Archives for January 2014

Your Life Partner Choice: Make it a Secret Weapon

Share Button

Life Lesson #2 from my 40 Lessons @ 40 post.

  • Key life decisions matter.  Take the time to get them right, with the information you have, but you’ll never have ALL the pieces.

Key life decisions are obvious, and a bunch pop into my mind.  

You have decision making control over…

  • College

  • Career Management: Environment, type, location, compensation level you’re satisfied with, autonomy…

  • Friends/who you spend time with, how/if you build relationships

  • Family:  Relationships with your kids,spouse, extended family

  • Financial:  When to save, how much, where to invest

  • Leisure pursuits

  • Location, where you live & play

  • Degree of “risk” in your life

  • Your attitude towards life

  • Your ENERGY LEVEL you apply to various aspects of life

Sometimes a tweet, those powerful little 140 character soundbites can bring it all home.  And this one does.

Life's critical decision, your spouse

As F’ing Perfect states:  

Be with the person that brings out the best in you.  

Is there anything more important, especially for life’s Hustlers than to be with someone that gives you every shot to maximize your potential?  

It would be painful for me to think about NOT having that person in my life.  Sometimes in life, especially in matters of the heart, your decisions are not rational, logical or “pro and con” lists on legal paper.  You just kind of go with them.

BUT, if I were single, this would be my #1 criteria for a Spouse “decision.”  I thank my lucky stars my wife checks this box, 10 times over.

Having a secret weapon in life is not cheating.  It’s smart.

Share Button

Integrity Matters: What We Can Learn From The A-Rod Saga

Share Button

I’ve been disgusted with the A-Rod saga for a long time.  Yes I’m a Yankee fan, and yes I love winning.  There is no doubt that a talent like A-Rod, (albeit his numbers have plummeted in recent years) is a talent that can tilt the odds in the Yankees favor.

A-Rod Ban

First, let’s try to suspend the steroid issue for a moment, granted that is difficult.  Here’s a superstar with plenty of baggage outside of this core issue.  Yankee leadership had to be struggling with the basics that all leaders confront when it comes to questionable employees:

When is enough, enough?  At what point does the baggage become too much to tolerate?  When does this impact the rest of the organization to the detriment?  The rest of the league?  The fans?  The sponsors?

The answer relative to the Yankees/A-Rod is probably “too much” and has been for years.  And what has Yankees ownership done?  They have sat back while Major League Baseball plays out their investigation.  Guaranteed contracts certainly don’t help.

There is one part of the human anatomy that is dangerous for Leaders to lean on in the decision making process:  Their heels.  

People can find a way to rationalize the “baggage.”  Baggage: Attitudes, surliness, off-field high profile romances, struggles in clutch time that can’t be over-come.  Stupid remarks that erode team-work vs. help it.  Office politics, gossip.  That’s baggage and it erodes performance.

Every organization has it’s “baggage factor.”  There are degrees of baggage everywhere.  You have a bit, average, or excessive.

An organizations “Baggage factor” can be managed. But one factor is simply Non-negotiable in Business:  Integrity.

Why is integrity different than baggage?  

  • There tends to not be “degrees” of integrity.  It is more absolute than baggage.  You have it, or you don’t.

  • If you do NOT have integrity, anything and everything is fair game.  Rules go out the window.  Self-interest trumps organizational/Stakeholder interest.

  • When integrity is questionable, the lines of decision making are blurry at best, vs crisp black and white.  That is dangerous.

The Yankees have been struggling with a clear Integrity issue on their team for years.  They knew this years ago.  They could have acted before hard evidence came out, but chose not to.  It’s easy to be on the outside, and armchair quarterback what they SHOULD do.  That’s not fair, but Fan is short for fanatic correct?  

I gave a prescription for the Yankees options in Feb ’13, which they didn’t take.  They would have been much better off, and their “brand value” would have increased substantially.  And the overall industry (Major League Baseball) would have been further along than the mess they find themselves in now.  

There are times when a market leader needs to suspend “self-interest” for the good of the entire industry.  Like a rising tide that lifts all boats, a falling tide has the same impact.  

Choosing to Lead is often difficult.  Sitting on your heels seems less painful.  But in the long run, the heels rarely are the right part to rest on.

Share Button

“Why is Everything Made In China?”

Share Button

My son has a fascination and knack for discovering where things are made, studying the fine print on every product he sees.  And lately, he’s become agitated with his agitated outcry:Outsource to China

Why is everything made in Chiiiiiiinnnnnnaaaa???

His parents give him the standard, simple answer:  “Cheap Labor.  That means cheap prices.”

There is some truth here for sure, but it really over-simplifies the off-shoring dilemma.

The fact is, depending on the type of product your manufacturing, labor is certainly a cost to manufacture a product, but it’s not the ENTIRE cost of goods.  If you’re dealing with a food product, labor may be less than 1/3 of the total cost.  The balance?

  • Overhead
  • Packaging
  • Materials

Then the cost to the end consumer is made up of a couple of other major components:

Variable Selling Expenses:

  • Transportation – To get the product to the customer (distributor, retailer)
  • Sales Commisions – To third party selling agents

The last major variable, and the biggest variable

  • A manufacturer’s expected profit Margin

Yet another variable, the retailers profit margin….

The China “labor factor” is certainly relevant.  But I would argue that the final consumer will see the end retail price move 5-15% (MAX) due to an off-shore model vs manufacturing in the good ‘ol USA.  And 15% is pushing it….

So why do manufacturers make the decision to move production off-shore?  Usually 2 reasons.

  1. Competitive pressure:  Their competitors are already there, so if they DON’T go off-sure they are at a disadvantage
  2. Customer Pressure: They value “made in the USA” but not enough to pay a premium to make it in the states.

Those are 2 valid reasons.  But at the underlying core is the following:

  • The products are not differentiated enough, so cost comparisons become a driving force on decision making
  • Since the products are not differentiated, the small %’s in cost difference are monumental to the business model.  Margins are tight, can’t absorb increases.  Margin is one of the critical metrics in business.  
  • The brands to not command an “emotional connection” with the end users.

In consumer products, Cost structures and Brand Value matter.  The brands that have both, an emotional connection and a lean cost structure tend to write their own ticket.  They have pricing power when costs move on them.  Their margins tend to be substantially stronger than competition.  As a result, they are not prisoners to the off-shoring pressure.

Lean cost structure + a Brand with an emotional connection to the consumer = a stable, sustainable margin.

It’s the holy grail of business.

 

An interesting read, geeky but data based study….

http://www.asiafloorwage.org/documents/Resources-onwages/Background_reading/onwage/The%20Impact%20of%20Substantial%20Labor%20Cost%20Increases.pdf

 

 

 

Share Button

Loyalty Matters and it Follows Relationships

Share Button

I love great service at restaurants, for a few reasons:

  • It complements an experience away from life’s daily grind

  • It is an opportunity to “vote” with your dollars:  Great service equals great tip.

  • It matters to the person delivering it.  Financially and “life skill building.”

  • It is RARE

I have always loved dining out. It provides a living lab for people trying to make a living and over time, what you see is the brutal reality of the bell curve come to life.  It is a fact that a very small % of the people you encounter will be exceptional. Most people would say the far right of the bell curve, the “exceptional” is 15-20% of the population.

The exceptional people tend to be memorable.  They make you WANT to come back, not just for the product, but HOW it is delivered, and how they make you FEEL.  Business owners are wise to reward these A players, they make them a ton of money and are truly special.  In short, they are few in numbers, and they drive the majority of the revenue.  Call them the 20% of people that drive 80% of the revenue.

3 especially bright people come to mind over the past 15 years.

1.  A waitress at the famous “Tick Tock Diner” in NJ

    • We dined here about 50+ times, always for breakfast over 2 years.
    • She knew our name, knew our baby girl’s name.  She gave her a gift on Hope’s 1 year birthday, which was waiting in her car and ready to deliver when we came in.

2.  A waitress at a Clifton NJ Italian Joint

    • Dined with her maybe 25+ times over 2 years.
    • She poured a “heavy” glass of wine, and sometimes an extra one “on me sweety!”
    • We cried with her when her sister passed away from a struggle with Cancer.

3.  A waiter at a fine dining Memphis establishment, “Flight.”

    • Had only dined here one time, but it was memorable.  When we think special occasion, this is now our place.
    • His training on a complicated menu, wine selection was impeccable, as was his demeanor, and genuine caring for the quality of our experience.

A couple of noteworthy learning’s from my list above?

  • Only 3 quickly come to mind.  My wife and I have been together for 15 years.  For people that dine out at least once a week, that’s a ton of different establishments, let’s say over 150.  And 3 are truly memorable?
  • Of the 3, 1 of them made my mental list due to extraordinary skill in his job.  The other 2 were certainly competent, but NOT extraordinary in their raw job skills.  
  • What made all of them extraordinary?  HEARTFELT & GENUINE service, caring and relationship building.

Relationships matter, and they impact the bottom line.

We lived in NJ for 2 years and ate out almost every single Saturday for Breakfast.   That’s 75+ breakfasts outside of our home. Was the Tick Tock Diner THAT MUCH better than the 10 other diners within a 5 mile radius of our home?  Not at all.  The other ones didn’t have “OUR Waitress.”

How about the Italian Joint?  Same thing.  In a town where there’s Italian food on every corner, there was only one that became “our place.”  The one with our favorite waitress.  One where we had an emotional connection with.

Product and price will always matter in business, especially restaurants.  But service makes the massive difference.  Great service is delivered by people that understand RELATIONSHIPS are king.

Loyalty is rewarded AFTER relationships are established, nurtured, and grown over time.  All the ads and promotions in the world can’t pull a consumer away from an established relationship. Loyalty drives long term, exceptional revenue that is difficult to compete with.  

The only thing that successfully stopped our $’s from flowing to the establishments mentioned above?

A move to another state.  

That’s loyalty.

 

Share Button
Follow

Get every new post delivered to your Inbox

Join other followers: