Today’s HSD (high satisfaction day) comes from this interview I did with Sage Simply Accounting partner Carol-Ann Brouwer of Simply Made Simple.
Carol-Ann attended a workshop on Firm of the Future in October 2010 and in one year has completely transformed into a Firm of the Future. In this year alone she doubled her income. Yes, I said doubled!
Get this, one of the first things she did was trash the timesheet!
Sorry my progressive friends, but Warren’s quote is nonsense. It ignores the most basic principle of a freer (not free) market – that wealth is generated on both sides of the vast overwhelming majority of transactions. Her quote implies a zero-sum thinking about the economy. It is false and I believe dangerous. It implies that everything you have done is at the expense of others. I hope none of you believe that.
Capitalism is, by definition about paying it forward. Farmers, factories, software companies, and consultants produce things (food, goods, services, and knowledge) that are of greater value to the purchaser than to the buyer. What is more, they create these things that are for the betterment of customers whom they do not even know today. In other words, they are being altruistic. Altruism being defined as “other centric.”
The roads, schools, and police to which Ms. Warren refers have been paid for, their makers have received just compensation. Where did the compensation come from – the people in the first place, but how did the government get this money? By claiming a share of the profits. In effect, Ms. Warren is claiming a double debt.
Ms. Warren while intending to or not is also making a great limited government, public choice theory argument, namely for schools, roads, and police. If government (and it should be the local government) were ONLY using tax money for the building roads, the education of students, and the funding of police, the tax burden would be much less. Instead we bailout failing companies, start endless wars on ideas (drugs, poverty, and terrorism to name a few), and now are taking over the healthcare industry.
The US federal government is quickly becoming a large and in debt insurance company with guns.
Personally, I do not think corporations should be taxed at all. There is mounting evidence that high corporate taxes result in lower wages for workers. After all, businesses just view taxes an expense. If the budget line item for taxes is made higher, then another line on the budget has to get reduced. Often that other line is wages and salaries.
Now, I am no corporatist. I think the bailouts were a travesty of justice, but notice this was government action once again interfering with the market.
Both governments and corporations are made up of people, flawed human beings. To paraphrase Milton Freidman, is political greed somehow nobler that economic greed? At least with economic greed a) the corporations have no guns (save those than make them) therefore cannot force me to buy something (even if it “for my own good,” see the mandate provision of Obamacare) and b) if we don’t like what a company sells we can quickly vote with our wallets rather than once every two, four or six years.
On Saturday, September 24, my friend and and former Sage colleague of mine, Rob Johnson, delivered the closing luncheon keynote at the last Simply Partnership Conference at the Bellagio Hotel in Las Vegas.
Jennifer Warawa, the newly minted vice president of partner programs and channel sales for Sage Small Business Solutions, and her team, in conjunction with Kimberly Dorony and the fabulous Sage Events team, did their usually outstanding jobs in putting on a great event.
In addition to our keynote (slides below), Rob and I performed our version of Wear Sunscreen as a commencement address. Here is the text of the speech:
Rob: Ladies and Gentlemen of the class of 2011:
Ed: If we could offer you only one tip for the future, backing up your data would be it. The long term benefits of backing up have been proved by technologists everywhere whereas the rest of our advice has no basis more reliable than our own meandering experiences… We will dispense this advice now.
Rob: Don’t worry about the future; or worry, but know that worrying is as effective as trying to solve a network connectivity issue by using bubble gum. The real troubles in your life are apt to be things that never crossed your worried mind; the kind that blindside you in your office at 4pm on some idle Tuesday.
Ed: Do one thing every day that scares you.
Ed: Don’t be reckless with your customer’s emotions, and don’t put up with customers who are reckless with yours.
Ed: Don’t waste your time on being jealous of other Sage partners; sometimes you’re ahead, sometimes you’re behind…the race is long, and in the end, it’s only with yourself.
Rob: Always accept a mint if offered to you.
Ed: Remember the compliments you receive, forget the insults; if you succeed in doing this; tell us how.
Ed: Keep your old customers thank you notes but, throw away your old manuals.
Rob: Get plenty of calcium. Be kind to your knees, you’ll miss them when they’re gone.
Ed: Enjoy your mind, use it every way you can…don’t be afraid of it, it’s the greatest instrument you’ll ever own.
Rob: Maybe you’ll marry, maybe you won’t, maybe you’ll have children, maybe you won’t, maybe you’ll divorce at 40, maybe you’ll dance the funky chicken on your 75th wedding anniversary…whatever you do, don’t congratulate yourself too much or berate yourself either – your choices are half chance, so are everybody else’s.
Ed: Dance…even if you have nowhere to do it but in your own living room.
Rob: Read the directions, even if, like me, you don’t intend follow them.
Ed: Spend more time with your parents; you never know when they’ll be gone for good.
Rob: Be nice to your siblings; they are the best link to your past and the people most likely to stick with you in the future.
Ed: Understand that friends come and go, but for the precious few that you should hold on to, work hard to bridge the gaps in geography and lifestyle because the older you get, the more you need the people you knew when you were young.
Ed: Spend some time in New York City once, but leave before it makes you hard; spend some time in Northern California once, but leave before it makes you soft.
Rob: Respect your elders.
Ed: Accept certain inalienable truths, prices will rise, politicians will philander, you too will get old, and when you do you’ll fantasize that when you were young prices were reasonable, politicians were noble and children respected their elders.
Rob: Don’t expect anyone else to support you. Maybe you have a triple A customer, maybe you have a wealthy spouse; but you never know when either one might run out.
Ed: Be careful whose advice you buy, but, be patient with those who supply it. Advice is a form of nostalgia, dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it’s worth.
Yesterday, I delivered a four-hour session on the Firm of the Future for IT industry media and analysts at the behest of Melody Chalaban on Sage North America’s media relations team. I want first to thank her for the opportunity and organization of the event.
Second, I want to thank Sage Partners and Firms of the Future, John Shaver from Aries Technology Group, creators of Bob’s Barbecue, Keith Greeno of Asyma Systems, and Peter Wolf from Azamba Consulting. (As you can see I am through the A’s with regard to flipping firms.) These three gentleman did an outstanding job of explaining how they have implemented the ideas that I only speak (some might say blather on) about.
Last Thursday, I had the privilege to tour the headquarters of Zappos in Henderson, NV just outside of Las Vegas with my friend and Sage partner Judy Thornell of Baytek. (Thanks, Judy for arranging the tour!) Without question Zappos is an amazing organization. If you ever have the chance to go on the tour, I highly recommend it to a friend/colleague. (A little NPS humor there.)
As soon as you walk in you notice, the place is loud. The lobby/reception area is like no other in that it bustles like a Las Vegas Strip street corner with friends (more later) walking through, talking and high-fiving. What is more this is clearly not an accident, the location was chosen precisely because it is busy. The Zappos culture is on display. It was further demonstrated by this pillow made from a tee-shirt that was on the couch in the reception area.
Jerry (in the red shirt at left) was the ringmaster. He greeted everyone warmly (and loudly) and peppered us with a series of one-liners throughout our wait. At one point, one of the tourists asked about where the men’s room was. Jerry replied without hesitation, “We just use the bushes out front.”
Our tour guide was the effervescent Rocco (on the megaphone above – I told you it was loud) whose title on his card is, I kid you not, Culture Magician. Throughout the tour he referred to his co-workers as “friends in department name” or “my fellow Zapponians.” The use of friends was genuine and did not sound odd, except the first time he said it.
The first and largest department we visited was the CLT – Customer Loyalty Team. This 24-hour a day team is talking on the phones, replying to email and conversing via chat. Chat is the newest part of the team which has increased from 11 people to 55 in the last year. Their mantra which they shouted to us as we walked by is, “Once you go chat, you’ll never go back.” Too funny!
Every new hire regardless of their position with the company does four weeks of CLT training (that is what they called it). This serves two purposes: 1) it instills the Zappos values and 2) it serves as a backup for their busy Christmas season. Since everyone has done time at CLT they can all pitch in rather than hire temporary workers who do not understand the culture. Brilliant idea!
If the new hire is on the CLT, they then serve an additional three weeks of what is called “incubation: before they are fully on the team.
Every six months the CLT undergoes what is called a “shift bid.” This is where the teams reshuffle and through a bidding process people move from shift to shift or from subteams (like email) to subteam (like chat) in the CLT.
We then met the gal who holds the record for the longest call – 8 hours and 25 minutes. Someone on the tour asked if she took a bathroom break. “One,” she replied. They are currently producing a video about it, but in the meantime you can view this one about the previous record holder, Jennifer S. Her call was a mere four hours!
One of the coolest employee program that Rocco mentioned was the concierge service for all employees. They can drop off their dry cleaning, get their cars detailed, or even, have a gift purchased for a loved one. Now this is not a free service, the employee pays a fee, plus the price of the purchase, but again, it is a stellar idea.
Next up where the friend on the legal team. For privacy purposes they are the only team that has offices and even they are decorated with big red awnings that are too big for the narrow hallway. CEO Tony Hsieh has a cubical on what is called Monkey Row because it is decorated like a jungle. “Don’t worry, the fire department has approved,” we were told by Rocco.
On the subject of the CEO, we introduced next to the FACE team (they have lots of acronyms, but they are very self effacing about them). FACE stands for Folks that answer CEO email!
Near the end of the tour we were given the opportunity to set in their Royalty Chair. This area is a restaging of a room we saw on the tour previously where friends go to work through and personal goals with a coach. When they achieve their goals they get to sit in the chair. Below is my picture in the chair which they posted on Twitter.
After the tour Judy and I stayed for a brief round of Q&A with Rocco and Renea another tour guide. Perhaps the best answer was in response to a question on following process. “You don’t have to follow our procedures just get the job done,” Rocco responded.
PS – I learned about the Zappos app on iPhone during the tour. Mind you, it is unlikely that I personally will buy anything on it. This is not a reflection of the app, but the fact that my wife Christine is in charge of any and all wardrobe purchases. What is significant is that I showed it to my sister-in-law who initially poo-pooed it saying, “I like to go into shoe stores so I can see and touch and smell the leather.” Well, after five minutes of playing with the app, she said, “I am smelling the leather!”
I was blessed in that the only person I personally knew who perished in the terrorist attacks was a friend of my cousin Thomas with whom I have played golf with a few times. For many, I know the tragedy hit much closer to home. This is not to say I was not affected by the events of that awful day, but as I reflect back, it was ten years ago today that my personal healing process with respect to 9/11 began.
When it was announced that my beloved New York Mets were going to play in the first professional sports event to be held in New York City after the attacks, I knew I wanted to be there. Although truth be told, it was probably Christine (now my wife) who suggested it out loud.
So, we purchased tickets.
For those of you not familiar with the layout of Shea Stadium, Section 1, Row V is the last row of the upper deck and directly behind home plate. From this vantage point we had not only a view of the entire stadium, but by turning around we could view the smoke still rising from Ground Zero.
As the immense crowd of 41,000+ swelled, I realized that we were not there for the Mets, but for ourselves. We were there out of defiance to Osama bin Laden and Al Qaeda. “You will NOT make us live in fear!” was the collective thought of everyone in the ballpark including the ballplayers and coaches.
The visiting (and usually much hated) Braves received a standing ovation as they were announced. The two like-named, but stylistically diametrically opposed managers, Bobby Cox and Bobby Valentine hugged at home plate. The virtual United Nations on the field including: Bruce Chen of Taiwan; Andruw Jones from Curacao; Julio Franco from the Dominican Republic; Tsuyoshi Shinjo from Osaka, Japan; Edgardo Alfonso from Venezuela; Rey Ordonez from La Habana, Cuba; Mike Piazza from Norristown, PA; and John Franco from Brooklyn, was matched in the assembly of New Yorkers including a native of Jamaica (the island, not Queens) who with his two kids sat next to me and a Hassidic (Orthodox Jewish) family who sat directly in front of us.
We all cheered Yankee fan Mayor Rudy Giuliani as he came out to throw the ceremonial first pitch, cried during the National Anthem sung by Diana Ross, and sang New York, New York with Liz Minnelli during the seventh inning stretch. The Mets wore caps representing New York’s Finest and Bravest (the police, fire and other emergency personnel) during the game. (John Franco would wear his FDNY hat the rest of the year.)
After falling behind by one in the top of the eighth, Alfonzo walked on a close pitch from Steve Karsay. What happened next could only be the stuff of Providence or Hollywood.
This was a monster blast of at least 440 feet. From my seat it looked like a line drive, “a frozen rope” as old-timers say. I hugged Christine and the kids; the man from Jamaica hugged his; the Hassid hugged his; we all hugged each other.
With the Mets now ahead 3-2, Armando Benitez (also from the Dominican Republic) gave up a walk to Javier Lopez (Puerto Rico), struck out B.J. Surhoff (from the Bronx), and enticed Keith Lockhart to ground into a game-ending double play. I am certain radio announcer, Bob Murphy said his trademarked, “…and the Mets win the ball game!”
The healing did not occur all at once, and in some sense it will always continue, but for me, it began that night at the ballpark.
Earlier this month I spoke to the Allen Area Patriots, a local Tea-Party related group with the goal of making basic economics more understandable to we (myself included) non-economists. The title of the presentation is Economics Made Simple.
This is an extended version of the material that Ron and I use during the Firm of the Future Symposium.
Part 2 of 7 is mostly the game and can be skipped without losing any major content.
For those interested I also created a follow-up reference guide as a post which includes the slides and links to source materials.
OK, not exactly, but if there were such a designation, today would be the day.
This is the Gospel read in all Roman Catholic Churches throughout the world.
The Parable of the Workers in the Vineyard
1 "For the kingdom of heaven is like a landowner who went out early in the morning to hire workers for his vineyard. 2 He agreed to pay them a denarius for the day and sent them into his vineyard.
3 "About nine in the morning he went out and saw others standing in the marketplace doing nothing. 4 He told them, ‘You also go and work in my vineyard, and I will pay you whatever is right.’ 5 So they went.
"He went out again about noon and about three in the afternoon and did the same thing.6 About five in the afternoon he went out and found still others standing around. He asked them, ‘Why have you been standing here all day long doing nothing?’
7 “’Because no one has hired us,’ they answered. "He said to them, ‘You also go and work in my vineyard.’
8 "When evening came, the owner of the vineyard said to his foreman, ‘Call the workers and pay them their wages, beginning with the last ones hired and going on to the first.’
9 "The workers who were hired about five in the afternoon came and each received a denarius. 10 So when those came who were hired first, they expected to receive more. But each one of them also received a denarius. 11 When they received it, they began to grumble against the landowner. 12 ‘These who were hired last worked only one hour,’ they said, ‘and you have made them equal to us who have borne the burden of the work and the heat of the day.’
13 "But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? 14 Take your pay and go. I want to give the one who was hired last the same as I gave you. 15 Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’
16 "So the last will be first, and the first will be last."
Most interpret this as demonstrating the generous nature of God (which it certainly is), but adding an assumption (which is clearly NOT in the text) offers a more economic exegesis.
Perhaps the owner of the vineyard believed there to be a frost coming that evening which would destroy the unharvested grapes. This would make the grapes gathered later in the day of much greater value to him. Value is subjective!
What I find fascinating is that it is one of the few economics lessons in the Christian Bible – only appearing in the Gospel of Matthew. It is clearly a refutation of Marx’ Labor Theory of Value written 18 centuries early. Lastly, it is certainly classically liberal in that the owner is free to do with his money as he sees fit.
Unemployment numbers notwithstanding, the US economy has picked up ever so slightly in the past few months based on the anecdotal “evidence” from people I talk to. With that there has come a bit of a resurgence of the concept of benchmarking. Notice no one benchmarks in a down economy.
The problem as I see it, is that benchmarking promotes what Jonas Ridderstróale and Kjell A. Nordstróm call Karaoke Capitalism – a propensity to imitate rather than innovate. Their message is essentially, “Look, no matter how drunk the audience (prospects and customers) gets, you are still not Elvis (Apple).” Benchmarking kills innovation and this is a death knell for most companies. Do think Apple benchmarks?
In the past, I was a disciple of this kind of thinking and attended dozens of benchmarking sessions at business conferences until I noticed one of two universal reactions in both myself and the other participants.
If my company outperformed the average, I thought, “Well, I guess I am OK there. There is no reason to make any serious adjustments. After all, we are better than average.” The result – inaction on my part.
If my company underachieved when compared to the mean, I thought, “Hmmm, I think there might be something wrong about this data.” I would begin to ask questions, not about how I could improve, but rather about the data set. “How many companies including were under X number of people? How many companies also did software development? How many did not have a training center?” The result – inaction on my part.
Now that I have seen the light (thanks mostly to Ron Baker) I have been a constant bane to the existence of those that attend these session. I share my story and ask the participants as they exit the room, “What specifically are you going to change about your company now that you know this information?” The usual response is stuttering followed by an expression of either or both of my observations noted above.
I want to be clear, I do not think action should be taken based on this data in the first place. Why? Because ultimately we (myself and those attending the sessions) were right about this data – it is not scientific! In many cases the data is not even a valid statistical sample set from the pool of companies that is attempting to be benchmarked. Comparing ourselves with a mean means nothing. On average every person on the planet has one developed set of mammary glands and one testicle. So what! Who cares?
Lastly, also almost all benchmarking data is based on numbers available from the financial system, which by definition are accounting for what happened in the past. None of these numbers is a indicator or predictor of future success.
Instead of filling out forms and attending benchmarking sessions, I suggest thinking about how to innovate and create value for your customers today and in the future!