A few things to consider when observing the needs of benefit programs (Social Security, Medicare, Unemployment, etc) for Americans. I believe the current strain on the system may be particularly bad at the moment, which means it will improve for future generations. The added stress is temporary. Here’s why.

Three one-time events have occurred over the last 70 years that have led to American families being more spread out than ever before. And more politically polarized. So instead of Social Security being supplemental income for our parents who move back into the house when they retire, it is now expected to support two households. One in Connecticut or wherever your parents live. And another household must pay its way entirely, hopefully through employment, in a different city. This is just a theory, but here goes:

First – The American Interstate Highway System

The Interstate System has been called the Greatest Public Works Project in History.  From the day President Dwight D. Eisenhower signed the Federal-Aid Highway Act of 1956, the Interstate System has been a part of our culture—as construction projects, as transportation in our daily lives, and as an integral part of the American way of life.  Every citizen has been touched by it, if not directly as motorists, then indirectly because every item we buy has been on the Interstate System at some point.  President Eisenhower considered it one of the most important achievements of his two terms in office, and historians agree.

And for the PR people out there, don’t forget that Edward Bernays’ work with Mack Trucks was a precursor. Bernays, always humble, states ”One single idea changed the economics of a country.”

Second – Indoor Air Conditioning

Air conditioning is largely credited with the migration of Americans from the North to the South. From a book review Salon on AC. Note – some of the article is behind a pay-wall but this OTB review of the salon article on air conditioning has more quotes from the book “Losing Our Cool: Uncomfortable Truths About Our Air-Conditioned World”

But as science writer Stan Cox argues in his new book, “Losing Our Cool: Uncomfortable Truths About Our Air-Conditioned World (and Finding New Ways to Get Through the Summer),” the dizzying rise of air conditioning comes at a steep personal and societal price. We stay inside longer, exercise less, and get sick more often — and the electricity used to power all that A.C. is helping push the fast-forward button on global warming. The invention has also changed American politics: Love it or hate it, refrigerated cooling has been a major boon to the Republican Party. The advent of A.C. helped launch the massive Southern and Western population growth that’s transformed our electoral map in the last half century.

It was only in 1947 that “Mass-produced, low-cost window air conditioners become possible.” Figure 10 years for adoption and you’re looking at late 50s and 60s for things to be livable in a city like Houston. And another source on the role of AC in the South. Basically New Yorkers invented air conditioning and then used it to get the heck out of Dodge.

The Interstate Highway system and AC making the South livable created a virtual land rush with youth moving south and families spreading out across the country. And the migration, like the Sooners, was largely a one-time-event. Sure people will continue to move around, but not like they did over the last 50 years. It just makes more sense for humans to stay near our support network. It takes a gold-rush to lure us to new territories. Then we settle down.

Third – The Baby Boomers in Power

They have brought us many great things. Boomers invented the Web, DNA fingerprinting, lithium-ion batteries, the artificial heart and much more. Yet this is also a generation that has been fighting with itself for as long as I have been alive. Even the Wikipedia page on baby boomers is covered with conditional statements because they can’t agree. From Wikipedia:

In general, baby boomers are associated with a rejection or redefinition of traditional values; however, many commentators have disputed the extent of that rejection, noting the widespread continuity of values with older and younger generations. In Europe and North America boomers are widely associated with privilege, as many grew up in a time of affluence.^[2] As a group, they were the healthiest, and wealthiest generation to that time, and amongst the first to grow up genuinely expecting the world to improve with time.^[3]

So they are known for rejection but the commentators on the Boomer wikipedia article reject that they are known for rejection. Very meta. My point here is at this moment in time the baby boomers are running the country. And they grew up in a time of great social change.

Boomers grew up at a time of dramatic social change. In the United States, that social change marked the generation with a strong cultural cleavage, between the proponents of social change and the more conservative. Some analysts believe this cleavage played out politically since the time of the Vietnam War to the mid-2000s, to some extent defining the political landscape and division in the country. – NABBW

Boomers are in charge and they don’t like each other. Period. They are polarized. Is America becoming more polarized right and left and screaming at each other? Or is it just this one group? I believe the divisions in our country are not as great as portrayed in the media and it is more an inner-generational rift than an inter-generational rift. I just don’t hear the vitriol when two Gen-X-ers are talking. Their beliefs on most issues simply aren’t anywhere near the country-is-being-torn-apart feeling of the 60s and 70s.

The Boomers have made what we have in this country today possible. I appreciate that as I type this on the laptop they invented for me. But they have also buried us in debt and polarized the two party system George Washington, our only Independent President, hated. Like a good coach I am saying I loved seeing the points on the board, but you are fouling out. This is a generation that needs to do better. But they can’t because people don’t think and act as generations. They do so on beliefs and it is unlikely, possible but unlikely, people in their 50+ years will change their ideology. Rather than agree they will take their ball and go home, the future be damned. Thus we literally have to wait them out to save the country.

The Good News is the Future Will Be Better

The ramifications of these three one-time events is that we are spread out across the country without immediate family nearby. And we are screaming at each other because of ideological differences. Yet give it 20 years, yes I realize that is a long time, but when time goes by I predict it will get better. Specifically:

1. Stabilization of the American extended family. Humans naturally stay with their tribe. Fewer children will move to far off states which means more family in the same location. We need this support network. When you lose your job, as so many have these last few years, it is much easier to move into the guest room if your extended family is in the same state, or (gasp!) the same part of town.
2. Reduced costs to society for entitlement programs – when family is nearby, Social Security and Medicaid aren’t expected to fully support an entire household. They are needed to supplement the income of an elderly parent who is supported by their nearby family as well.
3. Reduced political rhetoric and infighting among Americans. As the boomers age out, the Millennial generation will move into power. The Millennials are a diverse group, but they are not divided like the boomers. Diversity does not equal divisiveness and I am quite optimistic about the Millennials long term. Perhaps “entitled” and “soft” like the doughboys currently, but the Millennials will emerge strong leaders as they enter the real world and mature past the overly-protective cocoons they grew up in. I have seen this growth in our employees. They can and will step up. And we as a country will be saved by these kids.

That’s my two cents anyway. It gets better. It’ll just take a while. Hang in there y’all.

A nice write up about the company in the Chronicle today by Ronnie Crocker with photos by Patrick Fallon. The article is here:

Q&A: People skills on the Internet

Slides from my talk yesterday at the PRSA Digital Impact Conference in New York.

“Sometimes you aren’t even sure it is a win?”

“When you’re a hoser, admit it”

- Adam Sohn at PRSADIconf

I am looking forward to getting back to NYC to present at the PRSA 2011 Digital Impact Conference: “Building Knowledge, Skills and Value for the New Decade”. It is May 5th and 6th at the The Sentry Conference Center.

My session is on Friday May 6 at 9:45 and is called

“PRofiting From the Personal-Branding Era: How to Convince the CEO to Encourage Personal Brands”

I’m particularly excited about it because we have been able to take the Personal Brand Era theories we believed to be true and begin testing them on our newly revised schipul.com. In particular we customized our staff pages to highlight the employees’ personal brands. And internally have turned up the heat on training and direct employee promotion.

For example on our site Courtney is on our biz dev team. Instead of her bio, we tell Courtney’s story. And while I can’t say yet that we have closed any deals because people know the answer for “What’s your hidden talent?” for Courtney is “An impersonation of a Minnesotan named Gayle“, I do know that she is more approachable. And apparently also has an ongoing dispute with a penguin. (I can’t explain that last part. But you can ask Courtney on twitter.)

Of particular interest will be our discussion of the THREATS to corporations from strong personal brands. I’ve learned a few things from the school of hard (read=EXPENSIVE) knocks over the last year. They aren’t just threats. They are expensive dangers that WILL bite you financially and hurt your brand.

1. What if you hire someone with a strong personal brand, announce it to the world, and then they quit unexpectedly a week later? You can do all of the damage control you want but it is still a ding on your brand. And as a CEO no matter what you say, you look kinda stupid. Having people retweet “congrats on the new job” tweets while others are tweeting “what happened” or more likely sending DM (Direct Messages) is awkward. How do you handle this?
2. What if you hire, train, promote and then the employee leaves with all of their new training before you recover the cost through billable time? How many times can you afford the 20k training cost loss before you cease training or stop promoting personal brands? It is a valid question. We’ll talk about it with candor.
3. What if the corporate and personal brands are so strong you get hate mail from anonymous people on facebook about your “strong corporate culture”? Yup, that really happened. I can tell you it didn’t bug me, but it did. Venom hurts. We’ll talk this through on how we changed internal communication to combat this perception?
4. What do you do when the team gets too full of itself? How can you prevent a good thing from coming across as arrogance externally? It ain’t easy, but it can be done.

I have a few solutions and thoughts for you as the CEO of a 35 employee growth company. Please join us at the PRSA Digital Impact Conference and let’s get this sorted out!

“This young lady does not realize that she has no capital in the bank to finance this request.”

- Buchanan PR

Some interesting excerpts, ones that I found interesting anyway, in Buffett’s 2011 annual letter. I read it every year and if you are interested in business you should too. I don’t own any Berkshire stock. I just like how Buffett thinks. All bold emphasis added by me.

On Railroads, Trucking and the Environment (for the PR curious, check Bernay’s work for Mack Trucks in 1949)

…railroads have major cost and environmentaladvantages over trucking, their main competitor. Last year BNSF moved each ton of freight it carried a record 500 miles on a single gallon of diesel fuel. That’s three times more fuel-efficient than trucking is, which means our railroad owns an important advantage in operating costs. Concurrently, our country gains because of reduced greenhouse emissions and a much smaller need for imported oil. When traffic travels by rail, society benefits. (pg 3)

Rail moves 42% ofAmerica’s inter-city freight, measured by ton-miles, and BNSF moves more than any other railroad – about 28% of the industry total. A little math will tell you that more than 11% of all inter-city ton-miles of freight in the U.S. is transported by BNSF. Given the shift of population to the West, our share may well inch higher. (pg 14)

On being optimistic in the current economic environment:

No matter how serene today may be, tomorrow is always uncertain.

Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.

We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and1941, America’s best days lie ahead. (pg 3-4)

On the folly of economic reporting periods to understand the value of a company:

Yearly figures, it should be noted, are neither to be ignored nor viewed as all-important. The pace of the earth’s movement around the sun is not synchronized with the time required for either investment ideas or operating decisions to bear fruit. (pg 4)

On hiring well. Talent is the secret to business:

Our trust is in people rather than process. A “hire well, manage little” code suits both them and me. (pg 7)

On the mobile home industry (they own Clayton) and the government’s policies that relate to home ownership:

To explain: Home-financing policies of our government, expressed through the loans found acceptable by FHA, Freddie Mac and Fannie Mae, favor site-built homes and work to negate the price advantage that manufactured homes offer.We finance more manufactured-home buyers than any other company. Our experience, therefore, should be instructive to those parties preparing to overhaul our country’s home-loan practices. Let’s take a look.  [Net Losses as a Percentage of Average Loans in 2010 for Clayton was 1.72%]

…

Our borrowers get in trouble when they lose their jobs, have health problems, get divorced, etc. The recession has hit them hard. But they want to stay in their homes, and generally they borrowed sensible amounts in relation to their income. In addition, we were keeping the originated mortgages for our own account, which means we were not securitizing or otherwise reselling them. If we were stupid in our lending, we were going to pay the price. That concentrates the mind.

…

But a house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender – often protected by a government guarantee – facilitates his fantasy. Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford. (pg 16-17)

On selecting talent:

One footnote: When we issued a press release about Todd’s joining us, a number of commentators pointed out that he was “little-known” and expressed puzzlement that we didn’t seek a “big-name.” I wonder how many of them would have known of Lou in 1979, Ajit in 1985, or, for that matter, Charlie in 1959. Our goal was to find a 2-year-old Secretariat, not a 10-year-old Seabiscuit. (Whoops – that may not be the smartest metaphor for an 80-year-old CEO to use.) (pg 19)

On Net Income and why it is useless to measure the health of a company:

Earlier in this letter, I pointed out some numbers that Charlie and I find useful in valuing Berkshire and measuring its progress.Let’s focus here on a number we omitted, but which many in the media feature above all others: net income. Important though that number may be at most companies, it is almost always meaningless at Berkshire. Regardless of how our businesses might be doing, Charlie and I could – quite legally – cause net income in any given period to be almost any number we would like.

We have that flexibility because realized gains or losses on investments go into the net income figure, whereas unrealized gains (and, in most cases, losses) are excluded.

…

…Charlie and I have never sold a security because of the effect a sale would have on the net income we were soon to report. We both have a deep disgust for “game playing” with numbers, a practice that was rampant throughout corporate Americain the 1990s and still persists, though it occurs less frequently and less blatantly than it used to. (pg 21)

On real valuations and being unable to pinpoint a number:

Our inability to pinpoint a number doesn’t bother us: We would rather be approximately right than precisely wrong.

John Kenneth Galbraith once slyly observed that economists were most economical with ideas: They made the ones learned in graduate school last a lifetime. University finance departments often behave similarly.Witness the tenacity with which almost all clung to the theory of efficient markets throughout the 1970s and 1980s, dismissively calling powerful facts that refuted it “anomalies.” (I always love explanations of that kind:The Flat Earth Society probably views a ship’s circling of the globe as an annoying, but inconsequential,anomaly.) (pg 21)

On the social responsibility of conservative financial practices (no leverage) and keeping cash on hand:

Charlie and I have no interest in any activity that could pose the slightest threat to Berkshire’s well being. (With our having a combined age of 167, starting over is not on our bucket list.) We are forever conscious of the fact that you, our partners, have entrusted us with what in many cases is a major portion of your savings. In addition, important philanthropy is dependent on our prudence. Finally, many disabled victims of accidents caused by our insureds are counting on us to deliver sums payable decades from now. It would be irresponsible for us to risk what all these constituencies need just to pursue a few points of extra return.

On NOT paying dividends and instead reinvesting. Always a growth stock in a way:

Furthermore, not a dime of cash has left Berkshire for dividends or share repurchases during the past 40 years. Instead, we have retained all of our earnings to strengthen our business, a reinforcement now running about $1 billion per month. Our net worth has thus increased from $48 million to $157 billion during those four decades and our intrinsic value has grown far more. No other American corporation has come close to building up its financial strength in this unrelenting way.

By being so cautious in respect to leverage, we penalize our returns by a minor amount. Having loads of liquidity, though, lets us sleep well. Moreover, during the episodes of financial chaos that occasionally erupt in oureconomy, we will be equipped both financially and emotionally to play offense while others scramble for survival. That’s what allowed us to invest $15.6 billion in 25 days of panic following the Lehman bankruptcy in 2008 (pg 24)

And towards the end of the letter he does what a good business man should. HE ASKS FOR YOUR BUSINESS!

The best reason to exit, of course, is to shop. We will help you do that by filling the 194,300-squarefoot hall that adjoins the meeting area with products from dozens of Berkshire subsidiaries. Last year, you did your part, and most locations racked up record sales. In a nine-hour period, we sold 1,053 pairs of Justin boots, 12,416 pounds of See’s candy, 8,000 Dairy Queen Blizzards® and 8,800 Quikut knives (that’s 16 knives perminute). But you can do better. Remember: Anyone who says money can’t buy happiness simply hasn’t learned where to shop.

GEICO will have a booth staffed by a number of its top counselors from around the country, all ofthem ready to supply you with auto insurance quotes. [etc...] (pg 24)

If I have quoted it above. Particularly if it is bold. It is an opinion I agree with. I think the man speaks the truth.

I have been digging into the background story on the 2011 revolution in Egypt. Follow that last link for a good recap of how the police beating of Khaled Said created a maelstrom that has turned into massive protests and labor strikes in Egypt. A man named Wael Ghonim has emerged as a symbol of the revolution in Egypt after his CNN Interview as a rebuttal of Omar Suleiman, the General now promoted to a VP, did an interview with ABC News.

Regarding the politics of Mubarak’s autocracy, I think we can agree on some fundamentals:

1. The killing of Khaled Said was unjustified and horrible.
2. The government response to these allegations in Egypt was insufficient.
3. The protests are right to object to 30 years of “Emergency Rule“
4. Mubarak should step down immediately
5. The US historical support for Mubarak, while unlike the situation with the Shah in Iran, will likely not win us many friends in post-Mubarak Egypt.
6. Social media has played a key role in the protests as evidenced by the Internet blackout implemented by the government.

Wait. I’m not so sure about number 6. The role of social media is unclear.

Working in social media I was curious and looked up the facebook group and the twitter accounts. What struck me was that for a country with a population of 77 Million, the page and the twitter account have relatively few followers. Right now Wael Ghonim on twitter has 46,035 followers

and the Khalid Said page on Facebook has 61,687 fans

Both of those numbers seem small to me given the scope of the protests. My first thought was “you must be looking at the wrong page. Surely there is an arabic page that is the real FB connector. I emailed a politically active Egyptian friend (Fayza!) and her response was:

I think that’s probably as good as you’re going to get. It’s a very active page, so my guess is that it’s the best resource for his supporters that Facebook has to offer. Lots of Egyptians speak fluent English because of the prevalence of tourism. It doesn’t surprise me that the primary FB presence is in English at all.

Perhaps Gladwell is right that the Revolution will not be tweeted. When Gladwell in his post talks about networks he says:

The drawbacks of networks scarcely matter if the network isn’t interested in systemic change—if it just wants to frighten or humiliate or make a splash—or if it doesn’t need to think strategically. But if you’re taking on a powerful and organized establishment you have to be a hierarchy.

So either social media isn’t the huge driver for change, or it is a very small subset of the population communicating through social media that is facilitating the action. But you certainly can’t say that hundreds of thousands are responding to direct tweets with a central call to action.

So to me the role of social media in the revolution is still a conundrum. And as I type this, it looks like the rumors of him stepping down tonight on 2/10/2011 were false.

More to follow….

Edelman Trust Barometer 2011 Released. Highlights from Meg Strout’s blog followed by the slideshare. Meg’s summary:

There’s been a decline in trust in “a person like myself” and regular employees, arguably because of “over-friending”

Trust in credentialed experts (70%) and company technical specialists (64%) is soaring

Informed publics (media consumers) need to hear things three to five times for it to effect a behavior change

To stand out and build trust, businesses must activate internal thought leaders across several spheres of media

Via Meg Strout

Worth a read on wikileaks Wikileaks, the World’s First Stateless News Organization

Ask yourself: Why didn’t Wikileaks just publish the Afghanistan war logs and let journalists ‘round the world have at them? Why hand them over to The New York Times, the Guardian and Der Spiegel first? Because as Julien Assange, founder of Wikileaks, explained last October, if a big story is available to everyone equally, journalists will pass on it.

“It’s counterintuitive,” he said then. “You’d think the bigger and more important the document is, the more likely it will be reported on but that’s absolutely not true. It’s about supply and demand. Zero supply equals high demand, it has value. As soon as we release the material, the supply goes to infinity, so the perceived value goes to zero.”