Why Some Business Owners Think Now Is the Time to Sell

This article was originally published by the New York Times on Wed., Dec. 21, 2011.

By Katherine Reynolds Lewis

Looking back, Cyndi Finkle wishes she had sold her craft services company, Sunday Night Dinner, early in 2008 when the economy was booming. With a track record of 30 to 50 percent annual growth for each of the previous five years, it could have been a compelling transaction.

At the time, however, she was not emotionally ready to part with a business she had started in 1997 and built into one of the largest suppliers of services to television crews and casts in Los Angeles. When her husband suggested selling, “I burst into tears and looked at him as if he were telling me to cut off my arm,” Ms. Finkle said. “Then everything changed, and I realized he was right.”

But the recession hit, and Ms. Finkle’s annual revenue dropped sharply along with declining television advertising and production budgets — making it impossible for her to sell. “I’ve had to work really hard the last three years to save my company and get it back, a lot of times working for free,” she said. “It was no longer about building it, it was about keeping it going until things got better.”

When working from home just doesn't work

There's no denying that working remotely provides tremendous benefits, but more organizations are finding that virtual collaboration also comes with significant limitations.

This article was originally published by Fortune.com on Monday, Dec. 19, 2011.

By Katherine Reynolds Lewis, contributor

FORTUNE – Once a year, leaders of Community Options come together from its 35 locations for a retreat. The nonprofit organization runs a variety of entrepreneurial ventures that create job opportunities and provide housing for people with disabilities.

At the most recent summit, the chief financial officer was bemoaning the wasted flowers at the organization's New Brunswick, N.J. floral store, due to the inevitable difficulty in managing inventory to meet customer orders.

Listening in, a graphic designer from Community Options' Daily Plan It, which rents shared office space and provides support services such as document shredding, thought they could use the dead, unsold flowers to create potpourri. As a result, Community Options is now launching a line of potpourri, which will be packaged and sold by people with disabilities.

"It's all because a group of people got together and came up with this idea," says Robert Stack, founder and chief executive of Princeton, N.J.-based Community Options. "People play off each other."

How to groom Gen Y to take the company reins

Start talking about younger workers, and pretty soon the word "entitled" comes up. But several companies have started programs to help the younger set learn the corporate ropes.

This article was originally published by Fortune.com on Thursday, Dec. 1, 2011.

By Katherine Reynolds Lewis, contributor

FORTUNE -- If you want to liven up a group of senior managers, raise the topic of the youngest employees in the workforce. Suddenly, the conversation turns animated, with strong opinions on everything from their flip-flops to their conversational style. "They are always multitasking," managers complain. "And why do they need so much feedback? Can't they just figure it out?"

Sooner or later, the word "entitled" is bound to come up, as executives compare the way they behaved as new workers with the attitudes of the Millennial Generation, those employees born between 1978 and 2000, says Lauren Stiller Rikleen, an inter-generational consultant and author of a new report on Millennial leadership for the Boston College Center for Work and Family.

Volcker rule: Why it matters to consumers

This article was originally published by Bankrate.com on Friday November 11, 2011.

By Katherine Reynolds Lewis • Bankrate.com

Federal regulators in early October proposed new regulations aimed at stopping banks from trading for their own profit.

The so-called Volcker rule, named after former Federal Reserve Chairman Paul Volcker, is part of last year's Dodd-Frank Act, the sweeping financial reform law approved by Congress last year.

While high finance and hedge fund investments may seem far removed from your everyday life, consumer advocates and analysts say the stakes for the new law are high. Ultimately, the outcome matters to your pocketbook. Already, JPMorgan Chase & Co., Goldman Sachs and Morgan Stanley have closed or announced plans to shut down their proprietary trading divisions in anticipation of those activities being banned.

With the Office of the Comptroller of the Currency accepting comments on the proposal through Jan. 13, 2012, here's your chance to weigh in on guidelines for the U.S. financial system. The Volcker rule could affect your financial life in several ways.

Promoting bank stability

The overriding aim of the Volcker rule is to promote stability in the banking system and help to prevent a repeat of the financial crisis in 2008. The near-collapse of Lehman Brothers and American International Group, or AIG, prompted Congress to pass an unprecedented $700 billion government bailout in 2008.

How flexible work actually works

Imagine unlimited paid vacation and sick leave, with no mandated office hours. Chaos, right? Not according to a handful of award-winning employers profiled in a new report on effective workplaces.

This article was originally published by Fortune.com on Wednesday, Nov. 9, 2011.

By Katherine Reynolds Lewis, contributor

FORTUNE -- At MeetingMatrix International, a communications firm based in Portsmouth, N.H., employees have no defined work schedules, unlimited paid time off, and meetings are optional. How do they ever get any work done? That's actually the only thing that matters: results.

MeetingMatrix executives point to longer customer support hours, increased sales during a down economy, and 100% retention as evidence that their focus on the end results -- and not hours in the office -- works.

"When you start treating people like adults, they start acting like it," says the company's CEO Jmichaele Keller, who in 2008 shelved his company's employee monitoring systems in favor of a more flexible approach. Under the new regime, "people have a lot of ability to shape what is going on in their world and not a lot of micromanaging.... There really is no direct tie in an office environment between the amount of time spent and the productivity of that individual."

D.C. area housing market feels the pinch from lower jumbo mortgage limits

This article was first published on Saturday, November 5, by the Washington Post.

By Katherine Reynolds Lewis

Srinivasan Soundararajan and Jennifer Nordin have been thinking about selling their Potomac townhouse and moving into a detached house for some time. With two small children, 1 and 3 years old, they are beginning to outgrow their three-bedroom house.

This past summer, the couple stayed out of the market because of Congress’s gridlock over the U.S. debt ceiling; they feared that a spike in interest rates could disrupt a pending house purchase. Once lawmakers agreed to raise the ceiling, they started looking at houses again.

Now that they’re close to making an offer on a property, a change in federal housing policy has hampered their plans.

On Oct. 1, Fannie Mae and Freddie Mac lowered the maximum size of so-called jumbo mortgages that they would back to $625,500. Before Oct. 1, Washington-area mortgages as big as $729,750 could be purchased by Fannie and Freddie and repackaged to sell to bond investors, or guaranteed by the Federal Housing Administration. The change was the result of a law Congress passed in 2008 to stimulate the housing market in the depths of the crisis.

As a result, the upper end of the Washington real estate market is feeling the pain as buyers have fewer options to finance the purchase of a house. And sellers, like Soundararajan and Nordin, feel the change constrains the pool of potential buyers for their townhouse, which they expect to list at $725,000.

“It would definitely affect the ability of someone to buy our house,” said Soundararajan, a 43-year-old attorney, noting that his sale price equals the new cap plus a down payment of $100,000. “That’s not a first-time buyer. We’re going to lose that market.”

Fed: Drags on economy worse than thought

This article was originally published by Bankrate.com on Wednesday November 2, 2011.

By Katherine Reynolds Lewis • Bankrate.com

Federal Reserve Chairman Ben Bernanke defended the central bank's efforts to stimulate the economy and encourage job creation while expressing sympathy for the frustration many Americans feel at the slow pace of economic recovery.

At a press conference following the regular Federal Open Market Committee meeting today, Bernanke acknowledged criticism from Republicans in Congress, GOP presidential candidates and Occupy Wall Street protesters.

"I certainly understand that many people are dissatisfied with the state of the economy. I am dissatisfied with the state of the economy," Bernanke said. "Increased inequality has been going on for at least 30 years."

The Fed intervened in 2008 to prevent the dire consequences of a financial sector collapse, not simply to shore up investment bankers' salaries as some protesters claim. "We were trying to protect the financial system to prevent a serious collapse of the financial system and the American economy," he said.

Bernanke's remarks came after the FOMC members voted to keep the federal funds rate near zero and maintain the current levels of monetary policy accommodation, while noting that more policy options remain if economic conditions worsen.

Should you include volunteer work on a resume?

With many talented workers experiencing stretches of unemployment, employers are taking a harder look at unpaid experience. Here's what to include -- and what to leave out.

This article was originally published by Fortune.com on Thursday, Oct. 20, 2012.

By Katherine Reynolds Lewis, contributor

FORTUNE -- Scale Computing chief executive Jeff Ready recently was interviewing job candidates for a position whose duties included coordinating all-hands meetings at the Indianapolis-based manufacturer. One prospective employee's resume included her experience planning an annual fundraiser for a local charity, several years in a row.

"To me, that experience was awesome. She had done it for four to five years; she obviously liked doing it, or she wouldn't have done it for free," says Ready.

The volunteer work stood out because her resume described the event planning experience and how many attendees were involved, making it clear that it was a substantial amount of responsibility. "You've got that four or five-second opportunity to say something that's going to grab my attention," Ready says. "In that case it was that I'm the lead event planner for the big charity event."

Increasingly, corporate bosses like Ready are taking note of job candidates' volunteer efforts. They recognize that in the recent recession, talented employees may have had stretches of unemployment that they filled with unpaid work. A recent LinkedIn (LNKD) survey found that 41% of hiring managers consider volunteer experience equally valuable as paid work.

But workers still feel nervous about what experience to include and how to be honest while also presenting in the best light. LinkedIn found that 89% of professionals surveyed had volunteer experience, but only 45% included it on their resume.

4 Reasons the Mortgage Mess Won't Get Fixed

This article was originally published by the Fiscal Times on Friday, Oct. 14, 2011.

By Katherine Reynolds Lewis, The Fiscal Times

Every day seems to bring fresh bad news about the housing market. Sales are down, foreclosures are up, mortgages are harder to obtain. Americans had better get used to it -- the housing mess is unlikely to see a near-term fix.

Since taking over mortgage giants Fannie Mae and Freddie Mac in the heat of the 2008 financial crisis, the government now stands behind about 95 percent of U.S. residential mortgages. Without any policy changes, this course will push the national debt to $30 trillion in ten years, according to Peter J. Wallison, a fellow at the American Enterprise Institute.

It could get even worse. CoreLogic estimates that 10.9 million homeowners owe more on their mortgages than the property is worth, or 22.5 percent of all outstanding loans. Amherst Securities Group projects that without further policy changes, 10.4 million additional borrowers are likely to default on their mortgages.

Policy experts agree that the situation poses unacceptably high risks to taxpayers and that private investors must eventually replace the federal government in housing finance -- but they disagree on both the path forward and how the future system will be structured.

"It certainly feels as though we are stalled," said Susan Wachter, professor of financial management at the University of Pennsylvania's Wharton School, before testifying to Congress on housing finance on Thursday morning. "The most important thing that has to happen is that there needs to be consensus."

Unfortunately for U.S. taxpayers and homeowners, there's little hope that the deadlock will break. Here are four reasons that the mortgage mess won't get fixed any time soon.

Congressional Reform is for Dreamers: When Congress passed comprehensive financial reform last year, the future of Fannie and Freddie was the biggest piece that lawmakers failed to address, largely for lack of political will. But with presidential election season in full swing, experts predict housing finance legislation will have to wait at least until 2013, at the earliest.
"Ultimately you need legislation to have a defined role for the future of Fannie and Freddie," said Phillip Swagel, public policy professor at the University of Maryland. "I don't see that happening in 2011 or 2012."

A software company takes a page from Toyota's playbook

Using a combination of Toyota-inspired lean manufacturing principles and an open office atmosphere, Menlo Innovations' work environment is attracting attention.

This article was originally published by Fortune.com on Thursday, Oct. 6, 2011.

By Katherine Reynolds Lewis, contributor

FORTUNE – At most white-collar job offices around the country, workers scurry from cubicle to cubicle, speaking in hushed tones. Take a step into software firm Menlo Innovation's offices in Ann Arbor, Mich., and it's clear that this firm is more cotton mill factory floor than monastery.

Instead of rows of cubicles, visitors enter an open space that calls to mind an artist's loft or an industrial warehouse that is filled with the sound of a dozen overlapping conversations.

"A lot of people don't believe software development can be done in anything but library quiet," says CEO Rich Sheridan, during a tour of his company's space. "I have 12 years of experience that says differently."

Sheridan and his co-founders built Menlo's work culture with a great deal of intention, and with the modest aim "to end human suffering in the world as it relates to technology." The free-form floor plan was inspired by Thomas Edison's Menlo Park, N.J., laboratory, which had an open and collaborative workspace that in turn drew inspiration from the machine shops of the day.