Incentives Need To Be Aligned To Work

An article on Friday, October 22nd in the New York Times on page A14 described a number of Governors who are running for office, or are already incumbents, who are recommending or providing tax breaks to create jobs. Frank Caprio in Rhode Island (yes, the guy who told the President yesterday to "go shove it") is recommending a Business Finder Tax Credit that would provide $1000 for a company who brings a new business to Rhode Island and both companies would share a $10,000 reward if the new business hires 20 or more people. He also wants to waive the filing fees for any new corporation that creates a new job.

The Iowa Republican candidate wants to waive state income taxes for start-ups for their first three years (this is great, but I'm not sure there is a realization that most start-ups don't make a profit in their early years so there aren't any taxes due). the recommendation also wants to waive start-ups paying sales taxes up to $50K in their first three years. That could be good on their capital purchases. but, $50K in sales tax breaks would mean that the company would have to spend a lot to get the full benefit. Costco tables and chairs, a few PCs with a 5% sales tax takes a long way to get to $50K of savings.

Other candidates in Illinois, Florida and Maryland are trying to come up with their own ideas.

In 2006, in our book; Talent Force: A New Manifesto for the Human Side of Business (can be found at http://www.amazon.com/gp/product/0131855239/qid=1136138630/sr=2-1/ref=pd_bbs_b_2_1/104-1629927-8463150?s=books&v=glance&n=2 ) Hank Stringer and I called for "Free Talent Zones". This is where states could attract talent and therefore would want to relocate to these states. The incentives we recommended would not be about tax breaks to companies (which one side or another seems to have a problem), but instead provide incentives to workers directly. Give them a break on state income taxes, real-estate taxes, education fees, etc. Allow a company so many of these incentives for new hiring and believe me, the talent will come and the companies will will have incentives to hire. Imagine being able to recruit telling candidates about these types of incentives.

Rather than postulate on things that don't seem to make a difference or are so small in impact, I sure wish our politicians would be bold enough to think outside of the box and focus on those things that would really make behaviors and actions change. "Cash for Clunkers" was a success because the incentives went to the buyer, not the seller. Sellers finally picked up on it and then made it into an advertising bonanza and all parties got the benefit.

Let's try and think like this for talent, employment and rhe real creation of jobs!

Update - Why Does Someone Steal My Newspaper...And Who Is It?

10/18/10 Update:

Since originally writing this post, I have done some more investigating and this week we had a breakthrough. The neighbor across the street cleared out and trimmed their bushes and these filled blue bags were found thrown deep into the bushes. As we can see, these are the quickly identifiable blue bags of the New York Times, the same paper that goes missing on any given day from my front gate. This morning's paper was stolen. It could be that any one of the bags from this picture could have been filled this morning. A better detective might have felt for the warmest of the bags, but I thought better of it. This update is to just let the culprit know that I am on to your M.O.. You steal my paper, give the dog the signal, he/she fills in close range to the house and then you walk home with Tom Friedman and All the News Fit To Print without a bag. We are circling in on you and one day, when you least expect it, you will be exposed!


Originally posted: 1/11/10


My wife and I live in an affluent neighborhood in the Bay Area of California. By virtue of this, we live in one of the more affluent neighborhoods in the country. We have a gate on our house. It's a nice place to live and one of those areas where crime is not something that is top of mind. Which makes it even more curious to me why and who steals my New York Times in the mornings? This has been occurring now for over a year and it has necessitated having the paper carrier (who has been a delight through this) to make sure the the paper gets slid under or thrown over the gate. I am befuddled as to who and why someone wants to steal my paper. So, this has me working to profile who the culprit might be:

-I think it is a man. I have no reason to know why I think this, other than I have always had a hard time seeing a woman committing crimes. I shouldn't really be so naive as I was recently conned by a woman outside of a hotel in Rochester, NY on a snowy night who needed money to buy gas to drive 50 miles. It was New Years Eve and snowing and blowing at 10 degrees. What was I supposed to do? The hotel receptionist said it is a common scam in their area. So, women do commit crimes, but would a woman really steal my newspaper? I don't think so, so for that thin reasoning, I think it is a man.

-He is either an insomniac or he goes to bed early at night. I know this because the New York Times is delivered to us between 4:30AM and 5:00AM. I go out and retrieve the paper around 5:30AM and it is already gone by then. To be out on the streets before 5AM, he must go to bed by 8:30AM to get his eight hours of sleep.

-He knows axioms and may repeat these to others. I know this because he is an early riser and he must be following the axiom that the early bird gets the worm...or in this case the stolen paper.

-He's at least a little if not well overweight. I think I know this because it doesn't happen every day. There is no rhyme or reason to the days, which tells me that he doesn't work out every day and is not consistent in his exercise routine.

-He's a walker, not a runner. Runners don't like to carry things while they are running, so unless he lives within a few hundred yards, carrying the New York Times any further is a pain.

-He's not an early technology adopter. If he was, he would already have a Kindle or some type of e-reader and be downloading the New York Times Daily.

-He's a political liberal or left-leaning moderate. I know this because, why else would he want the New York Times? Otherwise, he would be seeking out someone where he could steal the Wall Street Journal.

-He's literate. I know that because he never steals our San Francisco Chronicle that is lying right next to the New York Times.

-He doesn't do crossword puzzles. If he did, he would steal the paper everyday and he would for sure take the Sunday paper, which he never does.

-Finally, he has a clean lawn. I know this because everything we are told is that people don't read newsprint anymore and that it is a dying medium. So, if that is the case, then he must have a dog and he has a poop-free lawn. You know, those blue bags are the best!

These are the clues I have so far. If you have any ideas for us on who it might be, please pass them along to me. They don't think this is an important enough crime for that COPS or that America's Most Wanted Show, but we all watch enough CSI, NCIS, Law and Order, and Cold Case that we ought to be able to figure out this very, very serious crime.

Thank You for your help.

Is President Obama A Three Envelope Leader?

There is a story about the CEO who loses his job. On the way out of the office as the new CEO is moving in, the new CEO asks, "Do you have any advice for me?"

The departing CEO says to him, "I left you three sealed and numbered envelopes in the upper left hand corner of the desk. Use them only when you need them and use them wisely. That is the only advice I have for you".

The terminated CEO then leaves. The new CEO registers the comment and goes about settling into his new job. All is going well for him for the first few weeks but in a few short months he finds himself all alone at his desk on a Friday night at midnight staring at his management reports and realizing that things are not going well at all. All the numbers are down and the Board is starting to ask questions and customers and employees are losing faith in him. He is at wits end and doesn't know where to turn. It is then that he remembers the words of the departing CEO and he opens up the top left hand drawer of his desk and there in in the back are the three envelopes, just as he had been told they would be. Not knowing what else to do with the business, he decides to open envelope number one and he reads inside this statement, "Blame your predecessor."

The sitting CEO takes the advice and begins pointing out all of the failings of the prior CEO and claims that the mess the business is in is really all because of the prior leader and administration. This sentiment resonates with customers, employees and his Board and for a few more months the heat comes off of him and all looks good. But, again on a late Friday night a number of months later, he finds himself once again under fire and he has now been in the job long enough that he just can't blame anyone else now but himself. The business is tanking and everyone is now pointing at him. Not knowing what else to do, he reaches for envelope number two and inside he reads, "Reorganize".

This seems like a brilliant suggestion so starting the next morning the CEO begins removing his team of managers and replacing them with new people. This seems to be a terrific piece of advice as for almost the next year there is lots of energy and activity with people changing jobs and bringing in new ideas and as the CEO he spends a lot of time introducing new people to the team and explaining how the new people will be the ones to lead the company to new levels of success, etc. But, just as before, now a year after the reorganization has settled in and he doesn't have anyone left to replace, the business begins to fail again and all eyes are on him to either improve the business results or he will be the next one to be replaced. As he comes out of his most contentious Board meeting, he rushes to his office to do the only thing he knows to do and he grabs the third and final envelope and rips it open looking for the advice to save him and he reads inside, "Make three envelopes".

We are nearing the midterm of President Obama's first term and these past few weeks I have not been able to think of much else other than the story of the three envelopes. For the first year plus, the President spent much of his political time and capital blaming the Bush Administration for the mess of the country and the mess he was inheriting. There was some truth in it, but after a while it began to tire and we looked to him to not tell us the problems of the past, but give us solutions for the future. We did get some of those but not without bitter partisanship that has left a sour taste in everyone's mouth and a feeling that our government is working more poorly than before. The press began to call for the changes at the top of the President's administration to try and recover the hope of Washington working differently. There was not much movement until the announcement that Rahm Emanuel, the President's Chief of Staff would step down, then Lawrence Summers, his senior economic advisor quickly followed suit, and then last week General James Jones, his head of National Security resigned. Leaks were coming from the White House that even a change with Vice-President Biden might be in the works to make room for Hillary Clinton to move out of the Secretary of State role to be Vice President. From the outside looking in, it looks like a concerted and deliberate reorganization is taking place.

Could it be that the President has reached for the first two envelopes and he is still only half way through his first term?

I am one American who certainly hopes not, but it is hard to not think that this might be the case. Soon we will know how the American people are responding to the agenda that has been set forth for us over the last two years. Much will ride on the November elections. Whether or not the President will need to reach for the third envelope, still resides with his ability to focus and deliver on the hopes, dreams and agenda that he laid out to the American people in 2008.

I still can still be optimistic and more than anything hope that he is not a three envelope leader.