Monthly Archives: March 2012

Is Chrysler the Cubs of Cars?

Last Sunday 60 Minutes did a story on Chrysler’s great comeback since Sergio Marchionne of Fiat took the reins of the company in 2009. When Marchionne came on, Chrysler used a $6 billion high interest loan from the U.S. Treasury to modernize the company’s plants with state of the art equipment, upgrade 16 existing car models in just 18 months and begin integrating Chrysler and Fiat’s operations. Last year Chrysler turned a $1.83 billion profit and paid back its $6 billion federal bailout six years ahead of time.

When Marchionne came on, one of the first things he did was overhaul the company’s hierarchical management structure. He appointed 26 new young leaders from within the company, many of whom had not previously been at the top of the food chain, to report to him directly. He then vacated the chairman’s office on the top floor of Chrysler headquarters and moved his office to the floor with the engineers so he could better connect with the people designing the products. The revitalized company has recently come up with ingenious advertising campaigns such as the Superbowl ad with Clint Eastwood and the “Imported from Detroit” commercial featuring rapper Eminem.

Marchionne’s story at Chrysler reminds me of Theo Epstein’s recent hiring as the Chicago Cubs new President of Baseball Operations. Epstein, the man who many credit with ending the Boston Red Sox “Curse of the Bambino,” immediately cleaned house, keeping only a handful of front office people from the previous Cubs regime. He then assembled a management team composed of several guys from his former Boston and San Diego stints. This offseason, in a matter of months, the Cubs went from having the smallest management team in the Majors to having one of the largest with an army of scouts. Epstein quickly cut large salaried players and traded a few popular ones for players he considered undervalued. He hired Dale Sveum as the new manager, a coach with a decent baseball pedigree but definitely not the sexiest crowd pleasing candidate available. Epstein believes that Sveum will change the team’s culture to emphasize fielding fundamentals and accountability, the basics it appears the team has lost.

Epstein and Marchionne were brought in to run the Cubs and Chrysler because the organizations needed a reboot. Quick fixes just wouldn’t cut it anymore. Radical, fundamental change was the only choice to succeed.

Why do people believe these guys will succeed where so many others have failed? Because they don’t have the same handcuffs which hinder most managers. They appear to have no fear to try new radical things even if it may mean hurting feelings, laying people off, creating a lot of new work, or just failing in front of everyone.

Most people are inclined to make decisions based on “how things have always been done,” and much of the time we are unconscious that this is the basis for our decisions. People also make wrong decisions because trying new things, although exciting, is scary. The Cubs will probably have to lose a bunch of games before they start to dominate. Maybe the next new Chrysler model will be an Aztec. The greats can deal with these possibilities.

Take a step back and examine your business, or your personal life for that matter. Are you too scared to make changes which likely are imperative to succeed and be happy? Do you have the guts to make decisions like a turnaround master? I need to work that out with my shrink next week.

Question 1: Which will happen first, Chrysler is Number 1 in American car sales, or the Cubs win the World Series?

Question 2: Does using Clint Eastwood and Eminem to advertise cars offend you?

Watch the “60 Minutes” Interview here

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Are you sure you want to be an entrepreneur?

What’s the business plan? What’s your revenue model? How do you get from point A to Point B? Can you scale this?

These are the questions people used to ask and lenders still probably ask to people audacious enough to start a business. I think they are the wrong questions today.

These are the questions I would ask today, after a lifetime of experience as a business owner and operator.

1) Do you believe in yourself as a business owner? If you cannot answer “yes” and believe in the “yes” you have very little chance, because you are going to get knocked off your pins almost immediately and numerous times after that. If you do not truly believe in yourself, you will be demolished by the first few hits.

2) Are you flexible enough to look at the evidence and switch course? Whatever plan you start with is imperfect. You have to accept that and mutate to accommodate the reality that reveals itself. The market will tell you of you’ve got it right if you can give it a little time and communicate clearly what you are about.

3) Never believe there is only one correct way to do things. There are always lots of ways to do things and many are better than the one you thought was “the only way” to do something. People used to think that the only way to bake a cookie was with wheat flour. Today a whole industry has sprouted around gluten-free baked goods.

Since 1990, Starbucks has defined what a coffee shop is, but in Palo Alto, California, the best coffee I’ve ever tasted is sold at Zombie Runner, a shop catering to marathon runners. People line up and pay premium prices for their amazing coffee and chocolates.

4) Does your idea keep you up at night? If you are not a little nuts and worried about starting something new and pursuing it like a wacko, you probably will not be successful, because somebody else will be crazier and more committed and eat you. This is the downside of entrepreneurship and the books and manuals tend to neglect it. From my experience, the really good deals (and after the really bad ones, too) are the ones that upset your gut, the ones that wake you at 3:00 a.m. to recheck your numbers. The good deals are usually the ones that you think you are overpaying for, or bidding too close for. But you are doing them because you know in your gut there is a way to make it work even if you don’t know what it is at that moment.

5) Starting a business is ridiculously easy but making it successful is incredibly hard. Don’t do it if you want a balanced life, whatever that is. Being an entrepreneur, at least at the beginning, is all about stupid imbalance. You and your loved ones must accept this for a while or you will be miserable with guilt and surrounded by anger. Unfortunately, your loved ones will also be unhappy if after all you put them though the enterprise still ends in failure, which is likely to happen.

Have a nice day.

Question: If you could choose between owning/running a business or being an employee with nice salary in a good work environment, which would you pick?

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Baseball Religion

This blog is about religion. No, not Rick Santorum. Nothing about Judaism or Islam. I’m talking about the Cub religion, which I’ve practiced since I was three. Chicago is a town where you are either born Cubs or Sox. You really can’t be both, though some mixed marriages have survived – I’ve been told.

My lineage is Cub, primarily through my Mother, who grew up near Wrigley Field and used to walk to the games during high school. Her father, Sam Kassel, was a Cub fan from a young age. His parents owned a small grocery store on Chicago’s West side around the turn of the century and Cub players like Johnny Evers (“Tinker to Evers to Chance” fame) used to come by to purchase booze because the old stadium was nearby. He met the wonderfully named Mordecai “Three Finger” Brown (who had lost two digits in a farm accident) and Ty Cobb “The Georgia Peach,” who he said was as nasty as his reputation.

My grandfather and I talked baseball often. It was the primary way we connected. My Cub zealotry grew during grade school as I was ridiculed by the White Sox fans who outnumbered Cub fans 10 to 1 on the South side where I lived. In high school it only got worse. The Cubs were absolutely awful in those days. Even with the magnificent Ernie Banks, who broke the color barrier for the Cubs in 1954. I identified with the constant underdog Cubbies through the great announcer and story teller Jack Brickhouse whose signature home run call (Back, Back, Back – Hey, Hey!) still reverberates in my head.

As a lonely South side Cub fan, White Sox rooters were like an occupying force in my life. When the Sox won the pennant in 1959 behind “Little Louie” Aparicio and Nellie Fox it was a nightmare. The Fire Commissioner turned on the air raid sirens throughout the city. I knew the Russkys weren’t attacking, but celebrating the White Sox triumph was nearly as bad. The ridicule of the Sox mob made me a man. It toughened me for dealing with anti-Semitism later in my life.

The Sox Inquisition of ’59 turned my juvenile Cub love into a smoldering fanaticism. And it has continued. I raised my children “Cub” even though we resided among the Sox heathens in the South suburbs of Chicago. They learned the lessons I had learned in the 1950s. They endured the sarcasm, the mockery, the belittling banter of omnipresent Sox fans, but they held fast to their religion. When my daughter gave her first sermon as a Rabbi, 10 years ago, she referred to long time Cub Shawon Dunston, who was ending his career with the San Francisco Giants where she had moved. She has used a Cub reference in her High Holiday sermons ever since. It is her trademark. And she married a Cub fan who was living in the Bay Area, of course.

When Harry Caray, the great Cub broadcaster, died my son Noah and I mourned him. We brought Cub hats to the makeshift memorial at Wrigley Field and stood in silence for several moments. Holy Cow.

In 2003 when the Cubs were in the Playoffs I had just had major retina surgery and had to keep my head faced down for two weeks. I watched the games though a special mirrored periscope. And in 2008 when I was about to go into the operating room for quadruple coronary bypass surgery my whole family sang “Take Me Out to the Ballgame” as they were rolling me away.

So it is no joke to say my Cub allegiance is a big part of my life. When you have been through illness you realize you have a finite number of seasons to root for teams. I would hope you have things that you love like I love the Cubbies.

Question: Is there a certain team or player in any sport you love to hate?
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How to NOT Get a Job

A friend of mine was trying to help an acquaintance of hers get a new job. She sent me her résumé for my suggestions, or better yet, to see if I might want to hire her. I read the short résumé of the 50-year-old lady and cringed. She claimed at the top of the document that she increased corporate sales by 11.7% and cash flow by 3.4%.

As a boss I read those numbers and the word “bogus” flashed before my eyes. A person in an estimating job like this woman had, should not boast that she raised sales or cash flow by a precise amount. She may have been part of a team that helped improve business, but to attribute a statistically precise number to your work achievement is ridiculous and impossible because a business is a team effort.

As an owner and company president of a small business with a dozen employees I cannot accurately quantify my own achievement or failure. I also know that financial documents are accounting concoctions even when they are conscientiously put together.

So when I see a résumé, and I have seen a ton of them, that has canned language like “detail oriented” or “self-driven” on top of precise statistics that do not jibe with my view of the messy reality of business I recoil.

This lady who is searching to better herself has fallen into the trick bag of corporate gibberish. She will never pull herself out of the job quicksand by doing what she thinks everybody else does. In my world, sending out a résumé of dubious statistics and clichés is a sure losing strategy.

When my friend asked me what I would recommend this lady do, I paused to consider it because I did not want to come off as an arrogant jerk.

This is my honest advice. Be like George Costanza in one of my favorite Seinfeld episodes. As usual life was going badly for poor George so one day he decided to do everything the opposite of his normal instinct. He then landed his dream job with the New York Yankees after ridiculing George Steinbrenner.

For the woman who asked me for advice about her resume, I would recommend she make a YouTube video and look straight into the camera and say something like this:

“I’m 50 years old with a lifetime of practical business experience. I am a smart and good person, a caring mother and I get along with the people I work with. I show up every day and give my job my all. I am not a superstar, but I am the kind of productive team player that I’ve found most businesses need.”

I think many employers would react favorably to this approach. It definitely would be better than phony percentages and “innovative, detail oriented” blah, blah, blah.

Question: Would you rather hire an A player who is a prima donna or a B player who is a joy to work with?

Seinfeld’s George Costanza getting a job with the Yankees by criticizing George Steinbrenner.

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Industry Scuttlebutt

I received a fascinating phone call after the last blog on titanium wedding bands from a gentleman named Roger Turnley. Roger has spent many years in the jewelry game and before that he sold Citizen CNCs for Methods Machinery in Los Angeles. He is acutely aware of the intersection of machine tools and wedding bands. In recent years he has developed his own CNC machine under the name RingTech aimed at the jewelry makers all over the world.

According to Roger Turnley, 80 million rings are produced in the U.S. annually (shipped worldwide). I was highly skeptical of the number but he stuck by it. He said that people lose rings, they get divorced and remarried, gay people buy them. A lot of variations on the theme of commitment are translated into rings, and titanium is the hot material for younger folks who want to make a statement about how they are different from their parents.

Mr. Turnley, an Englishman now living in Phoenix, runs around the world these days developing the market for RingTech. Australia, Turkey, Brazil and Dubai are all hot destinations in the jewelry trade. Armenians, who do not have a country today, are big players in the business, as are the Turks with Istanbul being a world hub in jewelry. He says he uses a network of friends in the business to vet his potential buyers because confusing a Turk and an Armenian could kill a deal fast.

Roger said that my concept of a jeweler making rings in his garage is a viable idea. He cited a client of his in Wisconsin who was making a living producing 150 inlaid rings a month on a modified Bridgeport but now is doing almost a thousand a month using his proprietary machinery.

Turnley is promoting his RingTech machines to the medical industry now. He says the needs are surprisingly similar. This I have a basic understanding of because I have a ring in one of my heart valves.

*****

I was highly annoyed Sunday when I realized my son Ari and daughter Sarah were beating me in numerous games of “Words with Friends” (an Internet form of Scrabble). It is both a great joy and a big ego slap to see my kids surpass me. My son Noah edits my blog now and critiques me on my negotiating approach. What a great thing – yet I’m still a tad ticked off. Am I slipping or are they just getting better?

 

*****

I’m totally uninspired by NCAA Basketball Tournament this year. At this point the only team I would like to see advance is Murray State. There’s John Calipari with his new version of one year collegians, Jim Boeheim in Syracuse – the poor guy must be 93. Is he the Joe Paterno of college ball? Duke and Carolina, can’t anybody break their lock on the ACC? Coach K has three Plumlee brothers on the team whose first names begin with M. There ought to be an NCAA rule against that.

I used to adore the college game. Butler, Gonzaga, St. Mary’s upsetting the big guys. If Gordon Hayward had not gone into the draft, Butler might be a big guy in the 2012.

Oh well. Give me LeBron to hate, the Bulls to love, Kevin Durant to admire and Charles Barkley to laugh with. For me this year, strike and all, the NBA is fantastic.

Question: Are you happy or sad when your kids beat you?

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Lord of the Titanium Rings

I was shooting the breeze with a fellow machine tool peddler and he threw out the comment that he had an inquiry from a Chassidic jeweler in Manhattan who was interested in buying a M32 Citizen to run titanium wedding bands.

This intrigued me because I had never heard of a wedding band made of such material, but he told me it was the hot new thing in jewelry.

“How much would it cost to make one?” I asked.

He said he had already priced it and figured a ring would cost $6 max for material, plus polishing costs. My capitalist bones started to vibrate.

“What do they sell for?”

“About $125 a copy in a jewelry store, maybe $80 on Amazon.com,” he said.

I checked further online and found cheap crap coming in from Asia for $25 per ring.

“This could be a great gig for a wholesale jeweler who could sell to independents. If you could make $50 a ring and sell 1,000 a month – pretty nice game to play before it gets too commoditized,” I said.

But maybe I am just whistling Dixie and jewelry should be left to the professionals.

So I’m going to throw it out to you, the machining pros, who read my stuff. Do you think a job shop could successfully infiltrate the esoteric insiders’ market to sell titanium wedding bands?

If so, how would you do it? Would you aim at the low end? Would you hire your daughter-in-law to approach jewelry mavens? Would you try to hit a home run with Costco?

Or would you stick to making something easy like a bone screw?

Question 1: Is making rings on a CNC Swiss a good idea?

Question 2: Would you buy a titanium wedding band on the Internet for $50?

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