Archive for January, 2007

After seeing all the carnage on television, I was somewhat apprehensive as I strapped myself into the jet leaving for New Orleans. What would I see? From the images on television, the 360 guy and all the media, I expected that most of what I had come to love in my past 16 visits would be ruined and somewhat threatening. I, however, was committed. I was on the plane to go see a client.

I arrived around dusk and grabbed a taxi ready to pay—with my wallet and my eyes. I imagined the worst. The driver and I pulled out of the airport and headed towards the city: the usual route and for the first few minutes everything seemed fine. I thought to myself, maybe the thousands of destroyed homes are down the highway, as all I ever remember seeing on the news were the tops of home submerged. Nothing. Everything seemed as it were. Businesses were standing and homes were filled with lights.

I once again thought to myself, “This can’t be.” I repeated myself over and over again as we neared the dome where the Saints just played their playoff game for their chance to play in the Super Bowl. Nada. The city stood as it did just a year and a half later. From the city streets to the French Quarter, the only reminisce of damage was the fact that several more stores stood vacant due to the lack of visitors.

Quite frankly, if I hadn’t known that Katrina swept into town, I would never have figured it out myself.

Then what, what was going on? Why were there no visitors? All media. All public perception.

I checked into the Omni and wondered. I was to meet Joey at 10 AM.

The next morning I was in for a lesson. Joey had just learned that the rabbi of his temple does not let anyone present at the temple until they have a tour of the damage so they, too, can appreciate what had happened. He asked that all those in the congregation do the same.

Joey picked me up and we headed east towards where the initial damage occurred during the storm. About 1-2 miles out of town, the scenery changed fast. Within minutes I found myself looking at building upon building that was empty, torn up, falling down. Businesses were gone; malls were not only empty, they had been torn out by their guts so that you could see the back wall.

We continued as Joey told me that this part of town was the hardest hit. It was the low income and lower-mid income areas. This is where the storm surge came up from the ocean and dumped water while the wind howled. Joey showed me where the first levy broke and how the homes were instantly filled with upwards of 8-12 feet of water.

Funny thing, however, was there was no smell nor could you see a line where the water had been. What I saw was home upon home upon home sitting in ruins. These were the employees of all those shops in New Orleans. As far as your eye could see, the homes were damaged. Many had markings to define how badly. From what Joey told me, those with a certain number on the marking also defined how many bodies were found inside.

We traveled further away from the city and all I could think of was how incredible this was to the eye. I pictured driving 15 miles in any direction from my home and then considered how much water it would take to consume so many homes.

Yet, there was some light.

The light came in the form of some open businesses such as McDonald’s, Dominoes, auto part supply houses, and building supplies. There were people rebuilding one house at a time.

The problem from my perspective is this. When you have one family working on a home and 40 around it damaged, there is no traction for the next family around the block to believe their money would be best spent in rebuilding. So many residents had left town. I also realize that if you own a single story home, and these almost all were single family homes, hopelessness had to set in as you contemplated starting over.

Joey mentioned that there was a few billion in federal money set aside for rebuilding, and with 10,000 applications, only 200 had been granted in 18 months. These people had no money and could not afford to rebuild on their own.

Besides there are no schools, and police and fire departments being run out of run down buildings. How can you bring a child back to an area where there are no schools? Schools, even smaller versions, could begin to rejuvenate the area.

The banks also appeared to be in a dilemma. Banks only want homes they can resell. With over 100,000 homes damaged, repossessing or foreclosing on a home was a bad idea, because then the banks would be responsible for the building. Bankers opted to leave the homes in the names of the owners who have long since left—to the tune of about 700,000 people, leaving the area with a population of one half its original size.

This will take a good 10-20 years to rebuild.

But that was not all. Joey wanted me to see more. To know more.

We headed north to the middle class and upper-middle class neighborhoods where I saw first hand pictures that I had not seen on television. He told me about MRGO, a project designed to cut the travel time from the Mississippi River to the Gulf of Mexico, that ended up eliminating a full day’s transit for a ship making the journey. He explained how New Orleans was one of the busiest ports in the country, supplying the central states and then back out again. This MRGO involved dredging a channel from the river to the ocean while removing the natural barrier of trees and wetland that used to protect the inland. Joey showed me how Katrina’s wrath traveled right up the channel causing a huge amount of damage.

Back to the drive. These larger homes had also been 8-12 feet under water for close to a month. They, too, had damage, and they, too, were to a large degree not paid off by insurance.

From the construction angle, however, these homes were being rebuilt. Given that many were two-family homes, the first floor needed work, and the top floors were spared. Joey’s friends have taken their own monies to rebuild.

Still the entire was mentally unimaginable. We were a good 20 miles from the city where water from lake had filled the entire basin. I was told that French were pretty smart; they build the city and the French quarter on the lip of the bowl and not in the basin.

We passed the Six Flags Amusement Park, still idle since the storm.

Next was Joey’s neck of the woods. The west side. Here, he told me another story. One that shocked me. His take was that the day after the storm, people returned to their homes and there was absolutely no damage. They felt saved since his home was on the other side of the levee break. If the levee had broken the other way, he’d have been 10 feet under water. Everyone was at least elated for their own lives…yet distraught about their town.

This soon changed. For some reason, the mayor had told all the pump operators to leave town. In the voices of those that I spoke to on the west side, it was as if you told fire fighters to not fight a raging fire, and that they could go home. That the coast guard did not have to go out when it was wet. Well, the pump operators, those responsible for keeping the city dry, left town, and by the following morning the waterways had over swelled with water causing several feet of water to blanket the area. Joey’s home had $150,000 worth of damage, and all the furniture was lost including a carpet that Joey said he and his wife saved up 20 years to purchase. They had a rug fund for spare cash.

He even took me to see the multi-million-dollar homes belonging to the richest of the richest in New Orleans. Every house had damage and every house had workers doing repairs: many sustaining complete overhauls. House after house, he commented, “Empty. Empty. Empty.”

The difference on the west side was again that two-level homes still had the top level in good shape. The other difference was if you drove down a block and out of 40 homes, 20 had workers doing repairs, you’d be more likely to see hope and send in the crews.

Yet even in this neck of the woods, a $250,000 home was just sold for $60,000.

Now, I know what you’re thinking. Americans should not support the rebuilding of New Orleans. I tried to think that myself as I pictured telling all the families in Sacramento, Tampa, Miami to leave their homes. That it was too dangerous.

It would be as if American said that California was on a fault and given the risks, if there was an earthquake, they would not rebuild. Or Florida residents. Sorry, your fault. I’ve said this myself as I watch the Mississippi river overflow and wash away homes… yet people always rebuild.

It took this little tour to make me think about the media and its role in promoting and marketing the destruction of New Orleans and yet without tourism support, those that live and work in the area may never be able to recover. It made me think that just maybe we only see the damage from the perspective of a 30-second clip.

True, there is damage and tons of it. Mississippi still lay in ruin and that part of the country was not subject to any levee being destroyed. Just a plain old hurricane such as those hitting Florida every few years. The difference is means. Those hardest hit don’t know how to rebuild, and given that New Orleans is most likely here to stay, we should do it right and make sure that the city is built up strong.

I have no answers to this challenge other than to say the tour was one to be remembered. I would tell you put New Orleans on your next visit, just so that the French Quarter remains alive and vibrant. From what I see, New Orleans is not going anywhere. It’s open for business and it needs Americans support.

Check out a creative graphic version of the storm and the damages I recommend the interactive graphics model button as you can click through the events one at a time while the simulation delivers an explaination of what happened during Katrina.

Bill has owned his business for years and has done incredibly well for himself yet he wanted more. The challenge was that he wanted to produce more consistency within his retail stores so that he could gauge long term sales. This “control” always eluded him and his employees.

Without Bill knowing it, he had inadvertently created this artificial ebb and flow because he was not managing his real estate as well as he could have managed it.

Here’s the condition. Bill’s product needed wall space, so he filled his walls with product and set up easels to display what could not fit on the walls. His employees were always told to quickly fill a space when a product sells so that there was opportunity for the next sale to be generated. This type or proactive approach, yet productive, caused his own ebb and flow.

After requesting to calculate his entire wall inventory, the staff came up with a valuation of about US$500,000. This meant that at any time the inventory was a half a million dollars, he could achieve a certain amount of sales. If the total inventory was $400,000, it meant that given stabilized traffic, he would, without realizing it, have just lowered his potential sales volume unless there was more traffic or there were hot items to purchase.

The trouble was, when you sell an $8000 item, his staff often did fill this piece of real estate with a $3000 item or even a $1000 item. The real estate value dropped. The correction was simple. Always watch what inventory was removed and replace it with similar inventory valuation.

Once Bill noticed that the wall was inventory, he was able to utilize the same thinking in other areas of his business. His catalog, website and shows performed by the business all had a new take on how the company managed their sales.

Large retailers do this on a very broad scale. For example, 7Eleven stores will only take on product that turns very rapidly given that the store foot print is small and an item carried may be the only one in its product category. The product must be a mover and fill revenue/profit expectation.

Such a concept is simple. Yet millions of retail shops around the world still believe that to create volume you must increase traffic and purchasing frequency. Now once again, think if you had sold ten $200 items last year and the same space is now holding $100 items, you’d need to increase purchases by two, and you’d be busier with no revenue growth.

It’s all real estate valuation. Keep it in mind next time you dress your store.

View image“>click here for larger image

While reading Discover Magazine’s December 2006 issue I found this interesting pullout of the periodic table created by Theodore Gray. What makes it so unique is that the creator spent @ US$23,000 of his own money to collect all the elements of the table and then to photograph the items for the more visually appealing table.

You ask, “Why $23,000? Because several of the items are not off-the-shelf products. You might say he had to be creative in finding radioactive materials.

My immediate thoughts were, we’ve all be looking at this table since its “modern looking” creation in 1869 and the only way it’s been reproduced is with the text of the element. (The Greeks thought there were four elements: fire, air, earth and water.)

So the next time you believe it’s been done before or that there’s no way to improve your ideas, remember Theodore Gray. (He loves his periodic tables!)

BTW – if you want to learn more or order product he’s created from the images, check out his website and his product page.

Here’s a small activity that can create huge returns.

For years my wife Lorrie asked our family to place their dirty dishes into the dishwasher with semi-successful results. I say semi-successful, because on days that the dishwasher held clean dishes, dirty ones rested in the sink.

Then something changed.

Lorrie shifted the end of the cleaning cycle from when clean dishes are in the dishwasher to when clean dishes are in the cabinets. Although the cycle didn’t change, the termination point shifted.

The results are that you can almost always find a dishwasher available to accept dirty dishes, and therefore little reason to leave any in the sink.

Shifting your CYCLE TERMINATION can create large returns. United Airlines cleans their airplanes in the Syracuse market in the morning and not when the airplane lands at the end of the day.

Then in the mornings the cleaning crew arrives, boards the plane, cleans it, and makes it ready for the next flight. The crew also has the responsibility of making sure that everything is in “ready” order. On several occasions this strategy has back fired for my travels.

On one particular day, the weather delayed the cleaning crew in the morning and even though the flight could have departed on schedule, we were delayed until the plane was ready. On another occasion the cleaning crew found something wrong with the plane that required maintenance. By the time I left, I had missed my connection and what should have been a 10:39 AM arrival at my destination; I arrived at 6:23 PM. (I was traveling from New York to Wyoming.)

If the airline had made the shift, the end of the cycle would be a clean plane at the end of the day. The plane would be on its way with no disruptions.

I’ve seen this technique work with other service-related firms such as those with fleets of trucks, tree trimming, and uniform deliveries. Imagine a restaurant that left its kitchen and dining areas dirty until the next morning. It wouldn’t make much sense. If the end of the day equals the ready state for the next day when the employees come in fresh for work, they can get started immediately.

I work with my best clients to do the same with time management. The end of the day is WHEN THE PLAN FOR THE NEXT DAY IS COMPLETED. Then when you walk in the next morning, you are ready to rock-n-roll.

Think about it. The activities have not changed, just the timing.

In our house, at least for me, knowing that the dishwasher is always available to accept dirty dishes means that my dish ALWAYS goes into the dishwasher.

Now if I can only figure out how Lorrie can clean out the dishwasher and all the utensils in 4 minutes when it takes me about 20, I’d be a happy camper.

Everyday I’m surprised at how quickly new technologies are shifting from once considered corporate-only tools and specialized office tools to home “appliances.” Case in point: the Sears Craftsman CompuServe Compact Woodworking Machine. It’s a computer-controlled 3D engraving machine that not long ago would have only been in the hands of sophisticated manufacturing shops. Typically these would have been in facilities that needed to add complex designs to woodwork in order to achieve 3D images and patterns on wood.

In the 1900′s you’d have needed a skilled craftsman with years of study. Now all you do is connect your computer, lock in a design, and start the machine.

WOW.

Check out Sears website and video

AW has a challenge. She’s both the marketing director and a business development manager for a thriving firm. She’s constantly in demand to create proposals for her firm, often feeling overwhelmed as others pile work on her desk.

Story: Needing some new stationery, I Googled “letterhead” to find a printing vendor. One in particular, overnightprints.com, appeared to have the turnaround time and pricing that fit our needs. After making the decision to move forward I did have one question about uploading a certain type of file developed in Corel 12. When I called their number and was transferred to the customer service department, I was pleased to hear an audible that told me what number I was in line for a customer service representative. “You are now number 22 in line.” The system went even further to count down the number so that I was aware of my hold time: 21, 20, 17, 16, 15, 12, etc. I felt as if I knew where I stood.

AW’s challenges could be solved with a similar solution. AW could create a simple program to let others in the firm see what proposals or quotes she has on her desk before they upload a file. The viewer can see the client, project, estimated $, type of quote and date due so that the individual placing the request can gauge timing and importance. The system would also enable AW to ask two parties with conflicts to decide prioritization or even to aid her in completing the task if possible.

On the same page, AW could have all the fields for uploading the documents, pictures, and comments that would pertain to the project, making the package even more complete.

Once this is in place, the portal can become even more valuable.

Statistical analysis of who’s asking for quotes for what clients, closing rates, time tables, peak volumes, etc. could eventually help the department figure out staffing needs and which customers are just wasting the firm’s time.

The value to the second part of the solution reminds me of something I had learned 20 years ago while doing some manufacturing. Split between contract sales(we sell at wholesale pricing to businesses) and manufacturing sales(direct sales to the public), we one day added up all the orders from what appeared to be our number one contract client and compared them to our own direct sales. The results were eye popping. It appeared that we had done approximately 100 orders for our contract client and 110 orders in our production facility. The volume, however, translated differently. For every month we did $10,000 in volume for the wholesale client, we did $100,000 in direct-to-the-public sales. (Cost of goods hovered at about 50%.)

It was a “no brainer;” we’d rather our staff did nothing but clean up than spend the time working on the contract work for two reasons. The first: wear and tear on people and equipment. The second: when our great clients called, we had no available production time to service their needs. Besides it also interfered with our 7 artists’ production for work outsourced by our firm.

In AW’s case, she could develop a portal and expand the capacity of its analytical features to easily double her volume, save her hours of work, and aid the company in making priorities.

There’s a belief the strong leaders made decisions quickly and once they find that decision, they are less likely to reverse this decision. It’s wrong on may levels.

1. Often what appears to be a quick decision to an outsider may have had days, months, or years in the making. Take the realestate developer that walks onto a piece of land to pronounce this is it. One might mistake this action to be quick to decide. Truth be told, he’d been thinking about the project for 2 years, and this parcel fit the bill.

2. There are as many types of decisions as there are people in the world. US president JFK, during the Cuban Missle crisis (where Russians had placed tactical nuclear weapons on Cuban land and faced them at the United States), did not rush to action. It’s been told he heard the advice of countless people before he made his decision to push back.

3. Successful people have flexiblity to adapt. If they do not, they would dissappear like dinosaurs. The key is they know when to change slowly and when to change quickly. It all depends on the challenge facing the individual and the pressures at work. Take an executive that finds out he’s just lost a major contract worth millions. The impact is severe. Within days, new strategies and tactics can be placed into motion.

Just because a motto is repeated by millions of people doesn’t make it true. This is especially true when the people talking are looking at a situation from the outside in, rather than from the inside perspective. When it comes to making decisions, the management decision usually only appears to be made quickly, when in fact, the roots of the decision have been developing for a much longer time.

Three different people in the same environment will see three different pictures. Although this appears to be an obvious statement, it is essential to keep this concept at the center of your decision making as a leader in management.

Picture a sales manager giving a tour of a high-end hotel to a potentially large client. His hope is that everything is in order so as to insure that this client will bring its $1 million worth of business to the hotel. During the tour, the manager and his prospective client stumble upon a table stacked with trash and plates. Since the previous event had been completed for over an hour, the client takes a mental note. The manager also.

When the tour is completed, the manager’s first phone call is to operations and housekeeping to insure this never happens again. Several issues may be running through the head of this individual: who’s responsible, we might have lost a big sale I’ve worked months on to develop, I’ve lost my commission, has this happened to other sales people, etc. To a large degree, the mental traffic is about sales. A silo within the organization.

If the same situation happened to the VP of operations, the focus would change to operational issues includining but not limited to food services and housekeeping, sales, and human resources (new hires and training), engineering. All this to with the objective in mind to preventing such situations from occurring ever again.

Do note, the further up the leadership and management chart, the more the cause of (and blame for) the trash “display” reaches past silos and into multiple departments.

Now picture the CEO giving the tour. Silos all but dissapear as a great CEO thinks globaly. The trash issue is no longer isolated in sales or operations. The CEO looks at how finance, IT, HR, engineering, sales, marketing affect the problem and may be affected by the trash in the corner.

The loss of any one sale could potentially harm long-term goals as the funding to build the next expansion. What might have happened if the tour would have been with a banker or an investor?
There is more at stake then just garbage.

As for solutions the CEO should have the ablity to connect ideas throughout the organziation. She may propose eliminating paper wrapping around any container that could be left behind. The CEO’s job is to see the biggest picture.

Although three different views will always emerge from threedifferent people, the more you get as many leaders and managers to see the big picture, the more impact all decisions will have (and finger pointing will be decreased).

Two completely different companies approached me with almost the exact same challenge. One was a small one-person US$50,000 company has had trouble keeping up with quotes as he gets about 12 leads a week besides his current business. The second company was a US$200 million dollar firm that has the same challenge in that quotes to this marketing person appear to be getting more and more complex.

Two months earlier I contacted this particular company to complete a project. This after several months of looking for someone with the skills necessary to complete the project. From the onset he appeared to have his act together and very quickly understood what I wished to accomplish.

His final words, “I’ll have you a quote by next Friday.” Friday came and went. After a few weeks on the road I called again, now with adding a few more small items I wished completed, I asked if he could honestly do the work. This time we set a longer time frame for me to get the proposal considering he had a lot of work in house.

He promised me that a quote once again would appear as promised. It did not.

Yesterday we spoke once again and once again he told me about this prized proposal I’ve yet to see. I stopped him dead in his tracks and told him that there are three things happening in his business.

1. He’s afraid to call people back, because he’s not completed his proposals.
2. He then has to do work at a lower fee because he feels guilty for putting them off for too long.
3. He’s got so many proposals in backup that he can’t make time to get them done; therefore, he’s losing business.

All correct. In essence he’s lost business to people who want to give him business because he can’t price out the work.

In a nutshell his inability to give people a quote was killing his business.

For some odd reason he thought that every client needed a full proposal so that the project would be accurate. He was so accurate with his wording that each proposal was upwards of 6-7 pages long. Mind you, his average ticket was US$1000 and two of my quotes were less than US$200.

He was wasting time on non-productive administrative work that was jeopardizing his business.

His solution was easy.

* No proposal under US$2000 should be more than one page long.
* Proposal should include fees, delivery schedule, short scope of project, and terms.
* He should attach an MP3 audio of the scope of each project detailed with a SCRIPTED introduction and ending to cover all issues.
* Each detail in the project should be numbered and structured, and this can all be done by hand on a note pad in just minutes.
* An internal pricing model should be built so that he can take the core elements of the project and based on time and value, he can add up key items and get a total amount….then +++

Within an hour, I had all three projects quoted. His wife’s response was “Duh. What he said.” He now can create 6 quotes in a few hours.

Within a day, this was one of his client’s reaction.

“I really like the fact that you sent an MP3 with your proposal. It makes the process much more personal and makes the listener more confident about their selection if they have already spoken with you before. It makes it less Internet computer program or robot and more of a real life presentation from a real person and company.”

Funny. The client refers to this as more personal AND YET IT’S NO LONGER A LETTER. IT’S AN MP3 WHICH IS HIGH TECH!

Let’s now transfer this to a $200 million dollar firm with a similar challenge. They produce about 400 proposals per year and they are finding it’s taking them more and more time to create proposals as their clients are asking for more history on the success of previous projects…to such a degree that they are building a complex database to be able handle researching such requests.

In essence, their firm was challenged with proposals that have been getting long and longer to produce for the same return.

The paradigm shifted when the conversation turned to self-fulfilling prophecies. Was the client asking for more and more detail or were they supplying more and more details, because they believed that they needed to do all the work to get the business. Out of the 400 proposals, about one half had this escalation.

From the information given, it appeared that the company was creating their own challenges. Little comments such as, “We can provide you with back up examples of our work details,” could trigger an avalanche of work.

Besides, having worked with many other firms in this industry, this was the first I had heard of the requests to the degree in which she described. Again, a structured approach to removing just 10% of the quotes would free up hundreds of man hours.

So the next time the customer says, “I want to buy,” keep it simple and close the deal. The one-man company could have given me the price over the phone and I would have said yes two months earlier. The larger company needs to take stock in their own success and realize that most of their business already wants to buy. They are just adding work to the same project.

Are you?

Almost every day I receive a Men’s Health email with information on keeping healthy. Everything from exercising to eating properly. In a recent January edition I was intrigued to find out that the writer had decided to organize his photographs during the holiday season only to find a photo where his belly poked out from under his Syracuse T-shirt.

Today it’s a different picture.

Fifteen pounds of fat has disappeared and ten pounds of muscle has taken its place. (Note to reader that the picture 1 attached to the article looks like a 2007-style, fit Charles Atlas. Ribbed, trim and muscular.)

Wondering if I had ever met the writer, I jumped on line and searched the Syracuse University Alumni Database only to find….Jamie Bellavance, the Assistant Online Editor is not a “he” but a “she.” Or at least that’s how it’s listed. Ms. Jamie B.

Now I could have been mistaken, however, while scrolling down I noticed that her employer was Rodale Press, the producers of the email I’d be receiving.

Curious, I searched for articles by Jamie at Syracuse’s Daily Orange College paper and in fact found that there was a Jamie B. who did write for the paper including “Top 10 Craziest Places to Have Sex.”

Yup, it was her.

I guess the fact that Jamie’s writing the articles is not my issue here in that the publishers of Men’s Health have a goal of selling product to people like me who want to stay healthy. My trouble is that there are places for illusion and places for truth. For example, I would expect that if I were to see a movie, illusion. But when I put stock in the advice of the company for my well being, I would want truths because I might be using this copy to guide future decisions.

The challenge then becomes, can Jamie or Rodale give me great advice without breaking this trust. Yes. Jamie’s most likely been in the industry since college, and if she has kept herself in shape and had learned from such experiences, her advice can add value. She can also capture data to make a case for male activities.

In the case of business illusion, everyone plays such games. The big store on the web is a little store off the beaten path. The packaging makes the product seem sexier than it is. The trouble is, with today’s technology AND someone’s desire to reach out and touch someone, Google and the computer can break these boundaries.

You might say that it’s the image of someone dialing a 900 number and believing they are talking to a sexy woman only to find out it’s a man with a 5 o’clock shadow and a hairy beer belly. Bad picture.

When you make decisions in 2007 terms, make sure you can back what you say or it might come back to haunt you.