Archive for the ‘General Business’ Category.

It May Be Hard to Go Back To Full-Time Work

Back in April of 2013 I wrote about how Obamacare was increasing incentives for offering part-time rather than full-time work.   I warned at the time that once employers got used to scheduling based on part-time shifts, they might never want to go back because it could actually be cheaper and easier than using full-time workers

The service industry generally does not operate 8 hours a day, 5 days a week, so its labor needs do not match traditional full-time shifts.  Those of us who run service companies already have to piece together multiple employees and shifts to cover our operating hours.  In this environment, there is no reason one can’t stitch together employees making 29 hours a week (that don’t have to be given expensive health care policies) nearly as easily as one can stitch together 40 hours a week employees.   In fact, it can be easier — a store that needs to cover 10AM to 9PM can cover with two 5.5 hour a day employees.   If they work 5 days a week, that is 27.5 hours a week, safely part-time.  Three people working such hours with staggered days off can cover the store’s hours for 7 days.

Based on the numbers above, a store might actually prefer to only have sub-30 hour shifts, but may have, until recently, provided full-time 40 hours work because good employees expect it and other employers were offering it.  In other words, they had to offer full-time work because competition in the labor market demanded it.  But if everyone in the service business stops offering full-time work, the competitive pressure to offer anything but part-time jobs will be gone.  The service business may never go back.

The future American service worker will likely be faced with stitching together multiple part-time shifts.  Companies may partner to coordinate shifts so that workers split time between the companies, and third-party clearing houses may emerge in a new value-added role of helping employers and employees stitch together part-time shifts.

Today Virginia Postrel sees this effect in action

The worst thing about being on jury duty isn’t actually serving on a jury. It’s having to check in every day -- possibly several times a day, depending on your local system -- to see whether you’ll be needed. You can’t plan either your work or your personal life. Your schedule is unpredictable and completely out of your control.

For many part-time workers in the post-crash economy, life has become like endless jury duty. Scheduling software now lets employers constantly optimize who’s working, better balancing labor costs and likely demand. The process demands enormous flexibilityfrom part-time workers, sometimes requiring them to be on call all the time without knowing when they’ll work or how much they’ll earn. That puts the kibosh on the age-old strategy of working two or more part-time jobs to make ends meet. As my colleague Megan McArdle writes, “No matter how hard you are willing to work, stringing together anything approaching a minimum income becomes impossible.”

Beware of Scam Calls From (816) 420-4632 or (866) 680-8628

I post this not because the odds are high any of you readers have had this issue but I want these numbers to be found on an internet search.

Both numbers were leaving a message saying they were from "Citi" or "Citicard" calling about my account (and that it was not a sales call).  Since I have no Citicorp credit cards or accounts of any type, and since they were calling a Google Voice number that I would never have put on an account (in fact don't even really use), I was totally suspicious.  When I called them they asked for my account number.  I said I did not have one but was calling to see what kind of scam they were running.  They said they were from Citicard and don't do scams, but could I give them my phone number.  I said I had to look it up, because they were calling a Google voice number I never use.  The moment I said that, they hung up on me, the universal indicator of a scamster giving up.

Update:  There is a legitimate Citi group with the same name.  It sounds to me that these folks at the numbers above are recording the legitimate Citi greeting replaying it on their lines.  But then their physical operator answers the phone completely differently than does the legitimate Citi operator.  The Citi group being spoofed is this one.

Hiring Conundrum -- The Obama Employees

For some reason I do not fully understand, the people who pester me the hardest for jobs tend to work out the worst as employees.  I cannot think of a reason this should be true, so perhaps this is just an artifact of having only a few data points.   But yet again we recently had another person we had to terminate who pursued me literally for years for a job, only to be unproductive and ineffective in the job from day one.  For some reason energy and enthusiasm in the job hunt do not translate to energy and enthusiasm in the job.

I have come to think of these as Obama employees -- people who are brilliant and energetic in seeking a job, but ineffective and oddly unmotivated once they have the job.

Postscript:  Last year, we had about 300 seasonal employees.  Of these, perhaps 50-75 will choose not to return or will not be asked to return the following year, opening up that many positions for new hires.  For these 50-75 spots, we had over 22,000 applications last year.  And since many of these applications are for a couple, we really had well over 30,000 applications.  This makes us more selective than Harvard, lol.

Wherein I Have Another Great Product Idea Too Late

We increasingly use VRBO to find rental houses when we go on vacation.  The key transfer process seems to be the most awkward.  Either the owner or their representative has to meet you (a hassle for them) or they have an old style mechanical lockbox where a fixed combination opens the box and gives you the key.

All of this strikes me as both a hassle and tremendously insecure.  Most folks do not change their lockbox combinations very often, so I could probably go back to most of them today and get back in the house.  Also, since the owners tend to leave only one key, and my wife and I prefer to have two or three for us and the kids, we tend to go immediately to the local hardware store to make copies.

It would make a lot more sense to have an electronic combination lock whose combination changes automatically, over the Internet, with each rental.  I figured developing such a thing would be pretty easy and the first step I would take would be to try to cut a co-branding deal with VRBO, AirBNB, etc.  You can imagine something like "VRBO Secure" where a home owner would buy the lock via VRBO and would then get a little icon on their listing.

Unfortunately, as is usual with my product brainstorms, someone is already there.  But no one yet seems to have cut a co-branding deal with VRBO or airBNB.  Seems like that would be a win-win for both the lock company and the rental agency.go.

Small Homage to Ayn Rand -- Exiting A California Business on September 2

Today I gave notice that I was exiting another park operations contract in California.  This location has always been marginal, but we kept holding out hope of improving it.  But with rising CA minimum wage, the PPACA, and onerous CA labor and liability laws, operating in CA is so hard that I have to make good money or get out.

I had to pick a termination date at the end of the summer.  I was going to choose Labor Day but looking at the calendar, it gave me a smile to slip the date to September 2, a date that should be familiar to anyone who is a real Atlas Shrugged geek.  It is an inside joke guaranteed not to be recognized by any of the government agency managers we work with there.

Two Business Realities I Underestimated in My Youth

1.  Its all about having the right people.  When I was in b-school, I honestly laughed at statements like this.  I thought it was new age bullsh*t.  I was totally enamored of quantitative analysis and business strategy.  After running a business for 10 years, I now know that people are everything.  Everything - our ability to grow, to handle difficult compliance issues, to work safely, to reduce costs - relies entirely on my finding the right people in the right spots.  Everything else is a rounding error.

2.  There is only a very limited number of things you can deploy to the field at any one time.  It took me a really long time to realize that my mind - in fact, any manager's mind - likely works way faster than the bandwidth that exists to actually deploy new things to the field.  Putting customer initiative X on hold because compliance issue Y needs to be deployed first is really frustrating, but trying to do too much means nothing gets done.

I would observe relative to #2 above that over the last few years the combination of the Feds + legislatures like in CA are generating new compliance issues faster than we can deploy solutions and train for them.   In California, we have put most all new customer initiatives on hold because we are simply overwhelmed with management and employee training relative to various local government mandates.

Yet Another Reason I am Short Facebook


via Maggies Farm

In addition, some smart people are saying the WhatsApp acquisition for a bazillion dollars makes sense, but I can't help feeling like it is the late 90's all over again.

update:  Apparently unlike most all other major online advertisers, Facebook terms and conditions do not allow 3rd party click audits.

Administrative Bloat

Benjamin Ginsberg is discussing administrative bloat in academia:

Carlson confirms this sad tale by reporting that increases in administrative staffing drove a 28 percent expansion of the higher education work force from 2000 to 2012.  This period, of course, includes several years of severe recession when colleges saw their revenues decline and many found themselves forced to make hard choices about spending.  The character of these choices is evident from the data reported by Carlson.  Colleges reined in spending on instruction and faculty salaries, hired more part-time adjunct faculty and fewer full-time professors and, yet, found the money to employ more and more administrators and staffers.

Administrative bloat is a problem in every organization.  It would be nice to think that organizations can stay right-sized at all times, but the reality is that they bloat in good times, and have to have layoffs to trim the fat in bad times.

The difference between high and low-performing organizations, though, is often where they make their cuts.  It appears from this example that academia is protecting its administration staff at the expense of its front-line value delivery staff (ie the faculty).  This is a hallmark of failing organizations, and we find a lot of this behavior in public agencies.  For example, several years ago when Arizona State Parks had to have  a big layoff, they barely touched their enormous headquarters staff and laid off mostly field customer service and maintenance staff. (At the time, Arizona State Parks and my company, both of whom run public parks, served about the same number of visitors.  ASP had over 100 HQ staff, I had 1.5).

This tendency to protect administrative staff over value-delivery staff is not unique to public institutions - General Motors did the same thing for years in the 70's and 80's.  But it is more prevalent in the public realm because of lack of competition.  In the private world, companies that engage in such behaviors are eventually swept away (except if you are GM and get bailed out at every turn).  Public agencies persist on and on and on and never go away, no matter how much they screw up.  When was the last time you ever heard of even the smallest public agency getting shut down?

I would love to see more on the psychology of this tendency to protect administrative over line staff.   My presumption has always been that 1) those in charge of the layoffs know the administrative staff personally, and so it is harder to lay them off and 2) Administrative staff tend to offload work from the executives, so they have more immediate value to the executives running the layoffs.

Business Model Ripped From the Pages of My Book BMOC

Apparently, a company named "Sumpto" has adopted a business model right out of my novel BMOC (written about 7 years ago).  This is a scene where entrepreneur Preston Marsh is interviewing and trying to recruit the protagonist Susan out of business school.  They are discussing the business model of his company called BMOC.  Half of its business model was that companies paid BMOC to place their products in the hands of influential high school students.

[Marsh:] The real innovation, though is… do you know what a product placement is?”

[Susan:] “Sure. It’s when a company pays to get their product into a TV show or movie – like when Reese’s pieces were used in the movie ET or I guess if you showed Seabiscuit eating Purina Horse Chow.”

“Exactly! And product placements are particularly effective. They act like an ad but they can’t be ignored like an ad. Anyway, we have taken product placements one step further: We get paid by major manufacturers to place their products not in movies but in the hands of the most popular kids in high school, the ones who really lead opinion as to what’s cool and not cool who we…”

“Who you happen to have on retainer anyway.”

“Exactly. But be careful how you think about ‘on retainer.’ The natural reaction is to assume this means money, but in our case it’s not. We keep the most popular people on retainer merely by …”

“Giving them free products,” Susan interrupted again, with growing excitement, “that manufacturers are already paying you to put in their hands.”

This is from Sumpto's web site.  (You will have to click through, for some reason even copying it as text is crashing my site, not sure why).

A big hat tip to reader Don, who not only found the site but paid me the indirect complement of having remembered my book.  Thanks!

Yet another case when I was 7-10 years too early (at Mercata were were about 10 years too early to cash in on social media as Groupon did with a similar model to ours).  But honestly, I was trying to make up quasi-outrageous business models.  For god sakes the other two major business ventures in the book were building fountains to harvest the coins thrown in them and selling musical tones for elevators.  I had no idea I should have been getting venture funding.

By the way, for the dozens of my literary fans, I am almost done with my next book, which is  really going to be good.   This novel writing thing really is about practice.  Teasers to follow...

Best Buy Says It's Not Afraid of "Showrooming". Really?

Best Buy says it is not afraid of showrooming, the practice of testing products at a physical retailer and then buying it online.  Best Buy says it is confident it can convert visitors into buyers, even if their intent was to buy online.

Well, that is a brave front.  And I wish them luck -- I certainly like having bricks and mortar retailers around when I need something fast and can't wait for the UPS truck.  But it probably was no accident that the article was illustrated with this picture:

MK-CH537_SHOWRO_G_20131103185606

 

What don't you see there?  CD's, DVD's, speakers, DVD players, computer games and most of the other stuff that used to make up a lot of Best Buy's floor space.  Because they have already been demolished by online retailers in those categories.   The picture above is of appliances, one of the few high dollar categories that has not migrated to the web.   Go to Best Buy and you will see appliances, health equipment, and TV's, all categories where bricks and mortar stores have some advantages over online.

This makes perfect sense, but don't tell me Best Buy is ready to take on the online retailers.  They are bobbing and weaving, ducking this competition wherever they can.

Postscript:  Best Buy is hoping that having "trained" sales people to help customers will garner business.  There are two problems with this.  One, the training of their sales staff has always been spotty, and likely will not get better as their financials go south.  And two, I find that Amazon.com reviews are far more helpful, and often more knowledgeable, than most in-store sales staff.   But on the positive side, who doesn't enjoy getting hassled for an extended warranty at checkout?

Liberal Douchebag vs. Liberal Douchebag: Google Employees Invade San Francisco

This is an article a reader described as being from the "screw them all" category, and I am inclined to agree.  There are many funny bits in the piece, but I particularly liked the San Francisco lefties arguing that these new Google millionaires should act more like the Rockefellers and the Vanderbilts.  LOL for sure.

Incredibly, no one asks the obvious question -- why is home supply in San Francisco treated as zero sum, such that a Google millionaire moving in by necessity kicks some  poor people out.  The reason is that no place in the country does more than San Francisco and the Bay Area to make it impossible to build new housing.  San Francisco has some unique geographic constraints but you don't hear people complaining about this in Houston (which is in fact a much larger city).  In fact, I am trying to imagine Houston complaining about too many rich people moving in.  I just can't seem to focus that image in my head.

Actually, the article does very briefly consider the supply side of the equation, but of course no one mentions government development and zoning restrictions -- its the fault of capitalist speculators!  My reader highlights this paragraph:

Though he doesn’t much care for the start-up douchebags, Redmond blames not individual tech workers for the current crisis, but property speculators and the lawmakers who have let them take advantage of their precious commodity: space. “If we had a major earthquake in San Francisco, the water mains all broke, and some guy showed up with a water truck and started selling water for $10 a gallon, people would be pissed,” he says. “That guy would be ridden out of town; he’d be attacked with sticks and pitchforks. But that’s what the real estate people are doing right now – and they’re getting away with it.”

Memo to speculators:  If I have lost all access to water and am dying of thirst, you are welcome to come to my house and sell water to me for $100 a gallon.  I promise no pitchforks at my house.

PS-  One thing I did not know is that tech companies seem to be running large private bus systems

The Google buses, which often stop in spaces supposedly reserved for public transport, are a particular point of contention. This growing fleet of unmarked luxury coaches carries some 14,000 people on their 35-mile trip from the city to Silicon Valley and back. Since the search giant introduced the buses a decade ago, Facebook, Apple, eBay and almost 40 other companies have followed suit. Each new route quickly becomes a corridor of hip clothing stores and restaurants.

This is an interesting exercise in privatization.  For riders, it certainly would be nice to have routes custom designed to match your needs (ie exactly from your origin to your destination without changing trains or busses), something that is often an issue with public transport networks.  Als0- and this is going to sound awful but it is from many public surveys and not my own point of view - these private bus networks get around the social mixing issue that turns a lot of middle class riders off on bus systems.

This is obviously expensive but I understand why some companies do it.  As someone wrote a while back, no one in their right mind would put Silicon Valley in California today if it were not already there.  It is absurdly expensive to do business in CA and it is expensive to live there as an employee.  However, tech companies have found that  a certain good called "access to San Francisco" is quite valuable to the types of young smart employees they want to hire and can overcome these negatives.  So the bus system is a way for companies to better provide this good.  The irony of the article is that as so many tech companies are selling this good (ie access to San Francisco) they may be changing the character of San Francisco in a way that makes the good less valuable over time.

Blackberry Handset Business Apparently Valued at Zero

I don't really have a horse in this race, but I found it interesting to look at the deal Blackberry has made to sell itself to a Canadian insurance company.  The part of the business we all know and used to love -- the famous Blackberry handset business -- apparently is worth zero.

In a WSJ article, they cite the following valuations:

  • Cash on hand:  $2.6 billion
  • Patent portfolio:  $1 billion +
  • Blackberry secure phone network:  $1 billion

Given that the price for the transaction is $4.7 billion, that implies the handset / smartphone business is worth zero.  Which comes as no surprise, given Blackberry's eroding position over the last 5 years or so.

The last item on the list above seems to cause a lot of debate.  I don't know enough to participate in that debate, but it appears to me that Blackberry's one last market bastion is the enterprise market where their enterprise servers and more proprietary network gave enterprises more control over their employees devices and how they used them.  Which made their decision in 2012 to apparently obsolete their installed base of enterprise servers with Blackberry 10 all the more bewildering.

I have wondered why Microsoft didn't try to use the enterprise market as a way to get into the tablet and handset market.  It would seem to play to its strengths and neither Android nor iOS are particularly enterprise-friendly.

Scam Alert -- US Telecom

We get literally (as they would say on the TV show Archer, literally literally and not figuratively literally) hundreds of paper bills to pay each month in our business.   We can barely keep up just with paying them all, much less vetting every one.  Which is what scam artist marketers count on when they craft fake bills they spam to businesses in hopes that some percentage, in their hustle and bustle, will pay the bills without knowing they are fraudulent.

These letters really, really tick me off.  They are sent by people who apparently cannot sell a product or service on its own merits and so must trick harried business people into accidentally sending them money.  I get these most frequently from companies that send me letters that look just like a government agency requiring yet another fee (the corporate minutes fraud).

So here is the most recent bill my accounts payable person questioned and put on my desk.   It is from a company called US Telecom, and despite the remission address on the letter it is apparently based in California.  You can click to enlarge the letter -- it is in very high resolution, which we will need to find the small print that they use to try to cover their butts.

Click to Enlarge US Telecom Scam Letter

 

Does this look like a regular bill to you for some service we have contracted for?  It did to me.  Note the "Due upon Receipt" at the top, the calculation below with previous balance and new balance and "pay this amount."  No reasonable person in this country would say it looks like anything but an invoice for service received.

But this is not a bill.  It is a solicitation for services.  If you send the money, then you are committed.  And by the way, per the terms below, once the agreement is in place, it cannot be terminated or amended (or likely refunded) without a signature from both parties, which means only if they approve it.  If they don't, congrats, you are stuck in this contract.  I have no idea if you actually paid, whether you would receive any services or not.  Since they priced this service without even knowing what assets I have that would be serviced (note no equipment or equipment location is listed in the bill, the first "tell" to me this was a fraud) I am not sure how they would ever provide any service.  (we were really saved by Quickbooks on this one, because my payables person flags any bill from a vendor not set up in our system).

They attempt to cover themselves, in the same way the corporate minutes scamsters do, with the small print in the last two lines at the bottom.   Can't read it?  LOL, I could not read it myself, even full size, without my glasses.  You can click through if you wish to see it on the high rez version.  But it says that it is not a bill, it is a solicitation, and that I am under no obligation to pay unless I accept the offer, which I do by paying.  But by the language, once paid, I have accepted the offer and cannot get out of it without a signature from an authorized officer of their company.  I bet that would be easy to get.

That last fine print may keep them out of jail or even let them sleep at night, but no legitimate business with a valuable product sells its services this way.

Update:  Apparently there is a legitimate US Telecom and they are understandably pissed.  They have set up a page on this billing fraud, and apparently the Attorneys General in a number of states are investigating.

Update #2:  Talk about waddling in late on a story!  These guys' registered corporate name is UST Development, run by a guy named David Bell.  Ken White of Popehat has been on these guys for years.  LOL, I even linked Ken's post a while back.  You sleazy folks out there can f*ck with me all you want but you do not want to mess with Ken White.

Update #3:  Good God, Ken did 14 posts on these guys.  Enjoy.

Mergers and Acquisitions for Entrepeneurs

The original purpose of this blog nine (eek!) years ago was to share lessons learned in my foray into entrepreneurship.   I still try to post some things on this topic, though we obviously have moved a bit away from this original concept.  But to this end, I wanted to link Walt Lipski's new small business M&A web site.  I think of Walt as a entrepreneur who happens now to do investment banking.   He was the one who helped me  ten years ago get into this business (the entire business acquisition and start-up process described here), and I still go to him from time to time for advice.  He is as straight forward and as trustworthy as anyone I have met in the M&A business.

Do Reporters Even Look At Their Own Charts?

A Wall Street Journal article today looks at problems at Sears in their critical appliance business.  I have no problem believing that Sears is in trouble, and at various times over the past decade (full disclosure here) have held small short positions in Sears.  The author argues that the Sears appliance business has had a number of missteps, and is contributing to Sears growing losses, propositions with which I cannot argue, in part because there is no data provided to confirm or deny the connection between problems in the appliance business and Sears' profitability woes.

The other theme of the article is that recent missteps in the appliance business, particularly the 2009 switch from Whirlpool to Samsung and LG to manufacture its in-house Kenmore brand, is hurting its market share in the retail appliance business, and leading the the growth in market share at Home Depot and Loews.   But the author's own data belie this conclusion.  Here is the market share chart she includes:

MK-CF765_SEARS_G_20130822175404

 

While Sears may have lost a couple of points of market share since 2008, and 2013 does not look like a particularly good year so far, the vast majority of its market share loss occurred from 2002-2008, long before most of the recent problems profiled in the article.  In fact, its more likely that the loss coincided with Sears reorganization with Kmart a decade ago, events referred to only briefly in the article.

Look, I have no insider knowledge here, just a pet peeve that trends referenced in an article should match trends in the data.  But Sears is a tired old retailer.  Many of its peers from the same era are dying or dead.  People are shifting their shopping away from the malls where Sears is located.  Lowes and Home Depot were both juggernauts during this period.  I would have said that a story could equally well have been written that despite all the confusion in their business, they have done a pretty descent job arresting the decline in their market share over the last five years.  Of course they are likely dead in the long run.

Postscript:  Oddly, I witnessed a similar Sears private label fracas when I worked for Emerson Electric over a decade ago.  For years and years, Emerson (not the folks who make the cheap radios and TVs) manufactured many of the Sears Craftsman hand tools and power tools.  Sears got tough one year, and negotiated a better deal of some sort with someone else, and an entire division of Emerson saw its sales basically going to zero.  So Emerson bought a bunch of orange paint and plastic, went to Home Depot, and cut a deal for a private label tool line at Home Depot (Emerson separately owns the Rigid tool company, so a lot of the items were branded Rigid).  Emerson ended up in potentially better shape (I did not stay long enough to see how it turned out), partnered with a growing rather than a declining franchise.

Customer Service Fail

I called Bank of America to stop payment on a check -- for some reason this seems to be one function that cannot be performed online.  I got right through to their business banking number.  However, they told me my account actually qualified for their special preferred, presumably premium, customer service number.  So they transferred me.  And I am still on hold, having waited now for over 10 minutes.  I have no idea why they couldn't solve my simple problem at the regular number without a transfer and long hold.

Making Money in a Declining Business

One of the lessons we learned at business school is that there can still be money to be made in a declining business.  Today's case in point:  AOL.  The butt of much Internet-related humor, did you know that AOL still has 3.9 million US subscribers?  To give a sense of scale, that makes its subscriber base about as large as Charter Communications, a not insignificant 6th place player in the cable TV market.  Its income statements are a total mess, cluttered with enough special charges and unusual income items to scare me off from touching the stock, but it looks like it is still making about $50 million a quarter on about $500 million in sales.  Not what it once was, but not an awful business either.

A company like this run for cash flow could do well for quite a while for shareholders.  Of course, companies like that are seldom run for cash flow -- that is not how corporate management incentives work.  Corporate managers are going to want to take the cash flow from the declining business and try to build some new kind of empire on the corpse of the old one.  Shareholders can reasonably ask why they are not just dividended the cash to make their own reinvestment, but insiders benefit much more if the cash is reinvested within the company.  And sure enough, AOL seems to be buying a ton of small companies.

A Note on 501(c)4 Corporations

This whole notion that  501(c)4 groups are receiving some kind of huge implicit tax subsidy whose use needs to be policed is simply absurd.  I am a board member of several 501(c)6 trade associations, which have roughly the same taxation rules as 501(c)4.

The largest tax subsidy, by far, available to some non-profits is the deductibility of donations to the group.  This is available to 501(c)3 groups (traditional charitable organizations) but NOT to  501(c)4 or  501(c)6 groups.  Whether the Tea Party of Cincinnati is a  501(c)4 or not, you cannot deduct your donations to them.

The one tax break that  501(c)4 corporations get is that they do not pay taxes on any surplus they accumulate in a year.  In general, non profit groups like this collect donations and spend them.  So in general, their outlays match their revenues, such that they tend to show very little income anyway, even if it were taxable.  The only thing the non-profit status brings to  501(c)4 organizations is that they don't have to spend a lot of time and effort trying to make sure, at the end of the fiscal year, that expenditures and revenues exactly match.  Basically, the one benefit granted is that these groups can collect money in November for expenditure in January without paying taxes on this money.  This is hardly much of a subsidy, just a common sense provision.  (By the way, at least in a  501(c)6, there is no break from the paperwork.  We will have to pay an accountant to file a tax return for the Feds and the state of California.

This actually comes up from time to time in my industry.  A couple of my competitors are actually non-profits.  My for profit competitors always complain that these non-profits have an advantage, arguing that they are really for-profit, but just paying their "owners" large salaries rather than dividends.  My general answer is, so what?  My company is a subchapter S corporation, and it does not pay taxes either -- I pay taxes on the profits as regular income in my personal tax return, exactly as if I had paid out all the profits as salary.  Sure, it would be nice to accumulate profits in the company tax free, but seeing the shoe-string way my non-profits competitors run, I don't think that is what they are doing.  It used to be that as non-profits, they considered themselves immune to certain laws, like the Fair Labor Standards Act and minimum wage, but the courts have disabused them of that notion.  So it is hard to see what advantage they enjoy, but folks love to complain none-the-less.

The only real business advantage I have ever found these non-profits have is in perception among leftish politicians -- they are considered "clean" while as a for-profit company I am considered "dirty".  Which is why in California, early laws allowing outside companies to operate public parks allowed non-profits but not for-profits, and almost every state who goes this route tries non-profits first for the same reason.  This no longer bothers me -- anyone who had ever been part of a non-profit can probably guess the reason.  They really are not set up to operate a 24/7/265 service business, and within a year typically fall short, and I, with a bit of patience, then get my chance.

Spam Masquerading as Official, Important Mail: Paramount Merchant Funding

It's been a while since I have received a fake "check" whose cashing obligates me to a four year contract, or a deceptive yellow pages solicitation, or even my favorite, the board minutes services that masquerade as an official government form.  So I will highlight Paramount Merchant Funding for this over the top message on the front of their envelope they sent me, again in an apparent bid to masquerade as some sort of official mail that must be opened.

paramount-merchant-funding

The scam here is clever -- I don't have time to bother looking it up, but my guess is that this message is literally true - for all mail sent through the USPS.  But it is obviously meant to virtually force someone to open it thinking it is official, which I was dumb enough to do.

They seem to have a perfect 1-star review record over at Yelp, a fact I could have called in advance sight unseen.  They have more BBB complaints in the last year (5) than my company has in our whole history (0).

NPR on the Obamacare-Driven Shift to Part-Time Work

I don't have time to excerpt but, as I predicted, the media is finally catching up to the enormous shift (mainly in the retail and service sector) to part-time work.    I had a long article on this at Forbes last week.

Never Miss A Good Opportunity to Shut Up

It strikes me that a service business model that relies on frequently suing your customers is not really sustainable.

My folks out in the field operating campground face far greater problems with customers than any of these petty complaints that Suburban Express is taking to court.  My folks have drunks in their face almost every weekend screaming obscenities at them.  We have people do crazy things to avoid paying small entry fees.  We get mostly positive reviews online but from time to time we inevitably get a negative review with which we disagree (e.g. from the aforementioned drunk who was ticked off we made him stop driving).

And you know how many of these folks we have taken to court in 10 years?  Zero.  Because unless your customer is reneging on some contractual obligation that amounts to a measurable percentage of your net worth, you don't take them to court.

Yes, it is satisfying from an ego perspective to contemplate taking action against some of them.  There are always "bad customers" who don't act in civilized and honorable ways.   But I  tell my folks that 1)  You are never going to teach a bad customer a lesson, because by definition these same folks totally lack self-awareness or else they would not have reached the age of fifty and still been such assholes.  And 2) you are just risking escalating the situation into something we don't want.  As did Suburban Express in the linked article.

The first thing one has to do in the customer service business is check one's ego at the door.  I have front-line employees that simply refuse to defuse things with customers (such as apologize for the customer's bad experience even if we were not reasonably the cause).  They will tell me that they refuse to apologize, that it was a "bad customer".   This is all ego.  I tell them, "you know what happens if you don't apologize and calm the customer down?  The customer calls me and I apologize, and probably give him a free night of camping to boot."  In the future, if this dispute goes public, no one is going to know how much of a jerk that customer was at the time.  Just as no one knows about these students in the Suburban Express example - some may have been  (likely were) drunken assholes.  But now the company looks like a dick for not just moving on.

This is all not to say I am perfect.  It is freaking amazingly easy to forget my own rule about checking one's ego at the door.  I sometimes forget it when dealing with some of the public agencies with which I am under contract.  One of the things you learn early about government agencies is that long-time government employees have never been inculcated with a respect for contract we might have in the private world.  If internal budget or rules changes make adhering to our contract terms difficult, they will sometimes ignore or unilaterally change the terms of our written contract.

And then I will get really pissed off.  Sometimes, I have to -- the changes are substantial and costly enough to matter.  But a lot of the time it is just ego.  The changes are small and de minimis from our financial point of view but I get all worked up, writing strings of eloquent and argumentative emails and letters, to show those guys at the agency just how wrong they are.  And you know what?  Just like I tell my folks, the guys on the other end are not going to change.  They are not bad people, but they have grown up all their lives in government work and have been taught to believe that contract language is secondary to complying with their internal bureaucratic rules.  They are never going to change.  All I am doing is ticking them off with my letters that are trying to count intellectual coup on them.

To this end, I think I am going to tape these two lines from Ken White's post on the wall in front of my desk

  • First, never miss a good opportunity to shut up.
  • Second, take some time to get a grip. You will not encounter a situation where waiting 48 hours to open your mouth will destroy your brand.

Anachronism

Apparently, Google is building a huge a showy hub for its corporate aircraft.  Does this strike anyone else as an anachronism, from the folks who bring us Gmail and Google groups?  It's like the Fedex having a Pony Express account.

By the way, if anyone read the fabulous book "Barbarians and the Gate," they** will remember RJR Nabisco's construction of a corporate aircraft palace in Atlanta marked the beginning of the end of that company's fiscal extravagance.

 

** I know this is grammatically incorrect, but I am exhausted with English's lack of a third person singular gender-neutral pronoun and hate saying "he or she."  English is a language built bottom up from actual usage, so lacking any better idea, I support "they" as the solution.

KFC and China

Apparently YUM Brands stock is falling because investors are worried about KFC's prospects in China.  I am not a YUM supporter particularly, nor am I a patron of KFC, but from some exposure to China I can say that KFC in China is like Taco Bell in the movie Demolition Man.  They own the market.

Unlike All Those Passive People, I Am Waiting to Be Handed My Big Break

This is an amazing and self-refuting cry for help by Kate MacKay (via Maggies Farm)

By and large, my friends and my friends’ friends are all intelligent, educated, gregarious, and creative. They’re insightful and thoughtful. They’re critical and ambitious. So why do so many employers put them in positions that don’t take full advantage of what they’ve got to offer?...

But this is really bad talent management on the part of our employers. If you have ambitious, smart young people who actually want to do more work and use their talents to the maximum – so that they can grow as people and employees – then you’re an idiot as an employer to not take advantage of this....

The places that we work for are chock-a-block with people who are contented in their positions; they’re sitting low in their saddles, riding out the last miles toward the sunset of retirement. They’re not interested in changing horses any more, the way we are, and so those saddles that we want to have remain full, often by people who have lost more than just their ambitions for new jobs. They’ve lost the drive to get things done quickly, they’ve lost creativity, and they’ve especially lost the outsider’s perspective on the job they do and the company they work for. They’re entrenched in the corporate culture of the place, and nothing kills innovation or ambition faster than people dedicated to the status quo....

This is where I am, and many of my friends are in this position too, just hoping and waiting for either the next better job outside, or some radical shift inside. I’ve thought seriously about changing my LinkedIn profile blurb to something like, “My career goal is to gain a position that energizes, excites, challenges, and values me, so that I can continue to develop my skills and talents, and grow as a person.” I wonder if that would catch anyone’s eye?...

OK, stay with me, I am saving the good part for last, but it is important to get this background.  This person is seriously confused.  Companies do not exist to give one jobs that match one's skills.  In fact, they do not exist to provide jobs at all.  They exist to serve customers and thereby generate surpluses for the owners.  They hire people to do specific jobs that are part of a process to serve these customers and owners.

I am sympathetic to the notion that there is lost value in my employees, that they can do things that might be useful to me that I do not tap.  But I have 500 employees.  I have time to customize like maybe two of those jobs to the talents of individuals, and these are high level jobs where the benefit of that time commitment on my part is worth it.  For the rest of the employees, I have to be satisfied I am missing some value, because at best I don't have the time or resources to customize jobs to every employee's unique snowflakeness.  And at worst, such customization would mess up our customer service process.  At some level, I don't want every front line employee inventing his or her own imagined customer contact or cash management process.

But I promised you the best is yet to come. and here it is:

All of them wonder when their break is going to come, when the thing they’re doing will finally spill over from ‘just making it work’ to ‘making it.’ And I wonder that too, because this risk-taking group of determined individuals should be rewarded by the universe, I think, for their innovation and dedication. The other group, sitting undervalued at their desks, should be likewise rewarded for their abilities and ambitions.

My overall sense is that we’re all in the same place, sitting together in a kind of employment purgatory, waiting for something to happen. We keep working – we’re not sitting idle. We apply for jobs, we network, push for promotions or projects, advertise ourselves, and keep our eyes on the horizon. We are striving, ever striving, for the thing that we want that we know we can do. Economists be damned, we’re all just waiting for our big break, and we won’t be satisfied with a comfy saddle riding toward the sunset.

Did you get that?  This risk-taking and proactive group is determined to sit on their ass and wait for someone in the universe to appreciate them, for some organization to create a perfect job that gives each employee snowflake his or her perfect work experience.

Jeez, I have had a series of sucky jobs over time.  So as advice to those that think a proactive job search encompasses seriously considering a new Linked-in profile blurb, I did two things:

  • I changed jobs, and eventually went to work for myself.
  • I stopped defining my total-life fulfillment by what I do for a paycheck, and took on other tasks outside of work (blogging, writing, building) that brought me satisfaction but for which people have been as-yet unwilling to pay me.

Best Buy: We Focus on Items People Don't Buy from Walmart or Amazon

Well, that is not exactly what they said, but this confirms some earlier casual observations of their stores I have written lately:

Shoppers typically associate Best Buy with TVs and computers, but the retailer plans to dedicate more floor space to appliances in the coming months as the housing market continues to improve.

Here is my translation:  Half of our floor space has gone digital (DVD, CD, games) and the other half has items where Amazon and Walmart are killing us.  But we are locked into long-term leases we can't break for a bunch of freaking large stores so we need to put something out there.  So we will try appliances.  Next up, mattresses?