No. 5 May 2014

In a typical December, parcel carriers see their volumes peak mid-month. Last Christmas, however, more shoppers waited to the last-minute. Amazon Prime customers, for example, believed they had no reason to order early. In short, the December peak happened as forecast, but within this multi-week peak was a much bigger spike in activity concentrated in the last few days before Christmas that was just too big for UPS, in particular, to handle.

While all this was occurring, Amazon issued a congratulatory press release that lauded the fact that they had signed up 1 million Amazon Prime members in the third week of December and that demand was so great that it had to suspend enrollment.

But while delivery failures contributed to the profit hit, which the Amazon Prime program played a role in, the bigger hit comes from the Amazon Prime program itself.  Amazon Prime is a loss leader that enables Amazon to steal market share from traditional retailers.

Amazon’s 10-K demonstrated just how big a drag on profits this program really is. Supplemental information about outbound shipping results showed that for every $1 in shipping fees Amazon collected, they spent more than $2, for a total shipping loss of more than $3.5 billion.  That’s not pocket change.

Did you recently notice that the annual fee for Amazon Prime was increased?  Well, now you know why.

Have you ever heard about the “Zeignark effect”?  It’s named after a Russian psychiatrist who discovered that a waiter could remember incomplete orders more easily than those that were served and complete.  Further study showed that people are 90 percent more likely to remember tasks that are undone than those they completed. 

That makes some sense, but it also causes tremendous stress rather than pride of accomplishment.  There will always be work to be done, but stop and smell the roses – or the crocuses and daffodils – occasionally!   You’ll be glad you did!

In a recent Seth’s Blog, Seth Godin had this to say about money: “Money’s pretty new.  Before money, we traded.  My corn for your milk.  The trade enriches both of us and it’s simple.

‘Money, of course, makes a whole bunch of other transactions possible.  Maybe I don’t need your milk, but I can take your money and use it to buy something I do need, from someone else.  Very efficient, but also very abstract.”

As we ceased to trade, we moved all of our transactions to the abstract world of money.  And in this abstract world, “we’re constantly re-evaluating what money is worth.  Five dollars to buy a snack box on an airplane is worth something very different than $5 to buy a cup of coffee after a fancy meal, which is worth something different than $5 in the grocery store.  That’s because we get to pretend that the five dollars in each situation is worth a different amount.”

The value of that five dollars changes in our mind based on what and where we’re using it.

Godin’s conclusion is that “pricing based on cost makes no sense whatever, because cost is not abstract.  Pricing based on value does make sense because value is abstract.”  And that value changes in each situation, just like the value of $5 does for different products and where they are purchased.

My conclusion is: What we are willing to pay for something we want has no relationship to the actual cost of the item, but rather the value it has to us.  If that’s true or even partially true, how should that affect how we price what we sell in our own businesses?

A sales rep, an assistant and their manager are walking to lunch when they find an antique oil lamp.  They rub it, and a Genie comes out.  The Genie says, “I'll give each of you just one wish.”

“Me first!” says the assistant.  “I want to be in the Bahamas, driving a speedboat, without a care in the world.”  Poof!  She's gone.

“Me next!” says the sales rep.  “I want to be in Hawaii, relaxing on the beach with my personal masseuse, an endless supply of piña coladas and the love of my life.”  Poof!  He's gone.

“OK, you're up,” the Genie says to the manager.  The manager says, “I want those two back in the office after lunch.”

Moral:  Always let your boss have the first say.

No. 10 October 2013

Karl Pillemer is a gerontologist (someone who studies older people) who, in his work, kept meeting older people – many of whom had lost loved ones, been through tremendous difficulties, and had serious health problems – who nevertheless were happy, fulfilled, and deeply enjoying life. He found himself asking, “What’s that all about?” As he looked through existing research, he found that study after study validated the fact that older people – in their 70s, 80s and beyond – are actually happier than younger people. Pillemer thought that perhaps older people knew things about living a happy, healthy, fulfilling life that younger people didn’t, so he decided to find out what that practical wisdom was. He interviewed 1,000 seniors and asked them, “What is the most important lesson you want to pass along to the young?” From his interviews came his book, 30 Lessons for Living: Tried and True Advice from the Wisest Americans.

Here are a few of his findings about some of life's lessons that older people have learned during their long lives:  “…one lesson stood out; a lesson that older people knew about because of where they stand on life’s road – but that younger people could benefit from learning about. It was a lesson that almost all expressed. And they did it vehemently.

“What they wanted younger people to know is this: life is short. The older the respondent, the more likely they are to say that life passes by in what seems like an instant. They say this, not to depress younger people, but to get them to be more aware and selective about how they use their time. Older people practice what psychologists call ‘socioemotional selectivity’ – because their time is limited, they make careful decisions about how to use their time. Some implications of this insight are to say things now to people you care about, whether it is expressing gratitude or love; asking forgiveness or getting information; spending the maximum amount of time with children or grandchildren; and savoring daily pleasures instead of waiting for ‘big-ticket items’ to make you happy.

“The other piece of advice that comes from this idea that life is much shorter than you realize: Take a chance. People in their 70s, 80s, 90s and beyond endorse taking risks when you’re young, contrary to a stereotype that elders are conservative. Their message to young people starting out is ‘Go for it!’ They say that you are much more likely to regret what you didn’t do than what you did. As one 80-year-old said, ‘Unless you have a compelling reason to say no, always say yes to opportunities.’

“Elders have also learned that happiness is a choice – not a passive condition dependent on external events, nor is it the result of our personalities. We can choose – in a conscious shift in outlook every day – optimism over pessimism, hope over despair.” We can take responsibility for our own happiness throughout our life. As I’ve said many times in this column: Life is about choices every minute of every day. We can choose to be happy, smile and uplift people, or we can choose to put people down and try to make them as unhappy as we are. It’s not your personality. It’s your choice!

We also know experience is very important in our work lives. Harold S. Geneen, the former CEO of AT&T, had this to say about business experience: “In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later.” Those are true words of wisdom.

Harvey Mackay tells a story about “a little boy spending his Saturday morning playing in his sandbox. He had cars and trucks, his plastic pail, and a shiny red shovel. In the process of creating roads and tunnels in the soft sand, he discovered a large rock in the middle of the sandbox.

“The boy dug around the rock, managing to dislodge it from the dirt. With a little bit of struggle, he pushed and nudged the large rock across the sandbox by using his feet. When the boy got the rock to the edge of the sandbox, he found that he couldn’t roll it up and over the wall of the sandbox. Every time he made some progress, the rock tipped and then fell back into the sandbox.

“Frustrated, he burst into tears. All this time, the boy’s father watched from his living room window. As the tears fell, a large shadow fell across the boy and the sandbox. It was his father. Gently but firmly, he said, ‘Son, why didn’t you use all the strength that you had available?’

“Defeated, the boy sobbed back, ‘But I did, Daddy, I did! I used all the strength that I had!’

“‘No, son,’ corrected the father kindly. ‘You didn’t use all the strength you had. You didn’t ask me.’ With that, the father reached down, picked up the rock, and removed it from the sandbox.

“Successful people rarely reach the top without a lot of help along the way. The ability – and willingness – to ask for help is one trait that really stands out among those who are truly committed to success.” Seeking help and advice, when you need it, will move you quicker down the highway of success.

No. 9 September 2013

Harvey Mackay tells the following story about a son asking his mother what he needs to do to be a success when he grows up.

“The mother thought for a moment, and then told her son to bring her a pencil.  Puzzled, the boy found a pencil and gave it to her.

“If you want to do good,” she said, “you have to be just like this pencil.”

“What does that mean?” her son asked.

“First,” she said, “like a pencil, you’ll be able to do a lot of things, but not on your own.  You have to allow yourself to be held in someone’s hand.” 

The mother is talking about teamwork.  You can’t do it all by yourself.  Mackay defines teamwork as a collection of diverse individuals who respect each other and are committed to each other’s success.  You can’t be successful without a committed team working with you.

“Second,” she said, “like a pencil, you’ll have to go through a painful sharpening from time to time, but you’ll need it to become a better pencil.

Giving and taking criticism is not easy task, but it is necessary to become better.  No one ever choked to death swallowing his or her own pride.  Accepting honest criticism or a suggestion will make you better than you were before.

“Third, like a pencil, you’ll be able to correct any mistakes you make,” she said.

Everyone makes mistakes.  That’s one way you learn.  Mistakes don’t make you a failure.  There are really no mistakes in life, there are only lessons.

“Fourth, like a pencil, no matter what you look like on the outside, the most important part will always be what’s on the inside. 

Most people aren’t born with self-confidence.  Mackay’s advice to develop self-confidence is: track your success, practice being assertive, accept that failure is not the end of the world, step out of your comfort zone, set goals, keep improving your skills and above all else, don’t compare yourself to others.

“And fifth,” the mother finished, “like a pencil, you’ll have to press hard to make a mark.”

Success comes before work only in the dictionary.  There is no magic formula or magic wand.  Even people with natural talent or skills, continually hone those talents or skills with lots of hard work and practice.

The mother touched on five important topics – teamwork, being able to accept criticism, correcting mistakes, self-confidence, and working hard.  That’s good advice for all of us.

Rev. Robert Schuller says there are four kinds of people: "First, there are the cop-outs. These people set no goals and make no decisions.

"Second, there are the hold-outs. They have a beautiful dream, but they’re afraid to respond to its challenge because they aren’t sure they can make it. These people have lost all childlike faith.

"Third, there are the drop-outs. They start to make their dream come true. They know their role. They set their goals, but when the going gets tough, they quit. They don’t pay the toll.

"Finally, there are the all-outs. They are the people who know their role. They want and need and are going to be stars: star students, star parents, star waitresses. They want to shine out as an inspiration to others. They set their goals. . . . The all-outs never quit. Even when the toll gets heavy, they’re dedicated. They’re committed."

To be committed, you must be "all in." You can’t just do the best you can. You have to do everything you can. Remember, the difference between 100 percent ‘all in’ and 99 percent ‘all in’ is 100 percent.

 When I think of commitment, I think of the story of the Pig and the Chicken walking down the road.

 The Chicken says: "Hey Pig, I was thinking we should open a restaurant!"

The Pig replies: "Hmmm, what would we call it?"

The Chicken responds: "How about “Ham-n-Eggs?”"

The Pig thinks for a moment and says: "No thanks. I’d be committed, but you’d only be involved!"

No. 12 December 2012

I remember the Thanksgiving and Christmas dinners that Mom would fix for our family of four plus six to eight relatives that lived nearby.  They really weren’t “dinners” so much as they were “feasts,” in the Roman meaning of the word.  An immense amount of delicious food, including occasionally, dreaded brussel-sprouts or creamed pearl onions that my brother and I always said we didn’t like, but gobbled up along with everything else, because all the food tasted so good. 

What made up a typical Holiday “feast?”  For starters, it was a roasted turkey pulled out of the oven about an hour before dinner, and carved shortly thereafter.  There was always a wonderful sweet potato casserole, mashed potatoes and turkey giblet gravy, luscious cranberry salad with nuts and real cranberries in it; regular cranberry sauce; a plate of stuffed celery; southern style green beans; the aforementioned creamed pearl onions; an orange Jell-O salad with mandarin oranges; LeSeur baby green peas; a platter of Honey Baked Ham slices; warm rolls right out of the oven; and a platter of different types of pickles and olives. Once a serving plate or bowl was placed on the table, many believed that every spoonful taken out was magically replaced by an additional spoonful in the bottom of the bowl or plate making it virtually impossible to empty!.  I never believed that, but we did wonder sometimes.  Once you ate all you could, there was never room for desert, so desert was planned for several hours later (not that there would be any more room then either.). 

Next it was time for someone to be the first to get up from the table.  Moving is a very difficult thing to do after a big meal.  It seems like a nice concept, but it takes a huge effort to accomplish.  I’d look across the table at one of my uncles and wish I could say, “Uncle Bill, drag me over to the big brown sofa and stretch me out on it so I can get a nap.”  I came close to saying that more than once, but ultimately I knew Uncle Bill wanted that spot on the brown sofa as much as I did.  And the race was on!

Desert deserves its own paragraph.  If you peeked at all the homemade desserts that typically appeared before each holiday dinner including a fresh coconut cake, a chocolate cake, an apple pie, a mincemeat pie, a sweet potato pie, a southern-style pecan pie, and vanilla ice cream, you would become so overwhelmed that you would think you were going to pass out.  We were always asked two questions: “What do you want for dessert, or do you want a little bit of everything?”  Can you imagine the size of that plate with a little bit of everything on it?  Someone would have to wash the turkey platter first and use it for “a little bit of everything!”  Memories of wonderful food, visiting relatives and just being with family nourish us year-round.  

During this Holiday season, don’t forget to share your bountiful blessings and food with those less fortunate or suffering from the effects of Hurricane Sandy.  They deserve our assistance, and our prayers.

Good leaders in business have a way of deeply connecting with their employees and co-workers.  One way they do this is by really listening to the people who work for them.  They pay attention to what people are telling them and take it seriously.  They are quick to implement ideas and they are quick to give credit to the person who had the idea.  Likewise, they are willing to accept blame and criticism when mistakes are made.  And they never abandon their employees.

Walter Bemis, in his book “On Becoming a Leader,” details what he believes to be the differences between leaders and managers.  Some are worth mentioning.  “A manager accepts the status quo; a leader challenges it.  A manager relies on control; a leader inspires trust.  A manager has a short-range view; a leader has a long-range perspective.  A manager maintains; a leader develops.  A manager administers; a leader innovates.  A manager focuses on systems and structure; a leader focuses on people.  A manager asks how and when; a leader asks what and why.  And a manager has his eye on the bottom line; a leader has his eye on the horizon.  Read through the list one more time and think about which attributes might improve your leadership abilities.

Harvey Mackay’s recent blog about the effect of good leadership on a business had a terrific quote by a college professor about how one goes about spotting a leader.  The professor said, “I have come to the conclusion that the only way one can determine a leader is to look at the person and…see if anybody is following.”

Happy Holidays.  Be thankful.  Share.  Pray.  And most of all, smile, so someone else will too.

09 September 2010

Have you seen any OPE industry headlines recently?  I have and I’m beginning to think that I should start feeling really good about the prospects for our industry and for the future of the businesses you and I run.  Of course, I can always look at the local newspaper’s morning headlines to bring me back down to reality and make me depressed.  

But why do that?  I’m only going to look at the OPE industry headlines because I want to feel good!  Here are some positive OPE headlines I’m seeing right out of the Outdoor Power Equipment and Engine Service Association’s (OPEESA) OPE-in-the-Know e-mail newsletter and other recent business news sources:

• “Echo Expands in Lake Zurich.” Well, Echo did buy Shindaiwa, and we thought it was only a matter of time before they had to expand. 129,000 square feet! Wow, that’s pretty big!

• “Briggs Invests $35.5 Million in Murray, KY Plant.” That’s a lot of money. What do they know that we don’t?

• “MTD to Add 107 Jobs with $9.3-Million Expansion in Mississippi.”  MTD is expanding into a 525,000-square-foot building with 10 plastic injection molding machines to be followed by two more assembly lines and a paint applicator system.  That’s a terrific investment in jobs and a tremendous belief in the strength of future business.

• “Blount International Acquires Speeco.” Blount will gain entry into products and markets that will complement its existing business with Speeco’s log splitters, post-hole diggers, tractor three-point linkage parts and equipment, and farm accessories. We could call this “growing smartly.”

• “Toro Profit Rises 70% as Demand Rebounds.” This Aug. 19 headline was the result of renewed demand from the professional segment of Toro’s business, which accounts for 70 percent of its total sales.

Our industry’s OEMs obviously have confidence in the future.  You and I should too.

In a recent edition of the Outdoor Power Equipment Institute’s (OPEI) SmartBrief e-mail newsletter, the following headline caught my eye: “OPEI Stresses Importance of Understanding Your Equipment.”  Does this mean if my lawnmower and I don’t get along, we have to go to counseling together?

Comedian Stephen Wright once said, “If we’re not allowed to have midnight snacks, why is there a light in the refrigerator?”   Well?

Harvey Mackay, my favorite business blogger, tells a story about the Wright brothers of airplane fame and the arrogance of the French government.\

“Early in the development of flight, the Wright brothers (Orville and Wilbur) were largely dismissed at home in America, and had to go abroad to get proper recognition for their aeronautical achievements.

“The French government gave the brothers an opportunity to demonstrate what they had done. But the French were obviously jealous of the two modest Americans.

“At a banquet in Paris to honor the accomplishments of the two Wright brothers, the chief speaker at the dinner devoted most of his remarks to claiming that France had led the world in aviation exploration and would do so in the future. However, he said very little in praise of the two American guests.

“When Wilbur Wright was called upon to speak, he said: ‘I am no hand at public speaking, and so I must on this occasion content myself with a few words. As I sat here listening to the speaker who preceded me, I heard his comparisons made to the eagle, to the swallow, and to the hawk as typifying skill and speed in mastery of the air. But somehow or other, I could not keep from thinking of the parrot, which, of all the ornithological kingdom is the poorest flier and the best talker.’”

Clearly, arrogance didn’t fly with Wilbur Wright.

Harvey Mackay suggested this moral for the story: “Arrogance is an odd affliction.  It makes everyone else sick.”

No. 4 April 2010

As I write this column on Friday, March 19, the sun is out and the temperature is expected to reach 70 degrees.  The beautiful weather is forecast to continue right through this early spring weekend.  The nice weather really makes it hard to stay focused on work.  I keep looking out the window wishing I was outside.  Anybody in a business related to the outdoor power equipment industry knows the feeling you get when the weather begins turning away from winter and closer to spring.  It makes your pulse race a little quicker!  It makes you smile!  You know “our time” is coming.  Spring has just about “sprung!”

Dealers and service centers have already purchased more parts and accessories for the 2010 spring season than they did last year by this time.  Most appear to have had a successful 2009, even as consumers continued not to have much to feel good about.  Our good year in 2009 reflected the generally good year our dealers and service centers had.  And we’re optimistic about 2010.  I hope you are too!

Speaking of “hope,” in Greek mythology there is a story about Pandora, who opened her fabled box and let out all evils except for hope.  The Greeks considered hope to be an evil like any other.  But soon humanity discovered that without hope to offset their troubles, the world was filled with despair. So Pandora let out hope as well. In the myth, hope was more potent than any of the other major evils.

In modern times, we consider hope to be anything but evil. It's what gets many of us through our worst days.  Lingering unemployment, foreclosure, dwindling retirement funds, businesses folding — any of these could make a person lose hope.

Fortunately, Pandora recognized the relevance of hope — an element that is critical to our very existence. In the current business climate, hope is what keeps us from throwing in the towel. I'm a realist, but I'm also an optimist. And while hope and optimism are not exactly the same, they are intrinsically linked.

I recently read that:  “All of life’s problems can be solved with two things—duct tape and WD40. If it doesn’t move and it should, you need WD40.  If it moves and it shouldn’t, you need duct tape.”  Give it try some time when nothing else seems to work.

The Outdoor Power Equipment and Engine Service Association (OPEESA) recently held their annual members meeting out in “toasty” Arizona on February 28 to March 3.  I suspect a lot of your suppliers -  whether OEM’s or distributors - attended the meeting.

Todd Teske, the CEO of Briggs & Stratton talked about the state of the OPE industry.” The returning and very popular economist Brian Beaulieu provided solid information about the current economy and what’s coming next.  Steve McClatchy discussed the “Business of You” and how to gain balance between your business and personal lives.  Industry speakers like Todd Teske and business and economic speakers like Brian Beaulieu made the meeting very worthwhile and fulfilling to attend..

I know when we get our dealers and service centers together for various types of meetings, they discover that they get their best ideas and take-aways from other attendees. Likewise, when we attend an association meeting like OPEESA’s, we take away just as many ideas and learnings from other attendees as we do from the speakers.  So the next time you don’t “feel like” attending a meeting, remember there is always a lot of value in being with and learning from people who face the same opportunities and problems you do.

You don’t need a dictionary to understand a title Robert Schuller’s inspirational book, Tough Times Never Last, But Tough People Do.

Caterina Fake is the co-founder of the photo-sharing Web site Flickr.  And she hates meetings.  When she use to have to hold a meeting, this is how she structured it:  “There would be an agenda distributed before the meeting.  Everybody would stand.  At the beginning of the meeting, everybody would drink 16 ounces of water.  We would discuss everything on the agenda, make all the decisions that needed to be made, and the meeting would be over when the first person had to go to the bathroom.”   Following her meeting rules, I believe we would have a lot of short meetings in my company or we would hold them in a bathroom!