The Definite Article

Oh, man. What a day.

Emotional roller coaster.

So, I lost my cell phone yesterday. Left it on the number 3 Lothian bus somewhere between Gilmarton and Canonmills. So I had no alarm. So I was late for work - not that late, but late. So I just barely made it on to this conference call.

I hate conference calls. They're an excuse to not do real work.

The place where I'm working now has 1 project manager for every 1.3 techincal people. Most techies have six or so projects, so most project managers have seven or eight projects. As you might expect, it takes two years to deploy fresh toilet roll to the men's toilets, including an eighteen week testing phase. It's insane.

Losing my phone made me feel like an idiot. Carol flew in today and I was supposed to meet her at a Starbucks on Princes St. (the upstairs one, with a full view of Castle Rock and Edinburgh Castle). Without my phone, she had no way of calling me to let me know when she arrived, so I was going to have to wait for her from basically 1430 until whenever she showed up.

Plus, I'm basically homeless here, looking for a flat while I stay with friends. So I'm calling letting agents and having them call me back. Which they can't do, because I left my phone on the bus.

Anyway, I get to work, have this call, get my picture taken for my new security badge, get in a car and drive to a back-up data center to unrack some Nokia IP710s that had caught fire. (Little known fact: Nokia IP710s catch fire. They are an electrical and fire hazard. Do not buy them.)

On the way out, I call the Lothian Bus company and, lo and behold, a driver turned in my phone! I'm surprised and feel extremely lucky. Of course, my phone had a pay-as-you-go SIM with only 12p on it, so someone might have turned it in only after they realized it was worthless.

So on the way back we stop and pick up my phone. Then we go to look at a flat quickly, before lunch is over. Well, the letting agent, in this case Broughton Property Management in Edinburgh, had told me to call if I was going to cancel. I hadn't called, hadn't cancelled and was looking forward to viewing this flat, at 7 East Claremont, down in Canonmills.

Well, no one showed. We sat around for about ten minutes and then I called Broughton Management. "You were asked to confirm and you didn't." the woman said when I called. "Sorry, but no one will be out to help you." Then she hung up the phone.

What arrogant shits! As if there weren't fifty other letting agents in Edinburgh! I don't need their service. I'm the customer, for Christ's sake! Argh! So frustrating. And they lied to me!

Anyway, I was hacked off, so we didn't call them back, just went back to work. I skipped lunch and went to Starbuck's to wait for Carol.

When she showed up, I realized that yes, it was worth getting out of bed this morning. She looked beautiful! Such a great site for sore eyes. I'd post her picture here but I have strict orders not to do it, so you'll all just have to come visit me in Edinburgh to meet her.

Anyway, Carol and I caught up a bit, exchanged Edinburgh numbers and I went back to work and she went over to her friend Brigitte Wallace's place.

At around ten until six, Adam and I pile into his car to race over to another flat we're supposed to be viewing at six. Well, it should only be ten minutes away, but Princes St is a worse snarl than usual and it takes us half an hour, so we get there at 6:15pm and the agent who was supposed to show us the flat is gone. I can't really blame her; I'd have left, too, if someone were fifteen minutes late, but it still sucked.

So we went and had a few beers and flirted with the pretty French waitress who brought us our drinks, then Adam went home and Carol dragged me out to dinner at Chez Jacques - passable, although her dinner was better than mine. Their menu is a little heavy on seafood for me, the chicken was poorly done, with a lousy balance of flavors. You'd think chicken, sundried tomatoes and chorizo would be a natural match but they somehow ruined it.

We left and Carol refused to come home with me, saying that it would take advantage of Roddy's hospitality. She may be right. At any rate, I came home and Roddy was just leaving for Francesca's.

Posted by Nate at 6:57 PM | Permalink | Comments (2)

Some good news and some bad news, good news first:

I'm going to Edinburgh and I'll be working for ThruPoint. Still. My resignation was refused. This is a good thing.

The bad news is that it will take longer for me to get there than I had originally thought, perhaps as long as a month.

Now on to the meat of the discussion.

How to attract and compensate expatriate talent has become a topic of increased concern as local companies develop a global reach or as global companies develop a local touch. There are a wide variety of opinions about whether or not to compete globally and how to do so; a large number of companies feel that their managers must have some overseas experience in order to become executives in a global company.

There are many questions to be answered when attracting overseas talent or relocating personnel. Of chief concern to the individual being relocated is compensation. Constructing a compensation package that everyone can live with is difficult enough - constructing one that incents the employee, meets the budget constraints of your company's bottom line as well as your personnel goals can be monumental.

To that end, I'm going to explain a single tool that can be used to assist in calculating an equitable equivalent salary between countries using a tried and tested method of performing currency arbitrage: purchasing power parity.

Purchasing power parity is a way of measuring the difference in purchasing power between two countries after accounting for the exchange rate. A brief example might help to illustrate:

An Apple iPod, a popular music player, sells for $299US in the United States at an Apple outlet. It sells for £248 in the UK. The exchange rate between these two coutnries is $1.83 to £1. To purchase an iPod in the UK using US dollars, you would need $453.84. The ratio of these prices is the purchasing power parity for the market in iPods. This number is 1.52. It implies that Americans have one and a half times the iPod purchasing power of Scots.

The HR director of your firm isn't concerned with the purchasing power parity for iPods, of course, but instead will want to look at a more representative index. The best known purchasing power parity index is the Big Mac index. The Big Mac is a standard product available nearly everywhere. Since McDonald's supply chain management is standardized, the price of a Big Mac includes the cost of using local infrastructure, securing local labor, fighting local bureaucracy and a host of other costs that will affect an employee who moves to the area. The Economist maintains the Big Mac index and it can be found at The Economist website. It happens to be one of the most accurate measures of purchasing power parity (PPP) around.

In order to apply PPP practically to salaries of expatriates, use this formula:

1. Find the exchange rate from the home country to the new country.
2. Calculate the difference in purchasing power parity.
3. Apply the difference in purchasing power parity to the exchange rate.
4. Use the resulting number as a multiple for the initial salary.

Here's an example:

Frieda works in the U.S. and wants to work in London. What sort of salary should she look for to enjoy the same standard of living, before taking tax into account?

First, her existing salary is $100,000.

Second, the exchange rate between the countries is 1.83.

Third, the PPP between the U.K. and U.S. is 1.23. In other words, a dollar of U.S. salary only buys 1/1.23 of a dollar of stuff in London, or about 81 cents. So she'll need a salary of $123,000, which is £67,213.

Frieda will have to take other things into account - she won't need health insurance, but British taxes will take an additional 17% bite out of her wages, for example.

What if the PPP is the same? Just use the exchange rate. Here's another example:

Bob works in the United States as an executive with a large firm. The large firm decides that he needs some experience managing a manufacturing unit in South Korea. He's open to the idea, so they work out a compensation package.

Let's say that Bob makes $248,000 in the U.S. The exchange rate from the $US to KRW (South Korean Won) is 1,201.10. The best source for this information can be found at Oanda. The Big Mac PPP between the two countries is 1; 1,201.10KRW buys $1US worth of goods in South Korea, the same as it does in Peoria, Illinois.

While there are almost certainly other concerns for the HR Director responsible for setting Bob's salary, a good baseline for ensuring that he enjoys the same standard of living in South Korea that he did in the U.S. will be 298million KRW.

Purchasing power parity provides a method of finding a baseline salary to maintain standard of living, all other things being equal. It should not be used as a golden formula that provides all answers, since other things are almost never equal.

Frieda may be able to walk to work, and thus not need a car. Bob may require extensive language training.

What purchasing power parity will do, however, is provide the starting value in a more extended calculation that HR managers can use to construct an equitable compensation plan.

-Nathan Dornbrook

Posted by Nate at 12:09 AM | Permalink | Comments (0)

Dissent is an important part of consensus building and an integral part of any consultation practice. What has marred the modern political landscape in the US in since the 1988 presidential election is that rhetoric has given way to ad hominem invective. Dissent is part of an intellectual process, not an automatic naysaying of the proclamations of an "opponent," arguments from certain members of Monty Python notwithstanding. Modern political discourse takes the form of statements and counterstatements between camps that maintain a posture of diametric opposition even on matters about which they actually agree. This isn't really dissent, but a kind of mental wrestling that benefits only the combatants, and only when they "win." More below.

Also:This past January 9th marked the two year anniversary of when Carol Forbes and I went on our first date. This coming January 26th markes the date that I'll be moving back to Edinburgh, a place that I've come to think of as home more than here in Alexandria, VA or Mentor, OH, where our parents live.

Dissent is a different animal entirely. Dissent takes place between two partners attempting to reach a consensus or find a common ground. The consensus may never be reached and the common ground may be non-existent, but the term implies a willingness to work towards some common goals.

Dissent, like assent and consent, comes from the Latin root sentre, meaning to feel. Dissent is when two parties feel differently. Consent used to mean to be of the same mind (to share feelings, as in con- sentre) and assent used means to aquiesce and implies thoughtful apathy, possibly a hold over from the Latin ad- sentre, to move away from feeling. Assent and consent now both carry a denotation of broad agreement, although in usage consent seems to be applied more to groups ("the consent of the governed") and assent to individuals ("He asked for her hand in marriage and she granted her assent.")

Etymology aside, dissent is missing from modern discourse. Actual dissent, in which thoughtful propositions are brought out for examination, inspected and tabled, rejected or accepted in due course, feels too much like equivocation for the shrill partisans who rule the roost. And frankly, watching two people who wish to eliminate the extremes of wealth and poverty come to an agreement makes for shitty TV even though it makes for good governance.

I mention this because there is a man running for President of the United States named Howard Dean. He is the former governor of Vermont, a largely white New England state that allows citizens to carry concealed firearms, is the home to Ben and Jerry's Ice Cream and is one of the oldest States of the Union. He has taken the country by storm and is headed for a Democratic nomination in first the Iowa caucuses tomorrow and then a likely victory in New Hampshire the following week.

Howard Dean claims the mantle of dissent. This is disengenuous. Instead, he has disagreed and shows no sign of desiring a rapprochement with either the current administration or with followers of Bill Clinton. This plays well in Liberal San Francisco but not so well in suburban Illinois. The stance is politically suicidal - but that doesn't bother me. What bothers me is that it is absent of dissent.

Howard Dean disagrees loudest with the sitting President not over the budget or America's relationship with the rest of the world, but instead has stated that the capture of Saddam Hussein will not make America any safer and that he doesn't think Osama bin Laden was behind the September 11th bombing. This is in addition to vehemently opposing the war in Iraq, a position that is increasingly untenable as chemical weapons are found buried in the desert by the Danes, Saddam Hussein is captured and the occupying forces prepare to turn the governing of Iraq over to Iraqis.

Furthermore, he has criticized Clinton for representing the Republican wing of the Democratic party, in spite of the fact that he was simultaneously the most popular Democrat since FDR and presided over a great American economic expansion (part of this expansion was bogus - Enron, dot-coms, telecomms overinvestment; an article for a separate essay).

So Howard Dean has attacked people to his left and to his right with vituperative language rather than appealing to the common ground he may share with them. For instance, he could point out to southerners that he favors gun ownership while pointing out to the coasts that he would have liked to have seen greater respect for international multilateralism in the approach to the second Gulf War. These things are true and make sense. It's a shame they don't make for good TV.

Bush, on the other hand, has done this to some extent. He's met the AARP and related lobby better than halfway with a prescription drug reform that threatens outrageous deficits and put into action primary and secondary educational reform of noble purpose although doubtful efficacy. Both were more than his predeccessor was able to acheive in the same areas, despite enormous effort.

In closing, I'd like to thank my sister, Mara, who has been so willing to engage in genuine dissent, disagreeing when her principles so demand to whatever drivel I might have a notion to publish here and agreeing when she thinks the same. It's an intellectual honesty that I wish all Americans had. It's sad that we cannot even bring ourselves to voice agreement even when we genuinely agree, lest we be seen as traitors to the cause. When Anne Coulter and Michael Moore can sit down, share a bagel and find some common ground, I'll allow my hope to be restored.

---

On to Edinburgh. Well, I finally just up and did it: I resigned from my current position, even though I love working for ThruPoint, deeply admire the senior leadership and agree wholeheartedly with the mission of helping companies to find ways to leverage their investments in technology to find greater returns. It takes special people to understand the marriage between IT and cost reduction, revenue generation and productivity increase; so many of the people that I've met that see how to use technology as a lubricant to the wheels of commerce and industry are at ThruPoint that it seems as though they have a monopoly. I'll miss them, the mentorship they gave me and I'll miss the way we felt like family.

However, I need to be in Edinburgh. Anyone who has lived there will tell you the same. I can remember making fun of a High School Girlfriend, Emily Stowe, for taking a year abroad in Edinburgh.

"It's cold and it rains all the time!" I said. "It's far away; you'll get homesick. And it's as far north as Moscow! It'll get pitch black in winter."

Well, I was 3 for 4. It's cold and rains all the time, it's pitch black in winter and it's as far north as Moscow. However, it's also the most beautiful English speaking city in the world; Prague is better looking, but I don't speak Czech and the restaurants are better in Edinburgh.

I didn't get homesick - until I left. Since then, I've known I wasn't finished with the city, or she wasn't finished with me, or vice versa.

Sincerely,
- Nathan

Posted by Nate at 2:11 AM | Permalink | Comments (4)