Bottom Line Business Insights : Maryland Business Lawyer & Attorney : Wagonheim & Associates Law Firm : Mergers & Acquisitions & Contractual Negotiation

The other day, I found myself at a traffic light behind a company truck.  The truck belonged to and advertised a dog waste removal company. I pondered this. For a while, I wondered what the job interview was like. But as the light turned green and traffic started to move, I noticed something else. The truck was sporting a bumper sticker that read:

Your Life is not My Problem

I turned my pondering up a notch. "How is it," I wondered, "that in this one moment, frozen in time, the dog poop guy seems to be looking down on my life?" Now, don't get me wrong. This guy, perhaps even the owner, had a company, did honest work, and maybe even made a killing performing a service that hordes of people would pay to avoid having to do. But why was his employee insulting me? And did the company's owner know it?

And this led me to my question:

How many owners realize the hidden (and not-so-hidden) messages their employees are sending?

Several years ago, Walgreens faced a lawsuit over just this issue- only in more extreme form.  It seems that Walgreens pharmacy employees entered their thoughts on various customers in the comments field of the company's prescription software.  There, stapled right to a prescription for a customer's anti-anxiety medication, was a print out featuring some anonymous employee's assessment "She's CRAZY."

Now maybe she is, and maybe she isn't. But one thing we know for sure. Walgreens has spent millions of dollars on a campaign to convince the public that it is a friendly neighborhood pharmacy. How much money, then, did this one errant employee flush down the drain with one careless, or in this case, incredibly stupid example of personal expression?

Appearances matter. If your employees have customer contact, check every aspect of the interaction.

• What do the outgoing voice mail messages say?
• Look for bumper stickers on vehicles used for delivery-- political, religious, or even humorous. What's funny to one is insulting to another.
• Listen to how your employees express themselves. Do they have a penchant for telling ethnic jokes or making sexist comments in an attempt to be funny? Some people do these things so often they don't even notice them anymore.

Can you see your company through your prospective customer's eyes? If the dog waste company could, they might have taken the time to ponder that bumper sticker.

This podcast is brought to you by WYPR and Eliot Wagonheim. Please click here to listen to this podcast.

Measurement informs decisions - in business anyway.  At least, that's the way it's supposed to be.  Business decisions are supposed to be divorced from the emotional, relying instead on rational analysis and careful calculation.

Except for when they're not.

In my practice, I have had innumerable discussions with business executives in the midst of important (and expensive) initiatives that they don't have the slightest idea how to measure.  When pressed, even accomplished executives will tell you that some things are just "intangibles" that "can't be measured."

After all, how can you tell if an employee empowerment initiative is working? What are the metrics (or measurement points) to see if the new training program is kicking in?

Douglas Hubbard, in How to Measure Anything, advised us to look to ancient Greece for inspiration.  In approximately 200 B.C., a Greek philosopher made the first recorded measurement of the circumference of the Earth.  No lasers.  No satellites. No advanced surveying equipment. And this was centuries before Magellan circumnavigated the globe.

Instead, he measured the angle of shadows. The greater the distance separating the objects casting them, the greater the angle.  The angle, he figured, was the same small percentage of your everyday 360 degree circle as the distance between the objects was the circumference of the earth.

Using modern instruments, typical results put his answer within 3% of the actual value.

What does this have to do with business? It shows us that making logical conclusions after measuring what we can actually get our hands around, allows us to measure the immeasurable.

First, we state the obvious: If something matters, the result must be detectable in some way. In other words, if that employee empowerment initiative or new training program does not have an EFFECT on something important, why do it in the first place? Once managers figure out why something matters, the result must be detectable in some way.

Second, if this thing is detectable, then it must be detectable in some amount. Meaning, if you can observe a thing at all, you can observe more of it or less of it. That's the stuff of measurement.

My point... and I know I've gotten pretty far into the weeds here... is that too many of my clients waste far too much money going on gut feel alone.  And they proceed on gut feel because they accept the proposition that something can't be measured.  But instead, the issue is that they haven't stated the problem clearly enough to set out the detectable thing they're hoping to observe if the initiative is successful.

As the famous inventor, Charles Kettering, once said: "A problem well stated is a problem half solved."

Give some thought to that, and some of your larger, seemingly intangible business decisions, will seem a lot less impulsive and a lot more... measured.

This podcast is brought to you by WYPR and Eliot Wagonheim. Please click here to listen to this podcast.

Last night, basketball fans finally got their answer to the question that has been tormenting them and clogging sports radio airwaves since Cleveland bowed out of the NBA playoffs: “Where is LeBron going?”

But I have a different question: “Should you have hired him?”

Not in the literal sense, certainly, as he may not have been willing to work as an accountant or landscaper or dental assistant…and you may not have been willing to offer your next hire a “max contract” for $100,000,000 over 5 years. But figuratively…

Whatever your industry…whatever your business, you are one day bound to run into a prospective hire that looks to you like a superstar. All the talent in the world. Incredibly highly regarded. And while it might stretch the budget to acquire them, the temptation to put your company on the map with just one hire can’t simply be ignored. 

But here’s the thing, and it remains what puzzles me about the LeBron sweepstakes. LeBron’s teams in Cleveland have always fallen short. And when it comes down to crunch time – 1 down with under 10 seconds left – it looks to me like LeBron trusts his teammates less and less. 

His teams haven’t won a championship. And because basketball is a team sport, he can’t win one alone.

Bill Olson, one of the nation’s leading experts in recruiting and staffing recently observed that compatibility with an organizations culture is one of the most overlooked keys to determining success of an impact player. 

Mark Hamdan, author and founder of HRsmart recommends making your most valuable employees – people who understand your mission and culture – part of the hiring and recruitment process. 

Talent, integrity, passion and work ethic are individual traits. Vital, to be sure, but more determinative of whether the individual can succeed.

Fit is organizational. Is the new hire in synch with YOUR vision, YOUR culture, YOUR way forward? 

Equally important, have you made a serious effort to develop a method for finding out? Recruitment and assessment is so much more than placing a classified ad and holding an interview day. Those 45 minute stilted conversations preceded by a 5 minute skimming of the resume tell you next to nothing. Whether the new hire will join 4 people or 400, how will you know from Day 1 that he or she is the right fit? 

OK, granted, that was a trick question. You can’t know. But you can make sure that you’ve taken your best shot at knowing. 

And that’s what gets me about the LeBron sweepstakes. There was a 1 hour special on ESPN in which LeBron announced where he chose to go.  It was called “The Decision”.

I didn’t watch, because to me, it wasn’t solely his decision in the first place…or it shouldn’t have been. His decision was where to set up the interview. The special I’d be much more interested in seeing, is how an organization decided to choose him. 

This podcast is brought to you by WYPR and Eliot Wagonheim.  Please click here to listen to this podcast.

Is there anyone in the Western Hemisphere above the age of 3 who does not know that Cinderella’s slipper was made of glass? I’m betting you’ve known that fact since you were a kid. 

But did you ever ask yourself why? 

Why in the world would anyone – even a fictional person – wear a glass shoe? It would be slippery and uncomfortable, cold, unforgiving and fragile. Why would anyone even write that into a story?

Well, the truth is…they didn’t.

In Charles Perrault’s original text in ancient French, the slipper was made of ‘vair’, pronounced the same as ‘verre,’ which indeed means glass. ‘Vair’, however, means squirrel fur …  a far more sensible choice when it comes to fine ancient French footwear. Because of the error in translation, generations of children have had to try to visualize poor Cinderella negotiating the dance floor in glass.

With thanks to Rob Millard for his explanation originally posted in his exceptional blog Adventure of Strategy, the Cinderella story is, to me, a classic example of the old game telephone.

Words, inartfully chosen and thoughtlessly repeated, can kill. They can kill initiatives, careers and companies.

And all this brings me to e-mail. 

It is said that over 90% of communication is non-verbal – not what we say, but how we say it – tone, facial expression, body language, emphasis and demeanor. E-mail contains none of that.

The words: “we should talk” can convey a multitude of meanings – a breakup, a scolding, an earnest request for a meeting, a plea for advice, or a recognition of value in what the other person may have to share. Those words in e-mail, however, are construed however the reader is pre-disposed to construe them. They can be seen as hostile, forboding, threatening, or condescending. 

And that’s how misunderstandings are created. It’s how dialogue is killed in favor of company-wide drama. 

Think about how e-mail is used in your business. As a company leader, think about the use of e-mail as a way to shortcut conversations that, in person, may take more of your valuable time.

John Wooden once said: “If you don’t have time to do it right, where are you going to find the time to do it over?”

Nowhere is this more true that with communication.  As e-mail becomes more prevalent, the need to limit its power, curb its unintended consequences, and emphasize face-to-face becomes even more important. 

Unless…like Cinderella…you like drama.

It has been well over a month since the Deepwater Horizon oil rig exploded in the Gulf of Mexico, unleashing one of history’s great environmental calamities. We’ve heard of plans like a containment dome, deep sea robotic drones , and the latest – top kill. But for all the plans and for all the briefings, for all projections, and for all the muddled plans, one thing remains clear:

BP had no back-up plan. In simplistic terms, they flipped a switch to start oil flowing and had absolutely no way to flip it back off. And that’s fine if they were dealing with their own business risk and nothing else, but as everyone knows, something much bigger was at stake. 

The point you should take away from this is not limited to BP. Every business needs a disaster recovery plan – EVERY BUSINESS.

BP was simply the lesson writ large. 

Disaster can strike any business.

• A manager can take ill, requiring coverage for her appointments and accounts
• A server can fail, risking the loss of thousands of files and years of historical data
• A building can be destroyed by fire or flood, taking with it the systems and paper on which the business is built.

Insurance may … if you have the right coverage … enable you to replace the THINGS. But how will you carry on the business?

There are certain things absolutely essential for a business owner to consider:

1.       Look… 15 years ago, I was a partner in a small law firm in which one of the primary partners was diagnosed with pancreatitis. The rest of us had to scramble to figure out his cases, appointments, and trial dates. We had no idea. He might as well have written them down on cocktail napkins. His system made sense to him…but he was hospitalized and out of commission. 

a.       The next week we began looking at practice management software that would give partners access to everyone else’s business calendar. We adopted a rigid policy that all appointments, trial dates, and critical deadlines had to be entered in the system. 

b.      We were unprepared for that one incident. But we learned from it.

                                                               i.      What about you – can you cover if a primary person goes MIA? (The hit by a bus scenario?)

2.       Look at your computer system. Think to yourself: “What if it gets knocked out or fails? Not tomorrow, but today…right now. What would happen?”

a.       Look at your back-up system. Is it working? 

b.      Do you back it up every day? 

c.       Do you take the back-up tapes offsite? 

d.      Has anyone ever run the drill of trying to restore your data with the back-up tapes?

3.       What happens if the worst happens – fire, flood, etc.? 

a.       How’s your insurance?

b.      Have you reviewed your policy to make sure it covers your business equipment as it stands today, rather than how it stood years ago when you first put the insurance in place?

                                                               i.      If you don’t take the policy out of the drawer and look at it, you may find that it’s like the dress pants you bought for your son three years ago. When you finally need them, they no longer fit.

c.       Do you have business interruption service that will help you pay the rent and pay your people so that you can take the time to get back on your feet?

d.      Can you replace your facilities or will you lose your clients and your business?

In other words, don’t be BP.

Run the fire drill. No matter the size of your business, if you rely on its ability to continue day-to-day, make sure you have a Plan B.

This podcast is brought to you by WYPR and Eliot Wagonheim.  Please click here to listen to this podcast.

I was in law school when I saw my first Kinko’s. It was sometime in the late 1980’s. I can’t remember the date, but I can remember what I thought:

“Who needs a 24 hour copy place? Who do they think would be making copies at 2:00 in the morning?”

It was later that same year that I found myself in a Kinko’s at 2:00 in the morning, thanking God for its founder, Paul Orfalea.

In 1970, Orfalea, a dyslexic C student at USC, who declared himself to be “basically unemployable,” used a $5,000 student loan to buy a copier, rent a recently vacated hamburger stand, and offer copying services to his fellow students at 4¢ per page.

Recently, I was on Midday with Dan Rodricks and Dan posed the question:

“Does it make sense to start a business in today’s economy?”

I think this is the perfect economy in which to start a new business. New businesses are like weeds, they find the cracks in the cement and somehow manage to thrive in the harshest environments and often surrounded by universal negativity. 

The art of entrepreneurship was never better described than it was by Mr. Bigweld in Robots – “find a need; fill a need.” (Although it sounded much better when Mel Brooks said it.)

That’s what Orfalea did. 

The entrepreneurs of today, however, have to be smart – not just creative. Creativity can identify the need. The smart part comes in when trying to start a business with limited access to capital.

Banks have tightened up. Loans to established businesses are hard enough to come by. Loans to new businesses, even based on the best business plans, are rarer still.   My point is that this economy has put thousands of talented would-be…could-be entrepreneurs on the street. But knowing they won’t find the capital, they have to prepare to start a lean, mean, scalable enterprise.

What I mean by that is that the new, fledgling company must follow these simple rules:

1. Little or no overhead. – No long term lease for overhead, no salary commitments, no huge investments in lawyers or accountants before dollar one flows through the door.

2. It has to be scalable – meaning the business can be expanded, if successful, to provide for growth and income.

3. It has to fill a need. Sure, there are businesses and products that first create a need and then sell you something you just found out you needed (take the iPad for example), but for most new businesses, it’s important to fill an existing need so you can appeal to a ready-made customer base.

4. Your customers have to be accessible. If your products or services only appeal to movie stars and international governments, it could be the best thing in the world, but unless you have a connection, they’ll never know about it. You have to be able to reach your customers, quickly, easily and cheaply.

And Finally…

It has to interest you. A business, like a marriage, will have its ups and downs. There has to be a spark there to keep your interest through the lean and difficult times. That’s the passion, and without it, you will never be an entrepreneur. 

With it, you can move mountains.

This podcast is brought to you by WYPR and Eliot Wagonheim. Please click here to listen to this podcast.