Friday, September 30, 2011

Is Employee Morale Overrated?

I noticed that someone searched for my blog with, "Is employee morale overrated..."  I had to stop and think about it!  I mean that is an odd question, but yet you have to think about it.

Employee morale?  If the searcher meant a definition of morale that signified happiness or satisfaction, then yes, it could be overrated.  If the term morale was used in the classical sense of the word, as ‘espirit de corps,’ then by no means and at no time can employee morale be overrated.

The concept of morale has always been primarily a military term, but militaries are nothing more than organizations with a goal, and as such the concept of ‘espirit de corps’ applies equally to all organizations.  Of course the history of war is full of examples of armies suffering from low pay or no pay, poor rations, and horrendous working conditions, but still with high spirits achieved unbelievable results; the American Revolutionary War is a classic example.

In the workplace the key drivers of employee morale are:

  • Job Security
  • Management Style
  • Staff feeling that their contribution is valued by their employer
  • Realistic opportunities for merit-based promotion
  • The perceived social or economic value of the work being done by the organization as a whole
  • The perceived status of the work being done by the organization as a whole
  • Team composition
  • The work culture

One cannot buy morale or ‘espirt de corps’ with wages, benefits, and cafeterias with free food, or lattes at will; morale is instilled from within an organization and an individual employee.  Being a “cool” place to work is not morale, nor should weekly pizza parties be viewed as an example of team building.

 I spent three days at a printing facility recently where the plant employees work 12 hour shifts doing work that is hard physically and mentally tedious.  Were the employees ‘happy?” or were they “satisfied?”  One couldn’t really tell because there was very little communication among the employees, realistically the work was very unfulfilling and of low esteem.  But, the ‘espirit de corps’ was sky high!  They had jobs to do, tasks that had to be accomplished, and there was little to no floor management. 

Not one employee missed work or reported late.  Every employee gets a five minute break every hour, a ten minute break every two hours, and a twenty minute lunch, which are all paid and not once did anyone leave early or return late. 

Wives and husbands were actually hired together for the same shifts but not allowed to work the same lines, and that was a brilliant going against the grain in the traditional human resources management bible. 

Extraordinary effort on the part of average individuals is the true example of employee morale and it can never be overrated.

Thursday, September 29, 2011

Technology, Retail, and Ecommence

Women account for roughly 75 cents of every dollar spent at retail and women are early adopters of the IPad tablet; in less than a year the IPad, or Tcommerce will revolutionize retail.

The IPad, or tablet, is not just an ebook reader, or something to surf the web with, it is;
If you're fortunate and hip enough to own an iPad -- or have otherwise experimented with one -- the preference for this shopping device will come as no surprise. The nearly 10-inch display offers a comfortable environment for web-surfing and product consideration, overcoming the size restraints that can frustrate shoppers on mobile phones. Compared to point-and-clicking from a laptop, the touch-screen functionality provides a more immediately satisfying and tactile shopping experience. Lightweight and compact, tablets with 3G/4G connectivity are also inherently free from the constraints of the desktop; they can be comfortably schlepped from commuter trains to airport lounges to kitchen counters, facilitating purchases at every venue.
Now, Mark Zuckerberg would have you believe that Fcommerce is the next thing to "blow up"  and Facebook even commissioned a study that showed that while Facebook showed a 92% increase in referrals in August 2011 over the same month a year earlier the reality is that Facebook only accounts for 1.2% of Ecommerce conversions.  Twitter only accounted for .5% but it did achieve the highest purchase average of $121.33.  Social Media conversions represent impulse purchases, not planned purchases; planned purchases are the domain of Google and search.  An explanation of an "impulse purchase" is:
Consumers on Facebook and Twitter don’t intend to make a purchase, but rather share information. A spontaneous shopper might see an ad and get pulled into the retailer’s Web site. The shopper’s personality, combined with impulse and influence from the ad, prompts the sale or conversion.
The IPad or tablet, will totally change retail from a radically different perspective; now a consumer, armed with an IPad, can shop at any brick and mortar establishment and use their IPad to scour the internet for the same product at a cheaper price.  Thus even impulse buys will become rational.

With the announcement of the new Amazon Tablet for $199 Amazon could have become the internet based "Walmart" if their new tablet had included 3G/4G rather than Wifi.

Then of course, you will have the experts going on about "the shopping experience" and multi-channel retail, but I always refer back to an article, Don't Compete On Price, from 2007 that made the same claims and then used Circuit City as a successful case in point!

The reality is that technology, especially the tablet but also mobile technology, have the ability to turn brick and mortar retail stores into nothing but browsing catalog showrooms, much like Service Merchandise, where the purchases are made online from ones cheaper competitor.

The forces of innovation and technology always start out creating more choices and opportunities but they always end up favoring the bigger lower cost competition.  Whether one is talking about trains, automobiles, or the internet, the opportunities once created for many end up leaving only a few.

The only way a manufacturer or a retailer can compete is to focus on a niche, specialization, and  exclusivity.

Tuesday, September 20, 2011

From Niches To Communities To Tribes

Being a producer of a niche product to a niche market I am constantly seeking out new ways to capitalize on opportunities.  

Between "how can I gain an advantage?" to "there has to be a better way?" that pretty much encompasses the totality of my mind set.  

I realize that one of my current key problems is that while I am using terms such as "community," "social media," and or "consumer centric," the reality is that my concept of these terms is totally different than what is considered popular at the moment and I am missing the mark in the confusion.

I am gambling on the fact that the future belongs to those who go from creating a community to creating a tribe.  While a community is about sharing a tribe is about belonging and it involves participation and loyalty.

The reality is that the social network comes first and the sale of product is secondary.  Which involves totaling changing the way one thinks.  You create a platform that is attractive to your niche market, someplace where those that belong to the niche market feel comfortable and share; and you reward the sharing with discounts to products.

Tribes are about exclusion and exclusivity and brands that cater to niche markets have to create a sense of pride with their brand.  Ecommerce is becoming too much like traditional retail with endless promotions and advertising. The reality is that the internet has created an opportunity to create platforms where people congregate, socialize, hang out, and then you advertise and promote within the platform.      

Tribes are about belonging, and belonging should instill a sense of pride among the members of the tribe.  When your niche is big and tall and plus size then the pride has to come from exclusivity.  Thus, you promote the social, the music, the games, the interaction and you promote products that cater to the interests captured in the social and size availability becomes the gatekeeper.

Tribalism thus creates a pride of participation and belonging which in turn creates increased product sales.  Its not the brand that is promoted but rather the social that promotes the brand.

You have then created a sense of belonging with the statement "A Shirt For US!" A positive sentiment from a negative attribute; you have created a tribe from a shared physical attribute.  

Thursday, September 15, 2011

The Wisdom Of Thinking Differently

I came across this article about Kevin Kelley, the head coach of Pulaski Academy in Little Rock, Arkansas.  

Since I am not a football fanatic I was not aware that Pulaski Academy is a small school of 350 students with an outstanding record in football.  But, they have an outstanding record and the coach is well respected in his field; as well respected as he is unorthodox in his coaching.

As the article states,
"Kelley has become a cult figure among both football coaches and the sports analytics community for his disregard -- contempt even -- for traditional football wisdom."
He forbids his teams from punting on 4th down and that is just the beginning!  The article continues with,
The funny thing about Kelley: He's not a mad scientist or an iconoclast, zigging where everyone else is zagging, for the hell of it. Rather, he's a relentlessly rational sort whose methods have backing in data.
The decision not to punt? According to Kelley's statistics, when a team punts from near its end zone, the opponent will take possession inside the 40-yard line and will then score a touchdown 77 percent of the time. If it recovers on downs inside the 10, it will score a touchdown 92 percent of the time. "So [forsaking] a punt, you give your offense a chance to stay on the field," he said. "And if you miss, the odds of the other team scoring only increase 15 percent. It's like someone said, '[Punting] is what you do on fourth down,' and everyone did it without asking why."
Yes, it surprises people that "thinking outside of the box" or drawing different conclusions can be very logical and rational.  If you think about it following the norm, or conventional wisdom, will achieve nothing more than mediocrity.  

Of course in business, there are benefits in mediocrity, or conventional wisdom, if you are a huge established company; you will not gain much but you won't lose anything either.  But the idea that unconventional ideas or 'thinking outside the box' is risky or only to be attempted as a last resort is wrong also.  

Sometimes the most unconventional, the most unorthodox ideas are actually the most rational and the most conservative. We spend an immense amount of time and effort trying to figure out what our competitors are doing without really grasping the logic of why we do what we do.

I have made enough presentations in my life, and offered proposals or solutions to problems that were met with, "That's Crazy!"  Then I would sit and take it step by step, documenting and proving the logic, and slowly but surely you would convince people, a step at a time, that what they initially thought was "crazy" was actually the most logical course of action.

Sometimes rules are just nothing more than outdated traditions that no one ever  bothered to question.

Wednesday, September 14, 2011

Saturday, September 10, 2011

Business By Design

Change is constant and never linear;  and I can't help but get excited over all the opportunity I see today!

Watching the technology that being created and envisioning how that could benefit a consumer goods manufacturer/retailer I cannot help but see new opportunities on a regular basis.

The internet has exploded retail, opening opportunities for niches to be exploited and specialty brands to flourish.  But, change is transformative and dialectic; thus you have to think 'thesis,' 'anti thesis,' and 'synthesis.'

Yes, the internet (ecommerce and social media) has dramatically changed retail, but mobile and QR codes will be even more disruptive.

Macy's has already begun to push back by developing "incubation centers" for fashion designers.  Major department stores will begin to develop their own private label, or store brands of clothing.  Thus, to bemoan the death of the major department stores is too premature.

Even brands like Fruit of the Loom and Hanes, will eventually find themselves competing with "Value" brands that will be developed by the major discounters to increase their margins on the commodity products much like grocery stores have done.

Where as ecommerce and social media disrupted retail shopping channels smart phones and QR codes/bar codes can very easy restore the old dynamics of scale.  40% of all wireless phones are now smart phones and 20% of smart phone users acknowledge that they regularly scan codes in to seek out better prices. 

That will force retailers to develop their own exclusive brands and force manufacturers of major brands to either go exclusively B2C or work out exclusive deals with retailers, such as what HP and Dell do with their computers.

The future for small niche companies and or web based product lines is to use this same technology to their benefit; a SHOPBOX or a Pop Up Shop.  Every time I sit down and review my business plan I find more options, more opportunities, and cannot help but get excited at the sheer size of the opportunities being created on almost a daily basis!  I think every small retailer should read the books recommended in this post:  Whenever anyone claims "big trouble" that also translates into big opportunities!

Think of your consumers as "tribes" and follow them! We are so focused with connecting and having conversations with our consumers that we fail to realize that the future of retail, for brands is to now get out among your communities.  The future belongs to those brands that become part of their consumers lives.

Thursday, September 8, 2011

Politics and Economics

I guess tonight is the night that Barack Obama makes his big speech about jobs!  Pretty much more of the same, tax credits, extended unemployment benefits, infrastructure investments, and funds for states and local governments so that they do not have to lay off teachers and first responders.

No need for me to tune into the speech, because the reality is none of these prescriptions will deal with the economic issues we are currently facing.

In a recent column Jeremy Siegel notes that the S&P 500, which "...represents nearly 80% of the market listed value of U.S. stocks, and U.S. economy..." derive almost 50% of their profits from overseas.

So, simply put 80% of our economy is focused internationally because that is where the growth is and where their futures lie; the days of these business entities creating jobs in the U.S. is over.  Since we do not tax foreign profits until the money is brought to the United States and as they are expanding overseas and have no need to repatriate these profits we will continue to see a reduction in corporate tax collections.

The other day I participated in a debate at a tech venture capital blog, A VC, and of course the sentiment was that technology could solve all of our problems and that government just needs to get out of their way.

The reality is that technology does not create as many jobs as the technology that it creates replaces.  

Then I came across this article this afternoon, What 10 small business owners would tell the President, and one comment in particular stuck out;
"I used to do a lot of the baking and now my partner and I have moved to other aspects of the business. We have stepped out of the kitchen. It is nice to see the business is growing. We started in 2005. We have 20 employees, pretty much full time at this point.

We have a cobranded line of mixes with Williams-Sonoma: brownie mixes, a Bundt cake coming out, and a whole line of breakfast treats. We had this urge to move on and away from the cupcake to prove that American baking is more than just about the cupcake.

We have been hiring more people. It has been a slow, steady climb. We will hire when the need arises. So far, we have never had to let anyone go ever since we opened, actually.

I would like to hear that President Obama is going to continue to back small business owners. There are ways to encourage growth. The number one thing is making credit easy to get. At the moment it is so difficult. It is almost comical. They need to figure out how to extend credit to small business without it being such a hassle.

We actually did go through the process in the very, very beginning of trying to secure startup money. The paperwork required a lawyer and an accountant. The SBA loans are beyond complicated: It is so much paperwork -- so much of a hassle that I could see a lot of people not applying because it is so labor intensive. It is not worth it in the end. It is almost worth it to go outside the SBA."
 I have worked in the world of small businesses, companies with 15 to over a 1,000 employees all my life, and never in my life have I seen a time when financing was as hard to get as it is today.  Its not hard to get, its impossible.

I see all the opportunity being created by technology and the internet for small businesses, for old economy start ups, and niche products, and I wonder how long we can continue to invest in technology when the natural consumer, the creators of advertising for social communities and such on the internet, of all that is being created, are disappearing.  Small businesses are the income stream for most of what today is called social media and without funding they cannot maximize the potential of what our cutting edge technology can create.

Our government cannot see past the lobbyists and special interests that represent the major firms to even notice that we could have a very vibrant job creating environment, if they could find the small innovative companies within the old economy.

I have all but given up on seeking funding, sometimes you just have to accept that you are trying to fit a square peg in a round hole; not enough tech for the folks looking for the next big thing and too much of a niche product to be of interest to old economy investors.

We are in a period of transformation and without small business we have no way to bridge the gap between today and our future economy.  So we will build roads and borrow money hoping that something changes while our major corporations continue to focus on the global economy and our innovation will be squandered with the burden of rising taxes and more entitlements.  

Wednesday, September 7, 2011

I Would Rather Be Lucky....

"I would rather be lucky than good..." is a claim I have made a few hundred time in my life!  It seems to grab people's attention and it always gets a response.

The reality is luck does not exist; its actually nothing more than a poor word choice for what we refer to when we finally achieve success through hard work and persistence.

There is no such thing as " overnight success."

Its kind of like the word 'persistence' which sometimes is used because it sounds better than what we really mean, which is "stubbornness."

Chance can only exist in a world where "success has many fathers while failure is an orphan."  If one does not own up to their failures then success can only be derived from chance and the key difference between persistence and stubbornness is actually nothing more than the ability to listen and learn.

My favorite quote is one that comes with every single mutual fund, "Past Performance is not indicative of future results."

Yes, I would rather be lucky than good, I would rather rely on hard work, persistence, listening, and learning than I would on skill, which is nothing more than the accumulation of the results of past performance.

Monday, September 5, 2011

Part 2: Success With Tees

When contemplating a tee shirt for a promotion, or as advertising, or for your line of art that you hope will make you a household name, you have to understand that the shirt its self says more about you than you realize.

With a 100% cotton shirt you have a variety of yarn processes, from carded cotton, which is rough, to ring spun, which will produce a much softer garment.  One is much more durable and the other is much more comfortable.  

Of course, now you also have tee shirt manufacturers that take a courser cotton and treat the fabric with silicon to give it a softer hand.  It also can lead to problems with screen printing.  

In regards to screen printing you will also find that the thicker and courser the yarn the better the ink holds, the smoother the ink sits on the shirt, and the longer the design will last.  The best shirts for screen printing are those from 18 singles yarn.  Once you start getting to 24 singles and above you are basically screen printing a "throw away" shirt.

If I was putting my company name on a shirt, or promoting a cause that I believed in I would want a shirt that was going to stand the test of time.

Remember, the graphics may dazzle but if the shirt is not comfortable it will not be worn.  If you are doing a promotion, then you need to realize that you get additional mileage from your promotion the more people wear the shirt.

If you have no clue as to what sizes you will need, then the safe bet is a 1-2-2-1, or 1 M, 2 L, 3 XL, and 1 XXL.

Oh, and always design your graphics with the color of the shirt defined!  Never design on white unless you are going to print on white!  One other key point, a design may really "pop" on your computer screen, but you need to realize that you need the design to "pop" when someone is standing 8 to 12 feet away from someone wearing your shirt!

One last point, if your market is teenagers then slim fit and 30 singles are great shirts but once your customer reaches 26 or 27 years old, slim fit and 30 singles yarn just isn't going to be all that attractive as a shirt any longer!

Turning Social Media Upside Down

I remember S&H Green Stamps!  As a child I remember wanting to go shopping with my mother so we could watch her earn stamps as her items were rung up on the cash register, then of course there was the fight to determine who got to carry the stamps home and the licking of the stamps and adding them to your books was actually a family event.  Kids even bragged about the number of books their family had completed and I am sure that housewives would discuss which retailer gave the most coupons and what was the best item to purchase with their books during their weekly coffee sessions around a neighbors kitchen table.

That was social media long before the advent of the internet as social media has become the "coffee klatches" of the 21st century.

For companies and brands the primary focus of their social media campaign is to advertise but the real success of social media is about conversations not the number of 'visits' or 'likes' one attains.

Everyone attempts to determine the success of their social media campaigns by the number of conversions that occur from social media sites but the reality is they may want to take a hint from S&H Green Stamps and think about how many conversations their product can create on social media.

Rather than viewing social media as nothing more than an advertising channel why not think of it as rather how many conversations can my product generate?

I think the ideal social media campaign would involve a game and that game would be involve some sort of token that would be gained via purchases of your product.  Zynga creates some awesome social media games, that create conversations and interaction.  All of their games involve earning points via playing the game but also involve the purchase of other, different points.  It would be logical to replace the PayPal based purchase of other points with tokens that are earned through the purchase of products.

You would benefit from the fact that individuals would be interacting and broadcasting that they purchase your product, at the same time you would be creating the potential for increases in the sales of your products  due to the desire of the game players to earn additional rewards and at the same time you would be creating an opportunity for consumers to earn rewards through their participation.

I have to admit that I am fascinated with the social psychology that is built into the games that Zynga has produced.  The way they build interaction and competition into their products and it just seems to me that they have created the ideal social media vehicle for products;  for the creation of the 21st century S&H Green Stamp program.