Innovative do: 11 documentaries that will make you smarter about business

11 documentaries that will make you smarter about business

Burts Buzz

If you've got just a few hours to boost your business savvy, we've got you covered. These 11 documentary films offer in-depth looks at entrepreneurs, companies, and big ideas you might only be superficially familiar with.

From a film on Wal-Mart's business practices to one on aspiring sommeliers, each will simultaneously entertain and educate you about business.

What it really takes to launch a company

If you think that starting and building a company is like a real-life version of "The Social Network," think again. The 2014 documentary miniseries "startupland" takes viewers through the development of five businesses enrolled in a tech accelerator, showing how scary the experience really is. Each episode features interviews with well-known business execs and entrepreneurs, including Reddit's Alexis Ohanian and AOL's Steve Case. (The feature film "startupland," from the same creators, comes out this year.)

How a personal-care line became an accidental success

The face on Burt's Bees products belongs to Burt Shavitz, a beekeeper who never anticipated that he'd found a billion-dollar international brand. "Burt's Buzz" tells the story of Shavitz's career, starting from his days as a young New York City photojournalist. Viewers also learn about Shavitz's complicated relationship with cofounder Roxane Quimby, who eventually bought Shavitz out and sold the business to the Clorox company.

How to turn your passion into a profession

"Somm" follows a group of four men preparing for the master sommelier exam, a test with one of the lowest pass rates in the world. Their obsession with getting ready for the exam consumes them as well as the people closest to them. The film will inspire you to pursue your own ambitions, however lofty they may seem.

See the rest of the story at Business Insider

Why companies use interim CEOs — and why they're usually a bad idea

jack dorsey

Twitter surprised Silicon Valley and Wall Street on June 11 when CEO Dick Costolo announced he would be stepping down as CEO on July 1, largely due to flat growth this year, and that chairman and cofounder Jack Dorsey would step in as interim CEO.

According to the announcement, Dorsey would also remain CEO of his digital payments company Square, and a search committee led by board members Peter Currie, Peter Fenton, and Ev Williams would look for a permanent CEO. Costolo will remain on the board.

Overall, it's an unorthodox plan, but a company's decision to put up an interim CEO during a time of crisis is fairly common.

In their 2007 research paper "The use of an interim CEO during succession episodes and firm performance," published in the Strategic Management Journal, University of Virginia professors Gary A. Ballinger and Jeremy J. Marcel found that about 17% of CEO successions of public companies install an interim CEO for 45 days or more before settling on a permanent one. They also concluded it's a decision companies should prepare for in advance.

Ballinger and Marcel found that companies typically experience lower returns on assets and decreased market value during the interim period compared to those that transition to a permanent CEO — and that the potential downturn grows increasingly worse the longer the interim period lasts.

For their study, Ballinger and Marcel looked at 2500 public company CEO transitions in the years 1996-1998, and evaluated their performance seven years after making the transition. They examined SEC documents and media coverage, and also interviewed three former interim CEOs.

They controlled for industry, size, age of the firm, economic climate, and surprises like a death or a scandal.

We went through the research paper and spoke with Ballinger to determine these main points from the study:

• There is strong evidence that companies experience lower financial performance when choosing an interim CEO compared to companies that immediately choose a permanent one.

Companies with an interim CEO at the helm for four quarters or more had a market cap 19% lower than those using non-interim successions.

Similarly, companies with an interim CEO for two quarters, three quarters, or four quarters earned on average $110 million, $148 million, and $278 million less net income, respectively, compared to companies that underwent a non-interim succession.

Ballinger and Marcel credit this to the limits often placed on an interim CEO. Such executives are typically tasked with addressing short-term problems plaguing the company — but without implementing any long-term strategies that could otherwise hinder their replacement.

As former Radio Shack interim CEO Claire Babrowski told the Wall Street Journal in 2006 after replacing a CEO who lied on his résumé, "I needed to calm investors, employees, and customers ... I was determined not to do anything that might force the board's hand to choose me if they didn't want me ... I didn't want to stick the company with expensive talent or commit millions of dollars ... before someone permanent was named."

• There is no evidence that the state of an industry affects an interim CEO's performance.

• There is no strong evidence that companies who choose an interim CEO are more likely to fail in the long-term than those undergoing a non-interim succession.

• There is strong evidence that interim CEOs who also serve as chairman of the board perform better than non-chairman interim CEOs.

Of the companies studied, 7.9% of those that selected a chairman as interim CEO failed within seven years, compared to 20% of those that went with a non-chairman.

The research found that companies with chairman interim CEOs had stronger returns on assets but comparable market performance compared to those with non-chairman interims. jack dorsey dick costolo

Ballinger and Marcel say this is explained by not only the chairman's ability to better manage the company compared to a non-chairman, but also by a chairman's ability to minimize the strength of the power vacuum that is created when a CEO steps down and is not permanently replaced.

As New York Times columnist and author of "Hatching Twitter" Nick Bilton wrote on Twitter days after the recent announcement, regarding that vacuum: "Advice to tech journos: There are lots of people inside (& outside) Twitter spinning their own agenda. Be wary of who whispers in your ear."

• There is evidence that an interim period can be a "tryout" for a CEO.

Business Insider CEO Henry Blodget is one of the spectators who thinks Twitter's board intends to make Dorsey its permanent CEO but is using an interim period as a safeguard and tactic to calm shareholders' anxieties.

Ballinger says that is not a farfetched possibility.

From the companies he and Marcel studied, 5 out of 40 chairman interim CEOs became permanent, and 21 out of 49 non-chairman interim CEOs became permanent.

Regarding Twitter, its current situation is reminiscent of when Steve Jobs, a former CEO and founder like Dorsey, returned to Apple as an interim CEO for an extended period before becoming a permanent, and much lauded, chief executive.

We'll see in the weeks ahead which analysts were correct and why Twitter's board actually made its decision.

From a general perspective, however, Ballinger and Marcel determined that going the interim CEO route is an undesirable situation for a company to be in, and that whenever possible, a board should always have a clear succession plan in place.

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NOW WATCH: The full story of Jack Dorsey is much more awesome than you realize

This one policy could be the key to making the freelance economy work

Baby throwing money

There's a certain view of the future of the economy in Silicon Valley that envisions people working independently of companies.

It's a freelancer model wherein people and their skills are portable. They move from company to company, plugging in their skills for a few hours or days at a time, then move on to the next project.

The problem with this plan is that it's hard to support yourself on a freelance income, particularly if you do low-skill jobs like delivery, driving, or house cleaning.

People who make an average or below-average hourly wage need the benefits generally tied to employment, such as health insurance and retirement savings.

Last week, venture capitalist Simon Rothman said there should be a "third class of worker," neither employee nor totally independent. This class of worker would get benefits from another entity that wasn't her employer.

But there might be an even better, simpler way: a universal basic income, or UBI.

What is UBI?

Universal basic income is exactly what it sounds like.

Every person — well, usually every person below a certain income threshold — gets a basic amount of money handed to them on a regular basis without question or direction. Typically, the government is the one to make the payments (yes, that means raising taxes). It's essentially getting paid for living in a place or being a citizen. It's not a lot — just enough for a person to scrape by. Almost everyone will still need a job to maintain their standard of living. But it's a regular payment that everyone can count on for the basic necessities in life, even if for some reason they find themselves unable to find enough, or any, work.

In the freelance economy, independent contractors could use their UBI funds to pay for their healthcare and start contributing a predictable amount of savings. Their skills could be used exactly where and when they were needed most. Employers wouldn't need to be tied to a heavy, broken employment system. They could be light and nimble and pivot as many times as needed. Everyone might be better off.

Is there any proof that this works?

Studies about UBI are hard to do, because simply handing money to people is such a politically fraught topic. But the research that has been done on it shows that it doesn't actually reduce employment much for primary earners. People still want to work. It does reduce poverty, and may contribute to better health and social outcomes.

An experiment in Canada in the 1970s seems to suggest that people living with a guaranteed income are healthier. An experiment in India found that poor households with a UBI used it to pay down debt and increase their savings rate. The India experiment showed that people who received this regular cash were more likely to work. And more likely to work for themselves.

"Cash grants led to an increase in own-account work, and a relative switch from wage labour to own-account farming and small-scale business," the paper said.

How would you pay for it?

UBI is expensive, but not impossible to afford.

Economist John Quiggin did some back-of-the-envelope calculations a couple of years ago and figured out how much taxes would go up by (emphasis added):

Depending on the design of the tax scales and the mix between income and other taxes, the marginal rate for the average worker would probably be around 40 per cent, and with a moderately progressive tax scale, lots of workers would be paying marginal rates above 50 per cent.

Summing up the exercise, I’d say that a universal basic income of the type I’ve sketched out here is economically feasible, but not, in the current environment, politically sustainable. However, while economic feasibility is largely a matter of arithmetic, and therefore resistant to change, political sustainability is more mutable, and depends critically on the distributional questions I’ve elided so far. A shift of 10 per cent of national income away from working households might seem inconceivable, but of course that’s precisely what’s happened in the US over the last twenty or thirty years, except that the beneficiaries have not been the poor but the top 1 per cent. So, if that money were clawed back by the state, it could fund a UBI at no additional cost to the 99 per cent.

So this would be expensive.

But there's a way to do it that makes it expensive only for the wealthy. The wealthy, generally the economy's capital, are the ones who are advocating this shift in the economy in the first place.

Are they willing to fund this economic paradigm shift? The current political climate would suggest no. But the important thing to know is that it's economically feasible, if the political climate changes.

Imagine a socialist state fueling the libertarian dream economy.