We haven't been hearing much about "Mad Cow Disease" in the U.S. lately, although the debate about unsafe meat packing plants and lack of USDA supervision rages on. Most Americans are probably worried about more immediate (or at least, newer) problems, such as $4+ per gallon gasoline ($5.25 per gallon of diesel, at one station I passed this morning!) or whether a person of African ancestry will ever be President of the United States if he doesn't wear the correct lapel pin, or even who's going to win on this season of "So You Think You Can Dance." Unless you are actually employed by a company in the meat packing, cattle ranching or food wholesaling industries, you're probably not thinking about "Mad Cow" anymore -- although you may be cooking your meat a little more thoroughly than you used to. Unfortunately, the same can not be said for all consumers of U.S. beef products...
South Korea had actually enacted a complete ban on U.S. meat products after the 2003 "outbreak" was detected -- although there is some justification in asking if three detected cases really constitutes an outbreak. The ban was lifted briefly last year, but quickly reimposed after bones and bone fragments (prohibited under the trade agreement) were found in some shipments. Then, earlier this year, South Korea elected a new, highly pro-U.S.A. President, and suddenly everything is fine again and the shipments of American beef products can resume. Only, it seems that the Korean public doesn't see it that way...
It turns out that the average South Korean is much more afraid of a horrible, fatal (if relatively rare) brain disease than they are of having a negative impact on the U.S. beef industry. South Korea was, prior to 2003, the third largest export market for American Beef, and it's hard to imagine that losing all of those sales has been at all good for the meat packing industry (already being hit hard by increases in fuel costs, a weak economy and lower consumer spending in the U.S., the resurgence of Spam as a main dish alternative and so on). In fact, if the public outcry is any indicator, consumers in South Korea are much less willing to take chances with the safety of their food supply than American or British shoppers, and the fact that the renewal of American beef imports is being seen as a pro-American politician caving in to pressure from Washington really ISN'T helping...
It's another really good example of how the global economy affects you, whether you like it or not. In point of fact, even if you are not employed by any company associated with beef production in the U.S., this issue will still have some impact on your existence, at least in the sense that another industry experiencing poor sales will contribute to the ongoing problems with the U.S. economy. The international tension doesn't help, either; the last thing we need is more countries where the people resent America and try to avoid buying the few exports we still have. The combination could easily lead to even more unemployment, an even worse trade imbalance with South Korea, and additional hits to an economy that is already lurching toward disaster...
Now I'm not suggesting that anyone reading these posts would ever do anything as stupid as engaging in unsafe business practices that allow a frightening disease to cross over from cattle into human beings, or anything as corrupt and evil as maintaining such a practice (and even bribing government inspectors trying to prevent it) in the face of incalcuble risks to both human life and safety and to our country's international reputation. I'm not even suggesting that anyone reading these words would run for public office, become a Lame Duck, and then maintain diplomatic policies that would place foreign consumers at risk while trashing our international relations, all to make a quick buck and curry favor with powerful political allies...
I am saying that what you don't know CAN hurt you. And if you aren't already reading the International Business news, you should probably consider starting...
Saturday, May 31, 2008
Friday, May 30, 2008
Lay It On The Line
In addition to the Dean of Extension and the Mayor of Long Beach (and my boss and his counterparts), the opening session of our Green Conference included remarks by two leaders in the field of conservation and sustainable business: Ed Begley Jr. and Burton Hamner. When these guys talk, you ought to listen -- and I'm pleased to say that just about everyone attending the conference did, including the aforementioned dignitaries...
Mr. Begley probably doesn't need much introduction; he's a veteran actor who has been working in Hollywood for over four decades now (his IMdB entry has nearly 300 credits running from 1967 to present) and has been closely associated with the environmental movement for years now. What most people may not realize (I didn't until he explained it to us) is that Mr. Begley has been involved with environmental causes for nearly as long as he has been an actor. It all began in the early 1970s with the effort to improve air quality in the Los Angeles Basin, and a small electric car that Ed purchased because it was cheap AND green at the same time. Still largely unknown at the time, Ed needed an inexpensive means of transportation, and quickly discovered that it cost far less to charge up the car's batteries than it did to purchase gasoline. Using the savings from this vehicle, he then invested in a solar hot water system, and then used the savings from that to purchase other alternative power products...
Mr. Begley's point, which I think is very well taken, is that it took him decades to achieve the unusually "green" lifestyle that eventually got him his own show on cable; that he could not possibly have afforded the infrastructure to switch over all at once, but by finding "green" measures that were both environmentally responsible and lower in cost, he was able to use each step to build for the next one. Similarly, it would be extremely difficult for any city, state or nation to switch over to a completely "green" way of life all at once, but given time and the proper commitment, change IS possible, including some very large scale change...
In business, this is usually called "incremental change" and the improvement in profitability or net gains is called an "incremental increase" in funds. The idea is that while a few dollars may not matter one way or the other, doing something that saves (or makes) the company a few dollars millions of times every year will start to add up after awhile...
Burton Hamner isn't a celebrity in the same sense, although regular readers of this space will recall that I was once in partnership with his younger brother. Burt has been working as a management consultant, specifically in the field of sustainable business solutions, for nearly twenty years now, and he has helped companies and governments all over the world to become more efficient, less wasteful, and more environmentally responsible, while at the same time eliminating costly waste and improving profitability. I doubt if Burt has ever had a "warm and fuzzy" thought in his life; he's generally all business, and you could tell the crowd appreciated that...
Burt's address was about how sustainable business is reported on a company's financial statements -- and how much of the time, it isn't. Much of the time, the only information the CEO (and the Board of Directors) will ever see is the formal reporting, and therefore if sustainable business projects that increase profits and/or decrease waste are not reflected on those reports, senior personnel may never become aware of them, or the benefit being realized by the company. By the same token, the financial reports are one of the best places to look for waste and inefficiency in the first place. Burt gave us the example of a company that was paying for six times as much waste disposal service as they actually needed, and the counterpart example of a company that was paying to have tens of thousands of dollars worth of salable resources hauled away as waste...
In both cases, our speakers were urging the audience to stop avoiding the issue because looking for incremental ways to save natural resources and/or reading financial reports is difficult, and instead to start looking at the opportunities for change that are right there in front of them. Which, coincidentally, is what I'm urging all of you to do right now...
Mr. Begley probably doesn't need much introduction; he's a veteran actor who has been working in Hollywood for over four decades now (his IMdB entry has nearly 300 credits running from 1967 to present) and has been closely associated with the environmental movement for years now. What most people may not realize (I didn't until he explained it to us) is that Mr. Begley has been involved with environmental causes for nearly as long as he has been an actor. It all began in the early 1970s with the effort to improve air quality in the Los Angeles Basin, and a small electric car that Ed purchased because it was cheap AND green at the same time. Still largely unknown at the time, Ed needed an inexpensive means of transportation, and quickly discovered that it cost far less to charge up the car's batteries than it did to purchase gasoline. Using the savings from this vehicle, he then invested in a solar hot water system, and then used the savings from that to purchase other alternative power products...
Mr. Begley's point, which I think is very well taken, is that it took him decades to achieve the unusually "green" lifestyle that eventually got him his own show on cable; that he could not possibly have afforded the infrastructure to switch over all at once, but by finding "green" measures that were both environmentally responsible and lower in cost, he was able to use each step to build for the next one. Similarly, it would be extremely difficult for any city, state or nation to switch over to a completely "green" way of life all at once, but given time and the proper commitment, change IS possible, including some very large scale change...
In business, this is usually called "incremental change" and the improvement in profitability or net gains is called an "incremental increase" in funds. The idea is that while a few dollars may not matter one way or the other, doing something that saves (or makes) the company a few dollars millions of times every year will start to add up after awhile...
Burton Hamner isn't a celebrity in the same sense, although regular readers of this space will recall that I was once in partnership with his younger brother. Burt has been working as a management consultant, specifically in the field of sustainable business solutions, for nearly twenty years now, and he has helped companies and governments all over the world to become more efficient, less wasteful, and more environmentally responsible, while at the same time eliminating costly waste and improving profitability. I doubt if Burt has ever had a "warm and fuzzy" thought in his life; he's generally all business, and you could tell the crowd appreciated that...
Burt's address was about how sustainable business is reported on a company's financial statements -- and how much of the time, it isn't. Much of the time, the only information the CEO (and the Board of Directors) will ever see is the formal reporting, and therefore if sustainable business projects that increase profits and/or decrease waste are not reflected on those reports, senior personnel may never become aware of them, or the benefit being realized by the company. By the same token, the financial reports are one of the best places to look for waste and inefficiency in the first place. Burt gave us the example of a company that was paying for six times as much waste disposal service as they actually needed, and the counterpart example of a company that was paying to have tens of thousands of dollars worth of salable resources hauled away as waste...
In both cases, our speakers were urging the audience to stop avoiding the issue because looking for incremental ways to save natural resources and/or reading financial reports is difficult, and instead to start looking at the opportunities for change that are right there in front of them. Which, coincidentally, is what I'm urging all of you to do right now...
Thursday, May 29, 2008
Follow the Sun
All right; this isn't actually a post about the Green Conference; it's more of a follow-up. But sometimes that's the way it goes for a blogger; you're all set to start blogging away about some nice event you attended last Friday and up pops a news story that ties directly into your subject matter, and off you go...
There's a speculative piece on the MSN Money pages about solar power, and how more large companies are becoming interested in this most renewable of resources. It seems that J.P. Morgan and Wells Fargo are teaming up to produce solar power plants; Chevron and Google are funding research and seeking to acquire the smaller players in the field; even investment bankers are getting into the act, buying up windy land for wind turbine farms and sunny land for solar plants...
For decades the primary barrier to solar power as a viable means of producing power commercially, at least from a business standpoint, has been the cost of building the power plants. Simple thermal systems, like the solar hot-water heater systems common in Southern California, are relatively easy (and cheap) to construct, but using solar thermal systems to heat steam and power turbines has never paid off, and the photoelectric cells needed to convert sunlight directly into electricity have been expensive and inefficient. The technology isn't new (it's been around since at least the 1960s), but it serves no purpose to generate a kilowatt-hour for $1 using solar power when the local power company can generate the same amount of electricity with 25 cents worth of oil (or a penny's worth of coal)...
With the price of oil doubling and re-doubling over the past few years, the economics of the situation are changing. As the cost of fossil fuels rises, the cost of solar power is becoming more competitive, and the idea of having a power plant that doesn't require expensive fuel (even if it cost more to build) is becoming more attractive. If the demand for oil continues to rise at a geometric rate while the supply rises only at an arithmetic rate (or even begins to decline), then solar, wind and geothermal energy may eventually become more cost effective than the older power generation systems. And if that happens, all of the same companies are going to want have controlling interests in these new sources of billable, consumer electricity...
Of course, there are other new technologies coming that will probably compete with solar power plants. Hydrogen fuel-cell technology has been around almost as long as the photo-electric solar power systems, and the folks at American Honda tell me they are only a year or two away from releasing the first fuel-cell powered cars for use in North America; they say they've also got the "gas station" problem worked out, although they won't tell me what the solution they've come up with is, or when they're going to start setting up locations where you can buy the hydrogen as fuel. At the same time, they're also working on several "clean coal" technologies (which might make an excellent stop-gap until the truly "renewable" power sources are ready), including one that would produce a liquid fuel that you could use to power cars...
Needless to say, none of these companies are working on any these ideas out of the goodness of their little black corporate hearts; they want to become the next OPEC (or at least the next Standard Oil) and rake in the same kind of outrageous profits the big oil companies are making these days. That this might also result in a higher standard of living, a cleaner environment, and a better way of life for everybody, not just those in industrialized and oil-producing countries, is just an added benefit...
There's a speculative piece on the MSN Money pages about solar power, and how more large companies are becoming interested in this most renewable of resources. It seems that J.P. Morgan and Wells Fargo are teaming up to produce solar power plants; Chevron and Google are funding research and seeking to acquire the smaller players in the field; even investment bankers are getting into the act, buying up windy land for wind turbine farms and sunny land for solar plants...
For decades the primary barrier to solar power as a viable means of producing power commercially, at least from a business standpoint, has been the cost of building the power plants. Simple thermal systems, like the solar hot-water heater systems common in Southern California, are relatively easy (and cheap) to construct, but using solar thermal systems to heat steam and power turbines has never paid off, and the photoelectric cells needed to convert sunlight directly into electricity have been expensive and inefficient. The technology isn't new (it's been around since at least the 1960s), but it serves no purpose to generate a kilowatt-hour for $1 using solar power when the local power company can generate the same amount of electricity with 25 cents worth of oil (or a penny's worth of coal)...
With the price of oil doubling and re-doubling over the past few years, the economics of the situation are changing. As the cost of fossil fuels rises, the cost of solar power is becoming more competitive, and the idea of having a power plant that doesn't require expensive fuel (even if it cost more to build) is becoming more attractive. If the demand for oil continues to rise at a geometric rate while the supply rises only at an arithmetic rate (or even begins to decline), then solar, wind and geothermal energy may eventually become more cost effective than the older power generation systems. And if that happens, all of the same companies are going to want have controlling interests in these new sources of billable, consumer electricity...
Of course, there are other new technologies coming that will probably compete with solar power plants. Hydrogen fuel-cell technology has been around almost as long as the photo-electric solar power systems, and the folks at American Honda tell me they are only a year or two away from releasing the first fuel-cell powered cars for use in North America; they say they've also got the "gas station" problem worked out, although they won't tell me what the solution they've come up with is, or when they're going to start setting up locations where you can buy the hydrogen as fuel. At the same time, they're also working on several "clean coal" technologies (which might make an excellent stop-gap until the truly "renewable" power sources are ready), including one that would produce a liquid fuel that you could use to power cars...
Needless to say, none of these companies are working on any these ideas out of the goodness of their little black corporate hearts; they want to become the next OPEC (or at least the next Standard Oil) and rake in the same kind of outrageous profits the big oil companies are making these days. That this might also result in a higher standard of living, a cleaner environment, and a better way of life for everybody, not just those in industrialized and oil-producing countries, is just an added benefit...
Wednesday, May 28, 2008
Change The World?
"So why are you having another Green conference?" somebody asked me a couple of weeks ago. "By this point, anybody who believes in conservation probably already knows about it, and people who don't believe in it aren't going to listen anyway. What good is hugging an bunch of trees and telling everybody else to get out there and hug one going to do?" The same person also said some much more cutting things about having the conference on the Friday before Memorial day, charging $395 per person to attend it, charging extra for the tour of Long Beach Harbor, and so on, but their basic thrust was what good is it going to do if we all get together and feel good about ourselves if the rest of the world is never going to change?
I bring this up because that question lies at the heart of the decision to have a Green conference in the first place, as well as the decision every person attending made to give up their time (and money) and go to Long Beach in the first place. After all, every year on Earth Day (and usually a few other times as well) all of the so-called "Tree Huggers" and "Greens" get together and talk about how wonderful it would be if everyone in the world was living in harmony with nature, leaving no carbon footprint and creating no waste, greenhouse gas, or any other impact in the environment, but that doesn't seem to be lowering the number of giant SUVs on the road, the number of giant "McMansions" being built, or the amount of oil, coal, gas or wood being collected and burned...
The rather sad fact is that no amount of warm, fuzzy activity is going to amount anything. We can all get together, all 6 billion plus of us, and sit in a circle and sing songs about helping the planet get healthier, and it won't make a bit of difference -- unless we actually DO SOMETHING other than sitting around and singing. Showing people how they can make more money doing something in an environmentally responsible manner; demonstrating how throwing things away costs money and wastes things you spent money on, whereas recycling things can make you money; telling people about a better way and showing them ways to be more successful by doing it -- that WILL change world for the better...
Don't get me wrong; I'm all for idealism, sincerity and commitment to the cause. It's just that I like results a whole lot more. I'm not sure what the long-term results are going to be from our day at the Westin in Long Beach; all I know is that if there is ever going to be meaningful change in our world, it will not come at the expense of the people who live here. Telling them to give up their homes, their jobs, and their way of life in order to support an abstraction like the general health of the planet really is the sort of fuzzy-headed thinking the arch-conservatives always said it was. Telling them to make more money while saving on health costs, living longer, and enjoying the world more... Yeah, that might work...
Over the next few weeks I'm going to post a few ideas that came out of the Green conference last week; ways that your company might be able to use to make more money, waste fewer resources, improve community relations, and pay fewer fines. After that, maybe we can all sit in a circle and sing for a while, if anyone still wants to...
I bring this up because that question lies at the heart of the decision to have a Green conference in the first place, as well as the decision every person attending made to give up their time (and money) and go to Long Beach in the first place. After all, every year on Earth Day (and usually a few other times as well) all of the so-called "Tree Huggers" and "Greens" get together and talk about how wonderful it would be if everyone in the world was living in harmony with nature, leaving no carbon footprint and creating no waste, greenhouse gas, or any other impact in the environment, but that doesn't seem to be lowering the number of giant SUVs on the road, the number of giant "McMansions" being built, or the amount of oil, coal, gas or wood being collected and burned...
The rather sad fact is that no amount of warm, fuzzy activity is going to amount anything. We can all get together, all 6 billion plus of us, and sit in a circle and sing songs about helping the planet get healthier, and it won't make a bit of difference -- unless we actually DO SOMETHING other than sitting around and singing. Showing people how they can make more money doing something in an environmentally responsible manner; demonstrating how throwing things away costs money and wastes things you spent money on, whereas recycling things can make you money; telling people about a better way and showing them ways to be more successful by doing it -- that WILL change world for the better...
Don't get me wrong; I'm all for idealism, sincerity and commitment to the cause. It's just that I like results a whole lot more. I'm not sure what the long-term results are going to be from our day at the Westin in Long Beach; all I know is that if there is ever going to be meaningful change in our world, it will not come at the expense of the people who live here. Telling them to give up their homes, their jobs, and their way of life in order to support an abstraction like the general health of the planet really is the sort of fuzzy-headed thinking the arch-conservatives always said it was. Telling them to make more money while saving on health costs, living longer, and enjoying the world more... Yeah, that might work...
Over the next few weeks I'm going to post a few ideas that came out of the Green conference last week; ways that your company might be able to use to make more money, waste fewer resources, improve community relations, and pay fewer fines. After that, maybe we can all sit in a circle and sing for a while, if anyone still wants to...
Tuesday, May 27, 2008
Going Green
This past week UCLA Extension held its first-ever conference on sustainable business topics, which we called "The Business of Green: What's the Payoff?" As is usually the case with new course offerings, this one needs a bit of work -- particularly on the marketing side, as we fell short of the 300 or so participants we had wanted to get. As a proof of concept event, however, it was quite impressive, proving that not only does there exist a market for programming of this type, but also that there is support for sustainable business practices and education on how to be more environmentally responsible from the business community, local governments, and higher education in Southern California.
Of course, most people do not associate business and environmentally correct practice; the common belief is that most business people are concerned only with maximizing profit, at whatever cost to the environment. This leads to a rather childish popular image of environmentalists as long-haired hippies carrying signs and staging protests, and business people as buttoned-down conservatives with big cigars wearing three-piece suits who never look beyond the next quarter's balance sheet. The reality is that not only is conservation a very big business these days, but more and more companies are coming to realize that there is more money to be made in going green than there was going things the old way...
To take the obvious example, factories (and offices and even retail stores) that use less electricity are cheaper to operate; compact-fluorescent bulbs, better insulation and more efficient heating and cooling all drop straight to the bottom line. Simple measures like putting floor mats by the entrance to the building (which keeps people from tracking dirt all over the place, and lowers your maintenance costs) or adding water-conservation equipment to the restrooms (low-flow sinks and toilets, waterless urinals and the like) can generate huge savings in money not spent, as well as improving your relations with the community as an "environmentally sensitive" business.
Then there's the question of waste, in both senses of the word. Anything your company purchases and then throws away is a loss straight off the books; not only are you not getting anything for it, you're probably also spending money to have someone take it away. Waste paper, metal, glass and plastic can be sold for reclamation; organic wastes can be used for making compost (or sold to a company that does). One disposal company that presented at the conference was using discarded wood to run a power plant, yard waste (like lawn clippings and leaves) and household organic waste (food mostly) to make compost, and then gathering up all of the metal, plastic and glass for recycling. They make money on practically everything they haul away, and the beautiful part is that for the most part, people are paying THEM to do the hauling in the first place...
Now, I'm not going to tell you that every business out there can make use of every scrap of material it purchases, with zero waste of any kind. What I can tell you is that almost any kind of business operation can save money, improve community relations, and avoid long-term health risks and fines by shifting to a sustainable business model. And that doesn't even address the best reason for holding such a conference in the first place...
Of course, most people do not associate business and environmentally correct practice; the common belief is that most business people are concerned only with maximizing profit, at whatever cost to the environment. This leads to a rather childish popular image of environmentalists as long-haired hippies carrying signs and staging protests, and business people as buttoned-down conservatives with big cigars wearing three-piece suits who never look beyond the next quarter's balance sheet. The reality is that not only is conservation a very big business these days, but more and more companies are coming to realize that there is more money to be made in going green than there was going things the old way...
To take the obvious example, factories (and offices and even retail stores) that use less electricity are cheaper to operate; compact-fluorescent bulbs, better insulation and more efficient heating and cooling all drop straight to the bottom line. Simple measures like putting floor mats by the entrance to the building (which keeps people from tracking dirt all over the place, and lowers your maintenance costs) or adding water-conservation equipment to the restrooms (low-flow sinks and toilets, waterless urinals and the like) can generate huge savings in money not spent, as well as improving your relations with the community as an "environmentally sensitive" business.
Then there's the question of waste, in both senses of the word. Anything your company purchases and then throws away is a loss straight off the books; not only are you not getting anything for it, you're probably also spending money to have someone take it away. Waste paper, metal, glass and plastic can be sold for reclamation; organic wastes can be used for making compost (or sold to a company that does). One disposal company that presented at the conference was using discarded wood to run a power plant, yard waste (like lawn clippings and leaves) and household organic waste (food mostly) to make compost, and then gathering up all of the metal, plastic and glass for recycling. They make money on practically everything they haul away, and the beautiful part is that for the most part, people are paying THEM to do the hauling in the first place...
Now, I'm not going to tell you that every business out there can make use of every scrap of material it purchases, with zero waste of any kind. What I can tell you is that almost any kind of business operation can save money, improve community relations, and avoid long-term health risks and fines by shifting to a sustainable business model. And that doesn't even address the best reason for holding such a conference in the first place...
Monday, May 26, 2008
Shades of Gray
If you've ever been a manager, especially in a large company or institution, you've probably been treated to at least one briefing from the Human Resources department, where they told you what to do about malfeasance in the work place, and how to go about reporting it, dealing with it, stamping it out, and so on. It's an upbeat event, isn't it, particularly when you consider the topic being discussed. Bad things are going to happen sometimes, and when they do we have procedures for you to follow that will solve all of the problems, protect the innocent, punish the guilty, and get everything back to good in jig time. The problem is, in real life things are rarely as black and white as HR is going to make them sound...
Of course, if the problem your business unit is experiencing is actually a crime, the situation is relatively straightforward. You have a duty just as a citizen to report theft, embezzlement, arson, assault and so on to the proper authorities; you also have a responsibility as an officer of the company to make sure that higher management is made aware of such offenses, and that proper sanctions are invoked against any employee who has crossed that line. As a manager, you are also responsible for curtailing (and when necessary punishing) offenses that are not actually against the law, but which violate company policy (e.g. horseplay, insubordination, attendance issues). But what about issues that are neither actually illegal nor outlawed under company policy?
Suppose, for example, that you know that one of your coworkers is so opposed to a given project that he is going to ensure its failure by not assigning sufficient resources to it, and then claiming that his department was just too busy to successfully complete the assignment? This is technically insubordination, in that the coworker is not following the directions given by his superiors, but you'll never be able to prove it. Moreover, if your coworker is right in opposing the project (because it will harm the company, the employees, the environment, or the country), then his choice may be ethically or professionally correct, even if it is insubordinate in the conventional sense. Is your responsibility to do the right thing by the company and the community more important than your duty to the company to enforce its rules and report those who don't?
What about the case where you know (but the appropriate executives do not) that a member of the management team is incompetent? Or is simply overloaded by the demands of the job and letting things slide and fail? Or is being rude, unpleasant and hostile to other employees? If it was someone who reports to you there would be direct actions you could take, but what if the offending employee is one of your peers, or your supervisor's peers? Do you complain to your supervisor and ask him to take matters up with higher authority? Do you report matters to Human Resources and ask them for help? Or do you go over your own supervisor’s head and take matters directly to higher management on your own initiative?
Alternately, of course, you could just leave things the way they are and hope someone from higher management finds out and resolves the situation for you. You can work to minimize the damage, make sure the projects that are actually critical to the future of the company do not fail, try to keep anyone from getting upset enough to sue, and generally work to hold everything together behind the scenes...
I'm not going to suggest that there are any simple answers to these questions, or that I would have any of those answers if they existed. All I am saying is that sooner or later, unless your company or agency is very well run indeed, you are going to face such a situation yourself...
Of course, if the problem your business unit is experiencing is actually a crime, the situation is relatively straightforward. You have a duty just as a citizen to report theft, embezzlement, arson, assault and so on to the proper authorities; you also have a responsibility as an officer of the company to make sure that higher management is made aware of such offenses, and that proper sanctions are invoked against any employee who has crossed that line. As a manager, you are also responsible for curtailing (and when necessary punishing) offenses that are not actually against the law, but which violate company policy (e.g. horseplay, insubordination, attendance issues). But what about issues that are neither actually illegal nor outlawed under company policy?
Suppose, for example, that you know that one of your coworkers is so opposed to a given project that he is going to ensure its failure by not assigning sufficient resources to it, and then claiming that his department was just too busy to successfully complete the assignment? This is technically insubordination, in that the coworker is not following the directions given by his superiors, but you'll never be able to prove it. Moreover, if your coworker is right in opposing the project (because it will harm the company, the employees, the environment, or the country), then his choice may be ethically or professionally correct, even if it is insubordinate in the conventional sense. Is your responsibility to do the right thing by the company and the community more important than your duty to the company to enforce its rules and report those who don't?
What about the case where you know (but the appropriate executives do not) that a member of the management team is incompetent? Or is simply overloaded by the demands of the job and letting things slide and fail? Or is being rude, unpleasant and hostile to other employees? If it was someone who reports to you there would be direct actions you could take, but what if the offending employee is one of your peers, or your supervisor's peers? Do you complain to your supervisor and ask him to take matters up with higher authority? Do you report matters to Human Resources and ask them for help? Or do you go over your own supervisor’s head and take matters directly to higher management on your own initiative?
Alternately, of course, you could just leave things the way they are and hope someone from higher management finds out and resolves the situation for you. You can work to minimize the damage, make sure the projects that are actually critical to the future of the company do not fail, try to keep anyone from getting upset enough to sue, and generally work to hold everything together behind the scenes...
I'm not going to suggest that there are any simple answers to these questions, or that I would have any of those answers if they existed. All I am saying is that sooner or later, unless your company or agency is very well run indeed, you are going to face such a situation yourself...
Sunday, May 25, 2008
Innovation Corner
Hi Everybody! Today on Innovation Corner we salute one of the most amazing innovations to hit the venerable sport of Baseball since the development of the batting helmet and the Designated Hitter! I refer, of course, to the "Bobble Foot" doll being given away by the St. Paul Saints of the American Association of Independent Baseball league!
Everyone in America has probably heard of bobble HEAD dolls (or "nodders" as they are sometimes called); little ceramic figurine caricatures of individuals (such as specific baseball players) or types of people (such as baseball players in general) which have been sold at sporting events for generations. The dolls get their names because their oversized heads are attached to their much smaller bodies by a loose spring, causing them to "bob" at the slightest touch. In recent years, these traditional, kitschy souvenirs have been experiencing a level of popularity never seen in decades past, with caricatures of beloved, reviled or just topical figures becoming popular collectables, and many major league teams giving them away on special themed nights.
The Saints, a team already known for mocking public figures as well as for their outrageous promotional campaigns, appear to have come up with a new wrinkle, however. Instead of a figure with a bobbing head, they're giving away a ceramic representation of a toilet stall, with a pair of feet (as if from a figure seated on the toilet itself) that dangle into view and "bobble" or "tap," depending on your point of view. You can view the story here if you want to (it includes a nice picture of the figurine). Although the effigy's face is not visible, the whole thing is obviously a clear reference to the Larry Craig case (the U.S. Senator arrested for soliciting sex in a men's bathroom by tapping his feet)...
Now, the as promotions go, it's hardly the most outrageous thing a professional baseball team has ever done; it's probably not even the most outrageous thing the Saints have ever done, if it comes to that. In 2007 the team gave away rubber dog bones in mockery of the Michael Vick case; in 2006 they gave away rubber boats in mockery of the Minnesota Viking's "Love Boat" prostitution scandal, and in 2003 they gave away hood ornaments mocking the Viking's Randy Moss, who had been arrested for "nudging" a police officer with his car. The team's regular traditions include a "team pig" which ferries extra baseballs onto the field each inning (where it receives a snack for its trouble). Obviously, this is not the most serious team in professional sports; it's not actually surprising that the team's principal owner is Mike Veeck, the son of legendary Major League owner Bill Veeck, who was best known for outrageous promotions as owner of the St. Louis Browns, Cleveland Indians, and Chicago White Sox. Or that comedian and actor Bill Murray is also a part owner...
It's also hard to imagine much of a downside to this stunt. Senator Craig is from Idaho, not Minnesota, and it's doubtful if enough people would be rushing to his defense that there would be any protest over this. What's remarkable about the idea is how unique the concept is, how well the team has executed it, and how much publicity they are getting from a give-away item that didn't cost them any more to produce than any other bobble head figure. It may not be innovation in the sense of creating a new product, a new market segment or a new technology, but as a means of cutting through the background noise in a market that already has four other professional sports teams and a major college program, it's really quite remarkable...
Everyone in America has probably heard of bobble HEAD dolls (or "nodders" as they are sometimes called); little ceramic figurine caricatures of individuals (such as specific baseball players) or types of people (such as baseball players in general) which have been sold at sporting events for generations. The dolls get their names because their oversized heads are attached to their much smaller bodies by a loose spring, causing them to "bob" at the slightest touch. In recent years, these traditional, kitschy souvenirs have been experiencing a level of popularity never seen in decades past, with caricatures of beloved, reviled or just topical figures becoming popular collectables, and many major league teams giving them away on special themed nights.
The Saints, a team already known for mocking public figures as well as for their outrageous promotional campaigns, appear to have come up with a new wrinkle, however. Instead of a figure with a bobbing head, they're giving away a ceramic representation of a toilet stall, with a pair of feet (as if from a figure seated on the toilet itself) that dangle into view and "bobble" or "tap," depending on your point of view. You can view the story here if you want to (it includes a nice picture of the figurine). Although the effigy's face is not visible, the whole thing is obviously a clear reference to the Larry Craig case (the U.S. Senator arrested for soliciting sex in a men's bathroom by tapping his feet)...
Now, the as promotions go, it's hardly the most outrageous thing a professional baseball team has ever done; it's probably not even the most outrageous thing the Saints have ever done, if it comes to that. In 2007 the team gave away rubber dog bones in mockery of the Michael Vick case; in 2006 they gave away rubber boats in mockery of the Minnesota Viking's "Love Boat" prostitution scandal, and in 2003 they gave away hood ornaments mocking the Viking's Randy Moss, who had been arrested for "nudging" a police officer with his car. The team's regular traditions include a "team pig" which ferries extra baseballs onto the field each inning (where it receives a snack for its trouble). Obviously, this is not the most serious team in professional sports; it's not actually surprising that the team's principal owner is Mike Veeck, the son of legendary Major League owner Bill Veeck, who was best known for outrageous promotions as owner of the St. Louis Browns, Cleveland Indians, and Chicago White Sox. Or that comedian and actor Bill Murray is also a part owner...
It's also hard to imagine much of a downside to this stunt. Senator Craig is from Idaho, not Minnesota, and it's doubtful if enough people would be rushing to his defense that there would be any protest over this. What's remarkable about the idea is how unique the concept is, how well the team has executed it, and how much publicity they are getting from a give-away item that didn't cost them any more to produce than any other bobble head figure. It may not be innovation in the sense of creating a new product, a new market segment or a new technology, but as a means of cutting through the background noise in a market that already has four other professional sports teams and a major college program, it's really quite remarkable...
Saturday, May 24, 2008
Quicker Than The Eye
There was a story on the MSN Money site this week talking about how American Airlines is going to start charging $15 per checked bag for all of their flights, in an effort to bring in more money and cope with fuel costs. Keep in mind, that's not $15 for a second bag, or for an overweight bag, or anything like that. It's going to be $15 for your FIRST checked bag of less than 50 pounds; additional bags and heavier ones will be more than that. As a result, I would expect to see even more people using duct tape to make handles for refrigerator boxes and then trying to carry them onto airplanes; I would also expect to see more bags being pulled out of the cabin and sent down to the baggage compartment (at $15 a pop, plus additional handling charges or whatever). And there's no telling how much they're going to charge for golf clubs, skis, or other special baggage...
Sounds horrible, doesn't it? Well, actually, there are already a number of airline fees that are far more objectionable, and you're probably already paying most of them. Take booking fees, for example: anytime you buy an airline ticket anywhere other than the airline's own website, they're probably going to add $5 to $25; even ordering tickets over the telephone has a charge associated with it. Airport improvement fees, transit taxes, arrival fees and the like are unavoidable (it's how many local governments pay to upgrade and maintain their airports), and fuel surcharges have been applied to all tickets every summer for years now -- although the rise from $4 or $5 to $70 for rising fuel costs is making summer travel a lot less popular this year.
Some of these fees can be avoided. Changing a ticket when you've purchased one of those "Restricted" tickets, for example, will already run you another $25 to $75 (potentially more than the ticket itself), but you can avoid this by being very certain of your travel plans. Paper tickets are now often a $50 or $75 surcharge (plus extra to have them printed and delivered), but most of us use e-tickets anyway. In-flight meals that you have to pay for can be annoying, but I have been bringing my own food on airlines for years now anyway (ever since I was on a long flight and the only food offered was full of things to which I'm allergic). Probably the worst of the lot are surcharges added when using frequent flyer miles to upgrade your ticket -- it's still going to be cheaper than buying the first class ticked out of pocket, but unless you set these up well in advance you might have to pay an extra $300 for that "free" upgrade.
Given all of these additional fees, you almost have to wonder if the checked baggage surcharge is actually intended to cover rising fuel costs, especially considering that most airlines already have a fuel surcharge to make good that difference. Given the amount of outcry being raised over this new fee, and the amount of media coverage it's drawing, I could almost believe that the whole point of the exercise is to draw attention away from the more annoying and egregious fees being charged for previously free services like picking your seat, checking in a curbside, or using a paper ticket. Like trying to follow the ball in the old "cups and balls" trick; the hand is quicker than the eye...
So what can be done about it? In the long run, charging $100 in fare and $300 in fees is not going to be any more popular with customers than charging $400 in the first place. Eventually, the airlines that offer the best value to the customer (not necessarily the lowest fares or the fewest fees) will achieve dominant market positions, and if the companies that do this are also intelligently run, they should also become the most profitable (and therefore successful) companies in the industry. The airlines that continue to raise prices and fees while not providing value will go the way of TWA, Pan-Am, and Western Airlines, and no one will miss them, either...
Sounds horrible, doesn't it? Well, actually, there are already a number of airline fees that are far more objectionable, and you're probably already paying most of them. Take booking fees, for example: anytime you buy an airline ticket anywhere other than the airline's own website, they're probably going to add $5 to $25; even ordering tickets over the telephone has a charge associated with it. Airport improvement fees, transit taxes, arrival fees and the like are unavoidable (it's how many local governments pay to upgrade and maintain their airports), and fuel surcharges have been applied to all tickets every summer for years now -- although the rise from $4 or $5 to $70 for rising fuel costs is making summer travel a lot less popular this year.
Some of these fees can be avoided. Changing a ticket when you've purchased one of those "Restricted" tickets, for example, will already run you another $25 to $75 (potentially more than the ticket itself), but you can avoid this by being very certain of your travel plans. Paper tickets are now often a $50 or $75 surcharge (plus extra to have them printed and delivered), but most of us use e-tickets anyway. In-flight meals that you have to pay for can be annoying, but I have been bringing my own food on airlines for years now anyway (ever since I was on a long flight and the only food offered was full of things to which I'm allergic). Probably the worst of the lot are surcharges added when using frequent flyer miles to upgrade your ticket -- it's still going to be cheaper than buying the first class ticked out of pocket, but unless you set these up well in advance you might have to pay an extra $300 for that "free" upgrade.
Given all of these additional fees, you almost have to wonder if the checked baggage surcharge is actually intended to cover rising fuel costs, especially considering that most airlines already have a fuel surcharge to make good that difference. Given the amount of outcry being raised over this new fee, and the amount of media coverage it's drawing, I could almost believe that the whole point of the exercise is to draw attention away from the more annoying and egregious fees being charged for previously free services like picking your seat, checking in a curbside, or using a paper ticket. Like trying to follow the ball in the old "cups and balls" trick; the hand is quicker than the eye...
So what can be done about it? In the long run, charging $100 in fare and $300 in fees is not going to be any more popular with customers than charging $400 in the first place. Eventually, the airlines that offer the best value to the customer (not necessarily the lowest fares or the fewest fees) will achieve dominant market positions, and if the companies that do this are also intelligently run, they should also become the most profitable (and therefore successful) companies in the industry. The airlines that continue to raise prices and fees while not providing value will go the way of TWA, Pan-Am, and Western Airlines, and no one will miss them, either...
Friday, May 23, 2008
Harder Than It Looks
A few days ago I saw an article on the AOL Money site that was talking about how some CEOs never seem to get out into the field and look at the conditions their customers encounter, whether it's retail people who never tour their own stores, consumer goods manufacturers who never tour the retail outlets that carry their goods, the CEO of Ford Motor Company who never goes out to the dealerships, and so on. All of these people were being portrayed as lazy, or at least out of touch with their customers, and the author was insinuating that this accounted for the poor performance of their companies. To nail down the point, the author also mentioned a handful of CEOs who do make a point of connecting with their customers at the retail level (including the legendary Sam Walton), implying that this is the explanation for their firms doing so well.
It's an appealing idea, isn't it? If all it takes for a firm to succeed in an increasingly competitive marketplace is to have the guy at the top get in the limo and go visit all of stores, then anybody can be a top CEO! Every company can be the best there is, and if they fail, it's only because those overpaid yahoos in senior management are too lazy to get out there and connect with their customers! All we need is good old-fashioned Yankee work ethic! None of this professional training in business and management, decades of real-world experience, painstaking analysis and evaluation; just give any old goober a plane ticket and a rental car, and you too can rule the world!
Alas, if only it were so...
The fact is, this is the same sort of lazy, anti-intellectual garbage that brought you the dot-com crash, wheat and corn prices that have tripled in the past six months, and "mission statements" that are four pages long. Yes, it's important for the leadership of a company to understand the market forces that drive their customers, including conditions in the stores that sell their product. But it isn't necessary for the CEO to actually go anywhere, provide the flow of information up from the field operations units is good enough to provide that perspective. It was a great PR gesture to have customers walk into a Wal-Mart and shake hands with Sam, one of the richest men in the world at the time, and the value of having him talk with his line personnel and LISTEN to their concerns while he was there is well established. But if I'm one of the stockholders, I'd rather have the CEO of Ford sit down with a focus group of customers who have stopped buying Ford vehicles and ask what he (and his officers) can do to get those customers back than have him swanning around a dealership shaking hands...
The fact is, even if you know exactly what your customers want to purchase this minute, that may not help you design, build and fill the inventory with what they are going to want to purchase in a year -- and if it takes you three years to bring a product to market then knowing what people want to purchase right now may not help. The issues that drive consumers away in California might be the same factors that draw them in droves in Michigan; business concepts that work in April may be total failures in December; trends driven by movies or television shows (or their cast members) may fade away when the programs do. Running a company is an enormously complex task, and even some very capable, highly intelligent, incredibly hard working people will ultimately fail at it, some for reasons completely beyond their control.
As the old saying goes, "It's harder than it looks..."
It's an appealing idea, isn't it? If all it takes for a firm to succeed in an increasingly competitive marketplace is to have the guy at the top get in the limo and go visit all of stores, then anybody can be a top CEO! Every company can be the best there is, and if they fail, it's only because those overpaid yahoos in senior management are too lazy to get out there and connect with their customers! All we need is good old-fashioned Yankee work ethic! None of this professional training in business and management, decades of real-world experience, painstaking analysis and evaluation; just give any old goober a plane ticket and a rental car, and you too can rule the world!
Alas, if only it were so...
The fact is, this is the same sort of lazy, anti-intellectual garbage that brought you the dot-com crash, wheat and corn prices that have tripled in the past six months, and "mission statements" that are four pages long. Yes, it's important for the leadership of a company to understand the market forces that drive their customers, including conditions in the stores that sell their product. But it isn't necessary for the CEO to actually go anywhere, provide the flow of information up from the field operations units is good enough to provide that perspective. It was a great PR gesture to have customers walk into a Wal-Mart and shake hands with Sam, one of the richest men in the world at the time, and the value of having him talk with his line personnel and LISTEN to their concerns while he was there is well established. But if I'm one of the stockholders, I'd rather have the CEO of Ford sit down with a focus group of customers who have stopped buying Ford vehicles and ask what he (and his officers) can do to get those customers back than have him swanning around a dealership shaking hands...
The fact is, even if you know exactly what your customers want to purchase this minute, that may not help you design, build and fill the inventory with what they are going to want to purchase in a year -- and if it takes you three years to bring a product to market then knowing what people want to purchase right now may not help. The issues that drive consumers away in California might be the same factors that draw them in droves in Michigan; business concepts that work in April may be total failures in December; trends driven by movies or television shows (or their cast members) may fade away when the programs do. Running a company is an enormously complex task, and even some very capable, highly intelligent, incredibly hard working people will ultimately fail at it, some for reasons completely beyond their control.
As the old saying goes, "It's harder than it looks..."
Thursday, May 22, 2008
The Ethics of Whiners
A few weeks ago I wrote in this space about the flap over Royal Caribbean Cruise Lines and some passengers they kicked off one of their ships because one of them (the toddler in their family) was sick and needed to go to the hospital. Much of this flap has blown over because, as it turns out, the cruise line WAS trying harder than originally reported, and the customers WERE refusing to cooperate (despite having an extremely sick baby). But I didn't bring up the question of ethics in that post because I don't believe there was one; the only real issue was one of yellow journalism and telling only one side of a story because it makes for better TV.
This week, Royal Caribbean is back in the news, and this time the issue is a lot further into the gray area, to the point where there is an ethics issue involved. A story picked up by one of the USA Today travel blogs tells about RCCL deciding to ban two former passengers from sailing on any of their ships for life. The story goes that this couple had been on six RCCL cruises over the past three years, during which they complained incessantly about everything. They also posted those complaints on public discussion boards, and continued to do so even after the company offered them discounts and credits toward future trips. In fact, they appear to have posted the amounts of the credits and discounts, too, and may have gloated about them into the bargain. For the cruise line, this was the last straw; not only were these people finding dozens of "problems" all over the ships, they were effectively encouraging everyone out there who had ever done business with the company to try to scam RCCL for money. They told the couple that they should take their business elsewhere.
Now, almost every business has boilerplate text somewhere reserving the right to refuse service to anyone, and just about every business will have to invoke those protections sooner or later. My question is, if you believe that someone is scamming your company and encouraging the whole world to do the same, do you still have any obligation to these people? How about if you have done your best to settle their complaints, and even offered them compensation for their trouble? For that matter, if you do reach a settlement with these customers, do you have the right to require them not to talk about the settlement (or the amount)?
By the same token, no one is disputing that the customers in this story have the right to free speech, and are entitled to post anything they want to about any company that draws their ire. For that matter, no one is going to dispute that the travel and hospitality industries are providing service to customers under some of the most challenging circumstances possible, and even the first-class passengers/guests are going to experience the occasional foul-up. The question is, if you are the customer and the company is actually trying to take care of you, do you have any obligation to cooperate with them, or at least stop complaining about them in public forums? Is causing problems for this company just because you can (and because they might give you more money) any different from damaging any other company for fun and profit, through vandalism, shoplifting, stealing the salt shakers, or whatever? And if you've had even one or two bad experiences with a service provider, why keep going back (6 times in 3 years)? Why not exercise that great American tradition of "voting with you feet" and pick another cruise line?
It's worth thinking about...
This week, Royal Caribbean is back in the news, and this time the issue is a lot further into the gray area, to the point where there is an ethics issue involved. A story picked up by one of the USA Today travel blogs tells about RCCL deciding to ban two former passengers from sailing on any of their ships for life. The story goes that this couple had been on six RCCL cruises over the past three years, during which they complained incessantly about everything. They also posted those complaints on public discussion boards, and continued to do so even after the company offered them discounts and credits toward future trips. In fact, they appear to have posted the amounts of the credits and discounts, too, and may have gloated about them into the bargain. For the cruise line, this was the last straw; not only were these people finding dozens of "problems" all over the ships, they were effectively encouraging everyone out there who had ever done business with the company to try to scam RCCL for money. They told the couple that they should take their business elsewhere.
Now, almost every business has boilerplate text somewhere reserving the right to refuse service to anyone, and just about every business will have to invoke those protections sooner or later. My question is, if you believe that someone is scamming your company and encouraging the whole world to do the same, do you still have any obligation to these people? How about if you have done your best to settle their complaints, and even offered them compensation for their trouble? For that matter, if you do reach a settlement with these customers, do you have the right to require them not to talk about the settlement (or the amount)?
By the same token, no one is disputing that the customers in this story have the right to free speech, and are entitled to post anything they want to about any company that draws their ire. For that matter, no one is going to dispute that the travel and hospitality industries are providing service to customers under some of the most challenging circumstances possible, and even the first-class passengers/guests are going to experience the occasional foul-up. The question is, if you are the customer and the company is actually trying to take care of you, do you have any obligation to cooperate with them, or at least stop complaining about them in public forums? Is causing problems for this company just because you can (and because they might give you more money) any different from damaging any other company for fun and profit, through vandalism, shoplifting, stealing the salt shakers, or whatever? And if you've had even one or two bad experiences with a service provider, why keep going back (6 times in 3 years)? Why not exercise that great American tradition of "voting with you feet" and pick another cruise line?
It's worth thinking about...
Wednesday, May 21, 2008
Another Follow-up
It's a little bit eerie, when you write about a wave of potential failures in the Retail sector, and less than a month later one of the major companies you were reading about is going into the tank. But only a little bit, since I got that tip (for the post titled “Retail is Burning”) from online research in the first place, and this is what a business analyst does. No, we don't just walk in, look around for a few moments, and then tell the owner, "You are a business!" In this particular case, the company in question is Circuit City, and they have begun preparations to sell off the company, most likely to Blockbuster. What, exactly, Blockbuster will do with the stricken retail chain remains to be seen...
The biggest issue cited in the story is the downturn in the U.S. economy, which is making consumers skittish about purchasing non-essential items like home electronics in the first place, and definitely putting a damper on the sales of big-ticket items wide-screen televisions and home theater systems. Without these sales the company cannot sell lucrative extended warranty and service plans, delivery services or installation and set-up services, either, which is a major problem since that's where most electronics retailers make the majority of their money. However, the chain's large number of brick-and-mortar locations, including many in under-performing or declining communities, was also cited as a factor, as was the increasing competition from both industry leaders like Best Buy and warehouse store competitors like Costco and Wal-Mart. Blockbuster's management has a history of closing marginal stores and making the surviving ones more profitable, and they might be able to figure out how to compete with the warehouse stores. But it's really hard to imagine what they intend to do about the economy...
The thing is, Blockbuster has not done well itself, in recent years. Their new CEO has had some luck restructuring the company and returning the focus of their operations to sectors (e.g. real world locations) and advantages (e.g., convenience, speed, low price) where they can successfully compete with newer, more technology-dependant competitors like NetFlix and iTunes. Blockbuster is expected to become profitable again later this year, although it remains to be seen if they can stay ahead of the competition in the longer term -- and there's no way to tell if acquiring another problem company will actually help them.
From an outsider's point of view, it does seem as if there might be a niche left in the electronics business that Circuit City could take over, although it would take a major effort to move into it. The big issue with much of their competition is the lack of service; in a warehouse store there is literally none to speak of, and even big-box retailers like Best Buy and Wal-Mart are prone to either not having enough help on the sales floor or else trying to sell you whatever they have the most of in the store, whether that's what you needed or not. In theory, a retailer could add value for the customer by hiring good sales associates and training them to help customers of low and moderate technical ability to find what they need and get the support they require. They would also, of necessity, have to remedy the chain's supply problems, since finding the article you want and then not being able to purchase any is another major source of customer dissatisfaction.
If the concept sounds familiar, it should: it's the Nordstrom model, applied to electronics. If the new Circuit City operations can develop the reputation for being the place where you can go to get exactly what you need, whether you know what that is or not, every time, with people who can get you through the process quickly and efficiently... Yeah, they might make a go of it. But if they try to compete on price or convenience alone, they're going to be wrecked...
The biggest issue cited in the story is the downturn in the U.S. economy, which is making consumers skittish about purchasing non-essential items like home electronics in the first place, and definitely putting a damper on the sales of big-ticket items wide-screen televisions and home theater systems. Without these sales the company cannot sell lucrative extended warranty and service plans, delivery services or installation and set-up services, either, which is a major problem since that's where most electronics retailers make the majority of their money. However, the chain's large number of brick-and-mortar locations, including many in under-performing or declining communities, was also cited as a factor, as was the increasing competition from both industry leaders like Best Buy and warehouse store competitors like Costco and Wal-Mart. Blockbuster's management has a history of closing marginal stores and making the surviving ones more profitable, and they might be able to figure out how to compete with the warehouse stores. But it's really hard to imagine what they intend to do about the economy...
The thing is, Blockbuster has not done well itself, in recent years. Their new CEO has had some luck restructuring the company and returning the focus of their operations to sectors (e.g. real world locations) and advantages (e.g., convenience, speed, low price) where they can successfully compete with newer, more technology-dependant competitors like NetFlix and iTunes. Blockbuster is expected to become profitable again later this year, although it remains to be seen if they can stay ahead of the competition in the longer term -- and there's no way to tell if acquiring another problem company will actually help them.
From an outsider's point of view, it does seem as if there might be a niche left in the electronics business that Circuit City could take over, although it would take a major effort to move into it. The big issue with much of their competition is the lack of service; in a warehouse store there is literally none to speak of, and even big-box retailers like Best Buy and Wal-Mart are prone to either not having enough help on the sales floor or else trying to sell you whatever they have the most of in the store, whether that's what you needed or not. In theory, a retailer could add value for the customer by hiring good sales associates and training them to help customers of low and moderate technical ability to find what they need and get the support they require. They would also, of necessity, have to remedy the chain's supply problems, since finding the article you want and then not being able to purchase any is another major source of customer dissatisfaction.
If the concept sounds familiar, it should: it's the Nordstrom model, applied to electronics. If the new Circuit City operations can develop the reputation for being the place where you can go to get exactly what you need, whether you know what that is or not, every time, with people who can get you through the process quickly and efficiently... Yeah, they might make a go of it. But if they try to compete on price or convenience alone, they're going to be wrecked...
Tuesday, May 20, 2008
A New Approach
Remember last week in my post about the Papa John's fiasco in Cleveland, when I said this stuff practically writes itself? Well, here's another good example from over the weekend: The Everet Herald is reporting that drive-through espresso stands operated by young women wearing bikinis or even less (called "sexpresso" stands by the newspaper) are causing a great deal of controversy in Washington State, where they apparently take their coffee (and tea and espresso) very seriously...
Now, I'm sure all of my long-term readers will remember that I've written about drive-through coffee operations before, in my post about What Business Are They In? The primary appeal of these operations is the convenience (and speed) of being able to obtain your morning coffee without having to get out of the car, and in Los Angeles (where everyone drives, everyone expects to park and repark constantly, and not everyone drinks coffee constantly) these stands have had limited appeal. In Washington State, however, it seems that the demand for drive-through coffee is much higher, the competition between these roadside stands is much fiercer, and the owners have been looking for a new business approach in order to gain (or maintain) market share...
This, in turn, seems to have led them to consider what they could do that would make a humble roadside coffee stand more eye-catching, and some of them seem to have taken that idea literally. Even better, the inevitable backlash from feminists, conservatives and anyone else who thinks that half-naked women and caffeinated beverages don't mix has gained attention in the media, generated controversy in the community, and generally provided lots of free advertising for the stands that have adopted this business model...
It's hard to say exactly what business these coffee stands are in -- beyond the obvious beverage service, of course. None of the young female baristas are allowed to do anything more suggestive than smile while handing you your coffee, and one of the owners correctly points out that you can see much more revealing costume on any beach, at least during the summer time. Clearly these operations are not going to pose any threat to strip clubs, Hooters locations, "lingerie modeling" shops, or similar business units any time soon. By the same token, it's hard to say who (other than a few old prudes and busybodies) this type of business harms; even if we are willing to accept that the sight of scantily-clad females is creating a traffic hazard (and that isn't easy to accept), a strategically-placed hedge or shrub should take care of that issue...
In the long run, it's doubtful that having your product handed to the customer by a young woman in a revealing costume will make any significant improvement in your sales, although we should note the persistence of bars employing scantily-clad cocktail waitresses before we dismiss the concept out of hand. In the short term, however, a handful of businesses who would normally never draw a second glance are landing in the local paper and generating a buzz all along the Internet just by asking a few of their personnel to dress down for work...
Now, I'm sure all of my long-term readers will remember that I've written about drive-through coffee operations before, in my post about What Business Are They In? The primary appeal of these operations is the convenience (and speed) of being able to obtain your morning coffee without having to get out of the car, and in Los Angeles (where everyone drives, everyone expects to park and repark constantly, and not everyone drinks coffee constantly) these stands have had limited appeal. In Washington State, however, it seems that the demand for drive-through coffee is much higher, the competition between these roadside stands is much fiercer, and the owners have been looking for a new business approach in order to gain (or maintain) market share...
This, in turn, seems to have led them to consider what they could do that would make a humble roadside coffee stand more eye-catching, and some of them seem to have taken that idea literally. Even better, the inevitable backlash from feminists, conservatives and anyone else who thinks that half-naked women and caffeinated beverages don't mix has gained attention in the media, generated controversy in the community, and generally provided lots of free advertising for the stands that have adopted this business model...
It's hard to say exactly what business these coffee stands are in -- beyond the obvious beverage service, of course. None of the young female baristas are allowed to do anything more suggestive than smile while handing you your coffee, and one of the owners correctly points out that you can see much more revealing costume on any beach, at least during the summer time. Clearly these operations are not going to pose any threat to strip clubs, Hooters locations, "lingerie modeling" shops, or similar business units any time soon. By the same token, it's hard to say who (other than a few old prudes and busybodies) this type of business harms; even if we are willing to accept that the sight of scantily-clad females is creating a traffic hazard (and that isn't easy to accept), a strategically-placed hedge or shrub should take care of that issue...
In the long run, it's doubtful that having your product handed to the customer by a young woman in a revealing costume will make any significant improvement in your sales, although we should note the persistence of bars employing scantily-clad cocktail waitresses before we dismiss the concept out of hand. In the short term, however, a handful of businesses who would normally never draw a second glance are landing in the local paper and generating a buzz all along the Internet just by asking a few of their personnel to dress down for work...
Monday, May 19, 2008
Product Placements Gone Wild
Some time ago I wrote in this space about product placements -- common name-brand consumer products placed into movies and television programs as an advertising measure. If done properly it can be a very powerful marketing technique, as when the move "E.T." put the previously almost unknown Reese’s Pieces on the map (M&Ms were originally in the script, but the company worried about the possible negative marketing impact if the movie had failed, and opted out). Done improperly it's usually just a waste of money, as in the Coca-Cola placements in the Bill Cosby movie “Leonard, Part VI” (almost no one saw the movie, and these days even Bill Cosby disowns the project). But last night I witnessed the most amazing collection of product placements I have ever seen -- and I'm not even sure how many of them were paid for...
The show was "Extreme Makeover: Home Edition," the 21st Century answer to "Queen for a Day" in the 1940s and 1950s. For those not familiar with it, every week a team of "designers" shows up at the home of some poor folks who are in desperate need of improved or upgraded living quarters, sends the family on vacation for a week, and then demolishes and rebuilds their house from the ground up -- assisted by a small army of builders using the fastest techniques available and working often literally around the clock. Viewers are encouraged to videotape an explanation of why they or someone they know deserves to have their house remodeled (which replaces the audience participation vote of the earlier program), and the design team will create unique room decor, furniture and whatnot to both customize the new structure and hold the viewers' interest.
Now, if you're thinking that such an operation would have many great opportunities for product placement, you're quite right. Obviously, EVERY show is a chance for the builders working on the house to show how fast and how capable they are -- if they can build a house THIS nice in only seven days, what could they do for you if you gave them a few months? The program's major sponsor is Sears, and they never miss a chance to show their products, delivery trucks and sometimes even stores on camera during the week's build project. Another common sponsor is Ford Motor Company, who often provide vehicles to the family if they need some, and gain the opportunity to showcase their products, personnel and even showrooms as a result.
Last night's season finale episode took the whole concept to the extreme, however. All of the builders (and there were 18 different building companies featured) got screen time for their name and logo, and most of them got to appear on screen and talk about how proud they were to be included. Every piece of construction equipment, from the earthmovers to the hand tools, had its manufacturer's name and logo clearly visible while it was on camera, and even things like the construction materials and temporary structures (fences, sanitary units) had manufacturer or supplier names and logos. All of the companies providing furnishings or finishings arrived in huge trucks with billboard-style ads on the sides, just the way Sears usually does, and both Sears and Ford got into this episode in a big way.
I tried to keep track of all of the product placements, and got lost somewhere in the mid two-digit range, but I'd be willing to bet there were 100 or more total placements -- which is a lot for a program only 92 minutes long. And that doesn't even consider all of the regular commercial breaks. I'm not sure how many of these companies paid to have their produces or services featured, and how many just provided goods/services as payment in kind for the placements, but it does make you wonder...
Do you think we could get ABC to leave those crews down in New Orleans for a few more months? At the rate they're going, it sees as if the "Extreme Makeover: Home Edition" people could have the whole place rebuilt in a year or so -- and I wouldn't bet against them making a profit while they were at it...
The show was "Extreme Makeover: Home Edition," the 21st Century answer to "Queen for a Day" in the 1940s and 1950s. For those not familiar with it, every week a team of "designers" shows up at the home of some poor folks who are in desperate need of improved or upgraded living quarters, sends the family on vacation for a week, and then demolishes and rebuilds their house from the ground up -- assisted by a small army of builders using the fastest techniques available and working often literally around the clock. Viewers are encouraged to videotape an explanation of why they or someone they know deserves to have their house remodeled (which replaces the audience participation vote of the earlier program), and the design team will create unique room decor, furniture and whatnot to both customize the new structure and hold the viewers' interest.
Now, if you're thinking that such an operation would have many great opportunities for product placement, you're quite right. Obviously, EVERY show is a chance for the builders working on the house to show how fast and how capable they are -- if they can build a house THIS nice in only seven days, what could they do for you if you gave them a few months? The program's major sponsor is Sears, and they never miss a chance to show their products, delivery trucks and sometimes even stores on camera during the week's build project. Another common sponsor is Ford Motor Company, who often provide vehicles to the family if they need some, and gain the opportunity to showcase their products, personnel and even showrooms as a result.
Last night's season finale episode took the whole concept to the extreme, however. All of the builders (and there were 18 different building companies featured) got screen time for their name and logo, and most of them got to appear on screen and talk about how proud they were to be included. Every piece of construction equipment, from the earthmovers to the hand tools, had its manufacturer's name and logo clearly visible while it was on camera, and even things like the construction materials and temporary structures (fences, sanitary units) had manufacturer or supplier names and logos. All of the companies providing furnishings or finishings arrived in huge trucks with billboard-style ads on the sides, just the way Sears usually does, and both Sears and Ford got into this episode in a big way.
I tried to keep track of all of the product placements, and got lost somewhere in the mid two-digit range, but I'd be willing to bet there were 100 or more total placements -- which is a lot for a program only 92 minutes long. And that doesn't even consider all of the regular commercial breaks. I'm not sure how many of these companies paid to have their produces or services featured, and how many just provided goods/services as payment in kind for the placements, but it does make you wonder...
Do you think we could get ABC to leave those crews down in New Orleans for a few more months? At the rate they're going, it sees as if the "Extreme Makeover: Home Edition" people could have the whole place rebuilt in a year or so -- and I wouldn't bet against them making a profit while they were at it...
Saturday, May 17, 2008
It's Worse Than That
Some time ago I wrote a post about two former consulting clients of mine who were considering opening their own coffee house despite having no experience whatsoever in Food Service, which I called (and still consider to be) The Hardest Business there is. I just ran across another blog that confirms some of those comments, and I thought I would call it to your attention. It's called Waiter Rant, and as you might expect, it's a series of rants offered by an actual veteran waiter.
Based on the fact that the Waiter (that's all he ever calls himself) is getting literally hundreds of comments on some of his posts, and actually has a book of his collected rants in print (it's called "Waiter Rant: Thanks for the Tip!" and you can get it on Amazon), it seems likely that he's been around for a while now, and I'm just happening onto him late, since I don't spend as much time online as I used to. It's amazing how actually having a girlfriend (and then marrying her) will change your priorities...
Be that as it may, it surprised me to learn that many of his posts confirm not only my thoughts about food service, but also about customer service in general, and specifics like the need to look out for all of your customers (not just the ones with misbehaving kids or other "personal" requirements), the need to take care of your employees and not allow them to be bullied by either the customers or their supervisors, and so on. It would seem that when I referred to food service as being the hardest business to succeed in as an owner and/or manager, I had completely underestimated how hard it is to survive in that industry as one of workers...
I can relate to the Waiter in a lot of ways - we agree on why customer service personnel should not be armed, for example. I've had many of the same problems with incompetent, abusive, arrogant and clueless supervisors that he describes, and I'll admit that I have the same difficulties suffering fools gladly - or indeed, at all. I suspect that the Waiter may be a former (or frustrated) professional writer, possibly a scriptwriter, based on the clarity of his descriptions and how well he handles the dialog. Even if it's all just verbatim reporting (which would be remarkable in itself), his set-up of the scenes is amazingly easy to follow; you could film each of his posts as parts of a movie (or a television show) and all you would need is a central plot to tack them all onto...
Whether or not this would make for a successful production I will leave to those who know more about such things. I'm just hoping that the Waiter is still around (or that his book is still in print, at least) when and if I ever get the chance to teach a class on the complexities of running a service business...
Because I'm going to assign the text as required reading for my students, if I ever get any...
Based on the fact that the Waiter (that's all he ever calls himself) is getting literally hundreds of comments on some of his posts, and actually has a book of his collected rants in print (it's called "Waiter Rant: Thanks for the Tip!" and you can get it on Amazon), it seems likely that he's been around for a while now, and I'm just happening onto him late, since I don't spend as much time online as I used to. It's amazing how actually having a girlfriend (and then marrying her) will change your priorities...
Be that as it may, it surprised me to learn that many of his posts confirm not only my thoughts about food service, but also about customer service in general, and specifics like the need to look out for all of your customers (not just the ones with misbehaving kids or other "personal" requirements), the need to take care of your employees and not allow them to be bullied by either the customers or their supervisors, and so on. It would seem that when I referred to food service as being the hardest business to succeed in as an owner and/or manager, I had completely underestimated how hard it is to survive in that industry as one of workers...
I can relate to the Waiter in a lot of ways - we agree on why customer service personnel should not be armed, for example. I've had many of the same problems with incompetent, abusive, arrogant and clueless supervisors that he describes, and I'll admit that I have the same difficulties suffering fools gladly - or indeed, at all. I suspect that the Waiter may be a former (or frustrated) professional writer, possibly a scriptwriter, based on the clarity of his descriptions and how well he handles the dialog. Even if it's all just verbatim reporting (which would be remarkable in itself), his set-up of the scenes is amazingly easy to follow; you could film each of his posts as parts of a movie (or a television show) and all you would need is a central plot to tack them all onto...
Whether or not this would make for a successful production I will leave to those who know more about such things. I'm just hoping that the Waiter is still around (or that his book is still in print, at least) when and if I ever get the chance to teach a class on the complexities of running a service business...
Because I'm going to assign the text as required reading for my students, if I ever get any...
Back to School - At My Age?
Ever since I broke the word to my friends and family that I was going back to school, I've been getting the same round of questions - to the point where I eventually put together an FAQ list to send around. I'll spare the reader the obvious personal questions (such as "Is your wife okay with this?" and "Are you going to sell your house? In THIS housing market?" and of course "You're from California; how will you deal with winter in a Northern state?"), because it's the questions that people aren't asking that may actually have some value in a business context.
The first ones would be, why do you need a Ph.D. when you've already got an MBA? Shouldn't you just be able to get a high-paying job in some large corporation? Or failing that, a low-paying but very steady job teaching community college or high school? The answer here is that the MBA has been devalued every year since shortly after I got one, and matters are just going to get worse. Part of it is the proliferation of degrees (like the EMBA, or "Executive" MBA) that sound like a Master's Degree in Business Administration, but require a third (or less) of the coursework and teach the student remarkably little. Part of it are diploma mills, online "MBA" programs, for-profit schools and the like, which have lowered the admission standards to "Having the Money" and the graduation requirements to "The Check Cleared." Some of these are legitimate teaching institutions; some of them are even fully accredited. All of this has combined to flood the job market with fake MBAs, low-quality MBAs, and people who claim to be MBAs but actually aren't really.
Even worse, people who have never been to business school for the most part have no idea what the MBA degree program is actually about, or what it might qualify one to do. Some of them resent the MBA holders, and some resort to the idiotic belief that "Anything I don't understand must not be important," but neither type wants to hire any. Then there are the "rugged individualist" types, who love to point out all of the people who have made it big without benefit of an MBA or even a college degree. If Carnegie, Mellon and Gates (either of the two Gates, actually) didn't need an MBA, why should we? It's the 21st Century remainder of a nasty anti-intellectual streak that has been part of American culture from the beginning, and it's a big part of why our commercial operations do not fare well in an knowledge-driven global economy. It also makes finding a job a royal pain for a management professional. And the glut of people who have an MBA or just look like they do makes the teaching route completely impossible...
Then there's the question of why I would want to go back to school in the first place. Those of you who have been reading this blog over the past year have probably got that one figured out already, but just for the record, I'm also a teacher, a strategist, a scholar, and an acute observer of human behavior -- and I'm too young to just stay a mid-level bureaucrat for the rest of my life. There are still things I want to learn, things I want to discover, places to go and things to do, and while I'm at it I think I'd like to teach a few new management professionals why things you don't understand are important (they can destroy your company) and why when somebody comes to you and says "Hi, I would like to give you a lot of money now," you say, "YES!"
And besides, it should be fun...
The first ones would be, why do you need a Ph.D. when you've already got an MBA? Shouldn't you just be able to get a high-paying job in some large corporation? Or failing that, a low-paying but very steady job teaching community college or high school? The answer here is that the MBA has been devalued every year since shortly after I got one, and matters are just going to get worse. Part of it is the proliferation of degrees (like the EMBA, or "Executive" MBA) that sound like a Master's Degree in Business Administration, but require a third (or less) of the coursework and teach the student remarkably little. Part of it are diploma mills, online "MBA" programs, for-profit schools and the like, which have lowered the admission standards to "Having the Money" and the graduation requirements to "The Check Cleared." Some of these are legitimate teaching institutions; some of them are even fully accredited. All of this has combined to flood the job market with fake MBAs, low-quality MBAs, and people who claim to be MBAs but actually aren't really.
Even worse, people who have never been to business school for the most part have no idea what the MBA degree program is actually about, or what it might qualify one to do. Some of them resent the MBA holders, and some resort to the idiotic belief that "Anything I don't understand must not be important," but neither type wants to hire any. Then there are the "rugged individualist" types, who love to point out all of the people who have made it big without benefit of an MBA or even a college degree. If Carnegie, Mellon and Gates (either of the two Gates, actually) didn't need an MBA, why should we? It's the 21st Century remainder of a nasty anti-intellectual streak that has been part of American culture from the beginning, and it's a big part of why our commercial operations do not fare well in an knowledge-driven global economy. It also makes finding a job a royal pain for a management professional. And the glut of people who have an MBA or just look like they do makes the teaching route completely impossible...
Then there's the question of why I would want to go back to school in the first place. Those of you who have been reading this blog over the past year have probably got that one figured out already, but just for the record, I'm also a teacher, a strategist, a scholar, and an acute observer of human behavior -- and I'm too young to just stay a mid-level bureaucrat for the rest of my life. There are still things I want to learn, things I want to discover, places to go and things to do, and while I'm at it I think I'd like to teach a few new management professionals why things you don't understand are important (they can destroy your company) and why when somebody comes to you and says "Hi, I would like to give you a lot of money now," you say, "YES!"
And besides, it should be fun...
Friday, May 16, 2008
If I Ran the Circus...
A long time ago, in an industry that no longer exists, I had the unusual problem of having been promoted far beyond anything I was prepared to do, and discovering that while the Peter Principle should have been in effect, it wasn't. I had a degree in English and a year plus on the job when I was promoted to be the manager of the work group of which I had been a part, responsible for 14 service locations in Metro Los Angeles and the rather eccentric men (there were no women at the time) who operated them. I had become the Regional Director of the Professional Resume and Writing Service...
I should have been terrified. In the cold light of a business degree and twenty additional years of experience, I can see that I was clearly being set up to take the blame for the failure (and ultimate dismantling) of the Los Angeles Region, which would in turn deflect the blame for this fiasco from the Executive whose marketing incompetence (I can not in good conscience call it anything else) had doomed the Region, the Division, and ultimately the company. The Executive in question being the President's son, of course...
Not realizing any of this, I set about running the Los Angeles Region the way I thought it SHOULD be run, based on nothing but a young man's romantic ideas about leadership. My predecessor in the role had been an alcoholic sexist bigot, whose parting advice to me was to never hire women or African Americans to be resume writers, because "They can't handle the job." Naturally my first two hires were D.L. Mackey, a woman, and Deborah Givins, an African American woman. Deborah did a fine job running one of my offices that had struggled previously, and D.L. broke all of the Region's performance records for sales, revenue and productivity that summer (the ones I had set the year before, it should be noted). I have always believed that racism and sexism are asinine (I could use stronger language, but I won't), and I have seldom seen a more resounding confirmation of that belief.
Buoyed by this success, my next move was to make sure that all of my people started getting paid on time. Each week in the resume business you sent your receipts to corporate headquarters at close of business on Thursday, and were supposed to get paid based on your performance (salary plus commission or straight commission, depending on your contract) the following Friday. Unfortunately, this rarely happened; all too often the receipts did not reach corporate until several working days later, and the payroll department tended to sit on the checks anyway. I put a stop to this problem by getting the payroll people to FedEx the previous week's paychecks to me on Thursday, and then driving around the Region picking up the receipts and dropping off the paychecks in person each Friday. I would also drop off any supplies the service offices had requested on the same visit.
As a result, all of my people got paid on time, every time, and none of them ever had to wait for their supplies. This made me extremely popular with my people, as you might imagine. When I instituted vacations and sick days (which had never existed in the Company before) my popularity shot up so high I had people from other regions (including some in other parts of the country!) trying to transfer into my unit, and all of the other Regional Directors began having to institute similar policies just to keep from losing all of their best people to me. Within three months, my Region, which had been 26th of the 36 Regions in the company, was rated 2nd overall and 1st in productivity, making me one of the top Regional Directors in the company.
They weren't sophisticated moves. I had no formal training in business, and very little in leadership; other than a few years in student government during college, I had never led or managed anything. But I had learned from an early age that most people will respond to loyalty and fairness, and everyone appreciates being treated well. That's how I thought a business should be run, and when they gave me the chance, that's how I ran this one -- never guessing that doing so would be the start of a 20-year odyssey that would lead me through Corporate America, an MBA, management consulting, higher education and (starting this summer) a doctoral program in Management. And yet, somehow it all worked. The truism I coined that first year as a manager is still true today: "Take care of your people, and they will take care of you..."
I should have been terrified. In the cold light of a business degree and twenty additional years of experience, I can see that I was clearly being set up to take the blame for the failure (and ultimate dismantling) of the Los Angeles Region, which would in turn deflect the blame for this fiasco from the Executive whose marketing incompetence (I can not in good conscience call it anything else) had doomed the Region, the Division, and ultimately the company. The Executive in question being the President's son, of course...
Not realizing any of this, I set about running the Los Angeles Region the way I thought it SHOULD be run, based on nothing but a young man's romantic ideas about leadership. My predecessor in the role had been an alcoholic sexist bigot, whose parting advice to me was to never hire women or African Americans to be resume writers, because "They can't handle the job." Naturally my first two hires were D.L. Mackey, a woman, and Deborah Givins, an African American woman. Deborah did a fine job running one of my offices that had struggled previously, and D.L. broke all of the Region's performance records for sales, revenue and productivity that summer (the ones I had set the year before, it should be noted). I have always believed that racism and sexism are asinine (I could use stronger language, but I won't), and I have seldom seen a more resounding confirmation of that belief.
Buoyed by this success, my next move was to make sure that all of my people started getting paid on time. Each week in the resume business you sent your receipts to corporate headquarters at close of business on Thursday, and were supposed to get paid based on your performance (salary plus commission or straight commission, depending on your contract) the following Friday. Unfortunately, this rarely happened; all too often the receipts did not reach corporate until several working days later, and the payroll department tended to sit on the checks anyway. I put a stop to this problem by getting the payroll people to FedEx the previous week's paychecks to me on Thursday, and then driving around the Region picking up the receipts and dropping off the paychecks in person each Friday. I would also drop off any supplies the service offices had requested on the same visit.
As a result, all of my people got paid on time, every time, and none of them ever had to wait for their supplies. This made me extremely popular with my people, as you might imagine. When I instituted vacations and sick days (which had never existed in the Company before) my popularity shot up so high I had people from other regions (including some in other parts of the country!) trying to transfer into my unit, and all of the other Regional Directors began having to institute similar policies just to keep from losing all of their best people to me. Within three months, my Region, which had been 26th of the 36 Regions in the company, was rated 2nd overall and 1st in productivity, making me one of the top Regional Directors in the company.
They weren't sophisticated moves. I had no formal training in business, and very little in leadership; other than a few years in student government during college, I had never led or managed anything. But I had learned from an early age that most people will respond to loyalty and fairness, and everyone appreciates being treated well. That's how I thought a business should be run, and when they gave me the chance, that's how I ran this one -- never guessing that doing so would be the start of a 20-year odyssey that would lead me through Corporate America, an MBA, management consulting, higher education and (starting this summer) a doctoral program in Management. And yet, somehow it all worked. The truism I coined that first year as a manager is still true today: "Take care of your people, and they will take care of you..."
Wednesday, May 14, 2008
The Trouble With Gift Cards
The trouble with those gift cards you can purchase at most large retail chains these days is not that they're impersonal; it's not that they might be redeemable only for merchandise that the recipient wouldn't actually want; it's not that they encourage people to spend more money out of their own funds to purchase larger and more extravagant items for themselves; it's not even that if you feed them too much they will start multiplying out of control and completely take over their environment. No, the trouble with gift cards is that if the company that sold them to you goes out of business before you can cash in the card, you're probably not getting your money back...
Let's leave the accounting rules out of it for a moment; from consumer's standpoint it doesn't really matter if the issuing company treats the money from the card purchases as unexpended inventory or interest-free capital or simply as somebody else's money. All that matters is that to the bankruptcy court, unredeemed gift cards are considered to be unsecured loans made to the company, and thus receive a much lower priority than other creditors, such as payroll, taxes, and secured loans. If the company has a lot of cash or liquid assets on the books when it goes under, then there might be enough left to honor your gift card after the other creditors are paid off. But this isn't likely to happen, unless the company made a lot of money on its "Final Sale and Clearance" and wasn't then able to restart operations.
Back in the days before electronic "smart cards" this wasn't as much of a problem; paper gift certificates were never as popular as the gift cards, and thus there were never as many of them in circulation at any given time. With the rise of these electronic gift cards, however, many retailers will now have enough unexpended gift cards on the books to represent a significant amount of money, which in turn has an impact on the company's cash position and liquidity. Good for them, but not really good for the consumer...
So what can we do about it, down here on the front lines of consumer spending? Well, first of all, don't just plunk down large sums of money on gift cards for companies about which you know nothing. You're effectively loaning money to these people, just on their word that they're not going to declare bankruptcy; shouldn't you at least check on them before you do it? Second, don't be sure that just because a company looks like it is doing well it really is; the Sharper Image just filed for Chapter 11 protections. Third, don't purchase cards long in advance of their use; the sooner you use them, the likelier you are to get your money back. This is particularly true around the Holidays, when every retailer looks prosperous, but not all of them will survive until spring...
An interesting alternative to a company's in-house gift cards are the American Express and Visa Gift Cards. From the end user's point of view, these function like electronic gift cards that are good anywhere (anywhere that takes credit cards, at least), so you aren't limited to spending it at the same place they got it. Instead of $100 at Golf World or Some Department Store You Never Shop At, you can take your Amex or Visa gift card to wherever you're shopping today and get $100 worth of something you really want. This is especially useful if the thing you need the most this week happens to be food, since most department stores do not sell groceries...
Even better, though, many of the credit card style gift cards are considered to be bank accounts -- the card is similar to a "check card" in that it just subtracts money from your "account" to pay for your purchases. This means that even if the bank goes under (or American Express does -- which is even more unlikely) there is no issue with getting your money back; it was never considered part of the issuing company's money, simply being "on account" for you in the bank's vault. In some cases these funds may even be protected by FDIC or subject to being redeemed by a "bailout" of the bank by Federal authorities -- ask the issuing institution how they've got things set up.
Or, alternately, I suppose you could always just send fruitcake…
Let's leave the accounting rules out of it for a moment; from consumer's standpoint it doesn't really matter if the issuing company treats the money from the card purchases as unexpended inventory or interest-free capital or simply as somebody else's money. All that matters is that to the bankruptcy court, unredeemed gift cards are considered to be unsecured loans made to the company, and thus receive a much lower priority than other creditors, such as payroll, taxes, and secured loans. If the company has a lot of cash or liquid assets on the books when it goes under, then there might be enough left to honor your gift card after the other creditors are paid off. But this isn't likely to happen, unless the company made a lot of money on its "Final Sale and Clearance" and wasn't then able to restart operations.
Back in the days before electronic "smart cards" this wasn't as much of a problem; paper gift certificates were never as popular as the gift cards, and thus there were never as many of them in circulation at any given time. With the rise of these electronic gift cards, however, many retailers will now have enough unexpended gift cards on the books to represent a significant amount of money, which in turn has an impact on the company's cash position and liquidity. Good for them, but not really good for the consumer...
So what can we do about it, down here on the front lines of consumer spending? Well, first of all, don't just plunk down large sums of money on gift cards for companies about which you know nothing. You're effectively loaning money to these people, just on their word that they're not going to declare bankruptcy; shouldn't you at least check on them before you do it? Second, don't be sure that just because a company looks like it is doing well it really is; the Sharper Image just filed for Chapter 11 protections. Third, don't purchase cards long in advance of their use; the sooner you use them, the likelier you are to get your money back. This is particularly true around the Holidays, when every retailer looks prosperous, but not all of them will survive until spring...
An interesting alternative to a company's in-house gift cards are the American Express and Visa Gift Cards. From the end user's point of view, these function like electronic gift cards that are good anywhere (anywhere that takes credit cards, at least), so you aren't limited to spending it at the same place they got it. Instead of $100 at Golf World or Some Department Store You Never Shop At, you can take your Amex or Visa gift card to wherever you're shopping today and get $100 worth of something you really want. This is especially useful if the thing you need the most this week happens to be food, since most department stores do not sell groceries...
Even better, though, many of the credit card style gift cards are considered to be bank accounts -- the card is similar to a "check card" in that it just subtracts money from your "account" to pay for your purchases. This means that even if the bank goes under (or American Express does -- which is even more unlikely) there is no issue with getting your money back; it was never considered part of the issuing company's money, simply being "on account" for you in the bank's vault. In some cases these funds may even be protected by FDIC or subject to being redeemed by a "bailout" of the bank by Federal authorities -- ask the issuing institution how they've got things set up.
Or, alternately, I suppose you could always just send fruitcake…
Tuesday, May 13, 2008
Everything Must Go!
Ever wonder why it is that when you go into a store with "Going Out Of Business!" signs in the window, everything you find for sale is really expensive? Despite the "Up To 50% Off!" signs? Actually, the signs probably have the "50% OFF!" part in really huge letters, so that people in passing cars can see them, and the "up to" part in 6-point type. Unless 4-point or 2-point was available, but that's really not the point. Even if we allow for the "up to" part, shouldn't the prices still be lower than when the store was part of a going concern?
An article in MSN Money News points out that in many cases, when a company has entered the "Final Clearance" stage of its life cycle, the owners will bring in truckloads of merchandise, either from their own warehouse or from some deep discounted source, put prices on it, and then mark it as 50% off. Since it's merchandise that was never sold in this store in the first place, there is no way for the consumer to tell if it's really 50% off, or full price, or even marked up from what it might have been before. The sad fact is, people are gullible, and greedy, and will rarely even ask. And if they do, so what? What does bad will mean to a business that will not be there next week? If they can trick the foolish and unwary into spending a lot of money on cheap, defective crap it just lowers the amount they will owe to their creditors -- or raises the amount of meat that will be left on the bones when they carve up the company.
In fact, if the company can acquire some marginal merchandise at pennies on the dollar, they can even use this tactic without resort to fraud. If the product originally retailed for $10 and the company was able to purchase it on close-out for $2, they can put it into their own "Going Out Of Business Sale" at $5, sell it to the customer at a genuine 50% off of the original retail price, and still make $3 (or 250% profits) on each sale. Of course, if the item was never worth even $2 (let alone $10), it's still a rip-off; and if the company goes out of business the following week and the item breaks two days after that, there is no way for the customer to get his or her money back. But at least the company isn't actually committing fraud.
This is not to suggest that all Final Clearance sales are fraudulent, or that it isn't possible for a knowledgeable consumer to make some good purchases during one. When the old Federated Electronics Group went under (almost 20 years ago now) I was able to find an really nice set of bookcase speakers on the $10 table that not only worked beautifully and sounded great, but were still working just fine a few weeks ago when I gave them to charity because we're moving across country and we don't really need them anymore. If you know what a good price for a given product is, and can find an example that isn't damaged or used (or really a cheap knock-off copy of what you wanted to buy) then you can come away from some of these sales with a bargain. And if you don't know what you want and what you should expect to pay for it, why are you making any major purchase in the first place?
Of course you still have the problem of not being able to return things to a retailer that does not exist anymore, which means you should probably look for manufacturer's warranties and/or third-party service contracts when making these purchases. If no such warranty is available, then you probably shouldn't purchase anything you can't afford to lose. And remember that if you have or purchase a gift card from a company that goes out of business, there is no way to get your money back...
But that's a post for another day...
An article in MSN Money News points out that in many cases, when a company has entered the "Final Clearance" stage of its life cycle, the owners will bring in truckloads of merchandise, either from their own warehouse or from some deep discounted source, put prices on it, and then mark it as 50% off. Since it's merchandise that was never sold in this store in the first place, there is no way for the consumer to tell if it's really 50% off, or full price, or even marked up from what it might have been before. The sad fact is, people are gullible, and greedy, and will rarely even ask. And if they do, so what? What does bad will mean to a business that will not be there next week? If they can trick the foolish and unwary into spending a lot of money on cheap, defective crap it just lowers the amount they will owe to their creditors -- or raises the amount of meat that will be left on the bones when they carve up the company.
In fact, if the company can acquire some marginal merchandise at pennies on the dollar, they can even use this tactic without resort to fraud. If the product originally retailed for $10 and the company was able to purchase it on close-out for $2, they can put it into their own "Going Out Of Business Sale" at $5, sell it to the customer at a genuine 50% off of the original retail price, and still make $3 (or 250% profits) on each sale. Of course, if the item was never worth even $2 (let alone $10), it's still a rip-off; and if the company goes out of business the following week and the item breaks two days after that, there is no way for the customer to get his or her money back. But at least the company isn't actually committing fraud.
This is not to suggest that all Final Clearance sales are fraudulent, or that it isn't possible for a knowledgeable consumer to make some good purchases during one. When the old Federated Electronics Group went under (almost 20 years ago now) I was able to find an really nice set of bookcase speakers on the $10 table that not only worked beautifully and sounded great, but were still working just fine a few weeks ago when I gave them to charity because we're moving across country and we don't really need them anymore. If you know what a good price for a given product is, and can find an example that isn't damaged or used (or really a cheap knock-off copy of what you wanted to buy) then you can come away from some of these sales with a bargain. And if you don't know what you want and what you should expect to pay for it, why are you making any major purchase in the first place?
Of course you still have the problem of not being able to return things to a retailer that does not exist anymore, which means you should probably look for manufacturer's warranties and/or third-party service contracts when making these purchases. If no such warranty is available, then you probably shouldn't purchase anything you can't afford to lose. And remember that if you have or purchase a gift card from a company that goes out of business, there is no way to get your money back...
But that's a post for another day...
Sunday, May 11, 2008
23-Cent Breakdown
There are days when the business pages are all full of old, boring crap that no one would ever been interested in, and I have to search far and wide to find something to rant about. And then there are days like today, when it seems like this blog practically writes itself…
A story in today’s Los Angeles Times illustrates the concept of a public relations gesture gone wrong so well that I’m not sure I could make up a better one out of whole cloth. It seems that Papa John’s Pizza had run afoul of the NBA fans in Cleveland by giving away t-shirts that were critical of the local team’s leading player, calling him a “crybaby” for complaining about unusually hard fouls during some of the playoff games. This might have endeared the company to fans of the opposing team (from Washington D.C.), but it was definitely having a negative impact on the company’s sales in Cleveland.
To try to get back in the good graces of the Cleveland fans, Papa John’s decided to run a special promotion in the Cleveland area this weekend: pizzas for only 23 cents, or effectively free. They probably figured the stunt would cost them a few thousand dollars worth of pizza, but would win back a lot of their marginal customers and might even get people who had not previously tried their product to do so. I mean, for 23 cents, why not?
Anyone who has ever worked in customer service can probably see at least one hole in this plan, and anybody who has ever worked in a low-end pizza operation would be able to tell you just by looking at it that this was a bad idea, but apparently whoever is actually running the Papa John’s operation these days knows even less about consumer behavior than they do about sports fans. What happened next was what almost always happens when you offer any consumer product for free: mobs of people showed up to get their 23-cent pizzas. Some Papa John’s locations in Cleveland were reporting waits of up to 90 minutes to get a pizza, which may not sound that bad, but consider that the normal time to cook one of these marginal pies is usually between 8 and 12 minutes…
Needless to say, the crowds got restless. People began cutting in line, shoving people out of their way, and generally misbehaving. Tempers frayed, fights broke out, and several locations had to call the police to restore order. But as bad as that was, things didn’t really go into the crapper until some of the Papa John’s locations began running out of pizzas, and had to start turning people away and closing. Within a single day’s badly conceived stunt, the company had managed to anger even more customers and potential customers than they had with the original offensive t-shirts, and make themselves look like complete idiots into the bargain.
Now I’m not going to suggest that all product give-away offers are foolish. Many companies use “loss-leader” sales every day, and most of these are completely uneventful; some of them even result in increased sales for the company. But in this case, offering what was effectively free food without adequate crowd control or supply was worse than futile; it was actually counterproductive…
In the future, I imagine Papa John’s will be a little more selective about such stunts, requiring people to call ahead for a pick-up time, or putting firm limits on the number of pizzas to be given away, or limiting the offer to specific locations that have enough room to park a large truck full of extra pizza ingredients, or perhaps just not giving away promotional items that alienate customers from another part of their operating area…
In the meanwhile, I hope everyone out there will take this episode to heart, and try to avoid being the next company to have a loss-leader or product give away blow up in your face. I can always find other things to write about, but not every company is going to survive a screw-up on this scale…
A story in today’s Los Angeles Times illustrates the concept of a public relations gesture gone wrong so well that I’m not sure I could make up a better one out of whole cloth. It seems that Papa John’s Pizza had run afoul of the NBA fans in Cleveland by giving away t-shirts that were critical of the local team’s leading player, calling him a “crybaby” for complaining about unusually hard fouls during some of the playoff games. This might have endeared the company to fans of the opposing team (from Washington D.C.), but it was definitely having a negative impact on the company’s sales in Cleveland.
To try to get back in the good graces of the Cleveland fans, Papa John’s decided to run a special promotion in the Cleveland area this weekend: pizzas for only 23 cents, or effectively free. They probably figured the stunt would cost them a few thousand dollars worth of pizza, but would win back a lot of their marginal customers and might even get people who had not previously tried their product to do so. I mean, for 23 cents, why not?
Anyone who has ever worked in customer service can probably see at least one hole in this plan, and anybody who has ever worked in a low-end pizza operation would be able to tell you just by looking at it that this was a bad idea, but apparently whoever is actually running the Papa John’s operation these days knows even less about consumer behavior than they do about sports fans. What happened next was what almost always happens when you offer any consumer product for free: mobs of people showed up to get their 23-cent pizzas. Some Papa John’s locations in Cleveland were reporting waits of up to 90 minutes to get a pizza, which may not sound that bad, but consider that the normal time to cook one of these marginal pies is usually between 8 and 12 minutes…
Needless to say, the crowds got restless. People began cutting in line, shoving people out of their way, and generally misbehaving. Tempers frayed, fights broke out, and several locations had to call the police to restore order. But as bad as that was, things didn’t really go into the crapper until some of the Papa John’s locations began running out of pizzas, and had to start turning people away and closing. Within a single day’s badly conceived stunt, the company had managed to anger even more customers and potential customers than they had with the original offensive t-shirts, and make themselves look like complete idiots into the bargain.
Now I’m not going to suggest that all product give-away offers are foolish. Many companies use “loss-leader” sales every day, and most of these are completely uneventful; some of them even result in increased sales for the company. But in this case, offering what was effectively free food without adequate crowd control or supply was worse than futile; it was actually counterproductive…
In the future, I imagine Papa John’s will be a little more selective about such stunts, requiring people to call ahead for a pick-up time, or putting firm limits on the number of pizzas to be given away, or limiting the offer to specific locations that have enough room to park a large truck full of extra pizza ingredients, or perhaps just not giving away promotional items that alienate customers from another part of their operating area…
In the meanwhile, I hope everyone out there will take this episode to heart, and try to avoid being the next company to have a loss-leader or product give away blow up in your face. I can always find other things to write about, but not every company is going to survive a screw-up on this scale…
The Ethics of Enlightened Self-Interest
Quite often in business discussions you will hear people talking about what they call “enlightened self-interest” – that is, behavior that is both ethically and morally correct and also in the best interest of the person taking it. The implication is that while it would be possible for the person in question to act in an unethical manner, it would not serve their own interests to do so, and so they won’t. This structure will sometimes be advanced as a reason for trusting another party when you are unable to arrange for a formal or contractual obligation; if the “smart” thing to do and the “right” thing to do are the same thing, it is unlikely that any sane person will choose the unethical course merely for the sake of doing so.
By contrast, you will often hear people asking why they should bother making the ethical choice, particularly when the alternative is more profitable, and especially when the alternative will make no real difference. Why should we go to the trouble of acting in good faith, for example, when the entire world is filled with people who will not act in good faith even if you do put a gun to their heads? Why should we clean up after ourselves when the next people will just leave a huge mess, and the janitor will have to pick up after them anyway? Why should we stop to help someone in distress when they’ll probably sue us for something, just because they can?
You might think that there wouldn’t be a business answer to this dilemma; that it would have to stay in the realm of the philosophers. I would like to suggest, however, that it is only in a business perspective, in profit and loss, that a clear answer to this ancient question can be found, and that in order to see that business solution, we need to increase the scope of the answer, not decrease it…
When you consider the world as a whole, it’s hard to say that any one ethical decision will make any difference. But as large as it is, our world is a finite place, and there are only so many decisions (ethical or otherwise) that can be made at any one moment. If you choose the ethical course, do the “right” thing, the number of ethical, fair and decent actions being taken in our world increases. Maybe only by one, but in business terms the distinction is meaningless; the total balance of our world has shifted closer to the black. The reason for doing so is simply because the world that you live in has gotten that much better – and it serves your interest to have a better world.
I don’t mean to suggest that the business people of the world are the saints of some new ethical reformation – I don’t want to see any of you laughing that hard; you might hurt yourselves. I am suggesting that the single best reason for behaving in an ethical fashion (and running a company in an ethical fashion) is because who wants to live in a world where people don’t? If any of you care I can furnish hundreds of examples where public perception of a firm as being an ethically run organization was also insanely profitable, earning the company many times more money than they could ever have made doing the “wrong” thing, but this merely emphasizes my point. It is incumbent upon us, the management professionals of the world, to always attempt to do the right thing; because it will save us a fortune in legal fees and fines and bad reputations, and because it will make us a fortune in customer retention, public relations and increased sales.
And because if we do not, then who will? It’s worth thinking about…
By contrast, you will often hear people asking why they should bother making the ethical choice, particularly when the alternative is more profitable, and especially when the alternative will make no real difference. Why should we go to the trouble of acting in good faith, for example, when the entire world is filled with people who will not act in good faith even if you do put a gun to their heads? Why should we clean up after ourselves when the next people will just leave a huge mess, and the janitor will have to pick up after them anyway? Why should we stop to help someone in distress when they’ll probably sue us for something, just because they can?
You might think that there wouldn’t be a business answer to this dilemma; that it would have to stay in the realm of the philosophers. I would like to suggest, however, that it is only in a business perspective, in profit and loss, that a clear answer to this ancient question can be found, and that in order to see that business solution, we need to increase the scope of the answer, not decrease it…
When you consider the world as a whole, it’s hard to say that any one ethical decision will make any difference. But as large as it is, our world is a finite place, and there are only so many decisions (ethical or otherwise) that can be made at any one moment. If you choose the ethical course, do the “right” thing, the number of ethical, fair and decent actions being taken in our world increases. Maybe only by one, but in business terms the distinction is meaningless; the total balance of our world has shifted closer to the black. The reason for doing so is simply because the world that you live in has gotten that much better – and it serves your interest to have a better world.
I don’t mean to suggest that the business people of the world are the saints of some new ethical reformation – I don’t want to see any of you laughing that hard; you might hurt yourselves. I am suggesting that the single best reason for behaving in an ethical fashion (and running a company in an ethical fashion) is because who wants to live in a world where people don’t? If any of you care I can furnish hundreds of examples where public perception of a firm as being an ethically run organization was also insanely profitable, earning the company many times more money than they could ever have made doing the “wrong” thing, but this merely emphasizes my point. It is incumbent upon us, the management professionals of the world, to always attempt to do the right thing; because it will save us a fortune in legal fees and fines and bad reputations, and because it will make us a fortune in customer retention, public relations and increased sales.
And because if we do not, then who will? It’s worth thinking about…
Saturday, May 10, 2008
The First Duty
Okay, before you ask, yes, I do know that the title of this post is also the title of a Star Trek: The Next Generation episode; a rather good one that features the return of Wil Wheaton and the appearance of “My Favorite Martian” Ray Walston. But I’m a business teacher, not a fanboy, and this blog is about business, not science fiction. And in a business context, that First Duty to which I refer is the duty to listen to your customers, and hear what they are actually saying – not what you want them to say.
It’s one of those points that are so obvious that it can be difficult to understand why you have to explain it to anyone, and yet it is found at the heart of every major customer service training program. After all, the first thing every customer wants to know is that you are paying attention to them; that they matter to you and that you will try to solve their problem (at least to the extent that you can). This is particularly important in circumstances where the customer is having a problem with your company, your product, your inventory, or some other business factor that you can (at least in theory) control; at that point, understanding the problem and helping to resolve it is absolutely critical.
What is less often brought up about this function is its importance in situations where there isn’t a customer service problem – yet. Consider, for example, the situation we had today with our second car. My wife stopped driving it four years ago, mostly because of the ongoing mechanical problems with the engine, and also partly because she was able to join a shared ride van program and thus didn’t have to drive to work anymore. Not operating a second vehicle has saved us a small fortune on gas, repairs and insurance, but it has also resulted in our not using the car for several years. When we decided to part with it, my wife called one of those donate-your-car-to-charity groups and explained that they could have the car, but they would need to tow it out of our carport and up a short ramp to the street.
When the charity group came to take the car, they arrived in a four-vehicle transporter that could not handle anything that wasn’t parked on the street (instead of the tow truck we had asked them to bring). They could not get to the car, and had no interest in coming back with a more suitable tow vehicle. So we called an auto-wrecking service, explained to them in careful detail where the car was and what it would take to get to it, and asked them to come out with a tow truck…
You guessed it: they showed up with a large flatbed truck that couldn’t back up to our carport either! Fortunately, the guys driving the flatbed and I were able to push the car far enough out of the garage that they were able to get a tow chain on it and pull it the rest of the way. But they came very close to doing themselves out of a very large amount of business (thus violating the First Rule of Business); the charity people DID succeed in screwing themselves out of a donation worth hundreds (or thousands) of dollars. All because they were unable to listen to what was required of them.
Then there was the Verizon FIOS sales rep who called our house today. Despite the fact that our last name has only five letters in it, and despite the fact that I corrected her three times about how you pronounce it, she couldn’t get it right. But that pales in comparison to the fact that when I told her we were not going to purchase the service, she then asked when a good time to speak with Mr. or Mrs. Burke might be. I don’t know if she honestly didn’t think I was the person who lives at this phone number, or if she thought someone else in my household might give her a different answer, or if she got lost in her script and was reading the wrong response, or if she’s really stupid that despite being told our name is Belin (B-E-L-I-N, short E, short I) three times she couldn’t remember it. I do know that getting snotty with me at that point was possible the most pathetic customer service failure I have ever seen, as well as the most incompetent telephone sales effort I have ever witnessed…
And remember that I’ve worked in both customer service and phone sales over the years! If it was a failure to program a computer, operate a vehicle, or even memorize complex information and understand its significance, I could be more sympathetic. But in all of these cases, all the people in question were being asked to do was listen…
It’s one of those points that are so obvious that it can be difficult to understand why you have to explain it to anyone, and yet it is found at the heart of every major customer service training program. After all, the first thing every customer wants to know is that you are paying attention to them; that they matter to you and that you will try to solve their problem (at least to the extent that you can). This is particularly important in circumstances where the customer is having a problem with your company, your product, your inventory, or some other business factor that you can (at least in theory) control; at that point, understanding the problem and helping to resolve it is absolutely critical.
What is less often brought up about this function is its importance in situations where there isn’t a customer service problem – yet. Consider, for example, the situation we had today with our second car. My wife stopped driving it four years ago, mostly because of the ongoing mechanical problems with the engine, and also partly because she was able to join a shared ride van program and thus didn’t have to drive to work anymore. Not operating a second vehicle has saved us a small fortune on gas, repairs and insurance, but it has also resulted in our not using the car for several years. When we decided to part with it, my wife called one of those donate-your-car-to-charity groups and explained that they could have the car, but they would need to tow it out of our carport and up a short ramp to the street.
When the charity group came to take the car, they arrived in a four-vehicle transporter that could not handle anything that wasn’t parked on the street (instead of the tow truck we had asked them to bring). They could not get to the car, and had no interest in coming back with a more suitable tow vehicle. So we called an auto-wrecking service, explained to them in careful detail where the car was and what it would take to get to it, and asked them to come out with a tow truck…
You guessed it: they showed up with a large flatbed truck that couldn’t back up to our carport either! Fortunately, the guys driving the flatbed and I were able to push the car far enough out of the garage that they were able to get a tow chain on it and pull it the rest of the way. But they came very close to doing themselves out of a very large amount of business (thus violating the First Rule of Business); the charity people DID succeed in screwing themselves out of a donation worth hundreds (or thousands) of dollars. All because they were unable to listen to what was required of them.
Then there was the Verizon FIOS sales rep who called our house today. Despite the fact that our last name has only five letters in it, and despite the fact that I corrected her three times about how you pronounce it, she couldn’t get it right. But that pales in comparison to the fact that when I told her we were not going to purchase the service, she then asked when a good time to speak with Mr. or Mrs. Burke might be. I don’t know if she honestly didn’t think I was the person who lives at this phone number, or if she thought someone else in my household might give her a different answer, or if she got lost in her script and was reading the wrong response, or if she’s really stupid that despite being told our name is Belin (B-E-L-I-N, short E, short I) three times she couldn’t remember it. I do know that getting snotty with me at that point was possible the most pathetic customer service failure I have ever seen, as well as the most incompetent telephone sales effort I have ever witnessed…
And remember that I’ve worked in both customer service and phone sales over the years! If it was a failure to program a computer, operate a vehicle, or even memorize complex information and understand its significance, I could be more sympathetic. But in all of these cases, all the people in question were being asked to do was listen…
Friday, May 9, 2008
Being Second-Guessed
A few people noted that in my post about management aphorisms a few months ago, I only exhorted managers of all levels not to second-guess the person on the ground; that is, not to question decisions made by someone else, on the spur of the moment, without benefit of hindsight, all the time in the world to think things over, and the complete lack of pressure that result from not having to take any responsibility for the situation (since the decision has already been made). I did not, however, mention what I would advocate when it is your decision that is being disparaged by Monday-morning quarterbacks who should really know better. Which, after all, would seem to be the more difficult role...
First off, acknowledge to yourself that this is not the first time this problem has come up, that it's completely understandable, and that unless you are a highly enlightened person, you've probably done it too. It can be hard to remember, in the light of subsequent experience and the presence of infinitely more comfortable circumstances just how dark, cold and scary a critical situation can be, and how hard it is to make a good decision while in the middle of one. In fact, unless the individual in question is a complete and utter fool, you might consider reminding whoever is second-guessing you of all of that...
Second, review the decision in your own mind. Actually, you probably have, endlessly, ever since you made it. But unless you are a complete and utter fool, you probably had a reason for making the choices you did. Were they valid choices, given what you knew at the time? More to the point, perhaps, ask yourself if you can now, with all of the time you need to think things over (but WITHOUT benefit of what you have subsequently learned!) make a better decision. Would you make the same decision again, or would you change things? There's another aphorism that applies here: "There is no shame in making mistakes. Only in repeating them."
Third, deconstruct the situation, not the decision or the person who made it. Perhaps in the future the person who is being critical of your choice should be the one to make those decisions; perhaps in the future you should be given more information or better resources when dealing with such a situation; perhaps in the future you or your organization can devise ways to prevent such situations from occurring. But you should not accept criticism from anyone who was not there at the time; you had to make the decision, not them, and those events are in the past, anyway. Working toward a better future is constructive; slamming someone over events in the past is punitive, and indicates that the person doing it is a fool, an idiot, or an incompetent.
If they were there with you during the crisis and agreed with your decision, or worse yet, refused to offer you any advice, only to criticize your choices later, they are all of the above...
Finally, if you are working for someone who persists in this kind of behavior, who is too stupid, incompetent and foolish to realize that such actions constitute disrespect for your abilities, arrogance of the worst sort, and invalid management practice (malpractice, in fact, although it isn't called that in our profession), then you will have to consider if your position if untenable and if you must consider a different career option. No one likes to change jobs on short notice, but a manager stupid and foolish enough to persist in this sort of monumental mistake is probably stupid enough to make other bad judgment calls and/or ignorant enough to foul up other situations in which they should have known better. I don't advocate storming out of the office and quitting on the spot, particularly if the problem you're having is isolated and most of your company's management structure does know better than this. Maybe you can transfer to another part of the company, or get higher management to help you out.
But if your entire management structure is riddled with Monday-morning quarterbacks, then by all means, get your resume ready. Because one day soon those idiots are going to destroy the company, and you don't want to be around when they do...
First off, acknowledge to yourself that this is not the first time this problem has come up, that it's completely understandable, and that unless you are a highly enlightened person, you've probably done it too. It can be hard to remember, in the light of subsequent experience and the presence of infinitely more comfortable circumstances just how dark, cold and scary a critical situation can be, and how hard it is to make a good decision while in the middle of one. In fact, unless the individual in question is a complete and utter fool, you might consider reminding whoever is second-guessing you of all of that...
Second, review the decision in your own mind. Actually, you probably have, endlessly, ever since you made it. But unless you are a complete and utter fool, you probably had a reason for making the choices you did. Were they valid choices, given what you knew at the time? More to the point, perhaps, ask yourself if you can now, with all of the time you need to think things over (but WITHOUT benefit of what you have subsequently learned!) make a better decision. Would you make the same decision again, or would you change things? There's another aphorism that applies here: "There is no shame in making mistakes. Only in repeating them."
Third, deconstruct the situation, not the decision or the person who made it. Perhaps in the future the person who is being critical of your choice should be the one to make those decisions; perhaps in the future you should be given more information or better resources when dealing with such a situation; perhaps in the future you or your organization can devise ways to prevent such situations from occurring. But you should not accept criticism from anyone who was not there at the time; you had to make the decision, not them, and those events are in the past, anyway. Working toward a better future is constructive; slamming someone over events in the past is punitive, and indicates that the person doing it is a fool, an idiot, or an incompetent.
If they were there with you during the crisis and agreed with your decision, or worse yet, refused to offer you any advice, only to criticize your choices later, they are all of the above...
Finally, if you are working for someone who persists in this kind of behavior, who is too stupid, incompetent and foolish to realize that such actions constitute disrespect for your abilities, arrogance of the worst sort, and invalid management practice (malpractice, in fact, although it isn't called that in our profession), then you will have to consider if your position if untenable and if you must consider a different career option. No one likes to change jobs on short notice, but a manager stupid and foolish enough to persist in this sort of monumental mistake is probably stupid enough to make other bad judgment calls and/or ignorant enough to foul up other situations in which they should have known better. I don't advocate storming out of the office and quitting on the spot, particularly if the problem you're having is isolated and most of your company's management structure does know better than this. Maybe you can transfer to another part of the company, or get higher management to help you out.
But if your entire management structure is riddled with Monday-morning quarterbacks, then by all means, get your resume ready. Because one day soon those idiots are going to destroy the company, and you don't want to be around when they do...
Thursday, May 8, 2008
Why Relationships Are Important
In most service-based businesses (at least, most service-based businesses that care about repeat business, anyway) you will hear people talking about the importance of establishing and maintaining relationships with their customers. I have actually met members of a customer service department whose title is "Relationship Manager," and who are charged with staying in touch with the company's better customers, specifically so those customers will have occasion to interact with the company that don't involve complaints, refund demands, or litigation meetings. It's even possible to purchase "relationship management" software that will track all of your customers, remember their birthdays, anniversaries, children’s' names (and birthdays), and advise you when it is time to call, write, email, send flowers, or whatever.
Some of you, I'm sure, have been subjected to these attentions, and have wondered if they really do any good; or at least if the company makes back the cost of taking such measures in the first place. If so, I really need to introduce you to the Realtor who sold us our house back in 2002. Her name is Martha, and she is amazingly good at what she does. Technically, I suppose, the people who used to own the house sold it to us, but we would never have found them (or they us) without Martha's help. And we would never have found her if I hadn't played a hunch; we met her at an open house one Saturday when we decided to stop and look around, even though the house in question was clearly out of our price range.
Martha was the agent showing the house, and she was busy enough that afternoon that she really could have told us she was too busy to talk just then and would get back to us later, and we wouldn't have minded. But she didn't; despite the time requirements of dealing with the dozens of people walking in and out that afternoon, she made a point of asking us what we were looking for, what our preferences were, what we thought we could afford, and what we might be willing to settle for. The house we met her in was taken off the market a few days later when the owners changed their minds about selling, but Martha showed us some others, and after a few setbacks (sellers who wanted too much, being out-bid by other buyers, and so on) we eventually arrived at the house we ended up buying in North Redondo.
You'd figure that would be it, right? Maybe a thank-you note the day the sale closed, or something, but then we'd all move on. And, in fact, a lesser talent might have. But Martha didn't. We continued to hear from her once or twice a year, either by telephone or by personal letter. We kept her posted about the passages in our lives, and we sent a couple of friends who were considering buying houses to her; we also told her about useful services in our neighborhood, like Precision Fence, our wonderful picket fence company (better AND cheaper than any of the competition!). And of course Martha put us on the mailing list for her online newsletter, but that's elementary stuff; if there's a Realtor out there who ISN'T doing an electronic newsletter, he or she should have his or her head examined.
It might well have seemed futile, and but for a million-to-one chance, it would have been. When we moved to Redondo we had no intention of selling the house, or moving, at least before the mortgage was paid off. I did point out at the time that we might want to trade the place in for a one-story residence when we retired, and after seeing the problems my grandmother had with her three-level condo after about age 95 or so, my wife reluctantly agreed. Still, it seemed unlikely that Martha would get any more business from us directly before the year 2032...
And then the Eli Broad College of Business at Michigan State University decided to accept me for their Ph.D. program, effective Fall Semester 2008, and all of a sudden, we needed to sell our house. Anyone want to guess who we called? Good thing she maintained her relationship with us, wasn't it?
Some of you, I'm sure, have been subjected to these attentions, and have wondered if they really do any good; or at least if the company makes back the cost of taking such measures in the first place. If so, I really need to introduce you to the Realtor who sold us our house back in 2002. Her name is Martha, and she is amazingly good at what she does. Technically, I suppose, the people who used to own the house sold it to us, but we would never have found them (or they us) without Martha's help. And we would never have found her if I hadn't played a hunch; we met her at an open house one Saturday when we decided to stop and look around, even though the house in question was clearly out of our price range.
Martha was the agent showing the house, and she was busy enough that afternoon that she really could have told us she was too busy to talk just then and would get back to us later, and we wouldn't have minded. But she didn't; despite the time requirements of dealing with the dozens of people walking in and out that afternoon, she made a point of asking us what we were looking for, what our preferences were, what we thought we could afford, and what we might be willing to settle for. The house we met her in was taken off the market a few days later when the owners changed their minds about selling, but Martha showed us some others, and after a few setbacks (sellers who wanted too much, being out-bid by other buyers, and so on) we eventually arrived at the house we ended up buying in North Redondo.
You'd figure that would be it, right? Maybe a thank-you note the day the sale closed, or something, but then we'd all move on. And, in fact, a lesser talent might have. But Martha didn't. We continued to hear from her once or twice a year, either by telephone or by personal letter. We kept her posted about the passages in our lives, and we sent a couple of friends who were considering buying houses to her; we also told her about useful services in our neighborhood, like Precision Fence, our wonderful picket fence company (better AND cheaper than any of the competition!). And of course Martha put us on the mailing list for her online newsletter, but that's elementary stuff; if there's a Realtor out there who ISN'T doing an electronic newsletter, he or she should have his or her head examined.
It might well have seemed futile, and but for a million-to-one chance, it would have been. When we moved to Redondo we had no intention of selling the house, or moving, at least before the mortgage was paid off. I did point out at the time that we might want to trade the place in for a one-story residence when we retired, and after seeing the problems my grandmother had with her three-level condo after about age 95 or so, my wife reluctantly agreed. Still, it seemed unlikely that Martha would get any more business from us directly before the year 2032...
And then the Eli Broad College of Business at Michigan State University decided to accept me for their Ph.D. program, effective Fall Semester 2008, and all of a sudden, we needed to sell our house. Anyone want to guess who we called? Good thing she maintained her relationship with us, wasn't it?
Not Invented Here
How many times has this happened to you? You're working on an absolute peach of an idea - something that will enrich the company, improve stockholder equity, solve all of those nagging problems that have beset your work group for years, and improve the quality of life enjoyed by all mankind. You don't expect a reward, let alone the promotion and raise you richly deserve, for making this happen; you're doing it because someone has to, because it's an idea worth having; because you take your fiduciary responsibility to the stockholders seriously, and because you take pride in your work. Even if your superiors steal all of the credit for your idea, it was still worth doing -- and of course, doing well.
Instead, your boss and his colleagues (or his boss and her colleagues) take one look at it and reject it without comment. Or, at least, without anything resembling INTELLIGENT comment. "That's not how we do things around here," they might say, if you've been with the company for a shorter time than they have. "It will take too long or cost too much," they could declare, if they don't feel like reading your proposal (after all, they control the money and the work schedules, so they get to decide) or thinking about it any longer. "This will never work," the might decree, if the idea has real merit and there's no easy way for them to steal the credit. "I don't like this," they might tell you, if you've demonstrated that your idea saves money, takes less time than existing methods, and works perfectly.
Chances are, you've just run into one of the worst things that can possibly befall an original idea: Not Invented Here Syndrome. Sometimes this means literally, in cases where the company has taken on a bunker mentality, and anything their own management team didn't dream up is seen as a threat to their way of life. Other times it indicates a manager who has come to view any subordinate with brain activity as a threat, who is maintaining control over the work group by attacking all ideas that he or she didn't personally invent and then blaming the employees for a lack of initiative and creativity. And sometimes it indicates that the person you are dealing with has fallen deeply, madly in love with their own idea or their own concept of how the business should be, and they can't bear to change or part with any of it.
I don't have any clever, magic-bullet ideas for how to beat this syndrome; it's one of the worst kinds of management failure, and may actually indicate that your manager is incompetent and/or in need of immediate replacement. You can prove the worth and value of an idea, and demonstrate that the concept will work, and still be met with comments like "You're right. I know you're right. But I'm not going to do it anyway." Trust me; I've seen it happen. If you have the power/influence with higher management, you may have to arrange an intervention by higher authority. If not, you might have to take whatever action you feel is appropriate to a supervisor who has gone mad and is going to destroy the company around you -- even if that means handing in your resignation and fleeing the scene.
To my fellow managers, I can only say that before you dismiss any idea, you should ask some logical questions. Will this idea work? If it does, will it make money or produce some other positive value for the company? What are its Net Present Value (NPV) and its Internal Rate of Return (IRR), and are they appropriate to the company, the current situation, and the characteristics of the idea? Can you personally gain by becoming the sponsor of this project and the mentor of the bright young person who came up with it? Is it, in fact, an artifact of how you nurture sharp young minds and the original ideas they produce? Or, at least, can you get YOUR boss to believe that it is? And, of course, if your subordinates fear bringing you new ideas to the point where they never do, how will you ever know when they ARE working on something that will enable them to take over your job?
It's worth thinking about...
Instead, your boss and his colleagues (or his boss and her colleagues) take one look at it and reject it without comment. Or, at least, without anything resembling INTELLIGENT comment. "That's not how we do things around here," they might say, if you've been with the company for a shorter time than they have. "It will take too long or cost too much," they could declare, if they don't feel like reading your proposal (after all, they control the money and the work schedules, so they get to decide) or thinking about it any longer. "This will never work," the might decree, if the idea has real merit and there's no easy way for them to steal the credit. "I don't like this," they might tell you, if you've demonstrated that your idea saves money, takes less time than existing methods, and works perfectly.
Chances are, you've just run into one of the worst things that can possibly befall an original idea: Not Invented Here Syndrome. Sometimes this means literally, in cases where the company has taken on a bunker mentality, and anything their own management team didn't dream up is seen as a threat to their way of life. Other times it indicates a manager who has come to view any subordinate with brain activity as a threat, who is maintaining control over the work group by attacking all ideas that he or she didn't personally invent and then blaming the employees for a lack of initiative and creativity. And sometimes it indicates that the person you are dealing with has fallen deeply, madly in love with their own idea or their own concept of how the business should be, and they can't bear to change or part with any of it.
I don't have any clever, magic-bullet ideas for how to beat this syndrome; it's one of the worst kinds of management failure, and may actually indicate that your manager is incompetent and/or in need of immediate replacement. You can prove the worth and value of an idea, and demonstrate that the concept will work, and still be met with comments like "You're right. I know you're right. But I'm not going to do it anyway." Trust me; I've seen it happen. If you have the power/influence with higher management, you may have to arrange an intervention by higher authority. If not, you might have to take whatever action you feel is appropriate to a supervisor who has gone mad and is going to destroy the company around you -- even if that means handing in your resignation and fleeing the scene.
To my fellow managers, I can only say that before you dismiss any idea, you should ask some logical questions. Will this idea work? If it does, will it make money or produce some other positive value for the company? What are its Net Present Value (NPV) and its Internal Rate of Return (IRR), and are they appropriate to the company, the current situation, and the characteristics of the idea? Can you personally gain by becoming the sponsor of this project and the mentor of the bright young person who came up with it? Is it, in fact, an artifact of how you nurture sharp young minds and the original ideas they produce? Or, at least, can you get YOUR boss to believe that it is? And, of course, if your subordinates fear bringing you new ideas to the point where they never do, how will you ever know when they ARE working on something that will enable them to take over your job?
It's worth thinking about...
Tuesday, May 6, 2008
Why Not the 'Net?
The Castle Press newsletter for last month had an interesting news item on it about why large companies are avoiding Internet advertising -- and why they should stop avoiding online ads and embrace them. I found that both sets of arguments (the ones Castle Press is using to advocate Internet advertising and the ones described as the reasons why many companies do not) say more about the businesses and their management teams than they do about advertising or the 'Net...
First off, it is believed that the majority of consumers today will make use of Internet research before making a purchase, in order to inform themselves about the product choices. This is probably true in the strictest sense - if we include in the description of "research" all of the people who merely see/hear about a product online and decide that because they saw it on the Internet it must be true. It's like saying that people use television ads to "research" product choices: they do, in the sense that "research" means "gain information about." But Internet research is becoming more difficult at time goes on, not less, and gaining information online that actually applies to what you are trying to do (especially credible information) is becoming more and more of a professional skill.
Then there's the fact that Internet use makes up 30% of all the media exposure the average person gets, but most companies are only spending 7.5% of their advertising budget on online ads. This sounds completely incompetent, doesn't it? But the problem with Internet advertising is that there are so many places available to put it. In most cities you have only a half-dozen television stations, twenty or thirty radio stations, and two or three newspapers. Just a few choice ad placements can be expected to reach virtually everyone in your territory who would buy your product in the first place. Local cable advertising may offer hundreds of additional channels, but the ability to target your ads more precisely (for example, placing ads for a kitchen supply store or gourmet wine shop on the Food Network) more than makes up for this.
By contrast, there are literally thousands of web sites available on any given subject, and no way to know which ones your particular customers will even look at. A quick Google search for "news," to take the obvious example, yields 3,600,000,000 hits. That's right, folks; over THREE BILLION Internet news pages, and your customers could be on any one of them, depending on how they phrased their search. Or, they could be the type who prefers to get their news from a talking head in a box in their living room and only read Internet entertainment pages (of which there are a much higher number). Even worse, unlike television or radio channels, there is no rating system for Internet sites. Counters are no help; they're too easy to manipulate, and even if they weren't there would be no guarantee that 100 hits is actually 100 people going there, as opposed to one hacker swinging by every few minutes (or a pirate link sending people to the site against their wishes). Until you can measure the benefit to be gained by Internet ads, no rational businessperson is likely to spend money on them.
Of course, there are also internal objections to Internet advertising, ranging from senior management who don't trust the entire medium to cynics who doubt the effectiveness of specific ads and placement, to companies that simply do not have the in-house ability to create web ads or place them anywhere. Too many people believe that Internet advertising is only practical for online and e-commerce companies, worry about the drain on the advertising budget for unproven marketing channels, or fear change in the form of disrupting their existing business model, breaking existing business relationships, or losing loyal customers. Needless to say, some of this can be mere empire-building, or managers objecting to new concepts simply because someone else thought of them (the infamous "Not Invented Here" syndrome)...
But that's a post for another day.
First off, it is believed that the majority of consumers today will make use of Internet research before making a purchase, in order to inform themselves about the product choices. This is probably true in the strictest sense - if we include in the description of "research" all of the people who merely see/hear about a product online and decide that because they saw it on the Internet it must be true. It's like saying that people use television ads to "research" product choices: they do, in the sense that "research" means "gain information about." But Internet research is becoming more difficult at time goes on, not less, and gaining information online that actually applies to what you are trying to do (especially credible information) is becoming more and more of a professional skill.
Then there's the fact that Internet use makes up 30% of all the media exposure the average person gets, but most companies are only spending 7.5% of their advertising budget on online ads. This sounds completely incompetent, doesn't it? But the problem with Internet advertising is that there are so many places available to put it. In most cities you have only a half-dozen television stations, twenty or thirty radio stations, and two or three newspapers. Just a few choice ad placements can be expected to reach virtually everyone in your territory who would buy your product in the first place. Local cable advertising may offer hundreds of additional channels, but the ability to target your ads more precisely (for example, placing ads for a kitchen supply store or gourmet wine shop on the Food Network) more than makes up for this.
By contrast, there are literally thousands of web sites available on any given subject, and no way to know which ones your particular customers will even look at. A quick Google search for "news," to take the obvious example, yields 3,600,000,000 hits. That's right, folks; over THREE BILLION Internet news pages, and your customers could be on any one of them, depending on how they phrased their search. Or, they could be the type who prefers to get their news from a talking head in a box in their living room and only read Internet entertainment pages (of which there are a much higher number). Even worse, unlike television or radio channels, there is no rating system for Internet sites. Counters are no help; they're too easy to manipulate, and even if they weren't there would be no guarantee that 100 hits is actually 100 people going there, as opposed to one hacker swinging by every few minutes (or a pirate link sending people to the site against their wishes). Until you can measure the benefit to be gained by Internet ads, no rational businessperson is likely to spend money on them.
Of course, there are also internal objections to Internet advertising, ranging from senior management who don't trust the entire medium to cynics who doubt the effectiveness of specific ads and placement, to companies that simply do not have the in-house ability to create web ads or place them anywhere. Too many people believe that Internet advertising is only practical for online and e-commerce companies, worry about the drain on the advertising budget for unproven marketing channels, or fear change in the form of disrupting their existing business model, breaking existing business relationships, or losing loyal customers. Needless to say, some of this can be mere empire-building, or managers objecting to new concepts simply because someone else thought of them (the infamous "Not Invented Here" syndrome)...
But that's a post for another day.
Sunday, May 4, 2008
Take Your Gun to Work Day
It had to be Florida, didn't it? There's a news story out of West Palm Beach about two supermarket employees who foiled what turns out to be not so much a robbery attempt or a takeover/hostage situation as a "shopping rage" incident because they were both carrying guns while on the job. You can read about it above if you want to. Now, I will admit that I have spent a few hours in retail management, down at the pointy end of a general merchandise retailer (a drug store), and in that position you find out very soon -- usually within hours of manning the Customer Service desk for the first time -- why the uniforms do not come with side arms...
In fact, this is a big part of why so many companies do not permit employees (other than licensed security personnel) to bring ANY weapons to work with them; because no matter how good you are at customer service, managing stress and holding your temper, eventually there will be at least one customer so obnoxious that you will have all you can manage not to shoot him or her. Admittedly, the company is probably also worried about the possibility of you accidentally shooting someone, shooting an annoying coworker, "accidentally" shooting someone who stands between you and that promotion, or doing in a supervisor who you think has torpedoed your career, and then being sued down to their underpants for failing to provide a safe working environment, but annoying customers and "street justice" are definitely on the list...
I'm not going to argue in favor of an armed workforce; as with society as a whole, gun ownership only works if the owners are responsible people, and I have worked with (and continue to this day to work with) people I wouldn't trust to operate a pea shooter in a responsible manner, let alone a firearm. I'm just going to point out that either of the gun-toting grocers in this story could easily have been killed if they hadn't been armed; that the night manager of the convenience store next to my drug store WAS killed during a robbery in 1995 while unarmed; that a single Sky Marshall with a single firearm could have prevented any one of the 9/11 hijackings from succeeding; that a single professor with a single firearm might have stopped the Virginia Tech killer in his tracks...
I’ll also point out that while this is something of a slippery slope argument (if we start allowing some employees in some companies to come to work armed, where will it end?) the lines are not as easy to draw, and the solutions are not as easy to invent, as people seem to think. No one wants to have armed security personnel everywhere in our society; I certainly don’t want them in my office while I’m working, or in the classroom if I’m teaching (or studying). Many small businesses could not afford such protection in the first place, and even if they could this type of solution takes us one step away from converting our society into one giant open-air prison. One quite small step, in fact.
Of course, there are security measures short of actual armed security guards that a business can take, such as the bulletproof partitions you see in some banks and gas stations, for example. A company can install silent alarms, make sure employees do not carry cash, and make sure that cash is collected from the registers and dropped into the safe on a regular basis. But there’s really not much you can do about some lunatic walking into your place of business, becoming offended by some kind of “rudeness” (real or imagined) and deciding to retaliate by shooting you or some of your employees. The only thing you can really be sure of in that situation is that everybody who hears the story will know exactly what you should have done to prevent the situation.
And that none of it will make a bit of difference after the fact...
In fact, this is a big part of why so many companies do not permit employees (other than licensed security personnel) to bring ANY weapons to work with them; because no matter how good you are at customer service, managing stress and holding your temper, eventually there will be at least one customer so obnoxious that you will have all you can manage not to shoot him or her. Admittedly, the company is probably also worried about the possibility of you accidentally shooting someone, shooting an annoying coworker, "accidentally" shooting someone who stands between you and that promotion, or doing in a supervisor who you think has torpedoed your career, and then being sued down to their underpants for failing to provide a safe working environment, but annoying customers and "street justice" are definitely on the list...
I'm not going to argue in favor of an armed workforce; as with society as a whole, gun ownership only works if the owners are responsible people, and I have worked with (and continue to this day to work with) people I wouldn't trust to operate a pea shooter in a responsible manner, let alone a firearm. I'm just going to point out that either of the gun-toting grocers in this story could easily have been killed if they hadn't been armed; that the night manager of the convenience store next to my drug store WAS killed during a robbery in 1995 while unarmed; that a single Sky Marshall with a single firearm could have prevented any one of the 9/11 hijackings from succeeding; that a single professor with a single firearm might have stopped the Virginia Tech killer in his tracks...
I’ll also point out that while this is something of a slippery slope argument (if we start allowing some employees in some companies to come to work armed, where will it end?) the lines are not as easy to draw, and the solutions are not as easy to invent, as people seem to think. No one wants to have armed security personnel everywhere in our society; I certainly don’t want them in my office while I’m working, or in the classroom if I’m teaching (or studying). Many small businesses could not afford such protection in the first place, and even if they could this type of solution takes us one step away from converting our society into one giant open-air prison. One quite small step, in fact.
Of course, there are security measures short of actual armed security guards that a business can take, such as the bulletproof partitions you see in some banks and gas stations, for example. A company can install silent alarms, make sure employees do not carry cash, and make sure that cash is collected from the registers and dropped into the safe on a regular basis. But there’s really not much you can do about some lunatic walking into your place of business, becoming offended by some kind of “rudeness” (real or imagined) and deciding to retaliate by shooting you or some of your employees. The only thing you can really be sure of in that situation is that everybody who hears the story will know exactly what you should have done to prevent the situation.
And that none of it will make a bit of difference after the fact...
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