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This Economy Calls for Immediate Discussion, Not!

Thursday, July 17th, 2008

Remember this sequence from Monty Python’s Life of Brian?

JUDITH: They’ve arrested Brian!

REG: What?

COMMANDOS: What?

JUDITH: They’ve dragged him off! They’re going to crucify him!

REG: Right! This calls for immediate discussion!

COMMANDO #1: Yeah.

JUDITH: What?!

COMMANDO #2: Immediate.

COMMANDO #1: Right.

LORETTA: New motion?

REG: Completely new motion, eh, that, ah– that there be, ah, immediate action–

$\"Death of Nero, by Kaempfer\"$ Action Is Risky, but Inaction Is Riskier
When the economy is burning, you can’t fiddle — unless you want to end up like Nero, which wouldn’t be good (see image at right). Yet there is a tendency as an entrepreneur or a business leader to hunker down, wait, see what happens. (more…)

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The Benefits of Open Source - Guest Post

Tuesday, June 17th, 2008

Image via WikipediaOpen Source Benefits
by Randy Kemp

Have you ever read Henry David Thoreau or Ralph Waldo Emerson? Well, one day Thoreau was in prison, for refusing to pay a war tax, and Ralph came to visit him. Ralph opened up with the question, “what are you doing in there?” Henry retorted, “My dear Emerson, what are you doing out there?” Now, like Emerson, I am asking you this question. When it comes to open source, “what are you doing out there?” Come inside and enjoy some of the benefits. It is quite possible that folks joining me today may have missed my first guest blog. So let’s start with a brief definition of open source software. Open source software is “a program in which the source code is available to the general public for use and/or modification from its original design free of charge, i.e., open. Open source code is typically created as a collaborative effort in which programmers improve upon the code and share the changes within the community.” (more…)

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Put Life into Your Meetings with Open Space

Wednesday, June 4th, 2008

Do you dread meetings as much as I do? The thought of sitting through a 3 or 4 hour session brings to mind images of the cartoon just to the north. But last week I had an opportunity to attend my first Open Space meeting, and wow, what a difference. (more…)

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Prisoner of Microsoft? Escape to Open Source

Wednesday, May 28th, 2008

If you’re using Microsoft to run your business because you have to, not because you want to, consider open source. You have software options that can save money and do a better job. Randy Kemp, a technical copywriter, business associate, and all-around fascinating guy, agreed to share some ideas on open source software. Thanks, Randy!

Open Source – Is It All Hype or Just Good Software?
By Randy Kemp

Open source software: Is it hype or just good software? Well, before we go into this question, we really need a definition. Let’s start with this good, basic definition of open source. They say, “Open source software is software for which the underlying code has been made available for users. Users are then able to read it or change it as they wish.” This is a good definition. But how do we find good open source software, if such a thing exists? (more…)

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Examples of Powerful Writing

Monday, April 21st, 2008

Joanna Young asks, What does powerful writing mean to you? Turns out to be a rather challenging question. I tried to define powerful writing as “memorably evocative.” Writing that sticks in my head and evokes an emotion or an impulse or an attitude has power. But when I think of examples, I don’t see the common denominators. So, rather than bore you with a half-baked analysis of a topic I don’t really understand, I’ll refer you to Joanna’s blog where you can find some actual insight.

In the meantime, I’d like to share few examples of writing I find powerful, in the hope you will enjoy them. Do you find any of them powerful? Why do these passages strike you as powerful — or not?

In Xanadu did Kubla Khan
A stately pleasure-dome decree : (more…)

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U.S. Must Slash Corporate Tax Rates Now

Tuesday, April 15th, 2008

On the political scene, oil companies are the punching bag du jour. People are fed up with $3.50/gallon gasoline and $110/barrel oil, so of course, it must be the fault of the oil companies, who are making money hand over fist at our expense.

Give me a break. Seems to me there are three factors contributing to high oil, and by extension, high gasoline prices.

1. A global economic boom which has caused rapidly rising demand for oil
2. An unstable political environment which leads to fear of supply disruption which leads to higher prices
3. An extremely weak U.S. dollar

What control do oil companies have over any of this? American consumers drive demand, and I still see plenty of Hummers and gas guzzling SUV’s on the road. When I was in Los Angeles in January, all eight lanes of The 5 were packed, except the carpool lane, which was practically empty. For our unstable political environment we can thank terrorists and the likes of Hugo Chavez. And the weak dollar? Thank our government’s fiscal and monetary policies for that one.

Even if you disagree with me, I hope you won’t argue with this. (more…)

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The Most Profitable Recession Ever?

Monday, March 24th, 2008

There are four big drags on the U.S. economy these days –

The weak housing market
The weak financial sector
Rapidly rising commodity prices
Weak consumer spending

Clearly these are interrelated. Analysts like to point out that our recent run of prosperity has been consumer driven. Since consumers are holding on to their cash to pay the mortgage and to buy staples, they declare the consumer driven boom to be over. What’s interesting is, this bad news is being over reported, and the good news about the amazing boom in U.S. exports is being ignored. In January 2008, the U.S. set records for total exports, as well as for exports of industrial supplies and materials, food, feeds, beverages, and petroleum. (U.S. Census Bureau, Monthly Trade Highlights)

Why does the export boom go unnoticed? Many chalk it up to the fact exports are a small part of the overall U.S. economy. An export boom doesn’t matter. As long as Americans aren’t consuming, it’s merely an island of plenty in a sea of poverty.

But just because our good economy was driven by consumer spending before, why should we expect or even want that to continue? What would be wrong with a strong American economy built on exporting tons of goods and services instead of Americans buying tons of plasma TV’s?

More American exports equals more American production. And more American production equals more American jobs — right? What am I missing? If what we’re going through right now is a transition from a spending based to a productivity based economy, isn’t that a good thing?

I don’t get it. Everybody’s worried about the fate of our major retailers. Not that I’d like to see any of them crash and burn, but how come nobody’s excited about the soaring fortunes of companies like Caterpillar and John Deere? There was a time when American manufacturing mattered, here and around the world. Those times weren’t all bad. The service economy we have today, which requires people to buy and buy and buy, encourages consumer debt and does little to create sustainable wealth for the next generation. I think a little more brick and mortar in our economy might be the best thing we could hope for. Am I crazy?

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Are You Addicted to Financial Pornography?

Monday, March 17th, 2008

If you follow the financial news in the mainstream media, you’re probably suffering from a three-month long (and counting) panic attack. Here’s an excerpt from an AP headline story published on March 13, 2008 -

Retail Sales Plunge by 0.6 Percent

WASHINGTON (AP) - Consumers, battered by plunging home prices and a credit crunch, stayed away from the malls in February, pushing retail sales down by a larger-than-expected amount. It was another worrisome sign that the country could be falling into a recession.

The Commerce Department reported Thursday that retail sales fell by 0.6 percent last month, far worse than the small 0.2 percent increase that analysts had been expecting.

The weakness was widespread with sales of autos, furniture and appliances all down.

It marked the second time in the past three months that retail sales have taken a tumble. Sales had fallen by an even bigger 0.7 percent in December, the largest drop in six months, as the nation’s retailers suffered through a dismal holiday shopping season. Sales posted a modest 0.4 percent gain in January.

There’s nothing remarkable about this article - typical of what we read and hear. But do you even notice all the emotional, unsettling words packed into the excerpt?

PLUNGE
BATTERED
CRUNCH
WORRISOME
FAR WORSE
WEAKNESS
TUMBLE
SUFFERED
DISMAL

Read any 10 business articles and you’ll find the same excessive, melodramatic subtext in nine of them. Take the phrase, “far worse than the small 0.2 percent increase that analysts had been expecting.” Are we to blithely assume all analysts think alike? The fact is, analysts differ and differ widely in their expectations and interpretation of data. But financial writers no longer seem interested in dutifully reporting the news. Instead, they titillate us by dressing up the facts in a silky sheet of provocative opinions. A financial adviser friend of mine refers to this phenomenon as “financial pornography.”

Why does the media tease and tantalize rather than inform? Because the media is interested in selling advertisements and subscriptions, not educating the public. And we eat it up like candy. After all, which story are you more likely to read?

RETAIL SALES DECLINE
–or–
RETAIL SALES PLUNGE

Making an extreme case not only sucks us into the story, it makes us hungry for more. What’s going to happen tomorrow? What catastrophe is coming next?

An economy of Biblical proportions?
Thursday’s story of Armageddon and others like it flooded the wires because this latest statistical pronouncement, according to the experts, confirmed that we are “officially” in or virtually in a “recession”. Soon after the story hit, the Dow tumbled over 200 points. However, by the end of the day, the Dow was up about 40. So much for dismal suffering. And keep in mind, just two days earlier, the Dow exploded for a 400 point gain — the largest one day gain in five years! That day, the news was euphoric - the Fed finally gets it! We’ve seen the beginning of the end of the credit crisis! Huzzah!

We’re hurtling down the road on the Media Mood Swing Express, and frankly, it’s making me nauseous.

I’m no economist, but I would contend that the reality is nowhere near as extreme as the rhetoric. For example, take this unemotional report from the Census Bureau on retail sales, also released March 13. Presumably these statistics fed into the stories about the retail plunge.

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for February, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $380.2 billion, a decrease of 0.6 percent (±0.5%) from the previous month, but 2.6 percent (±0.7%) above February 2007. Total sales for the December 2007 through February 2008 period were up 3.3 percent (±0.5%) from the same period a year ago. The December 2007 to January 2008 percent change was revised from +0.3 percent (±0.5%)* to +0.4 percent (±0.2%).

Retail trade sales were down 0.6 percent (±0.7%)* from January 2008, but were 2.4 percent (±0.8%) above last year. Gasoline station sales were up 20.2 percent (±1.0%) from February 2007 and sales of sporting goods, hobby, book, and music stores were up 6.3 percent (±2.8%) from last year.

Not great news, but does it sound like the sky is falling? Does it sound like a crisis? Only if you mix in some spicy adjectives with the facts. Don’t become a financial porn addict. I can think of three reasons why a crisis mentality is the wrong mentality.

“Recession” is a mere construct. Experts, who spend their lives trying to understand such things, can’t agree on whether or not we’re heading for one, in one, or pulling out of one. No question people feel the pinch in a slowdown, but even in a bad recession (and we’ve had plenty of them), it is possible to thrive. For example, in the current market, U.S. exports are booming, commodities are through the roof, agriculture is hot, and energy is hot. If you’re fortunate enough to work in one of these sectors, the future might look very bright. If you’re smart enough to invest wisely in one or more of these sectors, you have the opportunity to offset some of these insane price increases on gasoline and household items.
Economic data can be sliced and diced six ways from Sunday. The statistical sound bites we get from the media can’t possibly convey the meaning behind them. And again, even when experts understand the statistics, they can’t agree on the implications. Some say a weak dollar is O.K. Others say a weak dollar is disaster. Some say the government must bail out lenders. Others say the government must not. By the time the experts sort out the facts, we’ll be well into the next bull market.
The media wants to sell advertising and subscriptions. They have an agenda. Their spin cannot be taken at face value.

Trying to operate a business in an atmosphere of Armageddon is murder — companies don’t expand and consumers don’t buy when they are worried. It is possible to talk ourselves — or more accurately, to listen ourselves — into a recession.

I don’t want to make light of the fact that some people are feeling financial pain right now — heck, I’m one of them. All I’m saying is, when the media obscure instead of enlighten, when they editorialize instead of inform, they’re not helping us deal with the situation. Great business people I’ve known over the years say there’s money to be made whether the economy is going up or going down. Jim Cramer, my favorite stock guru, likes to say there’s always a bull market somewhere. So don’t talk yourself — as a buyer or a seller — into a panic just because the media panders to your base cravings for excitement. It’s financial pornography, and it’s not a victimless crime.

Rebalance your perspective before you rebalance your portfolio!

If you’re going to read, read The Wall Street Journal. It’s as good as it gets for getting the breadth and depth of information you need to make smart business decisions. Reading a cross section of financial blogs makes sense, too. Bloggers often have an agenda, but if you get a broad enough range of opinions, you can usually get a reasonable idea of what’s actually going on.
If that’s too much work, unplug the TV, shut down the computer, and wrap fish with the newspaper. Blacking out the financial news (Mad Money excepted) will calm your nerves and help you think clearly.

How can your business survive slow times? How are you turning problems into opportunity?

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What I Learned from Testifying in Court

Wednesday, March 5th, 2008

Robert Hruzek has another group project going — this time on the topic, What I Learned from the Law. Well, a few years back I had the unpleasant experience of testifying in open court for a day and a half. We were plaintiffs in a contract dispute and I was a key witness. Here’s what I learned about sitting on the hot seat.

There’s no substitute for preparation. Being a sales and marketing guy, meticulous research and preparation don’t exactly come naturally. However, in a legal setting, you simply can’t take shortcuts. Preparation means going over every piece of information directly and remotely connected to the case, again and again and again. It means rehearsing your responses out loud — not just thinking them through, but actually saying the words. My attorney forced me to do all this way past the point I thought was overkill, but in the end, I saw the value. Being well prepared helped me keep my cool on the stand.

Don’t take it personally. Our system of justice is an adversarial system. I learned that lawyers really take the “adversarial” part seriously. Anyone who watches TV knows opposing counsel will try anything in the book to trip you up and make you sound like an idiot (which in my case would not exactly require a law degree from Harvard). I was reminded time and again not to take it personally — it’s just business. You could be flambéed by opposing counsel for lunch and join him for a steak dinner that evening. He probably wouldn’t even remember you. Good to keep in mind while you’re being flambéed.

Don’t follow your instincts, do what your lawyer tells you. For example, when my lawyer said, keep your answers short with opposing counsel, my inner voice said, “No! Let me tell my story.” Wrong. During the case a few witnesses tried it and it backfired every time. Problem is, you may know the facts, but the attorneys know all the lines of argument and will take you right where they want to go if you give them an opening. Regardless of what you do, you’re going to get embarrassed somewhere, somehow, on cross examination, but don’t try to explain yourself. Be patient — if your attorney feels the need, he or she can rehabilitate you with one or two questions on redirect. The whole process of testifying takes you out of control. The natural reaction — mine, anyway — is to regain it. Doesn’t work.

How you look and act really matter. You could tell the judge was sizing up every witness very carefully. I definitely got the feeling if a witness came forward dressed casually or business casual, they were getting a black mark against them. For me, the most unnerving part of being on the stand was being aware that the judge was eyeballing me really hard all the time. Actually it might have helped, because it reminded me not to fidget, shift my eyes, or speak too quickly.

Uncomfortable as it was, testifying in court was a character builder and I’m glad, in a way, I went through it. Afterwards, a cold call or a tough client meeting didn’t seem so formidable. Still, the best lesson I learned about the courtroom is this. Stay out of it!

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What I Learned from My Business Mentors

Friday, February 8th, 2008

Luckily for me I had four fantastic mentors when I was coming up through the ranks. Here are 50 bits of business wisdom they passed on to me.

1. It’s common for small errors to cripple a business.
2. It’s rare for a big idea to catapult a business.
3. Always be searching for the big idea anyway.
4. Suppliers are as important as customers.
5. Pay bills on time.
6. Give people your full attention.
7. Have benchmarks and really study them.
8. The most effective business people are well rounded.
9. Ask for the order.
10. Always be willing to walk away from a negotiation.
11. When you’re good at something, exploit it to the max. Leave competitors in the dust.
12. Anything can be negotiated.
13. If someone wants to talk, listen.
14. Share your thought process. Talk about ideas while you’re forming them.
15. Don’t hire people with ” skill sets”. Hire people who can think.
16. Pay close attention to details.
17. Talk to customers and prospects as an equal.
18. As an owner, never allow yourself to lose touch with customers.
19. Great sales people find opportunity anywhere.
20. Great sales people know when to walk away.
21. Great sales people are not easy to manage.
22. Ineffective sales people are usually their own worst enemy.
23. Don’t rush decisions, especially about financial matters.
24. When in doubt, keep your mouth shut.
25. When people understand your vision, they will do everything in their power to achieve it.
26. When people do not understand your vision, they will achieve nothing.
27. Be quick to credit others for success and quick to accept responsibility for failure.
28. Seek credit worthy customers at all times.
29. Keep up with technology regardless of your age or position.
30. Read.
31. Show the spouses of key performers how much you appreciate their support.
32. Don’t be afraid to make mistakes.
33. Be conservative in financial management and aggressive in sales and marketing.
34. Talk to key performers regularly.
35. Never gossip. Don’t share company information unless you have a good reason.
36. Never lose touch with your key suppliers.
37. The biggest danger in a purchasing department is complacency.
38. The next biggest danger in a purchasing department is carelessness.
39. Any customer problem can be solved.
40. Be willing to be unpleasant or unreasonable if that’s what it takes to solve a customer’s problem.
41. Don’t be afraid to go over the head of your regular customer or supplier contact if that’s what it takes to solve a problem.
42. The most important time to encourage a sales person is after he or she has lost a big order.
43. A good boss always appreciates what you do, but always challenges you to do more.
44. Sales people cannot achieve spectacular results without being well organized and self-disciplined.
45. Never lose sight of the fact that customers and vendors have their own priorities.
46. Sometimes the best meeting agenda is no agenda. Sometimes people just need to blow off steam.
47. The two most important things a sales rep can do is return phone calls promptly and show up on time. Everything else is just gravy.
48. Write down or write off losses as quickly as you can. They just get more expensive with age.
49. The quality, cleanliness, and atmosphere of your facility is a direct reflection of how you conduct business.
50. Always be courteous in your business dealings. You never know how life will unfold.