning techniques that kids will find fun - like dropping fruit and bowling balls off buildings, and doing stuff on the computer. Alan shows how 6 year olds can learn about variables, acceleration and gravity, using deceptively simple tools on a $100 OLPC laptop ( from the One Laptop Per Child project - actually US$200, but still every school should be able to have these in every class).

Alan starts slow but the pace picks up once the OLPC appears.

There are only four types of officer. First, there are the lazy, stupid ones. Leave them alone, they do no harm…Second, there are the hard-working, intelligent ones. They make excellent staff officers, ensuring that every detail is properly considered. Third, there are the hard-working, stupid ones. These people are a menace and must be fired at once. They create irrelevant work for everybody. Finally, there are the intelligent, lazy ones. They are suited for the highest office.

- General Erich Von Manstein (1887-1973) on the German Officer Corps

Now some people take this far too seriously. I see it as an insightful, but tongue-in-cheek aphorism. With that caveat, how does it stack up when applied to the business managerial cadre?

• Lazy, stupid managers are unlikely to get in the way of their staff trying to do a good job and tend to go with the general thrust of strategic intent because to do otherwise might require effort. However, that’s not good enough for me in the long run, although you may want the odd one or two for necessary but low impact roles that no-one else is excited by.
• Hard-working, intelligent managers get things done, through their own efforts and direct leadership. They pay attention to details of design and execution. You have to get them on-side regarding strategic intent, and they may challenge what that intent should be, but they are smart enough to understand the need for unity of purpose and will work hard to achieve success. You want a lot of your managers to be in this category. Nurture and develop them.
• Hard-working, stupid managers are downright dangerous - they create unnecessary work, they reinvent the wheel, they constantly challenge strategic intent without having anything better to offer, and their teams are often the most dissatisfied. I agree - get rid of them.
• Lazy, intelligent managers are the ones who know what to do, but they don’t get sucked into day-to-day operations, and are smart enough to get others to do it. They also will challenge strategic intent, but are smart enough to understand the need for unity of purpose. and so are unlikely to change it until they themselves are in charge.They are designed for the top roles. Actually, there aren’t many lazy top managers, but the ability to think and to truly delegate is an important skill for senior management, so nurture and develop them too.

For more opinions, look at Jim McGee and Carmen Coyote, amongst others.

At lunch last Friday, I sat next to economist and columnist Tim Harford, the author of The Undercover Economist, who was in Wellington to speak to the Chamber of Commerce about his latest book The Logic of Life. Readers will already have read my review, so I won’t reiterate that. I asked Tim a few questions, to which I hopefully can paraphrase his answers correctly.

J: This new wave of economics writing applies the data analysis disciplines of economics to social issues, but is it still economics?

T: One circular argument is that economics is what economists do. Seriously though, economics works on a basic assumption of rationality, that people balance costs and benefits, risks and rewards. We’re now looking at broader (applications) than just monetary issues. And remember that some of the leading economics thinkers aren’t economists. Look at James Coleman.

J: A key concept in your latest book (and in economics) is that people’s actions are, on the whole, ‘rational’. But that’s not the same as ‘ideal’, is it?

T: No-one is perfectly rational. And the result of individual rationality can be social chaos. On the subject of rationality, it’s important to remember that people do not have to be supercomputers to work out costs and benefits. We deal with complex matters all the time. Take catching a cricket ball. We can describe the complex mathematics to calculate the flight of the ball, but only a few people actually know and understand them, and in any case, we couldn’t do the calculation fast enough to help us catch the ball. But somehow we do do that calculation subconsciously and very, very quickly. People and animals calculate costs and benefits all the time. Otherwise we couldn’t survive.

J: If you were in charge of the ship, what 3 policy initiatives would you implement?

T: I wouldn’t want to be in charge, but there are 3 things I want. Firstly, use randomised trials to test all policy initiatives. The insights are very powerful (and finding out that something doesn’t work is a successful result). Secondly, use international benchmarking a lot more to guide policy development. For example, when I was at the World Bank, we published a study of red tape around the world. New Zealand came out very favourably on setting up a company. Thirdly, I’d implement a rational green tax as fast as possible.

J: Carbon emission tax or ‘cap and trade’?

T: They’ve both got strengths and weaknesses, but either can do the job. Most economists favour emission taxes, but cap and trade is probably easier to get through the lobby groups and vested interests.

Tim made an important final point about intentions and actions. Economists don’t pay attention to what people say they will do, they look at what people actually do. That’s often very different, even when people know the supposed ‘right thing to do’. Marketers and designers should bear that in mind.

Carl Icahn, Numero Uno activist shareholder, is starting a blog. Sign up here.

When I close an account with someone, I nearly always tell them why - usually simply because my need for that service is over, thankfully rarely for bad service. So it’s astonishing how many businesses with otherwise good service processes handle account closures badly. Bureaucratic forms, non-standard processes, fumbled service terminations, over-billing, and slow repayment of credit balances are often made worse by lack of acknowledgement of the closure request and surly treatment not shown at other times. Don’t they realise that I might be a customer again at some future date? Even if not, that’s no excuse.

So it’s pleasing when someone does it right. When I emailed Fairfax to close my newspaper subscription because we’re planning to be based overseas for a while, I got a very fast response confirming cancellation of my usual subscription invoice, confirming the last date of delivery, and promising a revised subscription invoice near then, finishing off with a cheery “Have fun overseas!”

I’m impressed by the process and the personal touch. Well done, Fairfax - and especially well done, Michelle Davison.

Sorry - couldn’t help myself with that headline. I’ve enjoyed a stimulating lunch today with fellow business bloggers Jack Yan and Mark Di Somma. We only recently realised we all live in the same city, and this was my first meeting in person with them (at Vista on Oriental Parade, on a beautiful sunny day in Wellington; I recommend the smoked fishcakes and the coffee is superb).

There was no agenda for our meeting other than getting to know each other. Both Jack and Mark have lively bubbly personas and the conversation somehow covered how we got into blogging, the emotions we felt when visiting major battlefields, funny stories about airport incidents, and much mutual shaking of heads over timid strategy making.

We all feature branding strategy in what we do, albeit from different angles. Jack is publisher of fashion magazine Lucire, co-author of “Beyond Branding” and a consultant. Mark is a also a branding consultant, especially in business sectors facing seismic change. I focus on “the market offer” and how that is carried through into every aspect of strategy and execution.

Will anything come out of this? Who knows, but we’ll definitely meet again soon.

“There is a market for everything — even dead bodies.” One of the odder things I read over the holiday was a thought-provoking article on the Harvard Business School Working Knowledge site. “Having a cadaver for a medical student to practice on is something we like to see happen, but few really want to know how the cadaver was procured,” according to Harvard professor Michel Anteby.

Medical students use cadavers to gain experience, and their future patients are better off for it. Traditionally, cadavers have been obtained through university programs, but now entrepreneurial ventures are springing up to meet the growing demand for cadavers in medical training, in medical research, and for the development of new medical devices.

Given the sometimes uneasy feelings around the topic, it’s easy to understand how such entrepreneurial organizations (both for-profit and nonprofit) could make some people apprehensive, even raising instinctive fears of bodysnatchers looking for a quick payday.

Anteby studied the different strategies adopted by a not-for-profit academic organisation and an entrepreneurial venture. Both operated ethically but differently - the academic program provided “healthy” cadavers to medical schools while the entrepreneurial program provided “diseased” cadavers to research labs and medical device makers. Anteby wanted to see if there were any insights from the different approaches which could enable an increase in the availability of cadavers for research and education (a serious problem).

For me, the interesting point was this:

“There are many assumptions that can be made around ‘gray zone’ entrepreneurial ventures that bring up issues of legitimacy and moral order,” Anteby says. “Some of these assumptions are probably justified, and some need to be revisited.”

Society frequently changes its view on ethical/moral issues and money. Witness New Zealand’s decriminalisation of prostitution, or conversely, the Netherlands overturning its previously laissez-faire attitude to cannabis “coffee shops”. Protecting the disadvantaged from exploitation is important, but should that exclude reasonable ethical entrepreneurial endeavour? Why shouldn’t a healthy, well-informed and fully-consenting surrogate mother be paid for her services.

The vast majority of people in business don’t have to deal with such deep issues very often, if at all. But all business people need to think about the appropriate ethical base (whatever it might be) for their own business. Have you?

Update: Just a few hours after posting this, Tim Harford (of Undercover Economist fame) posted an article on organ donations: “The obvious - and sadly unacceptable - solution is a market for organ donations”.

It is an enormously sad time in New Zealand. Sir Edmund Hillary, conqueror of Everest and traverser of Antarctica, has died. Sir Ed, as he was known with great affection, is a New Zealand icon, the man alone, the staunch ordinary bloke, not too intellectual but thoroughly decent, who’d always look after the other fellow, and who was always far bigger than his physical feats. Ed Hillary epitomised how Kiwis see themselves. He was the “ordinary joker” that “knocked the bastard off”. Farewell, Sir Ed - New Zealand incarnate.

This isn’t meant to sound boastful, but I am inundated in December with invitations to business Christmas functions. Without wishing to sound ungrateful for the well-meant hospitality, I do find this Christmas drinks thing a bit tedious after a while. There are some do’s where I should go, either from a real sense of connection at a personal level with the inviting organisation, or because I have a figurehead role to play (these things are important). Otherwise nowadays, I just don’t accept - politely, of course.

In theory, a lot of these functions are meant to be a way for organisations to connect with their clients and business associates. However, they often fail to do so - not because of a lack of goodwill, but from a lack of spontaneity and originality.

A company would have far more impact with its “stakeholder” functions if (a) they were different from the usual canapes and wine format, and (b) more importantly, they were held at a different time of the year, when I’d be more inclined to attend and to heed any special messages from the organisation.

PS. Let me add that I’m not at all worried about the issue of stakeholders without a close sectarian or historical link to Christianity being offended by a Christian celebration (not that Christmas these days has much to do with Christianity). I’ve been to superb functions in other societies based on their high days and holy celebrations, and enjoyed the cultural experience. Done well, the reverse is true, I’m sure.

I enjoyed listening to a radio interview of Professor Paul Callaghan last Sunday morning. I was supposed to be in the gym, but ended up sitting in the car for an hour until the interview ended. Paul is the director of the MacDiarmid Institute for Advanced Materials and Nanotechnology, one of NZ’s newest research institutes, based at at Victoria University in Wellington. He’s a leading physicist, a superb teacher, and the 2007 Royal Society of NZ Distinguished Speaker.

Paul described himself as an enthusiastic late-comer to the overlap between science and business. He is on something of a campaign right now to extol the importance of science and technology to the future well-being of the NZ economy. His message could apply to almost any nation. If you’ re in NZ, go along to one of his upcoming lectures. You’ll enjoy his presentation and hopefully be moved by his messages.

Keith Turner, the founding CEO of Meridian Energy, has just announced that he plans to depart from the company in March 2008. I’ve known Keith since the early ’90s, when I was CEO of local electricity company Electra, and he was a senior executive with the Electricity Corporation of NZ. Keith was given the job of setting up what was to become Contact Energy, the privatised power generator, and did it well. After completing that job, he returned to Electricorp, where they then made him redundant - which didn’t go down well with many people. When Electricorp was itself split into 3 more companies, there was a rich irony in seeing Keith get the leadership of one of them.

At Meridian, Keith has led the company’s expansion of renewable energy generation in a very substantial way, as well as making his shareholder a tonne of money from Meridian’s foray into Australia. He’s regarded as one of NZ’s most influential people, and he’s also a nice bloke. He’ll be a hard act to follow.

Disclosure: I have investment interests in Contact, and most of the major players in the electricty sector are clients of Fronde.

Having spent nearly 3 weeks in France (I’m currently in Nice), I’m increasingly impressed by what I’ve seen - well-educated and cosmopolitan people, huge investment in infrastructure, and a strong belief in and application of technology as well as social mechanisms, without compromising on style and quality. Not to mention wonderful countryside, great food and wine, and good weather.

President Sarkozy wants to liberalise the economy, bureaucracy, social welfare and tax. Let’s not kid ourselves - it’s a massive change he’s propounding, which he may not be able to deliver. But if he can, France feels like a nation with the inherent scale, space, ambience and lifestyle to be a very good place to live, work and play. Dominic, you were spot on.

Fronde has some important clients in France, and we expect to do well with our mobile banking and mobile 2-factor security products.

Je suis en vacance. I haven’t read a paper or watched TV since a rugby disaster in Cardiff last week. However, I’m not crying in my beer. The current lack of articles is due  to being out of contact for the past week, cruising the Seine through Normandy. If you haven’t been to Normandy, I thoroughly recommend it.

Anyway, I haven’t a clue what’s happening in the world, but now I’m in Paris, I might write something soon, or not.

I arrived in San Francisco yesterday. This is my first time in the city itself - previously, I’ve gone out to San Jose and Silicon Valley. I was somewhat surprised by the standard attire of city professionals here. Instead of Silicon Valley chinos and polo shirts, they were nearly all - men and women - in black suits, now seemingly universal among professional groups in most major cities. Of course, they could be supporting New Zealand’s Rugby World Cup campaign, but, given even a large Adidas store here didn’t have any rugby paraphenalia, I doubt it. Somehow, I’d been expecting more imagination and individual style here, especially seeing the fantastic variety of smart clothing available from a huge range of retailers. Or maybe I just came on a black kind of day.