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    Learn a new word: Goodwill Impairment

    If you follow the tech and finance news at all, you will no doubt be familiar with the recent and ongoing troubles and challenges being experienced at Yahoo.  

    Yesterday the 'old school' internet company announced some strategic shifts, including the plans to reduce its workforce by 15% in the coming months, resulting in an employment count of about 9,000 -  42% below the level in 2010.

    Part of the earnings announcements included this statement, about on-paper losses totaling about $4.4B due to an accounting exercise known as 'Goodwill Impairment'. Here is the language from Yahoo, then we'll break it down a little, because well, that's what we do here on the blog:

    We concluded that the carrying value of our U.S. & Canada, Europe, Latin America and Tumblr reporting units exceeded their respective estimated fair values. The goodwill impairment resulted from a combination of factors, including decreases in our market capitalization, projected operating results and estimated future cash flows.

    Seems kind of boring, almost normal accounting-speak right? Let's look at the definition of a 'Goodwill Impairment', courtesy of our pals at Investopedia:

    Goodwill that has become or is considered to be of lower value than at the time or purchase. From an accounting perspective, when the carrying value of the goodwill exceeds the fair value, then it is considered to be impaired. Negative publicity about a firm can create goodwill impairment, as can the reduction of brand-name recognition.

    And in the notes about the accounting requirements related to Goodwill Impairment for companies, Investopedia says this:

    Generally accepted accounting principles, (GAAP), require businesses that have the type of assets that might be impaired to make periodic tests to see if those assets are, in fact, impaired.

    So the accounting rules require if your business has a potentially 'impaired' asset like Yahoo's $1.1B Tumblr division, that you must from time to time evaluate (and likely have audited), the 'true' value of the asset. And in the case of Tumblr, it turns out that it really isn't worth $1.1B and the true value is something like $300M, then you have to take a charge for the difference, ($800M), in the financial statements. And that stings investors a little bit. Ok, maybe a lot.

    Why the mini-accounting lesson?

    Because the periodic review, valuation, and write-down of financial assets in the accounting sense is probably an exercise we can and should apply to all kinds of projects, technologies, programs, even personal relationships. 

    Does that 'progressive' and high-tech performance management system and process you implemented in 2012 still have value today? Or does it need some kind of 'impairment' write-down as well?

    Does the new employee orientation guide that you spent big bucks developing and printing up in 2010 still have relevance today, in light of all the changes in business, technology, employee expectations, and more?

    Does your 'best work friend' that you have had since 2008 remain the 'right' person for you to pal around with, or are they kind of holding you back at the office?

    As Yahoo's experience with it's Tumblr acquisition remind us, things can change really, really fast. And an asset that was worth $1.1B just a couple of years ago suddenly is worth less than half that amount today. But the 'Goodwill Impairment' while painful, at least provides financial types a mechanism to recognize these changes, attempt to make them right on the financial statements, and give leaders a chance to move forward from a new starting place. And when times are bad, that at least offers a little bit of hope moving forward.

    If you could take a 'Goodwill Impairment' charge in your business or life today, what would it be?


    CHART OF THE DAY: Is it a good time to find a quality job?

    Guess what? CHART OF THE DAY is back for another year of stats, data, and information about work, labor markets, demographics, basketball, and Tom Cruise movies. 

    For new blog readers, here is a quick reminder of how CHART OF THE DAY works. First, I find what I think is an interesting chart, graph, Venn diagram, or my favorite an exploding Pie chart that helps visualize some data set I find intriguing. I re-publish the chart here with a link back to the original source. Last, I toss out 2 or 3 thoughts on the data's significance or relevance for those of us in the HR, talent, technology, workplace spaces.

    Got it? Okay, here goes...

    For 2016's first submission courtesy of Business Insider and Gallup, a look at what American's think about the question "Is it a good time or a bad time to find a quality job?"

    Some quick thoughts about the data:

    1. Gallup has been asking this question in their surveys since 2001, and the latest data from 2015 that shows the percentage of Americans that feel it is a good time to find a quality job sits at 42%, which is just a shade under the series' all-time high of 43% from 2007. Said a little differently, since 2001, according to this survey American's attitudes about the job market conditions have NEVER been more optimistic.

    2. Gallup didn't specifically survey people 'actively' looking for work, so we can assume the increased confidence in the labor market is a reflection of the broader population's attitudes. That means just about everyone is feeling if not good, at least relatively better about labor market conditions. Which translates to the likelihood of increased turnover, even for those employees that you thought were 'safe', i.e., not likely to seek opportunities elsewhere. Will 2016 be the year that more people seek greener grass elsewhere? Maybe so.

    3. The recent HR technology trend towards developing 'predictive' models for providing insights into things like attrition and retention can provide tools that can possibly help HR leaders in this area. But the key question I would ask my HR technology provider of such predictive tools is the extent to which, if at all, these tools take into account these external trends in worker attitudes. Does the tool adapt to reflect the macro-trends and environmental conditions that exist and impact organizations? Or will your 'predictive' tool really act like more of a 'reactive' tool, failing to adapt quickly enough to changing market conditions? Good questions to ask. 

    Ok that's it, I'm out.

    Happy Tuesday! 


    CHART OF THE DAY: The Technology Adoption Curve

    Super piece on the BlackRock Blog from a few days ago titled The Topic We Should All Be Paying Attention To (in 3 charts), that is the source of today's Chart of the Day.

    BlackRock is a major player in the financial/investment banking space, so the main point of their post was that instead of the seemingly endless hand-wringing amongst many financial markets observers in the US in the last 6 months or so regarding the potential .25% increase in the Fed Funds rate, folks should be thinking about the US economy much more holistically. 

    BlackRock's piece did have 3 charts to back up this point, and all are excellent, but I picked the one below, on the historical technology adoption curve for a selection of consumer technologies in the US over the last 100 years or so. I love this chart, have used a similar one in the past in some presentations I have done, and will happily steal this one in the future.

    Here is the chart, then as I am compelled, some FREE commentary from me after the data:

    As we can see from the data, in the last 15 years or so the technology adoption curves for some more recent tech innovations have become much, much steeper, almost vertical. It took the telephone maybe 50 years from its introduction to become almost universally adopted; more modern inventions like cell phones and PCs have taken maybe half as much time to reach similar adoption levels.

    Technologies are becoming widely, almost completely adopted much faster than in the fairly recent past. And while that is noteworthy in itself, the nature of and how many of these technologies are being utilized for 'work' purposes is perhaps even more important. 

    Many of the older technologies like radio, television, and microwaves were mostly about personal, in-home usage, and primarily oriented around improving the quality of leisure time. But in the last 20 years or so technologies like cell phones, the internet, and tablets, while still all offering a 'leisure' set of capabilities, have also become essential work and productivity tools and platforms for most everyone.

    So not only are modern technologies becoming adopted more rapidly, they also are more likely to begin as or at least evolve into tools for work, commerce, and productivity. We never really (unless you worked directly in the industry), gained much income or market share or anything from watching more TV or listening to the radio in your car. In fact, these technologies often took you away from 'work'. And that is not necessarily a bad thing.

    But now whether it is your iPhone, wifi everywhere, your 'work' Twitter account you use to share job openings at your company - today's technologies are as much about getting stuff done as they are about avoiding the things we ought to be doing.

    No judgment from me on that. Just an observation. I love technology. It is letting me 'work' on this post at the same time as I am watching a bunch of oversized men play a kid's game in an arena 1000 miles from here.

    Have a great Wednesday!


    CHART OF THE DAY: We can FINALLY stop talking about millennials

    In what has to be interpreted as a signal to the tens of thousands of workplace/leadership/management professional speakers and pundits out there that it is time (finally), to update those PowerPoint decks from 2009, it looks like we need to stop or at least slow down our collective fixation with Millennials.

    Take a look at today's Chart of the Day, courtesy of the fine folks at Goldman Sachs and let's together pour one out for the Millennials and raise one up for what is coming next. Here's the chart and as you have persistently demanded, some comments from me after the data:

    Awesome looking chart, right? And from the looks of it, it is time to stop worrying so much about the Millennials and start thinking about Gen Z! What might this mean to the rest of us - besides all the 'Generations in the Workplace' people that need to update their slides I mean?

    I have three quick takes, then like the Good Gen X-er I am have to go make the donuts...

    1. Technology - this is the first 'post-internet' generation. They have never known a world without almost constant connectivity, ubiquitous wifi, and life attached to their devices. Waiting for any kind of information is something they are not used to, nor will tolerate very well. Everything has to move faster, be more easily consumable, and actionable. If you thought the Millennials were annoying, just wait until your first set of Gen Z employees comes through the doors, (very soon), and laughs at your antiquated set of systems and processes.

    2. Diversity - In line with the increasing diversity in the population overall, Gen Z will be the most diverse generation in US history. According to Goldman, the majority of Gen Z will be non-white by 2020 or so. And with this diversity in composition, it seems likely that Gen Z-ers will also be the most accepting of diverse workplaces and teams. In fact, many of them will not even consciously think about 'diverstiy' in the ways that Gen X and Boomers always have, (and have needed to). To Gen Z, the team won't really seem 'diverse', it will just seem like 'the team.' I am not smart enough to know exactly what that means for corporate diversity and inclusion efforts, but I bet it will mean something.

    3. Backlash - In about three minutes from now, someone will take a shot at me or at this post for 'generalizing about the generations'. This person will probably be an older Gen X-er or possibly a Boomer. These people are cranky and should be ignored. Yes, I know not every Gen Z-er is the same and not every Boomer is some kind of Luddite. EVERYONE knows this. The point of talking about generational groups and trends is not to try to explain the motiviations and actions of EVERY SINGLE PERSON IN THE WORLD. The point is to try and make sense on a macro-level of how the shared experiences and enviroments of people who grow up in similar cultural, societal, and economic circumstances impact how they see the world and what that means for the world. And I think having that kind of understanding, or at least having the discussion, is important and valid.

    Ok, that's it from me. What say you? Do you care about Gen Z at all? Or are you happy (like I am), not to have to figure out how to spell 'Millennial' all the time?


    CHART OF THE DAY: In a world of infinite choice, we choose very little

    How many apps do you have installed on your smart phone? 50, 60, maybe more?

    How many TV channels does your cable or satellite TV subscription offer? A couple hundred, give or take?

    How many websites are there on the internet? Way, way too many to count I bet. Probably something in the order of tens of millions at least.

    So after thinking about those questions, let's ask another set of questions. How many apps, websites, and TV channels do you regularly use/visit/consume? What it the number of these apps, etc. that tend to dominate your time and attention?

    Take a look at the chart below, taken from a recent presentation given by business strategist Michael Wolf at a recent Wall St. Journal conference, for some insights into these questions, and then as you have come to demand, some FREE commentary from me after the data.

    Interesting data, let's unpack it a little here and see what it might mean for HR/Talent/anyone trying to get attention in a busy world. 

    The average person uses 27 apps in a month, but about 80% of that time is spent in only 5 apps. I will offer up my top 5 - Gmail, Twitter, Zite (a news aggregator), Feedly (an RSS feed reader), and The Score (a sports news and scores app). But whatever your Top 5 apps may be, chances are good they dominate your time on your phone to a significant extent.

    This same self-selected narrowing of almost endless choices also is seen with the general internet, and with TV content. We have tons of options, almost too many, yet we end up gravitating and focusing on those very few choices we seem to enjoy and identify with the most. And again, those lists are pretty small. 

    What should this data make us think about in more general terms as we try to pry precious attention and eyeballs towards our bright shiny new things?

    1. We choose very little, but the 'pie' is so big, even a tiny sliver is huge. With the continued growth of market penetration of smart phones, broadband connections, and wifi everywhere - more and more time is being spent online in all of its forms. Your app or website or internet show or podcast doesn't have to break into anyone's Top 5 to still be a huge success. You just have to identify, target, and create value for that small group that will be open and ready for your message. The HR Happy Hour Show that Trish McFarlane and I do is a great example of this. We may not be 'Serial', but we have a fantastic and growing audience of HR and HR tech fans and have built a really cool thing.

    2. Habits are really hard to change. You, me, everyone - we check the same 5 apps, the same 8 websites, watch the same 10 TV channels week after week after week. If you can't easily get folks to change their consumption habits then you have to find a way to better integrate with these habits. No one hates email more than me, but I still spend more time in email every day than I care to, and I still get plenty of news and information from this old habit. So it makes sense to focus at least some on getting your message better read in email or in one of the other 'Top' apps today (LinkedIn, Medium, Quora, Snapchat, etc.), instead of creating something brand new that requires users to adopt a new habit. 

    3. Don't 'break' things that are working. Once you have an audience, or a set of fans/followers etc., you have to be careful not to mess around or experiment too much all at one time. It is hard enough to initially earn the attention of the audience you seek, it is even harder to have to try and earn them a second time. As your audience grows you want to be sure you are growing along with them, but not leaving them behind if that makes sense. I'd like to run 'Ranked' posts every day, but if I did I am pretty sure I would drive away just about everyone who I have spent 7 or 8 years trying to connect with. But the occasional Tom Cruise or Ranked post is fine I think.

    No one has time for all the choices that are now available to us on our phones, the web, and our TVs. That doesn't mean there is not any room or any opportunity for something new to break through, it just means that the ideas that can break through are rarer than ever, and the people that can conjure up these ideas are more valuable than ever.

    Ok that's it, I am out. Go back to the sites/apps you really enjoy. 

    Have a great week!