You might have missed something in the financial news yesterday that reminds us of a really important business point. The good folks at Verizon wrote down the value of Oath, which is what they renamed their acquisitions of AOL and Yahoo. I’ll let the good folks at Bloomberg relay the facts:
Verizon Communications Inc. is conceding defeat on its crusade to turn a patchwork of dot-com-era businesses into a thriving online operation.
The wireless carrier slashed the value of its AOL and Yahoo acquisitions by $4.6 billion, an acknowledgment that tough competition for digital advertising is leading to shortfalls in revenue and profit. The move will erase almost half the value of the division it had been calling Oath, which houses AOL, Yahoo and other businesses like the Huffington Post.
For you non-financial types out there, writing down an asset is the accounting term used to describe a reduction in the book value of an asset due to economic or fundamental changes in the asset. In other words, something isn’t worth what you paid for it any longer. Oops. These were acquisitions that Verizon made to transition into taking on Facebook and Google as a content providing, eyeball-generating ad brand. This latest stumble comes on the heels of several others that Verizon has made over the last several years (a JV with Redbox, their failed news site, their awful app store and of course, V-Cast). When you basically spend $4.8 Billion and flush $4.6 Billion of it down the write-down toilet as they did the other day, you might need to rethink your strategic direction.
When you think about it, what Verizon did is not all that uncommon in business. They forget what their core competencies were and chased the latest shiny object. Big mistake. Where would we be now if all that capital had been invested in 5G networking or in WiMax? Video and advertising is something in which hundreds of companies are engaged. Yes, it’s highly profitable but it’s also dominated by two behemoths and subject to the ebbs and flows of consumer interest (whatever happened to MySpace anyway?). Why would you try to keep up with those Joneses?
It seems as if FiOS, their high-speed broadband service has been abandoned. They’re no longer expanding despite the fact that demand for very high-speed internet is everywhere. 5G is years away and technically challenging. Does anyone remember the dream of WiMax? Those are areas in which they are the Joneses and people have to keep up with them. None of us in business can forget what made our ventures successful because we think the grass is greener in some other business’ yard. Don’t chase the Jones’ success. Create your own.
One of the hardest things I’ve encountered over my years in business is getting people to commit to things. It could be a firm time for a meeting. It could be a deadline. I’ve found that people are often unwilling or unable to lock in firm dates and times. Maybe they have a fear of commitment or maybe they just want to maintain flexibility in their schedules.
Once you can get someone to make a commitment to you, it affects their actions going forward. Those actions have to become consistent with the commitment they’ve made to you, whether it’s finishing a report or making a decision about something or even just arranging their calendars to fit their appointment with you. That refocus is a good thing, so what can we do to encourage people to make those commitments?
One thing I’m finding helpful is allowing and encouraging people to book their own meetings with me. I use one of the online calendar services and I am finding that one I can get people to lock in a time to talk they rarely blow off the meeting. They usually go back and change the time via the calendar, which is a lot better than a no-show. By the way, if you want to set up a meeting with me to chat about franchises or other consulting, you can click this link.
I think the best thing you can do to get people to buy in and commit to you on something is to remember that they will only do so when it’s apparent to them that you’re following their agenda. Your reasons don’t matter. You need to make sure they know you’re asking for their time and energy because you’re solving their problem. If they commit, what’s the win for them? I try to make that clear to them before I seek to lock them into anything.
How well do you secure peoples’ commitments? Are you making it clear to them that you’re asking for that commitment for THEIR reasons and not yours?
It’s Foodie Friday and the topic today is really Faddie Friday. What got me thinking about food fads was hearing yet another discussion about keto diets. You know – low carb, no carb, no fun. I’ve been doing a variant of this for many years (and lost a lot of weight) but it actually goes back to the invention of the Atkins Diet in 1972. I’m not a full-blown keto person but I do watch my carbs and try to cut out sugar and foods that I know are high on the glycemic index.
Atkins is far from the only food fad. At one time, fondue was all the rage. I’ll bet if you dig deep enough into a closet or your garage you’ll find a fondue set, maybe one your mom handed down. Nothing like a communal bowl of hot cheese, wine, and seasonings, right?
Now we have fads such as juice cleansing, kale, and bacon, which down here in the South is not so much a fad as it is a way of life. What’s interesting to me is that fads aren’t the same thing as trends. You can think of it in business terms. Fads are those two-day blips in your revenue while trends are the steady direction of those revenues. Fads are jagged, trends are smooth. Food fad – kale. Food trend – healthier eating. Got it?
You need to think in those terms as you approach your business and how you run it. I’ve lived through several management fads and they weren’t all as benign as kale. Ever hear of Six Sigma? How about Business Process Re-Engineering? Matrix Management? Or one of my absolute favorites, MBO – Management By Objectives. Even though it was created by one of my favorite management people, Peter Drucker, it was cumbersome, time-wasting, and not quick enough to react. Obviously, I agree with much of the thinking behind it but the actual implementation could bog you down.
I bring all of these up (and it’s far from an exhaustive list) to remind each of us that we have to watch out for fads. I was told by a senior executive many years ago that the internet was both a fad and a scam. He had a little trouble figuring out the difference between a fad and a fundamental change. Take the time to distinguish between the two and you’ll be far better off than those who don’t. Make sense?
As I mentioned in this space a few weeks back, I’ve begun a new line of consulting involving matching people who are looking to take charge of their business lives and invest in a franchise of some sort with the right franchise for them. So far it’s been interesting work and today I’d like to share a few things I’ve found in this work that I think are applicable to other businesses. By the way, if you’re one of those people who want to be a corporation of one, click here to check out how I can help (end of gratuitous self-promotion).
Many of the things that come up are points that apply when you’re hiring or interviewing for a position yourself. The first is that of shared beliefs. Nearly every franchise gives me a listing of what their ideal candidate looks like. In many cases, they’re not looking at a technical skill set. You can be taught how to refinish a countertop or to run an afterschool program. Instead, I see things such as “belief in helping a community of learners” or “possess a passion to own a senior-focused care company that largely stems from personal experience caring for others.” You can’t teach those things. When you’re hiring, ask yourself if you’re more interested in someone who knows Excel inside and out or someone who will be a supportive member of your team and play nicely with the other kids in the sandbox. I always opt for the latter since I can teach the former.
Another thing that comes up a lot is that of a franchise’s record of success. How well does their system work? What are the financial results that prove it? If you’re looking to take a job because it’s more money, you’re overlooking the fact that the company may be hiring because people are leaving a sinking ship. How long have the current employees been there? Have they come up through the ranks? Why have people left? It’s relatively simple to find out how a company is doing, both from a financial and an employee-relations perspective. Take the time to find out. A larger paycheck is of lesser value if you’re miserable every day.
Finally, I try to help the candidate set realistic expectations about what their prospective business will be about. Very few people like surprises in business. Don’t oversell the job or the company if you’re hiring. Hopefully, you have a great story to tell and you should let the facts and track record speak for themselves. Keep the promises you make. If your expectations don’t align with the company’s or the candidate’s, there’s going to be a massive problem.
I always remind candidates that franchises are awarded, not sold. It’s a mutual job interview, not a business for sale off a shelf to anyone with the resources to invest. Your staff and your career should be treated the same way, don’t you think?
It’s Foodie Friday and today’s topic is an article I came across about something a restaurant chain is doing that I think is a fantastic idea. I’ll admit that I’m an old-school kind of a guy. When I go out to eat with family, friends, or business associates, I like to interact with them. You know: eye contact, conversation, a few laughs, that sort of thing.
That was the norm until about a dozen years ago when suddenly, everyone got smartphones. All of a sudden the table looked like the reading room at a library. Not a lot of talk and everyone with their heads down reading their phones. I hate it, especially since I generally keep my phone off the table and in a pocket when I’m drinking or dining with others. I figure if it’s an emergency, someone will call me. Responding to an email can wait a few minutes while I finish my meal and my conversation. And trust me – the intense argument on Facebook isn’t worth your time or attention.
What this restaurant chain is doing is simple and smart:
The lack of communication among its diners has prompted British restaurant chain Frankie & Benny’s to offer free meals for kids if families give up their phones when they enter the restaurant. The Italian-American restaurant…came up with the idea after examining the results of a survey it conducted about the way adults use their smartphones. After questioning 1,500 parents and children, the results revealed that around 10 percent of kids had at some point hidden their mom or dad’s handset in a bid to get their full attention. More than 70 percent of the children surveyed said they wished their parents would spend less time fiddling about on their phone, while about the same figure said it felt as if their parents preferred to be on their phone than with them.
Sad that it’s come to that but I often feel just like one of those kids. There is a broader point to be made as well. Walk into most meetings these days and one or more of the “participants” isn’t really participating because they’re preoccupied with their phone. Frankly, I’m a fan of turning phones to silent during a meeting and keeping them out of sight. If what’s going on in the room isn’t more important than what’s happening on your phone then either the meeting never should have happened or you shouldn’t be there.
I guess I have a love/hate relationship with my smartphone. I love that almost all the world’s information is right there and that I can communicate no matter where I am (I still remember running around NYC trying to find a working pay phone during a business emergency). I hate the fact that we respond like Pavlov’s dog to a beep or a buzz. I despise that we’re far less connected during our interactions even as we have the ability to be constantly connected. I didn’t like the fact that as the host I had to ask all the kids to put their phones away while the family was eating, at least for 10 or 15 minutes. You would have thought I had asked them to eat turnips.
Try putting down the phone in social situations and see if the quality of those situations doesn’t improve. Try it in meetings too. What do you have to lose?
I’m going to tell you a secret about me. I’m a bit of a weather freak. I check the weather multiple times a day and I rarely miss the weather segment on the 11PM news. If I ever meet Jim Cantore, I’m going to shake his hand and run like hell since disaster is on the way.
I have a favorite weatherperson, but he’s my favorite for a reason you might not have thought about and he also teaches us something about being a great manager. Why I love this guy is simple. He doesn’t just explain the “what” of weather. He explains the “why” as well.
All weather folks tell you the forecast. They let you know if it’s going to rain or freeze or be gloriously sunny. That’s the “what.” Very few, however, will explain to you about water vapor levels and what looking at the infrared satellite view and the radar can tell you about what’s going on in the atmosphere. That’s the “why.” Great managers do the same thing. They don’t just tell their team what they want to be done. They also explain why they want it done and how it fits into the bigger scheme of things. It’s more like telling a story than it is just stating a fact (in the case of weather) or issuing a command (in the case of managing).
I’ll admit that I sometimes used to put the “what” before the “why” as a manager, particularly when there was an emergency situation. That’s a weak excuse, frankly. It doesn’t take more than an extra minute to preface the what with a why and then add on a “how” for good measure. Even in most crisis situations, there is an extra minute to do that, and it often results in a better result and a more united team as the crisis is conquered.
When you watch your weather tonight, listen for the “why.” Do the same to yourself as you’re asking your team for help. Do you hear the “why”?
It’s holiday time, and holiday time is shopping time. Now if you’re anything like most people, a fair amount of your shopping is done online. Even if you don’t actually buy from an online retailer, you probably do a fair amount of your research using online reviews and they are our topic today.
A marketing solution provider called Uberall released its “Customer Review Report,” which analyzed how consumers evaluate reviews online. They found that consumers think brands should be very active online responding to reviews. In fact, 65% of consumers think brands should respond to every online review every time, whether the review is positive or negative. Other observations from the study were that 18% of consumers believe brands should respond only when the review is negative, while 10% feel they should never respond, and 6% think they should only respond when the review is positive.
How do you feel about it? Personally, I think it’s critical that brands monitor the reviews of their products and not only should they respond but they should also verify. I’ve found that review verification sites such as Fakespot provide a wonderful service. I recognize that some brands actually pay for fake positive reviews in order to mask the crappy stuff they’re selling. That’s short-sighted since the revenues they make will be far offset by the costs of returns, customer service calls and maybe even lawsuits. Running an Amazon URL through Fakespot or ReviewMeta can save you a lot of trouble and also tell you a lot about how well a company curates its reputation.
There was a study a few years back that found that 20% or so of Yelp reviews were fake. You can spend $1 to get one written and you just might end up having to pay up to $40,654 to the FTC for having done so. Online reviews are a great source of, if not THE best, information for consumers and a generally accurate reflection of how your brand is perceived. You should influence that perception through positive interaction and not through creative writing. Most of all, you should respond, especially at this time of year when it’s a crucial sales period for most brands. Are you doing so?