Friday, December 31, 2010

the Year in Review

Wow! What a year! Where has the time gone? I really can't believe that 2010 is over. I decided to do a year in review just because it seemed to be the thing to do in blog land:o) As I started looking at what all we had accomplished as a family, I realized that we have been busy making this house a home. We have really made this place our own and finally feel at home and not just living in a house

I am sharing links of each of my favorite projects for the year of 2010.

So here goes......













And there you have it. It's been a lot of hard work, but it's been fun. I do plan on making some changes for this blog for the following year. Stayed tuned to see what happens. 
I hope that you all have a wonderful weekend and please be safe.

Happy New Year!

Wednesday, December 29, 2010

Perhaps you should promote the poaching?

Seeing your star employees being poached by a rival always seems a bit of a bummer. And rightly so. We know from research, on industries as varied as semi-conductors and mutual funds, that they often take valuable knowledge with them and therefore enhance the performance of your rivals. And indeed, research on Silicon Valley law firms as well as on Dutch accounting firms*, shows that moving employees do not only enhance the survival chances of the poaching firms but also decrease the survival probability of the firms from which they were poached. This was especially true if the employees moved in groups and if it concerned geographically proximate rivals, because they are the ones you are especially in competition with.

Customers poaching

So far the bad news. But can there be any upside to your employees being recruited? Well, yes, actually there is definitely a potential upside to that as well – especially if your employees are being hired by your customers, as professors Deepak Somaya, Ian Williamson and Natalia Lorinkova discovered. They examined the movement of patent attorneys between 123 US law firms and 109 Fortune 500 companies from a variety of industries. And they found strong evidence that if a client company recruited a patent attorney from a law firm, subsequently that law firm would start to get significantly more business from that company.

Hence, your employees leaving for your clients can be a good thing; they bring you valuable business. McKinsey – always ranked as one of the most admired professional services firms in the field – understands and manages this process particularly well; once you have been employed by McKinsey you automatically become “an alumnus of The Firm” (rather than a deserter). The firm carefully nourishes its relationship with its “alumni”, because they subsequently bring a large chunk of their business through the door.

Competitors poaching

Recently, professors Rafael Corredoira from the University of Maryland and Lori Rosenkopf from the Wharton School even found a beneficial effect of your employees being poached by rival firms. Using patent analysis studying US semi-conductor firms, they examined the transfer of knowledge between pairs of firms: the firm from which the employee was poached and the poacher. Not surprisingly, there is quite a bit of evidence that when this happens, knowledge transfers to the poacher; it comes in the form of the brains of the newly arrived recruit. However, Rafael and Lori also discovered that, as a result of employees moving to another firm, the old employer also experienced knowledge inflow from the recruiting firm!

Now, how is that possible? Someone moves out and, as a consequence, you gain knowledge from the place they went to?! Well, that’s because in real life we often socialize with our colleagues. When they start to work for a different firm, this does not mean that we stop talking to them. And what do they talk about? Well, work… While having a drink or two, former colleagues exchange information about how things work at their new place, how they solved a particular problem over there, what technology they use, and how they have got their processes organized. And you benefit from that.

Perhaps slightly surprisingly, Rafael and Lori’s findings showed that this exchange of knowledge was especially pertinent if it concerned a geographically distant firm. They conjectured that that is because there are other means in which you can get knowledge from rival firms that are nearby; perhaps then it is likely that you already have friends there, go to the same local conferences anyway, or that your kids go to the same school. Whatever the reason, it seems evident that if your employees are at risk of being poached by a rival firm, make sure it is done by one far away: you don’t suffer the adverse consequences of a strengthened competitor as much, but you do get the knowledge inflow upside.

Hence, scrap the non-compete agreements and gardening leaves, but only on the condition that they are moving far away, and promise them a sumptuous dinner and lavish drinking budget if they come back to visit their old friends at the firm.

Monday, December 27, 2010

Clean Up, Clean Up, Everybody Everywhere...

 This was our house Christmas morning. I have never seen a White Christmas in the deep south before(been here almost 10 years)...and it was GREAT! The only problem was that we didn't get to enjoy it for very long because we had to make our way to my parents' house before the snow got too bad.
 Isn't it beautiful?
 This is the view off the side of our house. Before too long, that area behind the trees will be filled with houses. For now, we can still enjoy the view:o)
The snow is melting now, and I am in the process of breaking down all the Christmas decorations. I am really not into it, but I reeeeeeally want it all down....can I hire one of you to come do it for me:o)
I hope that you all had a wonderful Christmas. We surely did!!
Hoping to get my craft on here in the next few house is starting to look NEKKED!

Wednesday, December 22, 2010

FCC Moves to Halt Internet Service Provider Content Discrimination and Preferences

The Federal Communications Commission has moved to keep Internet service providers from limiting or unreasonably discriminating against content provided by competing services

The regulations are designed to keep telephone and cable companies that provide phone services from using their Internet services to limit use of Skype and other online telephone services. It is also intended to halt them from making content provided by audio and video service providers they do not own less desirable by limiting downloads from firms such as Netflix or Hulu or providing faster service only for their own content.

The rules are designed to maintain a level competitive position on the Internet and to restrict the abilities of companies that dominate access to the Internet from using oligopolistic control of the service points to harm content competitors.

The regulations require that services allow their customers equal access to all online content and services, but allow the services some flexibility to management network congestion and spam as long as the rules are clear and not anti-competitive.

The rules apply to fixed line services, but do not apply equally to wireless telephony which is becoming the primary means of Internet access though smart phones and electronic tablets and e-reader. Mobile phone providers are permitted to provide preferential access to their services or selected partners, but the rules forbid mobile providers from blocking access to competing sites and services. Mobile services are given more leeway to manage their networks because capacity is more limited than on the Internet.

The regulations are an important step in ensuring that major service providers such as Comcast and Verizon are not allowed to use their dominance in service provision to harm other companies and the FCC should be applauded for its efforts. Such companies have in the past shown their willingness to take advantage of their monopoloy power and are not widely noted for their consumer friendliness.

Major service providers and Republicans are vowing to fight the move, arguing that the FCC does not have the authority to issue such regulations. If the courts side with them on the issue, Congress should explicitly give it the authority or empower the Federal Trade Commission to ensure competivieneess online.

Does the stock market appreciate management consultants?

Management consultancy has boomed over the past decades. I recently saw a statistic which showed that in 1980 global revenues in the consultancy business equalled $3 billion. By 2005, it was more than $150 billion.

But what does it say about you, as a company and management team, when you are hiring a management consultant to help you out, with your strategy or organizational structure? On the one hand it is a good thing, right; you are not afraid to ask for help, and management consultants can bring in valuable outside knowledge, ideas, and experience. On the other hand, it could be interpreted as a bit of an admission of defeat… “we’re not able to figure it out ourselves”, “we have run out of ideas and options”, “we’re in seriously trouble; we need help” or something along those lines. Plus, these pin-striped guys do not exactly come cheap.

Whatever way you put it, it is some sort of a signal – either openness to outside ideas or a signal of brewing trouble. And signals are what the stock market is always on the lookout for, like a vulture spotting the slightest of limps in a wounded animal or, perhaps more kindly, some green shoots to announce the arrival of spring. So, it is an interesting question: does the stock market usually respond negatively or positively to a firm hiring a management consultant?

Professors Don Bergh from the University of Denver and Patrick Gibbons from University College Dublin set out to examine exactly this question. They collected information on 116 listed firms that publicly announced hiring a management consultancy, and statistically analyzed whether such an announcement increased or decreased the firm’s share price. And the answer was clear: share price increased with an average of 1.4% by the hiring of such an advisory firm. Now that’s value for money for you; the pin-striped guys haven’t even done anything yet and your company has already increased in worth.

But did everybody experience this uplifting effect? Not really: Don and Patrick also found that this entire effect could be attributed to well-performing firms; firms that already were healthy and profitable before bringing in the advisor saw quite an upsurge in their share price – apparently the market thinks that the combined forces will be able to make the company grow even faster. However, underperforming firms – firms with a more dismal financial track record – did not benefit at all from hiring a consultant. As a matter of fact, the stock market’s reaction would even turn negative for the real sub-par performers. Apparently, in that case it is interpreted as a sign that the company is in even more dire straits than originally assumed.

But might this not be dependent on who you hire, thou might wonder? Surely McKinsey, BCG, Bain or Booz Allen must be viewed differently by the market than some second-tier cheap-suit shop? Well, ehm… no. The stock market’s reaction was exactly the same no matter who the firm hired; whether it was McKinsey, some local chaps, or one of the big accounting firms doing a bit consultancy on the side; the market did not care. Apparently, it doesn’t matter whose help you ask, but it sure matters whether you ask for any at all.

Monday, December 20, 2010

Some Teachers' Gifts and A Weekend Holiday Tour

What a whirlwind weekend we had! I hope that you all had a great one. I'm sure several of you were attending last minute holiday parties and finishing your shopping. I FINALLY got my shopping done. Now, all we have to do this week is sit back and relax. The hubs is off work for the next two weeks. Life is grand:o)
Here's a quick overview of the gifts that I gave E's teachers at preschool.

I started with these fleece blankets from Walmart. They were $3 for the set. Not bad, eh?
Since they were already rolled up, I tied a ribbon around each of the blankets.

 I also found these mugs at Walmart. They were $2 a piece.
 I cut out some vinyl with my Cricut and applied it to each of the mugs. I love the first one...the initials are "M.E." How funny! Inside of the mugs I put a pack of hot cocoa, red crinkle filler and dipped white chocolate marshmallows. 
 I got these acrylic trays from my neighbor. She has started a little vinyl applique side business. She had a few extras left over, so I bought them off of her. I love these trays. I think they turned out so pretty!
 I also added peppermint cupcake jars in with the other goodies. Let me just say that those were DIVINE! They were so delicious. These gifts were such a huge hit with all the teachers. They were so excited.
 In other news....we had our 2nd annual Holiday Walk in the neighborhood this past weekend. There were 8 houses on the tour and ours was on it. I have pics to share of our house. Some will be repeats from an earlier post...please humor me:o)
For the previous post (and better shots of my living room tree) go Here
Our Master Bedroom:
just a little side note...I am fully aware NOW that almost all of our trees are frustrating!!:o)

 Dining Room

 Love these napkin rings from Pottery Barn!!!

 E's Room

 Space themed tree...I was a little disappointed in this tree. After Christmas I am going on a hunt for 2 white trees. One for the Hubs' office and one for E's room. All the ornaments on this tree are dark and they blend in with the green of the tree. Maybe I'll do silver in here...we'll see:o)
 SR's room.
Living Room

 Can you see the curtains in the kitchen window? No sew curtains using a canvas drop cloth. I'll do another post on those soon.
 Here's an updated shot of the Menu Board with the new wall color behind it. It stands out so much better now.
 Our appetizers that we served. 
 These little cookies were so yummy. Turtles I believe is what the kids are calling them these days. Pretzels, rolos and a nut of your choice(I used almonds). Super easy. You can find the recipe here
 Our upstairs guest room
 Bonus room (1/2 of it at least).I had another shot, but it was so fuzzy:(
 These little goody bags were the favors that we handed out to our guests. Head over to Cookies and Cups for this great party mix!
Our house tour was AWESOME! There were so many nice neighbors that were going on and on about how much they loved the house and how it was decorated. Even the men were talking about how much they loved it. Made me feel proud:o) The hubs even paid me a high compliment..He told me that sometimes he forgets how talented I really am. That really made me feel nice:o) Anyway, this is it for me for this week. We will be maxin' and relaxin' until after Christmas. I hope that you all have a very Merry Christmas!!!!

Participating in these parties:

Friday, December 17, 2010

The stock market generally hates acquisitions, but here is an exception to the rule

In about 70 percent of the cases, the stock market responds negatively to the announcement of an acquisition. Put differently, despite their popularity, the average take-over destroys value for the acquiring firm. There are literally hundreds of good academic studies that consistently show that effect. For long, it was actually quite impossible to find any category of acquisitions that defied this rule and made some money, but lately a few studies have started to emerge that identify types of acquisitions that are seen in a more positive light by the ever elusive stock market.

One such sub-sub-subcategory of acquisitions that do appear to make at least a little bit of money are international acquisitions that were preceded by an alliance between the merging firms, especially if it was a strong form of an alliance, i.e. an R&D or Marketing alliance or prior buyer-supplier relationship (rather than a mere equity stake or licensing agreement). I know, it sounds like a very very specific category but I am already glad we have at least found one.

Although such alliances-turned-acquisitions are pretty rare – as evidenced by research by professor John Hagedoorn from Maastricht University – there are examples of firms doing it that way consistently: Cisco is well-known for turning dozens of small equity alliances into full-fledged take-overs and also Heineken has been using this incremental approach over the years with much success, consistently first cooperating with local breweries before fully acquiring them.

And in a way I find it understandable why, although rare, this type of acquisitions has a pretty decent track record. Acquisitions are just very hard to do. They usually are fraught with information asymmetries; basically most firms don’t have a clue what they’re buying. And due diligence is not going to solve that problem; acquisition integration is often hampered by cultural differences, incompatible systems and plain mistrust – something you don’t just look up in the company’s books beforehand. Hence, the troubles are hard to avoid.

But a preceding alliance might actually do that trick for you. Having lived through a lengthy alliance before the deal (“a lat relation before moving in together”) will have reduced these information asymmetries and unfamiliarities while, crucially, in the process, may well have bred some much needed trust. Because trust is definitely what you require abundantly when merging households (although precisely then, it often is in short supply…).

Professors Aks Zaheer, Exequiel Hernandez and Sanjay Banerjee from the University of Minnesota examined such alliances-turned-acquisitions and assessed how the stock market responded to their announcements. Let’s say it was a weak “yes”: unlike the average take-over, the stock market had a weak but positive appreciation of these types of deals. Where the stock market usually responds negatively to an acquisition, they found that if the take-over was preceded by an alliance between the firms, the share price of the acquiring firm increased after the take-over announcement.

This results was really only true though (i.e. “statistically significant”) if it concerned an international acquisition. And in a way I find that understandable, because the issues of information asymmetry, cultural differences, and mistrust are clearly aggravated in the case of a cross-cultural merger. Hence, in these cases, a prior alliance proves particularly helpful.

So, see, there is a glimmer of hope after all, for the track record of M&A. All it needs is a bit of patience and fidgeting around before engaging in the real thing.

Thursday, December 16, 2010

Lounge-y Pants

It's been a lounge-y week. Well a week that involved very little motivation to do anything since both of the kids were down with the flu last weekend and this week has been spent recovering. They are much better now, only a cough, which will last for a few weeks, according to the doc...(Whoopee!) So needless to say, my wardrobe has consisted of pj's for the past week. I have looked skank-tastic with wild unkempt hair, no make up and usually not getting around to brushing my teeth until bedtime...fantastic isn't it?  I feel really sorry for the paint guy right now who is here painting S.R.'s closet door. He must have thought, WOW! when he saw me...Oh yeah, it's that good!
Anywho....There is a blog that I follow called Whimsy Couture. They have some of the cutest patterns for sale and even have some free ones...all about some free stuff! Anyway, occasionally they send out a call for help in testing new patterns. I answered the call this time:o) Most of my pjs are 8 years old (or older) and have holes all in them. This was my chance to freshen up my jammie wardrobe. The pattern was super easy to follow and I was done in less than an hour on these puppies. I made the legs a little long just in case they shrunk in the dryer...not real big on pre-washing my fabrics b/c I am impatient:o)
So I will be sporting these for the next 8 years:o) You guys should check out all the patterns that are available. 
Have you finished your Christmas shopping yet? I have 3 more gifts to buy....thought I was done:o/
I will be working on E's teacher gifts this afternoon. Just waiting on the paint guy to get done so I can put the rug rats down for a nap. Hopefully I will have pics to share with you tomorrow!

Monday, December 13, 2010

Acquisitions – finally something to cheer about…?

Decades of research scarily consistently shows that most acquisitions destroy value, and only cost the acquirer money. There is really no denying it – all “ifs” and “buts” have been raised, examined and rebutted – about 70 percent of acquisitions fail. That is because acquirers are usually inclined to overpay (under pressure from bankers, the press and their own adrenaline; a take-over premium of 60-80 percent is really nothing unusual) and because managers systematically overestimate their potential for value creation; integration is often much harder to pull off than one thinks and “synergies” carry you only so far. So far the (familiar) bad news.

Slightly to my surprise though – although not unwelcome – over the past years a few studies have emerged that managed to identify categories of acquisitions which on average do create surplus value. And the first category identified is actually quite a sizeable one: the acquisition of private firms. Pretty much all of the research on M&A is conducted on public firms; that is, firms listed on the stock market. And that is understandable because we simply have much more information on them; because they’re public firms, they more consistently gather and report data and, of course, share price data is available. Hence, we can examine them better.

Professors Laurence Capron from INSEAD and Jung-Chin Shen from York University managed to obtain data on a large number of private deals and, guess what, in contrast to the public deals they examined, these did create some value! Where the take-over of a public target made the share price of the average acquirer fall by about 1 percent; the acquisition of a private target raised it by an average of 4 percent. That may not seem overly impressive to you but it’s really quite a bit of peanuts if you calculate its monetary equivalent – certainly in comparison to the abysmal take-over track record of public deals.

But how come these private take-overs do appear to create some value? Well, that’s a bit of speculation, but Laurence and Jung-Chin had an informed suspicion: information asymmetry. Because, by definition, information about private firms is usually not publicly available, there would also be much fewer buyers aware of the juicy take-over target, and that it was possibly available at a bargain. Consequently, there were fewer bidders and more opportunity for value creation for the eventual acquirer.

Consequently, private deals usually do better than public ones. They might be a bit murkier, hidden and not as glamorous, but hey, they actually make you some dosh!

Thursday, December 9, 2010

We Have a Winner....

And the winner is......

The Baking Bride!!!!
Her fave characters are Mr. & Mrs. Potato Head:o) Love it!!
Make sure to shoot me an email with your address so I can get you your DVD....and thanks to all of you who participated in this giveaway....
Can't wait until the next one:o)

Board and Batten Bar

This was our project last weekend. The hubs was the man power behind this project. I was more than willing to hand it over after all the heartache I went thru working on the Dining Room. This took a few hours of work and we already had the supplies on hand so there wasn't any extra cost....finally a project that didn't require a trip to Lowes;o)
This is the before. I shared it with you guys the other day.
 The walls were a creamy yellow color with hints of Cheeto fingerprints dispersed thru out:o)  
I really love how it turned out. The hubs did an excellent job hanging the batten and I did a pretty stinkin' good job painting;o)
 Now if you'll notice, there are only 2 chairs sitting there. I am waiting for my new bar stools to get here so that I will have a total of 4. I really hope they get here before Sunday. We are having a White Elephant Christmas party at our house then. Can't wait!! 
On another note....the winner of the Toy Story 3 DVD will be announced tonight. Thanks for all the participation!