The Question You Should Ask Everyday 

January 17th, 2017

I subscribe to a very well-regarded business publication affiliated with a very prestigious business school.  Shame on me, my subscription had lapsed by four days when I finally got around to renewing it.  I tried to renew online but got caught in a circular pattern.  I clicked renew, it told me to login.  When I logged in, clicking renew took me to the new subscriber page.  I couldn’t become a new subscriber because my email account was already associated with a subscription! After unsuccessfully trying to get out of this pattern, I tried online chat.  The chat representative put me in the same circular pattern.  She finally told me she could not solve the problem and I needed to call customer service.  It only took 2 transfers for me to successfully give them money and renew my subscription.

I found it quite humorous that one of their leading articles for this month’s issue is titled “Kick-Ass Customer Service.” (It made the cover!)  I felt like I got kicked after that experience!  My head hurts just thinking about what happened.  My head hurt worse when I thought about what happens in our business when we make it hard to work with us.  If we make it difficult to do business with us, customers will just call someone else.  In this situation, I wanted a specific publication; there wasn’t a ready substitute.  Most of us don’t have that barrier to entry.  We just lose business.

In my first job after college, a salty senior investment banker was notorious for starting every conversation with, “What did you do to make us money today?”  I have a very vivid memory of him asking me that question the first time I met him.  He followed it up with, “Who the $&&#*(@) are you?”  All of this took place in the restroom.  I think that first question should be replaced with, “How have you made your customers’ lives easier today?”  If you do that, the money will follow.  If you don’t make it easy to do business with you, someone else will.  That will make more than your head hurt.

The Joys of Business: Customer Bankruptcies

January 10th, 2017

I won’t bore you with all the legal gibberish, but here’s a business summary of the fun involved with a customer filing bankruptcy. If someone files bankruptcy, any unsecured creditor (someone who sold them something) that got paid in the 90 days before the bankruptcy was filed is subject to a preferential treatment. That means the bankruptcy trustee can demand a return of any money a supplier received in the 90 days before the bankruptcy filing. So, let’s say someone is behind in payment. Let’s say they owe you $5,000. You have them on credit hold. They agree to pay you $1,000 in cash for a $500 order. You ship the order and they now owe you $4,500. If they file bankruptcy within 90 days, the trustee can demand the $1,000 back. The intent is to prevent someone who is going to file bankruptcy from paying money to preferred people (think brother in law). The reality is unsecured creditors who try to work with a struggling customer often take a bath.

We have a customer that filed bankruptcy a while ago. Not only is the trustee asking for preferential claims as described above, he is also claiming the parent company got stuck with the debts of the subsidiaries but received no benefit. They are claiming the parent paid us but actually should not have paid because of the legal wording of the purchase orders (even though the parent’s name is on the PO’s). He wants any money we were paid in the last 4 years! Isn’t that lovely? Any rationale person would agree that a secured creditor, such as a bank, should have more knowledge about the legal structure of a client than a supplier, such as me, selling labels to said client. Yet the secured creditor, through the bankruptcy trustee, is trying this tactic. Even if it doesn’t work, I’m out legal dollars with no hope of recovery. Isn’t that special?

Bankruptcy happens. It’s part of the creative destruction in capitalism. But let’s level the playing field a little. I have a simple change that would be powerful: if the bankruptcy trustee asserts claims that are denied in court, that trustee must personally pay the other side’s legal bills. Don’t take it out of the bankruptcy estate; make the firm who is asserting the claims personally responsible for legal fees for the other side. From a bigger picture perspective, I think we should look long and hard at having losers pay the other side’s legal fees in any lawsuit.

If Donald Trump really wants to create a business friendly climate in the US, he should start by examining the bankruptcy laws. He’s very familiar with them and is in a perfect position to make substantial changes that would improve the economy. It is situations like this that make me question if it’s really worth owning and growing a business in today’s environment.

House Republicans: Are You Kidding Me?

January 4th, 2017

Dear House Republicans,

As your first gesture with control of the House, you decided to make changes to the ethics office.  After a public outcry and your incompetence allowing Nancy Pelosi to take the high road, you changed your mind.  Did you really need to start off with these rule changes?  In case you missed it, the American public thinks most, if not all, politicians are lying and cheating scumbags.  Your first maneuver lends credence to that belief.  Did you miss Trump’s “drain the swamp” line?   In case you don’t understand what I’m saying, let me be clear (I can’t stand that phrase; I’m being condescending just like politicians and professional pundits are when they use that phrase.): you just flipped a giant middle finger to the American public.  Great start!

I know you quickly backtracked on implementing this ignorant idea, but the damage was done.  The older, excuse me, I’ll be politically correct, more experienced, I get, the more I realize how much optics and perceptions matter.  It’s a cliché but perceptions truly are reality.  Your first actions as leaders matter.  As the old commercial said, you never get a second chance to make a first impression.  Forget dandruff; you’re covered in lice right now.

I certainly hope this isn’t a sign of things to come.  Don’t get drunk on your power.  You were elected to represent the people, not yourselves.  Start acting that way.


A Disappointed  American

2017 is Here!

December 30th, 2016


It seems like every year goes faster than the year before. That’s one of the realities of getting older. As I tell my soon to be 11 year old son, a year is a much smaller percentage of my life than his. That’s why I can’t remember what I did yesterday and the years all seem to run together.

We turn the calendar yet again in a few days. Are you ready? Some not so scientific predictions and recommendations for the year:

1. Economic growth will surprise to the upside. I don’t think we’ll have the 4 or 5% GDP growth the Trump team is touting but the US will surpass the 1.5 to 2.2% growth we’ve seen the last few years. This will apply to 2017 only. See #2 and 3.
2. Prepare for a mild recession in 2018/2019 caused by saber rattling over trade and monetary tightening.
3. A big portion of our nominal GDP growth in 2017 will be related to an uptick in inflation. We haven’t seen inflation in our industry in 5 years. We’ll see price increases in 2017, as will a vast majority of our economy. Wages are already starting to accelerate
4. The M&A trend in labels/packaging as well as other industries will continue. The big will get bigger.
5. Expect bankruptcies to increase in late 2017/sometime in 2018. Be careful with credit!

For fun, I copied my blog from December 27, 2015. #2 happened!  Make your year great!

My New Year’s Wishes

We’re about to turn the calendar over to a new year. Every year, I realize how true it is that time goes faster as you get a little older. Here are 3 wishes for 2016:

1. None of the current candidates for president is elected. Every day, I cringe in dismay that these candidates are the best we have to offer as a country. I wish someone emerges that’s not in the race right now. He/she can be from either party. No candidate excites me right now.
2. One of my beloved Cleveland teams finally wins a championship. 1964 was the last major sports championship in Cleveland. Sad. I have confidence in LeBron and his crew but Golden State and San Antonio sure are tough.
3. The US federal government finally admits we can’t deficit spend forever. The public understands that borrowing for today’s consumption must be paid back by future generations. AARP actually runs a commercial explaining this to everyone.

Remember, I titled this “My New Year’s Wishes.” Earlier this year, a friend told me, “You can wish, want, and hope all day long. It’s what you do that makes things happen and causes change.” May you do what you need to do to accomplish your goals in 2016! Happy New Year!

CCL Buys Innovia Films

December 20th, 2016

I was already to write a blog with some Christmas and year end platitudes.   That all changed with yesterday’s announcement that CCL Industries was buying Innovia Films.  After doing what I could to prove to myself it wasn’t fake news, I decided to hold off on the Christmas wishes for now.  M&A news is near and dear to my heart, especially M&A news that shows how a large player is trying to change the game in the label/packaging space.  The bullet points below are taken from CCL’s press release ( ):

Highly strategic opportunity

  • Leading, specialty, global producer of co-extruded, Bi-axially Oriented Polypropylene (“BOPP”) films for labels, packaging & security applications
  • Unique capability for polymer banknotes significantly expands CCL’s security products, customers, markets and technologies
  • Proprietary technology and strong intellectual property portfolio based on scale in R&D drives margin profile

Not every label converter has $1.1 billion Canadian dollars to buy a fill extruder.  (I did find 82 cents in my winter coat this morning.  I just need the US dollar to keep appreciating.)  Scale is changing the game.  When this acquisition goes through, CCL will further expand its capabilities to extrude its own face and liner stocks, laminate them, print on them, and convert them.  Innovia also sells to many of CCL’s traditional suppliers.  Imagine those meetings!  I’m sure a lot of people in the label/packaging value chain just feel like they got a lump of coal for Christmas with this announcement!

The label/packaging world will continue to consolidate, both horizontally and vertically.  CCL has been leading the charge in capturing more of the value chain.  Over the last few years, they’ve bought film extruders, Avery’s office supplies business, and too many other label converters for me to count.  In 2011, CCL’s revenue was approximately $1.3 billion Canadian.  Next year, it will surpass $5 billion Canadian.  More importantly, they’ve grown their earnings faster than they’ve grown sales.  As us mere mortals fight over a piece of the pie in what we perceive as a mature industry, they’re focusing on baking a different pie for which they control the ingredients, ovens, and customers for.  Don’t bet against them.

Are We Really That Busy?

December 13th, 2016

The other day, I was stopped at a light with the turn lane to my left and a lane going straight to my right.  I looked to my left and saw the driver looking at her phone.  The driver to my right did the same.  Instinctively, I picked up my phone as well.  I immediately put it down and asked myself, “What are you doing?”  (My internal conversation with myself might have included some other words.)  Was it because I saw the other people on their devices?  Was I waiting for a critical email?  What was I afraid of missing?

 I was driving to work, less than 10 minutes from my office.  Would I really save much time by deleting emails?  That’s about all I would have done in the couple of minutes I was at the light  Instead of checking my email or surfing the web, I turned my radio up.  I tuned to my 80s Hairband station and rocked out to Warrant and Cinderella on my short drive to work.  Those songs reminded me of a college buddy I haven’t talked to in a while.  I called him when I got to work.  I didn’t know what I got until it was gone: a little time singing in the car is a lot more valuable than checking my phone. 

 Connectivity has its benefits.  We are exposed to what seems like an infinite amount of information on a daily basis.  We can connect with people at any time.  We compete to have more “friends” and larger networks.  Maybe it’s time to slow down a little.  As we come to a very busy time – year end stuff, holiday gatherings – put the devices down, spend a moment alone with your radio, or gasp, have a real conversation with someone in a face to face setting.  Build real connections, not just digital versions. 

75 Years Ago: A Day That Will Live in Infamy   

December 6th, 2016

On December 7, 1941, Japan attacked Pearl Harbor.  My grandfather, child of the depression and the son of immigrants, served in the war.  Fortunately, he was a prolific writer and kept a journal for most of his life.  If he had the platforms available today to share his wisdom, he would have actually made money writing instead of writing for the purpose of trying to covertly sell more labels!  He did author several books and articles related to his military service (Pacific Theater on a B-29 bomber) and work after the war (insurance).

Recently, I got some of his personal journals.  I am compiling them to share with my family.  I recently came across a passage he wrote on February 23, 1989.  President George H.W. Bush, himself a World War II veteran, attended Hirohito’s funeral on that date.  I remember talking to my grandfather about Bush’s decision back then.  I don’t think it’s a coincidence that I read his journal the week before the 75th anniversary of Pearl Harbor.

My grandfather’s opening and closing paragraphs from his entry about Hirohito’s funeral.  In between, he wrote about his internal struggles with Bush’s decision.  He served in the Army Air Corp on bombers in the Pacific.  He was shot at and shot at the enemy.

Please read his words closely and compare to the world today where it seems like every citizen and company is asking the government for help.  As the news reports almost daily on violence related to seemingly minor incidents (for example, traffic issues causing road rage), it also seems like our ability to forgive has been lost as well.  While my grandfather and many great men and women from his generation have left this world, my hope is we can honor their legacy by being more like them.

Hirohito’s Funeral – February 23, 1989 – Thursday 

When Japan attacked Pearl Harbor on December 7, 1941, I was one of millions of young Americans who felt a duty to enter the war.  A few months too young for military service, I waited with a strong burning desire until I could enlist…the draft was not necessary as far as I was concerned.  As a matter of fact, as a trained machinist from East Tech High School and with an important function as such at a defense plant, Ohio Crankshaft, it was at least as important to remain in that post as it was to join the Army Air Corps.  However, I chose the latter.

I cannot completely forget, as yet, any part in the war, and perhaps, never really will.  But I do forgive Japanese people for their actions and hope others will as well.  Hirohito will have to answer to Someone much higher and infinitely wiser.  I gently bow to that authority.  

Make Year End Useful  

November 29th, 2016

We’re coming up on year end.  Performance reviews, budgets, and other year-end activities.  Oh what a fun time of year it is!  After a few decades of performing the year end fire drill, it often becomes a perfunctory exercise.  That’s the problem: it should be an opportunity for growth and looking forward, not just looking backward and checking boxes so HR and your finance folks leave you alone.

If I (you) have done my (your) job as a manager, reviews should be a forward looking exercise.  People should know where they stand, what they’ve done well and what they have yet to accomplish; that feedback should have been provided throughout the year.  The “review” conversation should focus on what is ahead for the year, for the individual, his team, and the company.                                                                    

Regarding the budgeting process, zero based budgeting is coming back into style.  (A nice summary In a nutshell, everything starts at zero, rather than looking at what was spent last year and adding or subtracting.  This forces managers to really question what they need. While we haven’t implemented it completely at I.D. Images, we are experimenting with it in specific areas.  It is an eye opening exercise to question every expense and the structure of every department. 

 If you’ve got to do something, you might as well make it useful.  Take the opportunity to grow at year end. 

Be Grateful and Heed the Advice of 2nd Graders

November 22nd, 2016

I volunteer at the Julie Billiart School ( ), a very special place that helps kids with learning needs.  A highlight of my holiday season is receiving the cookbook the school’s 2nd graders create called, “How to Cook a Turkey.” Every year, each 2nd grader writes a recipe for cooking a turkey.  Their teachers compile them into a recipe book.  Their innocence and creativity always make me smile.  Last year, I picked out a recipe that I shared in this space.  This year, I’m pulling out some of my favorite comments.

  1. First, you’ll need to catch a turkey. (Jeffrey)
  2. Be sure to wear an apron, chef hat, and super hero cape when you cook your turkey!  (Ricky)
  3. When you’re done eating, put everything in the sink.  Mom will clean up the kitchen but you better not have made much of a mess. (Sian)
  4. The guys should just watch football and the kids can play board games. (Matthew)
  5. Eat Grandma’s brownies…she makes the best!!! (Anthony)

Every “recipe” had something that made me smile.  I’m thankful to receive their card and get a reminder from them what life is really about.  Reading their recipes reminded me that we have a tendency to complicate things, even Thanksgiving.  Yet kids just love the fun of it.  Shouldn’t we?

As you enjoy the Thanksgiving holiday, I hope you have the opportunity to think like a 2nd grader.  I hope time slows down for you. I hope you get to play.  I hope you don’t forget your super hero cape!


What’s Next?   

November 15th, 2016

As the experts predicted, Hillary Clinton was elected our 45th president last week.  Oh wait.  Oops.  They kinda missed that one.  The media’s missteps might be the lasting impact of this election.  I had two post-election conversations that stood out to me about the fallout of what happened.  One individual voted for Clinton; the other, as he put it “jumped on the Trump grenade and I pray it doesn’t explode.”  The Clinton voter said, “You know, I can’t stand Trump, but I found myself rooting for him because the media looked so stunned.”  The Trump “supporter” was more excited about the media’s struggles than Trump winning.  He gushed, “I thought Chuck Todd was going to cry!  I loved it!”  It might behoove the media to decamp from the coasts and actually spend a little time in the rest of the country.  Maybe they’ll discover we’re not a bunch of bigoted, misogynistic, backwards people after all.

I’m sure the Donald’s presidency will provide numerous blogging topics and Saturday Night Live skits  over the next couple of years.  I’m most concerned about the impacts on business Trump’s presidency will have.  The major impact I see is inflationary pressure.  Regular readers know I’m a broken record on inflation.  Like a broken clock, I’ll eventually be right.  The government keeps telling us it’s low; talk to any business owner about operating costs and he’ll disagree.  Trump clearly believes inflation is good.  If you’re a debtor (as real estate investors often are), inflation is good: you pay back your debt in dollars that are worth less than when you borrowed because of inflation.  All of Trump’s commentary indicate an indifference or even encouragement of inflation.  One way to make people feel better off is more money in their paychecks.  It’s hard to see that money trickling right back out in the form of higher costs.  As I’ve written in the past, the only politically acceptable way out of our fiscal mess is inflation.  (Our big fiscal issue is entitlements.  Were they even talked about in the campaign?  Did I miss that discussion?)

It’s going to be a wild ride.  I give Trump credit thus far.  An old management axiom states, “If you’re not making decisions that upset people, you’re not making decisions.”  Thus far, some of his decisions have upset his supporters; some have upset his non-supporters.  Leadership requires making decisions people don’t like.  I hope our president (and Congress) have the courage to make those decisions.