The Swamp is Alive and Well

March 27th, 2017

Along with industry colleagues, I spent a few days last week in Washington D.C.  I took part in a “fly in.”  A fly in is DC lingo for hiring a lobbying firm to set up meetings with congressional staffers to discuss issues pertinent to your cause.  We participated with a direct mail group, who has a vested interest in Post Office reform legislation that is currently going through committees in the House.  We also discussed tax reform and trade.  Of course, our visit coincided with what turned out to be a non-vote regarding the repeal of Obamacare.

Donald Trump and I both learned something last week: the swamp is here to stay.  The president learned how hard it is to get a bill passed, even with his own party in power.  I was and still am astounded at the machine that is Washington D.C.  There are literally millions of square feet of office space for congressional staffers.  I tried to find data on how many people work for Congress.  After seeing a lot of data, my blood pressure was getting too high.  As a result, I decided to end that search.  My best estimate (from a few years ago) is between 7,000 and 8,000 people work for Congress.  I know some of those work at offices in their home districts/states, but a lot of them are “on the hill.”  And they’re all on the federal payroll.  That’s a lot of money out of the pockets of the good ol’ American taxpayer.  Most of those staffers eventually graduate and guess what they do?  They become lobbyists!   Who do you think they listen to?  You don’t have a voice in Washington unless you’ve got a pocketbook!  There are over 12,500 registered federal lobbyists in the US.  That’s a large army figuring out how our tax dollars are spent and what regulations are good and bad.

(My source: https://sunlightfoundation.com/policy/documents/keeping_congress_competent/.  Note the data is from 2010!

Unless some real reform is done regarding lobbying, nothing will change.  The machine is too entrenched and too large.  Destroying it is the only solution.  No one who participates has an interest in doing that.  Those that pay lobbyists get their voices heard.  They don’t want that changed.  Lobbyists have a pretty good gig.  They don’t want that changed.  Congressional offices do not have the resources to understand what bills really mean (and I think many of them have no clue about business).  They need someone to educate them.  They don’t want that changed.

Money makes the world go around.  That is a gross understatement when it comes to our federal government. Trump motivated voters with his “drain the swamp” mantra.  Based on what I saw last week, there isn’t a siphon large enough to make that happen.

The Way Technology Should Work in Customer Service

March 21st, 2017

 

I had a customer service experience that demonstrates how technology can improve customer service.  First, a little background:

Shortly before Christmas, I took my son shopping.  He needed to get a present for his mother.  We walked into the store and he saw Roomba, the robot vacuum, and exclaimed, “Dad, Mom NEEDS this!”  I turned white and had never felt like a bigger failure in my life.  “What’s wrong, Dad?” he asked.  After my heart started beating again, I calmly said, “Logan, haven’t I taught you anything?  Under no circumstances do you ever, EVER get a woman an appliance or cleaning apparatus and call it a present.  It doesn’t matter if she’s a friend, girlfriend, wife, mother, grandmother, aunt – anyone.”  He was unfazed by my plea.  “Dad, Mom’s always vacuuming.  She’ll LOVE this.”

We bought it.  I had to think quickly to keep Logan (and more importantly me) out of trouble.  I decided we wouldn’t wrap it and give it to her immediately.  I would throw him under the bus and make it very clear that it was his idea.  He was thrilled, still not comprehending the danger he put us in with his choice.  We got it home and the initial reaction was as expected. “A vacuum as a present?  Really?  The dog will attack it.  I don’t want that thing.”  Using the power young sons have over mothers and men have while dating someone but  lose when they put a wedding ring on, Logan calmly explained, “Mom, this will help you.  I’ll even vacuum with Roomba.”  The effect was immediate.  She became excited about Roomba.

Roomba became a hit in our house.  The dog even tolerates it.  (I think he knows his hair is the reason we have it.)  The other day, my wife told me Roomba was making a weird noise.  I turned it over and realized one of the rollers (“extractors” in Roomba lingo) was torn.  I got online and did a chat session with a representative from the company.  I had logged in to my account.  Unlike many other experiences I’ve had, she actually had all my information available – no double entry required and I didn’t have to introduce myself to her.  I explained the situation.  She quickly diagnosed the problem and apologized.  She told me the company would send me a replacement part.  As I was explaining this to my wife, she said, “You better get her name and make sure that happens.”  Not that we’ve had bad experiences and been lied to before by customer service people.  I didn’t have to – I got an email indicating a replacement part was on its way before my chat session ended.  After our call ended, I received a transcript of our communication via email.  The part came on the promised date.  I put it in and Roomba is back in business.

As I’ve written in the past, technology is not a cure for apathy.  But if used properly, technology can help solve a customer’s problem quickly and efficiently.  If only technology could explain how women think…

The Healthcare Debacle Marches On

March 14th, 2017

In case you’ve been living under a rock, the Republicans introduced their alternative to Obamacare late last week.  The proposal would change subsidies to tax credits.  Right wingers are angry the proposal doesn’t go far enough to repeal Obamacare.  Left wingers are upset less people will have insurance.  Maybe Paul Ryan is on to something – no one is happy with this proposal!  If you’re not upsetting people, you’re not making a decision!

On a positive note, the Congressional Budget Office analysis predicts the proposal would reduce the deficit by $337 billion over 10 years.  It would also increase the number of uninsured by 14 million.  Curiously, no one on the left is reading the rest of that analysis.  The increase in the uninsured population would be driven primarily by people choosing not to buy insurance.  Without being required to buy insurance (the individual mandate), people would choose to spend their money elsewhere.

As I’ve written in the past, healthcare is a complicated issue.  Maybe it’s time to start from the beginning.  How did we get here?  Employers started offering health insurance as a benefit during the wage control years of World War II.  Employees were scarce and employers couldn’t compete on wages.  They competed via benefits.  That started this entire disaster.  Medicare and Medicaid came in the 1960s, making the government the largest buyer of healthcare services.  Why don’t we start over?  Why is health insurance treated any different than any other insurance?  My company doesn’t offer automobile insurance as a benefit.  My home owners’ premiums are paid with after tax dollars.  The argument from the other side is healthcare is a moral issue and society is better off if more people have health insurance.  I get that argument but I can also argue society is better off if many things happen and I really don’t want the government mandating anything else.

If I were emperor, here’s my simple and flawed plan:

  1. Health care is no longer a tax-advantaged benefit. If companies provide health insurance, it is considered taxable income.
  2. You only qualify for a standard deduction or itemizing deductions on your federal taxes if you have health insurance. If you don’t file tax returns, no subsidy (see below).
  3. Non-profit status for hospitals is eliminated. Pay taxes like the rest of us.
  4. All tax revenue from hospitals goes to support Medicaid/Medicare and subsidize those who can’t afford health insurance
  5. Allow competition across state lines for health insurance.

My plan would never get me elected.  As the Republicans in charge understand, it’s hard to get elected after taking away an entitlement.  (The right wingers in gerrymandered districts are OK, which is why they want to blow up Obamacare completely.)   It’s impossible to fix something that is fundamentally flawed.  It’s time for an intelligent debate on health insurance.

When Things Go Wrong, The Truth Shall Set You Free

March 7th, 2017

I was traveling last week.  I got to the airport early and made the fateful decision to check a bag.  I was connecting, it was a long flight, and I didn’t want to lug my bag around.  Frequent travelers know what happened next.  I made it to my destination but my bag did not.  After looking for my bag on the carousal, I went to the baggage desk.  Fortunately (or frighteningly, you decide), they knew my bag wasn’t there yet.  They told me not to worry; my bag was on the next flight out.  They promised to deliver it to my hotel that evening.  I filled out paperwork and they gave me a code to track my bag’s progress on line.  They told me I could be reimbursed up to $50 for incidentals I needed until my bag arrived.

The evening came and went without my bag arriving.  By the time I realized it wasn’t coming as promised, it was too late to buy clothes.  I went to bed expecting the bag first thing in the morning.  I got up early and according to the website, my bag had been delivered to my hotel.  I called the front desk.  No bag.  I called the airline.  After waiting several minutes, I was told the wrong code had been entered about my bag’s status.  My bag was still in route to me.  I showered, did my best to air out my clothes, put on the same clothes I wore the day before, and went to my meetings.  I periodically checked online to see if my bag arrived.  Finally, late that night, almost 36 hours later, my bag arrived at my hotel.

Had I known when my bag would actually arrive, I wouldn’t be writing this story.  I could have prepared by buying clothes, or at least had the proper expectation been set.  “Under promise and over deliver” is one of my favorite clichés.  Stuff happens.  When stuff happens, do the best you can to communicate honestly with your customers.  Oh, and never check a bag.

Bill Gates Wants to Tax Robots as Labor.  How About Microsoft Pays Its “Fair Share?”

February 28th, 2017

Dear Mr. Gates,

 Let me start by saying I admire your software and business vision and acumen.  You created a business that truly has changed the world.  Thank you.

 Recently, I saw an interview in which you recommended the government tax robots that replace workers.  Did you propose the government place taxes on your software that replaced jobs?  I don’t recall you or anyone at Microsoft advocating for increased taxes on your products.  In fact, every month I get an alert from our corporate credit card company.  We use Microsoft Office 365.  When we get billed, it goes through as a large foreign transaction on our card.  It seems we buy our Microsoft licenses from Ireland.  All of our licenses are used in the United States and purchased from a company headquartered in the United States.  According to an article, which I provided a link to below, Microsoft does that to reduce its tax bill.  The laws are the laws and if you can afford tax accountants and attorneys to pay less in taxes, I do not begrudge you.  I do begrudge you proposing the government to interfere in a new market under the guise of helping people displaced by new technology.  The cynic in me thinks you are proposing a tax because large companies, such as Microsoft, will better able to deal with that cost than a small company.  In other words, you want to create a barrier to entry for upstart companies who can’t afford legions of accountants, attorneys, and lobbyists to influence government policies.  Even more bluntly, you are now part of the “establishment” many Americans voted against in November.

 Mr. Gates, I know you have had your run-ins with the government over the years.  I recall Microsoft having some trouble over using its market share in operating systems to attempt to destroy Netscape and its browser.  I’m pretty sure Microsoft lost that case.  Now, you’re advocating for government interference in a new market.  “If you can’t beat ‘em, join ‘em” seems to be your strategy today. 

Technology disrupts industries.  A corollary to that is technology disrupts employment.  It also creates opportunities.  Government’s role in any new market should be establishing a level playing field, not helping pick winners and losers. 

 https://qz.com/911968/bill-gates-the-robot-that-takes-your-job-should-pay-taxes/

 http://www.businessinsider.com/apple-microsoft-avoids-taxes-loopholes-irs-2013-1

What’s Your Plan? 

February 21st, 2017

I’ve been a Simpsons fan since the days of the Tracy Ullman show.  Much to my wife’s chagrin, I sometimes watch reruns with our son.  An episode we saw last week made us laugh hysterically.  The retirement home Grandpa Simpson lives in has an issue that requires everyone to move out.  Grandpa and two of his friends come to live with the Simpsons.  Marge starts a conversation with Homer about preparing for the future.  Homer, as only Homer can, makes gestures of eating, drinking beer, and having a heart attack.  He then proudly proclaims, “My lifestyle is my retirement plan.”  You can view the clip here: https://www.youtube.com/watch?v=61DEMMzOrEc

The timing of me seeing this episode hit home.  Over the last few months, we’ve embarked on a strategic planning process at I.D. Images.  We’ve done it before but this time we are making a more concerted effort to get input from throughout our organization.  Hopefully, our choices won’t lead to a premature death of our company like Homer!  On a more serious note, one of the observations this process has led me to is we make choices every day, consciously and unconsciously, that will dramatically impact our company’s future.  Similarly, Homer makes choices every day.  He is aware of how those choices will impact his future (or lack thereof).  He knows his plan and is executing it well.  He is comfortable sharing his plan with his main stakeholder.  As part of our planning process, we are preparing to share our results with our key stakeholders, namely our employees.

As Yogi Berra quipped, “If you don’t know where you’re going, you’ll end up somewhere else.”  Whether it’s your personal life or professional life, have a plan.  Get input.  Share it with others.  And make contingent plans if your lifestyle is your retirement plan.  Modern medicine can do amazing things.

Technology + Apathy = Lost Business

February 14th, 2017

 

Since winter is almost over, I decided it’s finally time to fix the gap in our front door.  We need a simple seal at the bottom of our door.  I started my journey online.  The closest large home improvement store to me that advertises, “You can do this.  We can help,” claimed it had what I needed in the right color in stock.  Their website even told me the exact location I could find it in.  I stopped by after work to pick up my $1.98 corner seal.  I confidently marched to the location, excited to solve a home improvement problem with only one trip to the store!  I got to the location and looked.  And looked.  And looked.  No corner seal in the color I need.  They did have several boxes of white corner seals.  I looked for someone to help me.  I wandered around aimlessly and found two men sitting in the door and window section (yes, sitting) looking like they had nothing to do.  I asked and got a response that made my blood boil, “That’s not our department.”  Really?  I’m not your store’s customer?  “That’s not my job” or any equivalency is worthy of immediate termination in my book.  They offered to call someone from the department in which I needed help.  While they did that, I left the store.  I got in my car, got on my phone, and ordered the part online from a competitor of the store I went to.

Technology, when used properly, is an incredible tool for increasing efficiency.  In the perfect world, I would have ended my confident march into that store with my required door seal and some other stuff I didn’t plan on buying in my bag shortly after entering.  In the store’s perfect world, I would not have interacted with a person, saving them money.  Instead, I bought nothing and left with a bad taste in my mouth.  It happened that way because someone entered the part number improperly.  They probably got a shipment in with 2 colors of door seals on it and scanned in a box of the brown without scanning in white.  The brown sold out but the system had bad data so it thinks it still has brown.  (Inventory mishaps like that never happen at I.D. Images or with our customers.  Never!  If you believe that…)  Mistakes happen.  But the mistakes are amplified when you share data with your customers.  If their online system hadn’t told me they had what I needed, I would have never gone to that store.  I’d have no blog topic this week.

We all want more data and in general, more data is good.  But the more data we have, the more likely it is to have mistakes in it.  I can deal with mistakes.  Apathy makes me sick.  All the technology in the world won’t fix an apathetic workforce.  In fact, if used improperly, technology contributes to apathy.  The workforce gets concerned about losing jobs.  The only way to solve that problem is to engage your workforce and train them on value add activities.  Finding a part doesn’t really add value; that process can and should be automated.  Helping a frustrated customer does add value.  Had the apathetic worker offered to check inventory in other stores or simply walked me over to his colleague in the other department, I would have left with a smile on my face, even if they didn’t have the part I needed.  That lost opportunity cost a lot more than $1.98.

The Short Manual for Parenting and Managing

February 7th, 2017

I was talking with a good friend about the trials and tribulations of parenting recently.  I lamented how I mishandled the death of my son’s fish.  (“Fish die.  Get over it,” won’t win you any father of the year awards.)  He was lamenting how his perfectionist daughter was obsessed over a comment on her overall excellent report card and his son could care less whether the comments were negative or positive.  Of course, we brought out the cliché that handling those situations wasn’t in the manual that came with our children.

He segued that into a conversation he had with a client of his.  His client told him, “I’ve got an M.B.A. from a prestigious school.  I didn’t master anything and it took me 10 years of being called a manager to figure out what I was supposed to be doing.”  (His client was not me and did not attend the same business school I did!)  Of course, I quipped, “There’s no management manual that covers everything either.”

Our conversation got me thinking.  If you are blessed with children, there is no more important activity you do in your life than parenting.  If you are a participant in our economy, your critical activity is managing, whether it’s yourself, physical assets, a process, or other people.  Yet there’s no manual for parenting or managing.  This weekend, our cable TV went out.  I was able to go to the online manual and go through a step by step process to fix it.  It was dumbed down enough so even I could follow the instructions and fix the problem.  That manual doesn’t exist in life, at least not one that I know about.  Certainly, a plethora of books about parenting and managing exist.  Most of them mean well.  But I’ve yet to find a chapter in any business or parenting book that addresses what really happens in the day to day trials and tribulations we encounter.  I thought a little more.  Do we already have the manual for parenting and managing?

Maybe there’s no manual because the answer is quite simple.  We over complicate things.  “Treat others as you’d like to be treated,” is called the golden rule for a reason.  As I look back at my parenting failure(s) or the challenging times I’ve had as a manager, following the golden rule would have prevented a lot of problems.  A 300 page book can’t possibly have all the answers.  If I started with the golden rule, I would have been just fine.  Of course, I certainly need to supplement my short manual with several 300 page books on controlling my emotions.  But that’s a topic for another day.

The ADHD President: Keep Calm and Carry On

January 31st, 2017

We’re less than two weeks into the Trump regime and he’s already got heads spinning.  In one moment, he’s talking about jobs and bringing manufacturing back.  In the next moment, he’s tweeting about the media is lying about how many people were at the inauguration.  We’ve never seen anything quite like this come out of Pennsylvania Avenue.  Liberals and many conservatives think he’s certifiably insane.  Trumpsters (not conservatives) think he’s a master manipulator that will actually get stuff done.  As I’ve written in the past, his approach will keep comedians busy for the next few years.  The argument against his entertainment value is he’s dealing with serious issues and one of his off-the-wall comments could lead to a disaster.

Whether you love him or hate him, President Trump is here to stay.  His style is quite outlandish but face reality, it works for him.  He had success in business.  He won the presidency.  He’s not going to change.  He definitely had some blow-ups in business.  Certainly, he’ll have blow-ups as president, as every president does.  I certainly hope and pray his blow-ups as president don’t lead to war.  Given his track record of success, I think he deserves the benefit of the doubt when it comes to his ability to use discretion.  He’s not doing anything he didn’t say along the campaign trail.  I actually heard a talk show host say, “No politician does what he says he’ll do in a campaign.  They say things to fire up their base.”  Wake up!  Trump appealed to voters who were sick and tired of politicians not delivering on campaign promises; that’s who voted for him.  It is clear that Trump is not a conservative ideologue.  He replaced a liberal ideologue.  Over the last few decades, the ideologues took control of both parties.  The reality is most of the country hovers around the center.  Trump figured that out and is using it to his advantage right now.  That irritates the media who generally take either far left or far right positions.

During World War II, the British government created posters saying, “Keep Calm and Carry On.”  People were dying and bombs were landing in London.  If you’re that upset about Trump, turn the TV off, stay off CNN.com and Foxnews.com, and heed the advice of the British Government.  Focus on what you can control.  My son had to do an oral presentation at school this week.  One of the lines he read was, “If we all do little things to make the world a better and happier place, our little things will lead to bigger things.”  I found that sentence appropriate not only for elementary school kids but for the rest of us as well.  Spend less time worrying and more time doing.  You’ll be better off.

Earth to Businesses: Adapt or Die

January 24th, 2017

The other day, I took my wife on a romantic date to a large national retailer.  We hadn’t been there in a while and were quite surprised at the store’s condition.  Shelves were empty.  The store was dirty.    The store wasn’t very crowded.  When we went to check out, 2 of the 16 checkout lanes were open.  There were 4 or 5 people in each line.  Behind the checkout lines in plain view of everyone in line were 5 employees of the retailer, apparently observing the customers in line.  To the best of what we saw, they were doing absolutely nothing.  No one bothered to open another line.  A woman in front of us looked at them, looked at her cart, and walked out, buying nothing.  After a short wait, it was our turn to check out.  As the cashier was ringing up our items and trying to upsell us on a debit card that would save us 5% on our purchases, a manager walked over.  She had been part of the 5 person group doing nothing.  She interrupted the cashier, asking, “Could you change your hours and come in earlier tomorrow?”  The cashier stopped ringing in our items and dealt with the manager.  After the manager got her answer, she walked away and immediately started playing on her personal phone.  The checkout experience stunned us.    Last week, this same retailer announced it had a poor holiday season.  Go figure!

It’s no secret that online shopping is hurting retailers.  A physical store can’t compete with the convenience of items magically appearing at your doorstep and the selection of items available on line.  But we are social creatures.  We want interactions with people.  Those interactions must be positive experiences, however.  Negative experiences with retailers will drive more people to online shopping.  That will create a death spiral: less sales per square foot will drive less investment leading to even less sales until the inevitable closing of physical stores.

The concept of creative destruction is what makes capitalism special.  We had a milkman when I was a kid.  My mom filled out a form, put it in the box on our front porch and he delivered dairy products once a week.  That business was destroyed by super markets.  Online retailers, with subsidized freight costs helping, are now destroying the super markets/large retailers by essentially modernizing the milkman.  All businesses face competition.  If a business does not adapt, it will perish.  Retail stores have advantages – Amazon and other “etailers” are beginning to open retail stores because of these advantages (and freight subsidization won’t happen forever!).  If your business isn’t adapting, it will be adapted by its competitors.  That won’t end well.