What Will People Hoard Next?

We must be in the minority because we eat a lot of fresh fruit and vegetables. Now we’re eating more than before the virus crisis and I’m reading that farmers are not able to sell their crops because so many people are buying primarily meat and shelf stable food (cans, dried, frozen). Just look at the (low) price of strawberries over the last couple of weeks.

More proof, Costco posts a list of items they are out of and last week it included milk and eggs (they had some but what they had would be gone by early afternoon the day we were there), and fresh chicken. The produce section was overflowing. 

On April 27 the Wall Street Journal had an article titled, “Farmers Forced to Destroy Their Crops.” This after an article the week before about farmers dumping milk and eggs. It’s not that there’s not enough food, it’s what people are buying and how it’s packaged. If it’s packaged for food service distributors the packaging won’t work in the grocery stores.

On April 28 the WSJ had a headline, “Overcrowded Barns Hamper Pork Industry.” There’s a surplus of hogs as well as cows and chickens given the virus outbreak in meat packing plants. Tyson releases a notice about upcoming poultry shortages, stores can’t get their usual supply, and people hoard what is in the store.

I’m guessing they don’t teach about this in supply chain classes. Of course, they don’t teach about common sense and the lack of it is what’s fueling the fire (hoarding). So, will the produce aisles be hit hard next when there’s limited meat? We’ll have to wait and see.

“The secret to be successful with a child is to not be its parent.” Mell Lazarus

Random Thoughts Part 3 on the Virus Crisis

I get more feedback on my random thoughts memos than any four to six weeks combined, so here are some more.

Politicians look very well groomed, hair salons and barber shops are closed, I really need a haircut, so does anybody know where the governor is getting his hair cut?

“Non-essential” businesses are essential to the business owner and employees, aren’t they?

Did Joe Biden paint himself into a corner by saying he would pick a female running mate just before Andrew Cuomo became a star? 

What happens if government opens up the economy and workers are too scared to go back to their jobs? And/or the customers are too scared to go and buy?

We need a middle ground between Trump not caring if people get sick and (WA) Governor Inslee not caring about business owners and their employees.

And speaking of politicians, one of the best lines I’ve seen or heard came from a State rep in Wisconsin who said, why can we go to Walmart and buy flowers, but we can’t get flowers at the local florist?

There are almost no autoresponder replies to emails these days, other than from bankers telling us how busy they are with the paycheck protection program (and it’s true).

It’s easier to stay at home, especially on sunny days, if you’re an allergy sufferer and the pollen counts are at the top of the charts.

And speaking of allergies, what is the point of an allergy eyedrop coming in a .085 fluid ounce bottle (that’s about 1/7 of a teaspoon). The plastic must cost more than the solution.

I get a kick out of people who cross the street when they see you walking towards them. The mist we create when breathing doesn’t carry nearly that far (I’m guessing less than the six feet we’re told to be separated).

There’s a lot of well-deserved praise for health care workers, grocery store employees, and the same praise should be given to those in the supply chains that provide the products to the stores and medical facilities.

There’s a lot of creative comedy out there. A friend sent me a picture of an enraged Al Bundy with the caption, “Just to be clear, we’ve all agreed that liquor stores are “essential” and schools are not!”

There’s a huge and growing need for social/people interaction and Zoom Happy Hours are here to save the day. I think they’ll continue although not as frequently. 

Realize the officials in charge of the virus and economy in Washington State are the same genre of people who built the West Seattle bridge that is in danger of collapsing (on its own) about halfway through its expected life.

“If you make up your mind not to be happy, there’s no reason why you shouldn’t have a fairly good time.” Edith Wharton

One Bad Apple

In college basketball there are players known as being, “one-and-done,” as in playing one year for the college team and then going off to the NBA (because of rules preventing them from going to the NBA straight out of high school).

As a casual fan, I’ve come to appreciate the job certain coaches do with these players (aka prima donnas), not to mention their parents. Most of these players don’t want to be in college, it’s only a steppingstone, and often they tend to be culture disrupters. This appreciation comes from seeing all the other teams where these one-and-done players cause the team to underperform.

It’s just like in business, isn’t it? You strive to build a culture for growth, profits, advancement, and an enjoyable workplace and yet one person can damage, if not destroy, this. In an owner group I’m in I’ve heard about employees who:

  • Refuse to cooperate with others, it’s their way or no way.
  • Exhibit inappropriate behavior, sexist (sexual) in nature.
  • Bully co-workers.
  • Leverage special-class status (threatening that any action towards the employee would result in a legal action based on said status).

The above and other situations are why there’s constant interest from owners and managers on culture, employee relationships, managing all the HR regulations, etc. It’s a balancing act whether you manage single digits of people or hundreds. Unfortunately, there’s no easy, quick-fix solution; it takes patience and skill.

“Anything can happen, but it usually doesn’t.” (Humorist) Robert Benchley 

Your Business is Really a Community

I wrote this in Antigua, West Indies on another Rotary service project installing computers and Wi-Fi networks in schools, training teachers how to teach more effectively, with and without technology, and setting up our eighth sewing center.

As we were organizing the latest sewing center it really hit me how big community is on the island. While US cities from New York, to Seattle, to many others have neighborhoods and those neighborhoods have organizations, in Antigua it just seems they are tighter.

Main reasons for this are many people don’t have cars, they often stay in the area they were born, and so very much of their lives center around church (many, many types of churches, most of them small given the lack of mobility). They help each other on a regular basis. Ladies we would not consider to be “well off” sew clothes for those less fortunate because they care.

Think about this in regard to your business (or, for advisors, your client’s businesses). Community is like teams within a business. Most business buyers I meet tell me they are good at team building. Given a business is its people, both employees and customers, being able to bring employees together for a common goal is incredibly important. 

I recently wrote about our most recent Getting the Deal Done Breakfast Conference and guest speaker Bob Donegan, president of Ivar’s. Ivar’s has employee turnover less than 1/3 the industry average. Why? Because they value their people, give them advancement opportunities, and decision-making authority, especially if there’s an unhappy customer (from management down to maintenance people they can offer unhappy customers remediation). 

In a recent meeting with a roomful of business owners the following was asked, by an owner looking to buy another company, “What do I do first after closing?” The common answer was, talk to your people, ask them what they would do to grow the business, and, above all, listen. Good advice whether after an acquisition or any other time.

“Man’s character is his life.” Heraclitus

A Great Team Equals Success

We’re in Antigua, West Indies, on our Rotary project, working in the schools. Over the course of the trip I’ve had 12 meetings (in seven business days). They’ve included:

  • Government – meeting the acting Prime Minister, the Board of Education, and the Director of Education (really the COO of the school system), the Minister of Information and Technology, and the Director of Education.
  • Funding – a (great) meeting with our top non-Rotary funding source.
  • Media – appearing on Good Morning Antigua and a morning radio show.
  • Rotary – attending the Rotary Club of Antigua’s meeting.
  • And a few others.

This project is like business, there are partnerships everywhere. In business you have partnerships with customers, employees, suppliers, advisors, and more. In addition to the above Rotary, funding, and government partnerships my Rotary club also partnered with:

  • The Bellevue School District’s technology department, to provide the people to install computers and Wi-Fi networks.
  • Our trainer, who we hire to instruct the teachers on how to more effectively reach their students using technology (lesson plans, exercises, interactive, etc.).

Just like a business, we couldn’t do it in a vacuum. We need all of the above. And the result has been we’ve had an extremely successful trip, probably our most productive.

“We learn from history that we do not learn from history.” Georg W.F. Hagel

More Random Thoughts on Our Crisis

I’ve had a lot of positive comments about my random thoughts format during the crisis, so here are some more.

Every day I get closer to having my wife get the clippers out and give me a buzz cut. I needed a haircut three weeks ago, was debating if it was safe to be in a shop, and then the lockdown.

I’ve seen more than enough emails with links to all the disaster relief programs. I’ll bet I got 20 or more.

I find it really beneficial to not have news radio on during the day because all they talk about is virus related, and not much is new. I can get enough in short bursts in a lot less time.

We walk our dogs almost every day and boy are there a lot of people out walking we’ve never seen walking before. And, on a walking meeting with my friend Pete McDowell we ran into a couple who saw us coming, moved about 25 feet away, and gave us a dirty look for being on the same path they were on.

A lot of helping going on. Just in our family, my wife went to the store for our 85-year-old neighbor. Jessica and she are sewing masks for Evergreen Hospital. Tomorrow I’ll be helping deliver 300 meals the Bellevue Breakfast Rotary Club is buying from Tutta Bella for Overlake Hospital (when we’re done, I’m guessing we’ll provide at least 3,000 meals for health care workers). My younger daughter gave an elderly man at the store two extra masks she has (the store was out of them). I know this is happening in many families.

There’s sure a lot of creativity going into funny videos about the virus. A friend even sent me a YouTube link for a German one titled, “Scheiss Corona” sung to the tune of My Sharona. 

On a serious note, I wrote my State legislator and asked why politics crept into the shutdown policies (I know the answers and I’m not making judgments here). Why was Sound Transit allowed to work for a few weeks, but home remodelers can’t? Rotator cuff and joint replacements for people in pain are out but abortions are essential? Why are pot shops open but gun ranges aren’t? I think it healthier to shoot off a few rounds to relieve stress than get high.

A lot more of us are getting better at Zoom, GoToMeeting, Teams, and other video conferencing services.

People are going to get sick of working from home a lot faster than many “experts” think they will.

Finally, I get asked all the time about when I think the economy will bounce back. Most people are optimistic because we’ve bounced back fast before. Then I see Tom Douglas, Bill Gates, and others writing about how they think it will be a long road to full recovery. I’m guessing it will be somewhere in the middle of the timeline, but really have no idea. I hope the optimistic crowd is correct.

When the Employees Steer the Ship

A company Jessica and I have been helping has a dependency problem, which is not uncommon in small businesses. Unlike most, it’s not the owner and it’s not a customer concentration issue. It’s an employee, specifically the (former) operations manager.

I should say “almost former” because she’s ingrained herself so deep into the operations that she’s still working part-time even after she moved out of state. There are a few things only she can do, and they’re important tasks, some critically important like pricing.

You may ask, “How does this happen?” Just look at some of the causes (at this company and in general):

  • The employee takes over, is controlling, and won’t delegate (just like a founder/owner). This is what happened in my above example.
  • The owner is lazy and may think he’s delegating but he’s really offloading. 
  • The technical aspects of the business are not the owner’s expertise (and don’t often need to be) but the company isn’t large enough to have depth.
  • There’s not cross-training, no team building, and maybe not training in general.

It doesn’t take much effort to have this happen and I can speak from personal experience. Jessica’s been off for a couple days, there are some things I have to do using Salesforce, on which she’s much more accomplished than me, I got some done, and needed to speak with her before finishing.

When things are going well it’s no big deal. But if the employee leaves, gets sick, or is in an accident there’s a problem. It’s just like exit planning. Most owners don’t think of preparing the business for sale or they ignore it until it’s time to sell and then it’s too late. An employee dependency is something that can usually be prevented (or cured) if you pay attention to it.

“Children aren’t happy with nothing to ignore. And that’s what parents are for.” Ogden Nash

There’s a Lot Going On in Today’s World

Just some thoughts given our current situation. Disclaimer: You will probably find something to like and dislike based on your political preferences.

  • Mother Nature, the Hand of God, or whatever you want to call it can bring billions of people to their knees pretty quickly.
  • A few weeks ago I was in the “it’s not that serious” camp. Then I started seeing the hockey stick like charts of how this exploded in other countries. Amazing how South Korea handled it, versus Italy, because South Korea took action and took it quickly.
  • There is ample evidence government officials (of both parties) knew this could happen and took no preventative action. Bill Gates repeatedly warned of this and the National Institute of Health ran a model that showed we weren’t prepared.
  • The response from government should scare you about what it would be like if the government ran all health care (for some personal insights into the testing fiasco read Peggy Noonan’s WSJ column from March 21 – she describes her experience with the maze of getting tested and then getting results)
  • On March 16 we decided that to get away from news we’d watch comedy, starting with some Monty Python videos. It was a week of mostly funny stuff, which sure lightens the mood.
  • This could be much worse than the financial crisis of 10-12 years ago, especially for small businesses.  
  • Will $1,000 or so per person make a meaningful difference?
  • Bankers are contacting their loan customers, worried about how this is affecting them (and their ability to repay).
  • A trillion-dollar stimulus package on top of trillion-dollar deficits, wow! FYI, I wrote the White House a couple years ago complaining about these huge deficits during an economic boom.
  • It would be nice if our president would act like he actually cares.
  • On the local (Washington) front, our governor spent all last week lecturing us like a primary school teacher lectures her little kids. And to no avail as the headlines have been about people ignoring his warnings and hanging out all weekend in groups in parks and on beaches.
  • There’s going to be pent up demand when this calms down and let’s hope it quickly brings back the jobs being lost, especially the lower wage jobs.
  • I think and hope it will spur activity in the buy-sell market. I’m guessing there will be a lot of owners who will say, “I’m done, it’s time to get out.”
  • The sports page and sports networks don’t have much going on, do they? 

All in all, pretty scary stuff we’re going through. I have no doubt we’ll make it through all of this. From a business perspective, now is the time to be active. Waiting this out in the equivalent of a bunker will delay your (business) recovery.

Business Ownership with No Control

The January 21, 2020 Wall Street Journal had an article titled, “Sears Woes Overwhelm Spun-Off Hardware Stores.” It’s common knowledge Sears is in trouble, big trouble. What this article points out is independently owned Sears Hometown and Outlet Stores are in dire straits because Sears is, to put it bluntly, screwing them.

The stores don’t own the inventory, Sears owns it and they pay the store owners a commission. But Sears is not able to provide goods to sell due to their financial problems. And, they control the prices the stores can sell things for, which are higher prices than on the Sears website.

Arrangements like the above are commonplace. You think you’re in business for yourself but you’re a quasi-businessowner. It may be what you can sell, what you can charge, where you can market yourself, etc. No matter what, if the restrictions stifle what you can do, you should reconsider.

People who want to be in business, versus working for someone else, generally want control, independence, the ability to be creative, and more income (and equity). Pretty much in the above order – money is rarely mentioned first, second, or third.

If you’re thinking of owning a business, know what you want from the business and be very careful if you’re not in full control.

“There is always a well-known solution to every human problem – neat, plausible, and wrong.” H.L Mencken

Creativity in a Crisis

Once again, the phrase, “We live in interesting times” is being used.  There’s nothing but news about the coronavirus and at the same time marketing creativity is starting to flow. 

  • The Catering Company in Kirkland is offering ready-to-heat meal packages with reduced rates, no delivery charges, and emphasizing their food safety protocols.
  • Precor is running ads promoting the benefits of working out at home in the “clean, fresh air.” With many people scared to go anywhere, including the gym, they’re hitting a raw nerve their potential customers have.
  • An HVAC company is extolling the virtues of an air scrubber. Whether it works anywhere close to airplane filtration systems (hospital quality, removing 99.9% of contaminants) it sure sounds good. 
  • I received an email from HubStaff informing me their system helps track the accountability of employees working from home including automatic screenshots, website activity, and activity level based on keyboard and mouse usage. Given and owner told me she feels her working-at-home people get done about 70% compared to what they do in the office I’m sure there will be interest for this type of tracking software.
  • Pagliacci Pizza is marketing touch free pizza delivery. Order online, leave a tip online, and get it delivered at your door with no person-to-person contact.

To me the calm and quiet feels like Christmas and New Year’s with one exception. There still seems to be activity between business buyers and sellers. And, historically an economic slowdown has meant a vibrant buy-sell market as individual buyers fear losing their job (or they’ve lost it), owners say, “Not again, it’s time to retire,” and other owners see opportunity to grow (by acquisition).

“Nothing dates harder and faster and more strangely than the future.” (Author) Neil Galman