A broker is a party that mediates between a buyer and a seller.
I would like to extend this definition to represent a more abstract sense of doing business with the interests of every person you meet in mind.
In some ways every one who has ever sold anything has been a broker in the first sense.
It is rare that a person takes careful consideration of all of the ways they may trade information of value with their clients and colleagues as in the latter sense.
The abstract "brokerage" I'm describing has less to do with products, securities or services and more to do with strategic business planning with monetary goals.
If I as a Financial Planner have non-material but clearly valuable information that others do not, I am serving as an Information Broker when I write your Financial Plan. The degree of informational advantage, the money waiting to happen, may not be easily predicted, but it can be understood and compared through the double barreled process of generalization and specification.
If I provide for one company a specific way to relate to another so that the two companies make absolute gains based on the compliment of skills and assets they share I have created value greater than any goods or services exchanged. This value sourced purely in the informational advantage that I originate is the essence of brokerage.
Over time we can produce statistics to generalize about the value of information in a history of business outcomes and over time manage to produce an increasingly informed management team.
This informational advantage is non-linear. Meaning that it can produce large spikes in revenues or service cost reduction that will be noncontiguous with trends. It's source is in the depth and detail of understanding I have about the companies involved. In the information management industry small details often overtake big blue chips.
Corporate Strategy or Mergers and Acquisitions, benefits may reduce overall costs through shared services. They may also improve revenue generating messages by creating a unified front in marketing and sales. People often think that these blue chip strategies are rarely adopted in the small business environment. In reality these strategies are represented in the small business community, but only in a finite set of business owners who see the depth of their own people. The average small business owner often feels at risk when they lose any of their key talent and they can't imagine merging with another company in the same field. This would feel like giving up to a competitor.
In these lean times many small business owners are learning that they must partner whenever and where ever they may to find the hidden opportunities and bring to market core competencies. Those who "stick to their guns" tend to suffer in times of systemic change.
It is important for small businesses to observe that within each individual there is often several roles played. Many employees in small businesses take on many roles. If two competing companies knew each other well enough to identify the strengths and weaknesses within their staff, there would be the potential for the two companies to reduce the number of generalists and increase the number of specialists in either a partnership or a series of contracts for services.
Comcast encourages competitive quotes between it's own engineering cells as a means of observing the market value of the employees within each cell. Engineering cells literally auction the value of their own engineers internally through old fashioned phone calls and conversations about the projects on the table, the demand for skills, and the supply of skills across cells. There is some time lost as these engineers perform business functions with each other in cell to cell interactions but ultimately the value of the work and the cost of the work become more transparent through the conduct and tracking of this behavior.
I am not arguing for more specialization. I am not arguing for more generalization. I am arguing that a good business owner or manager can take advantage of a situation by adapting his strategy to meet the needs of the scenario at hand. This adaptation can maintain an underpinning in classic cost benefits analysis without leaning on ideal forms to produce optimal outcomes. Creative adaptation driven by bottom line orientation will increase the probability of non-linear revenue and savings spikes for your business. Free your mind and the rest will follow.
You probably already knew that.
-David Caro-Greene
Saturday, September 26, 2009
Monday, September 21, 2009
Social Post : Best Man
Yesterday I was the best man at my best friend's wedding.
I was honored to have been chosen.
As months passed and the date approached I wrote and rewrote the toast many times. Initially I wrote about the grooms family history and his personal characteristics. I translated this into Chinese with the bride. I thought everyone should know on both sides what this guy is made of.
Realizing it was not a history lesson. I wrote the speech to reflect my life experiences with Colin to tell a character story of the man I know so well. Then I realized a man's actions must speak, not a man's best man.
As the wedding date came closer and brought plans, dresses, tuxedos, decisions, and timing, it dawned on me what the wedding rituals are all about.
Every ritual signifies a part of the relationship between two families. A marriage is made up of a series of negotiations and agreements. As single men we often think of a marriage as a kind of legal trap for the stupid. It is not. It is a time to define a complex series of subtle relationships that exist between two families.
My wife and I could never get our parents to meet and have not done so even after six years going strong. I never had a chance to begin the process in my own experience in marriage of helping individual people within families become a group.
That is when it dawned on me that the only thing that really matters is that these families share the best that life has to offer together. What greater grudge can there be than to know that as a parent you have provided less than your best for your child.
The word compromise never worked for me. For me it brings up images of two starving men on a deserted island sharing the last coconut.
One family is a traditional Chinese family. They would like shark fin soup.
The other family is a traditional Berkeley family. They would like to save the species of shark endangered by the soup.
It seems we have only to compromise. One side has the soup and the other side does not. Isn't this a way of saying what is good for you may not be good for me.
This bothered me quite a bit. Knowing that this could be a problem for the Chinese family for the next 4000 years I decided to offer bit of a competition to save the shark.
I will be throwing a one year anniversary party in honor of the groom, the bride and the soup, same time, same place. I challenge all of you out there to contribute to the National Ocean Consevancy enough money to protect at least as many smalltooth sawfish sharks as you may endanger this year. Let me know how much you have contributed. I'll keep the score.
As we all know the smalltooth sawfish is at 15% of it's virgin population domestically and that is not OK.
What you may not know is that this is also advertised nationally by protection agencies across the Chinese provinces.
Chomp all the shark you want we will make more.
I thought you ought to know that.
-David Caro-Greene
I was honored to have been chosen.
As months passed and the date approached I wrote and rewrote the toast many times. Initially I wrote about the grooms family history and his personal characteristics. I translated this into Chinese with the bride. I thought everyone should know on both sides what this guy is made of.
Realizing it was not a history lesson. I wrote the speech to reflect my life experiences with Colin to tell a character story of the man I know so well. Then I realized a man's actions must speak, not a man's best man.
As the wedding date came closer and brought plans, dresses, tuxedos, decisions, and timing, it dawned on me what the wedding rituals are all about.
Every ritual signifies a part of the relationship between two families. A marriage is made up of a series of negotiations and agreements. As single men we often think of a marriage as a kind of legal trap for the stupid. It is not. It is a time to define a complex series of subtle relationships that exist between two families.
My wife and I could never get our parents to meet and have not done so even after six years going strong. I never had a chance to begin the process in my own experience in marriage of helping individual people within families become a group.
That is when it dawned on me that the only thing that really matters is that these families share the best that life has to offer together. What greater grudge can there be than to know that as a parent you have provided less than your best for your child.
The word compromise never worked for me. For me it brings up images of two starving men on a deserted island sharing the last coconut.
One family is a traditional Chinese family. They would like shark fin soup.
The other family is a traditional Berkeley family. They would like to save the species of shark endangered by the soup.
It seems we have only to compromise. One side has the soup and the other side does not. Isn't this a way of saying what is good for you may not be good for me.
This bothered me quite a bit. Knowing that this could be a problem for the Chinese family for the next 4000 years I decided to offer bit of a competition to save the shark.
I will be throwing a one year anniversary party in honor of the groom, the bride and the soup, same time, same place. I challenge all of you out there to contribute to the National Ocean Consevancy enough money to protect at least as many smalltooth sawfish sharks as you may endanger this year. Let me know how much you have contributed. I'll keep the score.
As we all know the smalltooth sawfish is at 15% of it's virgin population domestically and that is not OK.
What you may not know is that this is also advertised nationally by protection agencies across the Chinese provinces.
Chomp all the shark you want we will make more.
I thought you ought to know that.
-David Caro-Greene
Wednesday, September 16, 2009
What Malcolm X and the Washizumu don't know
Let's begin with a quote from Malcolm.
"Anytime you have to let another man set up a factory for you and you can't set up a factory for yourself, you're a child; anytime another man has to open up businesses for you and you don't know how to open up businesses for yourself and your people, you're a child; anytime another man sets up schools and you don't know how to set up your own schools, you're a child. Because a child is someone who sits around and waits for his father to do for him what he should be doing for himself, or what he's too young to do for himself, or what he is too dumb to do for himself."
Malcolm X
This sentiment is echoed in the traditional business practices of Japan. The system is designed to make certain that Japanese businesses do as much as they possibly can in house. In theory this makes certain that costs are controlled (i.e. favorable) and that the community is not subject to external influences.
In real life business does not work this way.
If a community spends it's resources trying to produce a technology, factory or resource it is taking resources away from other functions. If it can not produce these technologies in a way that is affordable, it is wasting it's valued time and money. Wasting time and money is a sure way to lose in a competitive scenario.
Let's take an example of a Japanese company that would like to design a product for an English speaking audience. Let's say the Japanese company has four choices. A Japanese Design Firm, a Japanese American Design Firm, a Big Budget American Design Firm or a Small American Design Firm.
The money politics are clear in each of the four choices. If the Japanese choose to go with a Japanese design firm they will be keeping the money within the Japanese business community.
Business is not politics.
The question should not be "Where does the design budget go?" it should be "what will be the result of my design efforts and how much will it cost to produce those results?"
If you want to design a product for an English speaking audience, you need to hire native English speakers who understand you.
If the Big Budget American Design firm does not make it clear that they can communicate your message and they are not priced well, don't go with them. If the Small American Design firm does not make it clear that they can communicate your message and they are not priced well, don't go with them.
A cost benefit analysis only requires looking at the outcomes and dividing them by the costs.
A small American design firm may put themselves into poverty to get the job done for the Japanese business. This is both favorable to the Politics and the Finances of the Japanese business community.
If the Japanese business decides to go with a Japanese design firm at a lower cost they are certainly not going to communicate what they intend to communicate through the design. If they pay too little to the Japanese design firm they may be putting people in their own community into poverty. This does not make any sense when there is the potential to get the job done by lower cost Americans.
In any case accountability is the main issue here. The history or nationality of the firm's people is not.
Negotiations should be centered around objective and competitive comparisons of all of the firms being considered. The most effective way to damage a community is to pay them very little for a lot of work. All people in the negotiation are trying to avoid this situation. Having work that pays less than you need to sustain business is more damaging to a business than having no work at all. If you have no work you can find something else to do.
Japanese designers can find other projects that pay more money, because Japanese designers, in general, have a better reputation than American designers.
Never overlook a business opportunity. You never know when someone is going to be able to provide more of what you want at a greater expense to himself than the person you usually work with.
I thought you ought to know that.
-David Caro-Greene
"Anytime you have to let another man set up a factory for you and you can't set up a factory for yourself, you're a child; anytime another man has to open up businesses for you and you don't know how to open up businesses for yourself and your people, you're a child; anytime another man sets up schools and you don't know how to set up your own schools, you're a child. Because a child is someone who sits around and waits for his father to do for him what he should be doing for himself, or what he's too young to do for himself, or what he is too dumb to do for himself."
Malcolm X
This sentiment is echoed in the traditional business practices of Japan. The system is designed to make certain that Japanese businesses do as much as they possibly can in house. In theory this makes certain that costs are controlled (i.e. favorable) and that the community is not subject to external influences.
In real life business does not work this way.
If a community spends it's resources trying to produce a technology, factory or resource it is taking resources away from other functions. If it can not produce these technologies in a way that is affordable, it is wasting it's valued time and money. Wasting time and money is a sure way to lose in a competitive scenario.
Let's take an example of a Japanese company that would like to design a product for an English speaking audience. Let's say the Japanese company has four choices. A Japanese Design Firm, a Japanese American Design Firm, a Big Budget American Design Firm or a Small American Design Firm.
The money politics are clear in each of the four choices. If the Japanese choose to go with a Japanese design firm they will be keeping the money within the Japanese business community.
Business is not politics.
The question should not be "Where does the design budget go?" it should be "what will be the result of my design efforts and how much will it cost to produce those results?"
If you want to design a product for an English speaking audience, you need to hire native English speakers who understand you.
If the Big Budget American Design firm does not make it clear that they can communicate your message and they are not priced well, don't go with them. If the Small American Design firm does not make it clear that they can communicate your message and they are not priced well, don't go with them.
A cost benefit analysis only requires looking at the outcomes and dividing them by the costs.
A small American design firm may put themselves into poverty to get the job done for the Japanese business. This is both favorable to the Politics and the Finances of the Japanese business community.
If the Japanese business decides to go with a Japanese design firm at a lower cost they are certainly not going to communicate what they intend to communicate through the design. If they pay too little to the Japanese design firm they may be putting people in their own community into poverty. This does not make any sense when there is the potential to get the job done by lower cost Americans.
In any case accountability is the main issue here. The history or nationality of the firm's people is not.
Negotiations should be centered around objective and competitive comparisons of all of the firms being considered. The most effective way to damage a community is to pay them very little for a lot of work. All people in the negotiation are trying to avoid this situation. Having work that pays less than you need to sustain business is more damaging to a business than having no work at all. If you have no work you can find something else to do.
Japanese designers can find other projects that pay more money, because Japanese designers, in general, have a better reputation than American designers.
Never overlook a business opportunity. You never know when someone is going to be able to provide more of what you want at a greater expense to himself than the person you usually work with.
I thought you ought to know that.
-David Caro-Greene
Monday, September 7, 2009
Professional Story : Bridging IT and Finance
The Story
I have been in Tech facing C Level Decision makers for six years. I say it all of the time. What does it mean?
It means I meet people all day long to talk about the technologies they produce, the technologies they service and the technologies they use to advise them on how and "who with" they might do more of the same "better, faster and cheaper".
The Tech industry is like any other business except more complicated, containing more exceptions and until recently a lot less political.
When my father walked off Berkeley High School Campus on to the Labs to learn cathode ray tubes, Fortran and Assembly he did not know he was going to end up training engineers at NASA, Lockheed and Apple on how to do their jobs with the then new C+ programming language but he was proud to be a part of it.
When he taught me to perform text analysis on hexadecimal code to search for and replace suspected dropped bits, showed me what the VC fund had him writing for accounting software in Basic and told me "son in the future everything is going to be on the computer. You won't be able to wipe your butt without pressing a buttOn button" he was not planning on raising a second generation Technology guy, it was only natural.
I saw where things were going with my father so I picked up a UC Berkeley Degree and some Masters education in Advertising.
As he transitioned from his last position in Corporate America as an Information Architect at TIS Worldwide to IT Director for one of the wealthiest groups of Lawyers in Northern California we had a chance to work together for a year. We had a chance to reflect on the past and the future of the Industry while helping our firm win Best Firm awards and reducing administrative malpractice costs to fractions.
The main difference is that in the old days everything was specialized. Now everything is a commodity. The skills change. Since I have been in business, most if not all of the deals now involve, insurance, lines of credit, Net30 accounts, upgrade planning, upgrade financing and maintenance. As a dealer I was purchasing from 14 hardware providers, contracting 3 service groups, getting financing quotes through 6 banks and blowing away many of my customers with financing options, savings, flexibility and time to delivery.
I became a Bay Area Business to Business Sales Leader at my first job, rocked some national scale manufacturing deals with Polywell Computers and recently made deals with CIOs at several Fortune 500 Companies at the multinational Corporate Executive Board.
The Turning Point
This is where the career change happened to me. The skills for selling a commodity are that of the broker. The industry demanded that I the computer salesmen become a broker. Just because one product appears to be the same as another it does not mean that price makes the deal. More importantly who can look past the appearances? When a client needs a financial product they can get from any financial house do you tell them it's the same no matter where you go? Many people honestly believe this is the case. But the devil is in the details. I differentiate products and services when others can't. I challenge people to compare the information I provide to that of the competition. Brokers are different animals from sales people because they have in mind the interests of several counterparties in each deal. Over the years my business to business database has became ripe and cumbersome.
I see hundreds of ways that the thousands of companies I have helped with technology could benefit from financial tools suited for the kind of business they perform.
One day I speak with the man who is presently my boss about working in financial services for Tech Businesses in California. I tell him about my plan to offer Health Care Benefits, Key Person Insurance, Employee Retirement Account Planning and Capital Expenditure review all under one name. He said "That is exactly how we are going to do it. But David, compliance say's I can't promote you to management until you have been here for at least six months."
So if you are wondering why an IT Business guy is asking you questions about your financial plans you need no longer wonder.
I thought you ought to know that.
David Caro-Greene
I have been in Tech facing C Level Decision makers for six years. I say it all of the time. What does it mean?
It means I meet people all day long to talk about the technologies they produce, the technologies they service and the technologies they use to advise them on how and "who with" they might do more of the same "better, faster and cheaper".
The Tech industry is like any other business except more complicated, containing more exceptions and until recently a lot less political.
When my father walked off Berkeley High School Campus on to the Labs to learn cathode ray tubes, Fortran and Assembly he did not know he was going to end up training engineers at NASA, Lockheed and Apple on how to do their jobs with the then new C+ programming language but he was proud to be a part of it.
When he taught me to perform text analysis on hexadecimal code to search for and replace suspected dropped bits, showed me what the VC fund had him writing for accounting software in Basic and told me "son in the future everything is going to be on the computer. You won't be able to wipe your butt without pressing a buttOn button" he was not planning on raising a second generation Technology guy, it was only natural.
I saw where things were going with my father so I picked up a UC Berkeley Degree and some Masters education in Advertising.
As he transitioned from his last position in Corporate America as an Information Architect at TIS Worldwide to IT Director for one of the wealthiest groups of Lawyers in Northern California we had a chance to work together for a year. We had a chance to reflect on the past and the future of the Industry while helping our firm win Best Firm awards and reducing administrative malpractice costs to fractions.
The main difference is that in the old days everything was specialized. Now everything is a commodity. The skills change. Since I have been in business, most if not all of the deals now involve, insurance, lines of credit, Net30 accounts, upgrade planning, upgrade financing and maintenance. As a dealer I was purchasing from 14 hardware providers, contracting 3 service groups, getting financing quotes through 6 banks and blowing away many of my customers with financing options, savings, flexibility and time to delivery.
I became a Bay Area Business to Business Sales Leader at my first job, rocked some national scale manufacturing deals with Polywell Computers and recently made deals with CIOs at several Fortune 500 Companies at the multinational Corporate Executive Board.
The Turning Point
This is where the career change happened to me. The skills for selling a commodity are that of the broker. The industry demanded that I the computer salesmen become a broker. Just because one product appears to be the same as another it does not mean that price makes the deal. More importantly who can look past the appearances? When a client needs a financial product they can get from any financial house do you tell them it's the same no matter where you go? Many people honestly believe this is the case. But the devil is in the details. I differentiate products and services when others can't. I challenge people to compare the information I provide to that of the competition. Brokers are different animals from sales people because they have in mind the interests of several counterparties in each deal. Over the years my business to business database has became ripe and cumbersome.
I see hundreds of ways that the thousands of companies I have helped with technology could benefit from financial tools suited for the kind of business they perform.
One day I speak with the man who is presently my boss about working in financial services for Tech Businesses in California. I tell him about my plan to offer Health Care Benefits, Key Person Insurance, Employee Retirement Account Planning and Capital Expenditure review all under one name. He said "That is exactly how we are going to do it. But David, compliance say's I can't promote you to management until you have been here for at least six months."
So if you are wondering why an IT Business guy is asking you questions about your financial plans you need no longer wonder.
I thought you ought to know that.
David Caro-Greene
Sunday, September 6, 2009
Risk or Reward
By law your financial advisor must ask you the survey question "on a scale from one to five how would you rate your risk aversion?". Based on your answer to this question the financial advisor is legally bound to discuss with you only specific investments that are deemed appropriate for your risk tolerance.
If this is the only question your advisor is discussing with you they are doing as little as they possibly may to keep you as a client.
When people design the way they do business to barely meet the legal standards for transparency and communication this is not a sign of low effort, it is the essence of low effort advice.
If an advisor recommends a specific investment and can not answer the question "why will this investment beat all other investments during the time I wish to invest?" to the point that you are table pounding certain about the answer.
The advisor has not provided advice. The advisor has provided tips.
Tips are for service. Tips are not a service to anyone.
Do your due diligence. Drill for the hard to know stuff. Don't take anyones word for the truth. Observe how words and actions match.
The investments companies make would be the actions to compare to those words. When they don't match. Why?
When they do match. Is there more to come?
These are questions we must hold near to defend our wealth.
Arm yourself. Information is -
-David Caro-Greene
If this is the only question your advisor is discussing with you they are doing as little as they possibly may to keep you as a client.
When people design the way they do business to barely meet the legal standards for transparency and communication this is not a sign of low effort, it is the essence of low effort advice.
If an advisor recommends a specific investment and can not answer the question "why will this investment beat all other investments during the time I wish to invest?" to the point that you are table pounding certain about the answer.
The advisor has not provided advice. The advisor has provided tips.
Tips are for service. Tips are not a service to anyone.
Do your due diligence. Drill for the hard to know stuff. Don't take anyones word for the truth. Observe how words and actions match.
The investments companies make would be the actions to compare to those words. When they don't match. Why?
When they do match. Is there more to come?
These are questions we must hold near to defend our wealth.
Arm yourself. Information is -
-David Caro-Greene
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