A Dark Society Viewed from Space

A few days ago Slate.com brought up an interesting article on North Korea written last year. It became timely again because of the death of Kim Jong Il, the country's leader, and the ascension of his son to take his place.

The article was written by Christopher Hitchens, himself recently passed. In the article North Korea's true status was eloquently and frankly described. It's not a pretty picture. The most stark demonstration of the country's limited economic wealth was reference to a satellite picture taken at night.  It shows the Korean peninsula, with both countries outlined. South Korea is pockmarked by lighted regions that make it look like it is suffering from an extreme case of the measles. North Korea, however, is almost complete darkness. Only one small area of light appears.

For many years we have heard that North Korea can't feed itself. Now we see that they also don't even have the resources to turn on the lights.

http://img216.imageshack.us/img216/8351/1207koreaelectricitygrikf0.jpg

GEEK ALERT: Photography at the Speed of Light

The New York Times reports that scientists have been able to photograph a laser beam as it moves forward. This requires shutter speeds equivalent to one-trillionth of a second. The implications for data gathering and analysis are extraordinary.

http://www.nytimes.com/2011/12/13/science/speed-of-light-lingers-in-face-of-mit-media-lab-camera.html?_r=1&hpw

"I've just been fired."

Relax. I didn't say this.

These were the words of just-dismissed Yahoo CEO Carol Bartz. It was a stunningly frank admission of her status. And it was e-mailed to all of Yahoo's 13,400 employees.

Sometimes the truth hurts. In this case it is unknown if this will hurt Bartz, or Yahoo, or both. Some observers give her credit for candor. Others see it as being selfish since it may hurt those same employees by putting her (former) company under more pressure.

What do you think? Is this better than saying someone has left their job "to pursue other opportunities" or some other excuse? Or is this the start of a new era of executive transparency?

For more on this please see today's New York Times.  http://www.nytimes.com/2011/09/08/technology/carol-bartzs-blunt-e-mail-on-firing-raises-issues.html?_r=1&hpw

Why Don't You Buy a Jet Fighter?

A recent story from thenextweb.com:

There once was a scrap yard owner who had financial troubles. He had a tough time competing with other scrap yard owners and just didn’t know how to differentiate from them.

Then one day he got offered an old russian jet fighter. The plane was stripped of its electronics and guns and in bad shape. It didn’t have any materials he could use so it was basically worthless.
He used his last money and bought the plane. Instead of taking it apart he just put it on his front lawn so everybody could see it.

His neighbors complained, his wife nearly left him and his competitors joked he was crazy and soon going out of business. Of course, the opposite happened. The fighter jet became a landmark in the area and people started referring to it to give directions (“just go left at the fighter jet and then straight ahead for 5 kilometers”). Pretty soon business started growing as his scrap yard became famous within the area.

Why look in the phone book for the nearest scrap yard? Just drive to the one with the fighter jet in the front lawn. Can’t find it? Ask anyone for the fighter jet scrap yard.

Some business are easy to differentiate. Usually quality matters more than appearance and brand recognition.
But sometimes you need a jet fighter.

http://thenextweb.com/entrepreneur/2011/08/25/why-dont-you-buy-a-jet-fighter/

50 Ways to Leave Your Law Firm

The authors of this article from The Economist. (http://www.economist.com/node/21525907?fsrc=scn/fb/wl/ar/bargainbriefs) describe how some law firms in the United States and Great Britain are becoming more client-centric and offering greater value. If successful, this trend may migrate to other professional services firms.

It seems to be a confluence of modern technologies and the loosening of out-of-date policies that protect  professions from competition. Of course, there are risks from bad lawyers jumping into the marketing mode and exposing their clients to shoddy performance. For a reference point just look back to the time when law firms were allowed to advertise -- we are now flooded with ambulance chasers on every billboard, bus bench and late-night television ad. It feels sleazy. It makes better professionals uncomfortable. And it probably clogs our courts. Is Lionel Hutz listening from the grave?

But this doesn't take away from the classic arguments for free-market competition. Business efficiencies are usually rewarded. And if those improvements come from better technology and less regulation, then there will be a widespread benefit. 

S&P Downgrades America's Debt ... But not for Obvious Reasons

Please see an excellent opinion piece in The Economist:
http://www.economist.com/blogs/freeexchange/2011/08/sps-credit-rating-cut?fsrc=scn/fb/wl/ar/downgradingpolitics

The main point of the article is that the downgrade was not entirely due to the creditworthiness of the United States. Instead, it had much to do with the willingness of America to pay its debt. The folks at S&P were put off by the fact that a default would even be considered by our so-called leaders.

I hope this kind of opinion grows. It might help us get rid of loud-mouth political extremists (from both sides of the aisle) and move our Congress into the roles of true leaders. This, after all, is what we should be electing them for and should be the work they aspire to do.

Champions and Non-Champions

The NBA season has been settled. Congratulations to the Dallas Mavericks on a well-deserved championship. It cost me a free steak, and I have to endure a good friend in Dallas who has experienced his version of the Rapture, but I believe the result is just. The Mavericks were the better team in this series. They played hard, they played fair, they were consistent, they were resilient, and they didn't mock their opponents (yes, I was upset with the coughing jokes).

Although it is personally disappointing to see the Miami Heat not measure up, it does not take away from their accomplishments. It has been a long and hard year. The three superstar players and their surrounding cast had to learn to become a team. Their coach had to learn to be a better leader. And they all had to learn to block out the incredible amount of noise surrounding them.

Their work is not yet done. Pat Riley correctly pointed out that it took him several years of coaching the Lakers to win his first championship. Michael Jordan did not win it all in his first year. In fact, many teams require several seasons of seasoning to reach the top.

We live in a televised fishbowl. We expect to sit in our living rooms and receive instant gratification: the climax to the story should happen within the next 58 minutes. The Heat was supposed to instantly come together, set the NBA record for fewest losses in a season, and then roll to the championship while making it look easy.

This is not reality. Especially for the Miami Heat. This team, as well as the rest of us who live in the real world, require more than one year to mature, develop, and acquire the depth needed to reach the top. This was the real reason they lost to the Mavericks. Just ask Nowitzky and Kidd who invested years of sweat, toil and tears to hoist the trophy.

The Miami Heat will be fine. Everyone on the team will learn from this. And, hopefully, they will use that knowledge to mature some more and bring home a championship.

IMF Chief, Former California Governor, World's Best Golfer, etc.

Dominique Strauss-Kahn. Arnold Schwarzenegger. Tiger Woods.

The list is much longer. But the subject is the same.

It is powerful men misbehaving sexually then trying to prevent the full story from being known.

The charges against Strauss-Kahn are new. This immediacy often delays all the facts from emerging. It may be expected that his possible trial would expose many elements that are now unknown. A plea bargain would probably prevent us from learning most of the details. We'll see.

Governor Arnold first attempted to withhold the cause of his marital breakup. Then the name of his son's mother. The media went to work and prevented the secrets from continuing.(Thank goodness for the Fourth Estate.) While Arnold didn't commit a crime, he certainly made an error in judgment, if not morals. It remains to be seen whether the tarnish on his reputation will be permanent.I believe much will depend on whether more information comes to light in the coming days.

Super Golfer Woods continues to suffer. His marriage ended and cost him hundreds of millions of dollars. Sponsors went away and so did his championship form. He is now injured and one can speculate on whether he will ever return to dominating the sport.

While Strauss-Kahn and Schwarsenegger are in the midst of their crises, Woods has passed his nadir. It is my opinion, however, that he did the most covering up. This is based on my experience serving for several years on the board of a non-profit domestic violence agency. The facts of Tiger's car accident and the trip to the hospital just didn't add up. Consider this:

-- He claimed to have had a major auto accident in his own driveway.
-- He claimed his wife had to break into the car to rescue him. But the vehicle was not on fire or underwater and the weather was not inclement. And it was at his house which is located in an upscale gated community with 24-hour security (the same type of employees who would also help a distressed motorist -- or even jump start their car).
-- He had called his attorney prior to the accident.
-- It was late on Thanksgiving night. Where was he going?

My thoughts immediately made a different series of connections.

-- Mr. and Mrs. Woods were fighting, probably over the exposure of his affairs.
-- The fight involved violence. Maybe Mrs. woods clubbed Tiger with a 9-iron. Regardless, he became seriously injured and required medical attention.
-- A trip to the hospital emergency room -- especially after Midnight on Thanksgiving -- would require the medical staff to ask what caused the injury. If he were suffering from a blow to the head, they would have immediately been suspicious if the story were not convincing.
-- If suspicions were great enough then they would have called the police to investigate.
-- If the police investigated and found evidence of domestic violence then they would have had the State authorities immediately remove the children from the house.
-- When Tiger became injured someone in the house called their attorney for advice. He probably suggested that the world's best golfer would be better wrecking his own car than losing his children in the middle of the night.

This speculation will probably never be proven. Mr. and Mrs. Woods have done a good job of keeping mum on the details of that night. They have stuck to their story and the media has been unable to pierce their veil.

I am not a person who embraces conspiracy theories. The Kennedy assassination, Clinton/Lewinsky, and the death of Princess Diana hold no long-term interest for me. But I do believe that Tiger Woods is both a sexual predator and a victim of domestic violence.

I also believe that we need to know more information about the Strauss-Kahn scandal. At this point we don't know if he was drunk, overly medicated, suffering from jet lag, or otherwise mentally impaired. If any of this is true, it certainly is no excuse for attempted rape. It does, however, offer perspective which is critically needed for any of us to form our own judgments about the misdeeds of the powerful.

Like Him or Hate Him, Trump Is Certainly Resilient

Most entrepreneurs will tell you that their lives are usually full of ups and downs. While successes are evident, most have their share of failures that are not remembered as prominently.

This is nicely illustrated by Time's list of Donald Trump's greatest blunders.
http://www.time.com/time/specials/packages/completelist/0,29569,2068227,00.html

You could also create similar lists for Bill Gates, Wayne Huizenga, or almost any other billionaire who started their own business. Their strong wills sometimes make them overly insensitive and egotistical. They make good and bad decisions. When they make the right choice they are heroes. When they make bad decisions they get to know another bankruptcy judge.

Their successes do not excuse their flaws. Each of these business titans probably has a trail of resentful colleagues, jilted partners, and friends and relatives who don't see any glory in their achievements.

The key to their success is not that they are great human beings. It is that they keep going despite their setbacks.

Understatement of the Day

Kate Middleton seems to have married well.

A Portrait of Structural Change

An interesting article from the Economist on how technology can reduce a profession to becoming a commodity. It discusses professional photographers, but it applies to many other careers, business models, and industries.

http://www.economist.com/blogs/democracyinamerica/2011/04/tech_demand_and_unemployment?fsrc=scn/fb/wl/bl/portraitofstructuralchange

I'm Reconsidering the Value of my College Degree

The University of Florida bass fishing team has won their second National Guard FLW College Fishing National Championship title. I've never been prouder.

QWERTY Explained

In an article on www.edge.org the author John McWhorter explains how our keyboard originated.

... (the) example is the seemingly illogical arrangement of letters on typewriter keyboards. Why not just have the letters in alphabetical order, or arrange them so that the most frequently occurring ones are under the strongest fingers? In fact, the first typewriter tended to jam when typed on too quickly, so its inventor deliberately concocted an arrangement that put A under the ungainly little finger. In addition, the first row was provided with all of the letters in the word typewriter so that salesmen, new to typing, could wangle typing the word using just one row.

Quickly, however, mechanical improvements made faster typing possible, and new keyboards placing letters according to frequency were presented. But it was too late: there was no going back. By the 1890s typists across America were used to QWERTY keyboards, having learned to zip away on new versions of them that did not stick so easily, and retraining them would have been expensive and, ultimately, unnecessary. So QWERTY was passed down the generations, and even today we use the queer QWERTY configuration on computer keyboards where jamming is a mechanical impossibility.

Do the Math

The government shutdown was averted by a deal to cut $38 billion from the budget. Yippee. It's not much of an accomplishment when the annual deficit is $1.4 trillion.

Before claiming any victories Congress should understand that they just reduced the annual deficit by 2.7 percent. BFD.

Someone wake me up when the actually make meaningful budget progress.

The Phoenix of Finance

For the past several years I have not had much respect for banks. They essentially stopped lending money to anyone except those who didn't really need it. If you had a small business then you were out of luck. Your banker was unwilling to help.

Of course they told you differently. But the reality was that very few loans were being made.

For a while there was a trend of non-bank lenders becoming more aggressive. Private financing sources were actually doing a few deals that banks wouldn't touch.

Not all of this was the fault of all the banks. The economy was battered and regulators tightened lending standards. Banks had to heal their balance sheets. They had little choice but lend to only "perfect" customers.

Things now appear to be loosening, at least a little bit. Today I met with some bankers who have created lending products that can be obtained by strong (not perfect) customers. This comes on the heels of another banker who told me of the relaxing standards of the SBA.

This appears to be real progress. Not just political maneuvering of the financial system. If I am correct in my assessment, then it may be one of the first signs of economic recovery in the small business sector.

Let's hope I'm right.

Shutdowns We Don't Care About

This post is being written on Friday, April 8th, with about 4 1/2 hours to go before the Federal Government is scheduled to shut down.

Excuse me while I yawn.

I know this is a bad attitude. But only in the macro perspective. Halting government services places workers' paychecks at risk, reduces essential services, and ruins the plans of thousands of visitors to national parks. I get all of that, and more.

On the other hand, at midnight nothing will happen to me. The lights in my house will still work, I will be connected to the Internet, and I will probably be watching sports highlights on TV.

So why don't I care more about this? Because I am normal -- I am selfish. If something doesn't cause me to change behavior, cost me money, or impact the health of someone in my family, then it gets placed lower on my list of concerns. It's all about me, just like it's all about you.

The government's status is not the only recent shutdown to impact my world. The NFL players strike may stop professional football. The tsunami in Japan has stopped factories from making products that I buy. And the shutdown of a favorite retailer in my neighborhood looks like it will be permanent.

I still don't care all that much. I will watch college football. I will find other stores that sell similar goods. And I won't be upset about any of it.

Eventually I will miss these things. But for the short term there is little disappointment or discomfort. My attitude will eventually change, but that's a long way off in the future.

I'm not sure politicians understand this. They talk about the grave dangers of a government shutdown. Most people can't relate to it any more than being able to comprehend a budget deficit of $1.4 trillion. It's too large and too distant.

So when you're reading the news or listening to interviews about the mess in Washington, ask yourself, "are they helping me relate to what's going on in terms that I can really understand?"

Then turn around and ask if your business is helping customers relate to what you do in terms that they can really understand.

They Put a Lid on the Basket

On Monday evening Butler and UConn played for the NCAA basketball championship. Most viewers and commentators thought it wasn't a good game. While both teams played hard and fair, they didn't do a good job of shooting the ball. The field goal percentage for Butler was the worst in the history of the championship game.

So why was everyone disappointed? Because we expect the championship of any sport should be the best and most memorable game of the year.

Sometimes it is, and sometimes it isn't. But each time we want it to be. After all, this is the ultimate game. Why shouldn't it have the best players making the best plays?

The basketball game that was played featured two outstanding defenses. And while we say we appreciate defense, it's the offense that generates the highlights. We like big scores. It's more interesting to see points go up on the scoreboard.

Our tastes translate across the sporting spectrum. Despite decades of American children playing little league soccer the game is nowhere near achieving a solid following on a professional level. One of the arguments about football eclipsing baseball is the one-hit pitchers' duel. Yes, that type of baseball game may be a gem, but there is so little scoring that the average fan becomes disinterested.

We like to see point production. It shows us that the players are succeeding within the contest. We become frustrated when players can't score points. It seems announcers would rather talk about scoring droughts of an offense than the prowess of a defense.

Is this because we hold athletes to a higher standard? In a word, yes. They are the best and we want to watch them achieve greatness. Unfortunately, defense can't be appreciated as easily as swishing the ball through the net from 28 feet. We want to see great skill and the results it creates.

This also applies to business. The salesman who lands a large account is lauded. The salesman who saves an unhappy customer is often overlooked. The painter is more visible than the bricklayer. And the doctor is more valued than the nurse who receives the urine sample.

Is this correct? Sometimes. You need years of training to diagnose and heal patients. You don't need nearly as much training to walk down the hall with a container of pee.

The challenge we all face is to give proper value for the job. It's not easy. The UConn defense will be written about to a lesser degree than the Butler shooters who went cold. It's probably not right, but it's the way our perceptions work.

Make sure you're correctly looking at your own business. Are you being impressed by the superficial, or are you appreciating the benefits of your company's unseen foundations? Take a step back and figure out what would happen if any of these foundations were to go away. Then you'll know what's most important instead of what's easy to appreciate.

I Trust Your Cothes So I Also Trust You

The Eonomist recently reported on a study of perceptions about designer labels (http://www.economist.com/node/18483423?fsrc=scn/fb/wl/ar/ivegotyoulabelled). The conclusion of the researchers was that we attach positive qualities to someone wearing clothes with recognizable brands of status. It gives us comfort and helps to quickly build trust.

Is this superficial? You betcha. But we are only human. And we need mechanisms to size up the strangers in front of us. So the labels are one method of short cutting the process.

It seems as though the clothes don't make the man, but the labels do.

It's great news for marketers who want justification for building brand names. It may also be a confirmation for businesses that feature recognizable brands; perceptions don't have to be built with customers who already have been impressed by the names and logos.

Thought for the Day: 30th March, 2011

“Facts are stubborn, but statistics are more pliable.” - Oscar Wilde

Earthquakes, Tsunamis and Meltdowns

What happens on the other side of the globe doesn't usually make too much of a difference in our day-to-day activities. But with a cataclysmic event this is not so true.

The triple-whammy in Japan is yet another reminder of this truth. Their problems are now starting to generate problems in the United States. Some things are obvious: reports in the media this morning are saying traces of radiation from the Japanese nuclear reactors were found in the atmosphere in Florida and North Carolina. Some things are not as obvious: you may not be able to get your Toyota repaired if the supply chains are disrupted and parts become scarce. And, some things are unknown: manufacturers such as Nikon may be forced to delay the rollout of new products that are normally made in northeastern Japan.

Any of these consequences could be large or small for individuals. Are you susceptible to health issues from the radiation? Can you drive to work if your car can't be repaired? And are you going to invest in a new camera now or just wait for another six months?

Of course the consequences for individuals also impact businesses. Health care providers, auto mechanics and professional photographers are now starting to realize that they may have to make adjustments to deal with all of this. How much will change is tough to know, but as the days go by and the news remains grim, it appears that the odds are increasing that the impact will be felt.

Keep in mind that is also happens in reverse. The rest of the world was not the subject of the attacks on the World Trade Center on September 11th. Yet it impacted financial markets, tourism, and many other areas of commerce in most countries around the globe. In fact, one estimate at the time said that approximately four percent of the entire United States economy was located in the devastated city blocks of New York. It's almost impossible for an event that large not to be felt internationally. More recently, the BP oil spill in 2010 had effects well beyond the Gulf of Mexico.

So how does Japan relate to your business activities? In my practice I am asking my clients if they sell anything from -- or to -- Japan. I am also keeping abreast of the news to identify the possibility of "collateral" impact - the health of employees, currency exchange rates, seafood prices, etc. Any of these issues can change the value or viability of a business.

A Side Note ... The crisis in Japan is much like many others. It is not just one event that increases the problems. Instead, it is a series of calamities that occur in a short span of time. Remember that Japan had an earthquake and  tsunami which caused the nuclear crisis. On September 11th it was one plane crash, another plane crash, a building collapse, and then another building collapse. In the Gulf of Mexico it was an oil rig explosion, followed by multiple months of leaking oil, which caused extensive disruptions to the environment and the regional economy. My contention is that if any of these events had only one problem (just an earthquake, just a plane crash, or just an oil rig explosion) then much of the disasters that we experience would have been avoided.
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Thought for the Day: 25th March, 2011

A bartender is just a pharmacist with a limited inventory.

NYT.com Into the Darkness

In a few days the New York Times website converts to a paid subscription format. Although this was attempted a few years ago, they are trying a new system that they believe is better for the current Internet environment.

I am reluctant to subscribe. Although I read the New York Times regularly I have a policy of not paying for news content on the web. There are just too many free websites where news is constantly available.

It is understandable that the Times must try to increase revenues. Journalism is expensive to produce. Especially great journalism. But the solution is not to limit the readership. It is to increase the traffic on the site which, in turn, allows the advertising to produce more revenues. My question to the publisher: have you done everything possible to promote the site before you started charging for it?

Maximize Your Profits: Declare All Your Taxes

There is a restaurant near my office that is extremely well-run. It makes more money than any other restaurant of its size that I know. It was surprising to me when I learned how this is accomplished.

The owner declares all of the cash in the business.

This is counter intuitive. Especially in the restaurant industry. It is common for owners of small eateries to hide some of the cash by not depositing it in the bank. This allows them to declare less revenues on their tax returns and, supposedly, avoid paying some taxes. It is difficult to find a small restaurant that files a correct tax return.

But not this business. Every penny goes through the bank and is reported to the IRS at the end of the year.

Does it cost more money? Actually, no.

For this restaurant it helps them make money. The approach to running this business is that everything is done correctly. Not just accounting for the cash, but purchasing the food, preparing the dishes, serving the meals, clearing the plates, greeting the customers, cleaning the floors, etc. There is a discipline throughout this business. Nothing is left to chance.

It would seem as though an operation this tight might not be a good place to eat. That is not true. It is a friendly place. The staff is well-trained and personable. There is no coldness. The food is good and fairly priced. The dining experience is solid and you leave the restaurant believing that you had a good experience.

It's quite a contrast from the old-style, expensive, snooty (French!?!) restaurants where the waiters were snobby, the wine stewards were snobbier, and the atmosphere was so heavy that most customers actually felt intimidated. There was no value since the prices were outrageous -- "the most expensive in town!"

Here quality, service and value are in perfect balance. And the restaurant makes money. A lot of money.

It's not easy to accomplish this performance. The owner must know the best way to perform each function. And the owner must train and supervise the staff to ensure that each function is never performed in a way that is less than the best. Consistency of quality is king.

Part of this consistency is found in the handling of cash. As with everything else, there is no cutting corners. Each penny is counted and deposited. Why? Because if it were done any other way the employees (and maybe the customers) would sense that there were limits to the discipline of quality and consistency. And that little bit of a shortcut would send a signal that other little shortcuts were also acceptable. The staff would then start taking liberties.

Think of it in another way: the strength of this business is the lack of hypocrisy of the owner. It is all by the book  Without exception.

We've all seen it the other way. In fact, many of us have worked in such businesses. Think of the time you had a job where management said that the customer was king ... but the employees were nothing more than the dirt underneath their feet. In these businesses morale was weak and it filtered down to the customer service. Eventually profits suffered.

Now consider your own business. What corners are being cut? How much does it really cost you?

Hello.

This blog is a forum for me to express thoughts on my current and former professions (selling businesses, photography, business consulting, crisis management and financial communications), my sporting and entertainment interests, volunteering, and a variety of miscellaneous topics ranging from current events to evolving philosophies. Is it any different than thousands of other blogs? I hope so.