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Archive for November, 2010

Lewis Schiff’s Inc. Small Business Council had its fall meeting last week in New York. The speaker on this occasion was the redoubtable Norm Brodsky, CEO of CitiStorage and small business guru. This was my first personal exposure to Brodsky, though I had heard of him through colleagues over the years.

Brodsky is a lovely guy–compelling, plain-spoken, generous. In answer to a Schiff question about his greatest entrepreneurial gifts he listed only one: “I can see the future.” And he proceeded to share a number of astute analyses of the future for small business, all of which warrant notice.

But one of his observations especially caught my attention–that being that it’s over for accomplished, well-remunerated, “at liberty” corporate employees in their 50’s and 60’s. Brodsky stated simply and bluntly that they mostly will not be rehired. Ever. Older workers are an unfortunate part of a permanent change in the employment paradigm, resulting from corporate belt-tightening and long-term recession. One of the results of this (along with many older folks simply falling through the cracks) will be a large increase in single proprietorships and consultants as these people scramble to cobble together a living.

I think Brodsky is unfortunately prescient in his dour predictions for older workers. But his view on this prompted the practical, Gordon Gekko-ish, opportunistic, Darwinian part of my entrepreneurial mind to ask, “How do I profit from this demographic catastrophe?

I have long and vociferously recommended to my clients and fellow entrepreneurs that they tap this underutilized subset of the employment pool. For years I have almost never employed an associate under 35 for my virtual executive sales company Corporate Rain International. Older employees have judgment, rich life experience (including the experience of hard knocks and failure, as well as success), proven skill sets, existential perspective, a work ethic, an ability to read people and sophistication on many levels. These unquantifiable qualities can only be learned over time. They cannot be taught in school.

With the unemployment situation as dire as it is for the over 50 crowd, the hiring of these folks should become increasingly cost efficient. Highly skilled, experienced older executives and managers should be increasingly highly available and affordable in this brave new world. Why not use them? I have for years. And with the coming tsunami of what may well be the dismantling of our increasingly unaffordable welfare state, the need for employment by older workers can only increase, with a concomitant downward pressure on costs for the entrepreneur.

The time for the utilization of the older employee is coming. And it should. As French existential novelist Albert Camus said, (Notebooks, 1935-42) “You cannot create experience. You must undergo it.”

Thanks Albert.

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There was a nice column on business networking in the Wall Street Journal last weekend (November 13, 2010 by Anne Kadet). Anne states, “On any given night, New Yorkers have their pick of 50-odd networking events. Last week, for instance, you could have mingled with Long Island Techies, Hispanic business owners, professional comedians or ‘Mommies with Babies and Businesses.’ But if you’re not a regular in on the networking circuit, you have to wonder:  Does anything ever come of all this sound and fury?

My own general feeling is that most networking is a distracting, energy vitiating waste of time. (Admittedly I’ve never felt very good at it, kinda like I was never very comfortable at picking up girls in bars.) There is only one form of networking that makes sense to me and that is networking with my peers; that is, networking with fellow CEOs, business owners, and entrepreneurs where relaxed conversations can occur allowing development of relationships in a general atmosphere of collegiality.

But, with that caveat, I wanted to recommend an article my partner David Downey, President of Corporate Rain International, sent me last week authored by an entrepreneur named Greg Peters from Ann Arbor, Michigan. Greg is the founder of The Reluctant Networker and he sets out some rules for networking in terms of law enforcement. His clever article is entitled Don’t Violate These Networking Laws and in it he lists some “misdemeanor” tickets he would give to misguided networkers.

Parking Ticket. This would be issued to anyone at a networking event who chooses to grab a seat at a table without first completing their networking goals. This is a relatively minor offense, but if you get too many of them your networking license can be revoked.

Speeding. Anyone who tried to ask for some benefit which exceeded the relationship that they had established so far would be in danger of receiving one of these bad boys.  The most egregious offenders would be the folks who ask for a high-level referral five minutes after meeting someone.

Passing in a No Passing Zone. Handing out your card when the other person didn’t specifically ask for it is another of those minor offenses that the networking police are watching for.

Not coming to a complete stop. The social butterflies (or social  climbers) who are always looking for someone better to talk to (or be seen talking to) collect the largest number of these citations. Part of the networking officers’ training is to watch for the tell-tale “looking over the other person’s shoulder” which usually indicates an infraction in progress.

Networking while trying to influence. NWI’s are the nice way of saying that instead of networking and trying to establish new long-term relationships, the perpetrator in question was trying to sell. This is definitely one of the more serious violations.

Illegal “You” turn. The networker who earns this ticket has a problem. They only want to talk about themselves. Whenever the conversation drifts to the other person, they try to turn the “you” back into “me.” Violators of this particular statute soon discover that they are alone on the road since no one can hang around for long with the conversational whiplash their networking can cause.

Thank you, Greg Peters.

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Both actors and entrepreneurs are huge risk-takers: The actor takes emotional risk. The entrepreneur takes financial risk.

I was an actor, among other things, for many years before I ever considered being an entrepreneur. I don’t think I’d be in business without the gifts I gleaned from that experience.

Acting is not a lucrative proposition for most of its practitioners. A ridiculously small percentage of the members of SAG, AFTRA and Actor’s Equity make an actual living acting. It is a hard life. Not at all the romantic, indulgent, cossetted life portrayed on Entertainment Tonight and Hollywood Extra.

But there are non-financial rewards to acting that apply very directly to business. First, you learn the skills of listening and human observation. Good actors are first and foremost good reactors. Two (and a corollary to one), acting teaches you human empathy and understanding at he deepest psychological levels, not just for yourself, but for a  multifaria of people. Three, acting teaches honesty, even when you are playing a dishonest character. It teaches you to understand motivation on many levels. And, therefore, four, it helps you to read people quickly and accurately in life. Five, without actually living the lives of people very different from yourself, you can come to understand what motivates and moves them in even the most quotidian of actions.

Furthermore, the very fact of needing to survive forces actors to take jobs that broaden human and economic understanding. When not working as an actor (which was most of the time when I was a actor), I have personally worked as a bartender, a tennis pro, a cook, a teacher and an assistant dean of students. I was even employed part-time as a nude model for art classes at the School of Visual Arts and Cooper Union in New York. I have actor friends who survived with jobs as variegated as dog walking, prostitution, and cab driving. (One of the oddest survival jobs I ever heard of was that of “stretcher.” This job consisted of hanging young men up and pulling on their legs to make them temporarily tall enough to qualify as policemen or firefighters. I heard Martin Sheen describe this as one of his survival jobs on Jay Leno one night.)

But I think the greatest gift of my failed acting career, to me as an entrepreneur and salesman, was learning to handle rejection. An actor faces very personal rejection day after day in the auditioning process. Compared to that, the simple vicissitudes of selling for my firm, Corporate Rain, are a piece of cake. The process of business selling, with all its to be expected rejection, is as nothing compared to the much more personal rejection of the actor’s daily process.

Finally, the actor’s life is a training in courage. Entrepreneurship is a very personal act of risk-taking. A good actor’s craft is quite akin to this and an excellent form of emotional weight-lifting in preparation for the everyday unpredictability and Darwinian fearsomeness of business.

As Tallulah Bankhead said, “It’s one of the tragic ironies of the theatre that only one man in it can count on steady work–the night watchman.

Thank you, Tallulah.

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Sometimes you need to fire your client. God, that’s a hard one for me.

After 16 years at the helm of my company Corporate Rain International and over 700 clients, I’ve only given a client the pink slip four times (and once it was simply for their sake because they were really too busy and successful to use what my company was doing for them.) However, in terms of long-term branding and business reputation, it is a road that must be taken occasionally.

It was real hard to let a client go in the wake of 2008. With fear, uncertainty, and outright panic widespread it was particularly painful to give any client the heave-ho. But even in the worst of times there is a point of demarcation that must not be crossed.

In my case that line of demarcation is first and foremost discourtesy to or abuse of my staff. My employees and associates are ultimately my first priority. They are more important to me than my clients. This is certainly counter intuitive for many of my small business colleagues. For example, The Guardian Life Index: What Matters Most to America’s Small Business Owners recently reported that customers are priority numero uno for the vast majority of entrepreneurs. This is certainly understandable given the cost and time commitment that goes into generating new business. However, my feeling is that I can get new clients, but maintaining an ethical, culturally consistent employee base is ultimately more important to the long-term health of my company. In fact, the customer is not “always right” when a basic incongruity emerges in corporate culture between your client and your company. Then it is better to gently disengage.

Crain’s New York (October 29, 2010) reports that CEO Kevin Labick of digital consulting firm Empathy Lab recently fired a huge retail client. He recounts a litany of offenses that ranged from treating staff disrespectfully to late payments to nickel-and-diming small matters clearly stipulated in the contract. Such a nuisance is a time waster and a distraction from long-term goals and the branded reputability of any small firm. Also, to hark back to last week’s blog, you may be judged by your client’s values and reputation, as much as your own.

Ecclesiastica in the Apocrypha states, “Have regard for your name, since it will remain for you longer than a great store of gold.

Thank you, Ecclesiasticus.

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Never lie down with dogs. You may get fleas.

There is a crucial differentiation to be made for any entrepreneur in the company he keeps. It defines a businessman and his firm every bit as much as his business plan and marketing. I say that not as some sort of clinch-jawed, nose-in-the-air snob, but as a practical man of business. From the inception of any enterprise it is important to conceptualize the long-term defining nature and implications of commercial partnerships and associations. Those companies and people you service and associate with will have implications for your own and your company’s reputation.

Both in terms of process and execution, it is a time saver and efficiency producer to assume that the ur-values of your company and those you serve are the same. It is always an anxious thing to try to fit a square peg into a round hole. That creates a strain. Even if it is a subconscious tension, a simple adumbration of uneasiness, conflicting or incongruent corporate value systems will impinge on the focused energy needed for collegial business success.

The corollary to this, obviously, is, as an entrepreneur, it is important to know who you are personally and what your company’s core value is. Without self-knowledge how is one to even know what constitutes a congruent client? A corporate culture is influenced by the cultures of those whom you choose to serve, as well as by your internal dynamics.

Ray L. Hunt, Dallas oil billionaire, former head of the Dallas Fed, and philanthropist, gave a very fine speech to the Dallas Chamber of Commerce a couple of weeks ago. In his speech he outlines 5 Principals of Business Excellence, which are well worth reporting on another time. But he concludes with this observation–“Quality attracts quality.

Clients and employee associates are drawn to a tone, an ethos, an aura. For long-term success you need to define, establish, and hold dear a set of core beliefs that permeate your organization. “If you build it, he will come.” to quote Ray Liotta as Shoeless Joe Jackson in Field of Dreams. If you build it right and present it effectively you will create long-term clients among kindred spirits. And you will not attract those you should not align with. Which is appropriate, apt, and an important business value.

Thank you, Ray L. Hunt.

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