Unplug from Your Smartphone Once in a While

Story first appeared in USA Today.

Do you take your smartphone to bed because you claim to use it as a nightlight, say it's the only alarm clock you have, or need to make sure you don't miss a critical text?

Here's the problem with that thinking: Now that the phone is only an arm's reach away, it's easy to check a few e-mails, perhaps sending off a few responses so you have one fewer thing to do tomorrow.

You've just stepped onto a very slippery slope that will make it difficult not to be connected 24/7. You've become one of those millions of workers who fire off e-mails at midnight or reach for the smartphone before your first cup of coffee every morning.

You may claim that you have to work this way because your job — or your employer — demands it.

But this drive to stay connected all the time is really your own fault, not something that can be blamed on just an employer or a job.

Using professional services firm the Boston Consulting Group as a sort of guinea pig, an expert asked a team of high-powered, always-connected consultants to see if they could disconnect more and actually improve their performance and job happiness. She found that the team not only discovered ways to turn off one night a week, they also became closer as a team, more satisfied with their jobs and produced better results.

The company saw a clear improvement in recruitment, retention and engagement, and the process spread throughout the organization.

But by committing as a team to predictable time off for each person, they communicated more, supported everyone's efforts to disconnect — and held one another accountable for slip-ups, such sending e-mails during designated time-off periods.

The problem when someone is connected 24/7 is that it sets a norm for other members of the team. They start to feel that to be responsive, they have to respond late at night to e-mails. It's not even urgent, but it just matriculates all this bad behavior.

In other words, the biggest enemy to work-life balance is us.

Even doctors, who do life-saving work, have times when they are off and times when they are on call. So, why don't the rest of us?

The process of predictable time off will work only if all the team members agree to it, she says. If a team wants to try it, she gives a list of suggestions in her book:

• Be honest. Tell other team members your hopes and fears.
• Stop the stubbornness. Maybe the collective goal of the group — having an afternoon off every two weeks — doesn't meet your top priority. Still, don't let that stop the process.
Look for goals everyone can meet but also are a stretch. Members of the Boston Consulting team never knew when they would get a night off. That uncertainty was solved by giving each person a regular evening when they weren't expected to be plugged in.
Just having that predictability was valuable for everyone, she says.
• Meet regularly. A team must share regularly what's happening in their lives. This helps build trust and a willingness to support one another.
If things get off track with a team member, don't rush to judgment but try to understand what's going on by asking questions.
• Hold one another accountable. Team members may enter into the agreement with the best of intentions, but it can be easy to slip back into old patterns when work becomes stressful.
However, that's when it's most important to remind one another to take a step back and realize that the work will be done better if the balance is maintained.

Research has found that people with unpredictable work often try to gain predictability by becoming more connected, but that leads only to more unpredictability.

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Berkshire Hathaway to Buy More Papers

Story first appeared in USA Today.

The CEO of Berkshire Hathaway says his company is likely to buy more newspapers in the next few years, and Berkshire Hathaway will not try to influence the editorial policies of any of them.

He wrote a memo this week to the editors and publishers of all of Berkshire's daily newspapers. That group is about to grow to include 26 daily newspapers because Berkshire announced last week that it plans to buy 63 newspapers from Media General for $142 million.

The letter was posted online Thursday by the Omaha World-Herald, which is a Berkshire newspaper.

The memo mostly reiterated things that had been said about newspapers before, but it appears that he wanted to put them in writing for the company's editors before the Media General deal is completed. That deal is expected to close in late June.

The CEO says Berkshire will look to buy small to mid-sized newspapers that cover their communities well. Stating that they will favor towns and cities with a strong sense of community, comparable to the 26 in which they will soon operate. If a citizenry cares little about its community, it will eventually care little about its newspaper.

Berkshire Hathaway includes more than 80 different subsidiaries that largely run themselves because the company is extremely decentralized. Buffett told the newspaper editors that he won't try to influence the way their reporters cover news.

The CEO said many of the newspaper editors he was writing to would likely outlive him as Berkshire employees, but he predicted that his successors would follow the same hands-off management approach.

The newspapers it is buying from Media General, which include the Richmond Times-Dispatch in Virginia and the Winston-Salem Journal in North Carolina, have been successful on both the business and journalistic fronts. He said that's also true of the newspapers Berkshire Hathaway already owns the Omaha World-Herald and the Buffalo News.

The CEO wrote that he believes newspapers need to adopt a business model that doesn't give away all its stories for free online.

The original instinct of newspapers then was to offer free in digital form what they were charging for in print. This is an unsustainable model and certain of our papers are already making progress in moving to something that makes more sense.

He believes newspapers will do well if they remain the primary source of information about their communities.

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Pharma Companies Battle for Takeover

Meda AB, Sweden’s biggest publicly traded drugmaker, is offering one of the best deals in the world for pharmaceutical companies looking to replenish their pipelines by swallowing up rivals.

The $2.78 billion company is trading at 5.4 times its projected cash flow in 2013, cheaper than 95 percent of specialty drug companies with market values larger than $1 billion, according to data compiled by Bloomberg. Meda is also valued at a discount of more than 70 percent to its competitors relative to sales and net assets, the data show.

While Meda in February said margins will suffer this year as it boosts spending on marketing, earnings are projected to reach a record in 2013, helped by sales from drugs such as its Dymista allergy medicine, which won U.S. approval this month. With Dymista poised to become the company’s top seller and at least six more drugs set to reach the market in coming years, Solna, Sweden-based Meda could lure suitors such as Valeant Pharmaceuticals International Inc. and Takeda Pharmaceutical Co., according to Nordea Bank AB.

Margin Squeeze

Meda’s products, focused on respiratory, cardiology, dermatology, central-nervous-system, pain and inflammation treatments, generated sales of 12.9 billion Swedish kronor ($1.8 billion) in 2011.

Meda’s earnings before interest, taxes, depreciation and amortization climbed 9 percent in 2011 to 4.7 billion kronor, or more than 36 percent of sales. The company said it expects Ebitda margins will be closer to 30 percent this year as it increases spending to market new drugs, introduce over-the- counter medicines in Europe and expand in emerging markets. While that would approach a five-year low, Meda is projected to resume margin growth next year and in 2014, when analysts project record Ebitda of 5.28 billion kronor, at more than 35 percent of estimated sales, according to data compiled by Bloomberg.

Growth Potential

They have interesting products and their potential is probably not reflected in the estimates until we see more of their progress. A takeover bid is “definitely” possible.

Shares of Meda closed yesterday at 65.55 kronor, down 8.5 percent for the year and 49 percent from its all-time high of 127.58 kronor in December 2006. At 5.4 times its projected 2013 cash from operations after deducting capital expenses, Meda was trading at a cheaper multiple than 63 of the 66 other specialty pharmaceutical companies with a market value larger than $1 billion, according to data compiled by Bloomberg. The median for the group was about 16 times.

The company was also less expensive than competitors relative to its 2011 sales, trading at 1.5 times revenue compared with the average for the group of 6 times, the data show. Meda traded at 1.3 times its book value, versus an average 4.6 times for peers.

Meda rose 2.3 percent to 67.05 kronor at 9:14 a.m. in Stockholm.

‘Prove-It’

On valuation, the stock’s really cheap. The main reason it’s cheap is they’ve re-based people’s margin expectations. They’re saying they’re making these investments, so now it’s kind of a prove-it story and they have to really show that they’re coming to the market and really are generating organic growth.

Meda may attract bigger rivals as they seek new products to replace those losing patent protection, Les Funtleyder, a health-care portfolio manager in New York at Miller Tabak & Co., which manages $800 million and doesn’t own Meda, said in a telephone interview. Globally, the drug industry faces the possible loss of more than $21 billion in sales this year from patent expirations, according to data compiled by Bloomberg.

Pipeline Power

What do most pharma companies need these days? Product or pipeline or both. Meda has a number of products that could make it salable and this new one, Dymista, is an additional revenue generator.

Dymista, a prescription nasal spray for treating seasonal allergies, could become the company’s top-selling treatment, with revenue potentially reaching 2.37 billion kronor in 2016, Luisa Hector, an analyst at Credit Suisse Group AG, wrote in an April 30 report. The drug will be available later this year in the U.S., where about 60 million people are affected by seasonal allergic rhinitis, according to Indianapolis Pharmaceutical Drug Litigation Lawyers familiar with the story.

Meda is seeking approval for two dermatology products, Zyclara and a combination product containing clindamycin and tretinoin. The company also acquired Antula Holding AB for 1.8 billion kronor last year, adding several over-the-counter products to its portfolio and a pipeline that may result in four new products in the coming years, according to its annual report.

Valeant Deals

There is a dividing line between pharmaceutical companies that have new products and those that do not. Meda has a valuable pipeline of products that are also close to market.

Meda and Valeant have a history of doing deals together. Valeant, based in Mississauga, Ontario, last June bought the rights to sell two of Meda’s medicines in the U.S. and Canada. In 2008, Valeant sold its European drug business to Meda, giving the Swedish company access to the faster-growing eastern European markets.

Given that they have so many collaborations, integration would be relatively straightforward.

Valeant may also want access to Meda’s geographic coverage in Europe, where Meda has expanded sales since buying the business from Valeant. About 63 percent of Meda’s 2011 sales were generated in western Europe, the company said in its annual report. That compares with 19 percent for Valeant, according to according to a regulatory filing in February.

Looking for Opportunities

Valeant feels that they can continue to find really interesting opportunities, acquisitions at good prices, and add them and at the end of the year have a pretty significant impact on the top line and bottom line.

Valeant approached Meda last year, two people familiar with the matter said in July.

Takeda, Asia’s biggest drugmaker, is also considering more takeovers as its best-selling diabetes treatment Actos loses patent protection this year. The Osaka-based company in September bought Swiss drugmaker Nycomed for 9.6 billion euros.

No Blockbusters

They have said publicly they are looking at more acquisitions, and it was rumored last year that they were also looking at Meda when they bought Nycomed. So they might still be interested.

Takeda's priority was integrating Nycomed. However, they are looking into all options including acquisitions that strengthen the foundation of the business or boost pipelines.

While Meda has a number of products, none are the type of standout drug that big pharmaceutical companies look for when considering acquisition targets.

Meda has a portfolio of successful smaller market drugs, but no blockbusters. Large pharmas really want the latter. Even Dymista will compete in a crowded allergy-medicine market where generics are available.

An acquirer would be buying a company with more debt relative to Ebitda than 95 percent of its competitors, according to data compiled by Bloomberg.

‘Manageable’ Debt

Still, Meda’s net debt, at 3.5 times Ebitda in 2011, is down from its peak of 13 times in 2005, the data show.

It’s actually kind of mid-range of where it’s been historically. It’s definitely manageable.

Even without a takeover, Bassion predicts the company’s shares could reach 85 kronor, almost 30 percent more than yesterday’s closing price. A buyer could offer another 30 percent on top of that, he said, which would value the company at more than 33 billion kronor, or $4.7 billion.

There’s certainly some aspects that would be attractive to other companies, given Meda’s product pipeline and historical growth trends.It’s basically a chance to get a pharma company at very cheap valuations.

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To Vacation or Not To Vacation...

Story first appeared in USA Today.

Gasoline prices are in retreat. Many hotels are offering a free night's stay. And as Memorial Day nears — kicking off the summer travel season — more Americans say they plan to take a vacation this year than last, but millions of us will simply stay at our desks.

It's not just higher airfares and escalating hotel fees that will cause some Americans to forgo a summer getaway. The nation's nose-to-the-grindstone culture — which only intensified during the Great Recession— has resulted in many Americans leaving vacation days on the table.

Americans are a hard-working lot, and they're ambitious and have a lot of priorities. A survey of more than 2,000 U.S. travelers found that nearly four in 10 didn't book a vacation within the past year. That number was much higher than in 2008, when just 28% didn't buy a vacation. Sometimes they forget to take care of their work-life balance.

Not taking all the vacation time that's available has become an American trait.

A poll conducted last September by Harris Interactive for JetBlue found that 57% of employed respondents said they would have unused vacation time at the end of the year. And a Radisson hotels study last year of more than 1,000 adults found that nearly two in three (65%) working Americans hadn't used all of their vacation time. Roughly a third said they stayed put because of their workload, and 19% noted that they didn't want to deal with a backlog of tasks upon their return.

A global survey taken of more than 12,500 workers by Ipsos Public Affairs and Reuters in 2010 found that only 57% of Americans used all their vacation time. That was in stark contrast to Europe, where 74% of workers on average took all their allotted days off. Europeans also tend to receive more vacation time than their American counterparts, management experts say.

Recognizing this opening, travel site Orbitz launched a "Take Vacation Back" ad campaign this month, complete with a tongue-in-cheek "vacation bill of rights" that has "no vacation day shall go un-traveled" listed at No. 1.

The president of Orbitz.com says the company saw an opportunity to talk to travelers about how much fun a getaway can be and remind them that they're not just entitled to them, but they actually need to take vacations. It's part of what makes them productive and happy.

Workplace fears

While the American inclination to bypass vacation predates the recent recession, experts say the sluggish economy hasn't helped.

Some employees might think that if you put in more time, you increase your chances for a promotion or reduce your chances for targeted layoffs. There's probably some signaling going on, for instance, that if you do take all your vacation time you're less committed to your job, to your company.

Culturally, Europeans have a greater commitment to leisure time, one that is supported by strong unions that give workers more bargaining power. And with American companies cutting staff and doubling the tasks given to those who remain working while on vacation — or not taking one at all — is a way to minimize the avalanche that would occur if you go away for a week or even a few days. Some employees are more stressed after a vacation than before, just because of the workload.

Despite a proclivity to stay in the office, plenty of Americans are planning to take some time off.

Auto and travel club AAA predicts that 34.8 million Americans will travel at least 50 miles from home over the Memorial Day weekend. That's up 1.2% from last year.

Some travel watchers say part of the uptick may be explained by a grim determination to take time away because the to-do lists at work are so long, and vacation time is so limited.

Regardless of outside influences — the economy, gas prices, weather — Americans really bristle at the idea of giving up their precious travel plans. And it's probably because most of us only get two to three weeks of vacation, so it's time we desperately need.

But be prepared to pay up

Getting away this year won't come cheap, however.

The lowest domestic summer airfares are up roughly 5% over last year, says Rick Seaney of Farecompare.com, which tracks ticket prices. Prices to fly internationally are about the same as last year, but average fuel surcharges and taxes can tack on another $600 round trip, he says.

Hotel rooms also are more expensive. The average daily rate is $106.64, up 3.9% from last summer, according to STR, a hotel research firm.
As a result, travel analysts say, many vacationers are looking to save a dollar wherever they can — whether it's spending a shorter time away from home, or taking a cruise to make sure they don't have to pay extra for meals and entertainment.

When Americans are traveling, they are economizing by selecting hotels that offer things like free breakfast and free Internet, or choosing vacation packages that are all-inclusive. They want to be able to take a vacation and spend dimes like they were dollars.

A TripAdvisor survey of more than 1,800 U.S. travelers taken this month found that 79% would take a spontaneous summer vacation if it was a bargain, while 21% said they would be willing to drive more than 10 hours if it meant significant savings compared with flying.

Since the economy is still very shaky, many Americans have made the decision to spend what vacation time we will take in the country, rather than looking at traveling overseas.

After spiking earlier in the year, fuel prices are dipping. But even if the price at the pump begins to rise again, many travelers say they won't be deterred.

A survey last month of 1,000 consumers commissioned by professional services firm Deloitte found that 54% said increasing pump prices wouldn't affect their plans to get away Memorial Day weekend. That's up from 41% last year. Travelers are probably getting used to gas costing more.

But some would-be vacationers also have cabin fever after staying close to home after the financial collapse of 2008.

Fares have been on the rise because there is less competition in the airline industry, jet fuel prices are up from last year and airlines are carefully matching the number of seats they offer to demand from passengers.

Those wanting to fly in June or July should be booking their trips now. And those wanting an August vacation should start setting it up in the next couple of weeks.

Vacations on the cheap
For those who manage to tear themselves away from work, there are vacation deals out there, from free hotel stays to cash rewards.

For instance, the Bermuda Tourism Board is offering a hotel credit of up to $600 depending on how long you stay.

Another deal offers vacationers staying at the Crowne Plaza, Holiday Inn or other InterContinental Hotels Group establishments a $75 prepaid card if they stay for two consecutive weekend nights between May 14 and Sept. 3.

And Universal Orlando is offering a vacation package starting at $899 for a family of four that includes a hotel stay, tickets to the theme parks, breakfast and transportation.

Vacationers also may want to book trips for June rather than July, says Orbitz, which found that hotel rates tended to be cheaper in June in eight of their top 10 summer vacation destinations, such as Cancun and Los Angeles. For instance, the average daily hotel rate in Orlando, the third-most popular vacation spot among Orbitz users this summer, is roughly $106 in June and $112 in July, a difference of 6%.

A growing number of travelers also are checking out vacation rentals rather than hotels to conserve cash, travel analysts say.

Vacation rentals can save hundreds of dollars compared to a hotel.

People forget if you're looking to save and on a budget, you can do well with free attractions such as some museums and national parks. There are a lot of great things you can see and do that wouldn't cost your family anything to visit.

Whatever they need to do to make it happen, Americans should try to take their vacation.

Even if they just get in the car and visit one of our amazing national parks they'll arrive back at work refreshed.

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