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.