As of December 31, 2015, the international Turnaround Management Association (TMA) reported that there were 487 Certified Turnaround Professionals (CTP) worldwide. Of those, only 24 of us are women.
At a time when the election cycle is too long, and the media spends too much of its time providing poll results, rumors, tweets and commentary rather than facts, it is vitally important that voters take time to cut through the fog and evaluate objectively which candidate(s) are, in their view, best qualified to be president of the United States.
Because voters across the nation represent different backgrounds, socio-economic statuses, core values, etc., individuals may draw vastly different conclusions about qualifications, but an objective approach helps to ensure that each person’s conclusions are based on objective criteria.
Below is a link to a matrix I designed to help voters evaluate those candidates that are of interest to them. Even if you think you have already made a decision, try completing the spreadsheet. The results may surprise you!
Fellman’s Candidate Selection Matrix (Note: Depending on which program you use, you may have to select “enable editing.”)
After you complete the matrix, I would love to know
- Did you have enough information about the candidates to rate them?
- Were you surprised by your results?
- Can you tell who my personal choice is from the matrix? (I tried really hard to be objective and asked friends from both parties to test it!)
© Renee C. Fellman, January 25, 2016, all rights reserved
When I read the BusinessWeek article, Amid Scandal, the Pope Sticks With Reforms, it occurred to me that Pope Francis is leading an incredibly challenging turnaround. As we all know, the Catholic Church has been faced with both sexual and financial wrongdoing, and Francis seems intent on bringing an end to both. In addition, he is urging a more welcoming and compassionate approach while also expressing his views on global issues.
Any turnaround requires significant change and involves
- Identifying what change is needed
- Defining and implementing specific actions to be taken to achieve that change
- Persuading key stakeholders, at every step of the way, to accept and support the change
Stakeholder persuasion is often the most challenging aspect. It has been said, “If you want to make enemies, try to change something.” Although Francis enjoys broad support both within and outside of the Church, he also faces an entrenched bureaucracy and opposition from “conservatives.” At least some members of those factions, threatened by or disagreeing with his actions, are surely trying to thwart his efforts.
Beneath his kind, gentle-but-strong public presence, Pope Francis must have a spine of steel.
Last week, the Business Journals ran an article, “3 qualities to look for when hiring a consultant.”
The three qualities were:
1. No ties to the company (that might create a conflict of interest)
2. Depth and breadth of experience
All three qualities are important, but none is more important than “Track record of producing results.”
Renee’s Rule™ – When interviewing consultants and/or checking their references, be sure to ask, “What improvements did the client company achieve as a result of the consultant’s work?”
In January 1987, just 5 months into my career, I received my first turnaround referral from the Special Assets (troubled loan) department of a bank. The client? Pesznecker Brothers. At that time, the company was a 2nd generation family business. There were two banks involved and serious doubt about whether the company could survive. Six months later, after instituting a variety of critical changes and successfully implementing an out-of-court Chapter 11 through which all creditors were ultimately paid in full, the company returned to profitability.
Fast forward to September 5, 2014: Pesznecker Brothers is now a third-generation family business, and the Portland Business Journal just ran a story ( Pesznecker Brothers Business Journal Article ) about a new product developed by the company in partnership with Portland’s Central City Concern, a win-win for both.
These were/are really good people. Turnarounds can be gut wrenching. Owners are asked to make dramatic, sometimes painful changes, and it can take a while to for them to recover. In this case, a year after I left, Dick Pesznecker and Don Ford, the owners at that time, invited me to lunch to thank me.
Since 1987, I have had clients almost 100 times the 1987 size of Pesznecker, but this turnaround remains one of my favorites. Making money is nice, but seeing the lasting fruits of my labor and being appreciated have value beyond measure.
I still display in my home a beautiful copper box, handcrafted by Leo Pesznecker, one of the original founders, and presented to me as a thank you. My photography is not great, but here are two photos: One of the box, itself; the other, Leo’s inscription from the bottom.
If you want to know more about Pesznecker from inception to today, visit About Us on the company’s website.
July 3, 2014, BloombergBusinessWeek: Hospitals Are Mining Credit Card Data to Predict Who Will Get Sick.
The article is accompanied by a photo of a doctor telling a patient, “Don’t lie to me, Susan, I heard about the 2 a.m. Papa John’s deliveries.”
According to the article, Carolinas Healthcare (CH), which operates 900 care centers and provides care to 2 million people, is purchasing information from data brokers to help CH’s healthcare team practice “proactive care.”
From data brokers, CH will have access to public records, store loyalty transactions, and credit card purchases; e.g., CH will know whether a patient filled his prescription or bought cigarettes. Its health care team will then be able to use that information to identify and reach out to high risk patients in order to intervene and, ideally, to achieve better outcomes.
The goal, to achieve better outcomes, is laudable, but is this practice acceptable or unacceptable? What do you think?
On Thursday, during a panel discussion on “Corporate Governance Perspectives,” a part of Portland State University’s Idea Xchange, Rick Miller, Founder and Chairman of the Board, Avamere, succinctly summarized his view of the role of a corporate director: “Strategically engaged; operationally distant.”
The question in my mind is, “How distant?” Elsewhere in my blog I have described major operational shortcomings in well known companies, shortcomings that have a negative impact on the bottom line. Clearly, the board should not be mucking about in operations, but shouldn’t the board have some way of evaluating operational effectiveness?
It was stunning to see that the 2/17/14 episode of the TV show, Intelligence, actually included the topic of “the singularity.” The TV series, itself, is not an “A,” but this particular episode and the main character, himself, illustrate the accelerating pace of the merger of biology (in this case, the human body) and technology.
I first learned about “transhumanism” and “the singularity” during a seminar led by Jose Cordeiro at a conference of the World Future Society, and I was fascinated! In brief, as Wikipedia describes,
- Transhumanism (abbreviated as H+ or h+) is an international cultural and intellectual movement with an eventual goal of fundamentally transforming the human condition by developing and making widely available technologies to greatly enhance human intellectual, physical, and psychological capacities. Transhumanist thinkers study the potential benefits and dangers of emerging technologies that could overcome fundamental human limitations, as well as study the ethical matters involved in developing and using such technologies. They predict that human beings may eventually be able to transform themselves into beings with such greatly expanded abilities as to merit the label “posthuman“.
- “The technological singularity, or simply the singularity, is a hypothetical moment in time when artificial intelligence will have progressed to the point of a greater-than-human intelligence, radically changing civilization, and perhaps human nature. Since the capabilities of such an intelligence may be difficult for a human to comprehend, the technological singularity is often seen as an occurrence (akin to a gravitational singularity) beyond which the future course of human history is unpredictable or even unfathomable.”
Ray Kurzweil (You may have seen a television ad in which he appears and says, “I invented Siri.”) has been a thought leader in this realm, has lectured and written widely about it. If you would like to know more, you may want to read one of his books. You could also watch Intelligence. Today, it is science fiction. Tomorrow?
The concepts are exhilarating and frightening and will, undoubtedly, be cause for heated (and important) debate as the future unfolds!
If you are interested in the topic of gender diversity (In this case, that means women in leadership roles), you will likely want to read the results of McKinsey’s global survey regarding gender diversity. (The article includes a link to the entire report.)
To me, the most notable finding is the disparity between the perceptions of women and men. The study notes: “At all levels, the views on leadership ability diverge by gender.”
As an example, see below: (Please note: this chart includes responses only from those who agree that women can lead as effectively as men. It is unfortunate that the chart below does not include responses from those who do not agree that women can lead as effectively as men.)
I love Portland, Oregon, where I live, but, although there are some notable exceptions, it’s a business backwater compared, particularly, to Seattle, our neighbor to the north. There are lots of really smart, creative people here, but, as a group, the business community seems not to look beyond its borders and sticks to “The Portland Way.” (“That’s how we do things here.”)
If you read the local Portland business news, it sounds like business is really popping, but if our business leaders subscribed, as I do, to The Business Journal’s “Industry Watch” email newsletters; e.g.,
- Commercial real estate
- Travel industry
- Retailing and restaurants
- Logistics and transportation
they would discover that Portland is almost never mentioned. I wish that community leaders would ask themselves, “Why?” I think part of the reason is that we too seldom look beyond our borders. It was interesting to me that community leaders from Austin, TX, have visited Portland to see what we do right, but I have never heard of a delegation from Portland going to Austin……
My key point: News publications should start using a bullet-point format so that readers can quickly learn the main points of news stories of interest to them.
One of the things I LOVE about the internet is that I can get huge amounts of news in a very short time. That also means, of course, that there is more news available than I can possibly read and absorb. Too often, from my perspective, it takes too long to read the stories, themselves, or watch the on-line video.
Publications, whether on-line or in print, should have 3 levels of story
- Headline: People can know topic and decide whether they want to know more
- Bullet-point summary of key points: For those who are interested but rushed
- Story: For those who are interested in more detail
When the headline leads to a video
- Bullet-point summary: For those who read faster than they can listen or don’t want to take time to watch the video
What do you think?
First, because healthcare is a hot topic, let me be PERFECTLY clear: I am not an expert on “Obamacare” and do not know whether it will prove, overall, to be a good or a bad thing. My comments here focus solely on a missing piece at healthgrades.com and NOT any legislation.
If you have followed my blog, you know that I am a strong advocate for results-based hiring and results-based management. Many bad hiring decisions have been made because decisions were based on “industry experience” rather than results. Many companies have failed because management was not evaluated or rewarded based on results.
Physicians, too, should be evaluated based on results, and healthgrades.com has an opportunity to help with that. Currently, their review criteria (somewhat edited) are:
- Ease of scheduling urgent appointments
- Office environment
- Staff friendliness
- Total wait time
- Level of trust in doctor’s decisions
- How well doctor explains
- How well provider listens
- Spends an appropriate amount of time
What’s missing? Level of satisfaction with results.
To illustrate my point: Although I do care about how long I have to wait, how good a listener my physician is, etc., my main concern is results. Almost 10 years ago I had a problem with my foot. I saw a well-known orthopedic surgeon/foot specialist. His office was exceptionally well-organized; he did not keep me waiting; he was VERY nice, a VERY good listener, took time to answer my questions, but his recommended solution was a surgery that would have kept me off my feet for 3-6 months. For a second opinion, I saw a different orthopedic surgeon/foot specialist. His office was not as well-organized, and he was gruff, to say the least. Bottom line: He recommended a change in orthotics instead of surgery. Ten years later, I am doing well and have not had to have surgery, thank you very much! As you might imagine, I prefer Dr. Gruff-who-got-results-without-surgery to Dr. Nice! (Of course, the dream doctor is the one who is both nice, etc. AND gets the best results.)
Sometimes, people make decisions–selecting doctors, treatments, etc., based on how they feel rather than on results achieved. If healthgrades.com added “Satisfaction with results” to the list of criteria, it would likely help both physicians and prospective patients focus more on outcomes.
Renee’s Rule™: Results matter.
I often borrow ebooks from the Multnomah County Library (my library) and, as I would do if I were visiting the physical library branch, spend time skimming the “shelves.” As a result of a recent search, I cannot help wondering who decided to acquire 60 ecopies of 50 Shades of Grey (15 copies currently available) but only 16 copies of Lean In (57 users currently on waiting list) and what criteria that person used.
Am I the only person who feels “over-personalized?”
The Wall Street Journal on-line now wants to “personalize” my news. I absolutely love being able to get my news on-line, but one of the biggest reasons I subscribe is to learn about topics that should or might be of interest to me–just like I did when I used to read print newspapers. Over-personalization could deprive me of that opportunity, or, at least, make it more difficult.
On top of that, the current trend to on-line “personalization” can misinterpret my interests. For example: On news.google.com (my home page), I read about the Kim Kardashian/Kanye West hook-up. Into my mind popped, “What a perfect couple!” (I do not mean that in a nice way…) and–don’t ask me what possessed me–but I clicked to see the article. For WEEKS thereafter, every time I looked at Google News, there was news about those two. Was I interested? No? But Google News thought I was.
Somewhere between no personalization and extreme personalization is the perfect solution, and I hope someone develops it soon.
What do you think?
After I got my iPhone 5, I started to rely on the googlemaps app for voice driving directions. If I wanted to see where I was going before I left, I looked at google maps on my computer. I loved being able to see the street view. From my perspective, google maps represented perfection. In fact, until two weeks ago, I had nothing but great experiences with All Things Google. Those days are evidently over.
The maps have “lost it.” For example, last week, I needed to meet someone at 5 Centerpointe Drive in Lake Oswego, OR. Google maps on my computer and on my iPhone showed it in a part of town 45 minutes from the building’s real location. This was the second time in two weeks that I had encountered this kind of problem, so I checked and double checked to be sure I wasn’t imagining things. I did report the map error, and it is now fixed, but the maps have gone from almost 100% reliable to not reliable–Now, I need to check googlemaps against mapquest every time. That is easy when I am in my home town, Portland; not so easy if I am traveling in an unfamiliar city.
I know I am not the only person having this problem. My next door neighbors spent two hours driving around yesterday because of the same problem. (Different address, of course)
Do you have any information about this issue? If so, please share!
This is not a Renee’s Rule™, but it is a rule I follow: “If it ain’t broke, don’t fix it.”
I suspect that almost everyone hopes that those news publications that provide accurate, thoughtful reporting will continue to thrive in the digital age.
For those of us who live in Portland, Oregon, therefore, it has been difficult to watch the struggles of The Oregonian, long our leading newspaper. In June, The Oregonian announced that it is shifting to four-day-a-week home delivery. Personally, although I do, occasionally, prefer to read “hard copies,” mostly, I love having digital access and, for example, read only the digital versions of The New York Times and The Wall Street Journal.
It is time for The Oregonian to enter the 21st century:
Most urgent: It is way past time for The Oregonian to require readers to pay for access to its on-line content. Much smaller communities figured this out long ago: e.g., the Medford Mail Tribune–a publication in less populous southern Oregon–for more than two years has required payment after a reader has clicked on 10 articles in one month.
People will pay for content that is valuable to them. The question now is: What content will The Oregonian decide to provide in order to attract readers?
As you can see, I haven’t “blogged” since March 7th. The reason? I’ve simply been inundated on both the business and personal fronts (most of it good!).
Recently, however, someone whom I respect criticized my most recent post, so I decided to clarify its purpose:
- In several prior posts, I have made the point that poor customer service and lack of attention to operational excellence can lead to lost customers, lost sales, lower profits–poor financial results.
- I have also written about “the paradox of choice;” i.e., when companies offer too many choices, people may avoid making purchases and/or may buy from a competitor that provides fewer choices–poor financial results.
- In my most recent post, I was making the point that not only can poor customer service and too many choices lead to undesirable financial results, but they can also lead to undesirable societal results; e.g., increased stress; wasted time; anger and frustration.
If I were a researcher, I would conduct a study and write a book about the impacts of disorganized, inefficient businesses on society as a whole. To me, that is a topic worth exploring.
As you may recall, one of Renee’s Rules™ is “Two sick companies do not make a healthy one.”
Based on my in-store and on-line customer service experiences with both Office Depot and Office Max, I predict that my rule will prove true for their upcoming merger UNLESS–and this is important–they hire a new, capable CEO for the combined entity. Although it is true that some of their troubles are attributable to the changing environment, the bigger problems is that these two companies simply are not well managed.
I rarely visited the Office Depot store in downtown Portland. Store layout was horrid. It simply took too long to find anything. (Apparently, others felt the same. The store is a ghost of its former self.) The last time I tried to do business with Office Depot, I tried to use a coupon I received in the mail to make an on-line purchase. The website would not recognize the coupon, so I tried calling. When the customer service rep was unable to solve the problem after 15 minutes, I said, “Thank you very much” and have never bought anything from them again. I really do “vote with my feet and/or my fingers.”
Office Max seems slightly better, but when I recently returned home from buying supplies at Office Max, I found a coupon that had started that day. Really?
In the big picture, I am a teeny customer, but the examples above are symptoms of the kinds of problems that affect larger customers, too.
These companies–like too many others (ToysRUs comes to mind.)–simply do not pay adequate attention to operations and to detail. They do not think about what it is like to be their customer. The merger will extend life but is unlikely to produce a healthy entity.
The tech pundits have cited multiple reasons for slower-than-anticipated sales of Windows 8 and related phones and tablets:
- Availability and pricing
- Poor connectivity, hardware problems
- Mixed early reactions
- Clumsy interface
- Misc. + the “current economic crisis”
Although all of the above reasons may, in fact, be contributing to slower sales, my gut feel (If “gut feel” is good enough for other pundits, it’s good enough for me!) is that the biggest issue is that everyone knows that it’s a mistake to be the first to get a new Microsoft program, let alone, a new piece of Microsoft hardware. There will be the inevitable “updates” and “fixes.”
Personally, I’m going to wait a few months and then update my PC to Windows 8 and switch to a Windows 8 phone and tablet. Am betting I’ll have lots of company.
So much for punditry. Calling Nate Silver! Any input on this burning issue?
As the election approaches, it is clear that the two presidential candidates have very different approaches to “fixing” the economy, reducing the deficit.
If you have not done so already, I strongly urge you to take a few minutes to go to the 2010 New York Times Article, Budget Puzzle: You Fix the Budget. In essence, it is an interactive spreadsheet that allows you to play with various scenarios. You can select which cuts you, personally, would make and what changes in the tax code, if any, you would make. You can run multiple scenarios and see the results immediately. Categories include
- Domestic programs and foreign aid
- Health care
- Social Security
- Existing taxes
- New taxes and tax reform
I have mentioned this article before, but with the election approaching, NOW is the time to try it. I can almost guarantee that you will find it FASCINATING! It changed my views about what steps should be taken. If you take it, I would love to hear your reaction.
In a Wall Street Journal article, Is Yahoo’s New Female CEO Headed for the ‘Glass Cliff’?, Christopher Shea asks whether Marissa Mayer’s appointment is a case of of a woman being hired for “mission impossible” so that a man won’t have to risk his reputation in such a role.
I have no idea whether that is the case, but I do know that this is a job I would not want and would not accept. For that reason, I am hoping that Ms. Mayer sees possibilities for Yahoo that I do not.
Some people may have been thrilled to learn about Votizen.com, which, according to their website, “is a web service that allows you to discover how your friends on social networks are registered to vote, and campaign with them to elect candidates that share your values.
The heart of Votizen is the over 200MM–strong voter database which is social media ready. Voters can connect to their own records to see their voting registration and history, as well as use it to prove their power to those that hold and seek office. Voters can then scan their social networks and reveal the voters they can work with to campaign for candidates they believe in, whether it’s nationwide for a Presidential election, or in a local city council race.”
If you are like me and were dismayed to discover that your personal political information might be available to your “connections” on LinkedIn, Facebook and Twitter, Votizen says that there is a way to protect your information. Send an email to firstname.lastname@example.org and ask them to send you an opt-out link.
Don’t misunderstand: I appreciate Votizen’s stated intention to “create a new political currency based on voter-to-voter connections, reducing the influence of money and increasing the importance of relationships in civic engagement.” At the same time, I prefer to keep my political affiliations private and think that revealing this kind of information should be “opt-in” rather than “opt-out.”
On a separate note, Votizen’s claims make me worry about our educational system because, unless I am missing something, it appears that the people at Votizen failed to pass or did not take the Common Sense Math course and did not learn the Double Check Your Work rule.
Fact check: Votizen claims to have a database of more than 200 million registered voters which would mean that approximately 2/3 of all citizens are registered voters. That felt wrong to me, so I did some checking and discovered that it really is wrong. The current population of the United States is approximately 314 million, and the US Commerce Department reported only approximately 137 million registered voters in 2010. (To see specifics, click on this link, the select Voting and Registration in the Election of November 2010, Detailed tables, Table 1.)
As a voter, a former elected public official and a former teacher, I believe that Votizen is wrong on its voter registration stats and wrong to make political affiliations public without permission.
If you saw the movie Bernie, you know that ethical issues are not always clear cut. The movie tells the true story of a gregarious, generous-hearted fellow who lived in Carthage, Texas. Everyone in the community loved him, but he killed his wealthy benefactor–shot her in the back four times and stored her body in the freezer.
Bernie should have gone to prison, right? Well…not according to almost everyone who lived in the town of Carthage. His benefactor was less than popular, and Bernie was otherwise such a nice guy and had been so generous to so many needy and appreciative people that almost everyone in the town was willing to give Bernie a “pass.” Pro-Bernie sentiment was so high that the Sheriff requested a change of venue so that Bernie, who had actually admitted to the killing, could be found guilty.
Bernie did go to prison, but this true-life story demonstrates that different people with different life experiences may have very different views about what is right and what is wrong.
The same holds true when it comes to ethical issues that face those who accept turnaround engagements. As you may recall from my article, Deconstructing the Code, which was circulated when I appeared on a panel at the annual conference of the Turnaround Management Association, there are huge disagreements among leading professionals about what is ethical and what is not.
As you probably know by now, the CEO of Yahoo, Scott Thompson, misrepresented his educational achievements on his resume.
Verifying the accuracy of educational claims is easy. Really easy. Evidently, however, no member of the Board of Directors asked whether any one had verified all of the statements on Thompson’s resume.
How could this happen? Apparently, board members “assumed” that basic due diligence had been done when, in fact, it had not.
Why does this happen? My personal theory is that many CEO’s and board members have never been intimately involved in or had responsibility for the details of running a business. They focus too much on the big picture and not enough on the details that can spell the difference between success and failure.
If you have time, I’d love to know your theory!
The New York Times today has a story, “A New Capital of Call Centers,” which focuses on the fact that many companies with US customers are moving their call centers to the Phillipines or back to the U.S. because personnel in the new locations speak better English than, say, their counterparts in India.
Evidently, these companies believe that customers’ primary concern is the quality of the language used by the call center agents. My primary concern, however, is whether or not the call center agent is actually able to answer my questions, solve my problem, and/or take my order accurately. Overall, I’ve had much better luck with the hard-to-understand foreign agents who seem to know what they are talking about than with US-based agents who are poorly trained and/or work in call centers in which no system is in place to help callers actually get their questions answered.
In brief, I wish companies would pay more attention to this Renee’s Rule™: Make my life easy.
What do you wish?
During the annual conference of the Turnaround Management Association (TMA) which was held the last week in October, I attended two sessions about “turnarounds” and was truly taken aback by what I heard.
An underlying theme, articulated by panelists in both sessions was, “We’ve been focusing on fixing the balance sheet. Now we need to learn how to fix the income statement.” Really? What have these people been doing? And does this explain why TMA sessions and publications in recent years have focused on “restructuring” instead of “turnarounds?” (My article which was attached to my last blog post explores this topic.)
Fixing the balance sheet is relatively easy: collecting receivables, reducing inventory, selling unneeded assets, renegotiating debt. Fixing operations is generally more difficult and, in many respects, requires a different skill set. For companies to survive over the longer term, they need to have carefully conceived plans, the right people in place, and effective management control systems. In addition, they must deliver their products and services in ways that are both cost-effective and customer-centric. To me, ensuring that those pieces are in place is a vital role of the turnaround expert. Evidently, not everyone agrees with my view.
To me, the word “turnaround” means fixing the balance sheet AND fixing operations. What does it mean to you?
In July, I was invited to write an article for the conference issue of The Journal of Corporate Renewal, the publication of the Turnaround Management Association (TMA). The topic I selected was “Ethical Issues in Turnaround Engagements.”
Although TMA declined to print the article in the conference issue because they found it to be too controversial, Jack Butler, an internationally recognized partner at Skadden’s corporate restructuring and governance practice, invited me to participate in the Advance Education Panel he is moderating at the TMA Conference in San Diego next week and to include the article in the materials distributed to session attendees. The title for the panel is “Ethical Challenges in Large, Mid and Small Companies.”
I intended the article to be a call to action by TMA, and it will be interesting to see how it plays out. It is my understanding that the article will be shared with TMA’s Strategic Planning Committee as well as the Certification Oversight Committee for the Certified Turnaround Professional program. I have been invited to submit it again for the March issue, which will be devoted to ethical issues, but I certainly hope that the content will be out-of-date by then!
Although I have made some revisions to the original (suggestions for refinements made by several people I interviewed), all of the basic points remain unchanged. Here is a link to the article: Deconstructing the Code.
It’s no wonder Sears is in trouble. Their personnel training and software systems need help.
The situation: A repair person came to perform annual preventive maintenance on my Kenmore washer and dryer. When I showed the person that I could not get the lint screen clean, he offered to send me a new one because a clogged screen slows down the drying process and uses more electricity.
He ordered a replacement screen. Sears sent the wrong screen. It would not fit into the slot.
I called Sears to order a replacement for the replacement and carefully explained what had happened, including that the problem was that the screen, itself, had lint that could not be removed by the repair person or by me.
Again, Sears sent the wrong part–but a different wrong part. In the photo below, the original part is on the top; the second replacement part, on the bottom. As you can see, there is no “screen” on the second part.
Here’s the worst part: After getting the second wrong part, I tried cleaning the screen with a soft-scrubbing sponge–guess what? It worked! If the repair person had only been properly trained……
Sears’ cost: Time for the repair person and the operators who took both the first and second orders + shipping for two parts + an unhappy customer.
A professional friend recently pointed out to me that in my two most recent posts, I was actually addressing the fact that www.thefoundary.com did not have a search function. It still doesn’t have one.
On the other hand, www.foundary.com, does have a search function but is likely just a site set up by a domain squatter to capture ad revenue from visitors who do what I did: type in the wrong URL.
Or..is it? Perhaps the people behind thefoundary.com are also using the name “foundary” in order to increase their revenue at a very low cost….
In my last post, I questioned the wisdom of Foundary.com’s lack of a search function. In fact, I had actually sent an email to them about this topic.
Here is a part of their reply: “Because we have a very limited, specialized, selection and each sale only lasts a few days there is no search feature.”
There is hope, however. When I visited their site today, there was a “Search” field…It doesn’t work for items on their site–it takes visitors to other websites–but I am hoping this means they listened and will develop an effective search function in the not-to-distant future. If they do, I may shop there.
Zulily.com and Foundary.com are websites that offer products of interest to me, HOWEVER, I don’t shop at either one because those sites have no effective search function. There is no field that says, “Search.”
What are they thinking? I assume they think people will buy a larger number of items if they have to navigate through lots of different pages to find something of interest because they’ll see multiple items they’d like to buy.
This may be a great strategy for shoppers who either live to shop or have plenty of time on their hands, but it may prevent busy people from doing any shopping at all on those sites.
Here is the question: Are the total sales to people with time to shop likely to be larger than total sales WOULD be if it were easy to search for specific items on these websites? My gut feel is that if these websites had first-rate search functionality, they would land sales not only from people who have time to shop but also from those who are pressed for time.
Perhaps I live in a warped reality–but most of the people I know (all age groups) would prefer EASY and TIME-SAVING to CUMBERSOME and TIME-CONSUMING.
If you follow my blog, you know I see a strong need for smaller stores with limited products. Bitten by the economy, retailers are buying into this approach.
Best Buy is reducing its footprint. Also mentioned in the story? Jo-Ann Fabric and PetSmart.
Still, it sounds like these size reductions are cost-cutting moves rather than a realization that many consumers seek and prefer a faster, easier, less stressful shopping experience.
The greatest danger to the future of our democracy is that too many people are unable to differentiate between what is fact and what is fiction and too few care.
Although I certainly agree that academic achievement needs to be improved in our country, no job in our educational system is more important than ensuring that our citizens can evaluate critically the information they receive.
Perhaps you have followed the Kyl/Colbert saga which prompted this post. Senator Jon Kyl declared in a speech in the US Senate that 90% of Planned Parenthood’s budget goes to abortions. He was more than slightly off the mark: the percentage is only 3%, and his office said that his comment was “not intended to be a factual statement.” The comedian Stephen Colbert responded with a twitter campaign that mocked Kyl’s behavior and drew attention to the lack of fact-based discussion which has become all too common.
Regardless of how we may feel about the abortion issue, it is scary to see that our elected officials (and too many others) simply don’t care about basing their arguments on facts. We will never all agree on all topics, but let’s base our disagreements on FACT rather than on FICTION. If we do not, we risk domination by demagoguery.
If you read my January post “Size DOES matter: The Pop-up Principle,” you know I’ve been saying that smaller stores that offer a narrower selection may prove more profitable for retailers because smaller stores accomplish two important things: Done effectively, they both reduce retailers’ costs AND provide a faster, less stressful shopping experience for customers.
Now, Walmart appears to be taking my advice. See article in the Huffington Post today.
In the case of Walmart, smaller stores will not only offer the advantages I’ve listed above but will also make Walmart’s merchandise and low-prices accessible to new customers who currently don’t want to or can’t travel to their super-sized stores.
I just responded to someone writing a research paper on turnarounds who asked, among other questions, “What are the key ingredients for a successful turnaround?” Here is my answer:
1. Management willing to make needed changes
2. Market for the company’s goods and services
3. Enough cash to get through the crisis
4. Turnaround team with a skill set that is a match for the issues facing the company
As a child, growing up in Omaha, Nebraska, I became a science fiction nut, and my interest in the future and what technology can achieve has endured.
In 1985, when I was in my MBA program, I took a course about “The Future.” It was taught by Harold Linstone. As a part of that course, each student wrote a scenario of what he/she thought the world would be like in 2000. I have saved my copy (It was composed on my Apple IIe. My sons were quite enthralled with it at the time, so it is preserved for all posterity in my safe deposit box.)
Among other things, I predicted that by the year 2000, there would be “terrorist attacks on our shores.” Am I prescient? Not really–To prepare for the assignment, I simply did a great deal of reading about trends at the time.
Some of my predictions were right; some were wrong. Some were right, but I had NO idea what they meant. (e.g., I predicted that we would be communicating via electronic mail, but I had NO idea that we would call it “email” and that it would dramatically change our lives.)
So..for what it’s worth, I am going to start a series of blog posts containing my predictions about what will occur over the next ten years. Some will be right; some will be wrong.. In any event I’ll be on-the-record, and it will be interesting to see the extent to which my predictions are accurate.
I have recently been asked by reporters, “What would you do at Harry and David?”
I responded with a description of the turnaround steps described below. Those steps are always the same, but the specifics vary from project to project. (When I spoke with reporters, I also discussed some of the situation-specific actions I would initiate.)
My S.O.P. (Standard operating procedure)
- Get total control of cash
- Prepare short-term cash forecast
- Select Turnaround Team from key, existing management team members
- Convene the team; go through financial statements line by line–first, looking for ways to improve short-term cash situation, second, identifying ways to increase revenues (and/or margins) and decrease costs — (note: understanding the financial statements inside and out is critical!)
- The result is a written plan that includes a list of who is responsible for achieving what results by which dates and financial projections, which are the numeric representation of the plan.
- Then, it’s time for the team to implement!
- Design and begin implementation of a sound management control system if one does not exist
- In the meantime, there are generally crises to contend with and negotiations with a wide range of stakeholders.
In addition to the above, I also send a web-based confidential survey to all employees. The employees know what’s wrong, what needs to be fixed, and often see things that people at “corporate” miss. Surveys to vendors and customers can be equally enlightening.
The above steps make it sound like the turnaround process is an orderly one, but it’s not. Leading a turnaround is like being a general on the battlefield. It’s messy and fraught with peril. You have a plan, but unexpected crises are constantly arising. I always tell prospective clients that it will feel like the opening scene from Saving Private Ryan. One of my favorite owner/clients used to stop by my office occasionally and say, “I’m having a ‘Saving Private Ryan’ day.”
It’s easy to blame e-readers and associated technological changes for Borders’ predicament, but they are merely the symptoms and not the disease.
When companies face the double whammy of game-changing technology and a sagging economy, they simply must have a sound strategy and consistent, capable, visionary leadership. Since 2005, however, Borders has had 4 different CEO’s. How could the company possibly develop or effectively execute a company-saving strategy while there was a revolving door at the entrance to the executive suite?
Bill asked some interesting questions, some of which I’ll be addressing in future posts; e.g., why would a distressed company prefer to avoid bankruptcy when in bankruptcy they can shed leases and have other protection? How can you have higher profits with lower revenues?
In the meantime: During the show, I promised to post some key financial statistics for Harry and David from 2006 through 2010. (Their fiscal year-end is approximately the end of June.) Here they are:
I’ll have more to say on this topic later….but from feedback I’ve been getting, it appears that the problems I saw were only the tip of the iceberg.
Many people believe that the CEO should have the “vision thing.” I believe that our presidents (plural!) and other elected officials should have the the “vision thing,” that it is their responsibility to set the priorities and anticipate problems before they occur.
It appears to me that these officials too often don’t even think about anticipating problems before they occur, let alone initiate preventive actions.
For example: On February 2nd, the Washington Post ran a story, Why does Fresno have thousands of job openings- and high unemployment? The answer, of course is that there is a mismatch between job openings and the skill sets of job applicants. Duh!
We seem to be discovering this nation-wide mismatch only recently, when it has, in fact, been on its way for at least 25 years.
For example, when I was in my MBA program (1984-5), I wrote a paper, “What to do about the coming structural unemployment.” In the paper (lost to posterity because I created it on a floppy disk using my Apple IIe), I addressed the unemployment/change in employment opportunities that would result from the two obvious trends: globalization and greater use of robotics.
If the trends and their impacts were obvious to me, surely they were obvious to countless others.
So here is the question: Why didn’t we, as a country, pay more attention to this problem earlier?
My answer is two-fold:
1. Elected officials are really fire-fighters who are so busy putting out the the current fires, they don’t have time to attend to the likely future ones.
2. We get the government we deserve.
On the business (as opposed to the political) front: Is the phenomenon described above any different from the leadership of Blockbuster and Borders being late to the technological revolution?
Why do some people “see” while others do not?
What I learned at the TMA conference is not what you expected.
I met with a private equity partner who told me he had actually visited my blog and read some of my posts. Not long ago, someone on the east coast contacted me to tell me he agreed with my comments about turnarounds. Then, I received an email from a long-time friend who had just learned about and visited my blog. Today, someone else left a comment about one of my posts……
This has serious implications: All this time, I’ve been having a grand time blissfully writing about whatever happens to enter my mind–what better forum for a person who has strong convictions and loves to talk about them?
Now, however, I’ll have to write my posts as if someone might actually READ them!
Wednesday, I am leaving for the Distressed Investing Conference of the Turnaround Management Association and am eager to see whether presenters spend much time discussing leadership considerations.
Many investments in distressed companies fail because the investors (most of them private equity firms) pay too little attention to selecting and managing company leadership, but the last time I attended this conference, 2009, there was only one session (really, it was only one panelist) who highlighted this very important issue.
Mike Heisley discussed the fact that distressed companies require a leader with traits that are very different from those required to lead a “healthy” company. He was exactly right. Click here to view my post from that event.
As you may recall, last Spring, I held a contest, “Are you smarter than an economist?” My two winners, who received $1,000 each for their on-target predictions, were “ordinary” people–well, definitely not economists.
Hmmmm…what does this say about professional economists and stock analysts?
The results are in! The checks, $1,000 each, are in the mail. The two winners of my contest, “Are you smarter than an economist?” are Gary Ritner, a Bellevue, Washington-based investment banker and co-founder of the Puget Sound Venture Club and Jeff Smith, a Project Manager for Caterpillar in Peoria, Illinois.
As you may recall, winners needed to predict correctly when GDP would improve at least 2% from the prior quarter and when unemployment would be the same or better than the same month in the prior year. http://www.reneefellman.com/blog/are-you-smarter-than-an-economist-contest/
Jeff predicted 3rd quarter ’09 and June ’10, for GDP and unemployment, respectively; Gary, 4th quarter ’09 and June ’10.
You may well be asking yourself: If they had two different GDP predictions, how could both of them be winners? The answer? After the contest started, the Bureau of Economic Analysis apparently changed the formula for calculating GDP. As of 3/26/10, the BEA website reported GDP improvement in Q3 ‘09 in chained dollars was 2.2%; as of 8/27/10, however, the website showed only 1.6% for Q3, but improvement of 5.0% in Q4.
So…that’s that—except I think the press should be asking Jeff and Gary what they predict for the future of the economy! They were smarter than many economists!
In the 9/20-9/26 edition of Bloomberg BusinessWeek, Matthew Lynn (and the photo that accompanied the article) implied that Stephen Elop, who became CEO of Nokia on 9/21, is not the best person to lead the turnaround because Elop is not a “phone expert.”
I do not know a great deal about Elop except that he was recently “the Canadian head of Microsoft’s business unit” and that he has software experience and a reputation for “shaking up” businesses, but I do know that Lynn’s apparent assumption—that “industry experience” is central to a turnaround—is just plain flawed.
One needs to look no further than Alex Mandel’s leadership of Teligent in the late ‘90’s to see that “industry experience” does not guarantee success. Mandel had been president and COO of AT&T, but Teligent failed spectacularly under his leadership. Although the failure was blamed on “the downturn and overcapacity,” the underlying issue was that on the ground and in the trenches, Teligent was simply unable to provide the reliable wireless services it promised. The lesson: The leadership skills required to launch a technology start-up with no existing infrastructure are very different from those required to lead a long-established company.
In a turnaround, where time truly is “of the essence,” the most valuable commodity is effective leadership, not industry expertise. I’ve had 34 clients. Of those, 3 were in one industry; 2 were in another; the rest were all “one-off.” Based on that experience, it is clear to me that industry experience is not, by any means, the determining factor.
The most important skills needed in leading a turnaround are
· The “power of the glance;” i.e., the ability to see quickly what needs to be done
· Common sense
· Ability to establish the right priorities
· Clarity of vision and the ability to convey that vision
· Ability to mobilize the troops to provide ideas and support the effort
Is having industry expertise a plus? Yes. But it is no substitute for having the right leadership skills. No matter what the industry, it is relatively easy to find someone with industry expertise. It is much more difficult to find someone who has the right leadership skills.
I’m rooting for Stephen Elop and hope he proves Mr. Lynn wrong!
Recently, I had to place a call to American Express’ customer service. First, my problem was solved right away. Second, almost immediately thereafter, I received a customer survey. Guess what the first survey question was? “Do you remember this call?” (paraphrased)
I almost fell out of my chair. Someone had finally THOUGHT about a customer survey and what it was trying to accomplish!
Customer satisfaction surveys are conducted, presumably, to get feedback about the customer’s “experience.” These surveys could be powerful tools for gaining and retaining customers and for reducing costs, but too often they are not. I call them the “Silly Surveys.” (Actually, some additional “S words” spring to mind…)
How many surveys have you received and wondered, “Which call and what person is this survey asking about?” If you are like me, too often, either I’ve had to talk with more than one support person, or the survey arrives long enough after the incident that I am not sure which incident, contact, or person the survey is asking about.
In addition, too many surveys fail to ask a critical question: Should this call have been necessary in the first place? Instead, it asks: Was the support person knowledgeable, clear, polite? Was the problem solved? The answer is often, “Yes, to all of the above,” but too often, the underlying problem is that the company has a poorly constructed website that makes it difficult to accomplish simple tasks–tasks that are easy to accomplish at other sites. I had to waste my time placing a call that should have been unnecessary.
In the case of the above example, the support person will get kudos (or, at least, won’t get into trouble), but I, the customer, having made too many similar calls to this company, am likely to be considering changing vendors, and the company is missing an opportunity to reduce its tech support costs. If customers could easily accomplish simple tasks at the website, fewer tech support people would be needed.
Renee’s Rule™: Put yourself in your customer’s shoes.
I recently read an article that said bloggers aren’t keeping up with their blogs. Clearly, I am guilty as charged but am going to try to do better! (Still, when I am in the midst of a turnaround engagement, there simply isn’t time to blog….)
Please stay tuned……
Can’t help it–I am fascinated with Gregory Meyer’s challenge to the Blockbuster board. For all I know, Meyer is a total flake, but why would anyone have confidence in the CURRENT board of directors who, by the way, are strongly fighting Meyer’s bid?
Click here for details from my earlier post.
For latest news: Click here.
The board meeting is June 24th… am eager to see whether Meyer gets elected.
One of the great things about having a blog is that I get to choose my topics, and today, I choose David Pogue–far and away my favorite technology writer–whose columns I follow in the New York Times. There is a link to his website on my blogroll in the bottom right-hand corner of my blog.
I am an unabashed fan and read David’s columns because I love them. Clearly, David is bright, articulate, practical and, above all, conveys a contagious exuberance in his writing. His columns are a delight, and I am guessing that he, personally, is a delight.
He also has a background in theater and is musically gifted. His intellect and exuberance are on display in that arena, as well. (See this youtube post, an impromptu production recorded in Times Square–be sure you watch the whole thing.)
The next conference of the World Future Society will be held in Boston from July 8-10th. I can’t wait!
Every couple of years, I attend the conference because these gatherings invariably have stimulating sessions that give one a peek into what’s on the horizon–or what might be on the horizon. It is helpful to me professionally because knowing what might happen can be useful, but on a personal level, it is just plain fascinating! The conference is my treat to myself!
A couple of years ago, in addition to attending the regular conference sessions, I was introduced to the concept of transhumanism during a pre-conference session led by Jose Cordeiro–and attended a first-rate session about the future of nanotechnology.
This year, Ray Kurzweil, one of the futurists whose work I studied during my MBA program, is a keynote speaker. If you are not familiar with the concept of “the singularity,” you should be. It is only a matter of time until the concept becomes reality.
I am posting this in case you are interested in attending the conference. If you do go, please let me know so we can compare notes about the sessions we attend.
Recently, I read an article in The New York Times, “OMG! It’s Steve Jobs!” which reports that Jobs is creating worldwide “buzz” by responding personally to emails.
Whether he is actually responding personally or is having someone else respond for him, he is being really smart. First, he will learn things and get ideas he would otherwise not have. Second, the “free” PR is worth its weight in gold.
Email can be a powerful management tool. When I start a new project, and there are more employees than I can possibly ever meet/talk with in person, I circulate a confidential employee survey (not generated from the client’s server) and give employees a personal email address to which they can send me confidential information.
These surveys and emails have become a powerful way for me to find out about problems and to develop solutions incredibly more quickly than I would otherwise be able to do—problems that some people at “corporate” may not know about, may want to hide, or may be afraid to share.
More about corporate politics and their impact on turnaround efforts in a later post.
The internet is a wonderful thing!
Sam Thacker, the Finance Expert at AllBusiness.com (He helps companies find financing), someone I have never met who lives in another part of the country, posted an announcement on Sunday about my “Are you smarter than an economist?” contest.
Although Sam and I live in different parts of the country and have never met, it is clear from reading each other’s posts that we both do our best to provide sound advice on our blogs, advice that businesses can really use.
Here is the link to his blog about my blog. While you are there, take a few minutes to read some of his posts and/or listen to his podcasts. They are packed with great info!