Corporate America Better Shape Itself Up or Someone Else Will

January 20th, 2020

Unlike some of the “Democratic Socialists” (whatever that means) currently in office or running for office in the US, I consider myself a true capitalist.  I believe you should be rewarded if you take a risk and invest time, intellect, or capital and it works.  Likewise, I believe you should suffer the consequences if your efforts do not work; “bailouts” from the government should not exist.  To work properly, capitalism produces winners and losers.  Creative destruction is what powers improvements in quality of life. 

Stories like Boeing’s help me understand why socialists are gaining traction in the US.  In case you missed it, Boeing’s latest version of its 737 has been pulled off the market because of safety concerns.  Two crashes killed hundreds of people.  For months, Boeing and US regulators insisted the plane was safe.  After significant pressure from the international community, airlines stopped flying the plane and Boeing suspended its production.  Boeing’s board, populated by a who’s who of American business and politics, recently fired the CEO.  For his efforts, he walked away with $62 MILLION.  By comparison, Boeing settled some lawsuits with the families of victims of the first crash.  It is estimated the families received $1.2 million per victim.  I’ve written before that I believe “fair” is the worst word in the English language.  Everyone’s definition of fair is arbitrary and based on his circumstances. I’ll refrain from saying, “This isn’t fair,” but it sure makes a good stump speech on a campaign trail.

I’ll go to one of my other blogs: optics matter.  Somewhere along the way, corporate America has forgotten that the way things look matters.  Producing high-end brands in sweatshops where people die doesn’t look good.  Paying CEOs 271 times an average worker doesn’t look good.  And, yes, paying a fired CEO $62 million doesn’t look good. 

If the corporate world doesn’t police itself, the public will through elections.  The government has not shown the ability to solve problems in highly regulated industries (healthcare, education, and housing).  The government getting involved in more of the economy won’t be good for anyone. 

Further reading:



Where Is Your Focus?

January 13th, 2020

I had an interesting conversation with a friend who is a professional salesman.  He has worked for startups and large multi-national corporations.  He recently joined a medium-sized public company.  I asked him how things were going.  He said, “I’ve never worked for a company that is so internally focused.  It feels like we have meetings about the meetings we’re going to have with ourselves.”  As our conversation wrapped up, he said, “I know I’m biased because I’m a sales person but the most successful companies I’ve ever worked for have an external focus.” 

After we hung up, I thought about his statement.  It’s the beginning of the year.  Everyone is busy with goals and thinking about what they’re going to do to improve this year.  Usually, those conversations are internally focused.  Executives set lofty goals.  Managers meet with employees and set performance objectives.  Rarely do people outside the organization have a voice in these conversations.  Maybe it’s time to change that. 

Amazon is famous for having an empty seat at meetings to represent a customer.  Maybe they’re on to something. 

It’s 2020? Where did the 2010s go?

January 6th, 2020

Is it just me or does it seem like 2010 was yesterday?  The decade flew by.  Time for a review of my 2019 predictions and a look into 2020.

As my 2019 trends/predictions demonstrate (humbly provided below), there’s a reason I’m selling labels and not a psychic.  You can read below but had you done the opposite of what I suggested in 2019, you’d be sitting pretty.  I still believe in trends towards increasing volatility in financial markets and supply chains.  I also think there will be an environmental backlash against direct to consumer shipping at some point, but I have no idea when that will occur. 

Without further ado, here is what I see for 2020.

  1. The trend away from growth at any cost that has started in the technology sector spreads to the entire economy.  Profits do indeed matter.  Public companies will miss revenue forecasts and say they are focused on profitability instead of growth.  That mindset will permeate the entire economy.  Expect to see signs of inflation as a result, especially in consumer services that have been heavily subsidized over the last few years (ride sharing, package delivery, food delivery). 
  2. The US economy continues to chug along.  Low growth continues.  Financial markets have tantrums over international affairs and concerns over the US election, but economic growth in the 2% range remains.   
  3. In the good ol’ label/packaging industry, expect more of the same trends we have seen for the last few years.  Consolidation will continue.  Convergence of print technologies and functions will continue.  The aging of our workforce will force companies to get more creative in how they attract young people to what is incorrectly perceived as a dying industry. 

I hope you enjoy a healthy and prosperous 2020. 

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.

Here’s to you, Dad!

December 30th, 2019

10 years ago today (December 31), I lost my father.  Like the great accountant he was, he moved on at the end of the year (literally and figuratively).  Those of us who knew him and loved him have moved on, better for having had him in our lives. 

My Dad grew up in a poor family.  He was the youngest of seven by many years, probably an “accident.” My grandfather died when my Dad was around 9 or 10, leaving my grandmother and his older siblings to raise him.  Fortunately, they pointed him in the right direction, which led him to meeting and marrying my Mom.  If it weren’t for that confluence of circumstances, you would not be reading this feeble blog!

My Dad ended up being the first person in his family to graduate from college.  He had a very successful career as an accountant.  Most importantly, he and my Mom raised four contributing members of society, even after going through the incredible pain of losing a child.  (OK, the contributing aspect is one the four of us can debate about each other, but that’s the subject for another blog or even a book.) He was never easy on us (except the youngest, our little sister!) but we knew he loved us.  He expected us to do our best at everything we did.    

Those of you that know me know I generally am a non-discriminate consumer of various alcoholic beverages. However, I’ve never been a big whiskey/bourbon/brown liquor person.  Earlier this year, my family vacationed in California and I spent an evening with my Dad’s best friend, Gary.    He proposed a toast to my Dad.  He ordered us my Dad’s favorite drink from their early careers, a Manhattan, which is whiskey (brown liquor), vermouth with a little bitters and a cherry added.    I drank it proudly.  Gary told me some stories about my Dad I wish I knew when he were alive.  Again, a subject for another blog. 

A few weeks ago, I was in New York with a close friend.  Without any prompting, he ordered us Manhattans while we waited for our dinner table.  I smiled and told him the story about the Manhattan being my Dad’s favorite drink.  We had a “moment,” as much as two guys can have, wondering why he ordered us Manhattans.  I again toasted my Dad and drank the Manhattan proudly. 

Here’s to you, Dad. I know you are still with me. 

May your New Year bring back fond memories and the opportunity to create new memories.   Happy New Year!

An Early Christmas Present?

December 23rd, 2019

Calling the economy confusing is an understatement. Across the globe, manufacturing has struggled this year.  Our president screams for lower interest rates despite US unemployment being at record lows.  I feel like Harry Truman, who famously said, “Give me a one-handed economist.  All my economists say ‘on one hand’ then ‘but on the other hand…’”

As I say often to our team, “Numbers don’t lie.”  We have to live in reality.  Maybe reality is getting a little better, at least in the manufacturing world.  As the attached commentary and graph from the investment advisory firm, PIMCO, show, maybe manufacturing has turned the corner and is on a path to growth.  Even Europe is showing signs of life.  Anecdotally, I see signs of growth.  Activity has certainly picked up. 

Happy Hanukah, Merry Christmas, Happy Festivus.  I hope you enjoy the holiday season with family and friends.  Here’s to hoping these numbers aren’t lying and we are on the cusp of improved economic growth. 


An uptick in manufacturing PMIs during November for several key global markets lent credence to the idea of a potential bottoming in global growth, even as other economic data were mixed. Several factors likely supported the marginal boost – including easier financial conditions (spurred by more accommodative policies around the globe) and nascent signs of both a U.S.?China trade deal and Brexit resolution. The apparent turn in data was particularly notable in the eurozone (Germany and France), highlighting that the improving business sentiment was more marked in regions generally susceptible to trade tensions and external growth conditions.

Does Business to Business Online Advertising Work?

December 15th, 2019

Last week, I was playing an online word game with my son.  We were using the “free” version so we were subject to advertisements.  After a round of playing, an ad appeared for a packaging equipment company.  I was impressed and frightened that the game knew that much about me.  I was also curious, as I know the company that was advertising quite well.  I have personal relationships with their president and sales people.  We sell to the same customers.  I filled the form out.

The next day, I got an email from one of their sales people, whom I know well.  I told her I was wondering if the advertising worked.  Before I finished my question, she said, “It’s a complete waste.  We get no leads whatsoever.  We are probably changing our spend next year.”  We got in a discussion about how to increase business and customer awareness.  Personal contacts, via phone calls, visits, and emails from sales people is much more effective than online advertising for both of our businesses.  I don’t think we’re unique.  No one has cracked the code for b to b marketing online. LinkedIn is great for job hunters and HR people looking to hire.  Social media might work for consumer awareness but I have found very few businesses that tell me they get a return on those investments. 

Marketing is a key way to grow your business.  Business to business companies spend tons of money on online marketing and advertising but see little sales growth in return.  I have a feeling some of that spend is going to be directed into other marketing efforts in the near future.    

Our Healthcare Payment System is Beyond Broken

December 9th, 2019

A family member recently experienced a healthcare emergency.  Said family member was taken to an emergency room known to be in that family’s network.  The ER staff was great.  After stabilizing the patient, the ER doctor said the patient needed to be transported to a different hospital, still within network, for evaluation and further testing that hospital could not perform.  The patient asked if personal transportation were allowed.  The doctor was adamant that the patient needed to be transported by ambulance. 

Fortunately, the patient is on the road to recovery.  Unfortunately, the patient received an almost $1,200 bill for an ambulance ride because the ambulance was out of network.  The patient was never consulted on choice of ambulance providers.  Had the ambulance been in network, the ambulance company would have been reimbursed $342.  To add insult to injury, the family has already hit its in network deductible, making the full amount due by the family.

Imagine if we all ran our businesses that way.  If I told someone, “Sorry, your labels took longer to produce than we thought, here’s your new bill,” I’d either be out of business or in court a lot.  I have come to find out that it is common practice for ambulance companies and even anesthesiologists that work at hospitals to be out of networks, even if a person goes to an in network hospital. 

The healthcare payment system needs radical changes.  Here are a few ideas:

  1. If hospitals charge non-insured people more than insured people, they lose non-profit status.  How a hospital systems that nets hundreds of millions of dollars in operating income is a non-profit is beyond me.  Both the Mayo Clinic and Cleveland Clinic make hundreds of millions of dollars a year and pay no income or property taxes.

  • If you go to an in network facility, all services determined to be medically necessary must be covered as in network by the insurance company. 
  • All prices must be available online in a format that a grade schooler can understand.  “Facility fees” should be banned.  As part of Obamacare, hospitals are allowed to charge additional fees for using their facility even if you see a doctor that is employed by that hospital. 
  • Any relationships that involve a hospital, doctor, or other service provider receiving payments of any kind must be disclosed.  I wonder if the ambulance company pays the hospital a “Provider fee” or some other payment that would be an illegal kickback in any other business. 

Doctors, hospitals, and insurance companies have to understand that people are incredibly frustrated by the current payment system in our country.  Insurance companies are the easy targets for politicians and the media.  I submit they are part of the problem, but so are the doctors and hospitals.  As our Democratic presidential candidates love to say about successful people in the private sector, “It’s time to hold them accountable.” 

A Leader’s Actions Matter

December 2nd, 2019

For you non-football fans out there, a little background is necessary for this post to make sense.  A little over two weeks ago, the Cleveland Browns played the Pittsburgh Steelers on national television.  The Browns won the game, 21-7, but the real story was a large fight that occurred at the end of the game.  Myles Garrett, the Browns’ star defensive end, sacked the Steelers’ quarterback, Mason Rudolph.  They jostled with each other on the ground.  Garrett got up and tore Rudolph’s helmet off.  He hit Rudolph in the head with the helmet.  The NFL suspended Garrett indefinitely, suspended a Steelers’ player, and fined numerous players and both teams. 

An enterprising Clevelander came up with a t-shirt that says, “Pittsburgh Started It.”  It has become wildly popular in Cleveland.  So popular, in fact, that the Browns’ rookie head coach, Freddie Kitchens, received one from his daughters.  He wore it out in public last week and a fan took a picture of Kitchens with the shirt on.  As you might expect, it went viral.  Of course, the Browns and Steelers played this weekend.  The Steelers won the game with their 3rd string quarterback and three other great offensive players not playing.  The loss effectively ended the Browns’ playoff dreams. 

Kitchens is adamant that the shirt had nothing to do with the game.  He said he wore the shirt because his daughters wanted him to wear it.  He’s right about the shirt not mattering but he apparently does not understand that the act of wearing the shirt did indeed matter.  Throughout the year, the Browns have been undisciplined.  They are the most penalized team in the NFL.  They have had numerous players ejected from games and fined for late hits.  Players have been suspended (and even cut) for being late to practice or missing team functions.  At times, the team looks confused on the field. 

People follow a leader’s actions.  Kitchens can talk to his team all he wants about discipline.  He has said numerous times, “I don’t coach penalties.”  The players, like all people, pay more attention to what he does than what he says.  Until he learns that, the Browns will continue to struggle.  It’s an old cliché: Actions speak louder than words.  That is especially true for leaders. 

A Pre-Thanksgiving Laugh

November 25th, 2019

Last week, I used my grill for the first time in a while.  I lit it and went in the house while it preheated.  When I came back out, I saw flames shooting out the bottom of the grill.  That’s generally not good.  I opened the lid to see a massive fire under my grates that was burning incredibly hot.  It was dark and I couldn’t see what was burning.  After a while, the fire burnt itself out. 

The next day, I went outside to see what happened.  I opened the grill and pulled out my grease pan.  I found a bunch of burnt acorns and other nuts in the bottom of the grill.  An enterprising squirrel decided to store his winter food in my grill.  As my wife quipped, “He wanted his chestnuts roasting on an open fire.” 

I hope this story brought a smile to your face as it did mine, singed eyebrows and all.  Have a wonderful Thanksgiving.   

Can We Find a Presidential Candidate Better than an 8th Grader?

November 18th, 2019

Our son recently ran for class office.  When the campaigns started, the candidates offered platforms that appealed to 8th graders: more recess, fast food for lunch, no homework, and so on.  In a conversation with him, he admitted that his “Chik Fil A” for lunch everyday promise was bogus.  “But Dad, it’s fun to talk about,” was his rationale for his campaign platform. 

With the tease from a Trump official that a “middle class tax cut” could be coming, it is official that every significant candidate in the 2020 presidential campaign is campaigning like an 8th grader.  Tax cuts. Free college. Free health care. Debt forgiveness.  Not one has offered any facts on our fiscal situation.  I’ll present a few:

  1. The US government continues to spend more than it takes in.  Tax revenues are up, but spending is up more.  That’s not sustainable.  Some combination of tax increases and spending cuts is necessary at some point.
  2. Nothing is free.  Every country with nationalized healthcare has a VAT (value add tax).  That’s the most regressive tax politicians have ever come up with.  If we continue to want the government to provide more (healthcare, education, defense, put in your pet project), everyone will pay more.  For all of you that think the rich will pay for everything, remember this warning.  You’re going to pay too. 
  3. There is a lot of talk about the wealthy paying their “fair share.”  As I’ve written in the past, I hate the word fair.  We all have our own definition of fair.  The reality is taking 100% of the income of the top 1% of earners would barely cover our deficit.  See Table 1.  The top 1% earned $2 trillion in 2016 and paid $538 billion in taxes, leaving $1.462 trillion.  Our deficit is over $1 trillion.  I’m pretty sure a 100% tax rate will have an impact on how much people in the “evil” 1% work. 

It’s time to have an adult conversation on taxes and spending.  Unfortunately, it appears the adults have left the room.  We’re left with the equivalent of 8th graders running for president.  Sad.