Bye, Bye Blogger

When it comes to using the web, I'm amazed at how much there is to learn every day. A case in point is blogs. Blogging is a good thing to do for a number of reasons. First, it allows you the opportunity to communicate with the people who are interested in what you say. Secondly, and a critical point at that is that a blog also provides you an opportunity to reach people you don't know who might be interested in what you have to say. It provides the opportunity to create a following and will hopefully lead to new customers.

I've been blogging for quite some time, my first post was in October of 2007 and encompasses something like 65 posts in total. What I did not know until recently was that my site was not receiving the benefit of all this activity. See, we've been using blogger, which is a Google product. It has nice functionality and best of all, its free. But, unfortunately, by using blogger in its standard format, the domain for our blog was vann-group.blogspot.com. This means that instead of driving traffic to our site, we were in fact helping drive traffic to Google. I'm pretty confident in saying that Google does not need my help to drive traffic.

There are a number of other reasons why its not a good idea to have your blog tied to a free blog tool like Blogger. Hubspot has a post - Why Business Blogs Shouldn't be On Blogspot.com" that you should check out for more insight into the topic. Also, if you are interested in seeing how well your site is maximized for the web, check out Website Grader, also a Hubspot tool. The first time we ran www.vann-group.com through the grader in December, we rated a 51 - this morning we are up to a 70. I expect it to go even higher now that we've moved our blog to www.blog.vann-group.com. So, if you have our blog bookmarked, please change the bookmark, or even better subscribe to the blog using an RSS feeder.

As an FYI, we are using WordPress as our new blogging software. WordPress is also free, but is an amazing tool. If you are going to start a blog, I would highly suggest using it.

The Decline of Differentiation

You may recall that back in March, we posted about a recent study done by Brand Keys regarding customer satisfaction and loyalty. The elements of the study that we saw provided some great insight, including this nugget:

The brands that won are the beneficiaries of consumers’ new expectations regarding brand value. The most significant shift is a neutralizing of the impact of price. And, believe it or not, this can actually turn out to be good news for brands. While economic news hasn’t been good, these shifts provide opportunities for brands that pay attention to what the consumer really expects and offer meaningful differentiation, will tip the value scales in their direction, because value matters more than ever. More than just price.

In catching up with my reading after a couple of days, I found this post - the Decline of Differentiation by the folks over at Branding Strategy Insider that provides some more insight into the study. What I found interesting, particularly from a brand perspective is that in a study of 1,847 different products/services analyzed, only 21% had any points of differentiation that were noticeable to consumers. Amazing when you think about all the time, money and effort spent building brands. Branding Strategy Insider chalked this up to the following:

1. Relying too heavily on price oriented programs rather than brand building. Unless your goal is to be the low cost provider, discounting is bad!
   
2. Allowing the creatives to be too creative; the result is ads and campaigns that are clever and win awards, but don't promote the differentiation of the product/service.
3. Management consultants don't focus on the customer in a meaningful way as they don't understand the mind of the customer, "which is where the marketing battles take place"

Number 3 speaks to us quite clearly, as we fully recognize that business strategy needs to start with the customer. If you don't understand what the customer values and you don't speak to it, you can't expect to stand out in the customers mind.

Management Fads & Trends

Over at BNET, there is a post entitled 9 Notable Management Fads (or Trends) that is worth a quick read. Of the 9 mentioned, my favorite comment is the one regarding strategic planning:

Strategic Planning. Rarely has such a critical concept been so poorly executed by so many consultants, executives and companies. It’s almost embarrassing.

I couldn't agree more with this sentiment. Strategic Planning has a bad reputation! We spend a significant amount of our time in front of our prospective clients explaining why the approach we take to planning is different than what they are used to. Its gotten to the point where we have started using the term transition planning, success planning and anything else that we can find to differentiate ourselves from the countless consultants who think a SWOT analysis and a series of "what actions are we going to take this year" is a reasonable approach to strategy.

In addition to the nine, I also think that two that are missing from the list, but warrant being included are Six Sigma and Innovation. An entire industry of consultants has popped up around each of these topics which have both spawned and untold number of books about how to implement Six Sigma and how to instill a culture of innovation in your company.

Are there any fads/trends that should be added to the list?

How do we Add Value

A critical challenge for all businesses, but particularly professional service businesses is adding value. We constantly hear that we have to "add value" - it is the rallying cry of consultants, management and leadership. ADD VALUE! Of course, the problem with this mantra is that we don't necessarily know what "added value" means. never mind how we add value. Over at the American Express Open Forum, there is a great post entitled "Are you a 100% sure you are adding value people will pay for?" that focuses on the definition of added value.

The original definition of added value was: “The contribution of the factors of production, i.e., land, labor and capital goods, to raising the value of a product out of commodity status”. The article suggests a new definition: “Added Value is total value MINUS the value without us. What you get is what you bring to others".

I like the definition, and think it can be used as a rather provocative question during a strategic planning session. More importantly, we should also be asking the inverse and identifying what the customer considers "added value". Alternatively, and likely the subject of another post is to ask ourselves the question of whether or not we should even be attempting to provide added value? What do you think?

The Mass Pike & Mismanagement

This is one for the "you can't make this stuff up" list. Apparently, the Mass Pike was backed up for oh, 45 miles or so on Sunday, because many of the toll takers decided to "bang out" for the holiday and management did not feel compelled to call in additional help, because they are really desperate for money and hoping to conserve cash. In an all too typical fashion, the response from Alan LeBovidge, the Director of the Pike was to blame his customers. As noted in this article in today's Boston Herald:

LeBovidge acknowledged his agency could have done a better job placing signs ahead of toll plazas telling drivers which lanes they should be in. But the Pike chief shifted the ultimate blame from his own management decisions and his toll takers’ work ethic to the drivers who were caught in the mess.

“Not enough drivers had Fast Lane transponders,” LeBovidge said.

Clearly, Mr. LeBovidge has never driven on the Mass Pike. If he did, he would know that the Fast Lane does not run the entire stretch of the Pike! Even better than this response was his advice: drivers better get used to it, or get a transponder. Memorial Day, he said, is likely to be just as bad.

Good to see our government representatives doing all they can to serve the people. By the way, Mr. LeBovidge is reported to make $140,000 a year and gives it to charity. Oh, and those toll collectors who couldn't be bothered to make it into work on Sunday - the senior toll collector makes on average $57,500 a year plus overtime and benefits.

Why I Read: The Blender Effect

One of the objectives I set for myself sometime last year was to keep better track of my time. Tracking time on paper or Excel made the billing process time consuming and painful. I started using Freshbooks, a fantastic web based application that is perfect for people like me who sell time. I was recently reviewing my time for the past six months and was startled not by what was on the time cards, but what was not. I have a pretty consistent work schedule. I'm normally in by 7:30 and stay at the office until 5:30 or 6 every weekday. Plus I usually work another 8 hours on Saturday and am out networking or at functions several nights a week. A realistic estimate of my work week is probably 65 - 70 hours a week.

However, my time sheet doesn't reflect that; it typically reflects 40 - 50 hours because its missing some activities. I don't keep track of phone calls or activities that run less than a half hour nor do I keep track of my time doing email, working at night, some of my retainer work or quick projects that are for friends of the firm.(i.e. non-billable) or non-profit. However, this only accounts for part of my missing time - let's say that accounts for 7 - 10 hours a week. What happens to the other 10 or 15 hours of missing time?

It turns out that I am spending a lot of time educating myself by reading; on average 1.5 to 2 hours a day, which amounts to somewhere between 600 and 800 hours a year! At first I was appalled by the number - no wonder I need to spend so much time working - I'm screwing around on the web all day! However, as I thought about it, I realized that reading that much every day is absolutely critical for me. By selling my advice, I am selling my knowledge and insight. I can't gain that knowledge and insight without constantly adding to it. That knowledge is provided from numerous sources.

The first place to begin is to look at my RSS feeds. I am currently following 37 blogs, not including a daily search of AllTop. Some of these are updated everyday (sometimes dozens of times) and others a couple of times a week. The topics are very diverse. Tech Crunch and Venture Beat keep me up to date on the latest happenings in technology. I follow Seth Godin and Guy Kawasaki to get my fill of recognized thought leaders and Chris Brogan for insight from an emerging thought leaders I follow several brand strategy focused blogs like Branding Strategy Insider, the Keyhole and the Darby O'Brien Agency Gut blog. For my social media fix I read the blogs of Fresh Tilled Soil, Groundswell and the Global Social Media Network. Beyond all the blogs I follow, I am also following the news constantly - Huffington Post, MSNBC, CNN, etc. And, when all that fails, I've got a twitter feed that is constantly identifying articles and posts that I might want to read. This also doesn't include the various magazines and books that get read on a daily/weekly/monthly basis. This is where the knowledge comes from.

Determing how this knowledge is translated into insight is harder to explain, but I liken it to experimenting with blender. I'm never sure which ingredients (i.e. knowledge) I've secured are going to be applied, but I know that at some point, something I read and learned will be thrown into the blender and utilized to create a great strategy. A quick look at our success stories demonstrates the results we've achieved over the years with what I call the "blender effect".

In another post, I'll provide detail about how you can use the blender effect to gain critical insights into your business. Trust me - its surprisingly simple.

My Choice to Fix GM and Other World Problems

As many of you know, the news of General Motors is not so good. In yesterday’s Bloomberg an article entitled "GM Bankruptcy Plan Developing as Board Seeks Savings", indicates that GM will likely be filing bankruptcy soon and splitting the company into two – one with good assets the other with bad. Too soon to comment on the plan because its all speculation, but it got me thinking about how to solve the problem. Two words popped into my head – Winston Wolf.

Winston Wolf is a character from Pulp Fiction. Pulp is a fantastic movie and for any guy who came of age in the 1990’s, it’s a cultural touchstone. The first time I saw it was in the Cinema Draft House in Arlington, VA, a great place to watch a movie because it’s a movie theater that just so happens to be a restaurant/bar as well. Pulp was an awesome movie because it was just so different; the violence was graphic, the music was eclectic, the story telling quick and the dialogue was fast, memorable and quotable - for frat boys such as myself this was the holy trinity of movie experiences.

The best part of Pulp Fiction is the characters. All are memorable and most immediately remember Travolta and Samuel L. Jackson as hit men Vincent Vega and Jules. Jackson is still trying to find to recapture the magic of him as Jule's - nothing tops his quoting of Ezekiel 25:17. However, my favorite character is the aforementioned Winston Wolf.

Harvey Keitel played the “Wolf”. His job is to solve problems. Check out this clip from the movie, but beware its not suitable for work, so turn the volume down if you must watch it at the office. I like the Wolf because he is pure genius, a strategist and leader for a chaotic and pressure packed world. As I watched the clip it occurred to me that he could be a great model for a CEO because of the traits he possesses:

1. He inspires confidence. When Jules calls Marcellus and explains the situation, Marcellus tells him the Wolf is on the case, Jules says "that's all you needed to say.
2. He is trusted. Recognizing the situation, Marcellus doesn't hesitate to call the Wolf to solve his problem. Likewise, in the other scenes, no one questions his approach; they trust that he is making the right decision.
3. He embraces the moment. The Wolf understands and acts on the sense of urgency, but does it with a calming approach. He is not frantic; he is relaxed and even takes time to get a cup of coffee - lots of cream and lots of sugar.
4. He is focused. The Wolf only asks the questions he needs the answers to. He doesn't care about why the situation happened, only the pertinent facts that he needs to make decisions and create an action plan.
5. He is quick. Once he has the facts about what he needs to know, he makes decisions. He doesn't take a lot of time to analyze the options and create all sorts of scenarios. He recognizes that its better to make a fast decision that might be wrong than no decision at all.
6. He delegates. Jimmy is getting coffee and linens, Jules & Vincent are cleaning the car and the Wolf is making the call's he needs to make to dispose of the car. Everyone has a responsibility and plays a role in solving the problem.
7. He is clear and concise. As he delegates, he provides pointed direction so there is no room for miscommunication or individual interpretation. Clean the car so there is no brains, make sure you get the puddles of blood cleaned up but don't worry about having it so clean you can eat off it. With the linens, only dark ones and make sure they are heavy.
8. He cuts through the bull. When Vincent complains that the Wolf doesn't say please, he is quick to point out why he doesn't say please while restating the objective of his actions.
9. He finds solutions and has a plan. He recognized the situation and the resources available and found a solution that achieved the end goal.
10. He motivates. When Jimmy created an obstacle about his wives linens, he utilized cash to motivate Jimmy to give them up but does it in a way where Jimmy can rationalize it and feel comfortable with it.
11. He is networked. He immediately called an associate to ensure that he has a place to send the car.
12. He is flexible. While he had a plan, he also realized that something could go wrong, so in the event it did, he instructed everyone not to do anything until he made a move. He had a contingency plan in place.

Excluding the circumstances of this particular movie, doesn't he possess leadership traits that we want our CEO's and elected officials to possess? Barring that, wouldn't it be great if the country had a Wolf that we could call? Somehow, I don’t think he would have a problem negotiating with lenders, unions and vendors nor laying out a plan to solve the problems.

Beyond the auto crisis, shouldn’t we get the Wolf involved in all our other issues? Can you imagine putting the Wolf on the job for solving the housing crisis, toxic assets or Iraq? How do you think the Wolf would approach these problems?

Build a Social Media Presence

Tim Lupo of Fresh Tilled Soil has a great post this morning entitled "How to Build a Strong Online Presence in 2009" We've been following Tim and rest of the team at Fresh Tilled Soil's advice on how to build a presence in Google for NextUp Careers. So far we've undertaken the following steps:

1. We've set up our LinkedIn profiles and joined industry specific groups on the site. This has provided us automatic access to thousand of Reliability Engineering and Predictive Maintenance Profesionals. We are now engaging in conversations about job and career related issues on the site. We also posted the press release announcing NextUp Careers.
2. We have been twittering on a daily basis in an account we set up specifically for NextUp. We typically twitter about things we've posted on the NextUp Careers blog or about interesting stories we've found on the web that relate to jobs and careers in the reliability engineering and predictive maintenance space.
3. We are in the process of establishing a Facebook page for NextUp and also a group on LinkedIn that will be dedicated to job and career topics. We also posted a basic demo of how NextUp works on Youtube. Five people have actually watched it

The results of our initial efforts on creating a presence have been pretty good. So far we've been able to get first page positioning on some of our keyword terms and are moving up the ranks on others. Its a long process - creating organic search success doesn't happen overnight, but if you are consistent with how you use social media sites, I think you will find the results very favorable. How are you using social media to drive traffic to your site?

Do You Know Guy Kawasaki?

I'll be the first to admit that before sometime last year, I had no idea who Guy Kawasaki really was. I had heard the name but I really didn't know who he was or for that matter really care. I did not follow technology in great detail, nor did I pay much attention to quirky marketing books. I read strategy, finance and books on execution. Not fuzzy books on marketing by guys named Guy and Seth (Godin).

Then, for whatever reason I kept hearing about Guy and started following him on his blog - How to Change the World, which it turns out is one of the most popular blogs in the world. The blog is everything mine is not (i.e. short and too the point) and is usually very informative. Guy is also a Twitter fanatic and I attempt to follow him (I could never read all the links he sends) when I can. Guy is also a well known author - his last book is entitled "Reality Check" and I just picked it up. Its 475 pages, so I'm not confident that I'll finish it anytime soon!

If you would like to get yourself familiar with Guy Kawasaki, but don't want to commit to 475 pages, I strongly recommend reading the interview Josh Bernoff of Groundswell conducted with him. The interview is light, but covers a variety of topics, including the 10/20/30 rule that says every presentation should have no more than 10 slides, last for 20 minutes and contain a font smaller than 30 points. I also found the interview interesting because of his comment that he really doesn't care about Web 1.0, 2.0 or the macro picture. One should be focused on building a "kick ass company". This is a point that we often try to get across to people we talk to who get worried about the things they can't control.

Anyways, check out the interview and his blog - I would highly recommend putting him on your RSS feed. Also, be sure to check out his company ALLTOP, which is a really great way to filter all the blogs out there. I use it frequently. Now, if I can just get the Vann Report on ALLTOP.

Angel Investing Declines

Discouraging news for entrepreneurs and small business owners looking to raising capital was published earlier this week. BusinessWeek has a quick post "Looking for an Angel" that details the results from the University of New Hampshire's Center for Venture Research - Survey of Angel Investing that was released earlier this week.

According to the report, angel investing was down $19.2 billion (26%) in 2008! What is particularly interesting about this number is that the total volume of deals was only down 2.9%. This means that while companies are raising money, they may not be raising enough. The biggest losers in this appears to be companies that are raising money for growth as the survey found those companies took the biggest hit.

The study indicates that a best case for 2009 will be flat line. This points further to the need to conserve cash and maximize your capital outflows. Also, it shows you will need to be creative in your capital raising as the angel avenue might not be a viable option for many companies. The three F's - friends, families and fools will be more important than ever. In addition to these, you may also want to take a look at Spark Capital's Start at Spark and Charles River Ventures Quick Start - both are seed funds that will provide seed capital to companies. I've been debating whether or not to apply with one of our new ventures. If I do, I'll let you know how it goes.

In the meantime, have any of you had any luck with raising money from angels or with either of these new programs? Stories are encourages and welcomed.

The Sanctity of Contracts

You may recall that a couple of weeks ago amidst the furor over the AIG bonuses, that I wrote a post entitled the world fiddles about the potential for this to set a precedent to undermine the confidence in contracts. Yesterday’s New York Times, has an article “Contracts Now Being Seen as Rewritable” regarding just this concern.

The Times article is generally focused on discussing the issue from the standpoint of city/state governments utilizing bankruptcy or the threat of bankruptcy to get unions to the negotiating table. However, of particular concern for business owners and professionals working on contracts is this statement from the article:

“The Treasury secretary, meanwhile, is working on a much broader initiative to give the federal government the power to modify the contracts of the financial institutions it takes over. The proposal raises several new issues, because it would eliminate the judicial oversight of bankruptcy proceedings and the opportunity for affected parties to challenge the changes.”

If we’ve learned nothing from this current financial disaster we should at least understand that there is a reason for rules and regulation. By contemplating action that will allow the Federal government to modify contracts it is being as irresponsible as the previous administration which turned a blind eye to the basic principals of finance and accounting. Contracts entered into in good faith are the foundation of our financial and legal system, undermining them, for any reason is even more dangerous than allowing NINJA loans and the like to proliferate the balance sheets of our financial institutions. I would rather see a process be burdensome than trample on the sanctity of a contract negotiated in good faith.

The Obama administration has pledged to be different. Hopefully, they will come to their senses and put this issue to bed.

If you've just been part of a "Reduction in Force' event

I just finished up my morning coffee which, on Sunday’s is always accompanied by a thorough reading of the Boston Globe. This mornings Globe Magazine has a great article on how to make the best of being out of a job. The article, entitled “From Lemons to Lemonade” can be found here.

A couple of key takeaways from the article:

1. Have a quick mourning period and then get over it. Your not going to be effective in your job hunt if your still bitter about your last one. Actually, I’m sure that is good dating advice as well.
2. Have a plan. I’m always reminded of the infamous words of AkAk’s dad in “One Crazy Summer”. “Without a plan, there’s no attack. No attack, no victory!”
3. If your not having success in finding something in your current field, don’t be afraid to try something different for a while. A temp job can give you the opportunity to do something you’ve always wanted to do. At the very least, it gets you active and earning a little coin. Plus, you never know who your going to meet when you are tending bar, mowing lawns or working retail.
4. Get out there and network. Engage yourself in Facebook, LinkedIn and the other networking sites.

Lastly, don’t spend all day long stalking monster.com, careerbuilder.com and all the other job boards out there. Of course, if your a professional in the reliability engineering and predictive maintenance industry do visit NextUp Careers!

Twittering Away

As many of you who follow me on the blog here know, I have been experimenting with Twitter. My last post about it indicated that I was less than enthused with the medium; I compared it to a fad like a pet rock or a friendship bracelet. This may still prove to be true, but I have been using it with increasing frequency and beginning to see the value in it.

I hate to admit it, but I am now operating two accounts! This is probably absolute madness but there is a method to it. The first account is related to my personal activity and is geared towards me and my Vann Group persona. The second account is for NextUp Careers, our new venture that I posted about the other day. This account is designed to promote NextUp within the Reliability & Predictive Maintenance industry that we are a part of.

So far, I have found this account to be far more useful and fun because I am engaging in a specific community. In doing so, we have a targeted audience that we are communicating with and we are able to promote our service in a way that generates awareness of our activity for those who are generally interested in it. In total, we have attracted 43 followers in the past week and adding more everyday.

What I am also finding out is that twittering on some level is just the random thoughts in your head that you decide to communicate to others whether because you have a need/purpose, or just because you can't help yourself. I find a couple of beers helps!

I'll continue to keep you updated on my twitter adventures, and if you have joined the fad, go ahead and follow me. I'll be sure to reciprocate.

The Education of an Entrepreneur

My first business venture was a lemonade stand which I had on the corner of Laurel and Columba St. It was an okay spot but I realized there was more traffic at the intersection of Columba and Grattan so I moved it. I was probably seven or eight years old.

Around the same time I started delivering papers for the kids in the neighborhood who were older than me and had routes. I helped Michael F. with his morning Republican route, Danny O. with his afternoon Transcript Telegram route and Billy B. with his Sunday route. When Billy went away to college I acquired his route and every Sunday for years my father drove me and my sisters Kim and Pam around while we delivered 125 papers. I had the route until I was 14 and old enough to get a job at Bradlees.

Kim, Pam and I also started a business selling colored salt. We would take chalk and color the sand and then layer it in glass jars. When I couldn't get them to focus on doing what I wanted with the business, I tried to buy them out. I was probably ten or eleven years old.

I also bought and sold baseball and basketball cards. My best return ever is when I bought a box of 1979 Topps basketball cards for $12. It had six Larry Bird/Magic Johnson rookie cards which I was able to sell for $100 a piece. I still dream of that deal!

In high school a couple of my friends and I financed keg parties. We would pool our money, buy a keg and sell cups for $5. Usually a good business where you got your money back and a pretty good profit, except for when the cops showed up. This was my first experience with financial risk.

I started my first company in college, doing research for my fathers clients who needed help finding information. I was also a pretty good writer in a fraternity with many guys who were not so I wrote term papers for $10 a page. My girlfriend at the time and I had a good number of conversations regarding the ethics of such an enterprise but ultimately agreed it was being done in the spirit of brotherhood. I guess she realized the benefits of me having money to take her out to dinner!

In 1999, I started Fisher, Tilton & Vann, Inc. because I realized I didn't do well working for other people. We also acquired Split Rock Capital from Bill Mazzeine. In 2003 we incorporated the Vann Group and in 2004 we acquired Client First Associates. I briefly invested in a property management and landscaping company and have since started several other smaller companies that are in various stages of development.

Despite all of this activity, I never considered myself an entrepreneur because nothing I was involved with was ever designed to scale and therefore, in my mind I wasn't building a company, which is what entrepreneurs do. Over time I have learned that this thinking is incorrect as it does not matter what size a company is, if you have the courage to take a risk your an entrepreneur. Nonetheless today I pleased to announce that I am meeting my old definition of an entrepreneur. Over the coming months within this space and in other places on the web, you will get the opportunity to learn about many of the ventures we will be launching.

In doing so, I want to make it clear that this does not signal a departure from what we do best. Quite the contrary as much of what we are focusing on will be geared towards helping transitional companies unlock their value. This will be done by leveraging the web and social media in ways that will allow us to provide tools and advice to companies across the globe - its going to be exciting!

We've also got great partners who are teaming up with us to make all of this a reality. Partnerships are a hallmark of the Vann Family's history of business success and we are really excited about their involvement. Their operational, industry and technical experience will allow us to do what we do best - make companies (ours and yours) grow.

With that said, I'm pleased to announce our first venture - NextUp Careers. You can link here to the press release for all the details about the first career portal dedicated to helping reliability engineering and predictive maintenance professionals find career opportunities and companies find the right fit. What we are building is pretty amazing, and I'll have a post soon on what makes it unique in the world of web-based job and career sites.

In the meantime, please continue to watch this space for progress on all the exciting things we are up to. Also, please keep us in mind as you think about how your going to transition your business from what it is to what you want it to be. We can't wait to help you.

The World Fiddles

It has been an interesting couple of weeks of world watching. There are three stories of particular note that I have found completely fascinating while abeing absolutely appalled at the response from the media and our political leaders in Washington.

The first is the Jon Stewart and the Daily Show's attempt at getting the media to pay attention to the role of the financial reporting media complex in creating/encouraging the behavior that has led us to this Great Recession. Stewart did a fantastic job in presenting the argument and as this clip shows, he ate Jim Cramer's lunch. However, what I find appalling is that the only reaction has been - "wow, it took a comedian to point this out". While Stewart/Cramer itself should not be a story, the fact that no journalist or media institution has taken on the cause before or after Stewart is appalling. As the stewards of public knowledge, financial networks like CNBC need to take a critical eye towards the actions of companies, not toss them softall questions. And, when they failed in that job, their peers should be the first to call them out on it. Instead, they give sympathy and call Jon Stewart unfair.

The second story that I find equally fascinating and appalling is the story of the AIG bonuses. I am truly embarrassed that this is a story and not for the reasons many of you might think as I am not appalled by the bonuses but the reaction to the bonuses. In saying that I can understand that it appears inappropriate and the amount of compensation over-the-top, we need to keep two things in mind: 1) retention bonuses are a reality when it comes to a crisis situation; and 2) these employees signed a legally binding contract to stay with AIG and see it through this epic disaster. The administration initially recognized point #1 and the rest of us should recognize #2. Consequently, none of the other details of this situation matter.

Since I am not appalled by the bonuses, what does make me cringe about this story ? That would be the grandstanding by the members of Congress and now the administration about their perceived "outrage" over these payments. What they fail to recognize is that their outrage and actions are trampling on one of the most basic foundations of our system of government - written contracts are legally binding.

For those of you who disagree with my position ,think for a moment about how you would conduct your business or how outraged you would be if Congress or the courts told you that the legally binding contract you entered into with good faith won't be honored because Congress was "outraged" over the terms. I doubt any of us would be happy or would be willing to sell a product or perform a service without cash in hand. Why then, should we be outraged by this company (which we as taxpayers own 80% of) or their employees doing what they need to do to save this business? As AIG's CEO noted, spending $165 million to save $1.6 trillion seems like a pretty good deal, especially since we've got $170 billion invested into it!

Unfortunately, what our political leadership doesn't seem to understand is that their actions do not save the U.S. taxpayer money, all they do is cost us money. If our government has no respect for a legally binding contract, how can an investor be confident in the institution they are investing in? Why should investors put money in our financial institutions when we cannot be confident that contracts or promises will be honored? The bottom line for me is that "backed by the full faith and credit of the United States Government" has a lot less value to me today than it did last week.

Lastly, I'm not sure how much of a story it will turn into, but President Obama made a comment last night about his bowling being consistent with the Special Olympics. Appropriate to say? Absolutely not. Something that most Americans would probably say? Absolutely. Is the comment ever said with true malice? Probably not. Yet, I imagine that this will be quite a story, or members of the media or Obama critics will try to make it a story. Why?

Because we would rather fiddle.

Wine & Corned Beef

In the event that you were curious about what to drink with your corned beef and cabbage today besides the obvious answer of beer, the folks over at BNET have the answer. Surprisingly enough, corned beef is as versatile as turkey when it comes to options. Happy St. Patrick's Day!

The Theory of Five

We at the Vann Group are often asked "how bad is it out there" or "how bad is it going to get". The obvious answer is that its "bad" and its "going to get worse for the foreseeable future". However, that really does not answer the question, so I've created a hypothesis based upon my own business experience and what I am seeing in the marketplace.

I'm calling my little hypothesis the "theory of five" even though from a scientific standpoint it really itsn't a theory yet, just a gut feeling, but I like the sound of "theory of five" better than the "hypothesis of five". Anyways, the theory starts on the premise that we have five companies in business at the start of the Great Recession. The question the theory aims to answer is "how many companies will be in business after the recession"? The answer is 70%.

We arrive at this answer as follows. For every five companies we have come across, three are surviving and even growing at some level; 60% of the companies out there are holding their own. Company number 4 is either already out of business or going out of business in relatively short order; 20% of our companies then are the weak link. These are companies that probably never should have been in business or just weren't positioned well enough to weather anything less than calm waters.

That leaves us with one company that is completely on the edge, it can go either way. With good management, a clean balance sheet, a good strategy and a little luck, this company will survive. If any one of these factors tips the wrong way, the Company is probably a goner. So, for the purposes of our theory, I am assuming a 50/50 split on this. If this is correct, that means 3.5 of every 5 companies will survive this recession/depression. Of course, that also means that 3 out of every ten companies will cease to exist once this ends.

Since this is really just a hypothesis, it will be interesting to see whether or not it proves out. I'm inclined to think its probably worst case, but you never know. A recent article in the Providence Journal, highlights some interesting facts about the loss of businesses in Rhode Island, which has been hit harder than any other state so far. The article notes that the number of corporations that disappeared last year increased by 23% over the previous year. A disturbing trend to say the least.

That's the theory of five. Sometime soon, I hope to have a post on what that total number of businesses lost would mean to employment, but until then, let me know your thoughts on my theory.

The Entrepreneur Fix

A recent editorial in the Wall St. Journal has been making the rounds in entrepreneur circles lately. The post, entitled "Entrepreneurs Can Lead Us Out of the Crisis" was penned by Tom Hayes, a Silicon Valley executive and Michael Malone, a writer for ABC News.

The editorial rightly notes that it is entrepreneurs who take the risks that lead to real job creation and it outlines some steps the government should take to encourage entrepreneurship and investment in early stage companies. Many of the idea's appear interesting, particularly the creation of investment accounts similar to a 529 plan, the rescinding of Sarbanes Oxley and the development of a tiered tax structure to encourage early stage investment.

The one that I found particularly interesting and that would really drive job creation across all segments of the economy would be the elimination of payroll taxes for early stage companies. The authors don't elaborate on the specifics of this, but it would be great if the government got behind something like this. Perhaps a company would get to waive payroll taxes for the first three years of their existence or until they've hired a set number of employees. The additional capital it would generate for start ups could be substantial and could also help alleviate some of the credit crunch we are facing right now.

Sadly, it is highly doubtful that our government could be this innovative in their thinking. With that being said, all business owners should support the authors call for a Presidential Summit on Entrepreneurship. The last one was held in 1982! If President Obama can hold a summit on health care, he can host one on Entrepreneurship; after all, entrepreneurs will probably be the people who solve health care.

Brand Loyalty & Your Customer's Value Expectation

Brand Keys, a NY based firm that measures customer loyalty has just published its most recent findings. This mornings Boston Herald has a quick article on some of the key points and notes that Dunkin Donuts had the #1 spot for coffee drinker loyalty, followed by McDonalds, Starbucks and Krispy Kreme. The Starbucks hits keep coming!

When you review the findings, the interesting nugget is that the perception of value received is critical to customer loyalty. No surprise there, but what is surprising is the note that customers no longer perceive it is their personal responsibility to find value, but the brand's responsibility to provide it. However, as the post notes, value and price are not linked:

The brands that won are the beneficiaries of consumers’ new expectations regarding brand value. The most significant shift is a neutralizing of the impact of price. And, believe it or not, this can actually turn out to be good news for brands. While economic news hasn’t been good, these shifts provide opportunities for brands that pay attention to what the consumer really expects and offer meaningful differentiation, will tip the value scales in their direction, because value matters more than ever. More than just price.

What this means for business is that we all must continue to identify the Customer's Value Expectation (CVE) and find unique ways to meet and exceed it. We've developed a great exercise for identifying the CVE and combining it with Blue Ocean Strategy methodology to find those differentiators. If you want to discuss how we can help you with identifying your CVE, let us know, we'll be happy to help.

Twitter Me This

About a week ago I decided to dig further into Twitter, so I set up an account and started posting my tweets. You can find me at www.twitter.com/mistervann. My impressions after the first week? Why am I doing this? I've posted a total of 8 times and have shared the mundane such as: 1) that I was having breakfast with the girls; 2) that I am really beginning to like the Black Ghosts; and 3) that I was going to Panera for a bagel because I had a craving for it. I also tweeted about my disatisfaction with XM Radio's customer service. Sadly, I was not contacted by XM so it appears they are not following posts about themselves on Twitter. Perhaps that explains the lousy customer service!

I enjoy coming across some of Guy Kawasaki's thoughts that he posts. Of course, if he really thinks its important, he probably posts it on his blog which I do read everytime he writes. Other than that, I just don't see the point of this. Apparently, I'm not the only one not feeling the whole Twitter thing. The Daily Beast has a post on how Twitter has "jumped the shark" this past week. Venture Beat had a post last week about how Twitter receives half the press coverage of Facebook, but has only a fraction of the traffic. VB indicates all the press might be generated by journalists who are using Twitter to pump their own writing. Perhaps with the hope that if they talk about it enough, people will do it and validate their foresight.

I'll probably continuing on Twitter for a little bit longer, but my initial reaction to this is that Twitter will go the way of friendship bracelets, the pet rock, parachute pants and AOL. What are your thoughts about Twitter's value and long-term usage?