Bill Gates's Favorite Business Book - Wall Street Journal - essay by Bill Gates himself

http://online.wsj.com/articles/bill-gatess-favorite-business-book-1405088228?mod=e2fb



John Brooks's 1960s collection 'Business Adventures' still offers many insights into running a strong business

By 

BILL GATES 

CONNECT

Updated July 11, 2014 6:20 p.m. ET

The rules for running a strong business haven't changed, says Bill Gates. John Keatley for The Wall Street Journal

Not long after I first met Warren Buffett back in 1991, I asked him to recommend his favorite book about business. He didn't miss a beat: "It's 'Business Adventures,' by John Brooks, " he said. "I'll send you my copy." I was intrigued: I had never heard of "Business Adventures" or John Brooks.

Today, more than two decades after Warren lent it to me—and more than four decades after it was first published—"Business Adventures" remains the best business book I've ever read. John Brooks is still my favorite business writer. (And Warren, if you're reading this, I still have your copy.)

A skeptic might wonder how this out-of-print collection of New Yorker articles from the 1960s could have anything to say about business today. After all, in 1966, when Brooks profiled Xerox, XRX +2.58% the company's top-of-the-line copier weighed 650 pounds, cost $27,500, required a full-time operator and came with a fire extinguisher because of its tendency to overheat. A lot has changed since then.

It's certainly true that many of the particulars of business have changed. But the fundamentals have not. Brooks's deeper insights about business are just as relevant today as they were back then. In terms of its longevity, "Business Adventures" stands alongside Benjamin Graham's "The Intelligent Investor," the 1949 book that Warren says is the best book on investing that he has ever read.

Brooks grew up in New Jersey during the Depression, attended Princeton University (where he roomed with future Secretary of State George Shultz ) and, after serving in World War II, turned to journalism with dreams of becoming a novelist. In addition to his magazine work, he published a handful of books, only some of which are still in print. He died in 1993.

As the journalist Michael Lewis wrote in his foreword to Brooks's book "The Go-Go Years," even when Brooks got things wrong, "at least he got them wrong in an interesting way." Unlike a lot of today's business writers, Brooks didn't boil his work down into pat how-to lessons or simplistic explanations for success. (How many times have you read that some company is taking off because they give their employees free lunch?) You won't find any listicles in his work. Brooks wrote long articles that frame an issue, explore it in depth, introduce a few compelling characters and show how things went for them.

In one called "The Impacted Philosophers," he uses a case of price-fixing at General Electric GE +1.34% to explore miscommunication—sometimes intentional miscommunication—up and down the corporate ladder. It was, he writes, "a breakdown in intramural communication so drastic as to make the building of the Tower of Babel seem a triumph of organizational rapport."

In "The Fate of the Edsel," he refutes the popular explanations for why Ford's flagship car was such a historic flop. It wasn't because the car was overly poll-tested; it was because Ford's executives only pretended to be acting on what the polls said. "Although the Edsel was supposed to be advertised, and otherwise promoted, strictly on the basis of preferences expressed in polls, some old-fashioned snake-oil selling methods, intuitive rather than scientific, crept in." It certainly didn't help that the first Edsels "were delivered with oil leaks, sticking hoods, trunks that wouldn't open and push buttons that…couldn't be budged with a hammer."

One of Brooks's most instructive stories is "Xerox Xerox Xerox Xerox." (The headline alone belongs in the Journalism Hall of Fame.) The example of Xerox is one that everyone in the tech industry should study. Starting in the early '70s, Xerox funded a huge amount of R&D that wasn't directly related to copiers, including research that led to Ethernet networks and the first graphical user interface (the look you know today as Windows or OS X).

Download a free copy of "Xerox Xerox Xerox Xerox."

But because Xerox executives didn't think these ideas fit their core business, they chose not to turn them into marketable products. Others stepped in and went to market with products based on the research that Xerox had done. Both Apple andMicrosoft, MSFT +0.97% for example, drew on Xerox's work on graphical user interfaces.

I know I'm not alone in seeing this decision as a mistake on Xerox's part. I was certainly determined to avoid it at Microsoft. I pushed hard to make sure that we kept thinking big about the opportunities created by our research in areas like computer vision and speech recognition. Many other journalists have written about Xerox, but Brooks's article tells an important part of the company's early story. He shows how it was built on original, outside-the-box thinking, which makes it all the more surprising that as Xerox matured, it would miss out on unconventional ideas developed by its own researchers.

Brooks was also a masterful storyteller. He could craft a page-turner like "The Last Great Corner," about the man who founded the Piggly Wiggly grocery chain and his attempt to foil investors intent on shorting his company's stock. I couldn't wait to see how things turned out for him. (Here's a spoiler: not well.) Other times you can almost hear Brooks chuckling as he tells some absurd story. There's a passage in "The Fate of the Edsel" in which a PR man for Ford organizes a fashion show for the wives of newspaper reporters. The host of the fashion show turns out to be a female impersonator, which might seem edgy today but would have been scandalous for a major U.S. corporation in 1957. Brooks notes that the reporters' wives "were able to give their husbands an extra paragraph or two for their stories."

Brooks's work is a great reminder that the rules for running a strong business and creating value haven't changed. For one thing, there's an essential human factor in every business endeavor. It doesn't matter if you have a perfect product, production plan and marketing pitch; you'll still need the right people to lead and implement those plans.

That is a lesson you learn quickly in business, and I've been reminded of it at every step of my career, first at Microsoft and now at the foundation. Which people are you going to back? Do their roles fit their abilities? Do they have both the IQ and EQ to succeed? Warren is famous for this approach at Berkshire Hathaway, BRKB +0.14%where he buys great businesses run by wonderful managers and then gets out of the way.

"Business Adventures" is as much about the strengths and weaknesses of leaders in challenging circumstances as it is about the particulars of one business or another. In that sense, it is still relevant not despite its age but because of it. John Brooks's work is really about human nature, which is why it has stood the test of time.

— Mr. Gates is the co-chairman of the Bill & Melinda Gates Foundation and the co-founder of Microsoft.

The U.S. Has Good Reason to Be Fed Up With China’s Economic Policy - TIME

http://time.com/2975757/the-u-s-has-good-reason-to-be-fed-up-with-chinas-economic-policy/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• Michael Schuman @MichaelSchuman
 

5:35 AM ET

    

U.S. Treasury Secretary Jacob Lew listens during a panel discussion at the North American Energy Summit in the Manhattan borough of New York, June 10, 2014.Adam Hunger—Reuters

Talks in Beijing between American and Chinese officials made little progress on key economic issues

No one expected big breakthroughs from the latest round of the annual U.S.-China Strategic and Economic Dialogue, held this week in Beijing. But the results didn’t even meet those lowly expectations. After two days of talks with Chinese officials, U.S. Treasury Secretary Jacob Lew left empty-handed. A much-coveted but long-discussed treaty to boost investment between the two countries only inched forward. Nor did China offer firm commitments to further liberalize its currency — an issue of great importance to Washington. That apparently left Lew searching for something positive to say to his Chinese hosts. “The commitments China has made here in Beijing over the past two days reflect the economic reform goals set forth” previously, Lew said on Thursday, “and we look forward to future progress.”

Washington has been waiting for progress for quite a while. U.S. officials have been repeatedly pressing Beijing to open markets wider to American companies, improve the protection of intellectual property, and make the economy more transparent and market-oriented. But in return, Washington just gets vague pledges and expressions of caution. Meanwhile, the two continue to bicker over trade practices — most notably these days, Washington’s punitive tariffs on Chinese solar panels. The stalemate in economic ties between the U.S. and China is symbolic of the greater strain between the two nations. China has responded angrily to U.S. charges that its military cyberspies on American companies, while officials from both sides have exchanged hostile barbs over China’s territorial disputes with Japan and other neighbors. Relations between the U.S. and China are arguably at their lowest point in years.

That’s bad news. What happens between the world’s two largest economies has ripple effects around the world. Each country, furthermore, needs the other for its own economic growth. U.S. companies require access to Chinese consumers to keep their profits growing, while China badly needs advanced U.S. technology to upgrade its industry. Still, the two sides often look upon each other warily. As China’s clout increases, the U.S. is frustrated that Beijing is not making the Chinese economy more open or playing by the perceived rules of international commerce. Beijing’s policymakers get upset when Washington badgers them on reforms they consider none of America’s business.

But the U.S. has good reason to be annoyed. Many of the issues that matter to Washington have been dragging on interminably with no resolution in sight. Take, for instance, the sticky issue of China’s currency, the yuan. Washington has complained for many years that Beijing manipulates the value of the yuan to promote its own exports, and during this week’s meetings, Lew again pressed his Chinese counterparts to make the process by which it is valued more market-driven. Though I have written on many occasions that the U.S. has exaggerated the impact the yuan’s value has had on the country’s trade deficit with China, Lew has a right to be fed up with the slow pace of change. The Chinese have been blabbering about allowing market forces to determine the yuan’s exchange rate for ages, and the reform is considered an integral part of China’s greater goal of liberalizing capital flows in and out of the country. But the government still wields tremendous influence over the direction of the yuan — a degree of control is has been reluctant to relinquish, promises aside. In this week’s meetings, China offered only more excuses. “If we move too fast, we will be tripped by the demons of details,” Chinese Vice Premier Wang Yang cryptically responded to Lew. Instead, Wang said Beijing was looking for “balance.”

“Balance,” however, has become Beijing-speak for “do nothing.” Currency reform is only one of many changes Chinese policymakers have promised, but never seem to implement. President Xi Jinping and his team have pledged to liberalize markets, fix the financial sector and allow private businessmen a bigger role in the economy. Economists swooned over a bold policy document released in November that committed the leadership to a sweeping reformation of China’s economic system. No one should expect such major changes to happen overnight, of course. But the fact is we’re still waiting for the process to really get started. Meanwhile, the Chinese economy is facing a host of unresolved problems that threaten its future. Growth has slowed, debt has mounted to dizzying levels, the financial sector is fundamentally flawed, and a property bubble appears to be bursting.

What Lew wants to see from China is a true effort to overhaul an economic model that is badly broken. That would be good for China, the U.S., and everybody else.

10 Things You Should Basically Never, Ever Say - TIME

http://time.com/2933430/dont-say-this/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• Jeff Haden
 

June 27, 2014

    

What you think and say definitely shapes your behavior. So don’t be your own worst enemy. If you want to succeed – whether as an entrepreneur or in any other professional and personal endeavor – here are ten things you should never say to yourself. Sometimes a small shift in perspective can make a huge difference… if you let it.

“All I need is one great idea.”

Everyone has great ideas, but the only ideas of value are the ideas you execute. If you’re searching for that one big idea that will change your life – or change your business – take a step back and regroup. Spend a few minutes each day searching for a revolutionary idea and put the majority of your focus on developing ideas that help your business execute better. Fix what isn’t working and think of better ways to serve your customers. Those are the ideas you really need.

“I deserve it.”

Sure, you work hard. You sacrifice a lot. But hard work and sacrifice isn’t a result; each is just an element in a process. The only thing you deserve is what you earn. So for example, don’t pull cash out of your business simply to reward yourself because you’ve worked hard and you “deserve it.” Reward yourself after your business has generated – and is likely to keep generating – significant cash. Deserve is not a function of your effort, it’s a function of your bottom line.

“If I could just get my hands on more capital.”

No business has enough capital. According to the Census Bureau 30% of small businesses were started with less than $5,000, and 10% of small business owners used a credit card to partly or fully fund the business. You may have little control on how much cash you have on hand, but you have a lot of control over revenues and costs. Stop worrying about the capital you don’t have and focus on leveraging what you do have – especially your “effort” capital.

“We’ll be fine after we cut a few costs.”

If you’re like me and your background is in operations it’s natural to focus on increasing productivity and minimizing costs. Often it’s impossible to save your way to profitability, though, and sometimes making cuts – especially in marketing and sales – makes it even harder. Sometimes Randolph Duke is right: The answer is to, “Sell, sell!”

“I can count on our customers staying loyal.”

Loyalty is hard to earn and easy to lose. I’m so loyal to my local bike shop I’ll even pay more; otherwise I’d feel guilty. But say I want to buy a bike they sell for $3,000. Would I buy the bike elsewhere for $2,900? No. $2,800? Probably not. $2,500? Absolutely. As it should be, customer loyalty is primarily based on customer self interest. If your prices are higher your service can outweigh those price differences, but only to a point. Plus even as we speak your competitors are working hard to deserve the loyalty of your customers.

“Let’s focus our marketing on building awareness.”

Conventional wisdom says people need to see an advertisement multiple times before they will act. Yet no startup can afford that slow – and costly – an approach. Always work to crafting direct advertising campaigns that work, at least to some degree, the first time. Then tweak and tweak and tweak some more. Besides, “awareness” is almost impossible to measure – but actual revenue always is.

“I want my company to be like one big happy family.”

While you should certainly try to create a friendly, caring, and supportive work environment, your business should neveroperatelike a family. Employees, like customers act, from self-interest. When their interests no longer align with your business, they leave – as well they should. Always be friendly and caring, but never let trying to create a family atmosphere overshadow running a profitable, sustainable business. Without profits, no business “family” can stay together.

“I’m just one small piece of the puzzle…”

True, but only to a point. All employees are important, but you are more important… if only because you have the greatest authority and therefore the greatest responsibility. Ultimately your business is a reflection of you; fail to recognize that fact and you give up the responsibility that is naturally yours.

“Word of mouth will definitely grow our business.”

Word of mouth is relatively passive and largely outside your control. No matter how many incentives you create, most of your customers won’t become raving fans and spread the “gospel of you” to everyone they meet. Except in rare cases the only way to grow a business is to actively market and sell. Someday word of mouth and referrals may drive significant business, but until that happens, focus on hunting, not gathering.

“If we just leave it alone… things will eventually get better.”

Sometimes you can’t afford to let others struggle. Allowing employees to learn from their mistakes is fine, but sometimes you have to step in. Before you delegate a task, decide how far you’re willing to let an employee go. Then track their progress and take over when necessary. Employees can still benefit from an abbreviated experience as long as they stay involved after you take back some of the control. Learning experiences are great… but never at the expense of results.

5 Ways to Stop Getting Completely Burned Out at Work - TIME

http://time.com/2906082/5-ways-to-stop-getting-completely-burned-out-at-work/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• Martha C. White
 

June 23, 2014

    

Sure, everybody’s had those weeks where you just want to get home from work and flop onto the sofa until your headache subsides. But if that’s happening every week — well, you’ve got a lot of company, for one thing, but it shouldn’t be like that. Yes, we’re all working harder and getting little (or nothing) extra for our efforts, but on-the-job burnout doesn’t have to be inevitable.

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That probably comes as new to many Americans. New research from jobs site Monster.com finds that a staggering four in five workers experience burnout in their jobs. Among millennials, the figure is even higher: 86% report feeling burned out at work. That’s not surprising, given how tough it’s been for millenials to land jobs at all.

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Burnout is different than regular bad-day stress, and it can be dangerous, say the experts at the Mayo Clinic. “Job burnout is a special type of job stress — a state of physical, emotional or mental exhaustion combined with doubts about your competence and the value of your work,” its website says. It warns that burnout can contribute to insomnia, depression, alcohol abuse, high cholesterol and a host of other health problems.

If the Monster data is any indication, odds are your chronic stress might be work burnout, especially if you’re a young adult. Here are some ways to send burnout packing.

Stop trying to do it all right now. Studies have shown that multitasking isn’t the productivity silver bullet it’s cracked up to be. In fact, sometimes trying to focus too much stuff at once can actually sap your momentum. “Try to block off time to focus and have uninterrupted productive time to get your work done,” says Joanie Courtney, Monster’s senior vice president of careers and employment. “Don’t let office or Internet distractions take you off task because they can lead to increased stress if you can’t get your work done.”

Take a break. Be sure to build in time for both physical and mental breaks. “Burnout is the result of a reduction in motivation from overwork. If you’re feeling this way, you have to budget in some time to take a break,” Courtney says. This is especially the case if your job involves repetitive tasks. A study published in the scientific journalCognition finds that people who take breaks can “recharge” their concentration and return to a task with renewed focus. Flip through a magazine, read up on a favorite hobby or take a walk around the block.

Tackle fixable problems. If you can identify a source of burnout — say, a grueling commute or feeling like you’re not getting feedback you need — try to fix it. “Discuss specific concerns with your supervisor. Perhaps you can work together to change expectations or reach compromises or solutions,” the Mayo Clinic suggests. For instance, if you’re spending three hours a day behind the wheel of your car, maybe you could work from home one day a week. If you feel like you’re not getting the training or guidance you need, try to schedule a standing meeting with your boss to go over your assignments.

Pat yourself on the back. One hallmark of burnout is feeling overwhelmingly cynical and not deriving any satisfaction from your achievements. If that sounds like you, make it a point to take the time to recognize the effort you’re putting in at work, says Heidi Golledge, CEO and co-founder of CareerBliss.com. “Each night, make a list of things you accomplished today and what you want to accomplish tomorrow,” she suggests. Even if you’re burnt out because no one else appreciates what you do, take a few minutes to be your own cheerleader.

Realize when you’d be better off leaving. As the song goes, know when to fold ‘em. “It’s OK to admit to yourself that there could be a better job out there,” Courtney says. You might be in the wrong job, or you might have outgrown your job and not have any chance to move up. If this is the case, “Begin to build an exit strategy from your job, and find a job that will meet your work needs,” she says. It’s easier to find a job when you’re already working, so start your new job search while you’re still on board rather than quitting in frustration.

9 Terrible Habits You Need to Stop Immediately - TIME

http://time.com/2954696/stop-bad-habits/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• Inc.
 

July 7, 2014

    

Guy checking internet with laptop at late night with dark room, view from above.Artur Debat—Moment Editorial/Getty Images

Author Tim Ferriss suggests some common bad habits you should definitely add to your not-to-do-list.

Perhaps you’ve heard of a “not-to-do list.” CEOs and productivity experts recommend the idea highly as a huge productivity booster that will help you free up time and headspace for all the things that really matter.

Sounds great. But what should go on it? Best-selling author Tim Ferriss has some ideas. In a recent short podcast he offered nine suggestions of bad work habits that many entrepreneurs and others desperately need to eliminate (chances are you are doing at least a couple of these–I’m personally massively guilty of two and five), so there is almost certainly something here that can boost your output.

Don’t overwhelm yourself, Ferriss says. Just tackle one or two at a time, eliminating counterproductive habits step by step, and eventually you’ll reclaim impressive amounts of time and energy.

Do Not Answer Calls from Unrecognized Numbers

Ferriss gives a couple of rationales for this one. First, the interruption will throw your concentration, costing you far more in time and brain power than just the conversation itself, and second, if it’s important, you’ll find yourself in a poor negotiating position, scrambling to formulate your thoughts when the caller is already well prepared. Instead, use Google Voice to check your messages or a service likePhoneTag to have them sent to you as email.

Do Not Email First Thing in the Morning or Last Thing at Night

“The former scrambles your priorities and all your plans for the day and the latter just gives you insomnia,” says Ferriss, who insists “email can wait until 10am” or after you check off at least one substantive to-do list item.

Do Not Agree to Meetings or Calls With No Clear Agenda or End Time

“If the desired outcome is defined clearly… and there’s an agenda listing topics–questions to cover–no meeting or call should last more than 30 minutes,” claims Ferriss, so “request them in advance so you can ‘best prepare and make good use of our time together.’”

Do Not Let People Ramble

Sounds harsh, but it’s necessary, Ferriss believes. “Small talk takes up big time,” he says, so when people start to tell you about their weekends, cut them off politely with something like “I’m in the middle of something, but what’s up?”

But be aware, not everyone agrees with this one (and certainly not in every situation), and you may want to pay particularly close attention to norms around chit chat when traveling internationally.

Do Not Check Email Constantly

Batch it and check it only periodically at set times (Ferriss goes for twice a day). Your inbox is analogous to a cocaine pellet dispenser, says Ferriss. Don’t be an addict. Tools like strategic use of the auto responder and Boomerang can help.

Do Not Over-Communicate With Low Profit, High Maintenance Customers

“Do an 80-20 analysis of your customer base in two ways,” Ferriss advises. “Which 20% are producing 80% or more of my profit, and which 20% are consuming 80% or more of my time? Then put the loudest and least productive on auto-pilot, citing a change of company policy.”

What should those “new policies” look like? Ferriss suggests emailing problem clients with things like guidance on the number of permissible calls and expected response times. If that sounds like it might annoy your loudmouth customers, his response is, essentially, who cares? Point them to other providers if they don’t like the new rules. “Sometimes you really have to fire your customers.”

Do Not Work More to Fix Being Too Busy

The cure for being overwhelmed isn’t working more, it’s sitting down and prioritizing your tasks, Ferriss believes. So don’t make the mistake of working frantically if you’re swamped. Instead, sit down and decide what actually needs doing urgently. If that means apologizing for a slightly late return call or paying a small late fee, so be it, as long as you manage to get the important things done.

“If you don’t have time, the truth is you don’t have priorities, so think harder, don’t work harder,” he says.

Do Not Carry a Digital Leash 24/7

At least one day a week leave you smartphone somewhere where you can’t get easy access to it. If you’re gasping, you’re probably the type of person that most needs to do kick this particular habit.

Do Not Expect Work to Fill a Void That Non-Work Relationships and Activities Should

“Work is not all of life,” says Ferriss. This seems obvious, but the sad truth is that while nearly everyone would agree to this in principle, it’s easy to let things slide to a point where your actions and your stated values don’t match up. Defend the time you have scheduled for loved ones and cool activities with the same ferocity you apply to getting to an important meeting for your business

How Well Do You Know The iPhone? - TIME

Please copy & paste the following link to access the quiz

file:///Users/josephcheng/iPhone%20Quiz.webarchive

• Victor Luckerson @VLuck
 

June 27, 2014

    

On the 7th birthday of the smartphone that changed phones forever, see how knowledgeable you are about Apple's revolutionary device

TECH INNOVATION

How Well Do You Know The iPhone?

• Victor Luckerson @VLuck
 

June 27, 2014

    

On the 7th birthday of the smartphone that changed phones forever, see how knowledgeable you are about Apple's revolutionary device

How to Hunt a Chinese Hacker - TIME

http://time.com/2918689/how-to-hunt-a-chinese-hacker/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• Sam Frizell @Sam_Frizell
 

July 3, 2014

    

Private security firm Crowdstrike says alleged hacker Chen Ping was an avid photographer.CrowdStrike Intelligence Report

The private firm CrowdStrike followed an alleged Chinese hacker's footprints and uncovered a detailed picture of a menace to U.S. businesses

There are many photographs of Chen Ping. In one, he’s scarfing down pastries at a birthday party. In another, the camera catches him mid-laugh, standing in front of an ivy-covered wall. Chen photographed his dorm room, too, with bottles of rice liquor splayed across a desk next to a potted plant, clothes hanging in the corner. In a garden, he took photos of his girlfriend, catching a pleasant smile.

The photos are curious because Chen was supposed to be one of the faceless warriors in an emerging global cyber-war, according to researchers at the Internet security firm CrowdStrike. But the 35-year-old former resident of Shanghai left a trail of clues and photographs that researchers say led back to a People’s Liberation Army headquarters, where a covert team of Chinese hackers has been attacking telecommunications and satellite companies in the U.S. for at least seven years. The CrowdStrike researchers nicknamed Chen’s hacking ring “Putter Panda.”

To the Chinese army, the hackers are known only as People’s Liberation Army Unit 61486 — a group that a U.S. government official confirmed in an interview with TIME was responsible for cyber-attacks on American companies. The group came to light in a recent New York Times story. And Project 2049, a nongovernmental think tank based in Arlington, Va., claimed in a 2011 report that Unit 61486 was involved in the interception of satellite communications, as well as the acquisition of research in satellite imagery. But it wasn’t until researchers at CrowdStrike tracked down the hacker called Chen that the world got an unprecedented inside look at one of China’s notorious cyber-attack units.

CrowdStrike is part of a fast-growing group of young companies including FireEye, Sourcefire, OpenDNS and others that are challenging more established players for a bigger claim to the $67 billion cyber-security industry. They’re doing that by tracking state-sponsored hackers like Unit 61486 and independent cyber-criminals alike, anticipating their attacks before they happen. According to research firm Gartner, the security-technology industry is expected to grow to $86 billion by 2016. As cyber-attacks from state-sponsored hackers simply become a cost of doing business for many American companies, security researchers are making money by stalking hackers through fiber-optic cables and web domains to their computers back home.

At CrowdStrike, a 20-person team of researchers used technology ranging from the cutting-edge to the prosaic to find Chen’s Shanghai office address, and then monitored him and his colleagues. Companies like CrowdStrike say they are the first line of defense for U.S. companies’ intellectual property. “This is like real-time warfare,” says George Kurtz, co-founder of CrowdStrike. “We’re able to see exactly what they’re trying to do, where they’re trying to go and able to stop them in their tracks.”

Digital Warfare

It’s become increasingly clear that the future of espionage will be played out through fiber-optic cables, web servers and other computer systems. Cyber-espionage costs U.S. companies $30 billion each year in lost intellectual property alone, according to the Center for Strategic and International Studies (CSIS), and that doesn’t include the cost of cleaning up and recovering information. The FBI notified 3,000 U.S. companies that they had been hacked in 2013 by cyber-criminals or Chinese state actors. “We remain concerned that Chinese authorities continue to use cyber-operations to steal information and intellectual property from U.S. entities for the purpose of giving Chinese companies a competitive advantage,” a senior administration official told TIME.

Cyber-attacks are not a one-way street, of course. The National Security Agency is believed to have developed powerful capabilities to strike foreign entities. The U.S. badly disrupted Iran’s nuclear program through targeted network attacks in 2009 and 2010, according to multiple reports at the time. And the Edward Snowden leaks revealed that the NSA is engaged in the surveillance of email and telecommunications around the world, with the primary aim of bolstering U.S. national security — rather than the bottom lines of U.S. companies.

But security experts say Chinese cyber-programs are broadly focused on disrupting foreign businesses, taking valuable intellectual property and sensitive bidding information that Chinese corporations can use to their advantage. After hacking American manufacturers and corporations, the PLA passes on information to Chinese state-owned enterprises, often for a fee, says Jim Lewis, the director of strategic technologies at CSIS and a former foreign-service officer with the Departments of State and Commerce. Chinese corporate hacking is a robust industry, not limited to stealing foreign commercial secrets but also involves Chinese companies trying to best each other. “The Chinese are far and away the global leaders in terms of commercial espionage,” says Lewis. “The PLA will steal the F-35 plans, but they’ll also steal paint formulas or soap formulas.”

By keeping tabs on hackers and publishing open reports, private security companies like CrowdStrike may also be playing a role in pushing the U.S. to prosecute hackers. Last year, security firm Mandiant identified a different Chinese army group, Unit 61398, that allegedly hacked a broad swath of U.S. companies. Then in May, the Justice Department made history by charging five individuals from Unit 61398 for hacking U.S. businesses. The Chinese government denied the Justice Department’s claims, calling the accusations of hacking “made up” in official statements. “China is a staunch defender of network security, and the Chinese government, military and associated personnel have never engaged in online theft of trade secrets,” Foreign Ministry spokesman Qin Gang said last month.

CrowdStrike had long been keeping tabs on Chen’s Unit 61486 for its customers, but it wasn’t until the Chinese government’s denials that the firm decided to publicize its findings. “We put out the report specifically based on the denials of the Chinese government after the Department of Justice indictment,” says Kurtz. “We kind of got fed up and said, O.K., here’s a totally separate group than the one that was focused on by the DOJ and here’s all the proof.” CrowdStrike says it alerted the U.S. government before it released its report.

Unit 61486 began exploiting vulnerabilities in Microsoft and Adobe coding as early as 2007, hacking satellite and telecommunications companies, says Adam Meyers, head of intelligence at CrowdStrike. “There was a massive number of targets and data that were hit,” Meyers says.

Following Chen’s Tracks

Meyers’ team at CrowdStrike compiled a startling amount of information about Chen Ping (who happens to have a very common name), the alleged member of Unit 61486. CrowdStrike first looked at remote web domains being used to direct and control malware on infected computers. The web domains had to be registered, and the team found that many of the domains were registered under the same email addresses. One registered at least a half-dozen of the website domain names; someone with another email address registered several as well.

The big find, however, was a certain “cpyy” — operating with two major email providers — who had registered a large number of the remote malware-control domains. The CrowdStrike team cast a wide net to find cpyy, trailing the nom de guerre to a personal blog by a registrant named Chen. Chen’s blog profile, all in Chinese, stated he was born on May 25, 1979, and that he worked for the “military/police.” Another cpyy blog listed the identical birthdate and noted that the user lived in Shanghai. The blog said, “Soldier’s duty is to defend the country, as long as our country is safe, our military is excellent.” Meyers’ team was fairly certain it was the same Chen, given that same handle appeared repeatedly, but they needed more evidence to connect him to the PLA.

Sifting through the public records that connected Chen’s online profiles, the team found photos he posted. He shot with a Nikon, CrowdStrike said. He had a Google Picasa album with some of the same pictures in his blog post. Photos captioned “me” showed a young man with a bemused smile, laughing in a tent with a friend, doing pull-ups in front of a group of soldiers and playing guitar in a field. He took artistic photographs of objects in what he called “office.” According to Meyers, the photos revealed Chen was not just one hacker acting alone: in one, PLA hats were stacked in the background, and another photo of satellite dishes in his album “office” indicated ties to army signals intelligence.

Intelligence reports traced Ping’s photographs of his office and matched them to satellite imagery of an army building in Shanghai, according to the CrowdStrike Intelligence Report.CrowdStrike Intelligence Report

Chen was sloppy. When he registered one of the malware-control web domains, he input a physical address that tied him to a Shanghai building near the massive satellite dishes from his photos, Meyers says. Close analysis of overhead satellite imagery linked all the buildings in Ping’s photos to the very same address. And the CrowdStrike team found a Chinese website that listed the same address as a PLA building for Ping’s unit, 61486.

That implicated Chen, the unit and by extension, the Chinese government, according to CrowdStrike. “These guys are human,” says Meyers. “Sometimes when you’re behind the keyboard and you walk away from it, you forget there are other people out there who are going to be looking for you.” (Chen did not respond to request for comment to his listed email addresses. China’s Foreign Ministry did not return requests for comment.)

Covering Up the Trail

When the Justice Department charged the five alleged Chinese hackers in May with stealing trade secrets from U.S. companies, it named the hackers in the indictment and published photos of them. To some observers it was not so much an attempt to prosecute the accused hackers, who would have to be extradited from China, but more of a clear message to the Chinese army: We know how to find you.

“Cyber-theft is real theft and we will hold state sponsored cyber-thieves accountable as we would any other transnational criminal organization that steals our goods and breaks our laws,” John Carlin, Assistant Attorney General for National Security, said in a statement in May.

Experts say that going forward, the Chinese are likely to be more careful about leaving fingerprints behind in cyber-attacks.

Chen had been moved out of Shanghai to Kunming, Yunnan province, as early as 2011, CrowdStrike said, where according to Project 2049, the nongovernmental think tank, his army bureau (the 12th) has a facility. After Meyers’ team released its report, all the data that had been used to find Unit 61486 was scrubbed from the Internet, and Ping seemed to disappear. “They cleaned up all of his online presence real quick after that report came out,” Meyers says. “The next day, all of his sites were gone.”

Google’s Blocking an Email Because Goldman Sachs Asked It To - TIME

• http://time.com/2953880/goldman-sachs-google-block-email/
• 
  
• Jack Linshi @jacklinshi
 

July 3, 2014

    

Goldman Sachs Group Inc. signage is displayed on the floor of the New York Stock Exchange in New York, U.S.Bloomberg/Getty Images

Google is blocking a user's access after Goldman accidentally sent a confidential message to the wrong person

Google is blocking a Gmail user from accessing a confidential message that was accidentally sent by a Goldman Sachs contractor, a Goldman spokesperson told Reuters Wednesday. The email, which contained privileged client information, was sent to a “@gmail.com” address instead of “@gs.com.”

The email snafu, which occurred on June 23, may have resulted in a “needless and massive” breach of privacy, Goldman told Reuters, leading the company to ask Google to block the message. A Goldman spokeswoman said Google complied with the investment bank’s request.

The e-mail, however, has not been deleted, an act which would require a court order, according to Google’s “incident response team.” Goldman accordingly filed a complaint on Friday in a New York state court in Manhattan.

“Emergency relief is necessary to avoid the risk of inflicting a needless and massive privacy violation upon Goldman Sachs’ clients, and to avoid the risk of unnecessary reputational damage to Goldman Sachs,” the financial firm stated in the court documents.

The contractor had been testing changes to the bank’s internal processes, Goldman said. The bank did not confirm how many clients were affected.

[Reuters]

3 Ways to Deal With Someone You Really Dislike at Work - TIME

http://time.com/2945147/tips-employee-management/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• The Muse
 

July 1, 2014

    

Most of the time, managing a team—or even just one person—can be super rewarding. As a manager, you have the opportunity to be a mentor to someone who’s eager to learn, and you’ll probably learn a few things yourself. But, what happens when you’re managing someone who isn’t quite your favorite?

You have a responsibility to mentor and manage every person on your team, whether you like them personally or not. But that doesn’t make the task any easier. I’ve had to manage several employees over the years that I most definitely would be happy to never see again. Here’s how I did it, without shirking my duties as a manager—or driving myself crazy.

Find Out Why

Sometimes, our least favorite employees are in that position at no fault of their own. I figured this out when starting a new job as a manager. I had one employee who was outgoing, ambitious, and hard working—and yet, I couldn’t stand her. For the longest time, I had no idea why.

So, I started making a mental note every time she did something that made me cringe and looked for patterns. It turned out, I found her most annoying every time she asked me a question—specifically one I couldn’t readily answer. I realized that, while her constant questions were definitely not on my favorite to-do list, the real issue wasn’t really with her, it was with me—I didn’t like feeling unprepared and put on the spot.

After that, I made a point to bone up on the issues she typically raised and enlisted her help in figuring out solutions to common snags the entire group faced. Not only did I improve my skills and knowledge as a manager, but I empowered her to take on more responsibility—and kept her busy in the process.

If you’ve got an employee you avoid like the plague, try to figure out what exactly it is about that person that’s driving you batty. The answer might surprise you, and trust me, once you realize what’s irking you, it’ll be much easier to address.

Grab a Pen

I’m a big fan of taking notes, and will rarely go anywhere around the office without my trusty notebook and pen in hand. While it’s obvious why this is beneficial in a meeting, I was surprised to realize my notebook had handy meditative powers, too.

A few years back, I was relatively new as a manager, so I hadn’t come across too many employees I didn’t really like, but one guy was a definite non-favorite. Among many other things, he was a talker. Every time he came by my desk to ask me “a question,” I’d find myself nodding off 20 minutes later, without a clue what he really needed. Not good.

So, I started keeping my notebook handy on my desk. Whenever he came by, I’d politely stop him, grab my pen, and start taking notes of our conversation.

My goal was twofold; first, I wanted to keep myself on track and force myself to pay attention to what he was saying—after all, I was still his manager, and I was there to help him—and secondly, I hoped that my furious note taking would help keep him on track, too. After all, it’s hard to ramble on and on when you know someone’s transcribing your every word.

One of the hardest tasks when dealing with your least favorite employees is making sure you give them the attention they deserve. Keep a pen and notebook handy, and you’ll not only make sure you’re paying attention, but you’ll have a sly diversionary tactic to keep your mind off how annoyed you are at the conversation.

Call For Backup

I know, this probably sounds strange, but if done correctly, it can be an elegant solution to dealing with your least favorite employee.

I stumbled across this tactic after I’d been a manager for a while and was lucky enough to have some great people working with me, including my second in command. She was always eager to learn and jumped at any opportunity to take on additional responsibilities. So, when I was getting frustrated with a particularly irksome employee, she asked if she could take a stab at coaching. The issue we were dealing with at the time was minor and, she suggested, a perfect opportunity for her to try her hand at managing.

This, it turned out, was a great approach. Not only did she get the chance to gradually test the management waters, I was able to observe and guide her throughout the process. And an unexpected benefit? I learned a ton watching her deal with this employee. She approached him in a completely different way, which he responded to quite well. I ended up adopting some of her techniques, and he and I eventually ended up getting along pretty well.

The lesson here is, when all else fails, don’t be afraid to call on someone else to pinch hit. Just remember, this should be used as a learning opportunity for both you and your (temporary) substitute, so don’t fall into the trap of just passing off all your difficult employees to other people.

When you manage, all your employees probably won’t be stars, and some of them will likely drive you crazy from time to time. Keep these tips in mind when you’re getting frustrated with one (or, um, all) of your employees, and they’ll never have a clue they aren’t your favorite.