Archive for June, 2012

Little Darth Vader Is a Role Model

Wednesday, June 13th, 2012

A Little Boy With A Big Heart

As I write this blog posting, small business owners and their employees are struggling to recover from disasters, such as severe wildfires in Colorado and New Mexico. The story of Max Page puts things in perspective.

Today Max is undergoing open-heart surgery in Los Angeles. Max is better known as the child who played Darth Vader in Volkswagen’s 2011 Super Bowl commercial. He is a seven-year-old boy born with a congenital heart defect. The surgery will replace his pulmonary valve and fix a hole in his heart. Max uses the celebrity that came from his television commercial to raise money for other children with heart defects, as he is an ambassador for Children’s Hospital in Los Angeles. Click here to support his cause.

The agency that developed the Volkswagen commercial released an e-mail from Max’s mother, Jennifer, which reads in part:

We told Max and Els [Max’s brother] Sunday afternoon. Initially, Max was crying and repeating how scared how he was. We unpeeled the layers by asking what exactly he was afraid of and tackled each issue as he could verbalize it. Blood draws, spending the night in the hospital and hurting are the big three. He was also very sad that summer would be in rest in recovery instead of playing baseball, golf and traveling. Around bedtime he asked if I would stay up with him and talk. He wanted to make a “CAN DO” list. So we wrote out all the things he can do so he could focus on those. Then he said we definitely had to “Fun Up” the house. So we went and got Els out of bed and spent the next hour redesigning each room with a theme, special rules and secret codes. In the Library (Els Room) we have to read with flashlights. On Whisper Lane (the hallway) you have to whisper. Going up the stairs you have to sing “Take me out to the ball game”. The most favorite is the garage—Explode Zone—science experiments and art projects, the messier the better.

Last night, I wanted to make sure he was doing as well as he seemed. He said, “Mom I don’t have a choice. I have to go through it. I don’t like it and it’s still scary—but I have to.  So I think I might as well go through it with a good attitude.” So as we hop on Max’s coattails to go on this ride—we too, shall do it with a good attitude. Though we will still tremble with tears and have our overwhelming moments—we will focus on the “CAN DO” and enjoy our Fun Up House.

Mighty Max wants me to include one more thing—one of the lines he uses when he speaks to groups.

“Kids, if you use your FORCE and dream big, you can achieve anything. We may be small—but we’re mighty!”

Max and his family show humor and courage in not only facing adversity, but are using it to help others. Let’s keep Max in our prayers today and send our best wishes for his speedy recovery.

Tragic Example of Equipment Failure

Tuesday, June 12th, 2012

No Single Point of FailureIn our framework for disaster risk, we place equipment failure in the “high frequency/low severity” category, an example of “everyday” disasters.  But the consequences of everyday disasters can be devastating, even when the source of the failure is trivial. A tragic example of equipment failure occurred when a freezer malfunction damaged one-third of the world’s largest collection of autism brain samples. The loss could set back brain research by decades. The collection was critical to the research of the Harvard Brain Tissue Resource Center.

The Boston Globe reports that the freezer, which was located in the McLean Psychiatric Hospital, a teaching hospital of Harvard Medical School, shut down in late May. The damage was not detected in a timely manner. The freezer is protected by two separate alarm systems and as an additional precaution, staff checked the external thermostat twice daily to verify that the brain tissue samples were stored at minus 80 degrees Celsius. But while the thermostat registered minus-79 degrees, a safe range to store the brain samples, the actual temperature was 7 degrees. The freezer area is securely locked and monitored by surveillance cameras. An internal investigation into the incident is underway.

This tragic loss, despite the multiple layers of protection in place, should prompt all of us to stop and think: can you identify the equipment critical to your small business operations? What measures have you put in place to protect it?

Texting Can Wait!

Monday, June 11th, 2012

Texting: It Can Wait!In Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery, I advised of the risks to your company when employees use their personal automobiles for business purposes. It is not just company-owned or leased vehicles that expose you to liability risk! Now businesses are focusing on a new emerging threat arising from driving: accidents caused by employees distracted by cell phone use. The National Safety Council estimates that 1.2 million automobile accidents, one-quarter of all yearly accidents, involve cell phone usage. Prudent companies aren’t waiting for legislatures to pass laws banning the use of cell phones (either voice conversations or texting) while driving; they are taking proactive measures to enhance safety.

Consider the policies of AT&T, which is not only a large corporate employer, but also a major cell phone service carrier. It has revised its corporate policies and engaged its nearly 250,000 employees in its “Texting & Driving? It Can Wait” campaign, which includes:

  • Engaging the teenaged children of AT&T employees in a youth advisory council to help refine messaging to be delivered to classmates in their own schools, advising of the hazards of texting or calling while driving.
  • Creating a resource center of information available for download to educate about driver safety with the use of cell phones.
  • Branding more than 2,000 company vans and trucks across 50 top markets with the “It Can Wait” message.
  • Developing a pledge to refrain from texting while driving and promoting it on the company Facebook page where over 11,000 individuals have already signed their commitments.
  • Providing information on product packaging and retail displays in over 2,000 company stores to educate about the “It Can Wait” campaign.
  • Donating $1.25 million to non-profit organizations promoting safe driving practices.

AT&T is to be commended for proactively addressing a risk arising from irresponsible use of its mobile telephones. That risk isn’t limited to driving, however. Employees operating hazardous equipment, such as in certain manufacturing facilities, or performing other functions where concentration and attention are critical, should also be advised to refrain from using their cell phones while working. To protect your small business and your employees, you should create a policy around the use of mobile telephones, particularly those phones that are owned or paid for by the company. It is important to give guidance to your employees and to document that you provided such guidance. You may want to refresh the policy on your company web site or Intranet or e-mailing it to employees as well as updating the company handbook. Emphasize that the message of “It Can Wait” is not just limited to the risks of teens texting while driving!

LinkedIn Security Breach Affects User Passwords

Thursday, June 7th, 2012

Don't Type the Obvious

The reports of compromised passwords for social networking site LinkedIn remind us of the importance of password security. A Russian hacker’s website has published more than 6 million passwords for LinkedIn (a social media site for business users to make connections) and 1.5 million passwords for eHarmony (an online dating site). The passwords are encrypted, but the hacker site is inviting other hackers to help decipher them. The company announced that the passwords were not necessarily compromised, but there was a risk. In less than a day of the announcement, hackers had broken more than 60% of the passwords. LinkedIn has announced that it will send e-mails to account holders explaining what has happened and how users can reset their passwords. The e-mails will not include links, which is critical for security as fraudsters have already begun sending out phishing e-mails.

As a precautionary measure, LinkedIn users ought to change their passwords by logging into LinkedIn and clicking their name in the top right hand corner, which opens a small drop-down menu, from which “Settings” appears. Click “Setting” and click “Change” next to “Password”. Enter your current password and create a new one. Be sure to select a strong password, one that cannot be easily guessed. Passwords such as “123456” or “qwerty” or “password” are useless for security purposes. Select a combination of letters (both caps and small letters), numbers and other characters to make the password more difficult to guess. Don’t use the same password for multiple sites as it makes life easier for the hackers. Keep your small business secure by staving off complacency. The news of the hacker attack on LinkedIn offers an opportunity to remind your employees of the importance of computer security.

A Small Victory for Productivity

Wednesday, June 6th, 2012


Today I was very pleasantly surprised when I received a call from a major telecommunications company. I had received unsolicited text messages from this company (for which my mobile telephone company charged me). I am not, and have never been, a customer of this phone company and I do not wish to pay for the privilege of being abused by intrusive mobile spam. There is nothing more annoying than the vibration of your cell phone over a meal. You apologize to your companion for the interruption, but since the phone is for emergency use only, you have to check the message.  Then you find out that it is a spammer or robo-dialer harassing you. Does any company really think that this is the way to acquire customers?

So I filed a complaint with the Federal Trade Commission’s online form. Although the process took only five minutes, I thought it a waste of time, as with the volume of complaints they receive, I certainly did not expect a response. But I filed my complaint as a matter of principle. Did you know that you may file a complaint if you received a call that used a recorded message instead of a live person, even if your telephone number does not appear on the Do Not Call Registry?

Calls from companies with which you have an existing business relationships are exempt from the provisions of the Do Not Call list, unless you have instructed them that they are not to solicit you. That was the issue of interest to the telecommunications company that called me. Apparently, the FTC forwarded my complaint to the company for a response. The company was embarrassed to learn that as its service is not allowed in my building, I cannot possibly be a customer. The representative of the company was apologetic and promised to further research the matter.

The National Do Not Call Registry was established to allow us to opt out of receiving telemarketing calls at home. Personally, I don’t agree with the approach. I believe telemarketers should only be able to call those who have “opted in” to receive such calls. That would dramatically reduce the call volume, wouldn’t it? But the government is reporting success with its approach: according to a recent Harris Interactive poll, 92% of people who reported placing a number on the registry said they are receiving fewer calls; 78% said they’re getting “far fewer calls” or none at all.

Companies that violate the provisions of the Do Not Call Registry may be subject to fines of up to $16,000 per offense. With the government desperate for revenues, the FTC may be motivated to follow up on individual complaints. In any event, I feel better for not having tolerated the abuse. As small business owners, particularly those working from home-based offices, these unwanted intrusions are a drain on our productivity and entirely unacceptable.

Weather Headlines

Tuesday, June 5th, 2012

My Weekend!

Today’s headlines on the Weather Channel’s website illustrate the diverse, crazy events across the U.S.:

  • “3 Dead After Strong Storm in Southern Missouri” describes a severe storm that struck the St. Louis area. Local authorities are trying to determine if the storm was a tornado or powerful straight-line winds.
  • “California: Last Rain of the Season” is the headline leading a story about heavy rainfall during California’s traditional dry season.  This headline is followed by
  • “Tender, Dry Conditions Keep West Fires Burning”. The largest wildfire in New Mexico’s recorded history covering 377 square miles required an evacuation of the area. Progress in containing the western flank of the fire gave officials sufficient confidence to allow residents and business owners to return to Mogollon, a small private run ghost town in the area.
  • “Flooding Leaves Midwest Farms Buried in Sand” informs us of the challenges in removing sand, which doesn’t hold water and nutrients as soil does, to clear farmland.

And on the East Coast, we experienced heavy rain and record high tides. I took this photograph over the weekend, showing a tree knocked over by the storm. Fortunately, no one was harmed and the parking space was vacant.  But the message to take to heart is that we must be prepared for any type of weather, as past patterns appear to have limited predictive value.

Hurricane Season 2012 Has Begun

Monday, June 4th, 2012

Thankfully, meteorologists predict a relatively mild storm season, but that is no reason for complacency. Unfortunately, complacency is still the norm in the small business sector. Travelers Insurance Company released a survey, on the first official day of the hurricane season, which found that the majority of small businesses are unprepared for business interruptions arising from storms of other disasters. Travelers gathered information from the participants at last month’s U.S. Chamber of Commerce Small Business Summit on their levels of readiness. Just over half of small businesses polled reported that they do not have a written business continuity plan and 57% lacked confidence that their insurance will cover financial losses.  “While their larger counterparts may have the capital to self insure and cover gaps, a smaller enterprise without the same resources may be forced into bankruptcy,” said Marc Schmittlein, CEO of Travelers’ small commercial accounts business. “This has implications for not only small business owners, but also for their communities and our economy at large.”

Is Homeownership Incompatible with Entrepreneurship?

Friday, June 1st, 2012

The High Cost of Homeownership

Is being a homeowner incompatible with being an entrepreneur? That is the conclusion of a study published by economists at the Spatial Economics Research Centre in London. They found that homeowners in the U.K. were less likely to become entrepreneurs as their mortgage debt discouraged them from assuming the additional risks of starting new businesses. The study’s authors believe that homeownership reduces “genuine entrepreneurship”, defined as creating a business more substantial than a sole proprietorship. Being self-employed, or even working from a home office, is one thing; taking on the commitment of a payroll for others is something else entirely. U.S. government policies, such as the mortgage tax deduction, create incentives for homeownership. Did the policy goal of fostering homeownership (more than 2/3 American households live in homes they own) stifle our economic growth?  In reading the study, I was reminded of the premise of the “Rich Dad, Poor Dad” series of books by Robert Kiyosaki. Conventional wisdom posits that we “own” our homes. Not so, says Kiyosaki, the bank owns the home; we own the right to service the debt. As entrepreneurial start-ups consume capital in their early years, it would be an additional burden to tie up capital in the down payment for a home. The study’s conclusion seems plausible, but homeowners may be a self-selected group that would not have otherwise chosen an entrepreneurial path.  I agree with the authors that government policies incenting homeownership are unwise. Why motivate people to tie up capital in illiquid assets that are cash flow negative? The study focuses on homeowners in the U.K., but let’s hope the team at the U.S. Small Business Administration reads it. SBA loans require collateral, typically property and usually the home of the small business borrower. Now there is a senseless policy incenting needless risk.