Bonuses must have an upside and a downside.  Do a great job and win big enough to make you stay with the firm.  Do a poor job and the bonus and salary structure should reinforce  either changing jobs or rethinking/retooling your career.  Easier said than done.

In the case of publicly-traded firms in the financial sector, all that was created was an upside.  Sell and makes millions, even if what you sell is detrimental to the firm.

Get this.  The APTA wants donations to help promote scholarships in the industry.

The American Public Transportation Foundation
Please “champion” the effort to ensure the future of our industry!
Dear Colleague:

We face a critical shortage of skilled and seasoned employees as thousands of workers from the “Baby boom” generation near retirement. We need to provide incentives to attract the  best of the best of our emerging talent. Your 2009 Champion gift will help achieve that goal, which in turn will helpus plan for a healthy, vibrant workforce. As you know, The American Public Transportation  Foundation provides scholarships for young professionals pursuing careers in public transportation. Your support will make our industry stand out from all the others. Our goal this month is to raise $5000.

….and yet when it comes to making our public transportation system stronger, they have been lacking in leadership.  Industry leaders are no closer to improving the transportation system then they were years ago.

Here is a sampling of what I recommended to the industry at a keynote to APTA’s executives.

US public transportation needs four factors to achieve 10+ % ridership:

1. Universal payment system. (You should be able to use your card in NYC, San Francisco and Atlanta and your own community as a universal pass.) This little switch would enable users to keep only one card in their pocket and most likely try another service around the country.

2. Connectivity of community public transportation systems with other communities (County roads, bridges and infrastructures, link to the next infrastructure. The same is necessary in order to increase ridership. Currently the systems do not connect.) Currently you can’t travel from Seattle to San Diego or Atlanta to Boston without jumping to an Amtrak or another service. It’s like building a bridge only half way and then stopping in the middle of the gorge.

3. Singular transportation guides throughout the system. (There needs to be one universal travel guide so that like airline travel, no one needs to relearn how to use a system.) I know I personally dread trying to figure out the maps in each city. Airlines have one system and so should the public transportation sector.

4. Transportation authorities need to be established. (Today, road and mass transit are at odds over how to use funding. With a transit authority the objective of the organization is to serve the public transportation needs in the best manner possible.) Right now the road and highway industry is 10x more powerful than all the other services so when it comes to funding. They get 90% of the pie even if it’s not the best use of the money to move people in that region.

5. Lastly, the future of public transportation will never improve until the industry moves from viewing that there are two types of users to three. Currently there exists the lingo that there are people with CHOICE and those Without Choice. With choice means they can use alternative forms of transportation, however, if gas goes up $1 per gallon, they might move into the Without Choice category. Obviously these users have only one method to get to work, shopping, visiting the doctor, etc. The group I suggested the industry see in the future is the group with MEANS. These are the people who earn $1 million per year and use the NYC Metro to get to work in the morning. These are the people with political clout and financial capital who would insure that NYC never closes the metro system.

What this means to the industry is “density” must be defined differently. They may get 50 people on the train in a low-income neighborhood and 17 people from the high-income community. The difference is the high-income travelers will make sure that there is a system at all for two reasons. They will be aware of the product AND it’s self serving. Their kids use it every day. (For those that don’t know, the industry looks for density of population to determine service development.)

Wow…I love technology that pushes us to think bigger. If this…then what’s next….!!!! Blood flow to the brain…who would have thought!

Courtesy of Vincent Callebaut Architecture in Paris are renditions of future living communities to be potentially built in Dubai.  These “Lilypad” cities rise and fall with the tides.  Interesting considering that experts estimate that water levels will sink coastal land.

The cities will be self sufficient, generate their own power from sun, water and wind while producing zero emissions.  Each city will house 50,000 people, have gardens, walkways, and streets.  Water will be caught in central lakes and then filtered.

Estimated completion date…..at least 90 years from now.  If global warming does raise water levels we may see them sooner than we expect.

Here’s a great pictorial definition of Social Networking.

I post this because in it’s simplest form. This scenario works when everyone is somehow connected to someone. For example, a decision maker from a company called me asking that I present to 800 people.  After some discussion, the two of us found that we had a connection to each other. The speaker who she hired last year is someone that I was working on a book with. What a coincidence.

On the flip side I have a problem with some of these social networking sites. They require work. I remember, not too long ago when I just had to keep track of my Facebook site. Now I have linkedin, ecademy, and more….it tires me to even write them all.

Each networking site offers the next best way to do business. Each one tries to make me open up my database to show connectivity. I have over 11,000 names in the database, and I bet, just like you, I don’t want to intrude on my friends and colleagues.

Besides, how many social networking sites are worth their time. Facebook connects me with a specific group of people and some social sites I’ve developed, such as a ning site for my NYU students (200+ members at this point).

Given that social networking is only a few years old, what will happen when we’ve accepted to be a part of twenty such networks? How can one manage all this and a have a life, too?

I personally believe that the entire model must change and will change for two reasons. One, there’s going to be an overkill point where too many social networks end up diluting the effectiveness of the entire group to a point where the time is not worth the effort. Second, people will start to be resentful of the endless solicitations: asking for input, to purchase services, to be connected. (I’ve not been able to turn off my FastPitchNetworking.com solicitations even though I don’t want to remove my name from the site….eventually I may have to.)

In the end, I like social networking in that the process links like-minded people with like-minded people. If you like doing needlepoint with one hand tied behind your back and only on Thursdays, great. There are others like you. Just remember, there’s only so much, in today’s technology, where being social is digital. Don’t forget to unplug and socialize with your friends down the street in person. Or, hop on a plane to visit one of your friends. Social networking is just a part of the “social” side that humans need.

Watch the video….

In the post-internet boom, the world witnessed a transformation of working arrangements.  Foreign employees of firms such as IBM were laid off only to find themselves returning back to their home counties to live once again.  When business volume increased, employees who were still working knew that they had a friend who used to be in the business who now lived overseas.  Given the cost of living difference, the past employee said, I’ll do the work in my home country and charge you a different rate.  Due to the connective digital lines under the ocean, the work could be easily completed.

We’re now seeing a similar condition, only the employees who are either being asked to work from home or are being laid off live down the street.  Just picture a similar scenario happening all over again, however slightly differently.  Firms such as Nissan Motors are asking employees to work from home because their physical building is too costly to operate.  With advancements in video, audio and virtual private networks, the same individual no longer will have a tangible office to return to.  They are now part of the virtual workforce.

Those laid off will face a similar scenario to the post-internet boom. “Carol has been laid off and already knows our business.  No need to re-hire her.  Let’s see if she will do this job as a part-time, outsourced employee?”  With the rise in unemployment rates and the likelihood that many people will be out of work for a long stretch of time, employees like Carol might jump at the chance to earn income once again, even as a part-timer home-based employee, forever changing working relationships and conditions.

The outsourced and virtual company is no more than a decade away.  Add some holographic meeting space, and we’re going to see this type of dispersed work structure as more common, because of the recession…depression.

As the global recession spreads, so, too, will more decision makers  move employees from physical offices into virtual work-at-home offices.  The trend will mimic that of the post-internet boom in the early 2000’s.

Well, not exactly.

A friend of mine sent this video to me.  I thought is was both well done and interesting.  I don’t believe everything the actor says, but many of the points he addresses are well said.

Watch the video with three thoughts in mind.

1. The /actor/presenter is in character making the entire point even stronger. Had he been wearing a suit or holding a beer what perceptions might you have had about the message? (When you’re presenting, are you this believable?)
2. The information delivered displays that the author has done some research or is aware of history.
3. The author does not only have beliefs but also offers solutions.  It is this information that gets people thinking.
4. There is a call to action.  One so simple that it’s hard to ignore yet most will not take action. This is the challenge all leaders have: to convert ideas to action.  Sometimes asking for more will generate more activity than making a task so simple it will be ignored.

In many countries the will of the people is the reason that government acts out of fear of protest or accountability.

Watch….

July 15, 2008
TODAY IN MANUFACTURING.NET
“GM ANNOUNCES MAJOR SHAKEUP — Automaker will lay off salaried workers, cut truck production, suspend its dividend and borrow $2 billion to $3 billion to weather a severe downturn in the U.S. market.”

That was last year, and what I had to say about it then–see below – written July 2008–is even more relevant today.

To me, while Honda and Toyota appear to be selling cars, GM, Chrysler and Ford continually make announcements about restructuring, slow sales volume, economic challenges. In all these reports I fail to see anyone taking responsibility for being globally blind.

Or should I say American Blind. Blind to the truth that while the Detroit Three were ramping up large truck sales the rest of the world sees a much different picture. China and India with over 2+ billion people are on the verge of the transportation age where individuals could purchase cars as a middle class. Gas in all countries except the US, even prior to the rise in fuel costs, was significantly higher than the US. And while Americans were doing well, there should be a transition in the next decade to smaller vehicles just because those having children will be empty nesters along with a very large senior population. Mind you small is relative as American most likely will opt for a “larger” smaller vehicle.

All these signs, as powerful as they are to everyone today, should have been seen by those in management of the automakers.

Toyota saw the writing on the wall when they, over 10 years ago, committed to producing fuel efficient cars. Toyota, understood this as they announced one of the cheapest cars on the planet realizing that even though India and China are growing, the vast majority of the people who live on this planet still don’t own cars AND that the cars they will be able to afford will be smaller.  TATA, an Indian firm, has been working on the introduction of a $2000 vehicle to target this market along with other developing markets.

Think Africa, think Malaysia, think Pakistan….

Even the poorest WORKING Americans earn more than 90% of the world’s population. I’ve heard numbers that if you earn over $20,000 US you are in the top 3% of the world so now picture car purchases in the near future.

The point to all this is that we’ve been a global world for a long time, not just in recent years. The ability to see beyond the four walls of the US should be on the minds of everyone who is Paid to Think™  in the US. Thinking about how in the near future, the inter-connectivity will exacerbate economic decisions. That those who still believe that by sticking one’s head in the ground or those who’s perceptions of others with different color skin and different beliefs are beneath themselves, so much so that their ignorance or lack of vision, will ultimately cause create bad decisions and eventually create other Big Threes.

There is a land of opportunity, just don’t be blind to the global possibilities.

My wife, Lorrie, just shared with me a story that I think is not only humorous but valuable.

When our sons shower, they leave the bathroom as if a hurricane’s ocean waves had hit the floor.  Today, Lorrie asked both boys, “What happens in here when you guys take a shower that causes the floor to get so wet?”

“Well…I have to walk across the floor to get my towel, ” one replied.
She then pointed to a towel hook right next to the curtain and said, “That’s what this hook is for: to hang your towel when you’re showering.”

The other brother asks, “Why didn’t anyone tell us?”

Just imagine Lorrie’s thoughts as she hears this statement.  There are TWO towel hooks near the shower, one on the left side and one on the right.  Both are so close to the shower that you ASSUME one can’t miss them.

Although the function of the hooks were seemingly obvious to us, since we came up with the ideas and installed the hooks, they were “invisible” to our sons.

And there’s no difference in business.  Just because you gave someone Microsoft Access, a CRM program or WORD, does it mean they know how to use the tool or even notice that the tool is available to them.  If you conjecture that software programs are by nature more complicated, then think of the little things you’ve done to make the world easier, and they, too, are not used– such as the salt near the door, the form for recording a process.  Just because you’ve built it does not mean they even know it exists.

So next time you see “water on the floor,” take the time to find out what’s happening before you pass judgment.

Where is my order?

I hate to say it, but in a given day I see more bad things happen than good things.  For example, a sheet metal manufacturer that received my call because of a referral, who definitely has the facilities to do the work, just told me that my order, which he’s had in his hands for 5 days,  has not been written up or placed in the system yet.

“We’ve just been busy working on a backlog of business.”

DON”T TELL ME THIS!!!

This guy worked hard to get the business. He spent time on the phone reviewing the project, worked up a quote, then reworked the quote to meet specific metal-cutting needs, then didn’t put the order in.

He could have easily said, “We have your order and we have a two-week production schedule.  Does that work for you?”  Or, “Your order did not specify a date you needed the order; is there a date you required the product?”

Give me something that sounds like the order is in house.  In the computer or not, I now feel like our order is taking second fiddle, and yet I have no rush for the order.  One week, two or three is fine with me.

Given the lack of urgency he’s displayed about my business, I won’t refer other business to this vendor. I might tell two or three others about my experience and caution them about how their project won’t be completed in a timely manner.

I’ve said this many times.  “Firms lose more business out their back door than their front door.”

And all this is solvable.  Paper, email or verbal orders are input within 24 hours of processing with an email confirmation of the delivery date.  If no date is specified, manufacturing scheduling software that takes into consideration time and materials as well as other projects in house AND profitability creates a manufacturing date.

Any costs associated with installing a new methodology could probably be paid for with an extra order or two from a happy customer or a referral from a happy customer…which I am not!

When our kids were 4 and 5 years old,  they went through a brief stage where they would argue over whose turn it was to select and watch the program airing on the family-room TV.  Since we limited television time overall, we wanted to come up with a fair solution that took us parents out of the equation and allowed the kids to solve their own problem.  So I created a tool to empower them to do just that.  It was a daily chart reaching out over 6 months at a time.  The chart would work in 30-minute intervals and the kids alternated days.  They used to define who had control over the TV by their half-hour mark.

We also set up a few rules.  Your time is your time.  If you swap your times and you end up with a conflict, we will adhere to the chart to solve the challenge.

The results were amazing.  No more arguments at all.  None.  They managed themselves.  If you’ve got a busy household, systems and structure can rapidly create new time, harmony and balance.

Using charts, schedules, technology, and standard procedures, you can erase conflicts within your organization and provide the tools to empower your staff to work through their own challenges.

The head manager of the DSW store located at Union Square in NYC has a tough challenge. Her store is located in the heart of the fashion capital of the world and smack in the middle of a busy part of town.  Her job is to sell value products while at the same time being hip.  This is a double-edged sword.

She recently told me that last year, the buyers were off.  They missed the trend and everyone was looking for  a certain style.  DSW does not always worry about the brand if at least they have an alternative in a particular style.

This year, the buyers hit the nail on the head when they purchased some wide-calf boots.  The result: the boots were their number-one seller.

I can tell you from experience that the calf circumference of boots being sold is often too small for the majority of women who want to purchase knee-high boots.  By opting to carry wide-calf boots for shoppers, this DSW store offered style and captured the current trend, too.

Yeah, everyone knows you need the “right people on the bus” and anyone who doesn’t should not be in a leadership role.  The challenge with the statement is not getting the right people but more so, how to find the right people and to make the group work after selected.

A few pointers.
1.  Hiring interviews should consist of a multi-step process, especially the higher your selection choice is within the firm.

2. Don’t only check references, check to see if they are winners in a myriad of environments.  Multiple winners have a tendency to win over and over again and a single winner is like a one-song wonder.  The candidate that has only one win should be observed to see if they have the capacity to win again or was it the environment and timing that made it happen.

3. The hire is only a fraction of the success of those “on the bus.”  What’s more important is, do you have the mechanisms in place to help this person win.  Do your business model, tools, and systems and structure give the new hire a high chance of success?  If the candidate worked at a large company with supportive services where when they turned around in their seat and IT was there along with engineering, logistics, HR and other services, the same type of environment may be necessary for them to win again.  Make sure that you deliver the other 75%.

4. To insure success, automate the mundane tasks and hire for intellect. The mundane takes away from the ability to THINK and often leads to fire fighting.

5. For those hired for management, make sure you understand their thinking process given that the person is being PAID TO THINK.  Don’t just see what they’ve accomplished. Strive to understand their thinking so you can determine if they really have the smarts to make what you want achieved a reality.  They must be able to work in a virtual world.

6.  Make sure to kick people off the bus when they are not working out.  Everyone says they do, but look around you. Are there still under performers working in your office?  I rest my case.

7. Last, make sure your bus is going in the right direction.  In the book Good to Great, 7 of the 11 companies in the book fell from grace within only a few years of the book being published.  The conclusion was the bus driver and those on the bus crashed.

I received a phone call from a rep from Callbox Sales and marketing an international firm offering sales solutions.  I took the call, spent 10 minutes on the phone, and scheduled a meeting for 2PM EST.

A positive sign for the employee from CallBox.

Within 2 hours an email confirmation arrived.

Hi

I hope everything is going well. I just would like to confirm your
appointment with our Senior Account Executive.  She/He will call you on 13th
of March, 2009 at 2:00PM EST  for a more thorough discussion about our
services and rates for your company.

If you need more information, you may go over our brochure by clicking on
this link: http://www.callboxinc.com/pdfbrochures/about-callbox.pdf

Call or email me if you have questions.

Best regards,

(name withheld)
Inside Sales
Callbox Sales and Marketing Solutions
Encino, CA
xxx-xxx-xxxxDirect Line

Optimizing sales performance.
http://Callboxinc.com/2500 HotConnect©

At 2:30 in the afternoon, NOT 2:00, the Senior Account Executive called and without skipping a beat started into the sale asking me about how I can use the services.  I reminded her that the call was for 2:00 and informed her that I had started another project since I did not hear from her.

She hesitated and replied, “Well, I was on another line and just finished.”

This from a company that focuses on making outbound telemarketing calls for companies to generate revenue.  Do they not see the connection as to their performance and my perception of the business?

This to me is a sales issue; someone could have called. It’s also an operational issue; the mechanism was not in place for a call center company to miss a call.

If you know me well…this is losing by a nose.

A Director at Siemens, one of the few windmill manufacturers in the world that supplies those huge 144-foot fins unused on large-scale wind farms, recently told me that just as the finishing touches on a manufacturing plant were completed, their sales blew through the roof  so much so that they already had overgrown the facility.

My first thought was is this connected to the problems related with India’s Suzion Energy’s troubles with stress fractures.  One of Suzion’s several customers,  Edison Mission Energy, has had stress fractures.  In Edison’s case, over 1251 blades were recalled.  If consider how the blades are 144 feet long and must be hoisted over two hundred feet in the air to be installed or removed, you can imagine that this is a costly problem for both manufacturer and customer.

The end result would be, since this is public news, that other prospects would most likely choose another vendor and contracts for production would be canceled.  Add to this the down time associated with such a fiasco since no energy is being produced.

So I asked, “Was this related to the blade recalls from the Indian company?”  He hadn’t heard anything about the troubled firm.

My thoughts are simple on this. Part of the role of management is to be aware of key issues related to your industry, markets or future.

In this case, this Director was not responsible for marketing, sales, or engineering, but he was responsible for Asset Management.  His role is to search for or build new facilities to meet corporate initiatives. As part of his portfolio he might have 200 real estate assets he’s managing besides building new facilities. So it would be easy to say, he’s only responsible for the physical asset.  And if he does this right, he’s done his job.

People who are Enterprise Thinkers and are Paid to Think, think beyond the normal and realize they must at least be aware of any happenings that pertain to their job and beyond, as well as what might impact their future.  They see the 50,000 foot view and realize they are not hired to just build a plant but to build a plant that takes advantage of today’s business and the firm’s future.

In this case, when a major supplier has a recall, you’ve got to bet that other customers could be canceling orders and shifting suppliers, which is exactly what happened.

Here are a few ways he could be “Aware.”

Set up a Google Alert for the industry key words.  I for example have the words “Paid to Think,” “Enterprise Thinking” and a host of other topics or phrases I’d like to get reports on regularly.

Another source is to subscribe to industry publications that would highlight such issues.  In this case, this was a multi-million dollar facility that casts fins with fiberglass, balsa wood, and a binder.  Yes, I too was surprised to find the balsa wood is in the fins.

Lastly, for a few dollars a month, he could hire researchers to keep him posted on any topics related to this project.  There are PhDs in India, China, Ukraine, and Argentina that will work for very little as a resource.

Just being aware of what’s happening could easily have changed the future of Siemens’ project plants; even if they made the decision not to do anything, this would have been a result of being informed.

Sources Siemens Windmills and WSJ  India Windmill Empire Begins to Show Cracks

I was sitting next to a woman who complained that her friend, who was seated in front of us, never replies to her emails.  I told her the solution was easy.  Surprised she asked how could she get her friend to reply.

I said, stop sending her long emails. Out of the corner of my eye I could see the receiver shaking her head in agreement, and I never saw one email.

The rationale was simple.  Short emails are more likely to get replied to than long emails because short emails set the stage for short replies.  Long emails place a burden on the other person, especially if their contents are personal.

So picture a family environment.  You send a long email about your entire week and the recipient feels obligated to reply back with some history of their life.  They put the reply aside for later.  Later becomes more than later and the reply is never going to happen.

Now sometimes you may want to send a long email and still want a reply.  If so, at the end, do one of the following.

1.  Say at the end, no need for a long reply…. just need the date and time of arrival.
2.  No need to reply.  This lessens the pressure of obligation and encourages others to send a simple reply.
3.  Ask them to reply to the following items….I need the following three items.

By removing the burden, you give the recipient a way out.  Realize that just because you wanted to type a disertation does not mean the other person has the time nor the desire.  Besides, if you told them that your business is up 300%, your kids just got into Harvard, and you won the Nobel Prize, they might feel like what they say would be trivial and it would be best to trash the email.

The owner of an online business told me about his desire to create a “one-stop-shop” experience for visitors. The trouble with one-stop shopping is that the terminology-concept was derived out of the brick-and-mortar model, and as the web expands, one-stop shopping no longer applies as a singular consumer winner.

Say you want to purchase a few items for your living room.  During your search you never leave your chair.  The only quandary you have is are you willing to pay three different shipping fees from three different locations.  If you could merge them to create one shipping fee, then most likely you would.  If you can’t, then you have to make the choice if the shipping is worth the purchase.  You might even try to find alternative sources that have a reduced rate to make up the difference.

The value in “one-stop shopping” still has a value, but it’s limited compared to a purchase from a brick-and-mortar establishment.

The same experience BI (before internet) involved driving from one location to another and then often back again.  Often a few purchases could take hours.  Then came the big boxes: Wal-Mart, Home Depot, Lowes, Target.  These stores try to be one stop shops on a mega level saving the buyer driving time and providing discounted pricing through economies of scale.

This is where one-stop shopping really has it’s value for both large and small stores.  A paint store might be a one-stop shop for all your interior needs, while a sewing store might have everything from sewing machines to needles, and fabric to thread. These stores leverage having everything in one place.

For the traditional one-stop shop, the few dollars becomes negligible in the scope of traveling around to save a few dollars.

So next time you’re thinking of becoming the one-stop shop, think first.  Does the one-stop shop on the net really do something for the consumer?  For the one-stop shop in brick and mortar, if you can get the consumer in the door, there is an advantage.

Just make sure the cost of being a one-stop shop is worth the effort. In the case of the online business discussed in the beginning, it’s a senseless mission when there is no savings and there was a cost to deliver the services desired.

Does your memory sometimes fail you in parking lots? Here is a simple tip to find your car after a trip or for everyday events.  After you park, take a quick picture of the location with your cell phone camera.  I typically take a picture of the signage.  If I feel this will only give me a partial clue, I also photograph the vehicle surrounded by its location: against a wall or column, about 8 cars from the end of an aisle. The combination helps me to easily find the car while I often hear people say, “Now where did I park the car?”

Here’s another story that publications and the media followed with much fan fair.  The featured firm was to take over the private jet business with a low-cost alternative.  Everyone perceived this to be a success story in the making.

Funny, little news when Eclipse files for bankruptcy.  A good story is great to hear and one that is incredible to promote and yet when the story turns sour, it’s page 14.  Not everything in business has to be positive to gain value.

ALBUQUERQUE, NM – January 20, 2009 – Today, Eclipse Aviation^® announced that Judge Mary Walrath of the United States Bankruptcy Court for the District of Delaware approved the sale of its assets for a combination of cash, equity and debt under Section 363 of the United States Bankruptcy Code to EclipseJet Aviation International, Inc. pending administrative closure on several remaining items.

EclipseJet’s bid of $28 million in cash, plus promissory notes and equity for the assets of Eclipse Aviation was verbally approved by the judge. Eclipse^® and EclipseJet will begin working toward the prompt closing of the final sales transaction. In the meantime, Eclipse expects to continue its current operations through the closing date.

EclipseJet is an affiliate of ETIRC Aviation, Eclipse’s largest shareholder, and a principal driver of the very light jet (VLJ) industry in Europe. ETIRC Aviation’s Chairman, Roel Pieper, became the acting CEO of Eclipse in July 2008 and has served as Eclipse’s Chairman since January 2008.

On November 25, 2008, Eclipse Aviation filed for Chapter 11 protection in the United States Bankruptcy Court for the District of Delaware. Since then, Eclipse has continued operations with debtor-in-possession (DIP) financing. Today’s sale enables the Eclipse 500 Jet^® to further solidify its position as the global standard for VLJs.

See press release from Eclipse

Forbes Layoff Tracker

You know the world is in trouble when a publisher decides to track layoffs.  Few appeared to be tracking hires over the years except for economists and government!

Check out the tracker at http://www.forbes.com/

When I awoke this morning I immediately noticed the sun shining through our windows and not a cloud in the sky. I knew today would be a beautiful day for a bike ride along a path that follows the old Erie Canal.

Like other rides, my goal was to bike in one direction for 30 minutes, then return to my starting point in less than 26 minutes. On a previous trek, I reached a barn, cattle, and some boys playing basketball on a cross road. I wanted to get at least this far today. To succeed, I must start with a faster pace in a lower gear.

I set off with my thoughts on the target.

The last time I rode this course I ran across four beavers, one opossum, one rabbit, two ducks, many birds and one snake. The most I’d ever seen in one trip.

Today however my mind was not completely on the trek but more on other challenges I was facing. I hoped my thoughts would not interfere with my speed; I sensed that I was less in tune with nature.

I biked at what I thought to be a faster pace than my last bike ride. As I approached the 30-minute mark, I believed that quite possibly I had not reached barn yet. I pedaled harder.

28:00, 29:00, 29:30, 29:50, 30…the watch gave chirped its command to stop.

I thought that I must have slowed down and not even realized it. How could I have not reached my goal? Didn’t I have enough carbs this morning? A little frustrated I took a drink and started back with the same zest that got me started. Then it struck me. I had no clue where I was and the scenery was different. I was at a place I’d never been.

I had actually kept my eyes so riveted to the road and my thoughts on my challenges that I blew by the old mark by over at least 1/2 a mile. I could not believe it. By taking my eyes off the extraneous and by not limiting myself to what I had seen, I had kept up the pace and overshot what I had expected to be a challenging goal.

On the ride back I had plenty of time to think about this SINGLE-MINDED FOCUS. How often have I let myself stop, because the scenery was familiar, and I had a goal in mind? If I had done this today, I’d most likely have done it before.

While this was going on, I was pedaling like mad to make sure I hit my starting mark on the way back. It was a slightly upward run compared to the first leg, and I was tired from the first 30 minutes.

As the minutes on my watch passed I knew I had to keep on pedaling hard. At 8 minutes I turned up the steam. At 5 minutes I felt that I may not make it so once again I pumped harder. At 4 minutes, no end in sight. At two minutes I became certain that the finish line was ahead, but could I do it in two? At one minute the entire part was an uphill grade. I put my legs into high gear and with 32 seconds to spare, I reached the end.

I had achieved both my marks—outbound distance and inbound return—and realized some life lessons.

If you focus on a goal, be careful you may achieve it.
With the right tools you can you’d be surprised at what you can achieve.
When you put your nose down, you may miss all the wonders around you.
An adventure/experience is what it is.

My table PC laptop lost its audio while I was traveling for work; this happened on Feb. 17.  I put off arranging for repairs until I could return home and settle down in my office. I wanted to check the warranty expiration date….then I just forgot.  On March 5, I discovered that the warranty had expired on Feb. 21!  My guess is the repair will be on the mother board, so to restore audio capabilities, I could be paying out of pocket for a new board plus the cost of labor.

The lesson: check your warranty’s expiration date as soon as there’s a problem.  The good intentions you have when you purchase an extended warranty are wasted if you don’t take advantage of the service!

As I entered the room, my son invited me to meet his new girl friend yet there was no one in the room. Ah, so 1900’s of me.

This is the year 2009 and my expectations were about to be shattered.  His girl was not in the room but 25 minutes away by car and our introduction was via a webcam.

Internally I was laughing at the realization that our 14 year old was truly in the digital age. Skyping and texting the two had formed a virtual and in person relationship that enables the two to share even when they are not face to face. (They met in person and have since spent weekends together so it’s perfectly normal…and she’s a great girl.)

I absolutely loved the new experience.

Recommendation, try to keep as current as possible by watching how kids live, since our youth may be bringing the next generation of ideas to our business environments.  In this case, our teens consider socializing via cam, text, and AIM as normal as by phone.

Would you?

… opens.”

Bet you thought it was an easy quote to finish.  Well, not only is the quote not finished, the original message is completely different than the quote often used to express the fact that opportunities are always opening.

Now here’s the entire quote as said by Alexander Graham Bell.

“When one door closes another door opens; but we often look so long and so regretfully upon the closed door, that we do not see the ones which open for us.”

Ouch! Such a different meaning!!!!

In the rapid strategizing tool REDEFINING, a key element of great strategy is to create a complete challenge statement.  Here’s an example where the second half of the thought changes the meaning the message entirely.

US Republican Senator Charles Grassley said that he would feel better if AIG’s top managers were to take a page from Japan’s corporate management book.  In Japan, failed execs apologize, step down, and oftentimes commit suicide.  The suicide part of the equation hit a raw nerve with many.  Grassley, unfortunately, misdirected his anger. The employees of AIG, who were to receive $165 million in bonuses, are receiving contractual bonuses, good or bad, like it or not, using funds supplied to the firm by congressmen (in the house and senate) who did not do their homework, or worse yet, ignored facts that were public knowledge back in May of 2008. This is the US Congress’ problem, not AIG’s.  But our government is so used to spinning everything, that they can’t give us straight talk.

Now today, members of our US Congress, in a backlash for their own errors, want to tax individual bonuses for those working in firms that received $5 billion or more. This leadership back peddling does not exemplify leaders who are forward thinking and accurate in their execution, but leaders who believe that they know it all and then play politics when the house of cards falls. If mismanagement of taxpayer funds is the crime deserving punishment, then we should tell congressmen that they, too, should say they are sorry, give back their income, and then fall on their swords. Whether we’re talking about an annual income of one hundred thousand dollars or one million, the rationale should apply to everyone in America if the congressmen are as “American” as they espouse to be in the media.

Here’s the history. On May 8, 2008, AIG disclosed in an SEC filing their plan to pay bonuses.  This information was available while congress deliberated about saving AIG. No smoke and mirrors. On Sept 16^th, $85B was approved as a two-year loan to the institution. In doing so, congressmen made the assumption and the case that AIG needed the support to cover insurance obligations, without completely understanding the complexity of AIG as a corporation, and how some of the funds had to pay payables such as START. Congressmen did not do their homework; if they had, they would have realized that AIG had to continue repaying any obligations it had on its books, not only the programs that congressmen wanted supported.

Mirror this with TARP funding. In haste, congress approved the TARP package to help ailing firms to shore up the economy. In the end, the financial firms that received the funding have given out bonuses in the billions such as Goldman Sachs Group, Morgan Stanley and Merrill Lynch’s distribution of over $36B in bonuses. That’s 173,000 employees without including JP Morgan Chase Citi Group and Bank of America. Don’t forget there are other bonuses that have not made the news.

The reason this unfolded as it did, is that the funding came from congress with no detailed plan as to how the funds should be spent, only the inference that the funds should be allocated to shoring up the housing market. This was a congressional error in leadership as both in the understanding that if you give a firm money it’s tough to ascertain what money goes where and how. Some funds go to operations, some to sales and marketing, some to conferences, some to salaries. Most Americans knew this, so why didn’t those in congress?

What’s even more ironic is the same congressmen also passed, along with President Obama, another trillion dollars worth of spending with 8700 earmarks. In many cases, the earmarks are far worse than the million-dollar bonuses. The only difference here is that theft, and there will be theft, will happen in small amounts all across the country as friends give out deals to friends, quotes are elevated and policy is changed to fit who ever the legislature favors. In my home town of Syracuse New York, our city council just witnessed a NO-BID $8+ million-dollar renovation project for Syracuse’s Hancock International Airport. To allow this to happen, the council also voted to change limits on other policies so that the vendor could take the project. They changed the law to fit the funding?!?!

Lastly, since Rep. Barney Frank is very vocal about most of these policies, then he, too, must fall prey to telling the world he’s sorry , returning of funds, etc. Rep. Frank had his hand in the development of the policy that directed Fanny and Freddy to purchase additional home loans that spurred the housing boom, that created housing wealth, that allowed individuals to pull out “equity” to buy pools, furniture,  vacations, and to invest in the market, that assisted in AIG’s growth and helped to allow Credit Default Swaps to work and CDO’s to be created. And even if some people argue that he didn’t have a hand in some of these problems, he played his part, and in doing so, accepted tax payer money as income and used tax payer money in an inappropriate manner. I don’t have to add, but I will, Rep. Frank pushed for TARP, the Stimulus package and the recently pork-filled “government continuation bill.”

Now add the new 90% SBA loan backing and the $300B in funding to stabilize the mortgage industry, and I believe Obama’s administration and congress are going to be condemning a lot of other executives and employees in years to come. Our own American three-ring circus.

The question is, will congress act in haste through the next 3 years and 9 months and in each judgment error they make will they act as irresponsibly as they are acting today? Congress might even want to have a conference outside of Washington at a 5-star resort to discuss the issues.

This is all just mismanagement, and if it’s to ever stop, we need to require that those in congress slow down, spend more time thinking and less time in front of the cameras, and figure out what the best strategies are to take, including the TACTICS on how the policies should be executed. Remember, these people are PAID TO THINK and they are doing a poor job on both sides of the aisle.

I expect more from our youth than I’m seeing from our public servants. I’m expecting an “I’m sorry” and a return of their paychecks!

I love all news coverage given to the, soon to be dolled out bonuses of $165 Million to AIG employees.  I love the coverage because this is actually old news.  AIG’s management knew that they’d be handing out bonuses to employees as far back as last year. The reason, the bonus contracts were already signed and the ink dried.  Besides, senior management had to use these numbers when creating projections as they when they requested TARP funds. (Bonuses may have been rolled into other expenses to defray comments or lending restrictions.)

Remember, they are financial institutions run by the very same people who were to be receiving the bonuses.  This required the management to be very clandestine in developing tactics so that their expected bonus income would not be in jeopardy.

It’s the same tactic Merrill Lynch & Co.  employees used when they issued $3.6 billion in bonuses.  Keep quiet, have secret meetings, sign the checks and then see what Cuomo or any other government official can do to rescind the payments. Their belief was, distribute the money and then see how the game plays out.

So far the tactic’s worked for Merrill’s former employees.  Bank of America won’t release the names of the recipients and the global public heard little about how or if the bonuses will be affected. AIG is using the same coaching handbook.

What’s even more disturbing is that Obama and Geithner only released this information today. Hours before payment, Before anything could be changed in the loan provisions for AIG. To believe that Obama or Geithner had no knowledge of the situation is the equivalent of a physician not knowing that the heart pumps blood.  It’s the mechanics of how B of A, Chase, Merrill, Bear Sterns, Goldman Sachs, Morgan Stanley and all the other firms hired and fired their staff. Obama and Geithner had to have known this information otherwise Geithner is useless in his position and Obama is not connecting the dots. Government and AIG all participated in the charade.

So the next time you hear about the mismanagement of funds in either the stimulus package or the TARP funding, ask yourself the following questions.  1. How long ago was the information being released actually known about and by whom? 2. What decisions, both strategic and tactical, did those managing the process make to allow this to happen?  3. What would it have taken for those that are PAID TO THINK to have stopped the wasteful spending of taxpayer money from happening in the first place?

It’s my belief that those in government are PAID TO THINK.  Their job is not to build the roads or work in the schools but to think things through all policy well enough so that the future is better than the present.  This is not what’s happening at least for everyone who sitting on the side lines watching not just the $165 million convert to paychecks for a few, but the billions that have already traded hands.

This will happen again!

NOTE: (Over 70% of the worlds largest public companies do not have this bonus structure!)

Use Your Brain

I was hired to consult for the CEO of a regional building-construction firm. Together, we developed a strategy to clean up operations and grow sales. Regarding sales growth, my client had a very specific complaint about a vendor who was hindering progress.

The building-construction firm had an agreement with the manufacturer of built-in items. The agreement went like this; in order for my client to keep his status as a regional distributor of the building products (which totaled nearly a billion dollars a year), he would have to guarantee to meet vendor specified sales quotas. The vendor, in turn, would work as a partner by feeding back sales leads to the distributor. However, my client believed that many sales leads were not being forwarded to his firm, and he wanted fix the problem.

I assumed nothing. My first step was to test the process. I posed as a prospective customer and contacted the manufacturer. Stating that I was in the process of building a facility where at least 30,000 square feet of the building would need the vendor’s product, I requested information. From my estimations, I would be spending $300,000.

The salesperson asked some specifics and said that I would receive follow up information by mail.

Nothing arrived.

I called, again. They promised to mail out information to me, again.

Nothing arrived, again.

Two weeks later, the Northeast Regional Vice President of the vendor firm was to visit my client, their “valued” partner. I asked if I could be included in the meeting.

On the day of the meeting we met in the conference room where the CEO took the head seat, the vendor sat to his right, I sat to his left, and a few other high-ranking employees filled in around the table.  As the conversation entered into the “how’s-business” phase, I stepped in, and the CEO pulled back.  I quietly asked the vendor how his firm works their leads.

Vendor: “Well David, when a lead comes in via the net, phone, fax or mail, we place the information into our system and immediately forward the lead into the channel’s distributor so that the distributor can follow up on the business. Then from our office, we put together some literature and start the process moving so that the customer feels they are being serviced.
“It works pretty nicely and it’s why we are successful.”
(Again realize their revenue is in the billions of dollars.)
David: “If I were to call up and request a quote to fill a 30,000 square-foot facility with your product…how much is that worth?”
Vendor: “Depends on the product, but I’d guess between $250-$400,000.”
David: “Nice size project.”
Vendor: “It’s a very nice size project.”
David: “Then when I call, you take the call, you take down my information, name, address, type of product, and when the build out is to happen.  Right?”
David: “Then you forward on to me some information while at the same time your regional firm would get the lead so that they could follow up.”
Vendor: “Yes.”
David:  “So what if I were to tell you it doesn’t work?”
Vendor: “No, it’s nice process we’ve put in place.”
David: “No, it doesn’t work.”
Vendor: “Oh, it works very well.  It’s how most firms in our industry work.”  At this point he’s getting pretty cocky that he knows his business and everyone at the table sees the display.
David: “No, I’m telling you it does not work.”
David: “What I mean to say is I called your office, gave them the specs on a 30,000 square-foot facility and they sent me nothing. Also, my client received nothing at all in terms of a sales lead.  I even called back a second time to try to get the materials and nothing happened then, either.”
I then shut up as the vendor squirmed for at least 30 seconds, which seamed like 10 minutes.
Vendor: “You caught me by surprise; do you think that was right?”
David: “You tell me?”
Vendor: “Well you could have told me we had a problem.”
David: “You have been told you have a problem, and you insist that the process works. This time, we needed to get your attention.”

At this point the vendor had a completely different stature and position in the room as we outlined several steps to insure that his firm didn’t drop the ball again. The steps included how emails should go to the vendor’s office and to my client’s office at the same time.  There is no need to forward the information considering today’s technological options.

The lesson here is that even though you’ve planned out a process, you have to test it and be willing to improve upon it. Rather than stay married to the concept that something is working well, consider how you can constantly improve what you do using state-of-the-art technologies and methodologies. There’s really no room for overconfidence or sloppiness in today’s world…especially when everyone is fighting for a dwindling pool of prospective buyers.

The president of a regional retail store closed her door tell me she wants to find a phenomenal new sales manager that won’t cost her much up front.  Mind you the old one, a partner in the firm, is not working out.  She did not want to pay too much and she wanted the sales person to also sell.  Additionally, she thought that if she offered some form of partnership in the company, she could attract better talent.

Ouch!

She had no clue where to turn and this was some of the advice I offered.

1. She had to think differently. She’d worked for two years with the current condition so unless she’s desperate, she needs to approach this project with the feeling she’s not rushed.
2. She needed to think about hiring a sales manager and what her expectations were, because often the sales manager skills and the sales person skills are different.  One helps the other succeed, and the other sells.
3.  She might want to reconsider the partner idea, especially in this recession.  There are plenty of people looking for work and they will do it for less.
4.  She may have to cut staff to make the economics work, however, that is a last resort.
5.  She should not give away titles.  They are easy to give and tough to take.  Once someone is a sales manager, are they now a VP of sales?
6.  She needs to define what the role is.  A sales manager should be responsible for setting commission, hiring, firing, tracking, setting up territories, educating sales staff, deciding on strategy for the staff, reviewing profitability, etc.  A lot of work.  Unfortunately, most people believe a sales manager should sell and then TRAIN and MOTIVATE their sales people.  A lower position.
6.5 She also must consider that the new sales manager and the sales people will be at odds if the sales manager also sells and earns his/her money off the floor.  There’s a contradiction in what should be done.  Should the sales manager take the business or let their commissioned sales people take the business???  In this case, I suggested given that she can’t split the territory up so the sales manager gets a territory, she should give extra commission to the new hire for making the sales people successful.
7. She needs do this in private so as to not upset the current condition.  This can be done by setting up an email account outside of her normal business so that she can do the interviewing in private.  Gmail and Yahoo accounts take minutes to set up. Also, a separate phone line can be used so that the voicemail goes to another location or a private box where the prospect does not know the company.
8.  She could use a firm to help find the talent.
9.  I recommended using online posting on Monster, CraigsList, and other online resources to minimize cost and maximize exposure.
10.  A hiring methodology should be drawn out.  1) Review resumes  2) Phone Interview  3) In-person interview at a local restaurant  4) On-premises interview for the final batch.  Inclusive is a set of criteria that she wants filled so that she’s not reacting, but strategically fulfilling needs.  Akin to having a shopping list.  Have one and you get what you need. Don’t or leave it home and you bring home extra and forget the one thing you wanted to purchase.
11. Establish a pay the company can afford with options if need be.
12.  She must prepare a way to tell the current partner/sales manager while thinking both the good and the bad that might arise.  We’re talking human reaction here and it’s not often pretty.
13.  She must create an Up-To-Speed Model to get the new hire up and running as fast as possible.  This means a close connection in the beginning and less supervision as time moves one.  Ask the question, what’s the most important thing the new hire should know?  Make a list and then select #1.  Then teach it.  Then move to #2.

Now looking back it may seem like a long list of activities, however, each one allows for a more precise strategy to get the best sales manager possible.  The cost of doing this wrong could be tens, if not hundreds of thousands of dollars in lost business and productivity.  The cost to set in motion the above is relatively peanuts and worth every minute.

You’d be surprised how many employees have no clue what “to make a profit” means and how to contribute.

The CEO of a $200M firm had an issue with one of his multi-million dollar sales people, because the CEO did not feel that his employee was reaching the market’s potential in his region, and he was being paid handsomely.

My first question to the CEO was, is he profitable?  Meaning if you add his several hundred thousand dollars of income and all the expenses, is he making money for the firm.  The CEO said he thought so and he’d ask someone in the accounting department to do a review of the projects he sold and calculate the profitability.

The numbers came back a week later and the CEO called me immediately to tell me that he after reviewing the numbers, he now realized the magnitude problem was greater than originally assumed.

I asked if we could fly the sales person in for a meeting without alarming him of our fact-finding mission.  He said that the following week there was a meeting that would be valuable for the person to fly in for, so he could be in within next week.

The following week, as we sat in the office, I asked the salesman, how he worked up his pricing for his quotes.  As you would expect, he asked their quote department to put together the numbers on the project and then he would work towards making the sale.

Drilling down a little further he said, “Well, I take the number and add ten percent over the cost. You know we have to make a profit.”

For the next hour we went over teaching the sales person that every time he made a sale, the firm lost hundred’s of thousands of dollars and that 10% is not a mark up.  It does not cover any of the overhead.  The quote was for production and for materials and nothing else.

Now you might think this is a rare occurrence.  It’s not.  Physicians often do not know how they make a profit.  They charge enough that even if they screwed up the numbers, they would still cover their bills.  Here’s an example:  an oral surgeon charges $700 for a root canal and they do 5 a day.  They have a staff of 4 that are directly and indirectly a part of their team.  Each is paid anywhere from $15-$30 per hour.  At the end of the day, they have a profit.

If you think I’m joking, ask your employees to outline some of the basics.  Some will spout the basics but have no clue how it works while others will want you to cry.

My suggestion is that it’s a good thing for everyone to have some clue as to what’s going on.  I also advised the client to change his quote department’s methodology so that the quote staff would prepare the estimated full price with a range of leeway.

Before you jump to conclusions about what is working and what isn’t, do your homework.  Imagine if the CEO had continued to assume that the salesperson was unprofitable because he wasn’t covering enough ground.  He’d have pushed the guy to make more below-expense sales, driving the company further into the red.

Ask who lit the first match that ignited this wild storm called recession, and the answer is as different as the people doing the answering. That can pose huge challenges when leadership is called to help solve the issue.

Leadership is about getting others to pursue an objective in some form of unity.  The higher the unity, along with other tools and methodologies, the faster the goals will be achieved.  The challenge is that everyone does have their own beliefs and expectations, and sometimes these expectations get in the way of any progress.

A native-Pakistani taxi driver that once drove me to a hotel said, “All around the world the people at the top of government are all corrupt, especially in Arab and Muslim countries.”  He went on to describe how in his home country of Pakistan, those currently in power are those that stole money under the last administration.  He then went on to say that the “Media never tells the truth.”

A member of a North Carolina Governing Board of a University says, “The trouble with the economy is that we have too much capacity, and when we have too much capacity, we have a recession until the capacity decreases.  This means businesses must go out of business to make this happen.”  When I asked about productivity and technological advances that may make the absorption of employees back into the system difficult, he said productivity has nothing to do with it.

Both different people having different perspectives as to how the US and global recession started and will continue.

As a leader, in politics, business, or organizations, the trouble is that the objective is not to just sell your ideas, but to realize that another person’s perception is reality, and you must understand their position before you can start to change perception.

An important consideration is that you, too, have an opinion so we must all be tolerant while we press forward.

The head of an interior-design firm in the Midwest has a great opportunity to expand his customer base by building flooring store within a furniture store.  This owner is very excited about the prospects of the new deal and after performing months of work, he is about to open the new location.

The trouble is he’s going to use his existing model to secure business in a location where a new model must be built.

The existing model is when someone comes in the door they do what they can to secure the deal so that the company makes a profit, the sales people make a commission, and the store remains open in what is, in the year 2009, a dismal economy.

The store owner told me that December 2008 was the worst month he’s had since he’s been in business.

The challenge with applying his current stand-alone-store model within the furniture store is that it won’t create new business the way he expects in the new environment.

For one moment, take the position of the owner of the furniture store.  It’s the largest furniture store in town.  I bet you’d only bring in a new project joint venture with a flooring store if you felt that by bringing in the new services, you’d sell more furniture.  At least that’s what you’d expect.

Now fast forward and take a look from the hidden camera on the ceiling.

A customer walks into your store and is greeted by a salesperson.  She helps one of the few prospects for the day come up with a new living room set up with about $2700 worth of furnishings.  She then suggests to the prospect that they might want to look at flooring to enhance the furniture.  And she’s right.  New floors would make the furniture “pop.”

So you now can picture the salesperson who has a semi-closed sale with a couple walking into the furniture section.  The couple has no clue that the two firms–furniture and flooring–are not one.  The flooring expert then really does a bang up sale and in the end, the couple shaves two pieces from their original furniture purchase and re-allots the money to the purchase of some new flooring.  Most likely this was not in your plans.

That’s the reason the model must change.

In this new location, the owner must live by a different set of rules.  The objective is to help the furniture store grow and at the same time grow the flooring business.  This means that YOU, the furniture store owner, peering down on the floor of your building, would like to see a balance.

You’d like to see a customer who comes to purchase furniture and being simultaneously assisted by the flooring expert.  You want to see your flooring specialist bringing tiles or wood to the furniture side so that your customer sees an entire package, and both parts of the business are working together.

You’d like to see the flooring salespeople set some of their own boundaries and on occasion, even lose a sale so that your furniture sales people don’t lose business.

You’d like to see your sales people view the flooring experts as a bonus to the business and not competition for the same dollars.  You want your prospective customers to consider the new products as a one-stop-shopping convenience, so that both the furniture side and the flooring side function as a coordinated effort resulting in more closed sales.

Notice I did not say team.  My experience is that most people don’t know how to play as a team.  They didn’t play a team sport when they were young or older, and when they did, they hogged the ball or dropped the ball too often.

This means that the owner of the flooring business must change his model so that at times, even when he loses, he wins. The balance is crucial for his new venture to work.

In the 60 minutes interview this week, Chris discussed how he made sure he was delivering to his audience and how he knows he’s on target.

“The way I tell which songs are working and which are not is if you see silhouettes (in the exit halls, since they are white on a sea of black), then you are probably doing something wrong, and the audience members are probably  going to get a hot dog.”

He called it the Silhouette Factor

I understand that each market has the ability to influence prices and that there are decisions, some calculated and some on the fly, that determine a price that someone may pay for a product.  If a firm introduces a $500 item in a market where there are $400 competitors, for some reason they should be able to justify the difference, otherwise the product won’t sell.  They need a differentiation factor.

Leaders and managers that don’t understand simple facts like this put their firms in jeopardy.

In government, the challenge appears to be a little different.

While driving home from a wedding near New York City, our GPS routed us through New Jersey and Pennsylvania which are west of the city and then upward to Syracuse, steering us on to full 5-hour drive.  Nearing midnight and still in New Jersey, I thought I thought we should fill up our tank with gas so that we had no problems finding fuel later on in the night, since many stores close at 10PM-12AM.

After about a 20-minute ride, we ended up finding a station approximately 2 miles off the main highway where the gas options were $1.69 for regular fuel if you paid cash and $1.79 for the use of a credit card.

A bit later, we crossed the New York State line and drove past the first gas station, noticing its price sign for the same gas, not rocket fuel or space-age technology, of $2.12.  The difference was 43 cents or about 25%. What’s even more amazing is that in New Jersey, it’s illegal to pump your own gas, and the New York price was for self service.

Summing up the difference at face value, you’d have to say that the gas station owner does a better job of being efficient at selling and distributing gas. Even though this might be true, the truth is that in NY the majority of the 25% price increase is the result of state taxes.

These are taxes that are to help NY to have better roads and bridges, schools, and infrastructure. So how does NJ do it?  NJ has roads, bridges, schools, and infrastructure, but their gas stations don’t have to rape consumers to provide for them.

Once again I’m challenged.  In New York, just a decade ago, the budget for education was around $12 billion and today that same budget is around $23 billion.  That’s $17,000+ to teach a student for a year, up from $7000+. (Many other states deliver education between $7000-$9000.)

I have two kids in a quality NY state high school, and I still can’t see the educational improvement.  In fact, throughout NY, the government is cutting programs not adding them. Besides New York is losing residents due to the high cost of real estate taxes, consumer goods taxes, utilities, and home ownership.

Over the years I’ve heard of countless business leaders who have taken their businesses just one hour south to Pennsylvania and seen their cost of utilities, personnel, and taxes drop by a third.  Imagine the jobs, consumerism and opportunities if a person who takes home $50,000 a year can now take home $65,000 per year.

All this is due to mismanagement and there are lessons for everyone.

1.  In NY, the leadership does not fear that the entire state will move away, so decision makers don’t feel the pressure to make better than poor decisions.  A business person does not have this luxury.  Unless your business has a propriety product or a monopoly, your customers can choose alternative vendors, thereby making the decisions made by management more calculated and important.

2.  In NY, the leadership has gotten comfortable with playing as a losing management team.  They go to work every day comparing themselves to themselves and not to their nearest competition.  Again they don’t fear that everyone in the state will leave, so there is no resolve to actually change.  Business people also become comfortable in their roles until a new person shows up and rocks the boat.  New people are a great way to push the rest of the company to excel.  It’s why there are tryouts for the National Football League teams every year.  You’re not guaranteed the spot even though you have the contract.

3. In NY, the thought of competitive intelligence is not commonplace, and yet in business, scrutinizing the competition is often the way to win.  In business, you’re having to ask, “What are they doing and how can we do it better?”  Not just playing the best practices game.  We want to copy what you do.  It’s watching what competitors do and then blowing away their offerings with something better.  Great managers always have a thought about what’s happening around them while focusing on making progress as their primary goal.

4.  In NY (and around the nation), people in politics love to play politics.  They get a thrill out of playing the game.  It’s funny.  I’ve known so many people, including myself that would rather shoot themselves than go through the stupid rituals that make political people politicians for life.  They’ll even tell you they could never do the job.  Funny, these people are often movers and shakers in business.  Could we then suggest that people in politics are not the builders but love to play the secondary role they play? Mmmmm.

4. In NY, those in  office just don’t know how to fix the problems.  I ask this question all the time to people in business.  “If the people could show up to work and solve every problem they have, why wouldn’t they?”  I get all sorts of answers and occasionally I have someone burst out the answer.  They don’t solve all their challenges because, well, they don’t know how. Otherwise they would have done it.  They’ve had the time, and in NY state’s case, they’ve already had enough money to solve many of our challenges, too.  The same holds true in business.  If someone shows up to work every day and still, after working on something for a long time, he still has the problem or has created a new problem, he probably doesn’t know how to fix the challenge.

What needs to happen is that leadership and management needs to be changed or taught new tools to make the change occur faster or more efficiently.  Tools such as those in Enterprise Thinking or what I teach at NYU in my strategy and innovation classes.  Tools that make decision making more precise.

The fact is that a 25% difference in the same product, where the lesser even gives a better service, is disgraceful.  On your end, how do you compare?

Quite some time ago, prior to the global recession, I signed up for an email alert system from manufacturing.net where they send to me current news on the manufacturing sector.  What I’ve loved about the system is that during these past few months, I’ve seen both sides of the layoff situation and the potential solutions, and they’re being provided in a non-judgmental forum.  I get just the news…globally.

For example, in the posting below, the report notes global concerns in Italy & Germany.  The writers could have easily talked about green initiatives or what’s going on within the business.  They did not.

Italy Paying New Car Buyers $1,900
Manufacturing.Net – February 06, 2009

The general manager at The Muse Hotel had challenges like many other hotels in NYC throughout 2008.  He questioned whether he should lower or maintain his current fees.

He had good reason to look for a new strategy amidst the Wall Street decline, the banking sector collapse and financial services sector in ruins.

He stuck to his beliefs and stuck with the traditional rate.  His belief was that his hotel was just renovated, the location is off Broadway, and The Muse is a boutique hotel with an incredible staff delivering incredible service.

The results were a combination of luck and planning.  While the Ritz had floors closed and the Broadway Marriott was down 30%, The Muse held strong most weekends with sold out capacity, even on some rooms that netted fees exceeding $1000.

Looking at the element of luck, based on my experiences with decision makers over the past several years, the GM made his own luck. He did things right, and now customers are returning because…well…it’s The Muse.

1.  If you’ve tried Skype and love seeing video, then try oovoo.com and you can set up conference calls amongst up to six people at one time.  Cool.

2.  Did you know you can take any image and drop it into your web browser to view it.  You can also do the opposite.  Drag an image off the browser onto your desktop.  You don’t have to save the file to a specific location.

Yves Rossy is the first man to possess the climb performance ability of an airplane using only his body movements to steer: the Icare’s dream reality !

Mikkel Viesergaard has hit upon a very simple idea called the Life Straw. Life Straw is a product that filters out 100% of the bacteria and 99% of the viruses from tainted drinking water for those whose lives are typically in underdeveloped countries.The straw is used like an ordinary straw with the exception of a filter designed to remove “toxins” to humans that typically induce diarrhea. Harmful bacteria and viruses are a medical concern because they’re killing 6,000 people per day. I’m betting this number does not influence other diseases that are a result of not having fresh water or those conditions where dehydration causes someone to be susceptible to other diseases.

The products range from $4US to $15US and allow a family to drink for a year out of one straw. The personal model filters a minimum of 700 liters or 84 gallons, while the family version filters a minimum of 15,000 liters or 3962 gallons of water.

Pretty incredible. So the next time you’re trying to be creative, realize the answer might be in your hands.

Check out our blog on the Snake Well Technology: a similar conclusion.

Some facts from the Life Straw website:

• More than one billion people in the world do not have access to safe drinking water – i.e. around 1/6th of the world’s population. (Source: Water Supply and Sanitation Collaborative Council)

• The average distance that women in Africa and Asia walk to collect water is 6 km. (Source: Water Supply and Sanitation Collaborative Council)

• The average weight of water that women in Africa and Asia carry on their heads can be anything up to 20kg – the equivalent of your airport luggage allowance. (Source: Water Supply and Sanitation Collaborative Council)

• Diarrhea kills over 1.8 million people per year and chronic diarrhea is a leading killer of people with AIDS. (Source: World Health Organization)

• In Africa, diarrhea is four times more common among children with HIV and seven times more common among adults with HIV than their HIV-negative household members. (Source: Mermin J, et al.)

• Diarrhea affects up to 90% of HIV patients. (Source: Bartlett JG, et al.)
  

• Diarrhea is one of the leading causes of morbidity and mortality among HIV-infected children.(Source: PEPFAR)

• “In a study among HIV-infected persons in Uganda, use of safe water decreased diarrhea-type illness by 36 percent”. (The U.S. President’s Emergency Plan for AIDS Relief)

Q. Why do old men wear shorts, black socks and loafers?

Because over the course of their lives, they learned that what mattered so much in their early days eventually didn’t really hold much meaning when they were older.

The wisdom of age, to some degree, is not about learning more; it’s about realizing what’s important and what’s not. At some point, maturity drives us to realize, “It doesn’t matter.” And in the grand scheme of life, many trivial things don’t.

What everyday opportunities are you ignoring that could teach you the lessons of pushing the extraneous aside and living life in a way that black socks and loafers actually don’t matter. (I just hope by the time I get to this point in my life, there are technologies that I can set that will never let this happen to me.)

For the past year I’ve taken my mountain bike to a local dirt path, put on my helmet and then started riding. One day, I stopped to read the sign that was the marker for a particular entrance. (The text is retyped below.)

Historic New York
The Erie Canal – Canvass White

When work on the Erie Canal began in 1817, little was known about canal engineering, and construction depended on the ingenuity of many persons. Canvass White (1798-1834), a surveyor, greatly facilitated canal construction by perfecting hydraulic cement. White discovered in 1818, near Chittenango, a “meagre limestone” that could be used to form a mortar which hardened under water. His discovery of this abundant, easily prepared, waterproof cement immensely improved construction techniques.

The Erie was a practical school for acquiring engineering knowledge. Resourceful contractors, surveyers and local workmen planned the canal through a wilderness. They drove stakes, bored holes, felled trees, pulled stumps, blasted rocks and dug in swamps. They built canal banks, towpaths, waste weirs, culverts, aqueducts, locks and gates.

When they finished in 1825, they had constructed a 363-mile canal across the state. It was considered the foremost engineering achievement of the time. Western New York flourished with new, cheap transportation. The canal insured the place of New York City as the nation’s greatest port and city, and it hastened development of the Mid-West.

The modernized State Barge Canal System, consisting of the Erie, Champlain, Oswego and Cayuga-Seneca Canals, was completed in 1919.

What I loved is that this is a true example of how innovation is always all around us, even on history’s time line.

White saw a challenge and  figured out how to make hydraulic cement which I’ve got to believe not only change the canal building but changed building forever. Boiled down, innovation happens often when everyday normal people are doing everyday normal work.

The next time someone pushes for complete equality, consider this quote by Coach Jon Gruden. “I do treat people differently, yeah, because I’ve yet to meet two people who are the same.”

No two employees, vendors, customers, bosses, or anyone else are the same. He’s right on the money.

Maybe today was just different in that I noticed something that I don’t normally remember. When the mail arrived, there was a copy of a catalog from a company that I’ve traditionally only known online. This is a type of software company.

The catalog hit me for two reasons. The first was that it was paper and the second, I found items in it that I would never have noticed if not for the paper version.

Sure I’d been to the site many times and have actually purchased products on at least a half dozen occasions, but that does not mean a customer knows what you offer just because you’ve got 50,000,000,000,000 items in your database. What it means is that through a search or through an ad, your customer/visitor finds you for a specific reason. Then, if your site is good enough to move people through different pages and towards other items, they take in the data and possibly purchase.

This one catalog had me flipping through pages. So 1989, but in a good way.

In fact, I found a software package I may never have taken the time to notice. It’s called Timeliner XE, a software program that generates time lines specifically targeted to those involved in teaching.  However, it also could be used for other purposes.

Here’s how it works. You set up a time line or use an existing template to start a visual. You pick the type of visual and then start adding dates and references. As you add the information, the time line appears and in doing so, gives a different perspective to the data. If you need a search engine, the software opens up Google without leaving the program, and you can input what you like as you see it. All this happens while the software generates your reference files for later use. This means you don’t have to go back and ask, “What page did I find that photo on?” It’s stored for ease of use and so, in academia, you don’t get called for plagiarizing.

The whole package is only $99.00.

I was introduced to this “find,” simply because the company opted for a different way of selling its products and services. In this case, it was an older approach to selling…paper!

Next time you think you’re being so fancy selling your product, try using some older technologies. They might enlighten your customer.

Also, check out Timeliner’s video demo. You might find it useful.

“Why study the stars? They all look the same to me.”

Ascribed to an apprentice of Galileo

Makes one wonder how often assumptions are made that in retrospect, are self limiting.

HP has set up a  nifty little site that helps you set up a new fax machine.  Yeh, I know, what’s a fax? Unfortunately there are people who still want faxes.  I prefer to send everything as a PDF image so that it’s digital.

Check out the site at:  HP FAX TESTER

Here’s a great tool for setting up meetings for a group of people.

One person sets up the possible meeting times and then the others get to pick when they are available.

Quick and easy.

Click Here: http://www.doodle.ch

I recently realized that my sunglasses had lost one of those nose holders that make the glasses sit comfortably. Having never lost one before, I thought I’d visit my local optometrist’s office down the street for the repair work.

When I entered the store, the lady behind counter looked up and asked how she could help.  While handing her the glasses, I explained that I lost nose piece and asked if I could get a replacement.  I considered the repair would be fairly simple.

I was told that Prada glasses have a special fitting and that the optometrist would need to see the glasses to determine if they’d need to special order the part.  He was to be in on the following Monday.  I left feeling a little cheated by Prada for making a specialty nose clip and by the store, since I believe the person who helped me should have been able to check inventory.

A few days later my son and I decided that a quick unscheduled trip to fly to NY City would be a lot of fun; plus I could also catch up with a group of friends from Camp Idylwold who were going to meet at the US Open.

Jake and I arrived the day before so that we could visit the Museum of Natural History, eat in Little Italy, and tour the Alex Beard Studio in Soho.  On our return walk to the hotel, I spotted a Sunglass Hut and thought just maybe they could help, because I had purchased the glasses at a Sunglass Hut in Rockefeller Center.  The lady I met looked at the glasses and said I should stop down at the Lenscrafters around the corner on West Broadway.

There I was met by Delcia who, upon first glimpse of the glasses, told me this was an easy fix and the cost would be $10.  She warned me that I would not have a Prada nose piece set but one of another brand.  I thought to myself, who cares!   She motioned for us to sit at one of the counters as she opened a box with enough nose pieces to fit every pair of glasses for an entire office building in Manhattan.

We selected two options and then she replaced the old with a completely new set all the while handing the glasses as if they were the most valuable item I could own.  Within minutes, the noes pieces were on and we started to do the micro adjustments to get the correct angles.

She asked, “These are a gorgeous pair of glasses. I’ve not seen anything similar. Where did you get them?”

I told her the Sunglass Hut uptown near 5th Avenue.  Little did I know that these were the magic words.  I had no clue that Luxottica owned and managed the Sunglass Huts, Lenscrafters and managed the optical units in Macy’s, Target, Sears, and BJ’s.

Luxottica Group out of Milan Italy.

“It is a global leader in eyewear, with nearly 5,800 optical and sun retail stores in North America, Asia-Pacific, China and Europe and a strong brand portfolio that includes Ray-Ban, the world’s best selling sun and prescription eyewear brand in the world, as well as, among others, license brands Bvlgari, Burberry, Chanel, Dolce & Gabbana, Donna Karan, Prada, Versace and Polo Ralph Lauren, beginning January 2007, and key house brands: Vogue, Persol, Arnette and REVO.

In addition to an extensive global network, the Group manages leading retail brands such as LensCrafters and Pearle Vision in North America, OPSM and Laubman & Pank in Asia-Pacific and Sunglass Hut globally.
The Group’s products are designed and manufactured in six Italy-based high-quality manufacturing plants and in the only two China-based plants wholly-owned by a premium eyewear manufacturer”

Luxottica Site

Having purchased the glasses from another part of the company there was no charge!

I left the shop talking to myself.

1.  If this shop could have filled my need why couldn’t the optician shop down the street?  Bad move on their behalf given that I most likley won’t return.
2.  Delcia did a wonderful job at servicing my glasses.  So well that I felt as if my eyecare and my purchase were a top priority.
3.  Sometime what we see is not what’s happening in the background.  Retailers turned to an expert to take care of their eyewear service needs and leveraged a $7.3B in revenue, completely verticle company to make doing business easier.
4. Smart companies know when to outsource and outsourcing does not always mean overseas or doing only unseen activities.  Sometimes they are a company’s first point of contact such as livechat or call center activies.
5.  My glasses look and feel great!

Businessweek’s June 2nd edition, Special Report on blogging had the following comment.

BLOGS. UP and UP (And Lots of Zombies) -

In the spring of 2005, search engine Technorati reported indexing 9 million blogs. Today’s figure? 74 million. It sounds impressive, but only a fraction of all bloggers have posted within the last two months. Eliminate the sleepers, and the blog universe shrivels to 5.2 million. Kevin Burton, CEO of FeedBlog, argues that there are even fewer active blogs, about 2 to 4 million. In either case, more than enough to read. In fact only one in four Americans online, according to Forester Research, reads a blog every month.”

When I finished reading this these few thoughts ran through my head.

1. People might like to hear what you or your business is thinking but not as much as one might believe.
2. Blogging like any other medium is a type of fad taken on by everyone and then once the real users figure out how to use the tool, they become the true users. Akin to the ONLINE business in early 2000s and then when the brick and mortar businesses figured out how the entire model worked, they transformed and now use the internet as one of the tools in their arsenal.
3. One must write well enough to capture readers. Too many people can’t write. It’s why I have most of my work edited by Lorrie. I write well but there are times when I’m lost as to what I’ve just written.
4. It’s easy to get caught in hype and people love to jump on the next trend train. The problem is, just like many other fad booms, the train is going no where.
5. Consistency is key to much of life’s successes. Blogging is no different.
6. Blogging alone won’t bring readers. It should supplement other marketing tools: TV, magazines, radio market. Use blogging as an additional value. Then readers get this extra as part of their experience.
7. The blogger must have something to say that your niche finds worth reading. Just because someone can type does not mean others will read it.
8. By setting up a blog it does not mean you’re all done. Blogging is a technology that requires technological knowledge OR money to pay others to do it. Setting up an RSS…tied to Feedburner or AddThis, putting code for optimization, offering email this, Digg This, Save to Del.icio.us, configuring podcasting, fixing htaccess files to allow photos, or achieving an artistic look to a site requires time and energy. Without anything but a personal reward, this activity soon falls to the bottom of the to do list.
9. Blogging will transform into just another vehicle to get a message out for those that can write, will write, and can do it well.
10. It’s not nice to write when no one reads what is said. You’ve got to have tough skin.
11. The net has allowed innovation to spread quickly. but has not insured any success. It still requires intelligent thought to make something successful.

12. For many people and organizations, the “blog,” is launched to bring fame and fortune. Those that understand blogging often consider the blog as an online database of thoughts that can be used in the future. This is a very different perspective and one that allows for the less than sonic boom celebrity status.
13. I hope someone reads this!

Where does the responsibility lie when a customer wants to do business with a certain company? Is the person who’s been a customer responsible for keeping track of records to insure accuracy for future business or is it the responsibility of the firm that has conducted the business in the past, and profited from the exchange, to keep these records.

One might suggest it’s the responsibility of the buyer. They make the decision to use the vendor and therefore they must keep the records especially in a B2B relationship. In a B2C the clarity as not as clear. Or at least in my opinion.

In this day and age, organizations, once given personal data including name, address, and phone are more prepared to take care of purchasing records than the average consumer. Especially on larger size purchases. For that matter if a purchasing discount card is used as a tracking method. The technology exists.

In both cases there is a need for someone to take responsibility for their record keeping however when the two records don’t match then someone must step up to the plate.

Case in point. For the past 3 years we’ve been purchasing mulch from a company called local garden center. They’ve charged about $25.99US for yard and about $40US for delivery.

This year I called for another 5 yards as our records in our CRM said we purchased $180 US for 5 yards plus delivery. This year when speaking with one of the employees, she said that her records say that we purchased not 5 but 6 yards.

She should be right. She’s holding the invoice for last year!

As promised the firm delivered the mulch and we started to work to beat a rain storm headed our way. As we were finishing up we still had quite a large pile of mulch sitting in our driveway. At least a yard.

Not wanting to be wasteful, we bagged up the goods and decided call the company about the extra goods. We’d offer to bring it up to the store and they can then give us a store credit for $20-30. Think about it; $20-$30 is a small amount of money, especially when you consider that the client would stand to make several hundred dollars off the two trees we wanted to purchase for our yard.

Besides, the only thing we can do right now is send the goods to the dump!!! What a waste of money and energy used to produce the mulch.

The first person on the phone could not help me so I was transferred. The second person who answered was no use. The third person, the person who told us to buy the 6 yards versus 5 yards of mulch, finally answered the phone. During this telephone tag we also looked up last year’s credit card transaction and there was a $180 charge on our card. Exactly 5 yards worth. When I told the vendor’s employee this, she said that she would not take back the goods. In essence we should trash it.

The whole experience left a bad taste in my mouth for what’s right.

Even though there is a balance that must be kept, here are some rules I would recommend.

* Small purchases B2C (soda, candy, shirt) both parties must keep records.

* Mid to large purchases B2C (Grocery bag, Videos, anyone with a purchase card, Furniture, etc) and the responsibility should fall on the organization/company to keep track of all commerce. Consider this; compared to an office how well do you keep records on household activities? When did you order the last pool supply or had your rugs shampooed?

The values can be enormous. Marketing efforts, clean and efficient reordering. Scheduling employee and managing cash flow. Even in the B2C market.

* Small, medium, large purchases B2B – Here I would put the onus on the company making the sale to keep accurate records if only for the purposes of aiding your customer in future purchases of your product or service. This does not mean the buyer is off the hook. Yes, you can trust the vendor to keep records but people go out of business and your time and purchasing power are worth its weight in gold. Time because the faster you can find who you purchase from the faster you can create reorders and go on to delivering your own product or service. Purchase Power because this becomes leverage for future business and shifting from supplier to supplier.

You do $375,000 US from one company and there are 5 others in the space, you can open your books to negotiation for better services, decreased pricing or even preferred status.

Customers in the B2C environment can do the same however it’s not as common. For example in our household we spend between $25-$60 a week in dry cleaning. If the records indicate the volume is about $1400 per year we might be able to leverage a constant discount rate instead of grabbing coupons out of our newspaper every week to get the same deal. A waste of time.

The garden center’s employee (could be one of the owners) never thought that her records were wrong and when I called to offer to return the goods for a small credit to be used in their store, she refused. Not only did she lose out on the next sale, but she lost out on two tree sales.

Always remember, it’s not whether you are right or wrong, it’s perception that matters and in the case of who’s responsible, make sure you’re covering what other consider to be your responsibility.

Unless you’ve lived under a rock for centuries you most likely heard the phrase, “Think outside the box.” Think about it for a minute. How do you know if you are outside of the box or for that matter inside the box? If I suggested to you that you should use round tires on your car, that would be outside of the box. You’d also think I were nuts. Square tires won’t roll. Sometimes we be better off inside the box! If there were any box we can define. Yes, I understand the phrase is used so that people are creative. Then let them be creative and not stupid. Don’t say it any more.