Don’t Blame the Tech…


February 20, 2014

In writing the opening to my article last week, I posed the question of whether Edward Snowden was a traitor or a hero.

I asked that question to demonstrate that technology itself is value neutral. A tool. What we do with it — and how we respond to what’s been done with it — depends on our views and values, our own history that fuels our own opinions.

Frankly, while the debate on Snowden’s fate is interesting and related, my point was not political, as many of the comments skewed. But, fair enough, this is clearly an important issue and a legitimate, passionate divide.

The issue remains, however, that we confuse technology not only with who is using it, but how it’s applied. In fact, we bundle technology with all that surrounds it and call everything technology. So, when Amazon couldn’t deliver packages to last-minute Christmas shoppers, it felt like and was reported as a technological fail, when in fact, the basics of shipping have been around since Sears started its mail-order catalog in the 1800s, and probably way before.

The NSA failed, too. So focused on their own data capture, it shockingly never occurred to them that someone could do to them what they were doing to others, collecting the data. And so a cheap, off-the-shelf piece of software brought the NSA to its knees.

But that, too, is not a failure of technology. It’s a lack of human touch. Even worse, a deficit of human vision. Someone didn’t think it through.

So, given that the Internet was designed with the precise intent of information sharing, it seems to me that we are scarily abdicating responsibility when we allow algorithms to make the tough judgment — and moral — calls.

Technology can make life easier. It can help us make sense of massive amounts of information. It can organize, sort and order. It can bring people together as never before. But the flip side holds true, too. Technology can complicate lives if process becomes a substitute for thoughtful decisions. It can distort information if it isn’t filtered intelligently. And, as we’ve seen, it sure can divide people as never before.

All of which means that technology is better, wiser, more effective when we believe its power is mechanical more than magical. Algorithmic, but not analytic.

Technology makes us better, but in every case we make the technology better. And if we’ve learned anything this year, it’s that people still matter most — for good or for bad.

So, to those who continue to debate Snowden’s fate, I leave it to you…hero or zero, either way only you will make the decision and not a passionless algorithm.

Posted by:David Sable

IRS Seems Ready to Give Up on Regulating Tax Preparers


February 20, 2014

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The Internal Revenue Service has suffered a series of legal defeats in its efforts to regulate the tax preparation profession, most recently this month when a federal appeals court upheld a district court decision that found the IRS lacks the statutory authority to require testing and continuing education of tax preparers.

In an interview yesterday with Accounting Today, the IRS’s new commissioner, John Koskinen, said the IRS is still looking at its options, but he seemed to accept the likelihood that the IRS is not going to win this particular battle in court (see IRS Commissioner Sees Further Appeals on Tax Preparer Lawsuit as Unlikely and Answers from the New IRS Commissioner).

“We’re disappointed with the decision, although the decision is fairly final in the sense that the only appeal would be to apply for a writ of certiorari to the Supreme Court,” he said in a phone interview. “And getting a writ granted by the Supreme Court is unlikely in most cases, and probably unlikely in this one as well.”

Koskinen also admitted that going to Congress to give the agency the statutory authority to impose the regulatory scheme is also a long shot, given the current climate in Congress. In recent years, Congress has continued to chip away at the IRS’s budget, despite the fact that the agency is one of the few that pays back far more than it gets in terms of contributing to the federal budget and lowering the overall deficit.

Koskinen appears to view voluntary certification of tax preparers as the most likely route. While the requirements, like those for the Registered Tax Return Preparer Program that the court invalidated, are not likely to be as stringent as those for Enrolled Agents, who have the right to represent taxpayers before the IRS, the voluntary certification could serve to provide some assurance to taxpayers that their preparer has met some minimum standards.

“My sense is we would get a reasonable percentage of people who would be delighted to take the course or courses over time, get a certification from the IRS that they’re not an Enrolled Agent, but on the other hand a certification that they’ve met sort of minimum standards that they might be able to market, or that people might be more comfortable going to them for,” said Koskinen.

The IRS will have to prove it’s ready to adapt to the challenge, and with a new commissioner in place, it’s already begun to show it’s making some changes this tax season and beyond. The IRS is facing not only budget constraints, but also new challenges like the Affordable Care Act and old challenges in which it has begun to make headway, like combating the threat of identity theft. With a new leader at the helm, it’s begun to reassess its priorities.

What do you think of the concept of a voluntary certification for tax preparers?

Michael Cohn is editor-in-chief of AccountingToday.com.


Photo: Shutterstock

Posted by:Mike Cohn

Mark Zuckerberg’s Net Worth Is Less Than Facebook’s Acquisition Of What’s App!


What’s App – If you have not been paying any attention to the news in technology today, Facebook has reportedly bought mobile messaging application “what’s App” for nineteen billion dollars. To put this amount of money into perspective, Mark Zuckerberg is worth an estimated sixteen billion dollars and Mark’s company, Facebook, is worth an estimated fifty three billion dollars. According to Isabelle Roughol, an Editor at Linkedin, “That’s 1,000 years of the company’s estimated revenue.”

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Bring Your Gifts to Work: My Maverick Hangout Experience


February 20, 2014

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Unlocking human potential.

It’s a manager’s most important task, but also the hardest to measure and understand. How can leaders empower employees to be free of bureaucracy and top-down management, while maintaining consistency and efficiency across the organization?

Gary Hamel, co-founder of the Management Innovation eXchange (MIX), and I discussed these issues and others during a Maverick Hangout on February 19. The MIX tackles many diverse management issues, including the Unlimited Human Potential Challenge which asks people to submit stories that emphasize the power of the individual.

I invite you to watch the video playback of our conversation. I’ve also highlighted what I thought were three key takeaways from the hangout.

  1. Think employee experience
    There is an emerging parallel between how companies treat their customers and employees. In the past, there were customer relationship management tools, but this view was too centered on the organization. No one wants their “relationship managed.”

    Similarly, there is no employee relationship management. There are individuals who bring unique talents and insights to a company in exchange for personal fulfillment (and yes, compensation). I’ll point to my own experience at SAP, where an internal survey shows the biggest motivator is how one’s work impacts the world beyond SAP. Don’t focus on human capital management but on employee engagement.

  2. It’s O.K. to fail
    This is a difficult pill to swallow for many managers. Empowering employees means more than providing the tools, information and capital to do their jobs. Leaders should encourage risk taking and innovating across the organization – if there are mistakes, it is better to correct them then to have never tried and stifle their creativity. As Demming said, drive fear from the workplace.
  3. Deconstructing the Pyramids
    People learn to protect the job that they have. Organizational pyramids and hierarchies exist for a reason, to provide structure and consistency. I’m not suggesting we move to a chaotic system of confusion, but there is something to be said for a networked system where individual employees can create their own relationship between the organization’s goals and their performance.

    Company culture is everything, and as I’ve said before, culture eats strategy for breakfast. In a “new pyramid,” the most important qualities will be empathy, for your fellow employee and their skills and responsibilities; diversity, because who wants five workers who think, act and reason the same way; and collaboration, because in a networked economy, we are all interconnected. That means success, and failure, is a shared concept more now than ever before. It remains to be seen what this model will eventually resemble.

Employees today want more than climbing the corporate ladder. In a better run world, there may not be a corporate ladder to climb. As Gary put it, organizations must create an environment where employees willingly bring their gifts to work, for employers who truly appreciate it.

I’d to love you hear your thoughts on the Hangout, and how you unlock potential at work.

Photo: www.bawgaj.eu / Flickr

It’s #Winning To Be Poor. Just Ask A Really Rich Guy


February 20, 2014

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Tom Perkins needs to find a hobby.

It seems the billionaire Silicon Valley venture capitalist hadn’t gotten it out of his system after calling attention, in what turned out to be the most-read letter-to-the-editor in Wall Street Journal history, “to the parallels of fascist Nazi Germany and its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the “rich.”

Weird. One might think unseemly. But he wasn’t done. In the same January 24th letter, he warned of, “’progressive radicalism”, which he described as “a rising tide of hatred of the successful one percent.” Perkins continued: “This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; its descendant ‘progressive’ radicalism is unthinkable now.”

Kristallnacht, the “Night of the Broken Glass” took place in Nazi Germany in 1938. In one night across the Third Reich, Jews were rounded up; many of whom were killed. More than 7,000 Jewish-owned businesses were damaged or destroyed, along with more than 1,000 synagogues. Yeah, Tom, Occupy Wall Street is a whole lot like Kristallnacht.

Most thinking folks dismissed Perkins comments as the ranting of a publicity-seeking billionaire gone bonkers. The venerable firm he founded, Kleiner Perkins Caulfield and Byers, tweeted: “Tom Perkins has not been involved in KPCB in years. We were shocked by his views expressed today in the WSJ and do not agree.” Perkins response to the tweet? “They threw me under the bus.”

Given one of several chances to clarify his remarks, Perkins doubled-down on his attacks on the poor at an event in San Francisco on February 13th, saying that “the extreme progressivism of the tax system” is a form of persecution of the top one percent of earners in America. When asked by Fortune’s Adam Lashinsky how he’d remedy the situation, he offered this solution: “You don’t get the vote if you don’t pay a dollar in taxes. But what I really think is it should be like a corporation. You pay a million dollars, you get a million votes.”

I don’t know Tom Perkins – though I’ve read his wife Danielle Steele’s novels – so it’s easy for me to discount his views as outlandish. I do know Kevin O’Leary, of Shark Tank fame, which makes it tough for me to slough-off something he said on the daily CBC show he co-hosts with my old friend Amanda Lang. On the January 21st edition of “The Lang and O’Leary Exchange”, O’Leary and Lang were discussing a recent OXFAM report which stated that the world’s 85 richest people hold the same amount of wealth as the poorest half of the planet’s population. O’Leary said: “This is a great thing because it inspires everybody, gets them motivation to look up to the one per cent and say, ‘I want to become one of those people, I’m going to fight hard to get up to the top.’ This is fantastic news and of course I’m going to applaud it. What can be wrong with this?”

It may not be flat out #winning to be poor, but it’s actually pretty good, according to Nicole Miller co-founder and CEO Bud Konheim. Konheim told CNBC that the poor should stop complaining, because: “we’ve got a country that the poverty level is wealth in 99 percent of the rest of the world… the guy that’s making, oh my God, he’s making $35,000 a year, why don’t we try that out in India or some countries we can’t even name. China, anyplace, the guy is wealthy.”

I can’t really decide whether any of these are actually attacks on the poor. Perkins framed it as an attack BY THE POOR on the wealthy, O’Leary pointed out how lucky the poor are, and Konheim wants America’s poor to think they’re not poor because, compared to low income Indians and Chinese.

America is not India. It’s not China. America is the biggest and most prosperous nation in the world. We’re debating raising the federal minimum wage to $10.10 an hour, from the current $7.25 an hour. If you work 40 hours a week earning the federal minimum wage, you earn about $15,000 a year. The left-leaning Economic Policy Institute says raising it to $10.10 would eventually help more than 20 million Americans. Conservatives argue raising the wage will hurt small businesses and keep them from hiring workers. Both sides have valid arguments.

Leaving that debate aside, let’s look at income which, for our purposes, includes what you earn from work, and what you earn from capital gains, dividends from stocks and interest from bonds. U.S family income roughly doubled from the late 1940s to the early 1970s for almost all Americans. But, starting in the 1970s, income began growing much faster for the top five percent of earners, than for people in the middle or bottom. For the top one percent, their after-tax incomes jumped more than 200 percent between 1979 and 2010. For most Americans, wages make up the vast majority of their income, as opposed to income from investments and wages, adjusted for inflation, have declined nearly six percent for the lowest earners between 1979 and 2012. Over the same time 23-year period, wages jumped nearly 40 percent for people in the top five percent.

Let’s look at this one more way: total wealth, which includes everything someone owns, including their home, stocks and bonds. As of 2010, the top one percent of households owned 35.4 percent of all privately held wealth; the next 19 percent owned 53.5 percent. That means that just 20 percent of Americans owned a whopping 89 percent, leaving only 11 percent of the wealth for the bottom 80 percent. More starkly, the richest 400 people in the U.S. have more wealth than the poorest 150 million. It makes sense when you think about it, because wealth begets wealth. If you started 2009 with money to invest in stocks or property, and the ability to get credit at some of the lowest rates in history, this has been one of the best five year periods in history for you. If you started 2009 broke or unemployed, it may still feel like a recession to you.

Perkins, and his fellow uber-rich, need to comprehend that there is no war on the rich in America. The middle and lower classes are too busy working for their increasingly elusive piece of the “American Dream” to be waging war on anyone. Society’s top earners control wealth, wages and political power. If there is class warfare, they rich are the only ones with the disposable time and income to wage it. Historically, America’s had strong, growing and empowered middle class to work as a buffer; folks who work hard and earn money, but not enough to avoid paying most taxes. We’re losing that in America and, along with it, the dream of millions of Americans of making it into the middle class.

If the rich realized the implications of it, they’d be mad as hell, too.

Photo: Getty Images North America