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Sunday, December 30, 2007

Has "Passion" Jumped the Shark?

First of all, happy holidays and New Year to all. 2007 was an exciting year for us and we are looking forward to a great but challenging 2008 as we look to see where this economy takes us. I"m not going to get into my predictions on the economy because there are many far better paid prognosticators who will get 2008 wrong, so I'll leave it to them and get on to my post.

For some context as to the title of this post, "jump the shark" is a term that denotes the point when something has reached its pinnacle and is now about to begin to decline. The term comes from a Happy Days episode when Fonzie literally jumped the shark tank with his motorcycle. This was the climax for Happy Days and the show went downhill from there. There is actually a whole website dedicated to "jump the shark" moments - be sure to check it out.

As any of you who know the Vann Group know, passion is something we talk about quite frequently. Its one of the core tenets of Collins Hedgehog Concept. We preach it as part of our strategic planning process and even have a section on our website dedicated to our passion and the passion we look for in choosing the companies we work with. So you can imagine how much it pains me to even begin to contemplate the thought that term "passion" has joined the lexicon of business terms and concepts that have jumped the shark.

Two recent news/stories have led me to consider whether or not passion has lost its meaning. The first was this story about Bill Parcells, who announced in his inaugural press conference with the Miami Dolphins announced that he would only be drafting players who have passion. Yikes! If Parcells is talking about passion the term has had to lose its meaning. After all, the Tuna has only ever had a passion about his next job, certainly not for building organizational culture that survives for the longterm. From the context in which we apply "passion", Parcells in the antonym!

The second story was in Sunday's Boston Globe Magazine and entitled Married to the Job. The article is about romantic relationships and dedication to work (yes, Amanda was sympathetic to the story!). Beyond that what caught my eye it has a paragraph about passion that really hit home and made me consider whether or not passion has jumped the shark. Here is the key paragraph from the article:

"
Consider: Some 978 of Monster.com's Massachusetts job listings have "passion" as a keyword. Companies want people who are passionate about investigating insurance claims, selling motorcycles, thwarting shoplifters, and replenishing the stock on the shelves of a discount clothing store. My favorite, placed by a restaurant chain, requires that all candidates demonstrate "a passion for casual dining." Do they rent rooms by the hour for that?"

So 978 job listings have the word passion in the description - amazing! Have that many companies gotten the religion of passion or has passion become just another buzzword that we are randomly applying because it sounds good to use? From a business sense has the word lost its meaning? Or alternatively, has it become a qualifier - as in you need a masters, 3-5 years experience and the ability to demonstrate passion about casual dining? I'm not sure, but what I do know is that once a word or phrase becomes ubiquitous it: 1) loses its value and 2) has a backlash against its use.

I would hate to see this happen to passion because much like the term "love" or "six figure bonus" when properly applied it communicates a powerful feeling. To have it watered down would be extremely disappointing because of what it does imply and what we believe. However, as I continue to assess whether or not passion has jumped the shark I've begun looking for other terms that I can use to communicate the principles of passion in the event I find that yes, passion is on the 2008 in/out list. So far, I'm not having any luck, as the thesaurus does not provide much help. Any suggestions you can provide would be greatly appreciated!

Lastly, I'm leaving for a European business trip on Friday, so look for a couple of posts in the next week or so as I will finally be able to catch up on my business reading.

Sunday, December 16, 2007

Tattletale Ethics

Cindy, you know by tattling on your friends, you're really just tattling on yourself. By tattling on your friends, you're just telling them that you're a tattletale. Now is that the tale you want to tell?

Mike Brady

Now Mike Brady may not be Peter Drucker, but he does provide an interesting point in management advice – nobody likes a tattletale. We may think of a tattling as a childhood obsession but it has some real implications in the world of business. After all, many of us know something unsavory about a competitor or fellow employee or have had an experience with someone that exposes behaviors/traits/responses that do not match the public persona that the individual/company has presented. We would love to announce it to the world, but we rarely do.

Why it tattling not tolerated by us? Is it the so-called “honor amongst thieves”? Is it our own perception that we are taking the highroad and not resorting to negative behavior? Or, is it because all of our lives we have had the words of Mike Brady reinforced – nobody likes a tattletale?

Take the case of Mr. Eric Mangini of the New York Jets. No need to go into the details as they are on display in every sports section today, but Mangini became a tattler this year when he turned into the league one of his peers – Bill Belicheck for videotaping signals of the Jets and other teams in the league. The initial outcry in the press and throughout the league was shame on Belicheck and the Patriots for cheating.

Yet, as time started to drift, there seems to be a bit of a directional shift. The comments in the press are not about what a brave and noble thing it was for Mangini to come forward, but consternation for his betrayal of: 1) the coaching fraternity (as Jimmy Johnson notes in USA Today, he did it and everybody else does it to a degree); 2) his mentor who brought him along from an intern to a head coach; and 3) the New England franchise and the Kraft family who were loyal to him and provided him the opportunity that led to his job.

Today, the press isn’t moralizing about how the Patriots cheating betrayed the spirit and integrity of the game. Instead there are segments of the media and the blogosphere that are talking about how untrustworthy Mangini is and how New England is going to use this as motivation to destroy the Jets. The anticipation of perhaps the greatest single game demolition in the history of football is being gleefully cheered by the masses. Mangini and the Jets have gone from protectors of the integrity of the game to the main course for the lions (err Patriots) at the Coliseum. Apparently, Mike Brady was right – tattling just tells your friends you are a tattletale.

Is there an ethical obligation to be a tattletale? One can argue that no significant harm was being done. Mangini could have easily adjusted his signals and could have informally made it known to his peers to look out for this when playing the Patriots. Tattling is an option, but not the only one. Did Mangini create a greater sin in his peers and the publics’ eyes because the nature of his actions made it very clear that in tattling he was only doing so to hurt a competitor and conceivably gain an advantage? If so, does this mean that tattling is only acceptable when there is nothing to gain in doing so? In essence, should we only tolerate tattling when it is for the public good?

It is commonly accepted that the messenger is usually the one who pays for delivering the news. One would assume that a man with the nickname “Mangenius” would have known this. Apparently, he decided otherwise or that the gain achieved from outing the Patriots as cheaters would outweigh the cost. In making his decision Mangini has learned that there are consequences to tattling.

Right or wrong, in tattling Mangini has opened himself up to public scrutiny. Whether he is cheating or not, his ethics and motivations are being questioned and criticized on a far more fundamental level. After all, people can understand the motivation of a cheater – the motivation of a tattler is not easily understood.

As business owners and managers we have to make difficult decisions everyday and this situation teaches some fundamental points of leadership. We live in a complex world and decisions need to be considered from every angle not just what is right and wrong. We need to take into account all the impacts of a decision especially when they involve ethics. Ethics seem to be a fuzzy thing and when calculating the impact of a decision on our business and our employees we need to recognize that what we perceive is right isn’t universal especially when the decision is going to be a public one. In the business world being “right” from an ethics standpoint has very little to do with the final outcome.

I don’t know what Mangini was thinking when he blew the whistle on Belicheck but it’s likely he didn’t consider the full impact the decision would have on his team or his own personal reputation. Whether anyone involved will admit it or not, one has to assume that it has had a negative impact on his team. Time spent answering questions about “camera-gate” take away preparation time and focus. Worse, perhaps he lost some of his locker room because not everyone agrees with his stance. After all, how willing are they going to be to give their all to someone who betrayed and publicly humiliated their mentor? If so, it has a direct impact on their ability to perform.

Whether or not tattling was the right decision is a call only Mangini can make. In hindsight maybe he makes the decision again or maybe he realizes that the gain wasn’t worth the price. At the very least, I hope he can sleep well at night. When it comes to ethical decisions that is all you can really hope for.

Thursday, December 13, 2007

Whoops!

I just noticed that the previous post was published uncompleted - apparently blogger decided I was done writing! I've finished the post so it doesn't stop in the middle of a sentence. Sorry about that. Look for another post in the next couple of days - the topic "Tattle Tell"

Tuesday, December 11, 2007

Some Odds & Ends

Clearly its been a while since I've last posted. I wish I could blame it on the holidays or the weather or even Dick Cheney, but alas, its all my fault. Yes, I'm taking the fall for my inability to maintain my blog site - clearly there is a discipline to this that I have not yet grasped. With that being said, I've been busy grabbing some miscellaneous insights into the world of business these days.

Last week I attended a rather enlightening credit union conference in Hawaii (go ahead sneer, the weather wasn't that good) and took along my family. That means Amanda and I took our nearly 1 year old daughter Abigail on a series of flights that covered almost 5,000 miles and 14 hours. At the time, I couldn't decide if I was just dumb or plain stupid! Amazingly enough, Abby is a fantastic traveler (she has already been to 10 states!) and was great on the plane so it was a great trip.

Anyways, I wasn't initially impressed with the conference proceedings, but as they soaked in, I was glad I went as I gleamed a number of insights. First, I should note that the keynote speaker was Charles Fishman of "the Wal-Mart Effect" fame. After hearing him speak and reading the book, I can say that he provided some fresh insights into Wal-Mart but certainly didn't provide the level of analysis on how smaller companies can compete with behemoths who have commoditized industries (paging Jim Collins). During his talk, Mr. Fishman spoke rather passionately about how challenging banking with Wachovia was and how wonderful it was to deal with his credit union. Mr. Fishman, in his discussion made it clear that the key to competing was to provide an unmatched level of customer service. However, it was very clear that despite numerous customer service problems his primary financial institution was Wachovia rather than the CU that served him so well.

During the Q&A I inquired as to why his PFI was Wachovia rather than his CU. His response was extremely enlightening. His CU was far away and despite moving to a new area he chose Wachovia with its many locations, great online banking and very competitive rate structure over finding a CU near his residence. Despite superior customer service, rates and convenience were so important to him that he didn't even bother looking into a credit union! What this proved is that while customers may scream about customer service a significant portion of any of our customers are just like Mr. Fishman - its the speed, convenience and price of the transaction that drives their decision - not customer service.

This clearly doesn't include every potential customer, but based on my reading of his book, I would have to say that it would be safe to assume that at least 1/3 of customers fit this mold. This means that at any given time at least 1/3 of your customers are ready to change their patronage of your business if someone faster, easier and cheaper catches their eye. Unless our plan is to compete in this type of red ocean this reality is extremely discouraging. However, the insight also provides a bit of a direction for building a Blue Ocean Strategy (yes we can help with that) if you desire to break away from servicing this element of the market.

Essentially, if can quickly conclude that at least 1/3 of the market of customers is not your customer you only have to worry about what the other 2/3rd's of the market wants. With some careful and thoughtful analysis you will probably determine that at least another 1/3 of the market is probably not your likely customer as well. This means that perhaps only 1/3 of the potential buyers of your product/service are your likely customer. I know this sounds strange, but take a look at your customer base today - what percentage do you consider truly loyal to you?

Recognizing that your market is a fraction of the size you thought it was can be strangely liberating as it allows you to truly identify who your ideal customer is and what it is that they want and need. With that knowledge you can then match it up against your core competencies to see where the gaps are and take steps to minimize them. In doing so, you will make your company more competitive and therefore more attractive to the customer you truly want as your customer.

Saturday, November 17, 2007

Thanks Mark!

In my post yesterday I made a comment about not being able to discern the differences in customer service anymore. I've had an experience the past couple of days that shines a light on what an exceptional customer experience is. I was in Charleston, South Carolina this week on business. Thursday morning I received a call from my tenant that the smoke alarms were going off. The decision was made to call the fire department as there was no way for Amanda or I to get home quickly enough (obviously for me) to check it out. The fire department arrived to our house and were greeted by smoke pouring out of the windows. Fortunately, they were able to get in and contain the fire before serious damage was done.

Once I got word of what happened, I called our insurance agent, Mark Osgood from Label Lavigne Insurance in Chicopee, Massachusetts. I told Mark what had happened and within twenty minutes he was at the house to meet with Amanda and to handle all the details for getting our lives back in place. A restoration company arrived to secure the house and an adjuster arrived to survey the damage and provide us with directions on what we would need to do next. A cleaning crew is now in to clean the house from top to bottom (a lot of smoke damage) and a dry cleaning service was in to take virtually every piece of clothing and fabric cleaned. All these services are being billed directly to the insurance company so we don't have to haggle.

Life won't be back to normal for a little while, but thanks to Mark this near tragedy has been a lot easier to deal with. Thanks Mark!

Wednesday, November 14, 2007

The Conflict Generation

It's been a while since I've had the opportunity to post which I guess is because its been a little crazy here at the Vann Group. I'll never complain about crazy, because crazy means we are busy and busy means we can pay the bills this month. Before I get into my thoughts on the topic of "conflict" I did want to mention that 60 minutes did a great story this past week on the narcissistic tendencies of the Millennial generation, which was a topic of a previous post. Check out the link if you get a chance.

One of the reasons we've been so busy here at the Vann Group the past couple of weeks is because of the increasing number of conflicts that are clients are involved with. Conflict in our business is not uncommon for us as it is an inherent reality of business. As the "consiglieri" for many business owners we are intimately involved in their day-to-day conflicts. These may range from customer or vendor issues to more personal issues related to partnerships and family members. At any given time, we might be involved in developing offensive/defensive strategies to combat the conflict or we get involved in actually mediating the resolution. It has always been a core of our business and we like to think that we are pretty good at finding attainable solutions.

That being said, we've noticed that the level of conflict in the businesses we work with is increasing. Whereas a couple of years we might have one or two going on, today we seem to have anywhere from half a dozen or more at any given time. They are at varying degrees of intensity but it seems as though it’s a constant. Interestingly enough, none of the conflicts are particularly vindictive (some are) but more commonly are the result of business realities.

That got me to ask the question “why are we seeing so many conflicts in business these days”?

I’ll start with my own reality as presently constructed. As I type right now its 11:30 on a Thursday night. There is no logical reason for me to be working at this particular moment yet here I sit crafting my thoughts for this post and intermittently responding to email. I just wrote one to a client and received a response within 10 minutes. Thus we have our first cause of conflict - technology has turned business into a 24/7 proposition. Because of email, cell phones and text messages we communicate with each other constantly and expect responses immediately. How many times has someone called you and asked you if you got the email they just sent? This rapid communication drives stress at a faster pace than before technology innovation. This stress creates conflict over issues that would previously be resolved without a conflict.

It’s not only the constant presence of communication that causes conflict, but also the way in which we communicate. A voice, email or text message is a quick way to touch base, but it also creates a situation where the meaning or intent of a message can get easily get misinterpreted because the purpose is to communicate quickly rather than respectfully. I make it a point to not respond to email on an emotional basis but I still do it. Increased misinterpretation of communication is the second reason for the rise in conflict.

My third belief in why we’ve seen conflict increase is also related to speed and stress as the speed and overall performance pressure of business today also helps to create conflict. A successful business today can be out of business tomorrow because of the breakneck pace at which business is transacted. We’ve really seen this trend in our crisis and turnaround business. When we get the call from a bank today its more likely than not to help with the wind down rather than the turnaround because the end came so quick. It’s not uncommon for the banker to tell us how surprised they were at the turn of events because the last numbers they saw were fine and all payments were current.

The fourth reason for this increased conflict is the level of expectations that have been set by all of us in business. Think about how often you actually believe that the level of service, the quality of the product and the price of both exceeded your expectations. That probably hasn't happened too much recently. Part of this can be attributed to the Wal-Mart effect. Amongst many other impacts, Wal-Mart has conditioned us to essentially believe that you can have quality goods at a cheap price. This perception has transitioned from retail to virtually every aspect of business because if Wal-Mart can do it then everybody should be able to do it.

At the same time, we've deluded ourselves into this belief in exceptional customer service. If you get a chance, go to Amazon .com and search for "customer service" and look at the number of books and the titles. Management guru’s have been bombarding us with theories on customer service for years. It has gotten to the point where we have no idea what even good customer service is let alone exceptional. Case in point, last week I was disputing the notion that Starbucks provides quality customer service. In hindsight, it probably does; I can’t think of a bad experience at the place. But my perception of customer service has become so skewed I have no way of discerning what is a reasonable standard for service anymore. Now, add that to the Wal-Mart effect on quality, price and delivery speed and you get a fantastic recipe for conflict.

We also need to put into the mix our own opinions about "quality of life" - the newest entitlement that we all supposedly deserve. I cannot begin to tell you how many people I know who believe that once they've achieved a reasonable level of success they are entitled to a "quality of life" that is rather unrealistic. The scope of this entitlement varies from business to business but typically involves increased compensation, less responsibility and more time off. This sense of entitlement is usually voiced quite loudly because the more they increase the more the entitled party gets to complain about how hard it is. This is usually not well received by partners, employees or customers. As the level of entitlement rises so does the level of conflict amongst those involved.

The last driver of conflict that I have identified is desire. I've increasingly noticed that as success comes and the entitlement feeling kicks in, the desire to grow and take risks diminish. Business then becomes more about protecting the status quo rather than creating a new standard. We've found this to be a particularly powerful source of conflict with partners’ as one desires the entitlements related to the status quo while another strives to raise the bar. Desire is an interesting source of conflict because it can often get hidden. There are usually practical arguments that a partner who lacks desire can hide behind when it comes time to not make a growth decision. The sense of entitlement tied into the lack of desire can destroy even the best of business partnerships.

The confluence of these external factors with what can easily be classified as common human characteristics is providing an unending stream of daily conflict. Assuming a continuation of these factors its safe to say that conflict, along with profit and risk has become one of the defining traits of being in business. The result of this is that we have an entire generation of business owners who need to be skilled in the art of creating, analyzing and resolving conflict. Hence we are the Conflict Generation.

As to how to master the traits of conflict…. that will be the subject of another post.

Wednesday, October 31, 2007

The Spirit of Competition

My wife will be the first to admit that I have an internet problem. There are all sorts of junkies out there in this world and my addiction is the internet. I've always been an avid reader/news hound and the internet provides me the opportunity to read constantly about sports, business, Lindsey and Brittney - there is always something new to read (damn you ESPN and Perez Hilton!). Because of this, I have an attention span that provides me at the most 7 - 12 minutes of focus at any given time. This is not great for productivity but it great for coming up with ideas to blog about which fortunately for me is now part of my job.

What has caught my attention this week in news is not the overwhelming number of stories about my beloved Red Sox winning the World Series, interest rate cuts or surging oil prices. Rather, I've been intrigued by the clamor in the sport pages regarding the New England Patriots willful disregard for their opponents feelings. Last Sunday the Patriots beat the Redskins by 45 points which has continued a season long trend of domination. To date they have beat their opponents by an average of 25.5 points per game! Some of the opponents have begun speaking out as they consider this "classless" and "disrespectful to the game". These comments have led to many sportswriters questioning whether its right for the Patriots to show no mercy.

From a business perspective, I've found this to be a rather interesting point of view. Baseball and football each generate annual revenues of $6 billion so I think there is a universal agreement that sports are a business. Those writing about the sanctity of the game and the need to show respect to the game appear to live in an era that likely never existed. When it costs $200 to go to a game its probably fair to say that the romanticism of the game as a pursuit of sportsmanship should no longer be part of the sporting dialog. Yet, for some reason sports still has this stereotype and the press - defenders of all that is sacred still expect our sports teams to abide by a mythical unwritten code of conduct.

Isn't it time for the American public to recognize what games really are - another operational element of the strategic plan that this particular business executes (appropriate word for the way the Patriots are playing). After all, can you imagine what the reaction from Wall Street would be if it was perceived or confirmed that a company held back its performance because in the spirit of competition it didn't want to disrespect its competitors! Stock prices would drop, CEO's would be fired and the press would be writing article after article about how America is losing its killer instinct and will soon be a province of China. Fortunately, ass Apple has demonstrated with its domination of the music player business and Microsoft has demonstrated with its inability to extended its domination of the desktop into other businesses we live in a business environment where businesses are not only expected to destroy their competition, but are penalized for not doing so.

Given this reality, shouldn't twe be applauding and celebrating the Patriots domination and decimation of its competition? Shouldn't the press and the blogosphere be praising Belicheck and the Patriots for their ability to execute their business plan better than anybody else? Should we not begin to study the Patriots so we can learn what they do and apply their approach to other business sectors? Should we not recognize the Patriots for what they are - the best run sports business in America - a business that warrants to be mentioned in the same breath as other companies that have dominated their industry?

I believe its time to recognize the Patriots for what they are. Based on what I've seen of the season so far, I believe that the Patriots are now the model sports franchise because they understand completely that their job is not to embrace the spirit of competition but to crush it. We live in a world today where winning isn't good enough because a win likely means your competition lives to fight another day.

The Patriots provide a good lead in to our latest white paper topic which covers the concepts outlined in the book Blue Ocean Strategy. Those who embrace the book recognize that the goal is not to compete with your competition, but to make them irrelevant. We don't believe in spending time worrying about the competition because you can't control it and every moment spent worrying about what the competition is doing is a moment we are not focused on our business. Based on the results so far, it appears Belicheck and the Patriots agree. So, if you get the opportunity, read the white paper. And, if your interested in seeing how you can become more like the Patriots, give us a call and we'll help you build a plan to crush the spirit of competition!

Monday, October 22, 2007

In Praise of Jim

At the Vann Group we love Jim Collins. Some of our colleagues have gone so far as to call us "groupies" which makes us sound like we have pictures of the "Hedgehog Concept" in our lockers and send him our undergarments in the mail. We are not that crazy, but we are disciples of Collins and use both "Built to Last" and "Good to Great" as our Bible when it comes to building companies.

Consequently, Kevin and I were pretty excited on Thursday when we had the opportunity to hear Collins speak in person for the first time at the Turnaround Management Association (TMA) conference. While the conference was a disappointment, Collins was not. A very dynamic speaker, he was engaging and was able to relate his research to the challenges of the TMA. Some interesting points from his talk:
  1. Many of the "Good to Great" companies went through a crisis which served as the turning point from bad or mediocre to good to eventually great. He likened this to a "freeze, unfreeze, freeze" moment where a crisis allows for great introspection/reflection and requires an organization to unfreeze from what it was doing in the past. With the new knowledge learned, it again freezes its frame of reference which serves as the foundation for its new approach. Interestingly enough, we've seen this with some of our clients who have started to make the leap.
  2. His research found no correlation between executive compensation and shareholder returns. Excessive executive pay tends to lead to one thing: even more excessive pay, not increased shareholder value.
  3. His team has argued quite a bit about the role of leadership in companies. His team proved that a certain type of leadership (Level 5) was prevalent in all the great companies. The myth of the celebrity CEO is shattered.
Overall, the talk was focused on the tenants of good to great and the need to put into practice its concepts of disciplined people, disciplined thought and disciplined actions. For those of you who haven't read and learned about Collins research I would urge you to do so. If you've already read him - read it again - I started this weekend.

Collins also began to discuss his current research, which hopefully will be published soon. He has two research projects underway and hopefully near completion. These are:
  1. Companies that went from startup to greatness in environments characterized by turbulent disruption.
  2. Companies that went from great to good. Why do some great companies fail and others do not.
As you can imagine, we are looking forward to reading about both as they are both extremely timely topics in todays world. Hurry up and publish Jim!

Lastly, as to the TMA conference, we were rather disappointed. First, we were surprised at how few had read Collins even though its been a bestseller for years. We were curious as to how these people could be in business and not have read the seminal business books of the last ten years? The only logic we could find is that turnaround people revel in the flip side. They seem to like it when the world or business has bad turns - guess its because that is how they make money!

We like to make money on th flip side as well, so we can fully appreciate that. However, we were also taken aback by the content of the conference. Each of the learning sessions were roundtable discussions and all seemed to be focused on the point of view of equity providers/financial lenders, etc rather than turnaround experts. We were hoping to hear about trends and new approaches to turnaround management. Instead we heard about the challenges of being in the second lien position when a company gets into trouble.

What we did learn was common sense. Apparently, its not good to be the lender when you are financing deals that are overvalued. But, its really bad to be in a position other than the first especially in the big deals that have been driving the private equity craze of late. It turns out that using creative types of financing, providing little in the way of covenants and then packaging the loans into smaller pieces is not a good way to ensure that a lender has influence over the direction of a company - especially when it hits a bump in the road. Fortunately, we already knew that. Maybe if these guys had read Collins they might have a little more insight into a company besides its credit rating.

Monday, October 15, 2007

Loonys, Euros & Pounds Oh My

The first time I traveled outside the US was to Ireland in 2000. At the time, Ireland was still on their own currency and overall it was reasonably affordable for an American to buy a pint or two of Guinness. Over the years, I noticed the cost of my trips to Ireland and then to other places on the map continued to increase, but it wasn't anything overwhelming. This year, as I've seen my international travel grow I have also seen the cost of that travel increase significantly. Unfortunately, it isn't because I'm staying in nicer hotels or drinking better wine (maybe a little bit better) - rather its been a change in the US & world attitude towards the dollar - its value is weakening.

There has been much hand wringing over this precipitous drop of the dollar against most major currencies. As a write this morning from Belgium the Euro has hit its all time high ($1.42) against the dollar. I don't have the ability or interest in preaching about the pros/cons of currency policy as I only understand currency impacts on their most basic level. When I'm home, imported goods are cheaper and when I'm overseas everything is more expensive - including Guinness!

However, what does intrigue me and what I am beginning to devote some time to is understanding what opportunities can be derived from a weak dollar.I know it sounds contrarian to find an opportunity in weakness, but I am of the opinion that the weak dollar has the potential to be a positive change that can lead to a favorable outcome. Like most others I claim that I have read most of Thomas Friedman's modern day challenge to War & Peace, i.e. "The World is Flat "
regarding the globalization of commerce and virtually everything else. As anyone who has attempted to complete the book will tell you - its long. However, six months after reading it, I still think about it often and quote its concepts to my customers - there must be something to it. The basic message I derived from Friedman and where I see the business opportunity for the American entrepreneur is the basic tenet that competition is no longer the guy down the street or in the next state. It's just as likely coming from the individual or company from the other side of the world. If you believe Friedman you'll concur that those companies and individuals who grasp this concept and embrace it will thrive - everyone else will be left behind.

For many people this is a very disheartening realization. After all, we've all been inundated by the Cassandra's in the press overreacting to outsourcing (another topic to be covered later) of good American jobs (especially white collar jobs) to all these third world nations where the hourly wage doesn't buy a Jr. Whopper. But, what if the game changed and we as Americans had an opportunity to gain a pricing advantage because of the weakness of our currency? What if the goods that we still make here or our individual knowledge/skills suddenly were cheaper and more abundant than those available in Europe? Would we begin to look at outsourcing differently than we do today?

Consider the case of Magic Dave. Not too long ago, Dave was voted England's Children Entertainer of the Year - a very talented magician. Dave is a good friend of a very good friend so I've been blessed to have someone in the UK to call when I'm there. The last time I was in London I spoke to Dave and was complaining about the price of everything- after all a 2:1 ratio is not a good exchange rate; I couldn't afford the Jr. Whopper! It was during that conversation when Dave told me he was buying a lot of his magic props from the United States because the currency differences made it more economical to do so. Imagine - it was cheaper to buy and ship equipment from the US than to walk down the street to the local vendor in the UK!

At the time of my conversation the impact of this didn't register, but it did today when I spent $7 for a bottle of water. Then it occurred to me - what happens when you have the goods/services/talent to sell, the technology to do so efficiently/effectively and seamlessly regardless of location and a currency rate that is favorable enough to overcome the logistic costs of providing those goods & services in other parts of the world?
It appears that we have this situation today and to me that means an opportunity to take advantage of potentially exists. After all, if Dave is a typical small business owner in England (sans the magic duck & wand) who has found it more economical and practical to buy the materials he needs for his business over the internet from a US company rather than the magic shop down the street, I've got to assume that the opportunity exists for others to do the same. Dave could be your customer if you went looking for him.

This post has been a bit long, but what I want to get across to everyone - especially those who think their opportunity in their local markets is limited is that there is significant potential to grow your business if you are willing to expand your world view. Even if you live in a one stop-light town, understanding that your market is global will allow you to conduct business anywhere. Clearly the opportunity will vary for every company, but whether you are a graphic artist or a manufacturer, there is a good chance that somewhere in Europe there is a Magic Dave wanting to buy what you sell!

Its scary, but if we open our eyes, we may find that a flat world is a very exciting place for those of us who are prepared to embrace it. Its a brave new world - are you ready to up for it?
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As an FYI - those of you in Massachusetts may want to check out the Massachusetts Export Center at Holyoke Community College. Its a great resource for getting started in exporting.

Thursday, October 4, 2007

Dear Boss, Its All About Me

A couple of days late, but I finally got around to reading this past Sunday's issue of the Boston Globe Magazine. If you haven't read it yet, the cover story - "In Praise of Arrogance" should serve as an eye opener for any business owner who is having challenges hiring employees and will likely need to hire the crop of twenty-somethings entering the workforce.

The article covers the realities of "the entitlement generation' - those born after 1970 (although I would prefer they move that to at least 1974) and their impact on the country/workforce. This is the generation of "
upstarts at the office who put their feet on their desks, voice their opinions frequently and loudly at meetings, and always volunteer – nay, expect – to take charge of the most interesting projects. They are smart, brash, even arrogant, and endowed with a commanding sense of entitlement. These young people were raised on a daily regimen of praise and flattery from their baby boomer parents and from teachers who embraced a self-esteem-boosting curriculum."

What makes this article interesting is that it expresses the opinon that this type of behavior will breed a new generation of entrepeneurs and that narcissistic behavior is exactly what America needs to stay competitive. To a certain degree I can concur with that - some of the most successful entrepreneurs that i know have a pretty strong narcissistic streak to them. After all, you have to have a high degree of confidence in yourself to take these types of risks. Fortunately, America always seems to breed a the right number of entrepreneurs who can create game breaking innovations that lead to companies that employ the rest.

And theres the rub that the authors fail to address. As Judge Smails aptly put it in Caddyshack "
the world needs ditch diggers to". What happens when there is an entire generation that has no interest in digging ditches as a starting point but instead believes that they are entitled to the corner office and the big paycheck? If the whole is greater than the sum of the parts and the parts have the mentality that "it would be hard compromising with a lot of different people whom I might clash with," how exactly are we as a nation going to build companies that have the size, scope and talent to compete globally?

America has always celebrated the power and uniqueness of the individual as that is one of the defining characteristics that make us a successful country. But I can't help but wonder if this generations inability to overcome its sense of entitlement will tip the balance of the golden mean and set us back at the very time we need to leap ahead.

Philosophical ponderings aside, the concern for all of us today is how do we deal with this generation and integrate them into our current businesses. I don't know the exact answers but I do know that if any company is going to thrive in the near future its going to have to change its approach to work and management of its employees. At the very least its going to require a strong set of managers who have the skills to lead. Fortunately, we do know how to build leaders!

Tuesday, October 2, 2007

Welcome to Web 2.0!

Our first foray onto the World Wide Web was six years ago when we launched our initial site. It contained dozens of pages detailing the sixteen different services we offered, the numerous companies that comprised the Vann Group, our biographies and our business philosophies. It was an opportunity to provide a vast amount of information to virtually anybody in the world without killing thousands of trees and enriching the post office thirty two cents at a time.

Despite this potential the site went unchanged for five years. Our business transitioned - people came and went, addresses changed (twice) and our services evolved but our site never kept up with the times. The potential of delivering our message to the world went unrecognized as we used the site the same way most businesses have used the yellow pages; as a glorified way to provide contact information. Sadly, this was the fate of many of the early sites on the web.

What we didn’t realize then is that the web can be so much more. Over the past year you’ve likely heard terms such as blog, wiki, podcasts, RSS feeds and social networks but haven’t figured out what exactly they are. These are the tools of web 2.0, which allow a site to go from a static placeholder to a platform that serves as the centerpiece of a Company or individuals communication efforts. Some say they are revolutionary and others say its just an extension of what is already been done. Either way, their growth into the mainstream makes them tools to be reckoned with.

Over the past two years we’ve been pushing our clients to embrace innovation and to recognize the power of branding their business. In doing so we’ve advocated the need to utilize web 2.0 technologies as a key tool in these efforts. We’ve done this because we believe in their potential as a game changer for mid-market businesses. Then we looked at our website and our brand and realized we were not practicing what we preached.

Today I am pleased to announce that we are now practicing what we preach. We've just completed a brand new flagship piece (email me if you would like a copy). And, if you’ve come across this page it's likely because you just received an email announcing the launch of our new site. In addition to clarifying who we are and what we do, the site will now offer white papers, surveys, e-zines and a whole host of other downloadable resources that will allow us to provide business information that is timely and practical and focused on topics that matter today.

With the launch of this site we are also launching our first blog. The blog will allow us to communicate our thoughts and opinions and information in real time to our customers, referral sources and anyone else who stumbles upon us via a search engine. More importantly thanks to the interactive nature of the site it will enable you to communicate your thoughts and opinions easily with us as well. I have no idea what the topic of the blogs will be, but we plan on using our virtual soapbox as often as possible as we hope our insights into the world will generate some great dialog. At the very least it should be an interesting experiment.

We have no idea where this site will take us or whether or not it will be successful in serving as a communication platform. We hope that it will help grow and enhance the ever expanding Vann Group community. We also hope that it will provide a tangible benefit to our readers via the information we provide. With that being said, we know that regardless of the success or failure of this site in meeting the expectations we have set we must constantly try new things to improve our businesses. Otherwise our businesses will end up like our first web page - static and obsolete!

With that said, I invite you to take a look around our site. Please sign up for our monthly e-zine and also subscribe to this blog. You can do that by just clicking the RSS button at the top of the page. Clicking it will open you up to a whole new world of web 2.0 – just like Alice chasing the rabbit down the hole to Wonderland.