Berkshire Hathaway announced today that it is buying railroad company Burlington Northern Santa Fe (BNI) for $44 billion, or $100/share. It is Berkshire Hathaway’s biggest-ever takeover. Bloomberg has more on Warren Buffett, railroad tycoon:

Berkshire has been building a stake in the Fort Worth, Texas-based railroad for more than two years as Buffett looked for what he called an “elephant”-sized acquisition in which he could deploy his company’s cash hoard, valued at more than $24 billion as of the end of June. Trains stand to become more competitive against trucks with fuel prices high, he has said.

Burlington Northern operates 32,000 miles of track, with 6,700 locomotives, according to its Web site. Most of the carrier’s network is west of the Mississippi, where it competes with Union Pacific. The company hauls cargo including grain, coal and so-called intermodal containers, which can move by a combination of rail, road and sea.

Hall of Fame basketball player and legendary coach John Wooden turns 99 today. Best known for coaching the UCLA Bruins through 27 winning seasons, Wooden mastered the tenets of leading successfully. Below are 12 John Wooden quotes that will inspire leadership success, regardless of field:

1. Never mistake activity for achievement.

2. A coach is someone who can give correction without causing resentment.

3. Ability is a poor man’s wealth.

4. Adversity is the state in which man mostly easily becomes acquainted with himself, being especially free of admirers then.

5. Do not let what you cannot do interfere with what you can do.

6. I’d rather have a lot of talent and a little experience than a lot of experience and a little talent.

7. Failure is not fatal, but failure to change might be.

8. It’s not so important who starts the game but who finishes it.

9. It isn’t what you do, but how you do it.

10. It’s what you learn after you know it all that counts.

11. Success comes from knowing that you did your best to become the best that you are capable of becoming.

12. Things turn out best for the people who make the best of the way things turn out.

(Source: BrainyQuote)

The Harvard Business Review has a valuable article on managing pessimists in your team. Among the tips:

1. Create awareness. This is best done by pulling the team member aside and explaining how his comments are received. The rule when giving this type of feedback, says Jon Katzenbach, author of Wisdom of Teams and founder of the Katzenbach Center at Booz & Co., is to “be at least as positive as you are negative.” Explain why the person is valued on the team and make clear the impact of his behavior. For example, you can say, “When you make negative comments, the team gets stuck and we aren’t able to move forward.” Kramer points out, “This kind of conversation can be useful from a diagnostic perspective.” Once you understand the underlying reason for the pessimism, you can provide additional support or information if it’s needed.

2. Reposition negative statements. Negativity can fester and eventually kill a team’s momentum and motivation. Don’t let negative comments linger. Ask for clarification or more information about what the speaker means. For example, if a team member says, “This project is never going to make it past Finance,” ask the speaker to explain why she thinks that. Better yet, you can ask for alternative solutions: “What can we do to make sure the project does make it past Finance?” You can also ask team members to use “but statements.” Ask them to follow skeptical or critical sentences with “but.” For example, your team member could say “This project is never going to make it past Finance, BUT it’s worth laying the groundwork now because next year, Finance is apt to approve more tech projects.” It’s helpful to model this type of behavior for the entire team. Offer your own constructive criticism while providing an alternative solution.

3. Involve the whole team. It can be damaging to single out a team member in front of the entire team. Peer pressure is a far more effective tactic. According to Kramer, “Sometimes social sanctions work better than leader sanctions.” Set team norms and ask everyone to observe them. Goldsmith suggests that individuals ask themselves before they speak, “Will this comment help our customers? Will this help our company? Will this help the person or team we’re talking about? Will this help the person we’re talking to?” As Goldsmith points out, “Honesty may be the best policy except when it’s destructive and unhelpful.” Once you’ve agreed on norms, ask the team to hold each other to them. This approach can be used when you’re not the team leader as well. If a fellow team member is regularly negative, you can appeal to what Kramer calls “the collective wisdom” of the team by modeling positive behavior and using peer pressure to show the pessimist a more productive way of contributing. Of course as a peer, your influence is limited and you may need to talk with the team leader if your attempts to redirect the pessimist don’t work.

Read more here.

New Haven police chief James Lewis recently called Yale student Annie Le’s death “an issue of workplace violence.” Raymond Clark III, accused of choking Le in a Yale lab, then stuffing her body into the building’s wall, was charged with murder earlier today. Police are currently running tests to see if Clark’s DNA matches the crime scene.

Lewis said the following with regards to workplace violence:

“It is important to note that this is not about urban crime, university crime, domestic crime but an issue of workplace violence, which is becoming a growing concern around the country,” Lewis said.

Yale president Richard Levin sent a similar message:

“This incident could have happened in any city, in any university, or in any workplace. It says more about the dark side of the human soul than it does about the extent of security measures.”

In 2005, the US Department of Labor ran a survey on US workplace violence prevention. In it, they found that almost 5% of the 7.1 million existing US businesses had an “incident of workplace violence” in the past 12 months. 1/3 of reported incidents had a negative impact on company workforces, but most businesses didn’t change violence prevention procedures after the incident.

More than 70% of US businesses lacked a program for addressing workplace violence.

If Annie Le’s murder qualifies as a workplace violence issue, why don’t more companies put programs in place to address potential problems? Yale itself has workplace violence prevention measures.

The Annie Le case proves prevention doesn’t always work. Still, businesses would be prudent to put some kind of program in place. What do they have to lose?

I read about Santa Monica-based TrueCar in today’s Wall Street Journal. TrueCar, which generates detailed price reports for carbuyers, launched late last month. As most media outlets and blogs have verified, TrueCar is a useful addition to the world of car buying. But will it work as a business? I decided to take a closer look at the company to see if I could find out.

Timing is Everything
TrueCar’s launch came at a good time. Although few people are buying new cars, everyone is looking for a bargain. And bargain-hunting websites are taking off, fueled by the media. Just look at this WSJ excerpt. It’s enough to give a broke consumer hope:

Many dealers have unusually high inventories they want to sell in a hurry, so buyers willing to research price trends, visit numerous dealers and negotiate assertively can pick up a set of wheels at discounts unheard of just a few months ago.

Overall, the average transaction price for passenger vehicles has fallen 2.9% in the past six months, to $27,941, while the average cash-back incentive rose 2.3% in April from a year earlier, to $2,628, according to market research firm J.D. Power & Associates.

The article says that according to TrueCar, dealers were selling 25% of their 2009 vehicles below cost in March of this year.

What does TrueCar do?
The service gives you a custom price report on your desired car. You choose your region, car, and features, and TrueCar determines a good price based on recent car sales in your market. You can then print your report and use it to negotiate with your dealer.

Features on the report include a good price, great price, average price paid, and average dealer cost for your car of choice. You can also see how prices on your car have been trending for the past 6 months or so. Graphs, easy-to-understand numbers, and a useful layout make the reports a helpful tool for car buyers. For a complete review, see this TechCrunch article.

According to the WSJ article,

(CEO Scott Painter says that) TrueCar hopes send car salesmen “the way of the travel agent.” Painter…says the slump in sales has resulted in discounts so steep that new cars can sometimes be less expensive than comparable used ones.

What Makes TrueCar Better?
TrueCar undoubtedly has a useful product, but why not use Edmunds.com or Kelly Blue Book to figure out a good price? According to TrueCar’s FAQ,

TrueCar is sharing the actual data itself, not opinions about what the price should be. We don’t have an opinion about price, we just show the truth. Others give statistical opinions of what is a fair price based on data, but they don’t expose the data itself. TrueCar also gives context to the numbers for the first time, by sharing the full range of prices people have actually paid.

Sounds good, but what makes the data itself special? I once again referred to the FAQ:

TrueCar aggregates data from dozens of sources – many of them proprietary and exclusive to TrueCar – and all highly confidential. TrueCar’s pricing data is currently calculated using roughly a quarter of all individual U.S. retail transactions per month. The company expects to expand that to close to half of all U.S. retail transactions by the end of the year.

How did TrueCar get its hands on exclusive, proprietary information? How much does that information cost the company, which is currently VC-funded? Are the number of sources along what make the data qualitatively superior to competitors, or is there more to it?

How Will TrueCar Make Money?
On first glance, it looked like TrueCar was following the old shaky dot-com model: Find advertisers, sell as-yet-undefined “special products.” From the FAQ:

TrueCar has nothing to sell and is not serving as an “infomediary.” Since we’re not in the business of connecting consumers with dealers, we have no hidden agenda and nothing holding us back from providing accurate data.

Our mission is to first make a positive leap forward for consumers and dealers. Down the road we have plans for advertising, and to develop a suite of specialty price distribution products.

So they’re not selling anything, they’re not in any kind of business, yet they’re providing a service. The TrueCar business model looked suspect on its own–are undefined monetization plans even viable anymore?–until I realized that it’s just a slice of a much bigger plan.

Secret to Success: The Leadership
TrueCar’s business model is unproven, and its proprietary data is opaque, but its leadership brings the entire company into context. CEO and serial entrepreneur Scott Painter founded Zag, CarsDirect.com, and Build-to-Order.com. He played a big role in bringing car shopping online, and, according to this bio, was the first person to introduce upfront car pricing on the Internet. Zag, which he launched in 2005, eventually plans to launch the auto industry’s first fully online transaction, which would include car pricing, purchase, insurance, and financing.

TrueCar.com is basically a piece of the Zag pie. Zag is positioning itself to serve the car industry, consumers, and advertisers. Painter’s choice to release TrueCar as a quasi-independent product is smart. Through TrueCar, he could gain consumer loyalty for his products and, as a result, increased dealer interest in Zag.

One of the main ideas behind Zag is to give consumers a fair price while increasing volume for dealers. TrueCar smoothly puts the consumer component in place. Will dealerships follow? Time will tell.

One thing is for certain: TrueCar is part of something bigger.

We’ve heard it a million times – that women in business face the ultimate challenge of [by nature] not taking enough risks. Well, turns out that’s not so ture, at least not about women in business.

According to a survey by Boston’s prestigious Simmons School of Management, women business leaders don’t shy from taking risks, but rather take advantage of risky opportunities on a regular basis.

Existing empirical research on gender and risk suggest women are risk-averse, particularly assessments that measure risk through financial resource allocation, and health and safety precautions. But a survey of more than 650 women managers polled during the 2008 Simmons School of Management national leadership conference in Boston revealed that businesswomen are highly likely to take risks related to business or professional opportunities.

The survey looked beyond the traditional definition of risk-taking in terms of financial allocation scenarios to include business and professional opportunities taken. And the results prove that women take a lot of risks.

“When you actually unpack the research, the finding that women avoid risk is based on very specific contexts and a limited concept of risk-taking actions,” said article co-author Sylvia Maxfield, a professor at the School of Management. “By including contexts in which significant investments of time and money are placed in projects which require learning-by-doing, and where the likelihood of success is very hard to predict, we found women engaged in a lot of risk-taking actions.”

Change is a big risk, and it turns out women aren’t afraid to tackle it.

• 80% reported pursuing a major change initiative “sometimes” or “often”
• 79% reported pursuing a new program
• 77% reported pursuing a new job
• 56% reported pursuing a major business development opportunity

While the survey proves women’s risk taking nature, society still perceives women as risk-averse. Therefore, the study authors recommend that women highlight their risk-taking in order to enhance their career potential.

For the complete article, “Risky Business: Busting the Myth of Women as Risk Averse,” go to www.simmons.edu/som/cgo

Image Credit: ellievanhoutte, Flickr

Wednesday is National Administrative Professional’s Day, formerly known as Secretary’s Day. The holiday was established in 1952 to honor people working in secretarial or administrative careers. Today, the name has changed, but the spirit of Administrative Professional’s Day remains the same.

The International Association of Administrative Professionals claims that…

…today, there are more than 4.1 million secretaries and administrative assistants working in the United States, according to U.S. Department of Labor statistics, and 8.9 million people working in various administrative support roles.

Although flower shops would have you believe differently, a bouquet, according to the IAAP, isn’t the best way to appreciate your favorite admin. Instead, they suggest the following gifts and events:

1. Hold a special event for the admins in your company. Hire a speaker for the event, or have the CEO speak to the group.

2. Offer administrative staff the chance to register for a professional development seminar, such as the IAAP’s Professional Education conference.

3. Give staff an annual membership in a relevant professional or networking association.

4. Get them a new certification, such as the CAP (Certified Administrative Professional).

5. Offer admins a half day off.

If you need to keep your gifts small, the IAAP suggests presenting admins with gift certificates, desk accessories, computer upgrades, or a bonus.

Fortunately, incompetence has definable roots. Identifying these roots helps companies peg where they are breeding incompetence, then modify their shortcomings to benefit of both managers and employees.

If you’re concerned about incompetence in your company, check out the five tips below to see what might be causing it–and how to deal with it:

1. Using numbers as the only device to measure performance.

My first job out of college was as an inside sales rep. Our 5-person team’s measure of success was our number of sales. However, it took a relatively high number of calls to even begin to land a sale. So our managers gave us performance points for the number of conversations we had. If we had fewer than 14 conversations a day, we were put on probation.

Nobody wanted to go on probation, so a workaround surfaced. On slow days, team members would enter fake conversation notes into the database that managers checked at the end of each business day. These fake notes were usually inconsequential (”Said he wasn’t interested,” etc.), but the point is that people entered a load of crap into the company’s database in order to save their own hides. Those daily quotas encouraged cheating, and harmed the company, too.

Remedy: Measure conversations weekly, taking slow days into account. Rate performance not by number, but by quality of conversations. Train staff in better sales technique and measure performance from there.

2. Spreading workers too thin.

Cost-cutting is an essential component of survival, but it’s also a quick and dirty way to overburden competent employees, thus breeding incompetence. How many times have you heard the story of such-and-such a manager who, when all her other employees were laid off, was forced to run a department all by herself? Companies need to realize that even the most competent employee can’t, by herself, replace an entire team.

Remedy: If staff must be cut, companies need to make a bigger effort to help remaining employees stay competent. Is there room in the budget for contractors? How about telecommuting, which would take some of the travel burden off the employee? New types of collaboration that would spread the job between multiple people?

3. Expecting too much, too soon.

This is an onus both of employers and employees. Both parties expect instant performance; when it doesn’t happen, managers grow disappointed and employees grow disillusioned. I’ve seen many bright-eyed employees enter new jobs with gusto, then fizzle and drag after months of not seeing the results they’d hoped for. Managers who expect employees to know everything from the outset grow impatient when they have to answer too many questions; those who sought miracles from their new employees become wary when progress is slow. It’s the beginning of communication breakdown, which often turns deadly.

Remedy: Unless it’s clear from the outset that the person has to hit the ground running, set scalable performance goals. Print out these goals and have the employee post them on his/her cube wall. Make expectations absolutely clear. Do the same with resources like training managers, helpful websites, etc. If you’re an employee, clearly communicate your limitations at the very beginning. You can do this without making yourself sound incompetent. Promise a company only what you can deliver. Make it clear that you want to grow with the company, not fester inside of it.

4. Putting a bigger premium on politics than performance.

It’s a fact of life that schmoozing often gets you further than quality performance. Unfortunately, some company cultures overemphasize the social aspect, resulting in employees who feel their advancement hinges more profoundly on department happy hours than innovation or quality of service. The result? The aggregate quality of the company suffers, and employees grow overly political or bored.

Remedy: Put a premium on what the employee is doing for the company, not for his/her social network. Don’t mistake personal affinity for organizational benefit. Making performance standards clear from the outset and having an employee report his results on a regular basis are two ways to emphasize accountability.

5. Rewarding mediocrity.

Imagine you’re a gung-ho new hire employee at Franklin Widgets, Inc. You come into the job ready to make an impact–until you notice that everyone spends most of their time staring slack-jawed at Facebook. After you realize you’re safe from managerial scrutiny, you join them. Why should you work hard if nobody else is?

Remedy: The onus is on managers to create a sense of urgency and accountability. Describing how to do this is beyond the scope of this post, but John P. Kotter’s work is an excellent place to start.

The Harvard Business Review has a good article explaining how to be a better manager in 15 minutes per day. Here’s an excerpt:

1. Turn dead time into development time. Walking back to your office after a meeting? Use those two minutes to give your direct report feedback on the presentation, and on how he could do better next time. He didn’t have a speaking role? Ask him how he thought the meeting went and how he might have made certain points differently — and then offer feedback on that. Direct, in-the-moment feedback is your single best tool for developing people.

4. Make two calls per day. On your way home from work, call (or email) two people you met with that day, and offer “feedforward.” “I like what you’ve done with the Smithers account. Next time, let’s try to keep marketing costs down. Thanks for your hard work.” Always make “thank you” a part of the message. Employees who feel appreciated, and know that you’re trying to develop their skills, stay engaged over the long run.

I would add taking a couple minutes to reflect on your daily interactions with people: What went well, what didn’t, what needs improving. That way, you can start the next day with an interaction plan to help you fill those extra time slots. Does anyone have any other tips?

The New York Times has reported that President Obama stocks his fridge with Honest Tea, an organic, Fair Trade, and unconventional beverage symbolic of the many cultural changes he is making within the White House. The article–read it here–went into detail about Obama’s management style, which is remarkably similar to what .coms exhibited earlier this decade. Here are the main ways Obama’s management style resembles that seen in .com organizations (using citations from the NYT article):

Accessibility: Mr. Obama has exhibited a relatively informal working relationship with aides like his staff secretary, Lisa Brown. In a visit to the Capitol on Tuesday, Mr. Obama surprised his former Senate colleagues by stopping to talk to reporters.

Casual dress: An ironclad rule of the George W. Bush administration — coat and tie in the Oval Office at all times — fell by the wayside, only the first of many signs that a more informal culture is growing up in the White House under new management. The president issued an informal edict for “business casual” on weekends.

He arrives and leaves late: He shows up at the Oval Office shortly before 9 in the morning, roughly two hours later than his early-to-bed, early-to-rise predecessor. He eats dinner with his family, then often returns to work; aides have seen him in the Oval Office as late as 10 p.m., reading briefing papers for the next day.

He is a hands-on manager: In the West Wing, Mr. Obama is a bit of a wanderer. When Mr. Bush wanted to see a member of his staff, the aide was summoned to the Oval Office. But Mr. Obama tends to roam the halls.

His meetings drag on: In the Obama White House, meetings start on time and often finish late. When the president invited Congressional leaders to 1600 Pennsylvania Avenue last week to talk about his economic stimulus package, the session ran so long that Mr. Obama wound up apologizing to the lawmakers — even as he kept them talking, engaging them in the details of the legislation far more than was customary for Mr. Bush.

He introduced alternative cuisine: There is also a new addition to White House cuisine: the refrigerators are stocked with the president’s favorite organic brew: Honest Tea, in Mr. Obama’s preferred flavors of Black Forest Berry and Green Dragon.