Carl from Chicago

Business executive interested in history, economics, taxation and energy policy.

Encyclopaedia Britannica

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Encyclopaedia Britannica is the venerable institution that prints all of those bound volumes that you had at your house (or your grandparent’s house) when you were a kid. Interestingly enough, their headquarters is right here in River North Chicago, and I walk by the building often on my way to work (it is on LaSalle Street, just North of the Chicago River.

When I mention Brittanica, the first thing that most people say is “Are they still in business?” This was Dan’s exact question when I mentioned that they are headquartered here in Chicago.

Early on, when the web was first starting up, many companies had the idea that capturing information would be a big money maker. For example, Microsoft has an encyclopedia called “Encarta” that was big news back in the ’90s, when it was battling Brittanica for leadership. About this time Microsoft also started up their online movie database “Cinemania” which was also popular for a while as an attempt to create valuable content.

People did pay for content back in the early days, when the web was somewhat of a novelty. I remember a good friend who bought Cinemania and loved it, since he was a giant movie buff, and he got a big kick out of being able to search through all the data and reviews and see some clips, as well. I think at the time if you mentioned that this all would be on the web, it seemed pretty far fetched, especially since home high-bandwidth broadband was a long ways away and we were stuck with dial up (remember all those AOL CDs in the mail?).

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Frozen In Time

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I started working in Chicago in the early ’90s. At that time, we had a hangover from the ’80s building boom, with a number of completed but vacant buildings. Our firm moved in at 161 N Clark Avenue, the Chicago Title and Trust Building, which was almost totally empty at the time. I remember walking through the floors and around the halls to get a 360 degree view of the city. Later Accenture (the consulting firm) moved in and ultimately the building seemed to get totally filled up.

After the ’80s building boom which tailed off in the early ’90s, Chicago construction went dormant. Nothing significant seemed to get built for a few years since no one could put an economic case together for more building while so much was vacant.

In the late ’90s and into the ’00s, Chicago construction boomed again. Per this Chicago Tribune article,

For a decade now, Chicago has been on an astonishing building binge. Since 1998, developers here have completed or started construction on more than 195 high-rise buildings, according to the Emporis building database. (A high-rise is defined as a building at least 12 stories tall.) That’s more high-rises than there are in all of Detroit (132), St. Louis (106) or Milwaukee (83).

But now it is all grinding to a halt. Some sky scrapers are stalled for lack of funding:

Work also is frozen at 111 W. Wacker Drive, home to Chicago’s other stalled supertall skyscraper, the Waterview Tower and Shangri-La Hotel. (To be considered “supertall,” a skyscraper needs to be at least 1,000 feet high.) … the project is stuck on the 26th floor, its exposed concrete frame looming over Wacker … (the project requires more) than $300 million in construction financing to finish the job.

Here is a view of the construction of the Shangri-La from my window… note the other building still under construction on the left.

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Fat Friends… and the Opposite

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Recently I met up with Dan in Madison to watch the Illini vs. the Wisconsin Badgers (we lost). Dan and I talk a lot via the web but usually only see each other a few times a year (during Bears games) but we correspond a lot. Any reader of this blog knows that Dan is quite the fitness fanatic / zealot and has really done a lot to get in tremendous shape over the last few years.

Seeing Dan reminded me of some research that I saw on friends… from this BBC article

“Fat Friends Can Boost Your Size”

The work, by scientists at the University of Warwick, Dartmouth College, and the University of Leuven, is being presented to an economics conference in Cambridge Massachusetts. They suggest choices about appearance, on which decisions such as job offers or being deemed attractive are based, are determined by the choices others around you make. So, if people around you are fat, it is permissible for you to be fat too.”

Thus hanging out with Dan reminds me that while I am getting a bit smaller, I have a long way to go. One thing that isn’t helping is the AMAZINGLY large portions of food that are dispensed to me continuously. Above is a photo of food from a local Italian restaurant (a chain) called Maggianos – these is one HALF order of pasta and meatballs with a HALF order of stuffed mushrooms. We take the 1/2 order and cut it into essentially quarters and it is still too much food (we won’t get those mushrooms again… they expanded like balloons in my stomach). This is for two people. Who needs to eat that much food?

Maybe if I had different friends…

Cross posted at LITGM

A Letter to David Kolata at CUB

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The Citizen’s Utility Board or “CUB” is a non-profit group that represents the consumers of the state of Illinois against the interests of the electric, gas and telecom utilities. Their web site is www.citizensutilityboard.org and I recently joined their membership ranks so now I see their periodic newsletter. David Kolata is the Executive Director of CUB (his photo is on the article, above).

HISTORY OF CUB

CUB was started in the mid-80’s. While there are many elements to CUB, the most relevant was their opposition to the big electric rate hikes that ComEd (now Exelon) was pushing through in the 1980’s, as their giant nuclear plants, plagued by cost overruns, came on line.

How the “rate setting process” works is that the utility will come forward and request a hike in rates, as well as the changes in rates by customer classes (business, residential, etc…). The Illinois Commerce Commission (ICC) typically decides whether or not the rate hike will be allowed and how much of the utility’s request to grant. CUB was established to represent the citizens of the state and generally this means fighting to keep the rate increase as small as possible. Typically the utility asks for $100M, CUB says give them nothing (or they owe us a refund), and then the ICC makes a decision somewhere along the continuum.

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“Managing by the Numbers”

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A recent article in Business Week is titled “Managing by the Numbers” and it focuses on IBM’s attempt to build a system to assign staff to appropriate engagements around the world. Rather than relying on manual processes, a central planning group is gathering capabilities for each of their employees and attempting to let the computer match skills to opportunities.

I have a lot of experience in consulting at a number of different organizations. If you are interested in the challenges (and opportunities) of running or being part of a professional services organization, I suggest that you read “Managing the Professional Services Firm” by David Maister.

The types of examples given in the book are staffing a web services engagement in the Philippines; there is an expensive (high ranking) consultant on the bench (meaning – unassigned and not currently earning income for the firm) in a faraway country vs. a less skilled (and cheaper) local consultant who could also be assigned to the job – which to choose? This is the type of “problem” that the program is supposed to solve. The implied conceit is that consultants are interchangeable, and you can just build a team out of individual skill sets, have them show up at the work site, and pull off the engagement.

When I worked at one of the large consulting firms, in order to save space, they went to a “hoteling” concept. Since consultants were usually on the road and not in the office, some bean counter figured that it would be cheaper to not give anyone a permanent office and just have them occupy whatever space was available on the occasion that they had to work in town. The company did attempt to link your phone to your location and sometimes even had a nameplate ready for you, along with a little cart for your office supplies, so you were able to get started working with a minimum of effort. The company only had to have office space for the people likely to show up, which was maybe 25% of the total staff on a given day, saving them in rent money.

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