Archive for May, 2010

Remember the Meaning of Memorial Day

Friday, May 28th, 2010

Today, many Americans begin celebrating the Memorial Day weekend. The news tells a story of two American families that are experiencing very different emotions.

Later today, the US Naval Academy class of 2010 will graduate. Two members of that class are a brother and sister who represent the fourth and fifth members of their family to graduate from the Academy. They are part of the first and only American family in which every member of the family graduated from a US military Academy. As one of the very first female graduates of the Academy, the mother is particularly proud of her 4′11″ tall daughter who is a company commander.

The second family is suffering with entirely different emotions after learning today of the death of their son who was the 1,000th soldier to die in Afghanistan.

The one emotion that both families are feeling is pride ….the pride in their children and in their commitment to serve in the US Armed Forces.

With the commercialization of holidays, we often forget the true meaning of those holidays. Some children think Memorial Day is a holiday representing the beginning of summer. They need to know that is a time to remember and give thanks to those who have served and have died to secure, insure and protect our freedom.

During a recent trip, I met a soldier at the airport and thanked him for his service. He was appreciative and began to tell me of some of his experiences of being both courageous and fearful. He spoke of his commitment and the reason for serving his country as well as the challenges for his family, his wife and young children. He was excited about his one-week leave and he also mentioned that in eight days he will head back to war; a war that he feels is justified. Upon leaving, he told me not to listen to the news and stated that we are doing good and “both the Iraqi and Afghanistan people are very appreciative”.

While visiting one of my son’s in Philadelphia last week, we received a call from a good friend who is an Army officer serving in Iraq. He was happy to speak to someone “back home”. We learned of his seven-day work weeks and the inability to leave their base during their off hours. He described it as “one step above being in prison” but he added that we are doing good for the Iraqi people. Admittedly, I felt helpless during the call because thanking Eric for his sacrifice is not nearly enough. I recommend that you do your part by walking up to servicemen and women when you see them and thank them for their commitment. It will mean more you could ever imagine.

Regardless of your views of politics or the war, take a few minutes this weekend and think of the people who put their lives on the line in order to assure your freedom.

Have a Happy and Safe Memorial Day weekend!

Ignore the Headlines

Sunday, May 23rd, 2010

Last evening I had dinner with two friends who I haven’t seen for four or five weeks. As the discussion turned to business, one friend remarked about the recession and how badly it is affecting business. The other friend replied that business is certainly different than it was five years ago and he is optimistic as his business is up and customers are more optimistic. The second friend has a construction firm, that he founded 30 years ago. Inevitably, both friends turned to me and asked my opinion. I remarked that while some companies have weathered the economic storm better than others, it has been clear that CEOs of client companies who have been opportunistic, vigilant and optimistic are doing reasonably well. The CEOs who are cautious and pessimistic have not been doing as well. The pessimi8stic friend asked if I’ve been reading the newspapers. While I normally read several daily papers, a heavy meeting and travel schedule precluded my normal reading.

This morning I read the last four editions of the Wall Street Journal and I quickly realized why the pessimistic friend asked if I had read the newspaper. After 15 years on a bank board with him, I knew that he was referring to the Wall Street Journal. The following are some of the headlines and article titles from two days last week:

• FDIC Sees More Failures as “Problem” Banks Hit 775
• Tightening the Credit Screws
• Wal-Mart Struggles to Keep Shoppers
• Pfizer Details Plans for 6,000 Job Cuts
• Apparel Prices Set to Rise
• China in the Catbird Seat
• Loan-Agent Fraud Grows
• Uncertainty Pushes Volatility Index Up 30%
• GM Posts Profit but Stays Wary
• Samsung to Double Factory Spending
• Lowe’s Remains Cautious Despite Rise in Profit
• Target is Cautious Amid Sharp Rise in Profit
• Inflation at 44 Year Low
• Producer Prices Edge Down and Keep Inflation at Bay

The list only represents a portion of the articles and the negative articles outnumber the more positive articles by about 2 to 1. Interestingly, as I read the papers I finished with a more positive outlook. Companies are beginning to see profits for the first time in two years. It’s OK that they are “cautious”, they should be.

Just as some businesses do better than others in a good economy; the same is true in a recession. The economic indicators are showing that the economy has bottomed out and is improving. The recovery is not instantaneous and will take multiple years. We will continue to see a mixture of good news and bad, that even happens during good economic times. Keep in mind that aside from the economy, there have been dramatic changes in business over the past five years. Like it or not, we are now part of a global economy in which Europe and Asia are major players.

My recommendation is to remain positive, keep a close eye on your company or business and continuously refine your strategy and the required tactics in order to achieve your goals. If you look ahead, you will see the light at the end of the tunnel. If you keep looking back, you’ll only see the darkness of the recession and not the recovery.

Don’t Watch The News

Monday, May 17th, 2010

As you know, this is the information age. Even if you do not watch the evening news, chances are that you are learning about the news throughout the day. There are the traditional news sources of TV, radio, newspapers and word-of-mouth. In addition many of us hear and read about the news on the Internet and through social media.

Recent business and financial news repeatedly mentions the jobless recovery, increasing unemployment rates, sudden drops and glitches in the stock market, the euro dropping to a 14 month low due to inflation fears, disappointing technology sector profit reports, etc. It’s OK to listen to the news, both good and bad but always keep in mind that it is the fear-driven bad news that sells. Even during times when the economy is chugging along and growing, you will hear a disproportionate number of negative news reports.

Over the past year, I have seen four examples of the potential effects of focusing on the bad news. Two of our clients stopped watching the evening news and limited the amount of business news to the news that directly impacted their organizations. Although I would like to take credit for their actions, the reality is that both of those CEO’s became increasingly frustrated with the continual bad news. Both of those companies are doing well and have enjoyed growth in their sales and profits over the past year. One of the companies has had an increase in employees while the other company has not had an increase nor have they laid-off any employees. The third and fourth clients continued to watch the news. The CEO of the one company installed a TV in his office with the news and finance channels on all-day. On several occasions he paused briefly during our meetings to listen to news reports. The company has had a 32% decrease in sales and downsized their staff.

The fourth client provides the most dramatic example. That company was doing well during the first 18 months of the recession and enjoyed an increase in sales in all but one of their target markets. The CEO was very positive and was encouraging employees to remain positive during the recession. One of the CEOs’ good friends and mentors was not doing as well with her businesses. For several months our client resisted the temptation to jump on the bandwagon of negativity. Eventually his friend wore him down. His employees noticed that our client began worrying about the recession and predicted a decrease in sales and warned of possible future decreases in bonuses, commissions and benefits, even while sales were increasing. He began streaming the news and financial reports on his computer and had news updates texted to his cell phone. He also began speaking with the friend/mentor each morning to discuss the news. The effects of his switch to a doom and gloom outlook were astounding. Within three months sales began to slide and after six months profits declined by 75%. The advertising budget was slashed and several key employees resigned. Ironically the two companies that hired the former employees have maintained sales during the recession and recently reported an increase in revenue as a result of hiring those employees.

The lesson to be learned is your employees want a leader who they can trust and believe in. The CEO or entrepreneur must be keenly aware of the impact that their words and actions will have on their employees and the future success of the business. The recession has had an impact on virtually all industries in most countries around the world. In addition, times have changed as the United States has become much less of an industrial economy and has transitioned to a service economy. Although we would like the economy to be where it was several years ago, the recovery will take multiple years. Just as a decline is rarely a straight line, an economic recovery will have peaks and valleys, which translate to some days with good news and other days with setbacks. There have been many positive economic indications that we are in recovery with a slow but improving upward trend. Be patient, remain diligent, and focus on the improvements rather than the inevitable occasional setbacks.