Weekend Briefing No. 102

Weekend Briefing No. 102 | When Unicorns Lose Their Horns, Millennials @ Work, Was Holocracy A Failure At Zappos?, Fiscal Sponsorship, Impact Investing In 2016

 

Welcome to the weekend. This week while the world’s elite are in Davos at the 46th annual World Economic Forum, I’m writing to you by the fire in a cabin upstate watching the snow fall and sipping hot cocoa with friends. In other news oil prices keep falling. Iran sanctions ended. Sarah Palin endorsed Donald Trump for US president. Vladimir Putin is accused of ordering a hit in London.

 

WEEKEND BRIEFING

When unicorns lose their horns. After a year of over-exuberant billion dollar valuations, expect a wave of “down rounds” (a round of financing where the company is valued lower than the last round). The preferred shareholders have anti-dilution rights which means that in a down round they will hold onto their same stake in the company while common shareholders (think employees and founders) see their stake shrink or disappear. This can often be a death-knell for the company as founders get forced out and employees run for greener pastures. Learn more in the New York Times.

Millenials in the workforce. Millenials now comprise the largest share of the US labor market and a growing number now occupy senior positions. They are no longer leaders of tomorrow, but increasingly, leaders of today. Here are some insights on their attitudes toward work: 1) Transitional. 25% would leave their job in the next 6 months for another opportunity. 66% expect to leave their current company by 2020. 2) Profit & Purpose. Millennials believe businesses to be more ethical and society-focused than a year ago, but remain wary of motivations. 3) Values. Personal values have the greatest influence on Millennials’ decision making. This emphasis on personal values continues into the boardroom; the rank order of priorities does not change for senior Millennials. Learn more in The 2016 Deloitte Millennial Survey. Thanks to Vanessa Leong for sending this two me for the second year in a row!

Was Holocracy a failure at Zappos ? Much of the press has focused on the “mass exodus” of employees leaving the company after a switch to a radical self-management system called Holocracy was implemented at Zappos. CEO Tony Hsieh notes: 1) They offered sweet severance packages – 3 months or 1 month for every year you worked there, whichever is greater. 2) About half of the people that left were leaving because it was a great opportunity to pursue their passion with some financial cushion, not out of dissatisfaction for the management structure. Hsieh says, “Our march towards self-organization and self-management isn’t an experiment. It’s the future of work and it’s the only structure that has stood the test of time.” Learn more in Fast Company.

Fiscal sponsorship is a contractual relationship that allows a person, group, or business to raise funding that advances a charitable purpose with the benefit of the tax-exempt status of a sponsor organization. This is most common when an organization wants to raise funds from donors, but doesn’t have their tax exempt status yet. When done right, fiscal sponsorship allows for efficient access to capital. When done wrong, it may result in an individual or for-profit company inappropriately deriving a private benefit from charitable contributions. Learn the ins and outs at Nonprofit Quarterly.

Impact investing in 2016. After a banner year in which the impact investing marketplace grew to $60 billion, new firms entered the arena and important policy changes removed perceived barriers to impact investment practices. Look for impact investing to accelerate in 2016. Here’s a roundup of marketplace predictions from investors and observers who have gazed into their crystal balls to start the new year at Impact Alpha.

 

THINGS I LIKE

The new key to happiness, rational thinking. This new school of self help has a rare level of interest among data-driven tech people and entrepreneurs who see personal development as just another optimization problem, if a uniquely central one. The Center For Applied Rationality are using behavioral economic hacks to improve motivation and get organized, but it also suggests that the real reward will be far greater; it enables users to be more intellectually dynamic and nimble, like parkour for the mind.

IKEA thinks the developed world has hit “peak stuff.” The company’s head of sustainability wants to introduce repair and recycling services to its stores.

 

ABOUT THE WEEKEND BRIEFING

The Weekend Briefing is a selection of this week’s top stories on innovation and society, curated by Kyle Westaway – author of Profit & Purpose and Managing Partner of Westaway Law. I consider it a privilege to be a part of your weekend routine. Thanks.

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