Subtitles and transcripts of podcasts

Subtitles and transcripts are available for some podcasts linked to this blog, for example for all videos on Under the video, select Subtitles available in, and to the right of the video, select Open interactive transcript.
For Russian readers / Для русскоязычных читателей: Для некоторых подкастов, описанных в блоге, например, для подкастов на сайте, есть субтитры и записи текстов. Под видео выберите Subtitles available in Russian, а справа от видео выберите Open interactive transcript.

Friday, March 25, 2011

Bob Pozen: Too Big to Save? How to Fix the U.S. Financial System

Motley Fool Conversations podcast (audio, 24 min).
Bob Pozen is the author of Too Big to Save? How to Fix the U.S. Financial System, the former chairman of MFS Investment Management, and a senior lecturer at Harvard Business School. This podcast is full of amazingly common sense (or provocative) ideas on how to improve the financial system. A few highlights are below.
Do not bail out too many institutions. Bail out only the institutions that are critical to the payment system, or those whose failure would have led to multiple other institution failures (a total of 20-30, not 500-600, as was done after 2008).
Have a system to select what to bail out, and do post-bailout reviews to see what works. Before any institution is bailed out, the Treasury Secretary must write down on a piece of paper the reason why it should be bailed out. The decision should be approved by FDIC Chairman and the Chairman of the Federal Reserve. After the bailout, the GAO should review the results.
Break the tyranny of quarterly results. Public companies should not provide quarterly earnings predictions, to focus attention on long-term results. At most, provide earnings predictions for the next 1-2 years, and use a range, not a single number.
Use professional boards of directors. Independent directors are not enough, if they lack expertise. Most of the directors of public financial companies, especially those for which the taxpayers are the ones left holding the bag, must have specific expertise in that industry. The opposite was true for many financial companies at the center of the crisis (only 1 director of Citigroup had working experience in a financial institution!). Directors must spend a minimum of a 2-3 full days per month in the company, unlike the current practice of 1 day every 2 months. Thus, directors will have enough expertise to hold more meaningful discussions with the executives.
Do not have Congress regulate executive compensation, because this usually has unintended consequences. For example, Wells Fargo worked around the new law that put a cap on CEO bonuses by simply increasing the CEO base salary by several fold. Instead, let the board of directors make the compensation rules. Executive bonuses should be determined by the recent long term (e.g., several years) financial results. At least some of the compensation of higher executives should be in the form of restricted shares (not cash) that vest after another several years, to align the interests of executives and long term investors. Such shares are essentially stock options. Executive compensation should be indexed by the industry group. If the entire industry goes up by 10%, and the company under-performs the industry and goes up only by 5%, the CEO gets a smaller bonus. If the industry goes down by 10%, and the company over-performs the industry and goes down only by 5%, the CEO gets a bigger bonus.
Use leverage and capitalization regulations to make financial institutions safer. The SEC rule of 2004 that allowed investment bank leverage to go up from 15:1 to 30:1 was a bad idea. With a 30:1 leverage, when the market goes down by even a little bit, which historically happens quite often, you have to sell a lot of assets. If everyone sells at the same time, you have a crisis.

Saturday, March 19, 2011

Shawn Achor: Why a Happy Brain Performs Better

Why a Happy Brain Performs Better - HBR IdeaCast - Harvard Business Review podcast
(audio, 15 min, with the interesting part starting at around 6 min).
Shawn Achor, the author of The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work, describes how happiness increases performance at work. These ideas fit nicely with the experience of many people that a good boss, nice colleagues, and a healthy environment at work boost productivity. I think that in an ideal economy, happy companies finish first (higher happiness leads to higher productivity and thus to higher earnings).
Here are a few ideas from the podcast that I found the most surprising, especially with respect to how little effort is required, and how big the resulting changes are.
Doctors perform diagnosis 50% faster when their brain is positive.
When managers increase their praise and recognition of 1 employee per day for 21 days in a row, the teams have 31% higher productivity 6 months later, relative to control groups.
Another study was performed at KPMG, a big accounting firm, right before the busy tax season. They trained 50% of the KPMG tax audit managers for 3 hours on positive psychology techniques, encouraging them to create 1 positive habit over a 21 day period. A few days later, the training group was significantly happier than the control group that did not receive any training. All the way through the tax season, up to 4 months later, the training group had significantly higher levels of life satisfaction, job satisfaction, and lower levels of stress.

Saturday, March 12, 2011

A. J. Jacobs: The Guinea Pig Diaries: My Life as an Experiment

Motley Fool Conversations podcast with the "immersion journalist" and author A. J. Jacobs about his book The Guinea Pig Diaries: My Life as an Experiment (audio, 24 min).
A. J. Jacobs describes a series of experiments he did with his life. There are many interesting ones, but I especially liked these two. 
Unitasking - do only one thing at a time. No multitasking. Unitasking changed his life for the better, making a qualitative difference, with an additional benefit of increased productivity. 
The Rationality Project - pay attention to our cognitive biases (with a nod to Dan Ariely here).  Make buying decisions based on research and rational factors, rather than subjective feelings. Read the restaurant menus from the bottom up to disregard the more expensive dishes that are usually placed at the top of the menu.
Pay attention to the positive events, which we usually disregard, not only to the negative events. For example, note every time your line in the supermarket is moving fast - otherwise our natural bias is to forget these events, which occur most of the time, and remember the rather few negative events, such as when the line was extremely slow.
What I like the most about A. J. Jacobs is not any of his specific wonderful experiments, but his general approach, which reminds us that science is a great tool, and you do not need a Ph.D. "license" or a lab to practice it!

Saturday, March 5, 2011

Tom Wujec: Surprising lessons about team performance from the marshmallow challenge

Tom Wujec: Build a tower, build a team | Video on or on The Marshmallow Challenge.
(video, 7 min)
Tom Wujec ran more than 70 experiments where teams of people competed with each other in building the tallest structure made of simple objects. Here are some of the surprising results.
Recent kindergarten graduates perform better than average adults, probably because kids make multiple successive prototypes, while adults design and build a single structure.
Recent business school graduates perform worse than average adults.
Excessive compensation dramatically decreases performance of inexperienced teams.