links for 2008-01-31
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Great piece of storytelling about consumerism, and how and why we need to change
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The reason why Chinese sweatshops aren't all bad
I've never had much of a position on globalisation and free markets. The entrepreneur in me loves the idea of free trade, but then there's the pesky issue of human rights.
I recently picked up a copy of Pietra Rivoli's 'Travels of a T-Shirt in the Global Economy' and it has finally given me some perspective on the issue.
The main take-home point is that both the free market proponents and the human rights activists play vital roles in improving the standard of living for poor people in developing nations like China.
Huh?
Whilst Chinese sweatshops are pretty horrible places to work, the research cited in the book shows that comparisons to Victorian sweatshops are unfounded. And the working environment is significantly better than the farms from which many of the industrial workers came from.
History shows us that low-level sweatshop working is a step on a ladder that has allowed developing countries (including the UK and United States, a few hundred years ago) to trade with the world, and gradually become more automated and skilled, and make ever increasingly valuable products. This trade raises the standard of living for ordinary people living in those countries. Free trade with the rest of the world provides a real opportunity for poor countries to develop and improve.
At the same time, the human rights activists play a massively important role. Campaigns publicising working conditions in sweatshops supplying companies like GAP; Nike and Adidas alter consumer opinion and create market pressure for improvement for worker conditions.
So we need to continue to campaign for better working conditions, but at the same time encourage free trade with these countries. Everyone wins.
Looking forward to hearing what Matt Matheson has to say about this on his return from the Amnesty International event he's attending today.
How to make an 'employees set their own salary' policy work
This is one of the more radical policies at Semco - Ricardo Semler's ultra-democratic Brazilian company. I think that if you can implement it right, it can help to make your organsiation a magnet for talent. The concept also gives me a feeling of mischievous excitement, which appeals too :)
We tentatively tried this out once with an employee who was hungry to progress quickly in the company, put in maximum effort and reap the rewards. It's a very hard discussion for any manager when an employee is suddenly asking for a huge raise, not least because we have open book accounting and so everyone else on the team would know what had happened.
But I thought it'd be an interesting experiment, so we allowed him to set his own salary, but made sure he understood that this would be transparent to all of his colleagues, and that it would be up to him to prove he's worth it. He increased his salary from £20,000 p.a. to £30,000 p.a. and although my first thought was "oh shit, this is going to backfire big-time" we kept our end of the bargain and let it play out.
It did cause some raised eyebrows from other team members - interestingly, more from the other relatively senior members of the team on similarly high salaries. But it was incredible to see how he instantly raised his game, worked his socks off, and although it wasn't immediate, his performance quickly caught up with his new salary.
It's my belief that in another company, a raise of that level would have never been authorised, and the employee would have left and got a job somewhere else on the higher salary, giving someone else the benefit of that talent.
It wasn't quite a happy ending though as he left the company within a year of the payrise, but I take a bit of comfort in that he left to pursue out of work interests, not to work for a competitor.
We haven't adopted a company-wide policy for employees setting their own salaries yet, but I think we may be getting close to a time when we could do this. My current thinking is that there are a few essential ingredients that you need to have in the mix to make it work:
- Open book accounting. You need transparency so that everyone knows what everyone else earns, so everyone is accountable to their colleagues. Also, you need a complete view of the company's financial position and budgets in order to set it to something appropriate.
- The policy should only apply to managers, and those managers should be subject to full-on 360 degree appraisals so that their reports assess their performance. Together with Pete Burden I'm currently working on some ideas about how you can create roles for managers without creating hierarchy - more on this another time.
- Directors have to maintain a right to over-rule a salary, but in general will try to avoid using this right.
If anyone knows of any companies other than Semco who have implemented this, I'd love to know. Or if you're considering opening your books and becoming more democratic, then please get in touch - it would be cool to meet up and chat about this stuff.
links for 2008-01-23
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meeting rooms in piccadilly circus and liverpool st
Edge Competencies: An essential economics lesson
I thought that the post I just wrote about Edge Competencies on the Nixon McInnes blog was worth a mention here too because it's related to how the Internet is democratising business. This isn't democracy in terms of power, but it's about value being decentralised. Whatever it is, I think it's a defining feature of the next phase of business.
Great blog on web production
Phil Herborn, who worked at Nixon McInnes for 2 years as production director is now back in sunny Sydney and has started a great blog on web production. Check it out.
Don't cry, Philbo, we miss you too.
Microsoft Office MuchosUltimateDatedness Edition
Just been looking for somewhere to buy a license key for MS Word (not for me!) and happened upon this page on the MS website. Couldn't believe that there are, count 'em, EIGHT different Microsoft Office packages available:
- Office Basic
- Office Home and Student
- Office Standard
- Office Small Business
- Office Professional
- Office Ultimate
- Office Professional Plus
- Office Enterprise
A tantalising array of options, depending on which way you'd like to be restricted and controlled, all masquerading as an offer of flexibility and choice for the buyer.
Reading this was like one of those moments where you feel like you're looking back from the future at something so dated, entrenched and ridiculous that you can hardly believe it actually happened.
Won't be long before marketing goes full circle and we get back to a beautifully simple Henry Ford-style offer: 'You can have any pricing package you like, so long as you want it FREE'.
How long is MS going to stubbornly hold on to the past?
Hello
- I'm Tom, a co-founder and director at Nixon McInnes - the social media agency in Brighton.
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