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Amidst the other recent headlines about his signature, you may have missed the news that Donald Trump plans to sign an executive order in the coming days that will allow defined-contribution plans like your 401k to include private market investments. If youre not the sort of person who views a mutual fund prospectus as light beach reading, this may sound like the kind of boring story that only your crypto-obsessed brother-in-law might care about. But this is serious business that could have repercussions on your retirementespecially if you’re not paying attention. This proposed policy could be sending us down the same bumpy road that knocked the tires off of company-sponsored pension plans, dramatically increasing retirement insecurity for most American workers. Heres what you need to know. Whats in the executive order? The specific details of the forthcoming executive order (EO) remain hazy. But most experts agree that the president will probably use the EO as an opportunity to formalize the 2020 Pantheon Ventures/Partners Group opinion letter from the Department of Labor. This letter, issued during Trumps first administration, suggests that private equity investment options could be included in defined-benefit plans (i.e., 401k and 403b plans and the like) as part of a target-dated fund or other managed fund. The letter also emphasizes that plan participants should not be able to directly access private equity investments. Its likely this letter may serve as a blueprint for the EO that crosses Trumps desk in the near future. Whats private equity? Private equity is an investment in a privately traded company by an accredited investor or group of investors who take on a controlling interest in the organization. Though typically lucrative, private equity investing is often characterized by a long time horizon and a lack of liquidity. Private equity firms often charge high fees and expenses, and they may not disclose conflicts of interest. Lets look at these specific characteristics: Private trading Private equity is an investment class that is not available to the general public. This is unlike shares in publicly traded companies that anyone can purchase on the open market. Accredited investors An individual may be considered an accredited investor if they have earned $200,000 (or $300,000 with a spouse) for each of the past two years, or if they have a net worth of over $1 million excluding their primary residence. This means youre only allowed to invest in private equity if you can be relatively sure you wont be completely wiped out if you make a single bad investment. Controlling interest Typically, private equity investors take a controlling interest in the company and work to actively manage the business in order to increase its value. Illiquidity Private equity investment requires a long time horizon and most private equity funds will impose limits on when an investor can withdraw their funds. These limits will often last years. Fee structure Private equity funds come with fees and expenses that can be confusing, opaque, or just plain undisclosed. Conflicts of interest Private equity firms can and do have interests that conflict with those of their investors and the funds they manage. Though the SEC has proposed stronger rules for Private Fund advisers, and the commission does enforce what it can, investors must remain vigilant for the possibility of conflicts of interest. So whats the problem with private equity? There are some very good reasons why defined-benefit plans have always been closed to private equity. At its best, private equity is an effective tool that can help companies restructure and position themselves for future growth. This is what Dell did in 2013. But too often, private equity functions more like the Bust Out episode of The Sopranos, where Tony drives his friend Daveys sporting goods store into bankruptcy by maxing out debt to purchase inventory the mobsters peddle for a profit. Sears and Toys R Us are two examples of companies that didnt survive their private equity adventures. Those two bankruptcies eliminated 70,000 jobs, and company pension plans were eventually frozen or terminated. Why add private equity to 401k plans? There are $12.2 trillion worth of assets in U.S. defined contribution retirement plans. Private equity would appreciate getting a foothold in an investment sector that has traditionally been cut off from non-accredited investors. Proponents of the idea claim that allowing 401k investors to include private equity in their defined contribution plans will give them the opportunity to enjoy the higher returns that are typically restricted to accredited investors. But detractors worry that private equity is too risky and illiquid an investment class to have in a workplace retirement planwhich is where an employee would take a hardship withdrawal during a tough economic time. Critics like Elizabeth Warren have called private equity predatory and demanded stronger regulations. Why not just ignore it? If investing in private equity isnt your cup of tea, it may seem reasonable to simply put the matter out of your mind. You just won invest in any of the private equity target-dated funds and your 401k will continue chugging along. The only issue with this plan is the fact that opening the door to private equity in our defined contribution plans will also make the employers sponsoring those plans more vulnerable. Under the Employment Retirement Income Security Act (ERISA), employers have a fiduciary responsibility to make sure the investment options in your 401k are prudent and that any fees are not onerous. Plan sponsors have traditionally been leery of private equity in 401k retirement plans because of their illiquidity, complexity, opacity, and high fees, which leaves them open to ERISA lawsuits. Considering the fact that ERISA lawsuits against excessive 401k fees have risen to a near record high in the past year, employers have good reason to be worried. Yes, this does mean that everything is working as planned. Employers are supposed to take fiduciary responsibility for their employees retirement plans, and when they dont, the workers can file ERISA lawsuits against themand win. So far, so good. But the creation of ERISA 50 years ago, including the much-vaunted litigation portion of the law, may have contributed to the decline of pension plans. If it ain’t broke . . . Placing even more complex fiduciary responsibility on the shoulders of employers could have similar unintended consequences that we cant yet see. Average 401k savings rates and balances have recently been at record highs. As pensions have declined, and more Americans are feeling nervous about the future of Social Security, do we really want to open up defined contribution retirement plans to a new class of under-regulated, risky investments? The average retirement investor simply has no need of private equity in their 401k.
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E-Commerce
When it comes to processes that employers, managers, and leaders dread, its likely to be performance management. And unfortunately, according to Gartner research, 71% of CHROs agree that managers are not fulfilling their role when it comes to performance management. And as a result, employees arent getting the type of feedback that they need to perform. These shortcomings ripple beyond individual performance and can affect organizational success. A May 2024 Gartner survey of 1,456 employees found that only 52% believe performance management is helping their organization achieve its business goals. What prevents employees from getting the most out of performance management is likely due to a perception of bias or lack of fairness in the process. Surprisingly, employees are starting to view AI as being less biased than humans when it comes to performance decisions. An October 2024 Gartner survey of nearly 3,500 employees found that 87% of employees think that algorithms could give fairer feedback than their managers right now, and an additional Gartner survey from June 2024 found that 58% of employees believe humans are more biased than AI when it comes to making compensation decisions. Generative AI in performance management Employees are embracing the idea that AI or generative AI (GenAI) can increase, rather than erode, fairness in the workplace. Understandably, a healthy level of skepticism still exists. At Gartner, we found that only 34% of employees agree or strongly agree that if an algorithm provided performance feedback (instead of their manager), the feedback would be fairer. It’s the duty of CHROs to improve the effectiveness and fairness of performance management at their organizations. But if that means integrating GenAI to achieve their goals, they need to take the following steps. Step one: Evaluate the benefits of GenAI against performance management pain points To leverage GenAI to improve performance management, HR leaders need to understand the pain points at their organization. They also need to have an idea of how GenAI capabilities might be useful in addressing them. Data from Gartner employee and manager surveys, as well as interviews with CHROs and heads of talent management, revealed two common complaints about performance management. First, the effort required is too high. Employees and managers complain that the process demands too much of them, is overly complex, and relies on cumbersome technology. Second, many questioned how useful it actually is. Employees and managers shared that performance management was not relevant to how they work, not aligned with business needs, and disengaging and unmotivating. To have a greater understanding of the pain points within their unique organization, CHROs and heads of talent management should ask managers and employees across the organization to provide feedback on their biggest pain points. From there, HR leaders can assess whether GenAI is the right tool to address those issues. For example, if fairness is an issue, leaders can implement GenAI as a tool to evaluate text for bias. If time-spend and disparate technology are an issue, companies can use GenAI to summarize data and generate insights from multiple HR systems. Step two: Gauge readiness for GenAI in performance management Not all workplaces are alike, and some may be more open to the full spectrum of GenAI capabilities than others. Surveys can be a great tool to assess workforce readiness for GenAI in performance management. This way, leaders can ensure that the technology enhances, rather than detracts, from the employee experience. Leaders should combine quantitative survey data with qualitative feedback by equipping managers with tools to get a fuller picture of workforce GenAI readiness. This might mean sharing standardized GenAI statements reflecting the desired performance state with managers. For example, that might mean using GenAI as a way to level bias in performance management, increase efficiency, and employee satisfaction. In addition, question guides can also support managers in gathering candid employee input, such as whether employees are comfortable with GenAI drafting goals or suggesting performance ratings (with human oversight). Managers should collate feedback to assess GenAIs limitations in performance management. Step three: Secure employee trust to boost adoption and satisfaction Trust is a top barrier to AI adoption. This is why building a foundation of trust is important when integrating GenAI in performance management. CHROs and talent management leaders can build employee trust by increasing visibility into decision-making and establishing an open dialogue about GenAI. HR leaders should start by equipping managers and employees with the rationale for how and why the organization is introducing GenAI in performance management. A simple view into the why behind a decision helps employees accept and trust the decision. Employees also need to understand how decisions will directly impact their roles, so they can process, adapt, and move forward in good faith. Lastly, leaders should establish mechanisms for employees to share feedback on GenAI in performance management to build trust and improve processes. These kinds of mechanisms help leaders identify when there is an erosion of trust, so they can rectify it by incorporating more human touch. Effective performance management leads to better organizational performance Improving performance manageent boosts employee engagement and business success. Gartner research shows that when HR aligns performance management with employee and business needs, organizations see higher perceptions of fairness and accuracy. They also see increases in employee performance (40%), engagement (59%), and overall workforce performance (60%). Increasing performance management utility drives better outcomes for everyone. With employees starting to see the potential of GenAI in performance management, now just might be the ideal time to integrate this technology.
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E-Commerce
Outdoor product company Yeti is best known for its coolers, but this summer, it has a surprise hit product that doesn’t having any cooling functionality at all. It’s a tote bag that’s been part of its existing product offering for yearsbut has gone viral on TikTok after taking a page out of the Stanley playbook, with product offerings that are colorful, accessorizable, and collectible. Launched in 2018, the durable, waterproof, $150 Yeti Camino Carryall Tote Bag isn’t new, but now dubbed the hottest mom tote of the summer, it’s taking on a new life as the sort of colorful must-have consumer product we’ve seen previously with the likes of Stanley cups or Trader Joe’s totes. At least one analyst credits the bag’s new level of popularity with a rise in stock price for the company, which reported quarterly sales of $351 million, up 3% from the same period last year. [Photo: Yeti] The bag’s hefty design is at the heart of its appeal. At 18.1 inches by 15.2 inches, the bag is big, “but not too big,” according to Yetis product page. And though it weighs barely more than 3 pounds empty, the tote’s oversize handles were built for carrying a lot at once, including bottles and half-gallon jugs that can be organized with deployable dividers. As its name implies (camino means road in Spanish), it’s tough and designed to be used on the go. “You can carry everything from firewood to kids’ sand tools to water for washing your hands after camping somewhere,” Yeti’s head of marketing, Bill Neff, told Fast Companys Jeff Beer in March. “Then you can hose it out. It became the super versatile piece for us.” The idea behind the Camino was Yeti cofounder Roy Seider’s, but not everyone at the company saw its potential at first. It was Yeti’s second bag product after branching out into the category in 2017, it and became a quick hit. “We didn’t know what it was going to be,” Neff said in March. “We thought it was going to skew female. No one really understood it, except for Roy, but we launched it and it was bananas how fast, for both male and female customers, it became the product that they used for everything.” For a company whose coolers have been called a luxury good for bros, though, the tote has offered an avenue to market specifically to women. Product images and TikTok videos tagged with the bag skew female, while colorways like influencer beige, pink, and cherry blossom cater especially to female tastes. As of this writing, all the fun colors are sold out on Yeti’s website and you can only order the Camino in boring colors: olive or navy. It’s clear the Camino is not just a bag for the outdoorsman anymore. It’s become a bag for moms too, as a heavy-duty, all-purpose utility purse or as a beach or diaper bag for long summer vacations or a quick trip to the park. It’s functional for sure, with room for everything, but like a dude donning North Face in the city, there’s an element of gorpcore in its appeal as an accessory. The ability to customize the bag with patches, charms, or Labubus, plus a rotating, limited-edition seasonal colorways, gives the product an extra edge on TikTok, where newness, exclusivity, and conspicuous consumption reign supreme. Yeti is now doubling down on bags. The company bought the Montana bag brand Mystery Ranch in January, and on its earnings call in May, CEO Matthew Reintjes credited the Camino specifically for helping Yeti’s strong quarter. “Yeti is bringing a unique point of view to this fragmented bag space supported by our strong design, brand and commercial engine,” Reintjes said. “We remain very optimistic about the massive global addressable market we see in front of us across premium bags, packs, and luggage.” Reintjes calls the Camino tote “the sleeper product” in Yeti’s portfolio. “It’s like the Swiss Army knife of bags,” he said in March. It’s more than just its versatility and durability, though, that have proven valuable for the company. Every brand is looking for its Stanley cup moment, and with the Camino tote, Yeti has found in its portfolio a product capable of viral TikTok infamy of its own.
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E-Commerce
Legos newest set is a replica of a Nintendo Game Boy, and its designed to tap into the millennial nostalgia thats ruling the cultural zeitgeist. The 421-piece set is the latest in a series of collaborations between Nintendo and Lego, which have included builds based on the Super Mario, Animal Crossing, and Mario Kart worlds. Currently, the Game Boy is available for preorder at a price point of $60; it will be purchasable online and in stores starting October 1. [Photo: Lego] According to a press release, the collectible is an almost one-to-one replica of the original Game Boy, standing at just over 5.5 inches tall and 3.5 inches wide. It comes complete with a control pad, A and B buttons, a contrast adjustment, and a volume dialessentially, all the elements youd find on the original device. The main drawback is that, tragically, the brick-based Game Boy is not playable. However, it does come with a Game Pak slot and two Game Paks (also made of Legos, of course) based on The Legend of Zelda: Link’s Awakening and Super Mario Land. The Game Paks come with lenticular screensor screens that use light deflection to mimic movementreplicating scenes from the respective games, so you can briefly pretend that its a functioning electronic. Legos Game Boy replica comes as 80s and 90s IP has flourished in pop culture. Movies like Barbie and Twisters, fast-food menu throwbacks, and the return of 90s fashion (like via the long-dead J.Crew catalog) have all brought millennial nostalgia into the limelight. [Photo: Lego] Theres also renewed interest in retro tech aesthetics, even among younger generations who werent around during the products heydays. In 2024, that meant product releases like Anduril founder Palmer Luckeys 90s-esque portable gaming device and a pager by Sega that only sends emojis. So far this year, the Commodore 64 PC has already made a comeback and the iPod Nano got turned into a design object. Now the Game Boy is on sale againif only in Lego form.
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E-Commerce
In a new stadium under construction in Egypt for Cairos Al-Ahly Football Club, the soccer field and more than half the seats are sunken slightly underground. The design is partly a way to meet local height restrictions. But the lower temperature below ground also helps keep the outdoor stadium more comfortable, even in sweltering summer weather. Al-Ahly Stadium in Cairo [Photo: Gensler] It allows us to benefit from natural cooling, says Ryan Sickman, who leads the sports practice at Gensler, the architecture firm behind the design. The stadiums facade, designed for LED displays, is also perforated so breezes can easily flow through. Its one of many ways that architects are designing sports venues for extreme heat as the world gets hotter and it’s becoming more difficult for athletes to playand for fans to watchsafely. In Austin, another Gensler-designed stadium is oriented so that as many fans as possible can sit in the shade during games. To keep the space ventilated, it isn’t enclosed. Instead of typical plastic seats, the designers chose mesh to help keep fans cooler. Q2 Stadium in Austin [Photo: Gensler] In Qatar, a stadium designed for the 2022 World Cup uses a white roof to reflect sunlight. Zaha Hadid Architects, the team that created the design, also shaped the roof to help channel hot air away from the stadium. It can be rolled out like a sail to shade the field or fully enclose the space. Inside, a solar-powered cooling system pumps cool air to each seat while also forming a cool bubble over the playing field. Materials also help. In Las Vegas, engineers at Arup used several different materials in the facade of Allegiant Stadium to keep it cooler inside. A translucent ETFE (ethylene tetrafluoroethylene) roof insulates the space. Black-and-silver coatings use infrared reflective pigments to reflect as much sun as possible. Tinted glass also helps reflect sunlight and reduce glare. Al Janoub Stadium in Doha [Photo: Hufton + Crow] Some approaches take inspiration from older ideas. A technology that circulates water under a field to help keep natural turf healthy, for example, can double as a way to keep the field cooler for players. In Jeddah, Saudi Arabia, the Arup-designed King Abdullah Sports City Stadium uses traditional Islamic screens for shade and ventilation. The cladding is designed to pull cool air in, then let it rise and exit the top of the stadium. On the roof, perforated mesh inserts inspired by bedouin tents let air flow through. Allegiant Stadium in Las Vegas [Photo: Jason O’Rear] Passive techniques like this reduce or sometimes eliminate the need for energy-intensive air-conditioning. Sickman says architects “can use some of the things that maybe we forgot because of the advent of technology and active cooling, and go back to strategies that served the test of time. Still, outdoor stadiums can only go so far. In cities like Cairo, soccer games are already played at night when the temperature is lower. The World Cup in Qatar was moved from summer to winter because of the heat. But as extreme heat waves become more common, it may sometimes be too hot to play even as teams try to adjust their scheduling. A report in the medical journal Lancet found that in 2023 people around the world experienced an average of 50 more days of health-threatening temperaturestimes when it could be dangerous to play sportsthan they would have without climate change.
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E-Commerce
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