Archive for the ‘Brian’s Blog’ Category

“You Can Do That, But You Should Probably Think About Doing This.”

Monday, February 11th, 2019

Like many industry colleagues, I attended Gary Cooper’s funeral last week.  “Coop” had been in the label industry for 30 years, most recently as CEO of Dot It.  He died suddenly and unexpectedly on Super Bowl Sunday.

There was not a dry eye in the house as Coop was eulogized by best friend, and his family, his son Truman, daughter Tory, and wife, Colleen.  Truman relayed stories of how his dad supported whatever he wanted to do.  He said that when he would go to Gary for advice and tell him what he wanted to do that, rather than say no, Gary would end the conversation with, “You can do that, but you should probably think about doing this.”  The conversation would end, Truman would think about his choices, and usually determined Gary was right.

I was fortunate to consider Gary a friend.  As I thought about Truman’s eulogy, I remembered conversations with Gary.  We had many business conversations and I would often solicit his input.  He had a way of guiding me to the right choice.  He was not dogmatic in his advice; he somehow was able to make you think the right choice was the decision you would have made all along.  Coop had a leadership gift we all can learn from: listen well and make people think before deciding.

If Coop were still with us, he probably would have said to a few of the attendees, “You can wear a sport coat to a funeral, but you should probably think about wearing a suit.”  (I know a few readers will understand that comment and that Coop is smiling down upon us.)

Do Not Forget the Fundamentals

Tuesday, February 5th, 2019

Having played defense a majority of my football career, I was one of the few people outside of New England that found the low scoring Super Bowl exciting.  Rule changes, along with offensive scheme changes, have led to an increase in scoring on all levels of football over the last several years.  Even I will admit that it does not hurt that high scoring games tend to be more exciting than defensive struggles.

Going into the Super Bowl, virtually every “expert” predicted a high-scoring affair.  The Rams feature a prolific young coach who structured a dynamic offense.  The Patriots have Tom Brady, arguably the greatest quarterback of all time.  Both teams’ defenses had struggled at times during the season and during the playoffs.  The conditions were ripe for a shootout.  ESPN’s “experts” predicted scores that ranged from 20-17 to 41-40, with an average final score of 31-27. http://www.espn.com/nfl/story/_/id/25884822/super-bowl-liii-score-predictions-espn-staff-picks-patriots-rams-2019-nfl  Oops. That’s a far cry from the 13-3 final.

Something happened on the way to the score everyone anticipated and hoped for: experience.  The Rams’ defensive coordinator, Wade Phillips, has been coaching in the NFL for over 40 years.  Bill Belichick, the Patriots mastermind, is the oldest coach ever to win a Super Bowl.  Both teams featured many experienced defensive players.  Give smart coaches and smart players a few weeks to prepare and good things will happen.  The bottom line is both defenses outplayed both offenses, with the Patriots playing a little better.

So what’s the lesson in all of this?  Bill Belichick is famous for telling everyone around him, “Do your job.”  Based on his demeanor, I imagine he might add a few words to that phrase every now and then.  It’s easy to get caught up in the hype of a shiny new object (product, service, etc.).  It’s easy to focus on a new marketing strategy.  It’s fun to chase new business.  Don’t forget the basics.  Growth is exciting.  New ideas are exciting.  But to win, you still have to execute the fundamentals.  The Patriots prove that time and time again.

It’s Time for a Serious Conversation about a Flat Tax

Monday, January 28th, 2019

Every now and then, I learn something that truly makes me wonder if there is any common sense left in the world.  A situation like that occurred last week.

Our auditors and tax accountants were in for field work.  They asked questions about our parking lots.  The latest tax changes make employee parking a non-deductible expense.  Translation: we have to allocate rent from our facilities to parking that we do not charge our employees for.  That is an expense we do not get to deduct anymore.  In other words, it is a stealth tax increase.  It is also a colossal waste of resources.  Our staff had to allocate time to figure out how many parking spots we have for employees, that I paid for.  Our accountants have another form to fill out, that I paid for.   The IRS has another form to process that we all pay for.  What it really demonstrates is that every tax bill offers permanent employment for attorneys, accountants, lobbyists, and government bureaucrats.

In the real world, simplification is rewarded.  Car companies became more profitable when they bundled popular option choices together instead of letting consumers choose options ala carte.  Retailers, both bricks and mortar and online, try to make transactions as frictionless as possible.  Only in the bizarre world of anything the government is involved with (taxes, healthcare, education) is obfuscation rewarded.  Let’s start with the tax system.  It is time to have a real discussion about a flat tax system.  Simplify, simplify, simplify.

If you have insomnia, click on the links below to read more about this ridiculousness.

https://www.irs.gov/newsroom/irs-issues-guidance-for-determining-nondeductible-amount-of-parking-fringe-expenses-and-unrelated-business-taxable-income-provides-penalty-relief-to-tax-exempt-organizations

https://www.journalofaccountancy.com/news/2018/dec/irs-guidance-qtf-benefits-parking-201820258.html

You Have to Adapt to Your Conditions

Monday, January 21st, 2019

We recently experienced our first real winter storm this season.  I was driving my son, who recently turned thirteen and now officially knows everything, to one of his friend’s houses.  The roads were slick.  I was driving below the speed limit.  Of course, he had to question me for going slow.  I explained to him that the roads were slippery and the speed limit did not matter; I had to be safe.  He sighed and rolled his eyes.  As if on cue, a car coming the other way was going fast and was going to attempt a right turn.  I said, “Look at that idiot.  He’s going to go off the road.”  Sure enough, he skidded off the road.  Luckily, he did not hit anything.

I tried to use this example as a Ward Cleaver-esque moment.  I emphasized how a car is not a toy and a driver has to understand the condition of the road.  I think all he heard was, “Blah, blah, blah.”  Hopefully, I can get my message through to him before he actually drives.  He is counting the days and insists he already knows how to drive.  Every parent faces similar challenges…

After dropping him off, I thought about what I had said.  Most drivers do adapt to road conditions but, as I witnessed, it only takes one person who is not adjusting properly to potentially create a huge problem.  Is everyone on your team adapting to the changing business conditions?  Are you all on the same page for tactical and strategic adjustments?  If not, it might be time to sit down, discuss the current environment and what you see for the future.

 

The Government Shutdown: A Proposed Solution and is it Trump’s Waterloo?

Tuesday, January 15th, 2019

As I write, the longest government shutdown in history continues while the President and Congressional Democrats trade blame in the media.  Instead of focusing on issues and negotiating, both sides appear dug in trying to gain a political advantage.  I have a simple solution for ending the shutdown:  Let’s pass a law that any time there is a shutdown, all elected and appointed officials forego their salaries and benefits for the length of the shutdown.  Congress, the president, and cabinet officials should not get paid if they do not fund the government.  That might bring them to the table a little faster.

The shutdown is beginning to impact the economy.  The fact that hundreds of thousands of government workers is regularly mentioned in the media.  The other economic impacts of the shutdown are just beginning to get attention.  Cargo ships are unable to deliver to US ports because paperwork is not being processed.  Airline travel is starting to be disrupted because of a lack of TSA workers.  New products launches are being delayed because the FDA is not fully staffed.

The President has touted the strong economy as evidence his policies are working.  A prolonged shutdown will have a negative impact on an economy that is already showing signs of slowing.  Even if Trump wins the proverbial battle and gets funding for the wall, he might lose the war by inflicting harm on the economy.  Border security is important but as Bill Clinton famously quipped, “It’s the economy, stupid.”  If the Trump and the Republicans do not figure that out soon, 2020 will not work out too well for them.

Are You Ready for 2019?

Tuesday, January 8th, 2019

Just writing the year “2019” scares me.  It seems like only yesterday we were in 1999, preparing for the new millennium.  (I know our IT department can’t wait to correct me.  Technically, the new millennium began in 2000.)   I got really scared and felt really old when I learned Prince released the album “1999” in 1982.  Time marches on whether we like it or not.

I’ll start with a recap of my 2018 trends which were posted January 3, 2018, and conclude with 2019 predictions.

  1. The return of inflation. Yes, I’ve thought this would happen for a while.  It took six years for label prices to go up.  I don’t know if there will be more increases this year but the overall trend for commodity prices is up.  Pay attention to oil.  If the Russians and OPEC are finally convinced that fracking is here to stay, they will restrict output and let prices rise.  While US producers will fill some of the gap, they will like the higher prices as well.  Don’t discount politics either.  We have a president that loves debt.  Debtors benefit in times of inflation. 2019 Comment: Not bad. Missed on oil but got inflation right.
  2. More consolidation in every industry. Technology and customer demands create advantages for those that scale.  That will continue to accelerate in 2018 and beyond.  I say this every year and it’s the one thing that I’ve been consistently right about! 2019 comment: I didn’t go out on a limb for this one.  The consolidation trend will continue. 
  3. Environmental concerns start to impact the packaging industry, especially in the U.S. The dramatic growth in internet retail has led to an explosion in packaging consumption.  If I were a bricks and mortar retailer, I’d be screaming about how environmentally unfriendly this trend is.  Prior to the recession, environmentally friendly packaging was a hot topic.  Once the recession hit, companies wanted to be environmentally friendly as long as it did not cost more money.  Smart companies will figure out how to make being environmentally friendly a strategic advantage.  Expect Amazon to announce a major environmental initiative. 2019 comment:  Do straws count?  The environment will remain a hot topic.  If your neighborhood is anything like mine, you saw the amount of packaging associated with e-commerce at the curb after Christmas.  https://www.nationalgeographic.com/environment/2018/07/news-plastic-drinking-straw-history-ban/

 2019 trends/predictions

  1. To state the obvious, after a relatively calm period, volatility returned to the financial markets in the last several weeks. It will continue and impact the economy.  Banks will begin to tighten credit standards.  Economic growth will surprise on the downside at some point during the year.  Overall, the US economy will grow but the growth rate will slow.  (This is a prediction I would love to be wrong about.)
  2. Expect volatility in your supply chain as shortages in raw material components (real or perceived) are possible. Top concerns are thermal transfer ribbons, release liners, and certain adhesive components.  As I’ve written in the past, price does not matter when you cannot get something.  Be prepared for longer lead times.
  3. The death of bricks and mortar retail continues to be greatly exaggerated. For environmental and cost reasons, direct to consumer shipping slows.  Merchants will encourage (translation: monetarily reward) consumers to pick up items ordered online at centralized locations.

The New Year is a great opportunity to reflect on what went right, what went wrong, and what you can do to change your future.  I hope you create the 2019 of your dreams.

 

 

 

What is Your Life’s Mission?

Tuesday, December 18th, 2018

 

My grandfather was a prolific writer. In addition to writing professional (insurance and sales related) and history (World War II) books, he kept a journal most of his life. One of my never ending projects is transcribing all of those writings for our family.

He was a religious person and often wrote about his faith. I recently came across something he wrote December 24, 1985, at 10 AM. (He documented everything!) An excerpt is below:

“We live comfortably – no question about it. Yet the greater and deeper satisfaction comes with non-material aspects of living. Perhaps there is a certain power of thought that permeates Christian humanity because so very many people have Christ in mind more profoundly at this time. Or, it may be because the air we breathe is filled with God-given reminders of what our mission in life truly is – to love God and serve others. Peace!”

During this holiday season that turns more secular every year, may you find what your mission in life truly is. Merry Christmas. Peace!

We’re All Human

Monday, December 10th, 2018

I was out with some friends last week.  The conversation turned to the funeral of George H.W. Bush.  One person seated at the table said, “I’m not a political person but for some reason, I’ve been drawn into watching everything.  From the dog laying at his casket to the family entering the Capitol Rotunda, I’m watching all of it.  And it’s emotional.”

Our group engaged in a lively discussion about why most of the country was glued to their television sets.  Many reasons were given.  “He is among the last of the Greatest Generation.”  “He oversaw the collapse of the Soviet Union.”  “He had a great relationship with his wife.”  “He represented a more bipartisan time.”  “He reminded me of my grandfather.”  All of those are valid and contributed to the admiration GHWB deserved and received.

I thought about our conversation as I drove home.  What really struck me was the humanity displayed by the Bush family.  We saw a former president and a former governor, along with their other siblings, grieving publicly.  No matter how successful, wealthy, or privileged a family might be, life events still happen to them.  Not all of those life events are fun.

In the hyper-partisan political environment we live in, my wish is the Bush family’s demonstration of humanity during a challenging time gets us all to think a little bit more.  Think about the human aspect of the person with whom you disagree.  Think about what is going on in that person’s life.  Think about what you have in common.  As the Bush family demonstrated, we all share similar life experiences.

GM, Amazon, and Crony Capitalism: Will We Ever Learn?

Tuesday, December 4th, 2018

Last week, General Motors announced it was closing plants and laying off a significant number of both white and blue collar workers.  GM said it is taking these actions from a “position of strength” and to prepare for the future.  Less than 10 years ago, the US government effectively bailed General Motors out, costing tax payers over $11 billion.

In mid-November, Amazon announced it was building its “HQ2” in New York and Northern Virginia.  It also is building a major operation Nashville.  The estimated total tax breaks (subsidies) Amazon will receive are $2.2 billion.  In New York, the subsidy amounts to approximately $48,000 per job.  In case anyone misunderstands, that $48,000 is being taken from New York’s tax payers and being given to Amazon.  Andrew Cuomo, the Democratic governor of New York, said, “This is the largest economic infusion the state has ever seen…These are great jobs.”  I find it funny that the same political party that ridicules supply side economics supports tax breaks for Amazon.  Politics certainly makes strange bedfellows.

When politicians decide what is and what is not a “great job,” I get concerned.  Aren’t all (legal) jobs important?  We continue down a path where the government gets to pick winners and losers despite evidence that this strategy does not work.  Crony capitalism is a losing strategy for tax payers.  For capitalism to work optimally, the playing field should be level for all participants.

Articles cited/Further reading

https://www.thebalance.com/auto-industry-bailout-gm-ford-chrysler-3305670

https://www.askheritage.org/the-auto-bailout-who-was-actually-bailed-out/

https://www.nbcnews.com/business/autos/oops-gm-bailout-cost-taxpayers-almost-1b-more-estimated-n93816

https://www.cnbc.com/2018/11/13/amazon-tax-incentives-in-new-york-city-virginia-and-nashville.html

https://nypost.com/2018/11/15/cuomo-calls-amazon-deal-a-home-run-while-defending-massive-tax-breaks/

Why Do We Accept Failure in Our Food Supply Chain?

Monday, November 26th, 2018

On November 20th, the Centers for Disease Control (CDC) issued a food safety alert regarding romaine lettuce due to E. coli concerns.  Several people in several states got sick.  At the time of the warning, no regulatory agency knew where the bad lettuce came from, so we were told to not eat any romaine lettuce.   On November 23rd, the Food and Drug Administration (FDA) announced the likely source of the bacteria was in California.  Even with this new information, the FDA was clear to state:  “No one distributor or source has been identified, so the FDA is warning consumers to avoid all types and brands of romaine lettuce.” https://fox6now.com/2018/11/25/fda-says-romaine-lettuce-recall-likely-california-based/

Why can a distributor or source not be identified?  It’s 2018!  Technology exists that can track our food back to its source.

I make labels for a living.  They usually do not involve getting people sick.  If we have a quality issue with a product, we can go back to our suppliers who can, in turn,  go back to their suppliers.  They can identify when the paper, film, adhesive, or silicone was made.  I half seriously say that they could tell us when the trees were cut down!  Yet we accept not knowing where our food comes from.  Does that make any sense?  Are we that cost conscious that we accept illness instead of paying a few cents more for a bag of lettuce?

If our politicians are too afraid to legislate better food traceability, maybe it is time for consumers to stand up and refuse to buy products that cannot be traced to their sources.  The “farm to table” movement needs a new chapter.