Being Thankful

The week of Thanksgiving, I was working on our Rotary project in Antigua, which will be in February 2019. It’s the time of year for reflection, as in, what are we thankful for and I got to thinking about the difference between Antigua, a small, developing country and here (and even less developed, third world countries).

I immediately came up with four items to compare.

  • Family– this is an interesting topic for comparing. We know the statistics state families in the US are not what they used to be, i.e. a lot of single parents. This is an issue in Antigua also although in many cases (extended) family is what keeps people going there. Family and church are very important in Antigua.
  • Basics– are you thankful you don’t even think about the basics? The power is on, the water clean, food may be expensive, but choices abound and are plentiful. And while the roads seem to always be crowded, we do have pretty well-maintained roads (and transit). In Antigua, even the locals don’t drink from the tap, food is even more expensive, there are regular brown-outs, and the roads, to be blunt, stink. Have you seen the Dominos commercial about how they’re fixing potholes? They’d go broke trying that in Antigua.
  • Education– our schools aren’t perfect but there’s a reason we go to Antigua to work in the schools. Ninety percent of the schools pale in comparison to schools around here. The other 10% are private, expensive, and have resources so they aren’t dependent on the Ministry of Education.
  • Project completion– government in the US may be inefficient and costly, we may need massive amounts of infrastructure improvement, but mostly things get done. Our project in Antigua missed 2018 and 2019 is a small-scale project. Why? Because the government took two years and massive amounts of prodding to put the Internet in the schools (they only had to do 10-12 schools to fulfill their obligation to Rotary – let’s not touch the subject of their obligation to their students). There were inter-Ministry squabbles, intra-Ministry bickering, no sense of urgency (island time), etc.

Here’s the thing, finally, no matter what it’s like compared to the US or Europe, the people in Antigua are incredibly happy. The island way of life seems less stressful.

Think about what you have to be thankful for, in business and life.

Elections, Passion, and Justification

As a prelude to the elections there was a story on the morning radio the other day about an elected official either convicted or about to plead guilty on three charges. Voters (supporters) said they’d vote for him anyway because a crooked member of their party was better than anybody from the other party.

While driving between meetings I was listening to a local talk show where the host and a guest sports announcer were justifying the Seahawks signing of a player who pleaded guilty of Insider Trading. They were excited because his suspension ends before the end of the season, so he’ll be back on the field. Never mind he’ll be sentenced to Federal prison in January.

The end justifies the means. I wonder how those voters would feel if a member of the other party was running after being indicted or convicted. Would the announcers feel the same way if a rival team signed a criminal?

I know there are people who feel this way about business; I don’t win if you don’t lose. It crops up occasionally in buy-sell deals. But most of my clients want a fair deal, want the employees treated fairly, and want customers to receive value.

It comes back to the old line, “If you tell the truth you won’t have trouble remembering what you said.” I can sense a good business when the owner tells me his employees get paid at the high end of the scale, turnover is low, or they do fun things like “beer Friday” or monthly BBQs. They want things done right.

“Only the doctor who has the disease really understands it.” Physician William Osler

 

Sometimes You Just Can’t Win

In the Seattle Times October 7, 2018 business section’s, “Speaking of Business” feature (a weekly roundup of quotes from the week’s most popular stories) were a couple examples of the above headline.

“We listened to our critics, thought hard about we wanted to do, and decided we want to lead.” Jeff Bezos on Amazon’s raising it’s starting wage to $15 an hour. Amazon got a lot of praise and then the Seattle City Councils admitted Socialist declared Mr. Bezos evil because he’s still rich. Others jumped on board because the wage increase came at the expense of stock grants, which were eliminated.

“It’s been a little like watching the air going out of a balloon.” Richard Lattanzi, steelworker and mayor of Clairton, PA on the unmet expectations of higher wages and better benefits due to tariffs on steel imports. The workers initially cheered because they felt the tariffs would raise all boats but now feel it’s only raising company profits not wages (correct based on other reports).

Everybody has an agenda. From the shop workers to middle-management to executives and especially the politicians. I don’t think this is different from past eras. One of my first jobs, in high school, was cleaning a warehouse a few evenings a week. I lost the job when the manager had a friend become unemployed and he got to take over the minimum wage, part-time job.

Every decision we make has repercussions, some good and some not so good. Being in business is often like raising kids. You better make sure you think through how others will perceive “what’s in it for me.”

“There are no easy answers, but there are simple answers.” Ronald Reagan

Competition Drives Prices

Every summer we take a road trip. I’ve noticed motel prices going down over the last few years and it seems obvious why they’re doing so – there’s a proliferation of franchise/chain motels everywhere.

In Bozeman, our dog-friendly place sits in the middle of five similar places. Across the highway are five or six “lower-level” motels and in back of our place there’s a development for a two-hotel convention center. The same seems to be true in other places along our route.

So, what’s going on here that we should pay attention to? Here are a few things.

  • Saturation – Too many similar businesses means price competition. Doesn’t matter if it’s motels, sandwich shops, oil change places, or something trendy like Curves used to be. Be unique.
  • Commodity – No differentiation. If you didn’t see the name you’d have a hard time telling one from another. Again, be unique.
  • Low barriers to entry – What’d it take to get into the motel business? Pay your franchise fee, build a building, and away you go. Whether it’s skills, a product, or something else, make it hard for others to duplicate.
  • Little competitive advantage – See above about being a commodity. Other than rewards programs what’s the reason to stay at any particular place? Oh, I got it, price is the reason. Make quality and service, i.e. value, your competitive advantage, not price.

Price shopping – Which brings us to how easy it is to compare prices these days with Expedia, Kayak, Hotels.com, etc. Position yourself so competitive pricing and shopping is not an issue.

Bottom line, if it’s easy to duplicate someone will duplicate it. Be unique.

“It’s better to prepare children than repair them.” Jim Zimmerman

Asking Why – A Great Question

I’m known in my family for constantly asking, “Why?” Others will say something about what they’re going to do, what they want to get, etc. and I’ll ask, Why?

Sometimes I get the answer, “Because.” And no, that’s not a reason why you want to do something.

  • A client told me if he had the money (at the time) he’d like to buy a larger machine. Why? It turns out because he likes big machines, not because the business needed it.
  • Years ago, one of my clients bought a business with way too much inventory. Why? Because the owner loved seeing full racks of stuff (and those full racks turned into cash with better management).
  • An owner had way too many employees. Why? Seems he didn’t want to work too hard, so he didn’t pay attention, and therefore made less money.

A client of mine, in a buy-sell deal, made it a (conscious) point of avoiding the why question by giving the answer in advance. For example, “This information is needed by Friday because (let’s say, to keep the bank on schedule).”

It’s a great simple one-word question to ask about marketing tactics, purchases, hiring, and much more.

“Even the smallest act of service, the simplest act of kindness, is a way to honor those we lost, a way to reclaim that spirit of unity that followed 9/11.”President Barack Obama

 

Control Doesn’t Mean Controlling

“I like being in control. I don’t like to listen to anything from anybody.”

The above is from the owner of a struggling business on the TV show Restaurant Impossible. When my wife and I heard it we immediately hit rewind so we could play it again and transcribe it.

I’m sure there are all kinds of fancy names for this as it’s one of the most common traits of business owners, especially founders. Ironically, in my opinion, the strongest statements about being in control come from owners of business not firing on all cylinders. No wonder there are over 1,000 books on Amazon when searching by “delegation” and over 300,000 when searching by “management.”

The top “blemish” I see in the hundreds of companies I come in contact with every year is a controlling owner who:

  • Has his or her hands in everything
  • Thinks they’re the only person who can do it right
  • Believes delegating is a sign of weakness

I recently visited my friend and past client Keith Jackson, owner of Industrial Revolution. He told me his four-person management team pretty much runs the day-to-day. On a personal note, Jessica has been with me since January 1. I turned over some client-based office work and she’s doing things I don’t know how to do, getting it done faster than I could, and this allows us to grow the business.

Being in control doesn’t mean doing it all. It means making sure it gets done and done right, and that makes the business more valuable.

“Only the educated are free.” Epictetus

It’s Always the Little (Unseen) Things

We had a perplexing problem with one of our garage door openers, as in it wouldn’t close, which usually means the safety beam is out of whack. My friend and I tried all kinds of stuff after trying to move the sensors in case they were out of line.

So I cleaned out the lenses with a wet Q-tip, and it worked. Then it didn’t, cleaned it again, it works, doesn’t work, repeat, etc. Finally, I took off one of the sensors to clean it and voila, there’s some stuff in the lens that looks like a little caterpillar cocoon. The Q-tip pushed it aside, but it would fall back into place, blocking the lens. Once removed, no problems.

It’s often the unseen things that get in the way.

  • One of my clients had a professional evaluation of the business (not a valuation but an operational assessment). One of the items in the report was, “the employees have an informal union,” meaning they were setting their own work polices, rules, etc.
  • A company thought their top customer (25%) was in love with them. In fact, it was the opposite. They were interviewing other providers and didn’t even ask for a quote from their existing vendor.
  • A rep firm did 80% of their business with one manufacturer, they switched firms, he almost went bankrupt, we turned it around, and guess what? Ten or so years later the same thing happened (although closer to a 50% manufacturer). Blinded by success he couldn’t see the risk.

There are too many techniques (to go over here) to see most of what has been unseen. It just takes the effort to peek behind the curtain.

“You’ve got to tell the world how to treat you. If the world tells you how you are going to be treated, you are in trouble.” James Baldwin

 

Routines Rule

It’s football season and one of the lessons we can all learn from football teams is the importance of routines. Once the preseason games start in the NFL the coaches get their players into their seven-day routine, which is includes an off-day, full contact day, planning day, game day, recovery day, etc.

I remember going to a professional group meeting many, many years ago. One of the panelists said her policy (her routine) was to do all her marketing on Mondays. I thought it stupid, but my friend Jerry latched on to this. At least he was blocking out time for it (he wasn’t the most organized of people).

Routines can, and should, cover many areas.

  • If you do creative work, what is the best time of day or day of week to do it?
  • If it’s keeping a team focused and on-point, when are those meetings and what do you cover?
  • Salespeople need to plan for phone calls, emails, in-person meetings, and have a schedule to get these things accomplished.

I have a reminder in my system for 7:30 every morning that is simply one word – reflection. To me it means think about what happened, what I’m going to get done that day, and look at the big picture. It’s a routine to get focused.

“The future has arrived – it’s just not evenly distributed yet.” William Gibson