Blake Glenn’s Looney thoughts, perspectives, adventures, and insights on the world of business!
— By Blake Glenn
Recently I had coffee with someone that I’d not been in touch with for quite a while. He’s one of the few people that has been extremely active at the grass-roots level in the struggling tech startup scene in Dayton, OH. I was one of those people for a little over three years. But when it was clear that the level of interest from the native population wasn’t there for building a vibrant tech startup scene, I dropped that thing like an Ebola-laced hot potato. But, quite admirably I have to say, he has continued on.
At one point in our conversation, we discussed his current job situation. He had moved from a quasi-government job to a tech startup. It’s a company that provides custom software development for clients. I asked if the company was also creating products for the general marketplace. He said no, that it wasn’t a Silicon Valley-type startup.
By that he meant the company wasn’t focused on a venture-backed, fast-growth model that pushed toward a multi-billion dollar IPO within 8 hours of launching. Our conversation induced a flashback. This made me think of all the years I spent living in the Washington, DC area. Through the 1990s there were hundreds of people launching tech related startups. But the vast majority of these were not startups that had a Silicon Valley model. These were overwhelmingly focused on chasing government contracts.
They usually have a few things in common:
Now I’m not saying this is not a viable model for many business owners. Many people have achieved personal success this way. I’m just saying that it’s not the same as the fast-growth entrepreneurial model of Silicon Valley legend. I’m not saying it’s better or worse, just different. It’s a different mindset and attitude. It’s a different culture. It’s a different set of expectations. It’s the classic entrepreneur vs small business debate. These people aren’t trying to change the world. They’re just trying to get paid by Aunt Samantha.
I’m really interested in knowing the contrast of wealth creation with this model verses the Silicon Valley model. That would be an interesting comparison. Despite the media attention of the trillions in riches reaped by Silicon Valley founders and employees, the startup failure rate is quite high, even for venture capital-backed firms. Hey Kauffman Foundation there’s a study for you.
In the meantime, any government agencies out there need a professional, highly experienced, multi-talented, sometimes humorours podcast creator-producer- host looking for a government contract?
Call me baby!
P.S. Startup Weekend is returning to Dayton! Make sure Dayton has a viable tech startup scene by participating. You can check out the details and register here.
Blake Glenn shares his looney perspectives, stories, and mis-adventures in The Looney Executive blog. He has interviewed hundreds (or at least tens) of people via The Looney Executive Podcasts and former TV show. He’s the founder of a tech group called IgniteTech, and claims to be a direct descendant of the original Looney Executive – Because there must be SOME explanation … right?
If you dare, I can be reached the old school way … blake@LooneyExecutive.com
It’s my first post of 2017. I’ve been away a little while. During my long hiatus I helped a family member close a deal to sell a property, moved many heavy items, took some much needed rest, discovered I need shoulder surgery (after moving many heavy items), and Donald Trump was elected President of the U.S. All of those things are true.
All. Of. THEM.
But in my near endless quest for uncovering interesting items happening in the business world, I came across an opinion piece in USA Today written by Steve Case, co-founder of AOL. For the last two years, through his Rise Of The Rest tour, Case has crisscrossed the U.S. in search of tech startup communities beyond Silicon Valley, Boston and New York City. In previous posts I refer to such cities and regions as “Outside The Valley”.
In any case, Case has spent time in a few cities that have been devastated by the decline of industrial age industries. And he has some interesting points to make about the growth of tech startups in there. Some of those key points include:
I just want to comment briefly about some of his points. First, I understand his belief that VCs need to redirect their investment resources to non-traditional cities. In fact, it may make good business sense to scour the entire country seeking out investment opportunities rather than just a select three or four cities. But that takes time, effort, and connections even for large VC firms.
So why would a VC seek out tech startups in, say, Dayton, OH, if there doesn’t already exist a strong tech startup community led by entrepreneurs? It’s the responsibility of the entrepreneurs in those regions to build their communities into viable, attractive cites whether VCs recognize them or not.
Case mentions that many cities are too risk-averse and lack fearlessness. As someone that led a tech startup Meetup group for 3 years in Dayton, I can testify to that fact. The mentality, not just of the institutions and general community, but of the people claiming to be entrepreneurs can be so damned oppressively conservative and failure-averse.
Finally, Case makes a good point about the fragmentation within many tech communities. While I led that tech startup group I attempted to organize a gathering for all leaders of regional tech groups. While my group focused specifically on tech startups there were many other groups focused on some particular technology or tech-related expertise. I contacted leaders from 17 or 18 groups in SW Ohio. We only had about five groups represented. To top the cake, the majority didn’t even respond to my invitation, including at least 3 that I already knew or had met previously. Not even a freakin’ no – just silence. And I sent at least two notices.
What Case found out during his Rise Of The Rest tour is what I learned during my three years of Meetup group dictatorship:
Cities with a traditional industrial base or dependence on a very narrow range of declining industries need a lot of time, patience, vodka and Tylenol as they seek to re-invent themselves into emerging tech startup hubs.
It’s been a little over a year since I shuttered IgniteTech, the tech startup group I founded. Over the next few weeks I’ll start posting my reflections and that adventure. I think I’ll call it “Surviving The Rustbelt”. Catchy title huh. Then again maybe not. I’m not completely sure I’ve survived it yet. Can someone pleeeaasseee hand me a bottle of Vodka. Actually … better make it the whole case. It’s gonna be a long story.
P.S. I’m actively recruiting test contestants for my business game show experiment. Interested? Please contact me so I can add you to the player pool!
A Brief Rant From the Looney Executive Business Files …
Today is election day – November 8, 2016. And at this most critical time in U.S. history, I have a perspective to share.
First of all this is a sort of stream-of-consciousness post. It’s not filled with facts and fancy statistics and credible references. It’s just my thoughts and opinions on a subject that I’ve found quite fascinating as I’ve watched the presidential race unfold, then drag on. And that is … the Donald Trump brand.
This isn’t about politics. Well ok maybe it is kind of. But it’s not about the presidential race itself. This is about business.
You see my focus is on the happenings in the looney world of business and commerce. And from a business perspective it’s been pretty interesting to watch the effect on Trump’s brand as he has pursued his political ambitions. It’s been a wacky ride indeed.
Frankly I think the Donald Trump brand has eroded significantly in recent years. And it’s due primarily to his foray into the political arena. There are so many things he’s said and done that singularly may not have necessarily created significant long-term damage. But collectively these have gathered into a celestial fireball aimed dead square at his brand and net worth (which still remains a mystery). Here are just a few of Trump’s blunders that have contributed to the Trump brand decline:
The list seems like a lot doesn’t it? But as I stated, those are just a few of the more notable examples. These behaviors in a private executive suite would be aggregious enough. But in a presidential race where every word, hell every syllable and every letter in a word, is publicly scrutinized, those are brand-killing blunders. His behavior should also have been the death knell of his political campaign. But this is a bizarro year in politics. A year where we all seemingly woke up one day in a world that resembled our own but was off by some fraction, just enough to make us say, “Oh SHIT! Is this real?”.
By the way, failures in business are simply a part of the entrepreneurial lifestyle. Usually that shouldn’t be held against any entrepreneur, including Trump. However, a key part of his brand are the “winner” and “success” stories that he touts. Most of the time he seems to downplay or outright dismiss any talk of his failures.
And one of Trump’s big problems is that while most of the customers of his branded properties and products (hotels, casinos, golf courses, steaks) tend to be high-income individuals, those attracted to his politics tend to come from the middle- and lower-economic stratus that can’t afford his prices. And as reported by Fortune.com and ABC News, there does seem to be a clearly identifiable erosion in his brand among those high-end customers that may last for years to come after this election is over.
Whether Donald Trump wins or loses the presidential election, it looks like he may have already lost his brand value advantage. All of this was avoidable. As far as maintaining his brand value, he shouldn’t have run for president. Any idiot knows that political races today receive more media coverage (print, radio, network TV, cable TV, Internet, Martian laser transmissions) than at any time in history. So why, with all of his baggage and personality flaws, would Donald Trump even run for president?
Well … ego-mania of course. Ego-mania is a condition that can not only be a deal killer. As we’ve witnessed in this presidential election cycle, it can be also be a weapon of mass destruction for valuable brands. Only time will tell how much destruction Trump has caused to his brand and how long, if ever, it will take to make a full recovery.
In 2008, shortly after being laid off from a brief part-time stint marketing for a small tech firm, I got a call from a placement company called Aquent. Like many placement firms, or “body shops” as some call them, Aquent matches talent with contract assignments at companies that need their expertise. And Aquent specialized specifically in placing “creative talent”.
After spotting my TV show and podcasting experiences on Monster.com, an Aquent rep contacted me. I’ll call her Susan. I think that may have been her actual name. But it’s been a few years and I’m not foolish enough to wager next month’s rent payment on that flimsy bit of speculation. So with my TV and podcast background, Susan thought I’d be a great fit for this gig.
In this case, the client in question was Booz Allen Hamilton, a big-time consulting firm based in the sprawling Virginia suburbs of Washington, DC. A couple of marketing managers at Booz Allen were seeking help with their projects – one with a web video series and the other with a podcast show. Each manager worked with a different Booz Allen group and planned to feature internal experts in these video and podcast episodes.
Both of these projects needed an executive producer. And I was the man for the job. In essence I would be the guy that led these projects from the nascent idea stage to shining new finished digital media product. So I drove from Maryland out to the section of Northern Virginia where both Aquent and Booz Allen were located – Tyson’s Corner.
If you love food and shopping, Tyson’s Corner is your absolute consumer Shangri-La, a mythical place filled with delicious ethnic foods, endless displays of designer clothes, multi-level shopping malls as far as the eye can see. You’ll even spot the occasional unicorn – usually sporting the latest designer trends, such as the Beyonce Unicorn Hat. But with a mighty burst of willpower I managed to fend off the temptation and make my way to the meeting with Susan.
She informed me about the project preliminaries, her Booz Allen clients, and of course Aquent. Susan was very nice and quite informative. I then had a meeting with the two Booz Allen marketing managers. The meeting went great! I touched on my expertise with producing a TV show and podcast and how I could successfully produce their respective projects. I was truly excited about this.
Then I waited … and waited. There were no calls. No emails. No smoke signals. No Morse code messages. Nothing. A few weeks went by with no word from Booz Allen. Susan assured me they were interested. But I thought maybe they found someone else they liked better. Perhaps our first date was better for me than it was for them. I was the anxious potential lover waiting for the follow up phone call that never came.
My ripe optimism slowly faded as the time ticked away. Naturally I thought it was over. So I decided to temporarily leave the cramped bustling DC-VA-MD metroplex for the wide open rustbelt allure of southwestern Ohio. I was contemplating my next move, there was no word from Booz Allen, and Thanksgiving was coming up. So I decided to just get an early start on spending the holidays with the family.
Sometimes though … sometimes when we think we’re making plans for ourselves, destiny intervenes, says “I Don’t Think So”, and makes plans on our behalf. A few short days after my arrival in Ohio, the clients called Susan with the great news. They wanted me to start as soon as possible. They just had to figure out some budgetary and other internal issues before launching the projects. Well of course. I knew that. I never had any doubt what-so-ever of their interest in me. So I gladly piled into my 2002 tan Buick LeSabre (is there any other color?) and drove the 500 monotonous miles back to the DC suburbs.
I started the project about 3 weeks before Christmas. The web video series we created was called “Ready for What’s Next”. It would be a slate of short webisodes featuring Booz Allen consultants discussing key topics critical to their corporate and government clients. As the executive producer, my duties included:
In the end, we created 40(+) webisodes of 1 minutes to 5 minutes in length. Unfortunately, that podcast show never came to fruition. That was fine with me. In retrospect it was much better for me to focus on producing the web video series. The project downside was that I had to listen to dozens of music pieces before the final selection was made for the intro music. I must have listened to “the chosen one” at least 100 times as we reviewed the videos. And I couldn’t get that damned music out of my head for an entire year.
But even now I look back at that gig as an all-time favorite. It was love at first sight. The gig was short, only three months. But it was one of the most fun and interesting assignments in my career, especially since I spent most of the time working from home, barely out of my PJ’s, sipping hot morning coffee with a little extra – Bailey’s, Amaretto and Kahlua. It’s not every gig where you can become intoxicated by noon and still keep your job.
P.S. In the event that your life has ground to a boring, meaningless, screeching halt, you can click here to see some of those exciting Booz Allen Mission Integration videos. Enjoy!
A few fun and interesting, though not necessarily “breaking”, news items from the business headlines
VW And The Price of Cheating
$15 Bil. That’s the amount of the settlement that Volkswagen agreed to with the U.S. government for “intentionally” cheating on emissions tests for its vehicles. I’m not clear how someone could “unintentionally” cheat. But apparently it is possible.
Gawker Sells For $135 Mil
After being slammed to the mat and held to a three count by Hulk Hogan via a court decision, the online gossip site was sold for $135 Mil. Hogan’s favorable court decision of $140 Mil pushed Gawker to file bankruptcy. Yes – you can buy a company out of bankruptcy.
A True Dog of A Tale
A couple of twenty something dudes. The U.S. government. A $300 Mil contract. Guns. Plenty of marijuana. It’s real life script tailor-made for the cinema. Need I say more. Sometimes the movie practically itself. Read on my friends. Read on. Oh yea, the movie is called “War Dogs”.
$72 Mil to Leave Your Job
It’s not fun to get fired. I know. I’ve been there. However, as firings go, stuffing $72 Mil dollars into a duffel bag as you exit is slightly better than simply a swift steel-toed boot to the rear. As this article shows, the Shakespearean drama/tragedy known as Viacom seems near an end with current CEO Philippe Dauman headed to the unemployment line. If you see Mr. Dauman standing along the road with a tin cup and home-made sign, please toss him a couple of dollars to buy supper.
A few fun and interesting, though not necessarily “breaking”, items from the business headlines
The Telephone Eats The Internet
Another one bites the dust!
Another Internet 1.0 pioneer has bitten the dust, at least in a sense. After years of buyout and merger rumors, Yahoo has finally been acquired by telephone company Verizon – itself a product of a series of mergers. It seems Verizon has embarked on a multi-course meal with plans to combine Yahoo with another recent meal – AOL. Here’s hoping that Verizon doesn’t get a case of severe indigestion from these two declining Internet dishes.
The Yahoo Timeline
Launched in 1994, Yahoo was a mega-hit for a few years. This timeline shows an interesting history, including the deal that made Mark Cuban rich!
Whatever Happened To The Internet Brands From the Web 1.0 Era?
Remember Altavista, Compuserve, and Netscape? A look at this list brings back so many memories. Ah, the good old days of Internet 1.0!
Palace Intrigue … Redstone vs Redstone
There’s nothing more exciting than a good ole knock-down drag-out corporate battle. This tale of palace intrigue includes so many interesting items – a 90-something year old media mogul that refuses to relinquish power at Viacom; The mogul’s daughter making moves to assert her own power over the empire; A Viacom chief executive fighting back against the mogul AND the daughter; At least one much younger former mogul girlfriend that wants her piece of the pie … Whew!
Man Claims iPhone Invention … in 1992
Will Apple have to fork over billions for infringing on an existing iPhone patent? Maybe. Maybe not. One word of advice though: If you want to secure a patent … always pay your patent fees!
Upon my arrival in LA, as always the tall palm trees, bright sunshine, and pollutant-infused smog embraced me with open arms. But, unfortunately, for the next week I wouldn’t see much of them. My immediate destiny was to be holed up deep within the bowels of the GAO office, leading efforts to turn around our fast disintegrating hopes for the $5,000,000 tech project.
When I got to the office I hit the ground running. I immediately set up a meeting with the client staff to hear their grievances. We held the meeting in the large conference room. It was windowless, barren, cold, grey, lacking in anything approaching personality, completely soulless. It was an appropriate scene for the hellish torture I was set to endure.
All of the client stakeholders were present. Having all of them present was critical. Some of these people may have had their careers tied to this project. And even the least powerful among them still had influence and could make our team’s life miserable with their discontent and dozens of small complaints, a death by a thousand tiny cuts.
I should have put on my toxic substance defense suit because the shit began flying immediately. While I wasn’t the reason for their travails, I was now the onsite representative of the enemy. And as such, I was now the one bright red target upon which to vent their unending anger.
The grievances were many. That the new network installation wasn’t going well was an epic understatement. There were lots of bugs. That happens all the time of course. Things never go the way you expect. And like roaches in real life, you could quash a few here and there, but you could also rest assured that they would pop up somewhere else. Again. And again.
The situation was exacerbated by the engineers and technicians whose poor attitudes angered the GAO staff . The techies didn’t communicate well about problem resolutions. They didn’t respond quickly to information requests. And most damaging of all, they were simply rude to the customers, treating them like uninformed idiots that didn’t deserve the tech’s time.
My employer had made a big mistake too. They had left a hard core network engineer named Terry in charge of the onsite team. They could not have chosen a worse candidate. He was a very good network engineer, maybe even superb. But his people and management skills were non-existent. He was rude, short-tempered, and thin-skinned.
He was the Donald Trump of the geek world. But this was my employer’s fault more than Terry’s. They knew about his “personality flaws”. He should have never been the onsite team lead in the first place. But, in a moment of weakness, they acquiesced to his desire to be the man.
The other techs followed behind him because, well, he was in charge. But they weren’t happy. The customers were haranguing them relentlessly, not due to their own ineptitude but due to his. And the team recognized Terry’s inadequacies. They were ready for a change. When I arrived, the GAO villagers were so incensed with Terry that they were gathering torches and pitch-forks and descending upon the tech castle to drive him out of the building. And I think each and every one of our team members was ready to join them!
I acted quickly to take control and try to put things on the right track. Here’s what I did:
Of course none of these items were rocket science. They weren’t that innovative. They weren’t going to change the world. They were all mostly just practical common sense actions needed to turn around this failing project, especially the Game-of-Thrones technique.
The primary requirements to do my job were pretty simple:
And, while not flawless, the tactics worked. Within a week we had saved the LA project, which helped to renew confidence in my employer, which helped save the other regional GAO installations, which means we rescued about $5,000,000 in revenue for my employer. I was proud of the team coming together under my leadership to make this happen. But it was a team effort. They just needed the right leader. I didn’t have to Game-of-Thrones Terry’s man parts … unfortunately. And my boss was able to maintain his golf privileges.
The trip wasn’t all work though. One upside of that adventure was that my girlfriend-of-the-time lived in the Los Angeles area. Though we amicably went our separate ways soon after this trip, it was certainly good to see her.
Frankly though, I couldn’t understand why she brought her good male friend with her each time we met. It was good to see that she had a friend out there. Who says men and women can’t just be friends. I guess he needed her support. Going through a difficult time according to her. And he was strong. Lots of muscles. I knew she was safe. She later got married and had kids. I never met her husband. But the kids kind of looked like that guy. What a coincidence. I wonder if they’re still friends.
Want to catch up on Part I? Just click here!
In mid-June, 1995 at approximately 8:29 am EST, on a typical sunny-hazy day, a major fire broke out in downtown Los Angeles, California. The sparks from this blue-hot blaze had been smoldering at a low level for about 10 days and now threatened to burst into an inferno and engulf the U.S. GAO building. The GAO was the Government Accounting Office.
An aside … As a result of a brilliant and strategically considered rebranding effort, in 2004 the “A” was changed from Accounting to Accountability. Yay!
This was not one of the ubiquitous 100-times-a-year forest fires indigenous to Southern California. No. This one was special. It was entirely contained within the GAO building. But if not contained, it threatened to leap-frog across the U.S. and spread to Atlanta, Washington, DC and other regional offices of the GAO.
Let me set the stage for this story.
You see I was working on-site as a contractor at the U.S. GAO Washington, DC headquarters. Our mission was to maintain the information technology system at the HQ as well as several field office locations around the country. Our services included installation, help desk support, repairs, maintenance, disaster recovery, and training. In total, the contract was worth about $5,000,000.
In 1995 the contractor I worked for was in discussions with the GAO for renewal and expansion of said contract. When you’re in a contract renewal year it’s like being a professional athlete in your last contract year. You want to have a great year. Be on your best behavior. Do a great job to try to ensure another big contract to keep the money rolling in. Those titanium golf clubs don’t buy themselves you know.
Needless to say, the higher-level, and by default, mid-level managers were all in a tizzy, as would be expected. The prospect of losing country-club memberships would panic even the most fearless individual. My employer implemented a secret plan send a specialist with a particular set of skills to address the situation.
And after conducting a bit of clandestine research, putting myself and those I love in dire danger, I was able to uncover the original transcript from the top-secret 1-on-1 crisis meeting with my boss, the project manager at U.S. GAO HQ in Washington, DC. Below I’ve provided a complete un-redacted original transcript.
8:47 am EST: Boss called into office of GAO division director in Washington, DC to get an earful on a critical situation developing in Los Angeles, CA
9:17 am EST: Boss asks to meet me in large GAO conference room … alone
9:23 am EST (I had to make a bathroom stop): Boss provides overview of the critical situation in Los Angeles
Full Transcript (un-redacted):
Boss: I need you Blake.
Me: Of course. How can I help sir?
Boss: We have a major situation in LA. A raging fire has broken out at the GAO regional office there. And I’m not so sure we can contain it. It’s bad. Real bad. Our entire tech contract is in deep shit. That’s $5,000,000 ready to go poof!
Me: Hmm. I see sir. How did this happen?
Boss: The geeks. Those damned geeks. No people skills. They ran wild. Talking to the customers like they were idiots. Not fixing problems in a timely fashion. They’re utterly out of control. They’ve fucked it all up! Damnit. Damn. It!
Me: I agree. That’s a bad situation sir. And by geeks I assume you primarily mean Terry, the onsite project manager.
Boss: Yes, Terry. Blake you’re our best hope. Hell you’re our only hope at this point. You’re the sole individual that can drag us out of that quagmire. Without you I’m afraid this contract will be lost. It’s worth $5,000,000 you know. We can’t lose it. You have to save it for us. It funds my country club membership. We have to focus on the real important things in life right?
Me: What? That’s a lot of pressure sir. By myself I don’t know if I can …
Boss (interrupting): We’re depending on you Blake. I mean TOTALLY. DEPENDING. ON. YOU. We really are. I need you to fly into LA and fix this freakin’ mess.
Me: Of course sir. I’ll do my best. But …
Boss (interrupting): No buts. I mean butts are fine. I like butts a lot, just not as part of this conversation. Just make this happen. And here may be a pony in it for you if you can pull off this miracle. You like ponies don’t you?
Me: Silence. Bewilderment. Staring. Mouth open.
Boss: Well don’t you?
Me: Uh. I don’t know. I never …
Boss (interrupting): Of course you do. What a stupid question. We all like ponies.
Me: Ok sir. I can see you’re under a lot of pressure. Are you ok?
Boss: How about a pink one. I think I can make that happen. You like pink do you?
Me: Pink? What?
Boss: Pressure! You have no freakin’ idea. I picked a helluva day to stop taking my pain killers recreationally.
Me: Ok. Ok. I’ll go to LA and do my best sir.
Boss: Of course. Your best is all I can ask for. That and fixing this mess of course. And saving my golf privileges. We can’t forget what’s important here. Am I right?
Me: No. I’m not promising …
Boss (interrupting): So that’s it then. It’s settled. You’ll fly out and deal with it. I already have you booked on a flight.
Me: What? When?
Boss: Two hours . You better get moving.
Me: Two hours! Sir what the fu…
Boss (interrupting): Excellent! I knew you’d be excited and want to leave right away. You’re my main man. By the way, does my golf swing look correct? Look at this.
Me: You son of a …
Boss (interrupting): No reason to thank me! You know I’m an unsentimental fool. When you reach LA be sure to check in straight away. Now off you go. You’re the man!
And with that I raced home, quickly packed, and caught a taxi to Washington National Airport. The 8-hour trip to Los Angeles, including the layover, flew by (no pun intended … ok it really was) rather quickly. I had a little time to prep myself for the hellish, toxic environment I was about to walk into – angry clients, battered tech staff, low morale on both sides, and the prospect of losing a $5,000,000 contract.
After a good night’s sleep, the last one I’d have for several days, I stepped onto pavement directly in front ofthe downtown Los Angeles GAO office. It was 8:00 am sharp. I quickly glanced the bright yellow shape in the sky, adjusted my red power tie, took a deep breath, opened the glass door, and walked head-first into the raging inferno inside.
For the rest of the story please read part II of LA On Fire!
Blake Glenn’s Looney thoughts, perspectives, and insights on the world of business!
I’m not an expert in the “art of the turnaround”. Not by any means. But as an outside advisor, I’ve had more than my share of brushes with troubled small businesses. I’ve had about 8 brushes as a consultant. I’ve had one inside experience as a part-time employee. And on one occasion I even parachuted into a hot mess to lead a tech “project turnaround” that was instrumental in my then-employer retaining a valuable contract with the U.S. government.
All of those situations were different of course. But almost all of them shared a handful of common traits:
And the reasons that small businesses find themselves in the midst of a quagmire aboard a rapidly sinking ship are also diverse. Some common reasons include:
That last one, commodity products, is a particular killer. It’s way too common in the world of small ventures. You provide a product or service that’s totally indistinguishable from many others available to customers. So rather than try to understand any obscure minute differences between the products (if any exist at all), customers simply shop for the lowest price.
And voila. There go your profit margins!
Captain … Iceberg straight ahead!
Small ventures have it tough I tell you. They have much less room for error than the troubled mega-businesses that often make the cover of Forbes magazine and the Wall Street Journal. Mega-companies such as IBM, Sears, and GM on the other hand, can go through several management teams over a period of years and still remain standing, though perhaps in a more deteriorated state. And unlike some mega-firms, small and mid-sized businesses aren’t too big or too important to fail. So government bailouts are nowhere to be seen in times of crisis.
But while each turnaround or crisis situation is unique, there are some general tactics you can implement to get a handle on the things.
Do An Assessment
Assess your cash flow. Do projections to get a clear picture of what’s going out and what’s coming in … and the timing for outflow and inflow. If you’re in an immediate crisis do this weekly. Also start regularly monitoring your income statement and balance sheet. Understand your key ratios and monitor them diligently. Assess your debt. What is owed to whom and for how much?
Also assess your management team. Are they equipped to deal with the crisis? What changes can be made to strengthen the team? Assess your employees. Maybe one or two of them can step into key roles on the turnaround team.
Stop/Minimize the Bleeding
This means try to minimize your losses by such methods as cutting costs, reworking debt payments if possible, and incentivizing quicker customer payments. You might also delay making payments to some vendors in order to temporarily help cash flow.
… with employees, key customers, lenders, and investors if you have them. Aprise them of the situation. And let them know how you plan to deal with the crisis. Get them on board early, especially employees. Let them know that their help is critical to your survival. Employees need their jobs, though some will almost certainly have to be let go. Customers need their products, though but maybe not from you if you sell commodities. And lenders want their money back.
Create a Turnaround Team
Launch a crisis team that includes one or two employees, not just managers or executives. Keep the team small. You must move quick and with urgency. And unwieldy committees notoriously move slowly. Appoint a turnaround manager that has the final say. This may be the owner, CEO, a founder, or other executive. Sometimes an outside turnaround manager is necessary, if you can afford it, because their judgment isn’t clouded by an emotional attachment.
Develop a Turnaround Plan
Create a strategy to survive and turn the ship around. Create goals and deadlines. Assign tasks. It’s just like a project plan, because, well, it is! Execute swiftly. Be flexible as things change and may call for different tactics than you thought.
These are just a few general tips on how to approach a basic turnaround. Of course each situation is unique. But these will at least get you going in the right direction.
And if you want to read an interesting and funny story about one of my turnaround experiences take a look at my post Jimmy’s Descent Into Hell.
Take care and watch out for those icebergs!
— by Blake Glenn
This is a brand spanking new feature. I’ll occasionally post micro reviews of business, or business-related, books that I’ve read. My intent is to simply provide my brief perspective and maybe wet your appetite a bit for books you may or may not have heard of but whose topics I find interesting.
While some of these books will be recent releases, many of them will be years, or even decades, old. And they are not necessarily the latest “gotta-read-it” New York Times best selling networking conversation starters.
So with no further delay, here’s the list for my very first Looney Executive Book Review:
“Billion-Dollar Ball: A Journey Through the Big-Money Culture of College Football” – by Gilbert Gaul
As a youngster growing up I was a big-time fan of college football. My favorites started with Ohio State but also included USC and Oklahoma. As time went on my interest was still there but declined significantly because, you know, I grew up and had many other interests. In recent years however, as the ESPN era has really changed college sports, I’ve gazed on diametrically with both horror and abundant interest.
This book does a good job of looking at the various revenue sources of college football such as ticket sales, sponsorships, and TV contracts. Gilbert Gaul focuses on the operations of mega-programs such as Oregon, Texas and Alabama. He also compares the revenue and funding for the monolithic empire of big-time college football to other sports such as women’s rowing. The contrast is stark indeed. After reading the book you may have blood-red angry smoke pouring from your ears or … perhaps wondering how to get a piece of this sweet multi-billion dollar action yourself.
Straight to Hell: True Tales of Deviance, Debauchery, and Billion-Dollar Deals Hardcover – by John LeFevre
More than 20 years ago I read my first book about the insider trading scandals of the late 1980’s. That book was about former investment banker Dennis Levine. I went on to read books about Michael Milken, the leveraged buyout of RJR nabisco and many more. And since the early 90’s I’ve had a fascination for Wall Street stories from various angles. Many were good, others mediocre, and a few were just bad.
I had high hopes for “Straight To Hell”. It’s about a young dude having an adventure on Wall Street, mostly based in foreign countries. Since most of my reads were from a prior generation I thought this might be an interesting Wall Street perspective from a newer generation. And I LOOOVE the name of the book. I actually have a series of personal stories about going to hell from my own business adventures.
But with that said … this book was a disappointment. While I like to hear about debauchery and juvenile behavior from way overpaid characters, this was just too damned much prostitution, drugging, drinking, and pooping-in-pants for me. I’m no prude by any stretch. Some of that actually is fascinating. But I thought there would be more about behind-the-scenes deal machinations. That fascinates me. I like to see how deals and strategies are pieced together. But maybe you’ll love it. If you love the poop-in-pants scene please never read this blog again!
Dead Companies Walking: How A Hedge Fund Manager Finds Opportunity in Unexpected Places – by Scott Fearon and Jesse Powell
This is another Wall Street book. But it’s from a different viewpoint. Hedge funds have become big news the last few years. And hedge fund managers, the big ones, are some of the world’s wealthiest people you’ve never ever heard of. This particular hedge fund manager, Soctt Fearon, doesn’t seem to be one of them. Not to say that he’s not well off. But, comparatively speaking, he runs a small hedge fund.
Part of his strategy is to “short” stocks. That is, he identifies companies whose stock prices he expects to decline and makes bets on them. He does this by using a fairly straight-forward formula to identify prospective investments. He tells interesting stories about how some firms fell onto rough times and why they make good “shorts”. Since distressed firms and turnarounds are another interest of mine, I wanted to read this book. And I liked it.
So that’s two thumbs up, one thumb down. But if you’re so inclined please read them all for yourself and let me know what you think.