No. 12 December 2009

I just heard from a friend at the North American Equipment Dealers Association (NAEDA). Our discussion centered about the large number of dealers going out of business this year. He stated what we all know is true about OPE dealers living on thin margins and the struggle to keep inventory on hand, pay wages, cover overhead etc. He recently read that the powersports industry estimates dealer closings could reach 1000 by the end of the year. I told him our company’s business analyst informed me today that our company had about 365 of our dealer customers go out of business through December 1 of this year. That’s over one a day. He and I worry that this industry will lose valuable employees plus quite a few dealers, and they will be very difficult to replace.

One day in ancient Greece, an acquaintance met the great philosopher Socrates and said, "Socrates, do you know what I just heard about your friend?"

"Hold on a minute," Socrates replied. "Before telling me anything, I'd like you to pass a little test. It's called the Triple Filter Test."

"Triple Filter Test?” asked the man.

"That's right," Socrates continued. "Before you talk to me about my friend, it might be a good idea to take a moment and filter what you're going to say. The first filter is Truth. Have you made absolutely sure that what you are about to tell me is true?"

"No," the man said, "actually I just heard about it and..."

"All right," said Socrates. "So you don't really know if it's true or not. Now let's try the second filter, the filter of Goodness. Is what you are about to tell me about my friend something good?"

"No, on the contrary..."

"So," Socrates continued, "you want to tell me something bad about him, but you're not certain it's true. You may still pass the test though, because there's one filter left: the filter of Usefulness. Is what you want to tell me about my friend going to be useful to me?"

"No, not really."

"Well," concluded Socrates, "if what you want to tell me is neither true nor good nor even useful, why tell it to me at all?"

Advice columnist Dear Abby had a wonderful saying about gossip which still rings true, "It is almost impossible to throw dirt on someone without getting a little on yourself."

I want to share with you a Christmas story I particularly like called “The Gold Wrapping Paper.”

“Once upon a time, a man punished his five-year-old daughter for using up the family’s only roll of expensive gold wrapping paper before Christmas.

Money was tight, so he became even more upset when on Christmas Eve, he saw that the child had used the expensive gold paper to decorate a large shoebox she had put under the Christmas tree.

Nevertheless, the next morning the little girl, filled with excitement, brought the gift box to her father and said, "This is for you, Daddy!"

As he opened the box, the father was embarrassed by his earlier overreaction, now regretting how he had punished her.

But when he opened the shoebox, he found it was empty and again his anger flared. "Don't you know, young lady,” he said harshly, “when you give someone a present there's supposed to be something inside the package!"

The little girl looked up at him with sad tears rolling from her eyes and whispered: "Daddy, it's not empty. I blew kisses into it until it was all full."

The father was crushed. He fell on his knees and put his arms around his precious little girl. He begged her to forgive him for his unnecessary anger.

An accident took the life of the child only a short time later. It is told that the father kept this little gold box by his bed for all the years of his life. Whenever he was discouraged or faced difficult problems, he would open the box, take out an imaginary kiss, and remember the love of this beautiful child who had put it there.

In a very real sense, each of us as human beings have been given an invisible golden box filled with unconditional love and kisses from our children, family, friends and God.

There is no more precious possession anyone could hold.”

Have a wonderful Holiday season with your family and friends.

No. 11 November 2009

A shareholder vote held recently by Tecumseh Products resulted in the Herrick family regaining control of the company they once owned and ran.

As you may recall, I called this saga a “soap opera” in my November 2008 OPE “Anonymous Distributor” column that detailed all the posturing and lawsuits. Remember that Kent Herrick, a former executive and his father Todd Herrick, former CEO, president and chairman, were ousted from the company in 2007. At that time some shareholders blamed the Herrick’s and their management team for allowing the Tecumseh engine division to become a non-factor in the air-cooled engine manufacturing business and losing major placement with lawn mower manufacturers and retailers like Sears.

As we all know, new management was put in place in 2007 and the engine division was later sold to Platinum Equity, LLC. But the Herrick family continued to be major shareholders in Tecumseh Products through their Herrick Foundation which owned more than 40 percent of the company’s voting stock in 2008.

As a result of the annual meeting in August, 2009, the shareholders voted to elect the Herrick slate of board candidates and voted down a recapitalization proposal that would have reduced the Herrick Foundation’s voting power. Kent Herrick was elected chairman of the board of directors.

Remembering a proud Tecumseh Engine Division once so strong, I can’t help but wonder why the shareholders want the fox’s guarding the chicken house again?

Here are some thoughts about the health care bills that may be imposed on all of us soon. Why should you and I care? Because we’re going to be paying for it for a very long time.

Here’s what John Feehy, president of the Feehy Group, an advocacy firm located in Washington, DC, had to say about the health care bill: “I believe that the health care bill is overly complex and not well-understood by most Americans. And it frontloads the pain and backloads the gain.

“To help pay for the benefits and to fit into the budget parameters as laid out by the president, most of the bills start increasing taxes and cutting Medicare benefits almost immediately, while the health insurance programs don’t really get up to speed for another four years or so.”

“The Democrat’s health care bill is also a direct money transfer from those middle class Americans who have health insurance to those who don’t. But polls show that most Americans not only have insurance, they are satisfied with it and fear that the Democratic plans could make it either more expensive or less effective.”

Feehy goes on to say that “making Americans pay more for their insurance (through higher premiums or taxes) or giving them fewer benefits (such as cutting the Medicare Advantage program), will cause a firestorm with middle class voters.”

Agree or disagree, you owe it to yourself to become more informed on this topic and its potential impact on your wallet and you and your family’s healthcare.

Harvey MacKay tells a wonderful story about applying a personal touch to make your sales efforts more effective. During World War II, the U.S. government began offering soldiers a life insurance policy with a $10,000 benefit if they were killed in combat.

In one unit, a young lieutenant delivered a polished presentation on the details of the plan. No one signed up. Then an older sergeant quietly asked the lieutenant if he could talk to the troops.

"Men," he said, "if you get this life insurance and you get killed, the government is going to send your family $10,000. If you don't get this insurance and you get killed, the government isn't going to send your family anything. So who do you think they're going to send up to the front lines—the ones who'll cost $10,000 when they're killed, or the ones who won't cost anything?"

All the soldiers immediately signed up.

That’s a great example of the power of applying a personal touch to your sales effort!

No. 10 October 2009

Trying times is no time to quit trying!

The weather at night has finally turned cool. It is really feeling like fall. Thank goodness we’re still receiving timely rain south of the Mason-Dixon Line, unlike our friends in other parts of the country. Service and repair business in the South, while not booming, remains steady.

Many of our customers have enjoyed excellent repair, parts and accessories sales in 2009. So have we. But it is interesting to see some service centers suffering even in an excellent service year. I wonder why? I have my opinions, but what I really get upset about is when we can tell that our customers are suffering, and they don’t ask anyone for advice and support. Who should they be talking to? The first person they should turn to in difficult times should be a trusted business friend like their accountant, attorney or banker. Next they should be talking to their suppliers. And when they do talk to their suppliers, they should have a plan in hand that they intend to follow - a plan that shows they’ve been thinking about solutions and a successful future.

I have to admit when I read the announcement that the Outdoor Power Equipment Institute (OPEI) was teaming up with Weekly Reader, lots of silly thoughts ran through my mind. For example, I know that we’ll soon see equipment owner’s manuals so entertaining and easy to read that they will be hard to get away from our children. “Gee, Dad, thanks for letting me read our lawnmower owner’s manual. It was great!” No more jokes about owner’s manuals only being read when something doesn’t work. We’ll be ordering owner’s manuals from Amazon and taking them to the beach to read during our vacations! Okay, that last one is a little far-fetched!

What’s the real reason OPEI is teaming up with Weekly Reader? They want to teach kids about the value of yards and green space, so they developed a new dog character called “Turf Mutt, the Yard Dog, a once homeless canine turned caped crusader who is ‘Out to save the Planet – One Yard at a Time.’” They also developed a classroom board game that teaches students about photosynthesis in everyday terms. And I know lots of other good ideas will follow. It’s never too early to teach our children about the value of green space and green lawns. What a great partnership!

Husqvarna recently appointed Michael Jones as new President to head up one of their five business units: Sales and Service in North and Latin America, beginning October 1, 2009. Jones comes to Husqvarna from GE, where he was General Manager, Cooking Products in the Appliances division. (No, you can’t ask him “what’s cooking at Husqvarna.”)The other four operating business units are Supply Chain, Products & Marketing, Sales and Service in Europe and Asia/Pacific, and Construction Products.

As Husqvarna shuts down it consumer product headquarters and offices in Augusta, Georgia and consolidates them into its Charlotte, NC, offices and distribution center, look for lots of other personnel changes to occur, including some names and people that you’ll recognize.

Harvey Mackay recently talked about how many businesses retreat to their comfort zones when challenged. But he goes on to mention that a comfort zone is a very dangerous place to be.

Mackay said, “In the bullfighting arena, expert matadors have long gained an edge by pinpointing a bull's comfort zone. Former Hewlett-Packard CEO Carly Fiorina has studied this phenomenon. "In bullfighting there is a term called querencia. The querencia is the spot in the ring to which the bull returns," she explains. "Each bull has a different querencia, but as the bullfight continues, and the animal becomes more threatened, it returns more and more often to his spot. As he returns to his querencia, he becomes more predictable."

What are the consequences of predictability? "In the end," Fiorina says, "the matador is able to kill the bull because instead of trying something new, the bull returns to what is familiar. His comfort zone."

"Bad habits," a pundit once noted, "are like a comfortable bed, easy to get into, but hard to get out of." Sticking with what's comfortable might be one of the deadliest habits of all.

No. 9 September 2009

Economist Jeff Thredgold recently shared a few upbeat thoughts about the economy. Consumer confidence regarding near-term and long-term expectations rose sharply in August 2009 to its highest level since December 2007. That’s good news, according to Thredgold, because “consumer spending still represents two-thirds of all US economic activity.”

The other upbeat information concerned home prices. After three solid years of decline, estimated home prices rose 2.9 percent during the second quarter when compared to the first quarter. “The combination of sharp home price declines and historically low mortgage interest rates, when compared to average family incomes, now suggest the highest level of housing affordability in a generation,” Thredgold said.

The bad news, according to Thredgold, is the latest estimate of budget deficits during the next decade. “We can live with budget deficits averaging $150-$300 billion annually…as bad as that is…we have done it for years,” he said. “In my view, we cannot live with deficits averaging $1 trillion EACH year.” I EMPHATICALLY agree with that last statement.

You can visit Thredgold’s Web site at www.thredgold.com and sign up for his free e-mail newsletter called the Tea Leaf. Thredgold puts important economic information in easy-to-understand terms, and makes it relevant and enjoyable to read.

I’m sure that most of you have heard the following quote from the late Dave Thomas, who founded the Wendy’s restaurant chain: “It seems the harder I work, the luckier I get.”

Yet we all know plenty of folks who have worked their heads and hearts off, but for some strange reason just aren’t successful in what they accomplish.

What is the correlation between luck and success? Did Thomas have it right?

John MacKay had the following to say about making his own luck and being successful in business: “I prefer to do everything in my power to make my own ‘luck’ — long hours, clear goals, calculated risks, good hires, expert advice, and a reasonable amount of fear have guided me.” What are you doing to make your “own luck?”

Recently, my company was about to implement a change in a standard business process. Thinking about the implementation of the change, brought to mind a business rule that I learned from my father. Once you see the name, you won’t require further explanation, because you will already be quite familiar with it and understand its implications. It is called the “Law of Unintended Consequences.”

Making a change, any change, has consequences. Your goal should be to be prepared for the consequences you know about and anticipate, and be prepared for the unintended consequences that will most certainly arise. It requires thoughtful focus on the implications of the change, maximizing the results you want, and minimizing the results you don’t want.

Anticipating unintended consequences will change the way people see you. You’ll be surprised at how much more effective you will become as people come to trust and believe in your judgment.

Here’s a good story about a little boy who understood the consequences of his actions.

A young boy enters a barbershop and the barber whispers to his customer, “This is the dumbest kid in the world. Watch this.”

The barber calls the boy over, puts a dollar bill in one hand and two quarters in the other and asks, “Which do you want son?” The boy takes the quarters and leaves the dollar.

“What did I tell you?” said the barber. “That kid never learns!”

When the customer leaves, he sees the same boy coming out of the ice cream store and says, “Hey, son. Why did you take the quarters instead of the dollar bill?”

The boy licked his cone and replied, “Because the day I take the dollar, the game’s over!”

Now that’s a smart kid!

No. 8 August 2009

How do you gain respect? Bret Simmons, a professor at the University of Nevada at Reno, suggests that you have to earn it. He says, “Respect is one of those things that too many managers and leaders think they are entitled to because of their experience, position or title.”

“Respect should never be demanded or even expected. To the extent you sow respect in the lives of others, you will reap respect in your own.”

“The paradox of respect is it is only something you can give away.” Isn’t that a powerful statement?

Police in Wells, Maine, recently arrested a man on a drunk-driving charge after he mowed his neighbor’s lawn with a riding mower – without consent. I wonder if the neighbor waited until his yard was completely mowed before he called the police? Wouldn’t you?

MTD Products recently sent a letter to all of its contracted service centers, announcing the addition of the Remington brand of electric- and battery-powered products to their stable of brand names and products. It’s a good move for MTD.

DESA Remington made electric or battery powered chain saws, pole saws, string trimmers, blowers, blower-vacs, cultivators, hedge trimmers, and other related accessories. It will be interesting to see what electric- and battery-powered products MTD will unveil this fall. MTD won’t be the last OPE manufacturer to get into this growing product niche. We’re going to see more and more battery-powered outdoor power products in retailers in the coming years.

My son recently bought a battery-powered lawn mower for his small yard. You would think by now that people would have seen battery-powered push mowers, but he told me that every time he mows, neighbors stop, watch, and listen. He still puts on a show for them, stopping and starting the electric motor instantly with a simple movement of a lever. He laughs, saying it’s almost a traffic-stopper. Who would have guessed?

Our dealers, many of whom swore their customers would never buy a battery-powered mower, are selling them like hot-cakes. You and I know not every customer that walks into your store is a battery-powered mower prospect, but as I mentioned in my August 2008 column, you might want to put a few on your showroom floor. You may be pleasantly surprised at how the quality has improved and consumer interest has grown over the past year or two.

Here’s a recent newspaper article headline I saw on the Internet from the Killeen Texas Daily Herald: “Texas small engine repair shop thrives on lawn mowers in summer.” Doesn’t that make you just want to say “Well, duh!”

In a recent Blog on leadership, Rick Johnson listed some key attributes of leaders. He said “Effective leaders are consistent, explicit and concise and they command a presence when they walk into a room. But, they are not arrogant and ego driven.”

“When they move on, others want to go with them. Their openness and honesty creates a legacy which people admire and look up to. They gain commitment and foster trust.”

Johnson went on to say that arrogance is something leaders should avoid at all costs. “If you start to believe that you are special and nobody is as good as you, just look at the number of people in your industry, in your state or in your country. Then ask yourself how many of these people even know your name. Unless you’re Tom Cruise or Angelina Jolie, chances are that not many people really even know who you are let alone actually care how good you think you are.”

“Good leaders listen at least twice as much as they talk. They take the “I” out of their vocabulary. They model themselves after the most respected people in their industry, not the most successful, because success does not necessarily mean respect.” Sounds like good advice to me.

No. 7 July 2009

In recognition of the 50th anniversary of Outdoor Power Equipment (OPE), I have to take a minute to reflect about this magazine’s founder, Bill Quinn, a publisher, editor and writer extraordinaire, who never saw a topic he wouldn’t or couldn’t write about. His “Partly Personal” column in each monthly issue of OPE magazine was required reading by everyone in the industry. And I do mean everyone.

He and I traded correspondence often (there was no email service back then) and he was always willing to share what he knew with a young twenty-something newbie to the industry. Eventually he came to recognize me at sight, and I was always honored when he’d speak with me at a lot of the early industry shows in the 70’s and 80’s. He was a unique person with a unique style of writing. And while he wasn’t afraid to “ruffle a few feathers” from time to time, you couldn’t help but agree more times than not with his common sense perspective.

If you liked Roger Stewart and The Southern Lawnmower Dealer Newsletter, you would love Bill Quinn. While there will be no one quite like him ever again, his legacy lives on in this magazine he loved. I’m glad it’s survived and continues to thrive in these uncertain times under the able leadership of Steve Noe. Now if we could just get Steve to tell some really corny jokes like Bill Quinn did!

Ed Lemco wrote recently that tough times require tough dealers. Many power sport dealers he knows are down over 50% in gross revenue this year. And he said their survival won’t result from simply “working harder.”

He added “Whatever the number of qualified buyers you are getting into your dealership, you cannot afford to waste any of them. This new type of buyer takes a whole lot more attention and energy from you than they did years ago. The first reaction you should have when times are tough is to increase sales effort, followed by cutting costs. Don’t wait on your OEM’s or your government to solve your problems. Stay focused and determined while maximizing your sales efforts with each and every customer that walks in your front door.”

I read all the call reports from our sales-people who call on our dealer and service center customers. Recently, a salesman asked our controller to raise the credit limit for one of our dealer customers. In explaining why the customer deserved the credit limit increase, the salesperson also mentioned that the dealer had been “late in paying us at times.”

I do not get involved in making credit decisions. For good reason, I believe that credit and credit limit decisions should be left up to our people who get paid for doing that and who have the experience to make good decisions about customer credit - and that’s not me.

But this recent request got me thinking about what criteria we have and use to make credit limit decisions for a customer who has established credit with us. We most likely don’t know this customer as well as our sales person does. What we do have is a payment record and a purchase history for this customer, as well as experienced accounting people who have made these decisions regularly and know historically what happens as a result.

Every time you make a transaction with a supplier, whether you buy something, return something or pay for something, you are creating a transaction history for your business and yourself. And it’s that history of your interaction with your suppliers that they use to guide their relationship with you. It’s not my history, but your history that counts. And that history can make it easy or very difficult to increase your credit limit. It’s really that simple.

On September 10, 1945, Mike, a young Wyandotte chicken, was about to become the dinner of farmer Lloyd Olsen of Fruita, Colorado. With a sharp ax in hand, Mr. Olsen firmly held Mike, preparing to make the bird ready for his wife Clara’s cooking pot. Mr. Olsen swung the implement, thereby lopping off a great deal of poor Mike’s head. Mike shook off the event, then continued trying to peck for food, believe it or not for the next year and a half.

Every year since that amazing day in 1945, the town celebrates Mike’s story with an annual Mike-the-Headless-Chicken Festival.

As part of the 2009 Festival there was a 5K “Run-Like-a-Headless-Chicken” race, Chicken games, a Chicken dance contest, a car show, arts and crafts displays and a lawnmower race. The famous “Good Egg” award was presented to a worthy Fruita citizen. And there was a “Chick Olympics” with categories including an egg toss, a peep-eating contest and a wing-eating contest followed by a Chick Olympic awards ceremony.

Even today, Mike’s will to live remains an inspiration to the citizens of Fruita. As one citizen put it: “It’s a great comfort to know you can live a normal life, even after you’ve lost your mind!” I guess there’s hope for some of us after all.

No. 6 June 2009

I saw some interesting data regarding the secondary costs of ethanol use in the June 2009 issue of National Geographic magazine: “The corn used to make a 25-gallon tank of ethanol would feed one person for a year,” as well as, “Federal mandates for corn-based ethanol soaked-up 30 percent of the 2008 US (corn) crop, helping send corn prices over eight dollars a bushel last year – triple the 2005 price.” Love the effects of government mandates and subsidies!

I was recently reading about the "Law of Empowerment" that states, “Only Secure Leaders Give Power to Others.” What kind of leader are you? Do you find it easy to empower your subordinates?

Weak and insecure leaders resist empowerment because they worry that they will become expendable if they train talented subordinates. Weak and insecure leaders view change as a threat, not an opportunity. And weak and insecure leaders resist anyone they believe threatens the self-esteem they receive from a title or position.

“Today, at a time when managers must do more with less - less people, less budget, less margin for error - leaders have no choice but to empower followers to share the load. Insecurity simply isn't compatible with survival. Even so, human nature resists empowerment.”

The article closed with a quotation on empowerment from decorated war hero and former vice presidential candidate, James B. Stockdale. He said, "Leadership must be based on goodwill... It means obvious and wholehearted commitment to helping followers... What we need for leaders are men of heart who are so helpful that they, in effect, do away with the need of their jobs. But leaders like that are never out of a job, never out of followers. Strange as it sounds, great leaders gain authority by giving it away." What a terrific quote. Great leaders gain authority when they give it away to others.

I miss the quarterly OPE industry shipment reports and forecasts once issued quarterly by the Outdoor Power Equipment Institute (OPEI,) the OPE industry’s manufacturer association. An industry friend told me recently that the OPEI board decided in 2008 to no longer issue the shipments information and industry forecasts on a public basis. Left to our own devices and without any prominent public notice about stopping the issue of these reports, one would tend to think the worse. I think this action sends the wrong message. OPEI probably hopes their decision doesn’t send any kind of message. They’re wrong.

Here’s a recent prediction on the upcoming hurricane season from the National Oceanic and Atmospheric Administration (NOAA) that made me pause. In a forecast discussing the uncertainty in the 2009 hurricane season outlook, “NOAA cited a 50 percent probability of a near-normal season, a 25 percent probability of an above-normal season and a 25 percent probability of a below-normal season.” Now that’s what I call a safe bet!

Briggs & Stratton recently rolled-out the Partners Standard Protocol (PSP) technology that lets their power products dealers communicate directly with suppliers using their computerized business management systems. The PSP system was developed in 2002 and is administered by the Motorcycle Industry Council (MIC). PSP is currently used by RV, marine, and power sports dealers and their suppliers.

Many industry pundits hope PSP becomes the OPE industry standard communication protocol. Will our industry manufacturer association, the Outdoor Power Equipment Institute (OPEI,) become the promoter and cheerleader for this or other viable communication standards like the MIC did? Does this industry still need a standard communication protocol?

In a recent newsletter, Harvey Mackay (http://www.harveymackay.com/), shared James Barksdale’s “Three Snake Rule.” I think you’ll like it.

“James Barksdale, former CEO of Netscape, was a charismatic manager whose maxims endeared him to his employees.

One of his favorites was formulated at a management retreat soon after he took over Netscape. It's known as his three-snake rule:

The first rule: If you see a snake, kill it. Don't set up a snake committee. Don't set up a snake user group. Don't write snake memos. Kill it.

The second rule: Don't play with dead snakes. (Don't revisit decisions.)

The paradoxical third: All opportunities start out looking like snakes.”

These rules should bring a smile to your face and a realization of how true they are.