Monthly Archives: March 2016

March 15, 2016 · 11:59 am

Business Suicide

A clear indication of when it might be time to rethink how you’re running your business is when your own interests overtake those of your customers. I’m pretty sure that while that sort of prioritization makes for short-term gains it’s a losing strategy in the long term. What’s prompted that is a piece I read this morning about programmatic media buying. You can read the piece here and it’s pretty sobering. That said, I suspect many executives could tell similar stories in their fields. 

The piece starts this way:

Programmatic is supposed to bring efficiency to ad buying. But in reality, it’s becoming murky and less reliable for many brands. Most of the time, brands end up paying their agency double and even triple when they collaborate on programmatic.

In other words, what is supposed to be a winning solution for both client and agency turns out to be anything but. I’m very sure that there will be collateral damage on publishers as well. This is what happens when business interests are misaligned. We see this sort of thing all the time. What caused the home mortgage crisis? Lenders putting their profits ahead of the customers to whom they issued loans they knew would be in jeopardy from day one. Why do some drug companies levy outrageous price increases? Shareholder interests before patients’.

One thing of which I remind clients is that as a consultant I have no interests other than theirs. Maybe that’s a lie of sorts since in truth my interest is in making their current customers as happy as possible while expanding that customer base. I think that’s the only way forward to sustained profitability, and it only happens when the business’ interests are perfectly aligned with the customer’s. Anything else is akin to committing business suicide. Do you agree?

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March 14, 2016 · 10:59 am

Daylight Saving

We turned our clocks ahead an hour yesterday and Daylight Saving (no “s”!) Time is upon us. Hopefully, you checked the batteries in your smoke and CO2 detectors too. There are some funny things about Daylight Saving and they’re instructive for business as well.

Victory-Cigar-Congress-Passes-DST papa edit

(Photo credit: Wikipedia)

First, as with many things in business, the origins of DST are widely misreported. There is a collective myth that Benjamin Franklin invented it when, in fact, he only commented back in 1784 that the French (he was in Paris) could save a lot of money if they’d awaken earlier. He proposed a change in sleep schedules, not in the time. The real father of modern DST is an Englishman, who had the idea and campaigned for it in the early 20th century (Germany implemented it in 1916, the first country to do so).

Second, the reasoning behind it is commonly misunderstood. Many people believe that it was to benefit farmers when, in fact, it was a wartime measure. Farmers don’t especially like it and they work by the sun anyway. In fact, farmers led the fight to repeal DST in 1919.  It doesn’t save energy and it does seem to lead to more strokes and heart attacks.

So the “who” and the “why” are not correctly understood and yet we continue to have DST in many places (interesting that it’s not universal, even within the USA). I bring this up because it seems as if there is beginning to be a discussion about why we have DST at all. Which leads to the business point.

So many things in business happen just because “that’s how things are done.” Why they’re done that way is often misunderstood and who is behind the process or practice is often misidentified.  There is rarely, if ever, a questioning and reevaluation, but like Daylight Saving, maybe it’s an anachronism that causes more problems than it solves.  Thoughts?

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March 11, 2016 · 10:02 am

Off The Fairway

I read a sad article this past week and it’s the topic for our Foodie Friday Fun today.  Fairway is one of my favorite markets.  In addition to having a huge selection of groceries and produce, both organic and non-organic, the prices for most things are reasonable.  The store began as a fruit and vegetable stand in the early 1930’s and has grown into a chain of fifteen stores spread across the New York Tri-State area.  That expansion, however, didn’t begin until the mid-1990’s, and really only took off after the chain was purchased by some private equity folks.

Fairway Market

 (Photo credit: Wikipedia)

According to the article I read from Grub Street, the chain is in dire straits.  It has a huge amount of debt and, as the article says:

Almost everyone agrees that a confluence of issues — including an overly aggressive and poorly executed expansion plan and rising competition in the quality-produce business — are the reasons Fairway is now in crisis. “It was a perfect storm,” says a former executive for the company.

Those are lessons for any business.  First, the systems that support one or two stores were inadequate to support many more.  The chain is having issues managing its inventory, and as any retail business knows, inventory management can make or break the operation.  The Point Of Sale system was antiquated, further compounding the inventory problem (how can you manage supply when you don’t have an accurate picture with respect to what’s selling?).  Most importantly, the market changed.

One of Fairway’s primary appeals was the availability of unique ingredients and products.  They have extensive meat and fish departments that often provide hard to find cuts at good prices.  The problem is that others are now doing the same and Fairway rested on their laurels rather than pushing to stay ahead of the pack.  All of those issues might be found in any business that allows success and rapid expansion to disrupt the processes and execution that brought that success in the first place.

It’s easy to think that it can’t happen to your business, and it won’t as long as you continue to attract talented, knowledgeable staff (Fairway couldn’t find enough to keep up with expansion), pay attention to your systems, execute well, and listen to the market (and your customers).  Easy to say, I know, but that’s why they call it work!

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