Sunday, December 11, 2005

Volume 15 - 'Big Boxes' getting bigger

Rumors are rampant on possible acquisition talks between The Home Depot and the industrial distributor Hughes Supply. "The speculation was fueled by the announcement a couple of weeks ago that Hughes Board of Directors has authorized the company to consider strategic alternatives for the company to maximize shareholder value." (from an article written by Lindsay Young)

Two things simply jump out at me, one involving the future impact on Contract Door Hardware Distributors and Locksmiths, and the other involving a totally different subject " maximize shareholder value".

Hughes Supply is a distributor of construction, repair and maintenance-related products. David Manthey, a Senior Distribution analyst who follows Hughes for Robert W. Baird & company Inc., Milwaukee, Wisconsin, says acquiring Hughes would fit with Home Depot's strategic mandate to expand beyond retail in the U.S. Recent acquisitions by Home Depot include White Cap Construction Supply, National Waterworks, Inc., and Williams Brothers Lumber Company. According to a news release from Home Depot earlier this year, the company is focused on building a leadership position in markets that serve business to business customers such as Commercial Builders.

If I were a Contract Door Hardware Distributor or Locksmith and my present suppliers were selling the 'Big Box Houses', I would have to cease and desist my purchase practices with those suppliers/manufacturers for the business strategy is now very evident on where the 'Big Box Houses' desire to move. The handwriting is on the wall! And, although there is nothing wrong with a strategy that promotes growth within one's company, it should not be done at the expense of your own customer group, whose past loyalties are obviously disregarded and mean nothing to the supplier/manufacturer who exhibits their lack of caring for you as a customer, nor do they care that they are doing their best to run you out of business, as opposed to seeking new revenue opportunities in available untapped markets, even if their products are labeled under a different name. Why, as a entrepreneurial business, would you continually feed those that are positioning themselves to destroy your very business?

The other news is that the magic words of "to maximize shareholder value" are used. Translated that means the financiers are collecting huge fees and the principal shareholders have access to new money while ordinary shareholders and absorbed employees, from the acquired company, just got screwed.

Have a very Merry Christmas and a great Holiday Season

Friday, November 25, 2005

Volume 14 - 'Consultative' selling within the Contract Door Hardware Distributor Market

During my last three years with the Amweld/WWH companies, I had the pleasure of taking on two very special challenges:

The first, was the creation of an Architectural Door Hardware Company within the framework of Amweld Building Products Inc. As you can see by reading my blog posts, I am now in the throws of repeating this very task as I, in conjunction with a few other Founding Members, who will be joining me, continue to create my own company, Independence2. The various topics related to start-up businesses and the Door Hardware Industry, form a great deal of my previous blog postings, so I invite you to go back and catch-up with past volumes that, hopefully, will help you in whatever venture you may be part of or you may be contemplating starting.

The second special assignment involves, what I call, 'consultative selling' which consists of a very special group of clients, and this is the main topic of this blog volume. The basis of this topic is the privilege I had in working very closely with six distinguished Contract Door Hardware Distributors, all being different in size, organizational structure, and business philosophy. I created a program called the 'Inner Circle'. The basic structure was simple, these selected customers permitted me a 'peak under their tent' of their respective companies, in return for a Business Process Report, consisting of an oral presentation accompanied with a detailed written report on what I witnessed, both the good and the bad. These Business Process Reports contained summaries of the data I witnessed personally, along with improvement suggestions. These Business Process Reports were drawn from various personal resources and my years of experience and provided in-depth analysis free of charge, of any kind, period. They saved thousands of dollars in Change Management, Sigma Six, and Quality Improvement Consulting fees. This is uniquely valuable for all Distributors, but even more so for the Distributors, where the business model consists of sole ownership structures, family businesses, or small and mid-size corporations, since in general these operations have limited finances available to invest in high-end outside consulting services and their related hundred thousand dollar fees. In case you read this and think, “okay, I just need to go higher a Consultant”, let me state this, there are few within the Door Hardware Industry that can boast extensive years of experience within this specific Door Hardware Market in conjunction with the rare relationships with Distributors that have taught me the personal insights into the Contract Door Hardware Distribution business I have witnessed.

In the final analysis, the experiment with my creation of the 'Inner Circle' concept had the following successful goal: Enhance relationships with a select tier group of Amweld Distributor Accounts by sharing proven techniques and management "Best Practices", in order to empower growth driven entrepreneur Distributors to seek and achieve a measurably higher growth and profitability rate. The overall Sales strategy was simply a supplement to Amweld's Sales and Marketing by offering to share existing accounts the proven “Best Practices” that I have successfully implemented over my years within the industry and which I have seen time and again provide results.

The actual Business Process Review started with an 'Assessment' and ended with a thorough 'Evaluation'. The broad stroke subject matter covered Sales & Marketing, Operations, Financial Management and Information Technology with specifics to the industry ranging from estimating, bidding , selling , vendor pricing, procurement, value engineering and change orders. In some cases, it carried over to in-depth discussions on merger and acquisitions, contract and job file administration, financial reporting & planning after-market expansion.

This successful experiment was an example of ‘consultative selling' using knowledge share of case study examples redefining a door, frame and hardware distributor in a manner geared toward sales growth and profitability, for that distributor, recognizing his uniqueness in a particular marketplace. It is not often that an entrepreneurial company can have the opportunity to affect the reshuffle of the elements of a major traditional industry on a geographical enhanced scaled openings industry but with the aid of techniques utilized with the 'Inner circle', in this experiment, our new company, Independence2, will use this a direct selling tool in the years to come. In an industry characterized by brand name and quality of product upgrading with generally poor service standards and little respect for distributors, Independence2 will, through a respect for and commitment to its distributors, effect a change that will affect practices for the new building and after-market end users, architects, contractors, facility managers commercial and industrial building owners.

Monday, November 07, 2005

Volume 13 - Importation of Goods - Trade Imbalance - Why and How?

There was a time, not long ago, within the early 60's that we as Americans noticed products, of various sorts, being made in Japan, Korea and other Asian countries reaching our shores and stores. 'Not impressed' would be an understatement as the 'bottom of the food chain' seemed to be their customer base with emphasis on the word 'cheap' both in price and quality. For example, the 1963 Honda was small, spartan, and certainly didn't fit into the realm of American muscle cars of this period. Although 'three swings for a dollar' with a baseball bat or sledgehammer onto this Japanese car, at more county fairs, with U.A.W. sponsorship protesting importation, raised more money for local charities than the Red Cross in that time period.

It didn't take very long however, about two decades or so, and this automobile manufacturer had captured 10% of the automobile market share and winning 'quality' awards on a yearly basis. And, today, we have more automobile manufacturers globally than we have candy companies with market share still progressing toward foreign manufacturers. Luckily for the U.S. economy 'they' are also spending billions of dollars building plants in this country. Examples abound of this importation phenomenon, in particular, with Asian manufacturing prowess involving every manufacturing type industry from clothing to cars to hardware to computers. The fastest growing economies in the world, so much so that their speed is effecting prices of steel, oil and essential natural resources.

Other than screaming about imports, decrying Washington DC's foreign policy and blaming others for the exodus of manufacturing, the implosion of imports, and decades late discussions concerning global economies, did you ever stop to ask why and how this phenomenon has occurred?

I have a theory. This theory states that there is presently an inverse relationship between the rapidly increasing importance of other world regions to the economic prosperity of the United States and how much our present primary and secondary educational system compares and competes with the world outside our borders. A sub-theory, directly related to present business, states that a steady decline in research and development within our small to medium size companies due to corporate focus on 'top-line' numbers has stagnated our manufacturing abilities and our poor showing in the market place. And, although I will argue the above statement concerning the downgrading of R & D to be absolutely correct, the real problem is actually more complex and more difficult to solve.

Our educational system pales in comparison to high achieving countries. Our educational system has stopped being competitive. Our educational system and its non-competitive mentality is root cause for our inability to be a manufacturing leader in today's global economy. Our primary and secondary schools are controlled by thousands of local 'boards of education' who are then overseen by State Boards and other governing bodies. Anyone, without any educational qualification, can be publicly elected to a school board. This entire system is full of non-productive and unaccountable bureaucracy. Our teachers, within primary and secondary education, are poorly paid and, unfortunately, most don't deserve anything more. Their standards are minimal; their teaching abilities are sedentary; their ill-prepared to help students close the international knowledge gap; and, they have no accountability other than to a school administration, a localized school board, and a union or association who simply have no understanding of what it takes to succeed in today's competitive world. Our high school football, basketball and baseball teams, both boys and girls, are world class; too bad our educational system isn't. Our higher educational institutions are still world class loaded with foreign students desiring the best education in the world in the areas of business, engineering and medicine while American students pursue non-business, non-science and non-engineering type curriculums.

In the past 10 years, 1994-2004 the population growth rate for youth ages 5-19 was higher in the United States than in Canada, France, Germany, Italy, Russia, the UK and Japan. Only 65% of U. S. children ages 3 to 5 were enrolled in center-based preprimary and primary education in 2001, a rate that was lower than the rates of all G8 countries with the exception of Canada. Yet in the same year almost 25% of U.S. 18 to 29 year olds were enrolled in higher education, the highest enrollment rate among those same countries. And of that number, only 7% in the general field of engineering, manufacturing and construction, according to the National Center for Education Statistics. Another example of this up-side-down system is the language instruction does not reflect today's realities. Over one million students in U.S. schools study French, a language spoken by 80 million people with fewer than 40,000 students that study Chinese, a language spoken by 1.3 billion people. The statistics available simply tell the tell.

It isn't a question of expenditures per student anymore than it is inner-city versus suburban curriculum or 'red states' versus 'blue states'. Its a fundamental organizational development problem that needs total revision starting with the local boards of education, the accountability of teachers, curriculums reflecting world importance, involvement of parents and implementation of standards without exception.

You can build walls around this country and tout protectionism, decry the global economy, and wish it was the decade of the 70's, but it isn't. It's the 21st century; it's the Global age; so, stop whining about the Global economy, deminishing manufacturing and resurgence of foreign countries and start implementing corrective action, acknowledging the real world, and, just possibly, we can regain world prominence, even on a higher level, through an educated workforce with a productive competitive outlook.

Monday, October 10, 2005

Volume 12 - Great Politicians, News Personalities (alleged news reporters) and Leadership in the Great State of Ohio!

There aren't any!

Ok, maybe there are great politicians or, more appropriately, were great politicians, the majority certainly six feet under; but the 'news' people, other than being so far 'left' they're able to reverse screw themselves in the ground, have exceeded ridiculousness with their hatred of the President and utter starvation for the ratings chart in the reporting of Katrina and Rita. These natural catastrophes are a news item and a humanitarian cause with a huge recovery process and reconstruction effort. It is and was not a stage for auditioning and exaggeration to benefit TV ratings. There are soap operas giving better performances with even the WWF displaying more honesty. These on-sight news reporters even make 'ambulance chaser' attorneys look forthright looking for another grievous injury story. It wasn't a story about a lack of evacuations, transportation, food, water, poor police communications or protection, most of which is not a responsibility of FEMA to begin with; it was about a local and state government made up of incompetent individuals, who make a career off of governmental subsidy, utterly failing to act. It was a failure of a welfare ridden community waiting for a the government to bail them out. (Review Volume 10 - State and Local Politicians have responsibility and accountability in Katrina disaster - if you still desire more editorial opinions regarding these events, and associated responsibilities including the levels of government misdirected subsidized development over the years.)

But, before I leave my brief rant on politics, 'soap opera' newspeople, and welfare mentality, I certainly don't want to leave out my home state of Ohio without a word of disgust and nausea toward its governmental leaders. Talk about lack of accountability; these people aren't qualified to run for office in Louisiana!

Here in Ohio, the Bureau of unemployment compensation fund recently lost millions of dollars due to investments made in rare coins. Yet, they invested in coins, and lost. But, according to some Senators and our Governor, gambling will never be allowed in this state while bordering states employ thousands of people and bring millions to their local economies. It breeds a decaying nature according to the politicians. Interesting.

Did I also mention that Ohio is the dumping ground of the United States? One of the most imported trash dumping states in the Union, if not the top garbage state. Ever ask a State legislator of Ohio if he/she endorsed dumps? Guess how they respond? Yet, I live in the largest importer of dump refuse in the country. Do you think that 'tipping' fees and other monies have anything to do with that position. Interesting.

Let's review: Lost millions of our taxpayer dollars in 'coin' investment; but tote the Bible while condemning gaming. One of the states (maybe the largest) that takes everyone's shit by the truckload and rail car. Fees. Hello. Hypocritical bunk. Bureaucratic bunk.

Monday, September 26, 2005

Volume 11- Independence2 (review of a start up company)

Please refer to the below listed Volumes for additional insight into this start up venture with the emphasis on the customer, the basis of our core values:

Volume 2- Customer Satisfaction & Accountability
Volume 3 – International Transportation
Volume 4 – Building block business update on the new start-up venture
Volume 6 – Independence2 update with the Operations & Marketing Member’s remarks
Volume 8 – How to Predict Success for Architectural Door Hardware distributors
Volume 9 – Value Experience

Independence2, LLC is an Ohio Corporation created in January of 2005, shortly after I separated from WWH/Amweld Building Products after almost two decades of dedication and work, with five of those years as Amweld’s President/CEO, during its most profitable and biggest growth years 1996-2001. At that time the company was solid and making immense profit for its ownership. Greed and ‘experts from afar’ along with insiders who wouldn’t know a customer, or understand ‘distribution’, took control and, like all ego built plans, that concentrate on ‘top-line’ numbers and imaginative ‘smoke and mirrors’, are destined for failure.

So, it was time to put forth a company based on a different set of core values. It was time to build a company that respects the customer. It was time to build a company that provides ownership to its founding members/employees. Actually, I owe a debt of gratitude to my former company and all its previous owners for they enabled me to acquire a business education of the highest quality and to establish a company founded on core values that respect the customer. To be part of building a company that runs on ‘execution and implementation’ with various revenue streams and not on ‘pounds and pieces’ and top-line revenue theorists junk thinking.

Our customer is that entrepreneurial stocking distributor who sells architectural door hardware products to the end user with the expertise that allows them to call on architects, contractors, facility managers and operational property executives. If you go into our Web Site you will see that it is under development and construction as is this entire process of building a company from the ground up. And like our Web Site, upon completion, it will be very interactive and have the best features that technology allows, so its development is slow and tedious as we progress through this building phase of our start up company. There is nothing simple about building a company from the ground up and the last thing that should be done is to rush such a process. From establishing core values to putting the financing into place to securing sourcing partners that have the same customer focus are but broad strokes over the process. Nevertheless, the process continues with a group of founding members that are relentless in their mission to accomplish a great task.

Independence2 will be a private labeled architectural door hardware company supplying architectural grade door hardware products ranging from the latest in Biometrics through grades 1 and 2 hardware including an association for commercial grade steel doors for the commercial construction industry sold only through stocking type distributors. It is owned and operated by a group of owner-founding members that understand the value of the distributor customer, respect for the supply chain and the obligations to each other within this company. Our customer is not the big box store nor is it any in-house retail unit. It is only that stocking distributor who sells architectural door hardware products to the end user. This company will run on execution and implementation for the customer’s benefit. It will maintain as a core value a customer consciousness that starts with specifying value from the customer’s perspective. We will not only encourage enterprise thinking on the part of our members, versus functional or departmental thinking, but also make enterprise thinking a way of doing business.

The question that we address is the one that most companies don’t consider: What do customers really want? Customers don’t care about trivial differences between brands. What they really want are quality products, reliable services, and a fair value for their money. Why do most companies consistently fail to meet even these basic customer needs? Because, they have no process of knowing how to meet and exceed the ordinary of customer expectations. Too many businesses have focused on the wrong things. The reality is different than the conventional wisdom in many ways. Whereas, most companies would agree that the customer is ‘King’, we, at Independence2, know that, in most cases, the customer does not feel that way in his relationship with most vendors. Ask almost anyone about his or her latest bad customer experience with their hollow metal or hardware vendor. Most can tell you about something recent like material not being 'ready' when told it would be, or not being told when orders would be 'complete' and ready to ship or how it shipped, or never really being satisfied over credit issues which make no sense to the customer. This list is endless.

We, at Independence2, also believe that we do not have to offer something unique to attract customers. Customers rarely buy a product or service because it offers something unique. They usually choose the brand that they expect to meet their basic needs a bit better or more conveniently than the competition. What customers want are products, and the ease of attaining those products, that are profitable to them, in all facets, not more differentiation. And, finally we, at Independence2, start with the inside the box philosophy with emphasis on the basics ensuring that we reliably meet customers reasonable expectations on our products.

Most of the business problems that I have witnessed over the years stem from the fact that people have failed to keep their eye on the ball, failed to listen to customers, and failed to deliver on the basics. I have witnessed manufacturing people spend countless hours and ridiculous amounts of money on projects that never served the customer’s purpose; never increased capacity; had terrible reliability and never worked to the expectations of the customer nor the company. The projects took on a life of their own and became the focal point and not the basic requirements like offering good service, quality products, with on-time delivery at a fair price. At Independence2, we know that it requires effort, as well as empathy and imagination in meeting customer expectations. Our company is created on this principle with owner-members dealing daily with this customer focused business mentality involving a combination of customer and competitor insights, good systems and the right culture. We understand the critical distinction between the viewpoints of customers and suppliers. We run counter to the conventional wisdom that abounds about competitive positioning and differentiation. Our differentiation is in how we deal with the customer and not merely the product. It is how we structure, train and correctly operate a company. Innovation is still critical, but its directed more at improving the delivery of the category benefits, and less at trying to develop unique brand benefits. And, execution is always more important than strategy.

Sunday, September 04, 2005

Volume 10 - State and Local Politicians have Responsibility and Accountability in Katrina Disaster

What ever happened to State accountability? City accountability? County (or Parish) accountability? What ever happened to State and City preparedness? What preparation was made for this disaster situation over the past two decades or two weeks prior? Were disaster scenarios, that have proven models available, used and applicable? Is your State prepared for a natural disaster?

The City of New Orleans was built, over two hundred years ago, eight feet below sea-level with pumping contraptions and levee protection built over decades and neglected over by politicians. It's a city built in a bathtub. It doesn't take a Rhodes scholar to understand worst case scenarios. If you are smart enough to do scenarios, as all States and major cities are obliged and accountable to perform, this never was a case of "if" just one of "when". The worst case scenario just took place in the Cresent City along with many smaller cities throughout Louisiana, Mississippi and Alabama. Three days afterwards riots (in New Orleans) and lawlessness are the order of the day from thugs and gangs and desperate people.

Yet, how many times did we read, over the past year or so, about the Governor of Louisiana and the owner of the New Orleans Saints arguing about new facilities and/or remodeling of the Superdome at costs staggering to the average person in that city. Or various court proceedings stopping commercial development, that might have contained proper hurricane codes within their construction, followed by other court proceedings over a variety of subjects ranging from gambling to hotel rooms. But, in all of that publicity and court proceedings, not a word about disaster plans and the implementation of rescue, evacuation, or communication issues or the greater good of building up the Barrier Islands that are all apparently missing, as this piece is being written, to help during strong storms. And, worse of all, a governor in Louisiana who constantly was on TV for the first two days, now doing a disappearing act with the majority of State and local politicians. And, legislators in the great State of Mississippi allowing gambling, like Louisiana (and probably other coastal cities)' on floating barges, instead of building codes that enforce proper structure, to bypass state and federal gambling laws instead of changing the law and building secure structures which would be the right and proper avenue of a well run business. But government is not like a well run business where accountability and responsibility are part of the program. They are experts in 'spin-talk' and the blame game. It was always a case of 'not on my watch will something like this occur' but it did and will occur again.

Whether the Federal Government was one day late or four days late in response or whether wrapping FEMA under Homeland Security was a good idea or not, State and local lack of preparedness is not going to be erased by blaming Homeland Security or the President of the United States. Not the President's fault. The federal government, and certainly Congress, make enough stupid mistakes. This isn't one of them. Accountability and responsibility are not elusive terms for local and state officials when it is convenient. They are tattoos that never go away. They are part of the job. If you're a politician, for god's sake accept the accountability and the responsibility and learn to think. Think in a forward manner that encompasses disaster thinking and rehearsals for your State. This is 2005 and not 1970, '911',within a week, will be four years old. Discuss and act on worse case scenarios. This isn't a Democrat versus Republican issue. This isn't about politics, power and procedures. It's about accountability and responsibility.

Unfortunately this failure of local and state government isn't going to be any different now than past federal failures with our airport security, which isn't any better today than it was previous to 2001, nor will it improve; or, the still lack of proper single communication systems with global technology for first responders of disaster situations; or, how much improvement has taken place with oil importation since the crisis of the late 70's and early 80's? None. Still dependent.

May a greater power take mercy on the Gulf Coast and especially the great City of New Orleans and somehow lesson the suffering that is going to be immense for years to come. And, since we're asking favors, how about some local and State accountability and responsibility, as well as citizentry, rather than the coming blame game spin talk.

Saturday, August 27, 2005

Volume 9 - Value Experience

I would like to explore the idea of value and experience within the business transaction relationship of a purchaser and vendor.

From our neighbor's conversations to the boardroom meetings, from our customers to our wives, we hear about the high price of products, the high cost of materials, labor, and a menu of topics within this on-going price circle increase that we all dwell, in both our private and workplace lives.

Yet, is it not true that we purchase cups of gourmet coffee for $2.00 instead of $.50 cents? We purchase clothes in much the same manner rather than off the rack at Wal-Mart. We play rounds of golf for higher prices than the public course two miles down the road. Aside from price, readily admitting we look at pricing initially, we still choose one store over another, not simply for price. And, for the sake of argument, we will eliminate safety, cleanliness, convenience, status, unemployment, the minimum age and a myriad of other nuisances that plague our ability to walk and chew gum at the same time in reference this matter of value and experience.

The point being that there are companies, places of business, entrepreneurs, and even manufacturers and material suppliers that have discovered two very great concepts. The first being that the customer, not the producer, determines value; and secondly, that the value comes from providing customers with extraordinary experiences. Therefore, those people that desire to succeed, and actually are willing to work to achieve this goal, have to create the circumstances by which the business transaction is a value experience for the customer.

A value experience is a set of circumstances when combined with the product goes beyond expectation to enhance the purchase. If you can discover this value experience, as it pertains to your business or product and grasp the concept of the total set of circumstances surrounding your relationship with the customer and the sale, you can elevate your product, regardless of how commodity oriented or simplistic in nature, to selling value added goods and services at higher margins.

You have to identify the value of your product; the different customers who share the same sense of value; and the experience itself which ties this model together. Thus, the beginning of more effective means of communication and discovery of new opportunities to refine or expand the value of your offering begins, not ends, with this knowledge.

Wednesday, July 20, 2005

Volume 8 - How to Predict Success for Architectural Door Hardware distributors

Success isn't about having the right people, the right tools, or the right structure. They all help, but they don't put a company over the top. Instead, success is all about having the right partners in your supply chain with the understanding of what causes what, and why.

As I have preached from day one, your business isn't built on the differentiation that manufacturers have attempted, in vain, to build into their products but on the quality, reliable services, and fair value for your money on those products. Yet, most companies consistently fail to meet even these basic customer needs.

The importance therefore of what causes 'what', and 'why' takes on a greater importance for the understanding and prediction of what's next within our industry and our particular businesses success. Obviously, we all have choices regarding our individual businesses. These choices are as varied as the description of an architectural door hardware distributor, with everyone doing and operating to their preferences, strengths and abilities. But, regardless, of these choices, we can all better predict the future if we understand, accept, and then act on the causes of 'what' and 'why'.

We have all read and heard about the over used phraseology of rapid growth and changing end-user demands rhetoric for decades. If you have a thriving business in the material supply construction industry, you already know that times change, demands change, products change and so on. What we should focus on is that disruption creates opportunities as well as threats. I believe that recognition of events and interpretation of such allows us to see the future clearer and therefore we can make better choices today which subsequently leads to better success tomorrow.

I believe that there is a value chain attribution that states that companies who take control of any activity or combination of activities, within the value chain, that drives performance in ways that matter most to their customers, regardless of historical experiences or personal preferences, are able to look into the future and show greater profits (not necessarily growth or topline sales) than ever before. Are there signals of change that have been ignored within your company in reference your present vendors? Are there signs that someone is capitalizing on opportunities at your expense? What are the likely result of battles between industry combatants? Are you making decisions that increase or decrease your ultimate chances of success?

All important questions to be individually answered. More importantly, are there clues that something is taking place, and believe me after two decades of working under different corporate ownerships, executive advisory committees, board meetings, inside-out looks into the public giants of our industry, the merger and acquisition fallacies and private conversations regarding door hardware distribution, you can count on it that something is taking place and, just maybe, not to your benefit. So, what to look, listen and pay attention too while building value into your door hardware architectural business is key.

Are you receiving more or less attention from your vendors? Is the emphasis from your vendor's operation tending toward growth, top-line sales, raising prices, excuses for delivery and less from customer input? Is your contacts (sales and customer service) with the company informed about the company or do you have to tell them what is going on about their own company? Is your frustration growing with the rhetoric of the vendor? Limitation of product or constant upcharge for performance enhanced attention that historically had been part of the original deal? Is the disruption with change creating market innovations or is it cutting into your profits? Are you being told that your vendor has reached all of their mid-year goals, that their sales are double digit but your service levels, pricing and attention doesn't reflect those statements? Are your vendors touting the high cost of steel, health care, and rise of petroleum based materials yet their concern for your business costs are never discussed? Do they tout their great employees yet your conversations with those employees are less than enthusiastic? Do they tout their obligations to the employees and concern for their families yet their working conditions are barely tolerable, employee turnover is double digit and your sales contact changes with regularity? I'm sure you get the point about honest questions and their subsequent meanings.

One of the very overlooked pieces of analysis regarding this subject is the process of evaluating or predicting industry change involving competitive battles. This will help you understand the companies' strengths and weaknesses, and when it is better to bet on an entrant to a market versus an incumbent. Remember when AT&T assumed MCI was an insignificant blip on its radar screen. Almost all incumbent leaders similarly discounted the ability of their disruptive competitors to move into the arena and take business. It is rare to predict what specific innovations, take-overs, mergers or consolidations will occur to boost a distruptive atmosphere but you can always predict that the disruptive firms will be motivated to figure out a way to do it more profitably for the customer.

And more importantly, when evaluating this potential battle within competition of vendors consider not only what is taken for granted, in that it is visible and obvious, such as fixed assets, technology, management, and product lines, but more importantly its established processes and values which define its strengths. Winners succeed at opportunities that fit their individual resources, processes and values, and struggle with those that run counter to those strengths thus emphasing, those that know themselves and their customers best, do what they do best.

The resources of a company can be assessed somewhat easily but the company's 'processes' are much more difficult to understand; yet, are telling in the final analysis toward their customer. Processes are the patterns of interaction, coordination, communication, and decision making employees work resources into products, services and other resources of greater worth to the customer. In other words, the best way to determine a company's processes from the outside is to imagine the kinds of problems it must have repeatedly solved in order to somewhat succeed. Yet, if companies must solve the same problem repeatedly, they develop a business double speak that simply changes the color of lipstick on the same old pig.

The company's values are the criteria employees use when making prioritization decisions. Every employee at every level of the company makes these sorts of decisions every day. These values drive a company's resource process that directly impacts the customer in both negative and positive ways depending upon the philosophy of the company toward its employees and customers. The historical data of individuals (record of philosophy toward customer) will always run true to present dealings. It is your obligation to recognize these keys for what they are and prepare accordingly. Even though companies should always seek to disrupt their competitors, they should never seek to disrupt their customers.

Until the next issue, stay healthy, be happy, and keep your friends close.

Thursday, June 30, 2005

Volume 7 - Congratulations Formula One

I’ve been a racecar fan from my earliest memories of my father tearing engines apart, rebuilding them, and repeating the process innumerable times. Pictures of him, hang in my office, winning the midget championships in 1937 driving a Chrysler special number 7, and running stock, modifieds, and even, in 1956, owning a Chrysler 300, which ran in the then category of ‘new cars’. He was one of the very first to experiment with power steering, something taken for granted today in NASCAR. Speaking of that organization, NASCAR, it has grown exponetially because, ‘the powers to be’ still recognize its fan as the most important ingredient, and may they always keep us (the fan) as their core value. Other major sports, from the NFL to the NBA and Major League Baseball, who can’t deal with their drug problems, strikes, and other business miss-managements, have all long forgotten the fan.

Thank goodness for auto racing in all of its forms, whether it be a sanctioned NASCAR event, a Friday night at your local dirt track, the 24 Hours of Daytona with the DP prototypes, a Grand AM or a SCCA event, the BAJA 1000 or the IRL with the presence of a contending female in Danica Patrick to Formula One. Excuse me, did I say Formula One? The same people that this past Father’s Day Weekend ran a total of six cars at Indianapolis, because they couldn’t settle a dispute among themselves about tire safety (and control of organizational power)?

Congratulations Formula One. You have now joined the ‘big’ leagues of major sports. You aren’t any better than Major League Baseball, the NFL, the NBA or even the NHL (arguably a question of whether this is a major sport), as they all forgot about the fan years ago. For stadiums, team owners, city and state administrations that don’t have the courage to say “no” and all collapse under the pressure to give tax payer money away to multi-millionaires, rather than change some rules and get the monies to local schools or State health care for their needy residents. Now, FIA, you show up at the only event you run in within the United States and with the largest tire manufacturer in the world, that can’t resolve a problem, that I’m sure, didn’t raise its ugly head until right before the race. So much for the American Market, take your internal struggles and go back to Europe, Asia or South America and insult other major racing markets with your insolence, ego and attitude, but spare us your rhetoric.

It’s simple. It’s all about the fan. The fan didn’t cause your problems, but, they always pay the price. You should understand Business 101, it’s all about the focus on the customer. It’s about on-time, complete shipments at a fair price. Those that listen and execute this core value have successful enterprises; those that don’t, think of a million excuses for their failure. They call in experts from afar, they blame the economy or even the workforce, but they never look in the mirror. It’s too bad that I’ve already given out the June 2005 ‘Stupid award’ (check earlier blog) for the FIA, from Mosley to Ecclestone to Michelin to the individual teams should all be able to share it!

Saturday, June 25, 2005

Volume 6 - Independence2 update with the Operations & Marketing Member's remarks

As you know, if you've been reading my blog or getting our newsletter, we've been working on the building blocks of putting together a new start-up international architectural door hardware company. Along with the effort of finding great people, (who presently are working with other companies, but have dedicated precious time and energy for this plan to be part of their future lives as they will all be percentage owners in this venture), quality products, internal systems, equity and debt financing, etc., it just takes time to do it right. Hence, we have not just thrown together a fly-by-night company, instead, we are taking the time to build a long lasting organization.

Our Operations and Marketing Member, Ms. Bonnie Buchanan, has spent exhaustive hours with software experts implementing an internal business structure integrated to ensure real-time deliverable results on our door hardware products and to establish a superior "ease of doing business" with us customer experience, that supports and enhances our first core company value, which is, our customers are the focal point of our business. In our recent newsletter, I have asked Ms. Buchanan to include a few words, to our perspective customers, on the topic of our Organization and its technology, so I'm including those remarks in this addition of my blog. Ms. Buchanan has also recently been published in the June 2005, edition of and a copy of her article, "Have CRM Vendors Ever Heard of Customer-Centricity?". You can view her article by clicking HERE.

"First, let me say, "Hello", to you all and I hope to one day meet each and every one of you in person. My experiences within your industry have shown me that it contains many, what us Southerners would term "good people", along with a wonderful network of long-term business relationships that make up the nexus of your industry. It is because of the character of the individuals, I have met so far, that I truly look forward to developing long-term business relationships with each of you, as time allows us to get to know each other better. In addition, I want to thank you for the warm reception I have received from those of you within the industry that I have thus far had the pleasure of meeting. Ron asked me to include a few words to you in this volume of our Newsletter about our technological structure and our current system implementations, so pardon any 'geek speak' and here goes:

On the Operations side, we are implementing an Enterprise wide solution that ties together all business processes and every aspect of how we "touch" our Customers. This is being accomplished through the integration of Voice over IP - VolP (a telecommunications protocol), back-end office applications (financial applications, etc.) tied into our Customer Management Relations (CRM) system, which handles our Customer records and integrates them with our Warehouse Management System (WMS) and Inventory Tracking solution to provide up-to-date, Real-Time, critical information to you, our Customers. Through this up-to-date technology and our on-going Customer Satisfaction focus, we are determined to accomplish our goal of providing to you, our Customers, the best and most superior Customer experience, possible. We hope that through the coming months you will be intrigued and hopefully, pleasantly surprised at the scope of just how serious we are about how valuable you are to us, not just from a one time product sale perspective, but as our business partner, with whom, we are determined to share success and enhance each of our organizations.

On the Marketing side, our goal is to provide you with an on-going customer focus, so particularly during this time of development and new implementation, you may be asked to provide feedback in the form of a quick couple of answers on a rather painless survey. We ask that you bare with us and keep in mind, that we ask this time of you, only because we highly value your opinions and experience. We want to make sure that you are happy and to accomplish that goal, we want to know in advance, not only what makes you unhappy, but also, how we can enhance our services to you, so that in turn you can better serve your own Customers. Who better is there to ask vital questions about how to make you happy and how our organization can help you increase your sales and service, than you? Maybe we can build into our structure and services, items or areas of interest to you or your customers that we have yet to consider, obviously, we would not know if we did not bother to ask. We are here for you, and because of you and for that reason, we at Independence2, LLC vow never to forget that fact. I invite you to contact me directly at my e-mail address by clicking HERE with any questions, comments or suggestions you may have. Thank you for your time, your interest, and hopefully, your individual support as we move forward in this endeavor.” - Sincerely Bonnie L. Buchanan

Until the next edition of my 2 am talk radio show with further updates on our start up company and opinions on various subjects, hug a friend and stand up for what you believe in.

Monday, June 20, 2005

Volume 5 - The respected Zell Miller...the disgraceful remarks of Senator Dick Durbin...and, Where is the Democratic Party that I grew up with?

As in the words of the distinguished former Democratic Governor and Senator, from the great State of Georgia, Zell Miller, in his book, "A Deficit of Decency", "I can remember when the Democrat believed that it was the duty of America to fight for freedom over tyranny. It was Democratic President Harry Truman who pushed the Red Army out of Iran, who came to the aid of Greece when Communists threatened to overthrow of Europe that was freed because Franklin Roosevelt led an army of liberators, not occupiers..." And, he continues, "Never in the history of the world has any soldier sacrificed more for the freedom and liberty of total strangers than the American soldier...It is the soldier who salutes the flag, services beneath the flag, whose coffin is draped by the flag, who gives that protester the freedom he abused to burn the flag." But not even this great Legislator could image a fellow Democrat denigrating without remorse, with the height of hyperbole, the comments of Senator Dick Durbin of Illinois who compared American interrogators (US military) at Guantanamo Bay "to Nazis, Soviet Gulags and Khmer Rouge leader Pol Pot.'' Congressional double speak and their far left liberalism has now surpassed the height of all time stupidity with such a remark, which offends not only the military, which defends this great county, but all Americans.

I concur with Governor Miller and I ask the question of what ever happened to the Democratic Party that I grew up with? What did FDR and Harry Truman do during their wars and cold war place in history? Research what the U.S. did during the time of FDR in relation to 'unlawful combatants'. They weren't fed restaurant style fish almandine, as they do at Guantanamo, while our U.S. military are left to eat MRE's. These thugs, who have killed Americans, are not rendered safe under any Geneva Convention rules. They are unlawful combatants who along with their leaders ought to be hunted (and treated) like animals.

It is reprehensible that we have conflict over whether the U.S. Military are wearing white gloves while handling the Koran. The Koran is a book. There have been over 1,700 U.S. Soldiers killed in Iraq with, sadly, more to die. What are we doing to solve that problem? The absolute crap about the treatment of these less than human thugs is nothing but the old cries of the sixties from the same generation of people who didn't appreciate our soldiers at that time of history and now to compare them to Hitler's Nazis is a disgrace.

Tuesday, May 10, 2005

Volume 3 - First Communion, Secure The Borders & International Transportation

The thunder roared, the lightening cracked, the wind howled and the earth moved as I walked under the porticos and into the side entrance of St. Patrick’s Church for my granddaughter’s first communion.

Well, ok, the cement didn’t crack, the beams didn’t break, the sky didn’t part (although my golfing buddies tell me that on the golf course at precisely 1:30 p.m. the temperature dropped, the wind blew and sleet appeared), but what can one expect when out of the many hundreds of people, the pastor, and presiding priest of this ceremony, singles you out and carries on a conversation before he starts the procession from the rear of the church, one does get a few raised eyes. Of course, I was sitting in almost the last row, which added in this identification process, some reminder of old school habits.

In any case, my granddaughter is the most beautiful angel on the face of the earth. My wish for her is that she understands the world as it is, and grows with wisdom beyond her years. May she understand and grasp the knowledge that there are good people and there are bad people and people with wrong intentions and that some of these people have titles, have actually participated in written laws of all sorts, some good and some bad, but all will effect her in some way. May she acquire through life experiences and an educational process the ability to stand up for what she believes. May she acquire an independence that will allow free thought without the bindings of some man-made law that defies substance.

Now back to the creation of our new company, Independence2, LLC. I have to admit that it’s been a long time since I’ve been so relaxed and happy with a project. It’s just a pleasure to work with people who have enthusiasm for a goal and dedication to bring perfection to a business plan. It is also very complimentary that former well-respected individuals within the Door and Hardware Industry call to see how they could help and possibly even join this team. Since our web-site is still under development and construction, we have sent out what could be described as an informational letter, volume I, to our customer base in early March and now are about to send, via e-mail and hard-copy, volume II.

Within that volume, I talk about our importation and transportation department and the work that it takes to be thoroughly knowledgeable with the international world of transportation. On that note of international business, which I will return to after this ‘plug’, which I deem to be extremely important; and that is an endorsement for everyone to go to and sign the petition to ask President Bush to secure the borders immediately from illegal immigration. And before, some of you 'go nuts' about that endorsement, lets be clear that we aren’t talking about the global economy, which people still actually debate as if we are going to build walls around this country and not participate with the rest of the world, nor are we against legal immigration. This is to solely stop illegal immigration and give the necessary support to a branch of the government to halt such activity.

Back to the subject at hand, International transportation and our diligent time spent with numerous conferences, both in-person and electronic, energetically creating the structure involved for clarification of export formalities. These subjects range in scope from insurance, custom clearance, compliance rules, points of origin, consolidators, freight forwarders, brokers, carriers (LTL, LTC, containers, ground and air) inline with our goal of assuring ‘door to door’ delivery without interference of ‘stock outs’ as might exist with other suppliers. At the same time, where others deal with these consolidators, brokers, multi-governmental agencies, customs, carriers, middle men and a variety of other untraceable nuisances of an international organization, as separate entities, we are developing a technologically structured system that will provide the real-time tracking and door to door service as yet non-existent within our industry. The specifics of which will become very apparent as we unveil more of this company and our main focus. More to come, have a great week, and be sure to give your friends a hug; they’re more important than you know. I just lost another one, and I miss him.

Wednesday, April 27, 2005

Volume 2 – Nationalism, Customer Satisfaction & Accountability

Let’s strip the pedal from the rose on this subject for I’ve had about all the ‘red, white and blue’ flag waving in the business community I can tolerate. Yes, folks we are talking about hiding behind the skirt of the American flag raving about “customer loyalty, fierce independence, made in America” and all the other PR words that money can buy.

I have nothing against programs that espouse ‘buying American’ nor those legitimate politicians, if any really exist, who jump infront of the bus to protect jobs in the United States. Nor is there one iota of anti-unionism within these thoughts (if your able to look up who started one of the first police unions in the State of Ohio, it was me).

So enough of political correctness, we are speaking here about stating the truth. Making statements, which have, at least, a semblance of matter that resembles the truth. We are talking about not being ‘two faced’ when addressing customers and employees but speaking what you know, as an official of a company, to be factual and not part of a systematic public relations program that simply substitutes words to hide fact from fiction.

Let’s get back to the topic of waving the flag. I’m talking about Presidents and CEO’s of companies waving the “buy American flag” who damn well know that in their private meeting sessions they are advocating purchases of parts from Asia, India and Mexico with their other divisions already having products going to the same customers that have no “made in America” connection whatsoever. If you gain a competitive advantage by purchasing a product or part overseas then by all means do it but don’t lie about it. Be ‘up front’, tell the truth and by all means keep ‘old glory’ out of the story. She deserves much better then to become a prop in your sad play.

Hide behind the flag if you must. In fact, add the Church, Temple and Mosque to your list of props, to attempt your cover-ups of the truth, but if you do, at least, be honest enough to live your practices. Don’t hand me your crap about how serious a responsibility it is to take care of your 700 employees and their families within your company, while you give out turkeys at Thanksgiving or at your semi-annual employee meetings when the fact is you don’t give a damn about them, hourly or salary, and would do everything within your power to get rid of your unions, cut staff and benefits, etc. to save a penny off the final production cost of your widget without a ‘blink’ toward that ‘family of employees’ and our ‘greatest asset are our employees’ speech. If they are, and they should be, your greatest asset, then manage your business like it should be done and cut other frivolous costs within your structure to save that penny on the end result but make no mistake in believing that lowest price is lowest cost.

Don’t preach to me about being fiercely loyal to your customers when you can’t produce ‘on-time’ and complete’ 100% of the time and yet your marketing department comes out with further programs such as ‘quick ship’ program when you can’t keep normal stock product regulated through an on-time inventory management system that is real time. Don’t talk loyalty with me when you have plans to hurt distributors rather than help with unjustified price increases. Those being defined as ones in which your cost structure, capitalization, is so high that you have to raise prices. Not the customer’s problem that your cost structure got out of control. And, don’t dare blame everything on raising steel or petroleum product costs. It’s a ‘global problem’. Understand that concept and the ramifications. Its costs have risen for all manufacturers. It’s just as expensive for the Mexicans and the Chinese as it is for you.

And then, the biggest lie of them all, starts with “trust me” or ”you have my word on it”. Well, everyone should feel really comfortable with that! I’m satisfied that some President of a company said we have his word on it (whatever the subject is). What exactly does that mean? Both the “trust” part and the “you have my word on it” part? It means absolutely nothing. He’s a paid employee that could be gone tomorrow. Just another example of attempting changing the color of lipstick on the pig from red to blue attempting to hide the fact that it’s still a pig. And the shame of it all is that the customer knows, understands and you think he’s simply stupid.

Now, the very complex business answer. Treat your employees like they are your most prized assets, for they are. Give the customer what he wants. Stop the frustration in the process of purchasing and using products that one manufactures or supplies. The established relationships with any positive anticipation dissolve when the customer endures the torture of simply attempting to read a simple packing list, which is unreadable. A phone call to the home office to find out if an item is in stock or completed often takes longer to yield an answer than it would take to have the customer service person walk to the warehouse part of the building and roam the aisles of racking looking for an item, which happens only if you’re lucky as having no answer at all or “we’ll get back to you”. With few exceptions, the customer experience can only be described as worthless.

The rate of customer dissatisfaction is on the increase. If you own a company or run a company ask yourself “why” and fix it with a good product, at a fair price, on-time and complete every time for the benefit of the customer. Find the problem areas and correct them at any cost. You don’t need HR involved or studies or consensus of opinion or experts from afar. Ask the people who do the work; perform the tasks and who talk with the customers. Then call the customer and listen. Then implement a program that shows true results toward solving problems without accepting excuses.

Volume 1 – Nothing sacred

I have absolutely no interest whatsoever in talk radio. In fact, I’m amazed that such a thing exists during the daylight hours. Who the hell is the audience? On the other hand, if there was a late night (early morning) talk radio show one could visualize the audience with some credibility. The hard working people who work an afternoon shift with constant overtime or those that work a graveyard shift with the benefit of a radio or those in the service industry who have just got done kissing your ass, general public, for the past eight or ten hours for lousy tips and poverty wages to struggle to become managers where they could work ninety hour weeks and/or put their lives on the line if not today, at some time in the future. They are on their way home just wanting to unwind before they have to go back to their Hotel, restaurant, tavern, police house, street department, fire station or diner job to put up with the likes of the so called professional person who’s indignation, arrogance and sheer stupidly are usually beyond imagination or maybe worse, the general public who is mindless at best and doesn’t have a clue. Thus, the name of my blog (for someday, I just might have that type radio show. Of course, I’ll have to own the radio station, and it will be located in the one of the gardens of the Cantinell di Capri on the Island of Capri encircled by the Mediterranean, but that’s another subject.)

Why the ‘blog’ site at all is even a more interesting question but one that I have accepted due to the start of my new company and advice of a person I do respect. Of course, in my blog, as you should already be able to discern, there are no boundaries. I’ll attempt to keep the subject on ‘business’ and related subject matter but I’m opinionated. And, if I decide to write about school shootings, lack of dress codes and apathy of parents and teachers, or the sexual predators in the Catholic Church, so be it. You have the right not to read it.

I have also been advised to tell you a little something about myself. I’m never really sure why something like this is important especially over the ‘net’ considering that I could be anybody with a tale to tell and an imagination equal. However, to appease those wiser than I, I’ve had four major categories of employment throughout my lifetime, to this point. They have occupied the fields of education, transportation, law enforcement and business management, including five years as President and CEO of a 45 million dollar company. I have degrees from Kent State University and Case Western Reserve University with even a one-year stint in the seminary.