Infosys to build software development center in eastern India

(Reuters) – Indian information technology company Infosys Ltd said on Monday it would open a software development center in the eastern state of West Bengal, with an investment of about 1 billion rupees ($14.28 million).

Employees walk along a corridor in the Infosys campus in the southern Indian city of Bangalore September 23, 2014. REUTERS/Abhishek Chinnappa

The first phase of construction bit.ly/2B4yf57 on the 525,000-square feet facility will be able to accommodate 1,000 employees, the country’s second-biggest software services exporter said.

The first phase is expected to be completed within 15 months from the date of obtaining regulatory clearances, the company said.

Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Subhranshu Sahu

The Creative Ways Your Boss Is Spying on You

Earlier this year, Amazon successfully patented an “ultrasonic tracker of a worker’s hands to monitor performance of assigned tasks.” Eerie, yes, but far from the only creative method of employee surveillance. Upwork watches freelancers through their webcams, and a UK railway company recently equipped workers with a wearable that measures their energy levels. By one study’s estimate, 94 percent of organizations currently monitor workers in some way. Regulations governing such conduct are lax; they haven’t changed since the 19th century.

The most common snooping techniques are relatively subtle. A system called Teramind—which lists BNP Paribas and the telecom giant Orange as customers on its website—sends pop-up warnings if it suspects employees are about to slack off or share confidential documents. Other companies rely on tools like Hubstaff to record the websites that workers are visiting and how much they’re typing.

Such software “solutions” pitch themselves as ways to enhance productivity. But trouble emerges, critics say, when employers invest too much significance in these metrics.

That’s because data has never been able to capture the finer points of creativity and the idiosyncratic nature of work. Where one account manager might do her best thinking behind a desk, another knows he’s sharpest on an afternoon stroll—a behavior that algorithms could blithely declare deviant. This then creates “a hidden layer of management,” says Jason Schultz, director of the NYU School of Law’s Technology Law & Policy Clinic. Those midday walkers might never find out why they’ve been passed over for a promotion. Once established, the image of the “ideal” employee sticks.

Try to hide from this all-seeing eye of corporate America—and you might make matters worse. Even the cleverest spoofing hacks can backfire. “The more workers try to be invisible, the more managers have a hard time figuring out what’s happening, and that justifies more surveillance,” says Michel Anteby, an associate professor of organizational behavior at Boston University. He calls it the “cycle of coercive surveillance.” Translation: lose/lose.

Unless you want to be spied on. In a recent study of Uber drivers, researchers found that a monitored employee can sometimes feel “more secure than the worker who … doesn’t know if her boss knows that she is working.” NYU’s Schultz admits that a degree of oversight can galvanize commitment, but he wants a law restricting its use to workplace tasks. Others insist data should be anonymized. One model is Humanyze, a “people analytics” service that provides clients not with individualized employee reports but rather with big-picture trends. Workers are then accountable to that big picture, each contributing modest brushstrokes. Don’t paint outside the lines.


This article appears in the August issue. Subscribe now.


More Great WIRED Stories

Uniti Group: Private Deals

Uniti Group (UNIT) and its key tenant Windstream Holdings (WIN) both reported earnings yesterday. In the earnings, there is some good and some bad.

On the positive side, UNIT made another acquisition/leaseback with CableSouth and a dark fiber lease to a national MSO. Meanwhile, WIN reported earnings that were better than expected.

On the negative side, UNIT reduced annual guidance due to delays as the TPx closing was pushed back a month, and fiber delays due to a large customer not being ready and permitting delays. While AFFO exceeds the dividend, UNIT continues to go further into debt to fund cap-ex.

Perhaps the most important news of the quarter was the change in tone regarding the potential of deals involving private capital funding. In previous calls, such discussions were suggested as hypotheticals that might occur at some distant point in the future. In this call, it was clear that management is expecting at least one, and possibly more, deals by the end of the year.

Acquisitions

UNIT is acquiring an additional 43,000 strand miles of fiber for $31 million. 34,000 of those strand miles will be leased back to CableSouth for $2.9 million/year with a 2% annual escalator.

Not only is UNIT getting an immediate 9.3% cap rate on the transaction, but it also has exclusive rights to use or lease the additional 9,000 strand miles. Additionally, CableSouth is currently an off-net provider for UNIT, so there will be immediate savings once UNIT owns the network.

This is a rather small deal, but it demonstrates that UNIT has the ability to make profitable acquisitions adjacent to its network. Year over year, the company has grown its network considerably.

Source

Despite the equity markets being closed to the company, UNIT has managed to increase its fiber network by 600,000 strand miles (12.5%) and 16,000 route miles (16.6%).

The recent lease deal announced with a “National MSO” is a concrete indication that UNIT can lease the excess capacity. The lease has a 20-year term, with an upfront payment of $23 million and $4 million in annual rent. With no cap-ex required and an expected incremental EBITDA margin of 90%, most of the revenue will be reaching the bottom line.

These are the kinds of deals that management has been promising are possible, but have not been seen. If leases like these become a regular occurrence, that is great news for UNIT.

Windstream

WIN’s earnings were well received by the market, with shares bouncing up over 25% in one day. The report can best be characterized as things not being nearly as bad as the market feared.

Source

Total revenues continue to decline, but margins continue to improve. Most importantly for UNIT investors, Adjusted OIBDAR (Operating Income Before Depreciation, Amortization, and Rent) remains above $500 million. WIN continues to have 3x rent coverage.

Another concern that has been weighing on UNIT has been the risk of a WIN bankruptcy. I have covered the Windstream vs. U.S. Bank vs. Aurelius lawsuit in numerous articles. With the trial over, the decision is now solely in the hands of the judge and should be coming within a month or so. A worst-case scenario decision would trigger an Event of Default on the bonds owned by Aurelius. A positive result should provide a boost for both WIN and UNIT.

Aside from the Aurelius bonds, WIN has made significant progress in kicking the can down the road.

Source

With the most recent debt exchange, WIN’s only significant debt maturities before 2023 are its revolver and the B-6 term loan.

In the conference call, Robert Gunderman suggested that there should be news regarding refinancing the revolver soon:

Hey, Davis. This is Bob. We certainly are having those conversations with our credit facility banks. I talk to these partners very often. They’ve been very supportive. Certain of them obviously have helped us refinance our balance sheet in a pretty significant way over the past year. And so, they’re very supportive. And I think we have great support from them going forward on the refinancing. And I’d say we’re very focused on making that progress very soon and so look for some additional steps on the refinancing of the credit facility going forward.

In terms of proceeds and pay downs to sort of enable for an extension, I do think that could be part of the discussions. And obviously as Tony foreshadowed earlier, we do have the ability to go out and refinance obviously a portion of that with first lien refinancing indebtedness if that’s the path we choose, and I do think there’s ready market access at reasonable rates to do that to pay down and act as an incentive to extend if in fact that’s needed.

It remains to be seen what price WIN will have to pay, but I am confident that both the revolver and term loan will be refinanced.

While I remain confident in my initial investment thesis that the master lease with UNIT would continue to be paid in the event of a bankruptcy, I am content to avoid having it tested.

Capital

UNIT borrowed a net $195 million on its revolving line of credit, bringing the available capacity down to $275 million. This is due to the acquisitions of the CenturyLink (NYSE:CTL) fiber, the first tranche of the TPx acquisition, and the ongoing deficit caused by cap-ex. That leaves the company with slightly over $350 million in available liquidity.

While that is enough for disclosed acquisitions and current operations, UNIT will need additional access to capital if it is going to achieve its goal of 50% diversification from WIN in 2019.

In the conference calls, UNIT’s management has been discussing alternative sources of capital if the share price does not improve. Previously, those discussions were generic, putting out potential ideas that might or might not take place in the future. In the Q2 earnings call, management made several statements, suggesting that some kind of private capital deal will be made sooner rather than later.

In the prepared remarks, Mark Wallace said:

Our discussions with private capital partners has continued to progress favorably and as Kenny mentioned our opportunity set has expanded considerably from these discussions. Our confidence has certainly increased that will be able to successfully partner on one of more investment opportunities in the future.

Then, Kenny Gunderman said:

In closing I want to emphasize that Uniti Group currently has an increasing number of strategic options available to us. The value of our portfolio and the outreach to private capital has led to plethora discussions with industry participants ranging from because it’s ranging from OpCo/PropCo transactions joined M&A commercial partnerships and even portfolio repositioning over time.

This brought on a line of questioning from David Barton:

David Barton

And then I guess just my last one was kind of your — this private capital partnership exercise that you kind of brought up last quarter and it sounds like it’s been going well, and you feel like you’re – sounds like you’re close to kind of pulling the trigger on at least one deal, that you said, quote in the near future. Should we be expecting this as kind of like a, something that happened in the coming quarter or the coming or the rest of the year or kind of just off into the future?

Mark Wallace

So I’ll say it’s certainly not off into the future. I’d say we’re in very active discussions. And as I said in my comments, it could be one or more. So I think it, I don’t know if it’s next quarter or so, but I’d certainly think, I think it’s very realistic that we’ll be talking about at least 1, if not more than 1 this year. But as Kenny said, there are numerous opportunities here. So it’s probably this year as well as next year as well.

And Mr. Gunderman later suggested that some of these deals might be quite large:

So lots of opportunities there and these private capital discussions have also led to focusing on more transformative type transactions where we can move the needle on a big way in one transaction or a couple of transactions. There is a tremendous amount of capital in the industry that’s very interested in the types of assets and the infrastructure space that we’re focusing on. So all that to say, we still feel good about our opportunity to reach that 50% diversification target and there are some attractively priced assets available and we think the capital is there to help us get there.

Management is pretty limited in what it can say before a deal is inked, but it might as well have been wearing bright neon signs that said “COMING SOON”.

By the next earnings call, there will likely be some kind of significant deal involving private capital. This will be a big positive for common shareholders in that any deal will help diversify from WIN and improve revenues.

On the other hand, private capital does not come for free. What will the price be, and will it be worth it? Without knowing the details, the impact on the common shareholder is impossible to predict. Investors will have to trust management to make deals that are beneficial for the long-term.

Conclusion

By the numbers, Q2 was a ho-hum quarter with flat revenues and business continuing as usual. The guidance cut is disappointing but has more to do with timing than any loss of revenue.

WIN had a better-than-expected quarter with OIBDAR slightly improving, and it appears that it has a handle on its debt for the immediate future.

Below the headlines, there are some significant things happening.

The signing of a major lease for dark fiber that will not require any additional cap-ex is an important proof of concept. UNIT has acquired a significant amount of underutilized fiber, betting that it can lease it up.

The real news came in the conference call as management made it clear that it is in advanced negotiations for acquisitions involving private capital and suggesting that these acquisitions could be large enough to significantly move the needle.

These types of deals could fundamentally change the company, and until the details are known, it is impossible to determine if the result will be positive or negative for common shareholders.

Disclosure: I am/we are long UNIT.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

5.5% From U.S. Bancorp – Is It Enough?

U.S. Bancorp (NYSE:USB) has issued a new series of preferred stock. The details are below:

The prospectus can be found here.

U.S. Bancorp was incorporated in Delaware in 1929 and operates as a financial holding company. It provides a full range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. The bank also engages in credit card services, merchant and ATM processing, mortgage banking, insurance, brokerage and leasing. U.S. Bancorp is the parent company of U.S. Bank National Association.

U.S. Bancorp has the following preferred stocks outstanding:

The preferred stocks have the following pricing:

Of all the issues, from a yield perspective, I like the new issue the best. I would prefer to own the Series M as it is a fixed to float structure (and therefore has a shorter duration), but the yield-to-call at 3.12% is not sufficient to own the series.

In order to judge whether the preferred is attractive, it must be considered versus the alternatives available. The following table shows U.S. Bancorp preferred stock versus preferred stock of its regional bank peers as well as national bank peers.

Of all of the preferreds above, from a yield perspective, I would go with the Wells Fargo (WFC) Series R (WFC.PR) fixed to float- despite the bank’s stumbling on nearly every consumer product it offers. Many investors, however, are price/premium sensitive; for those investors, I would select the Bank of America (BAC.PK) Series K (BAC.PK) as it has a higher yield and a palatable dollar price. The BAC issue, however, is a fixed rate issue and will therefore have greater duration exposure than either the USB or WFC issues.

The stripped yield of the peer group (graphically):

The new USB issue has a lower stripped yield than the majority of the peer group.

The yield-to-call of the peer group (graphically):

The new USB issue has a lower yield to call than the majority of the peer group.

As the table below shows, U.S. Bancorp is the highest rated issuer of the peer group, one reason that it has a lower yield than the majority of its peer group (the “less worry” premium).

To get a feel for how USB has traded historically, a comparison between USB and Wells Fargo:

USB Versus Wells Fargo:

The spread between WFC and USB is near its wides, more due to the issues plaguing WFC than USB getting tighter.

USB Versus BBT:

The spread between USB and BBT is near its tights as BBT has traded at lower yields.

I also like to look at the preferred peer group from different angles. One of them is the yield advantage of the preferred stock to the common stock. The preferred should have a higher yield as it has no voting rights and limited price upside. The following table shows the preferred yield advantage of the peer group issues:

While the USB preferred stock, on average, has a lower yield advantage than the peers, the new Series compares favorably to the peer group.

The yield advantage (graphically):

I also like to look at the peer group versus the risk-free rate (in this case, the 10-year Treasury note) as it shows the risk premium an investor receives. The table below shows the risk premiums of the peer group issues:

From a risk premium perspective, USB has a smaller risk premium than the majority of its peers (due to the lower yield), which is appropriate given the higher ratings and financial profile of the issuer.

The risk premium (graphically):

Equity snapshot:

Chart

USB Total Return Price data by YCharts

The common stock of U.S. Bancorp has underperformed its peers over the last year.

Bottom line: Versus the peer group, I like the new U.S. Bancorp Series K due to the financial profile of the bank and the balance of yield and proximity to par. I would prefer a fixed to float structure for the mitigation of duration risk, but the USBpM trades at a premium to par and has a low yield-to-call. For income investors, the new issue can serve as a highly rated diversifier within an income portfolio.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Netflix's 'House Of Cards' Is Crumbling

Several weeks ago Netflix (NFLX) plummeted in the wake of Q2 2018 earnings that showed positive subscriber growth and historic earnings but not at the levels Wall Street had expected.

Since then the stock has not recovered but rather slumped further, as a mix of bad Netflix Originals, increased hype and possibilities for Disney’s content streaming service as it continues to pull content from Netflix, and sudden competition from Roku (ROKU) and even Walmart (WMT) making it clear Netflix’s days as the only game really in town are over.

Netflix’s P/E ratio has shrunk enormously from its days of being over 200 and now sits at roughly 147, a historic low compared to recent years, as its stock price has remained slumped amid all of this past month’s announcements.

Chart

NFLX data by YCharts

As Netflix moves forward I believe the risks I’ve talked this past year about are starting to now fully materialize and the stock is going to face immense pressure from rapidly increasing competitors in the market, price pressure for subscriptions that seems downward rather than upward as it had hoped, and a content drought that is already causing worries for the company.

Even if Netflix is able to continue to grow revenue and subscribers, its P/E valuation will undoubtedly remain lower than its 200+ days as past hyped growth expectations simply are unreasonable. The question of how fast it can grow its earnings, if at all, compared to how fast its growth multiple shrinks as the content streaming market matures means that its investors may be in for days very different from past years.

Problem #1: Downward Price Pressure Derails Original Revenue Plan

For several years the content streaming market was really just Netflix, Amazon Prime (AMZN), and Hulu (FOXA). Under this market Netflix thrived, as many production companies flocked to Netflix, given its wide subscriber base, and seemingly all was well in the content creation and distribution pipeline. Netflix subscribers grew seemingly without end as the company’s stock rocketed up and its P/E valuation did too.

However even right now, in Summer 2018, the content streaming market is very different. Facebook Watch (FB) and YouTube Red (GOOGL) are gaining ground. Roku Channel, which launched last year and is based on ads (being called “free” by many) rather than subscriptions for its various movies and shows, is seeing immense interest after positive earnings and activity results.

Walmart, of all surprises, announced this month it is joining the fray as well by appealing to a “Middle America” market that it believes it knows and has a strong reputation with. Undoubtedly that may take a chunk out of Netflix’s U.S. base, or at least put pressure on Netflix to better justify its appeal to that market.

Furthermore, with Disney’s (DIS) acquisition of 21st Century Fox settled after Comcast’s (CMCSA) potential wrench in the machine earlier this summer we see what could be a huge content powerhouse once its streaming service is released and what combinations it may make with Disney’s soon-to-be asset Hulu.

Beyond that, subscriptions seem all the craze now as everything from ESPN+ gains ground to news services like Fox Nation, MSNBC’s upcoming subscription streaming service, and more.

The reasons this matters for Netflix are that it contradicts several long-standing assumptions that supported Netflix’s current growth trajectory to this point, specifically and importantly that Netflix always had pricing power up rather than down.

A major hope for Netflix’s future earnings and revenue was that it would be able to raise prices more for the core bulk of its users, which each $1 a month price jump equaling an increase in revenue of perhaps almost 10% and then bringing in real earnings as well.

However every sign seems to be pointing to a lower price point as the market basis for subscription prices. With consumers seemingly willing to utilize multiple subscription services to acquire their particular content needs, all-in-one services like Netflix are seeming misplaced as companies like Disney say they will price their service low, Walmart similar, and Roku even just shifting the model entirely to an ad-based one that gives Netflix-like content for free.

Problem #2: The Content Drought Begins For Netflix

The second major issue now facing Netflix is that it was always assumed Netflix would be a content king, whether because entertainment production giants would see them as the key distributor or because Netflix Originals would continue to be highly successful brands on their own.

However the latest Netflix Originals flop, “Insatiable,” is less of a surprise due to long-standing criticism of the bulk of Netflix Originals with praise for just a few, but now is a more prominent symptom of Netflix’s content crisis. In entertainment, brands are powerful and the intellectual property rights often command more money than any amount of actual production or distribution costs themselves.

Netflix for a long time benefited off of the immense variety of brands that found their home on it and the willingness of old and new brands to seek Netflix partnerships and funding. However this has changed, as Disney’s content powerhouse of brands is pulling completely away from the platform and major shows are turning down Netflix as offers from other platforms are more appealing, either in terms of money or in terms of building up the brand.

This puts Netflix in a difficult position, as it means it needs to either raise again already-immense and rising content costs or somehow find some kind of new series or “content universe” that is a hit with the public. The former is a crunch on Netflix’s originally optimistic dreams and the latter is extraordinarily difficult.

Conclusion

Netflix has blown past assumptions before but it is clear the market of mid-2018 is already vastly different from that of 2017, 2016, or prior, as now serious and targeted content streamers are clawing growth and maybe even eventually Netflix’s current base from the company.

As the content streaming market seemingly hits a far more mature level in 2019 with the entrance of Disney, Walmart, and more, Netflix will find itself needing to justify itself as one of the subscriptions people are willing to have. At the same time it will face downward price pressure combined with potentially increased content costs, leading to the original growth trajectory expected for the company to be derailed even further.

Even if the company continues to grow its revenues and earnings, even at a slower pace, rather than receding, the days of a 200+ P/E multiple are undoubtedly long over and the stock price seems to be beginning to now reflect that reality.

(Source: Complex)

Disclosure: I am/we are long FDN.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Want to Retain Millennial Talent? The Surprising Way This Company Does It is Smart (and Replicable)

Millennials are now the largest group of professionals in the U.S. And according to a recent Gallup poll, 21 percent of them (those born 1980-1996) have changed jobs within the past year–a number 3x as high as those outside that demographic.

This kind of job-hopping comes at a high cost: Gallup estimates that Millennial turnover costs the American economy close to $30 billion per year.

Employee turnover isn’t just bad for company culture and institutional memory; it also hurts your company’s bottom line. For example, Maia Josebachvili, VP of of People at Greenhouse, did a case study showing that retaining a sales person for three years instead of two (along with improved management) made a $1.3 million difference in net value to a company.

$1.3 million. Net.

It’s therefore worth putting energy into measures that help with retention, especially of Millennials. One company, Nextiva, stumbled on a creative way of doing just that, and has been expanding their efforts ever since.

It started in October of 2015, which was breast cancer awareness month. When a team member reached out to ask why the company wasn’t doing anything, leadership asked what she suggested; within a day she developed a plan.

She suggested partnering with the Mayo Clinic to support their efforts fundraising for a proton beam, a new cancer-fighting technology. Nextiva not only helped raise money, but changed their social media profile images to include a pink version of XBert (their mascot), with a pink ribbon. Representatives from the Mayo Clinic also came to the office to educate the team about breast cancer.

The dedicated portion of sales raised totaled just over $27,000. Plus, when the company’s CEO, Tomas Gorny, caught wind of the campaign, he had the Gorny Foundation match the donation.

That’s $54,000 raised in just a few days.

From there, the momentum was unstoppable. The company held a food drive in November, a toy drive in December, and then institutionalized the movement. It is now called Nextiva Cares, and it’s a big part of how the company engages and retains its talent.

For most companies, charitable giving is a disconnected experience–a check is cut around the holidays, with employees rarely aware of what the company is even contributing to.

With Nextiva Cares, though, people get their hands dirty. One month it’s a dog rescue center, the next, a homeless shelter. In the first half of 2018 alone, nearly 500 employees participated in Nextiva Cares events. The company has seen their young employee base’s enthusiasm and company spirit skyrocket.

Due to such strong participation, it now requires significant organization and coordination to run the program. But that effort is worth well it, considering that it does three important things at once:

1. It boosts employee engagement

A contagious sense of positivity spreads throughout the office after each volunteer event. Many times, those who volunteered reach out asking when the next event will be, how they can help, and when they’ll get an update from the organization on how things are going.

Giving back increases employee engagement in a natural and uplifting way. And according to the Harvard Business Review, organizations with high levels of engagement report 22 percent higher productivity.

2. It increases employee retention

As stated, the more a company retains talent, the more money it makes. This is part of why 87 percent of HR leaders see improved retention as a critical or high priority for the next five years.

Working for a company that gives back and supports the community creates a greater sense of purpose, which is key to wanting to stick around. According to Gorny, Nextiva’s CEO, “While we don’t track numbers, we believe our philanthropic branch has helped us retain employees who care about making a difference in both their work and their community.”

3. It facilitates team bonding

You don’t need to hire an expensive consultant to take your team to a high ropes course when you have this kind of program. Nextiva Cares gives employees the opportunity to meet colleagues in different departments, and bonding happens naturally over organizing supplies, assembling care packages, or carpooling to the animal shelter.

“While every employee has their own unique experience after each Nextiva Cares’ event, we all seem to share the same happiness high,” says Gorny. “Knowing that the work we are doing is going to a greater cause just feels good.”

That “happiness high” is partly neurological in nature: helping others releases oxytocin, which boosts your mood, helps you feel connected to others, and counteracts cortisol (the stress hormone). Plus, when oxytocin levels are elevated, so are your levels of serotonin and dopamine.

Basically, all this adds up to a win/win/win situation: happier employees, a stronger bottom line for the company, and wins for the local community (the recipient of the giving). 

Nextiva is currently developing a Charitable Giving Playbook, to arm other companies (from large corporations to small businesses) with the info and insight needed to enhance or create their own charitable giving programs. It will also outline what a program like this can do for company culture, employee morale and local impact.

But the truth is, you don’t need an official playbook to get started. All you need is the will to spread the love, and the desire to work with your teammates to do so.

“Love is the force that ignites the spirit and binds teams together.” – Phil Jackson

The CEO of Red Hat Wants to See His Employees Cussing and Crying. The Reason Behind It Is Priceless

Jim Whitehurst is president and chief executive officer of Red Hat, the world’s leading provider of open source enterprise IT software solutions and services.

Since joining Red Hat, Whitehurst has grown the company to nearly $3 billion. Under his leadership, Red Hat was named one of the best places to work by Glassdoor in 2016, 2014, and 2013. On top of that, Whitehurst was recently named one of the World’s Best CEOs by Barron’s.

Oh, and then there’s that crying and cussing bit. Allow me to explain.

Red Hat’s open emotional culture

When I got wind of Whitehurst’s unique philosophy of letting employees cry and cuss, I was intrigued. I often write and speak about leadership principles of authenticity, how we need to show up to work with passion and emotional honesty and not shut down communication in collaborative settings.

Whitehurst’s response proves to be a good leadership tactic for engaging employees of a specific culture–Red Hat’s. But does allowing employees to show emotions like crying work for other companies? Here’s Whitehurst:

“When it comes to expressing emotion, even if that means crying at work, the idea that professionalism is synonymous with rigidity and poker-faced composure is outdated. The best leaders stoke the fiery passion behind associates’ ideas and convictions. You can’t ask people to bring excitement and other ‘positive’ emotions to the table, but expect them to leave everything else at home.”

Fair enough.

At Red Hat, there’s a clear link between human emotions and innovation. You may see emotions carried out in a number of ways — from laughter and excitement to crying and swearing.

“If you’re cursing, it may be that you’re frustrated with a situation because you care! And that’s a very clear, very real feeling that individuals can leverage to drive change,” says Whitehurst.

His parting words: “As a leader, I encourage and want to see the open expression of such passionate emotions because they often serve as a catalyst for even more thoughtful and innovative thinking.”

Your turn, dead reader. Do you agree? Are human emotions as described above the catalyst for better, more innovative teams that produce results?

What Entrepreneurs Can Learn From This 700-Person Study on Courage and Motivation

Recently, I found some support for this view from an unusual quarter: A study that analyzed the actions of non-Jews who risked their lives to save Jews during the Holocaust. Adam Grant references the study, conducted by two sociologists after World War II, in his excellent book, Originals: How Non-Conformists Move the World

In the study, the authors called this group of non-Jews “rescuers.” They called a similar group of non-Jews who did not try to save anyone “non-rescuers.” The study revealed that what ultimately differentiated the rescuers from the non-rescuers was how their parents had disciplined bad behavior and praised good behavior.

When the rescuers were asked to recall their childhoods and the discipline they received, the word they used most was “explained.” Their parents had focused on the why behind disciplinary actions–providing moral lessons rather than simply punishment.

Grant notes that by explaining moral principles, the parents of those in the rescuer group had given their children an appreciation of the importance of complying voluntarily with rules that align with critical values and of questioning rules that don’t. They had succeeded in encouraging critical thinking and reasoning in their children.

The result? The rescuers were almost three times more likely to reference moral values that applied to all people, emphasizing that their parents taught them to respect all human beings. There was no rule they were following that prescribed helping victims of persecution–but they rescued Jews anyway.

Strong values are much more effective at eliciting positive outcomes and behaviors than rules.

I’ve found that this principle applies as well to business as it does to parenting. Values are critical for helping team members make thoughtful, sound decisions. They are also adaptable: Values can cover hundreds, if not thousands, of situations.

At the core, values are about who we want to be, not just what we want to do in some specific situation. For example, in one study Grant wrote about in a New York Times article, researchers found that children who were asked to be “helpers” instead of “to help” were more likely to clean up toys when asked. In another study, adults who were told, “Please don’t be a cheater,” cheated 50 percent less than those who were told, “Please don’t cheat.”

Rules, in contrast, often feel arbitrary and can quickly become outdated. It’s also virtually impossible to create rules that cover all possible behaviors or to monitor adherence.

Highly successful families, organizations and companies therefore select and focus on a few values that are most important to them. They explain the why informing those values and thoughtfully reinforce the standards they set. People are held accountable for not meeting standards and celebrated for behaviors that support those values.

At Acceleration Partners, our core values are: own it, embrace relationships, and excel and improve. These values inform every process in the company, from hiring to strategy. And we reinforce our core values through check-ins, company shout-outs and end-of-year “Core Value Awards,” which are voted on by peers. When a decision needs to me made and there is no clear guideline, we expect employees to turn to our values to find their answer.

This approach encourages team members to openly question decisions or actions that appear inconsistent with our values. And that, in turn, teaches something important–both to our company and the people who comprise it: Enforcement should not be a top-down process, but something facilitated by all members of the group.

At the end of the day, values will always trump rules when it comes to encouraging behaviors and attitudes that are conducive to success and personal accountability. The data is clear-and so is history.

Tesla's Logistics Have Been Lagging. That's Why Elon Musk Just Personally Delivered a Model 3

Shipping all those cars.

Electrek reported two weeks ago that parking lots all over California have been spotted filled with Tesla 3’s. Naysayers pointed out that it’s a sign of soft demand, but Electrek later reported that it’s a logistics issue, that deliveries are now the bottleneck with production surging.

In response to this, Tesla began testing a direct-from-factory-to-customers home delivery system. It allows the company to skip steps like waiting for trailers to fill with cars, hauling the cars to Tesla stores, and getting stuck in transit in between.

When Devin Scott received his new Model 3 at his home (the first such customer to do so in this test) more than just his shiny blue car emerged from an enclosed trailer. Elon Musk himself stepped out to hand-deliver the car to Scott.

Your first reaction might be, “Yet another PR ploy from an egomaniac.” Maybe. Or maybe you’d prefer I point out Musk’s recent botches on the PR front. Those have annoyed me too.

But for this article, I want to focus on the fact that this is an example of a company and leader that excels at first focusing on and solving one big problem before getting ahead of themselves in trying to solve the next one.

One problem at a time.

It’s also an example of a leader willing to roll up his sleeves and stay involved at each phase of problem-solving–all while continually pushing for creativity along the way.

To that point, Tesla is reportedly testing a five-minute new car pickup process for customers at Tesla stores. Show up to get your new car and leave five minutes later, armed with videos you can watch in your Tesla to teach you how to operate it. I’ve had many experiences where I went to pick up a new car and the process seemed to last three times longer than it should have. So, bravo.

It’s worth reiterating that as a leader, it’s important to focus your organization on solving one big problem at a time, renewing energy and creativity with each subsequent problem to solve. It’s so easy to get ahead of things and try to solve for everything all at once. I’m not saying don’t plan ahead and parallel path solution-crafting for multiple known problems when it makes sense. I’m saying don’t let your organization get ahead of itself.

Musk has publicly stated that the delivery system would soon be the bottleneck. And yet he kept the team laser-focused on first solving a gargantuan production problem.

Now he’s turning energy towards the next issue (logistics/delivery) and is role-modeling the other important takeaway for leaders: to keep visibly rolling up your sleeves to help with each new problem. I personally suspect Musk was part of the direct-to-customer test because he personally wanted to see how the experience went–not necessarily wanting to grab a bit more of the spotlight.

So while you may not have to solve for an entire car shipping system, you can still tune up your one-problem-at-a time leadership.

Why You Should Watch This Live Show On Yellowstone National Park

YELLOWSTONE NATIONAL PARK, WY – JULY 30: A black bear rest in a mixed age forest that partially burned in 1988 on June 30, 2018, in Yellowstone National Park, WY. The fires in 1988 burned 793,800 acres, 39% of Yellowstone’s 2.2 million acres. After 30 years most of the parks lodgepole pines destroyed in 1988 have regenerated and are thriving. (Photo by William Campbell/Corbis via Getty Images)

On Sunday night, 5 August 2018, Yellowstone National Park will be the center of a live broadcast inside of the park in the first of four live TV shows called Yellowstone Live which is produced by Plimsoll Productions and Berman Productions for National Geographic.

Yellowstone Live is an attempt to showcase the natural history and science of the oldest national park in America founded in 1872. Throughout the four live TV shows, the program will have more than 34 live cameras set up over the 2.2 million acre park in the hope they’re able to capture wolves, Grizzly bears or any one of the other 400 animal specials or natural events like Old Faithful. The show will also look cover the greater Yellowstone Ecosystem including Gallatin Mountain Range and Lamar Valley.

The four live shows will be hosted by Josh Elliott, TV journalist and former anchor for Good Morning America. Elliott is joined by Chris Packham, a British broadcaster, and presenter of BBC’s BAFTA award-winning program series, Springwatch, Autumnwatch, and Winterwatch.

The idea of the show is that wherever the excitement is, that’s where the cameras will go. If the ground squirrels are kind of giving it to us on that night, we’re going to be giving you the ground squirrels. But we’re hopeful, to see some alpha predators, because it isn’t often you can see a Grizzly Bear, doing Grizzly Bear things,” said Elliott. “We’re going to be very careful not to promise the audience, ‘you’re going to see wolves, so watch.'”

“From a filming point of view huge sections of the park are still inaccessible,” adds Packham. “The park does a great job of handling the 4.25 million people that visit it each year at the same time, not damage the ecosystem that exists there.”

“Within the park, there’s a great educational connection between animals and humans. Grizzly bears have moved outside of the park, and there is still conflicts with bears and people, and ultimately humans are always going to win unless you shout loudly for the animals. So Yellowstone Live looks at that human/animal conflict which offer a sort of public service information component,” said Packham.

Yellowstone National Park doesn’t allow any drones inside the park boundaries, so this means that the cinemaphotographers had to come up with different ways to capture wildlife.

Some of the technology involved to make this happen throughout the park are thermal cams, a helicopter, a cam ball in a beaver lodge, nine Go-pros, and a fiber optic thermal camera inside of a squirrel burrow.  The thermal cam, called the Magma Cam by the executive producer, Allen Berman, will reveal Yellowstone’s thermal activity. There will also be pre-filmed content in addition to the live streams as well as segments of educational content.

As part of that public service component, the Yellowstone Live team has set up a campsite incorrectly to stage all of the most common mistakes that a typical camper makes. This is being done in conjunction with the Grizzly and Wolf Discovery Center in West Yellowstone.

“The Discovery Center has rescued bears that either became too comfortable with humans or that was injured and would not have otherwise survived in the wild but are, in all other aspects, Grizzly bears,” said Elliott. “In our campsite (for Yellowstone Live) we’re going to hang the food too low, leave food strewn about, not hang the trash; we’re going to make it interesting for the viewers and show them live and in real time, what happens when you aren’t respectful of wildlife.”

“Yellowstone is one of the jewels in the crown [..], and I have been reading and learning about Yellowstone since I was a child, reading about it in National Geographic magazines,” said Packham. “If you have an interest in natural history and conservation, environmental care, you have an awareness of Yellowstone. Because the park and the surrounding greater Yellowstone ecosystem are incredibly important. There are very few places left in the northern hemisphere where there is this amount of space and freedom and degree of protection for the things that live there.”

“But, in an over-crowded world where our natural resources are running thin, where our species are ever increasingly imperiled, obviously you know what I’m going to say, I’m going to say we should push the balance to protect those species, ” Packham emphasized. “From an outside perspective, you don’t know what you’ve got here (with Yellowstone) and what you’ve got is absolutely astonishing. And that’s why we (in the UK) are envious. It’s not only astonishing because of the protective value that it offers but also the ability to study it. We’re looking at creatures here which are living in situations which are as natural as it possibly could be and there isn’t a single square meter of the UK where we could claim to be doing that.”

“I still struggle to find beauty in the humans because we disrupt all of those environments and are very often a spanner in the works, as we say, the fly in the ointment,” said Packham. “But the animals and the complexity of that balance, is always going to be beyond our comprehension really. I think we’re close to a turning point, but sometimes you almost have to hit rock bottom before you bounce back.”

Authur Middleton, Ecologist, National Geographic Society Fellow, lead researcher National Geographic’s Beyond Yellowstone works with migratory herds and studies how hoofed mammals – antelope, bison, bighorn sheep mammals, migrate. All those larger animals move considerable distances to meet their needs for reproducing and surviving, and their migration patterns have significant impacts on the landscape. 

“I study those ecological roles, but often this ends up in conflict with people. Most parks in the world are not big enough to contain or sustain their wildlife, so trying to understand how to reduce those conflicts outside the park with people is important,” added Middleton.

“These animals havroles we need to understand. They are natural wonders that you just can’t park your car next. We’ve been trying to go into the backcountry and into the places where this is happening and bring that wonder for people to see,” said Middleton. “Through this Yellowstone Live broadcast, National Geographic can bring the hidden lives of these animals, kind of natural wonder, to an audience e that people like me will never reach otherwise.

“If we want people to keep seeing that wildlife in the park that means people in concentric circles way outside the park need to be positively engaged in many different conservation solutions,” said Middleton. “For migrations, it’s habitat conservation, protections, maybe conservation easements, fencing, retrofits to be wildlife-friendly, road overpasses and underpasses. A scary thing at this time in our country and our world is people are pulling apart. For these animals, we need people to come together. I think [..] this kind of public communication broadcast can help,” added Middleton.

“Yellowstone is always telling a story, and I hope that it can one day be and project the story of how can people find common ground, whatever the issue is, and come together around the set of solutions that works,” said Middleton.  “We can’t just say, let’s just make the park bigger and remove the people. There’s going to be people, so we need to figure out how people can coexist with these creatures.”

Elliott says that aside from hoping to thread needles about nature, science, conservation, and education in Yellowstone Live, the audience gets to see these animals in their natural habitats.

“Yellowstone Live [..] is about appreciating the delicate balance that they strike here, and in national parks around the country and the world, every day, which is conservation and access, and how you ensure that people can enjoy their park but also stay true to the mission. In some instances, that means that the endangered species that live here are allowed to flourish and perhaps get off that list rather than head the other way,” said Elliott.

“I believe that Yellowstone Live is an apolitical broadcast, and will highlight the countless natural wonders that our country holds as well as the fragility that these species face without concerted efforts on their behalf by the other species who can determine whether or not the aforementioned species thrive,” quipped Elliott.

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Yellowstone Live airs on August 5, 2018, at 9 pm ET/ 8 pm CT on National Geographic Channel.