Making the Decision to Replace Yourself

This article was originally published by the New York Times on Thursday, Dec. 23, 2010.

In early 2008, Matt Dorey, founder and chief executive of Curve Dental, was at a loss. Three years into building a comprehensive Web-based software package for dentists, he felt the product was ready, but he was not sure how to make Curve a market leader. “The company was getting complicated,” Mr. Dorey said. “I was starting to become conscious of what I didn’t know. It was almost a feeling of loneliness.”

Then he learned of a chief executive, Jim Pack, who was looking for new opportunities after a private equity firm bought his medical-billing software company, AdvancedMD. Mr. Dorey reached out with a LinkedIn invitation. “This was someone I had been following for four years,” he recalled. “He was really open about sharing knowledge and letting us know about the challenges we face. I immediately knew there was nobody better to be the C.E.O. of this company.”

Mr. Dorey enlisted his board and top executives in a monthslong campaign to woo Mr. Pack, who ultimately agreed. Since Mr. Pack took over as chief executive in January 2009, Curve Dental has more than doubled its staff and has introduced its software to the American market, gaining share in more than 40 states and increasing its customer base fivefold. Picking the right replacement, Mr. Dorey said, “was the most important decision I’ve ever made at Curve and probably will ever make.”

Turning over your company to a successor is not to be taken lightly. And in many cases, sticking it out might be the better option, especially if you can delegate those parts of your job that have become unmanageable. But in some instances replacing yourself at the helm makes sense. Based on the experiences of small-business owners, this guide offers suggestions on how to make that decision and accomplish the transition as painlessly as possible.

HOW DO YOU KNOW? Ironically, the qualities that help you succeed as an entrepreneur — relentless optimism, willingness to tackle any challenge, a stubborn belief in yourself and your business — also make it hard to assess your own weaknesses dispassionately. But one individual rarely possesses all the varied skills and experiences needed to take a company from idea to product introduction to sales growth to institutionalizing operations. When you hit your limit, you and your company may benefit from a leader with a fresh set of eyes and a different skill set.

Rough Unemployment Road for Men Could Be Ending

This article was originally published by the Fiscal Times on Thursday, Dec. 23, 2010.

While women fared much better than men throughout the recession, the gap in the unemployment rates between men and women is beginning to narrow as more and more men are going back to work.

By Katherine Reynolds Lewis

Nearly two years after being laid off from his information technology sales job, Alan Yellowitz of Fairfax, Va. finally landed a job. He's making less than half of the $200,000 to $300,000 a year he once earned, but it's enough to keep the lights on, pay the mortgage and feed his family of four. "After 22 months of unemployment, we feel like we can breathe again," said the 47-year-old Yellowitz. "It's still somewhat rough. We’re still digging out of a hole. But getting a regular paycheck every two weeks feels amazing."

Yellowitz was a casualty of what some call the “mancession", more than two years of rampant unemployment that disproportionately hurt men more than women. Men did so poorly because far more of them worked in industries hit hard by the economic downturn – particularly manufacturing, construction and financial services. Women, by contrast, are disproportionately represented in sectors that are more resistant to economic cycles, such as health care and education.

With the recession officially over and the job market slowly improving, long-time unemployed workers like Yellowitz are beginning to find work. While the unemployment rate for men dropped by nearly a full percentage point to 10.6 percent in November from its 11.4 percent high last October, the female unemployment rate is holding steady near its 8.8 percent high of October 2009. Even though the uptick in employment for men is still relatively small the data suggest that the jobs now opening up are going to men more than to women.

"Men's unemployment rose faster and further than women's, but it has since recovered somewhat. In contrast, women's unemployment, while having peaked lower, hasn't actually come down," Betsey Stevenson, the chief economist at the Department of Labor, said in an interview with The Fiscal Times. "It does seem like the recovery has been more beneficial to men at this point. Some of this has to do with where the cuts [were] the deepest and where we [have] been able to add some jobs back."

One important question yet to be answered is whether males are merely bouncing back from the extreme job losses suffered during the Great Recession, or whether we are seeing the long-predicted turning point in the labor market in favor of women. Women hold an edge in the job market in part because they hold the majority of advanced degrees, and some experts believe that employers will hire and promote women to higher levels as a result. Thus far, the average woman still earns less than a comparable man, even when adjusted for hours worked and time out of the labor force.

House Republicans' Latest Fight Against Derivatives Reform

This article was originally published by the Fiscal Times on Thursday, Dec. 16, 2010.

Two House Republican lawmakers want financial regulators to slow down new rules for derivatives trading to avoid the effects on big corporations.

By Katherine Reynolds Lewis

Two key Republican lawmakers urged financial regulators to slow down the progress of new rules for the nearly $500 trillion over-the-counter derivatives market, an early sign that the new Republican House majority aims to delay and scale back the landmark financial regulatory overhaul that President Obama signed into law in July.

"As our economy slowly recovers, we have serious concerns that the Dodd-Frank bill for Wall Street reform will force American companies, which did not cause nor contribute to the financial crisis, to move billions of dollars in capital onto the sidelines to comply with the law," Reps. Spencer Bachus, R.-Ala., and Frank Lucas, R.-Okla., wrote in a letter dated Thursday, Dec. 16, to the heads of the Treasury Department, Securities and Exchange Commission, Federal Reserve Board and Commodity Futures Trading Commission. The two are the incoming chairmen of the House Financial Services and Agriculture Committees, respectively.

The Republicans' strategy is to delay implementation of the Dodd-Frank legislation until 2012, in hopes that a new Republican president and Senate will roll back or repeal the law, said David Min, associate director for financial markets policy at the Center for American Progress.

"They're trying to run out the clock a little bit," Min said. "They will try to delay the process through hearings, through tough letters and proposed legislation, but ultimately the presidency is held by Obama and the Senate is held by Democrats."

Banks Lose with New Derivatives Controls

This article was originally published by the Fiscal Times on Thursday, Dec. 9, 2010.

The Commodity Futures Trading Commission is considering new rules that could move derivatives trading to an exchange or clearinghouse, which would have a big impact on the profits of Wall Street banks.

By Katherine Reynolds Lewis

Federal regulators next week are set to propose new rules for trading over-the-counter derivatives, part of an effort to bring the $450 trillion market under government control for the first time, and shifting the balance of power between centralized exchanges and the world's largest financial institutions.

Congress tasked the Commodity Futures Trading Commission with shedding light on the opaque derivatives markets and bringing the majority of market activity -- possibly 80 or 90 percent -- into clearinghouses and centralized trading facilities. At stake is which market participants will profit and the cost of the new rules. Derivatives, financial contracts whose value is based on the price of an underlying asset such as a commodity, interest rate or currency, have been wildly profitable for Wall Street in recent years. The five largest U.S. dealers reaped an estimated $28 billion in 2009, according to an analysis by Bloomberg News.

Virginia farm supplies D.C. eateries despite animal-care violations

This article was originally published by TBD.com on Thursday, Nov. 18, 2010.

By Katherine Reynolds Lewis

Mie N Yu, Potenza, Zola -- they're all among a movement in Washington culinary circles toward locally grown, all-natural ingredients.

Another thing they have in common: dealings with Black Eagle Farm, a producer in rural Virginia that was found to have violated animal-care statutes and that lost its organic and humane certifications. Last December, a Virginia state veterinary inspector found that many of the animals at the Nelson County farm were emaciated and in need of veterinary care; the farm's working dogs ate raw meat rather than appropriate food; and one hen house contained eight chicken carcasses.

"The place was completely filthy," said Karen Davis, president of United Poultry Concerns, a Machipongo, Va.-based animal rights group that reviewed state records and photographs of the farm. "The company just stopped feeding the birds."

The state investigation was sparked by "numerous complaints" about maltreated dogs, livestock, and poultry on the farm, which is about 45 miles southwest of Charlottesville. A dead goat was tied to a fence, according to the records, and six dogs were allegedly being locked in a trailer full of feces for four days without water, and at least one was dying. The allegations and findings are spelled out in state records obtained through a Freedom of Information Act request by Gina Schaecher, general counsel for the Appalachian Great Pyrenees Rescue, based in Richmond, Va., which tried to rescue dogs on the farm.

Why Your Co-Workers May Hate You

This article was originally published by the Fiscal Times on Friday, Nov. 12, 2010.

It's parents vs. the childless at some workplaces as benefits geared to parents are seen as biased and unfair.

By Katherine Reynolds Lewis

With the holidays approaching, tension is mounting in some workplaces over which employees get time off — and which remain in the office while their co-workers enjoy turkey leftovers and long weekends out of town.

On one side: parents; on the other: childless people. Productivity demands have caused increased stress for all workers who feel they’re doing their job and two others; yet it’s often the child-free employees who pick up the slack because of a co-worker's flexible schedule, holiday plans or maternity leave. In this time of tight budgets and lean staffing the left-behinds are saying “enough.” They flock to online forums like The Childfree Life and STFU Parents to vent about being taken for granted because they have no children.

"You can work all the holidays, you can take the weekend trips, you can work late when your colleagues have to run home for the soccer practice or the recital," said Laura S. Scott, Roanoke, Va.-based author of "Two Is Enough" and founder of The Childless by Choice Project. "There's an assumption that the childfree don't have lives outside of work. There needs to be an acknowledgement that all employees, whether they have children or not, need work-life balance."

The work-life field was born in response to the flood of women entering the workforce in the 1970s, and in recent decades became mainstream as more employers recognized the value of flexible work benefits in attracting top talent. This summer, the Obama administration has spotlighted workplace flexibility through public statements, the first-ever White House summit on the topic and a pilot program giving federal workers greater flexibility.

But as employers compete to appear family friendly to both prospective employees and the government, they risk alienating child-free candidates who worry they will become second class citizens in the workplace. "The best employers provide flexibility equitably," said Ellen Galinsky, president of the Families and Work Institute. "Where the person with a kid might need to take off the day after Thanksgiving, the person without children may have a friend who is ill. None of us are without personal responsibilities."

With young people delaying marriage and child-rearing, and some never having children, there are more child-free people in the workplace. Nearly one-in-five American women will never bear children, double the percent in the 1970s, according to the Pew Research Center. But everyone has parents. In the last year, 42 percent of workers the Families and Work Institute surveyed have had elder care responsibilities, and 49 percent expect to in the future, Galinsky said.

Financial Advisors: New Rules Protect Consumers

This article was originally published by the Fiscal Times on Friday, Nov. 5, 2010

With more than 100 professional designations for financial-services providers, it can be hard to figure out who you can trust with your with your money. New government regulations may change that.

By Katherine Reynolds Lewis

Wondering whether to jump back into the market after the Federal Reserve's plan to pump $600 billion into the economy sent stocks to their highest level since September 2008, but worried about the uncertain outlook? People looking for good financial advice can have a hard time.

There are no federal rules for the training or conduct of someone who hangs a shingle as a financial planner. “Certified” financial service providers include more than 100 professional designations, with acronyms like CFP, CFM, CIMA, CFA, CLU, CPA, EA and PFC, representing everything from a single self-study course to years of education, professional training, continuing education, testing and ethics.

Adela Pena, 63, thought she was being responsible when she took early retirement from a telecommunications company in 1998 and invested a $400,000 lump sum pension payment in an annuity recommended by a financial adviser. She watched the value of her portfolio plummet and the adviser stopped returning phone calls. By 2008, she had only $49,000 left.

“Now all I’m living off is my Social Security and the generosity of my children,” she said in an interview from her San Jose, Calif., home. “It’s not like I spend my money foolishly. My children and I never really went on vacation because I wanted to make sure I had some money in my old age so they wouldn’t have to worry about me.”

New Government Oversight
Now, for the first time, financial planners could be subject to government oversight and broker-dealers could be required to act in their customers’ best interests, after two landmark reviews ordered by Congress in this summer's financial regulatory overhaul. The initiatives could reshape the marketplace for financial and investment advice. Policymakers hope new rules will restore some of the confidence shaken by the global financial crisis and stock market collapse in 2008, and better protect investors for the future.

“If I go to someone who markets himself as a doctor or a lawyer, I know that person has passed an exam and that person is subject to a code of professional conduct,” said Marilyn Mohrman-Gillis, managing director for public policy at the Certified Financial Planner Board of Standards, the organization that grants the CFP designation. “It’s easier to be a financial planner than it is to be a cosmetologist.”

High College Dropout Rate Threatens U.S. Growth

This article was originally published by the Fiscal Times on Tuesday, Oct. 28, 2010

Just over half the students who enter a four-year college complete their degree and even fewer community college students graduate, leaving many without the qualifications they need to land a job.

By Katherine Reynolds Lewis

Millions of first-year college students and their families now paying for the most expensive postsecondary education in U.S. history face a land mine: just 56 percent of those who enroll in a four-year college earn a bachelor’s degree. Those new undergraduates are now reaching the end of the first semester, a critical crossroads between finishing and dropping out.

Some students drop out because of trouble paying the cost — the average college debt upon graduation is a whopping $24,000. Others struggle to hold down a job while also attending college — tuition, room and board at many private universities tops $50,000 a year, and some state schools charges $10,000 a year just for tuition. But more than half of first-year students are simply underprepared for college-level work, said Jeff King, director of the Koehler Center for Teaching Excellence at Texas Christian University, which is developing a tool to identify students who are most at risk of dropping out. “There’s increasing pressure … to prove that after these thousands of dollars that parents are paying for a credential, the students are learning,” King said.

Education policymakers for decades have focused on opening the doors to higher education to more students, without much thought about whether those students are prepared and what happens if they’re not. Now, they’re starting to take action. Over the past decade, the U.S. has fallen from leader to 12th place in the ratio of young people with the equivalent of a bachelor’s degree, well behind Russia, Canada, Korea and Japan.

Study Harder

This article was originally published by Financial Planning magazine in October 2010.

The Dodd-Frank legislation calls for studies of fiduciary duty and financial planning oversight. What they find could change the industry.

By Katherine Reynolds Lewis

The buzz of activity in Washington over financial regulatory reform hasn't died since Congress passed the sweeping Dodd-Frank legislation and President Barack Obama signed it into law on July 21; it's merely moved from the halls of Congress to the regulatory agencies. For planners, the legislation kick-started two major initiatives that could transform the way financial advice is regulated and for the first time subject financial planning to explicit regulatory oversight.

The first is a study by the SEC about the obligations of brokers, dealers and investment advisors toward their clients. This study is likely to result in new rules imposing a fiduciary duty on all professionals who provide personalized investment advice, given SEC Chair Mary Schapiro's support for a uniform fiduciary standard. The second is a study by the Government Accountability Office (GAO) on the oversight of financial planning, which will result in recommendations to Congress of any legislation needed to close regulatory gaps and protect investors. Both studies are due in six months.

"It's very significant. Many major policy initiatives grow from government studies," says Marilyn Mohrman-Gillis, managing director of public policy for the CFP Board of Standards. "This regulatory reform bill provides a golden opportunity to start important change in the industry."

Justice quizzed on death penalty

This article was originally published by Gannett News Service and the Jackson Clarion-Ledger on Thursday, Sept. 30, 2010.

By Katherine Reynolds Lewis

WASHINGTON — Mississippi Justice James Graves Jr. clarified his position on the death penalty Wednesday during a Senate hearing on his nomination for a federal judgeship.

Responding to a question from Sen. Jeff Sessions, R-Ala., Graves explained that he joined a dissenting opinion in a capital murder case for reasons related only to claims by the defendant, Anthony Doss, that his attorneys had been ineffective and that he was mentally retarded.

"I take responsibility for joining that opinion, but I have not now nor have I ever subscribed to any point of view that the death penalty was unconstitutional," Graves told members of the Senate Judiciary Committee. "The United States Supreme Court has determined that the death penalty does not constitute cruel and unusual punishment. I would follow the law as handed down by the United States Supreme Court."

Graves, 56, is a nominee for the 5th U.S. Circuit Court of Appeals in New Orleans, which hears appeals from case in Mississippi, Louisiana and Texas.

He pointed to his nine years as a Mississippi justice, during which he voted to affirm convictions and the death penalty in at least a dozen capital punishment cases.

Graves is the only black justice on the court, which he joined in 2001. Before that, he was a Hinds County Circuit judge for 10 years.

He holds a bachelor's degree from Millsaps College and law and master's degrees from Syracuse University.