Making Rain

Well, here we go again. I’m worried. I don’t wish to be a small business Noriel Roubini or any kind of pessimist, but I continue to fear the economic myopia reflected in legislation recently enacted by Congress.

There is a little good news since I last wrote in this trope (see May 18, 2010, “Chicken Little and Entrepreneurship“). The major media are finally beginning to pay attention to the small business conundrum. Even the Obama administration is beginning to recognize the essential role of entrepreneurship in job creation and ending recession. Banks are finally at least giving lip service to loosening lending. But it ain’t nearly enough to assuage a looming bleakness that augurs nothing but ill for the small business community, with concomitant implications for the macro economy.

What is of increasing alarm to me is the issue of mandates. Let me list just a couple.

1. A requirement that all businesses must file 1099 forms with the IRS to report any purchases totaling more than $600 in a year. This is a gigantic added paperwork burden.
2. The unspecified rules and paperwork can now be imposed unilaterally and without explicit Congressional approval by well over 300 new bureaucratic entities legislated in ObamaCare.

The vagueness of all this is bloody scary. It creates a nightmarish chiaroscuro of uncertainty for business in general and the small businessman in particular. How do you plan, how do you budget, and how do you hire in such a hostile and fluid atmosphere?

I believe the current administration genuinely would now like to belatedly give small business a boost to aid the dismal employment picture. But there is a problem with this. The Obama government has lost the faith of most small businessmen not only because of hostile legislation, but also because of populist rhetoric that paints business as the venal enemy of the greater good. Explicit verbal attacks have been made on doctors, insurers, drug makers, oilmen, bankers, automakers, casinos, hoteliers, etc. It makes most of us feel like we have a big target on our chest.

Our trust that the government is on our side must somehow be restored. The heedlessly imposed new rules and mandates must give way to a practical and real sympathy to how business actually works. Bureaucratic mandates are a creativity killer for the entrepreneur and the capitalist risk-taker.

The Dallas Fed President Richard Fisher reports survey results that neatly sum up where most small business is in a recent speech to the San Antonio Chamber of Commerce. He says:

“…the politicians and officials who craft and enforce the rules are doing so in a capricious manner that makes long-term planning difficult, if not impossible. [Businessmen] are increasingly distressed by the lack of consistent  direction coming from Washington….So they are calling time-outs and heading for the sidelines while they wait for the referees to settle the rules of the game.”

Gore Vidal said in his 1968 book Sex, Death and Money, “There is something about a bureaucrat that does not like a poem.” Or an entrepreneur. Thanks, Gore.

Meetings. Ugh.

My idea of hell is to be forced to spend eternity in a meeting. I’ll do anything to avoid meetings. In fact, I doubt there are too many of us who love meetings. A former client says I should have myself checked out for ADD/ADHD since my daughter struggles with the condition and people who have ADD/ADHD have particular problems sitting in meetings. However, I think the greatest issue for me and a lot of fellow entrepreneurs is that we are hard driving, impatient, autonomous people.

Entrepreneurs are courageous. They are calculated risk-takers with the potential to have their heads handed to them every day. To even attempt the audacious act of entrepreneurship presupposes a strong will, a healthy ego, and the instincts of a jungle carnivore. These characteristics are, perhaps, not the ideal for mediating useful meetings.

I was reminded of this when I attended a seminar hosted by Lewis Schiff on Open Book Management (OBM) last week at a gathering of the Inc. Small Business Council. OBM is a term invented by John Case In the early ’90s. But the concept’s chief evangelist is Jack Stack, who has written and spoken extensively on the concept. To oversimplify, OBM’s core assumption is that most firms perform best when it’s employees see themselves as partners rather than hired hands. All company financials are shared by employees. Employers are challenged to improve profitability, and all share in new company efficiency and prosperity. Ideally. The assumptions are not very different from Employee Stock Ownership Plans (ESOPs), except there remains a single boss and owner.

I was fascinated by the concept of Open Book Management in theory since I have always tried to run my own outsourced executive sales firm, Corporate Rain International, collegiality–as a community of high-level peers. (I certainly try to never hire anyone who isn’t better than me.) That said, OMB is a bridge too far for me at present for several compelling reasons. But the one that strikes utter terror into my small businessman’s soul is the potentially endless meetings educating and sharing and discussing management decisions and finances. This potentiality alone is enough to send me fleeing the seductions of OMB.

As Eileen Shanahan acerbically states (as quoted by Harold Faber in The NY Times Magazine–3/17/68), “The length of a meeting rises with the square of the number of people present.” Or to quote that great business philosopher Mel Brooks. “It’s good to be King!“

I wanted to briefly follow up last week’s ruminations on the mind altering implications of new media technologies. As I noted at the end of last week’s post (July 20), my instinct is that if you try to do everything, you do nothing. I am frequently as much of a crazed multi-tasking fool as any other executive, as I rush through the hydra-headed challenges and crises of being the CEO of my own firm Corporate Rain International. Yet this flittery, fast-paced daily race often leaves me with the breathless sense that I am missing the bigger picture, of seeing the trees but not the forest.

Russell A. Poldrack, Director of the Imaging Research Center at the University of Texas, states:

“Our research shows that multitasking can have an insidious effect on learning, changing the brain systems that are involved so that even if one can learn while multitasking, the nature of that learning is altered to be less flexible.”

Or consider the work of Dr. Patricia Greenfield, a professor of developmental psychology at UCLA. She warns in a Science article last year that our growing use of the Internet, with all its advantages of speed and accessibility, seems to be weakening our “higher order cognitive processes [including] abstract vocabulary, mindfulness, reflection, inductive problem solving, critical thinking and imagination.”

Likewise, William Powers new book, Hamlet’s Blackberry, putatively argues convincingly that the distractions of manic connectivity can lead to a lack of productivity. Though I have not yet read his book, Mr. Powers apparently warns that an excess of digital activity reduces mental life to “a blizzard of snapshots” (WSJ review-David Harsanyi-June 30, 2010).

Nicholas Carr, in The Shallows (see last week’s post), begins his excellent book with a quote from HAL, the super computer in 2001: A Space Odyssey. HAL’s mind is being slowly erased at the end of the film and HAL plaintively says, “My mind is going. I can feel it.” Carr goes on to expound, “Over the last few years, I’ve had an uncomfortable sense that someone, or something, has been tinkering with my brain, remapping the neural circuitry, reprogramming the memory….Once I was a scuba diver in a sea of words. Now I zip along the surface like a guy on a Jet Ski.” Well put.  Thank you, Nicholas.

I love P.T. Barnum. Yes, he was a bit of a scoundrel and a con man. But very wise and seminal and modern in his practical thinking about business.

One of Barnum’s maxims I recently came across appeared in his essay “The Art of Money Getting or Golden Rules for Money Making” (1880). Barnum says: “When a man’s undivided attention is centered on one object, his mind will constantly be suggesting improvements of value, which would escape him if his brain was occupied by a dozen different subjects at once.” Barnum’s advice is most applicable to my present inundation-of-new-media conundrum.

One of the reasons I write this business blog is simply to clear some contemplative time for myself each week. It helps me coalesce my anomic ideas into something coherent. In a sense, I don’t know what I think till I write it down.

On July 6th I posted about the value of lifestyle and life balance accommodations for my employees. As a boss and a creative entrepreneur, clearing open-ended, spacious time for quiet contemplation without agenda is crucial for my emotional health and life balance.

Which brings me to Nicholas Carr‘s new book, “The Shallows: What the Internet is Doing to Our Brain.” Mr. Carr’s book sounds the alarm about the discomfiting implications of our manic connectivity, our addictive cyber hyperactivity. Carr points to significant neuroscientific evidence suggesting that the Net, with it’s constant distractions and velocity, is turning us into “scattered and superficial thinkers.” Carr states in The Wall Street Journal: “Over the last few years, I’ve had an uncomfortable sense that someone, or something, has been tinkering with my brain, remapping the neural circuitry, reprogramming the memory.” He cites extensive science in support of his thesis.

People who read text studded with links, the studies show, comprehend less than those who read traditional linear text. People who watch busy multimedia presentations remember less than those who take in information in a more sedate and focused manner. People who are continually distracted by emails, alerts and other messages understand less than those who are able to concentrate. And people who juggle many tasks are less creative and less productive than those who do one thing at a time….Only when we pay deep attention to a new piece of information are we able to associate it “meaningfully and systematically with knowledge already well established in memory” writes the Nobel Prize-winning neuroscientist Eric Kandel.

I will admit to being instinctively a bit of a Luddite. I’m not a techie, though my company, Corporate Rain International, is a cutting-edge technology-driven company. I hire technologists. I hope my instinctive caveats about our accelerating cyber-phantasmagoria are unwarranted. I try not to let the fear of the unknown interfere with a practical business reality. However, for myself it is important not to compulsively try to connect with every magic of the Internet (tweeting, texting, friending, linking, etc.)

The Roman philosopher Seneca said succinctly, “To be everywhere is to be nowhere.” I must agree. Thank you, Seneca.

I’ve just finished Harlan Coben’s novel Caught. It’s lots of fun, as are most of Coben’s novels. This one has a particularly labyrinthine and rococo plot involving the disappearance of a beautiful teenage girl, a disastrous scavenger hunt at Princeton, a drunken driver, a vanished corpse, a planted GPS, etc. All making an enjoyable and entrancing thriller, if you’re looking for a good beach read.

I have enjoyed Mr. Coben for many years. (We both love musical comedy, for one thing.) His characters are silly, heroic, original, kinky and quite contemporary.  But one subplot jolted me and aroused my anxiety as a small business entrepreneur.  This subplot shows the Internet being used to totally ravage the reputation, business and careers of five accomplished men who were roommates in college. I was struck with a stomach-clenching fear as this subplot unfolded. Could this happen to me or my company Corporate Rain International?

I don’t know. But, to judge from Coben’s fiction and cyber conjecture, it’s not at all out of the realm of the possible for any small business owner to unfairly take a reputation hit from a concerted effort to besmirch. Or perhaps this is just entrepreneurial paranoia.

Ah well. It’s part of the small businessman’s job to worry each day about the hypothetical, as well as the real, even if it is from the phantasmagoric imagination of Harlan Coben. As Pierre Beaumarchais noted in The Barber of Seville (1775), “I would rather worry without need than live without heed.” Thank you, Pierre.

Stay home. Be happy. Increase the efficiency of your company.

Last week I wrote about the under-appreciated value of the older employee. This week let’s consider the virtual employee. Both of these non-traditional HR solutions have buttressed the value and efficacy of my executive sales outsourcing firm Corporate Rain International for 16 years and I heartily recommend our approach. It’s the way business is increasingly going, whether you like it or not, but more importantly, it can lead to a cornucopia of personnel riches for the entrepreneur and a large boost to corporate esprit de corps.

Traditionally, the most valuable employees are those who arrive at their desks early and remain there after everyone else goes home. And they often are great workers. However, these single-minded office hard-drivers are not necessarily what the evolving worker wants to model himself on.

The Kenexa Research Institute of Minneapolis, Minnesota has done extensive research on the telecommuting employee. Surprisingly, in a poll of 10,000 US workers, 73% of remote and home-based workers were happy with their company as a place to work, compared with 64% for traditional office workers. Furthermore, 70% of the telecommuters said they were “proud to tell people I work for my company,” in contrast to 64% for traditional office workers. Jack Wiley of Kenexa states:

“When companies allow employees to work remotely or from home, they are explicitly communicating to them that  ‘I trust you to be dedicated to the accomplishment of the work, even if I’m not able to observe you doing it.’ It boils down to respect. I respect you and I have confidence in your commitment to the work—to do this under the conditions and at the time you feel will be most productive for you.” (WSJ-September 11, 2007)

Lifestyles and people’s needs are changing. I believe most contemporary employees are looking for a freer, less top-down work atmosphere. Jack Wiley of Kenexa notes that the most important thing an employee wants from an employer (besides compensation) is appreciation for the work they contribute and to be treated respectfully.

Flexibility is an increasingly valued commodity for employees. Many of my executive sales associates are very out-of-the-box in their needs and values. They are not people who necessarily want a traditional career. For example, Corporate Rain has sales executives who are raising venture capital on the side. Also, mothers who have held high-level corporate positions, but no longer want to be in that particular rat-race. We  have two associates writing books on the side, as well as associates who consult independently in fields like PR, HR, Non-profit, ROI augmentation, and the production of beer. We even have had a former VP of Jack Welch who owns a trout farm in North Carolina!

These are non-traditional employees who value the lifestyle flexibility offered by my firm. Most of these folks are of a quality I could never afford but for the fact that Corporate Rain offers unique support for flexible lifestyle enhancement. (My company is also a company of equals. In many ways, it’s intentionally as close to a Communist company as you can get and still be a going capitalist concern. But that’s a discussion for another day. Maybe next week.)

Employees’ changing values and desires will change the office world. Edward Deci and Richard Ryan of the University of Rochester are exemplars of a new school of “happiness” research. They have found that employees do their best work when motivated from within, when they have control of their time and decisions, and when they feel a deep sense of purpose. (Intrinsic Motivation and Self-Determination in Human Behavior–Plenum–1985)

So, why not happiness, freedom, AND work? Thomas Jefferson, who died on July 4, 1826 (as did John Adams), said, “It is neither wealth nor splendor, but tranquility and occupation, which give happiness.” (Letter to Mrs. A. S. Marks–1788) Thanks, Thomas.

Our lovely Great Recession has been a boon for my executive sales outsourcing firm Corporate Rain International. Yup. Despite alarming small business trends I’ve discussed lately, Corporate Rain has become a tighter, stronger, more profitable, more effective organization. So, in many ways, I personally feel gratitude for the current economic malaise.

Fear is a useful tool for change. White House Chief of Staff Rahm Emanuel has famously said a crisis is a terrible thing to waste. That’s true. So here’s how we’ve used the last two anni horribiles at Corporate Rain to become a better company with a steadily improving top and bottom line.

First of all, we’ve brought on an experienced COO with new responsibilities for streamlining and efficiencies, with broad authority to institute change. As founder of my firm I’ve had to let go responsibilities I’m not gifted at, an act made easier through urgency. We have cut inefficient personnel and process. Staff responsibilities have been reviewed and realigned. Our line-up of  executives and associates have never been stronger or more effective. Every expenditure is analyzed, no matter how minor. (My COO insisted I justify a $10 light bulb purchase last week. Annoying, but probably all to the good.)

Second, we have discovered at least two serious new revenue streams, which we had simply not bothered to pursue pre-recession. These new verticals are recession proof and make our long-term financial planning easier.

Third, when we have had extra staffing band-width, we have used our resources and experience on a pro bono basis to support a variety of charities including Texas Voice Project For Parkinson’s Disease, Alzheimer’s Association, By The Hand Club For Kids, and the Wilkinson Center, helping these institutions with free ongoing business development, research, and planning. We also sit on the boards of some of these organizations. On an individual basis I am deeply proud that most of our employees do active volunteer work individually, as well.

In addition to writing my alarmist concern about the current state of small business, I and Corporate Rain’s President David Downey have had personal meetings with elected officials in three different states and Washington D.C. to discuss both charitable issues and current small business problems. We have corporately committed to active participation with the boards of three different non-profits.

I do have a mystical instinct that karmic reward does follow energy given back to the universe. Without sounding too granola hippyish, bad times offer an even greater opportunity for an open spirit of entrepreneurial generosity. This recession presents a particularly useful chance to walk the walk of principles and ideals. And it’s really ultimately a selfish thing as it ennobles the tone of your company and engenders pride and happiness in employees. If nothing else, a tone of service and helpfulness osmoses into all your everyday interactions. It spawns trust and collegiality in potential clients.

So, while I cannot deny alarm and even morbidity in my concern about the current macro small business climate, there are so many daily positives that can come out of economic gloom. At least that has been the case for us.

Though we live in a fraught and difficult entrepreneurial atmosphere, there is really no bad time for doing good business.

General Douglas MacArthur said, “There is no security on this earth; there is only opportunity.” Thank you, Douglas.

Here’s my general feeling about new hiring these days. No way, José. The choice for my 30 employee firm, Corporate Rain International, is to not hire now unless we absolutely have to.

Why? For me and most of my small business colleagues, clients, and friends, the present Great Recession is a stunning entrepreneurial ambush. It’s a flabbergasting rule changer and assumption challenger. However, the conventional wisdom is that we’ve now turned a corner and that the entrepreneurial class is and should be beginning to make new hires.  As I mentioned on May 18 (Chicken Little and Entrepreneurship), I remain less that sanguine about a robust recovery, with it’s concomitant implications for a hiring ramp-up.

The news is technically positive. The Wall Street Journal reported on June 4 that unemployment is down to 9.7%. Payroll giant ADP reports private sector jobs increased 55,000 last month and the number of claims for unemployment went down by 10,000. Ford and GM are rehiring some autoworkers. Payrolls climbed 431,000 and pending home sales rose 6%. White House Head Economist Christina Romer spoke on Friday of “continuing signs of labor market recovery.” But before popping the recovery champagne, I have some very cautionary thoughts.

No one likes bad news. But beneath the patina of good news mentioned above (and emphasized in government press releases) there are lots of corrosive caveats. The first of these is purely factual. How much of this employment news is really true?

John Crudele of the NY Post has been on an editorial jihad about the undependable and illusory nature of governmental employment figures for some time, pointing out that much of what is accepted as factual truth about employment, new company formation, and economic activity is really hypothetical, and often quite optimistic, guesswork. In his column of June 3, titled, “Census Workers Share Their Horror Stories”, he shares anecdotal evidence that, among other things, the Census office hiring figures may be inflated. He states, “A couple of weeks ago I found out that Census was repeatedly hiring and firing workers without any apparent reason. I questioned if this was being done to artificially boost the nation’s employment figures since the Labor Department considers it a new job created whenever someone is hired to work as little as one hour in a month. Was Census churning jobs to make the economy look healthier than it really is?” Good question, John.

But even assuming governmental figures for employment were not disingenuous, 411,000 of the recent new payroll jobs were indeed with the Census Bureau, creating very short-term governmental employment. After predictions of a 200,000 gain in private sector jobs last month, the actual figure was 41,000. That’s not good. Despite lots of governmental cheer leading and happy talk, the private sector is just not coming back.

Pardon my pessimism, friends, but I feel more strongly than ever that small business is the canary in the coal mine that presages nothing good for the US economy. President Obama seems genuinely bemused as to why we small businessmen refuse to start hiring. Hasn’t he stimulated the economy out the wazoo? Yes. Probably excessively so. But little of this largesse has been directed toward the entrepreneur.

No less than Bill Gross of PIMCO, being interviewed on Bloomberg Radio (8:45 AM-June 4), stated job growth in the private sector is moribund, and that without temporary governmental stimulus unemployment would be over 11%. Even überliberal Robert Reich wrote a cautionary op-ed in The New York Times on Wednesday, June 2 titled “Entrepreneur or Unemployed?” which challenges optimistic assumptions about supposed increased entrepreneurial activity. Reich asks, “So why all this entrepreneurship last year?…In a word [it's actually] unemployment. Booted off company payrolls, millions of Americans had no choice but to try selling themselves. Another term for ‘entrepreneur’ is ‘self-employed.” Reich reports that layoffs have surged while hiring has almost disappeared. And these are permanent job losses, replaced by labor-saving technologies, outsourcing or contract labor. He predicts a 50% likelihood we will slip back into recession.

In addition to our current entrepreneurial conundrums, there are growing long-term disincentives that militate against small business hiring.

• The major disincentive is potential large costs of tax and bureaucracy associated with the new health care legislation. But, even worse, is the uncertainty this cryptic 2,000 page monstrosity has created. What the hell is really in it? I sure don’t know. I don’t think even the people in our government know. It’s bloody scary for a businessman.

• Second, how does private business hope to compete for employees with the increasingly bloated salaries of public sector workers? Westchester County Association executive Amy Allen, in the June issue of Westchester magazine, points out that the average public sector salary in my region of New York is about 6% above the average salary in the private sector. And this is before figuring in large pensions and health care for life. According to the Cato Institute, the average federal civilian salary with benefits is $119,982 compared with $59,909 for the average private sector worker. Wow.

• Third, states like New York are near bankruptcy. To solve their financial conundrum I predict these states will fall on small business with more taxes and more red tape–like lions on a lamb. Small business is vulnerable and weak compared to big business and public sector unions. I sure hope and pray I’m wrong on this one.

My cri du coeur is that the small business issue be addressed more insistently, more forcefully by the press and media, as well as government. Pay attention to us! All is not well out here in little business land. It would be utter imprudent madness for most of us to hire and rehire employees in the present environment.

Hire more workers?  Hell no.

Chicken Little famously said, “The sky is falling!  The sky is falling!” Well, for small business it may be true.

Small business is much more troubled than is being acknowledged. Small business is also not being sufficiently covered in the national press. It is the canary in the coal mine, despite 3 1/2 quarters of continuing real growth in G.D.P.

I can tell you categorically, brothers and sisters, that small business is not recovering like the macro-economy supposedly is. While my own firm is chugging along OK, the bulk of the clientele my small company serves is other small companies, and the fear and uncertainty I encounter every day in my clients and colleague entrepreneurs is palpable. No one wants to take risk. No one wants to substantially invest in the future.

You may say I am one small business guy at a little pip-squeak company spreading counter intuitive anecdote and calumny. One of my friends calls me the “the Nouriel Roubini of small business” because of my bleak outlook. I prefer to think of myself as a cold-eyed realist. I do not enjoy writing jeremiads or screeds. Nevertheless, I fear small business is entering a permarecession. Here is why.

1.  No one wants to lend money to risk-taking entrepreneurs.  Despite the so-called rebound of the economy, entrepreneurial accommodation from banks and venture capital ain’t happenin.’

2.  Health care mandates will keep small business small and profit diminished. I don’t know a single entrepreneur–not one–who evinces a full-voice enthusiasm to expand his workforce in this environment.

3.  Federal taxes is acomin’ in. This is on two levels. The new statist fiats by Washington on health care will have to be paid for. But other increases in taxation will fall hard on small businesses and, also, individually on small businessmen. Why invest in your company? Investment is disincentivised. So entrepreneurial passion and creativity becomes muted.

4.  State taxes will also increase. A lot. This includes property, sales and income taxes, plus continuing fee augments. This is particularly true for the Greece of America called California. And, unfortunately, it will soon be true of my beloved New York (Greece, Jr.). Business, of course, will migrate to seven or eight tax friendly states that I don’t live in. (See April 13, 2010 blog, “Texas and Entrepreneurship“)

5.  Bureaucracy will increase exponentially. I can assure you small business is already groaning under the demands of governmental paperwork. I see no option but for this to augment vastly.

6.  Unemployment, now between 9.7-10%, must eventually be felt by business as loss in demand.

7.  The present “recovery” is a government financed phenomenon. Keynesian to the max. When it stops, as it inevitably must, either a double-dip recession will ensue or a Jimmy Carter, Japan-style stagflation will appear. Small business (or big business for that matter) will not be robust enough to buttress employment when government ceases goosing the public sector and union jobs. Apres moi, le deluge, mes amis. The piper will be paid.

8.  The Fed has shot its wad. It cannot save us again.

9.  Because both Republicans and Democrats lack the political will to honestly exercise fiscal sanity, a huge new tax called inflation will sooner or later monetize the debt. I guarantee it. We will not become the Weimar Republic or Zimbabwe, but it will not be good.

Oh, dear. I seem to have gone on a bit. Mercifully, I will stop. There must be an end to such mordancy. I don’t like being a small business Paul Revere of the dour. But this is my view from the street.

Our country will not recover if small business does not do better. On a positive note, I’m glad to see there was some press attention yesterday to the small business conundrum. Meredith Whitney wrote on page 21A of the Wall Street Journal (May 17, 2010) a piece titled “The Small Business Credit Crunch.”  She states, “Unless real focus is afforded to reengaging small business in this country, we will have a tragic and dangerous unemployment level for an extended period of time.” The same WSJ edition has an article on page R4 titled “Tightening the Credit Screws“, about the difficulty of small business finance. And Robert Schiller, economics professor at Yale, discussed a long-term double-dip recession scenario in the Sunday New York Times (May 16, 2010).  He states, “I use a definition of a double-dip recession that doesn’t emphasize the short term.  Instead I see it as beginning with a recession in which unemployment rises to a high level then falls at a disappointingly slow rate.“  In describing certain parallels of the present to The Great Depression, Schiller describes a “…feeling of uncertainty that discouraged entrepreneurship, lending and spending, and, most important, hiring.”

Hmm.  Sounds familiar.

Horace Greeley, the nineteenth century editor of the New York Tribune, famously said, “Go west, young man!” I wish to update that maxim to, “Go to Texas, young man!”

Why? I’ll tell you why. Texas likes entrepreneurs, goddamn it. It welcomes them. It smoothes their way. It wants them. It loves them. You may say, “Doesn’t every state want our wonderful, productive, job-creating, creative business class?” No. Every state apparently does not.

I was in Dallas last month on business for my company, Corporate Rain. And I was pleasantly surprised by the palpable warmth extended to me in many ways as a non-resident small businessman looking to expand into this peculiar and unique state. I came home to New York feeling that Texas offers a paradigm and guidepost of what can surely make all our struggling states more internationally competitive.

Case in point, The Dallas Morning News (Sunday, March 14, 2010) printed a revealing, succinct article by staff writer Cheryl Hall about this phenomenon. Ms. Hall cites Michael Cox former chief economist for the Federal Reserve of Dallas (presently head of The O’Neil Center for Global  Markets at SMU). Mr. Cox apparently has a slogan for companies seeking to recruit elite workers from New York and California: MOVE TO TEXAS AND GET A FREE BMW. Ms. Hall confirms that this is no exaggeration; that professionals living in the Northeast and California “pay the equivalent of a year’s worth of expensive car payments in annual personal income tax”, which Texas doesn’t have. Professor Cox states, “Every six years Dallas adds a million people.” Since taking over as Director of the SMU O’Neil Center, Cox has created compelling statistics that point to Dallas/Ft. Worth as the new “it” economy for common sense American businessmen.

I live in Westchester County, New York. I personally love living here. I love the opera, the theatre, the art, the Yankees, the Mets, and the Jets, the wooded beauty, the distinctive seasons, the intellectual ferment, the buzzing frisson of sweaty go-go New York energy. But Westchester County bears the heaviest tax burden of any county in the United States. The State of New York is effectively bankrupt and controlled by featherbedding unions, selfishly interested only in maintaining staggeringly excessive benefits at any cost–mostly on the back of energetic productive small business. Why would any entrepreneur in his right mind come here?

Furthermore, even with New York’s incomparable cultural footprint, Dallas, particularly, is quietly growing its competitive cultural presence including a startling new world class opera house, the architecturally notable AT&T Performing Arts Center and the Morton H. Meyerson Symphony Hall (home to the Dallas Symphony, led by charismatic young conductor, Jaap van Zweden), and strong civic support of museums, theatres, parks, wildlife, environment, and education. Dallas is not New York, but it is stealthily becoming a quality of life, as well as an entrepreneurial, oasis. They’ve even elected a lesbian sheriff. Really.

On February 18, 2010, Forbes Magazine released its list of America’s most miserable cities. It’s not just Detroit and Newark on this list anymore. It’s also New York City, Chicago, and Cleveland. I assure you, my friends, we entrepreneurs will leave the New Yorks, the Californias, the Massachusetts, the Michigans, the Illinois, the New Jerseys, in droves. Eventually, entrepreneurs will shake the dust of these mad states from our sandals.

I won’t leave New York. I am willing to continue to pay the uncompetitive price of living in New York because I love it and it’s worth it to me. But for a young entrepreneur in New York or California it makes no sense to stay in these states when Texas and other sensible states beckon with lower taxes, reasonable government cost and efficiency, and rational labor costs.

The actor Fess Parker died while I was in Texas. Fess Parker was famous for portraying Davey Crockett in a Walt Disney TV series during the mid-fifties. (I still remember my Davey Crockett coonskin cap, which I wore religiously for a while.) Crockett, in a speech he made when he resigned his Tennessee legislative seat, memorably concluded his parting Jeremiad with the immortal words, “You may all go to Hell, and I will go to Texas.”

Well put, Davey. Good advice. Thank you.

As many of you know, I was an actor and singer for many years. Not a common background for a businessman. But I learned a lot that applies to my life as an accidental entrepreneur. (I’d better, since I have no formal training in business at all.)

Business friends and clients sometimes send their sons and daughters to me for advice if their progeny want to go into show business. These kids almost always ask what’s the most important thing about making it as a performer. My answer? LUCK. There are a multitude of truly talented young artists and, honestly, I find luck the key differentiator in their success. However, the secret is to be ready for luck to happen, when and if it does happen.

The same is utterly true of entrepreneurship. Successful entrepreneurs are driven and courageous. They are a passionate, hard-working breed. I truly love entrepreneurs. They are infinitely not boring people. But, despite their admirable, if disparate, natures and work habits, I still believe the key element in their success is luck.

How does luck happen? In my opinion it comes to those who are most comfortable in their own skins. It comes most easily to those who live and breathe their unique selfness.  There is an achieved existential integrity to people who have luck. They are themselves. Becoming a real “self” is, of course, a life-long process, but it is just as important as marketing, business plans, spread sheets, technological know-how and everything else they teach you in B-School.

There is wisdom in the phrase, “It’s better to be lucky than smart.” Luck defies encapsulation and control. It is an ineffable and recondite goddess. But it seems to me it comes to those who are soulfully open to acceptance of fate’s surprises. I believe it happens to people who’ve somehow developed an innate subconscious integrity that allows them to pivot adroitly and automatically in response to any happenstance.

I was lucky last week. On the train. I bumped into a neighbor, a man I’ve known passingly for a good while. We got to chatting about neighbor things and, quite incidentally, I mentioned that my firm, Corporate Rain, sets up elite sales initiation pipelines for corporate clients. Well. It turns out my neighbor represents a major foreign country and is responsible for helping his country’s firms penetrate the US market. Who’d ‘ave thunk it?  The next day he had me in front of nine CEO’s at his consulate’s boardroom. Within five days, three of these companies were clients. God bless Metro North.

Napoleon Bonaparte talked about luck. In his Maxims he said, “When a man is a favorite of fortune she never takes him unawares and, however astonishing her favors may be, she finds him ready.”

Thank you, Napoleon.

There is a famous German novella I read in college called Kleider Machen Leute by Gottfried Keller. (It is usually translated as “Clothes Make the Man”.)  It’s about a poor tailor who takes a coach journey and, through an odd set of circumstances, he is dressed in a fur trimmed cloak much above his real ability to afford and his station in life. He is mistaken for a rich man and the results of this misidentity and various people’s reactions guide the tale.

This novella is highly applicable to entrepreneurs. I believe many of us entrepreneurs don’t think enough about clothes in business. And we should. Here’s why.

Most of us spend large amounts on branding, marketing, and advertising creating the apt image for our firms. Yet it constantly amazes me how little thought owners give to how they present themselves sartorially.  It is relatively inexpensive personal branding we’re talking about here.

This most certainly does not mean an entrepreneur needs to be a fashion plate. Any styling from the funerial to the flamboyant can be appropriate, but it should be consistent with your chosen messaging and branding. Making strong, identifying statements through your attire can create a defined presence before you say a word. It can telegraph a context and corporate definition.

I’ve had clients who accomplish this bespoke branding very well in t-shirts. Some of my creative clients will choose bold colors. If you sell beer you might want to look like a guy who is comfortable in a bar. I am sure Anna Wintour spends extensive time each day ensuring her personal clothes visually affirm her authoritative fashion leadership as editor of Vogue Magazine. Personally, I try to look like a banker. My company Corporate Ran International is mostly known for creating high-quality meetings with real financial corporate decision-makers. My clients often entrust me with their most proprietary information and secrets. So, even though my personal history and proclivities are quite bohemian, I want to create assurance of stability and discretion. I do this partially by investing in expensive, highly tailored suits and by insisting that my associates always dress high when meeting with Corporate Rain clients.

You don’t need a personal makeover to brand yourself through your apparel. You do need to know what you have to offer and who you are. Then sartorial branding becomes simple common sense.

As the Greek stoic philosopher Epictetus states, “Know first who you are; and then adorn yourself accordingly.”

Thank you, Epictetus.

My employees are more important to me than my clients. Yup. Even more important than my clients.

A couple of weeks ago I mentioned that I can almost always gauge the health of a firm when I walk into a reception area. If the receptionist is happy, professional, and can tell you the basics about the firm, it is almost always a healthy company.

Employees are very much the real heart and soul of most service enterprises and, certainly, of my own company Corporate Rain International. This is not to say I don’t love my clients. I do. I work for them with passion and zeal. I worry about them at night. I like them personally. They often become my friends. However, I can get clients. What is harder is developing a cadre of associates that truly brands and inculcates my firm’s ethics, quality, and essence in their very being. That is Corporate Rain’s real value and capital, and why companies hire and stay with my firm.

Ken Makovsky

I was reminded of this in recently reading Ken Makovsky’s excellent blog “My Three Cents” (January 27, 2010 – www.makovsky.com/blog). He states, “Employees are the face of the company.  They are the ambassadors who make a difference.” Makovsky goes on to cite a study in The New York Times that found strong sales growth was closely correlated with employees who thought more highly of their company than did society at large. Ken Makovsky is profoundly correct.  I’ve always believed every employee should be a rainmaker and a P.R. touch point.

Dr. Steven Balder of NYU (In Crain’s New York Business) has noted that great workplaces have in common a sense of community that  is built upon respect for the employee.  He says,  “People are seeking more than just a job.  [Good companies] are validating people and making them feel respected.” He goes on to state that such firms are much better suited to survive the current recession. (I personally  try to be bluntly honest with my own associates in explaining my company’s financial basics, as we work our way through this “Great Recession”.) There is mutual respect and a sense of a communal shared risk in embracing this process. A culture of respect and equality activates the acceptance of entrepreneurial vision and leadership and the empowerment of collaborative, creative, vibrant business enterprise.

If you are interested in reading further on this subject try The Power of Respect by Deborah Norville, the anchor of Inside Edition.  She concludes her useful book with these words:

“If you run a business, why wouldn’t you want your employees to be more creative, to be more loyal, to give that little extra to their job—especially when all it takes to encourage it is to let people do their jobs with a little acknowledgment of what they do and recognition of their efforts….Consideration, deference, and inclusiveness require nothing but a respectful mindset.”

Thank you, Deborah.

Lida Askew with daughter Kathy

My mother, Lida Askew, died yesterday of Parkinson’s Disease. She was 83. My four sisters and I took turns holding her desiccated body and stroking her waxen features as she slowly shut down. The end was a gentle, hospice assisted descent into the sweet arms of…whatever comes next.

My mother was a good old girl who lived a full, useful life and she died without regret. She enjoyed her life to the end.  She enjoyed herself even while confined to a wheelchair and shaking with Parkinson’s. But, particularly interestingly, hers was a most conscious and generous death.

My mother was very decidedly not an entrepreneur. In fact, I think she looked a bit askance at my late in life embrace of capitalism. But she was a tremendous long-term planner, and, as such, an inspiration to me in thinking about succession in my own life and in the life of my company. She foresaw and directed every aspect of her own end. This included a very rationated, specific splitting and dispensation of her estate to prevent family friction, as well as detailed instructions on how she wished to die–that is, in her own bed and not in the hospital. She was very precise about pulling plugs and not extending her life artificially. (My sister Kathy has chronicled this process in her excellent blog www.thenewelder.com.)

I want to have the forethought to create an equal grace around the succession and inheritance issues of my firm Corporate Rain International. I don’t know much about those issues yet, but I want to be just as smoothly efficacious and wise in thinking about my employees, my clients, my family, and myself when things end. In her modest way, my mother created a splendid suggestive road map.

A couple of weeks ago I wrote about how I deal with very bad days. Harking back to that posting, I remember being depressed and distraught one day years ago and turning to my mother for solace and advice. (I think it was about a failed love affair). She was appropriately sympathetic, of course. That’s a mother’s job. Then she said, “But you know, Timothy, there’s little I can say that will cheer you up.  There’s only one thing I know to do on really bleak, dark days. The only thing I know to do on such hopeless days is spend that time cleaning my toilets.”

Thank you, my dear mother.  Goodbye.

Here’s a headline from the New York Post last year. MOST WORKERS WOULD FIRE THEIR BOSS! According to a survey conducted by the website badbossology.com, almost 50% of workers would fire their boss. The poll is based on the responses of 1,118 employees who elected to fill out a questionnaire on the site.

While this might not be the most compelling scientific study ever conducted, it is buttressed by other more authoritative studies. For example, a recent Gallup Poll of more than one million employees found the biggest single reason cited for why people leave a company is a bad boss.

Bad bossism is one of the things I try to avoid by fostering a sense of community and equality within my firm. There are several ways I do this. One, I genuinely try to never hire anyone who isn’t better than me. Two, I hire people who are self-starters and who think like a boss; that is, who think in terms of the whole company and not just their part of it. Three, I practice an open door policy and actively encourage advice and creativity from everyone in the company, including secretaries and  interns. And, whenever possible, I try out these suggestions, giving full credit. Four, I avoid hiring yes men and timid souls who are not comfortable with autonomy and responsibility within the boundaries of ethics and appropriate business process. I sometimes tell clients of my firm Corporate Rain International that we are as close to a communist company as you can get and still be a functioning capitalist entity.

One night several years ago I was watching The Sopranos. In this particular episode Tony Soprano was worried he was being yessed to death by his subordinates. He asks his wife about it. She replies:

“They go around complementing you on your new shoes, tell you you’re not going bald, not getting fat. Do you think they really care? You’re the boss! They’re scared of you. They have to kiss your ass and laugh at your stupid jokes.”

I recently read an interview (January 31, 2010–New York Times) with Mark Pincus, a serial entrepreneur and the founder and CEO of Zynga, who speaks of turning each of his employees into mini-CEOs. He recounts, “One thing I did at my second company was to put white sticky sheets on the wall, and I put everyone’s name on one of the sheets, and I said, ‘By the end of the week, everybody needs to write what you’re CEO of.” That’s how it should be.

One of the ways I judge a company when I first walk into a new office is what the receptionist says when I ask him or her about the company. If they can tell you with clarity and verve what the company’s about, it is almost invariably a well-managed, integrated firm. In a sense every employee should ideally be a salesman and PR representative for the corporation by securely embodying and articulating the corporate trope.

We entrepreneurs are passionate, driven, intense people, often with big egos, so it’s not easy. But I feel it’s worth a patient effort to bring a tonality of genuine openness, collegiality, and dialogic creativity to business. Surely, this form of corporate communism is not antithetical even to the ubercapitalist spirit of Ayn Rand’s John Galt.

It’s good to know where you’re going before you begin to go there.

My minister tells great stories. Here’s one. Supposedly true. It concerns Albert Einstein who was notoriously absent-minded. Einstein was taking a ride on the Metro North train out of New York. The conductor comes by to collect the tickets. Albert pats his pockets and can’t seem to find his ticket. The conductor recognizes him and tells Einstein not to worry about it. He goes through the rest of the train collecting tickets. On his way back he sees Professor Einstein on his knees on the floor frantically looking for his ticket. The conductor once again tells him not to worry, it’s alright if he can’t find his ticket. Albert Einstein looks up from the floor and says, “But I can’t remember where I’m going.”

There are many things I do poorly as an entrepreneur. I am a poor administrator.  I am impatient with meetings. I am not good with the quotidian details of spread sheets and day-to-day financial analysis. I am a poor technologist. My personal organization is frequently inchoate. And this is but a short list.

Nevertheless, I’ve led my firm, Corporate Rain International, for sixteen years. Probably the chiefest reason I’ve managed to get by is that I am very clear about where I want to go, who I want to be, who I want to have as clients, who I want as employees and associates, and what I want my brand to represent.

Harvard Business School I ain’t. For example, when I started out, I typed my bills on an old Underwood typewriter. Even then (1996) that pretty much classified me as a dinosaur. I knew nothing. But I very clearly did know where I wanted to be in five years, ten years, and fifteen years. I had a clear unalloyed personal goal. I knew where I wanted my journey to take me.

There are lots of ways to be a successful entrepreneur. The entrepreneurial pilgrimage I’ve chosen involves creating value in my life. Unlike many entrepreneurial colleagues, my ambition isn’t to be a master of the universe. Though I am successful one day at a time, money is also not it for me (though I’d love to be very rich). But those goals are also fine. (I’m a huge admirer of Donald Trump, though not remotely interested in being like him.) However, as naive a point as it is, it’s really necessary to know where you personally want to go if you are to get there. Thanks, Albert.

Eleemosynary. It’s one of my favorite words that almost no one knows the meaning of. It’s a word that will stump almost every spelling bee champion. It derives from the Greek “elos” meaning compassion and “eleemosyne” meaning alms. In contemporary terms eleemosynary means “relating to charity or charity donations.”

We’re approaching a new year, a time for new thoughts and new plans aborning. Yet I find myself looking back this week. And, as usual, I wish I’d been more efficacious at embodying the eleemosynary values I believe in and trumpet. The litany of little omissions and sins could lead me into a veritable orgy of self-recriminations. Ah, hypocrisy. However, as always, I try to post about practical concerns of entrepreneurship and salesmanship. And, I guess, thereby, write about everything else, too.

The truth is that an eleemosynary entrepreneur is ultimately more selfish than competitors driven only by desire for lucre or personal aggrandizement. Almost all religious faiths bespeak this basic verity, most notably Buddhism in its doctrine of Karma. Personally I am a kind of weak-kneed Christian. I attend church consistently to discipline the habit of focusing for an hour a week on what is of ultimate value. Hopefully this commitment has at least a faint echo in my business actions during the week. Gandhi famously said we must embody the change we wish to see in the world. Oh, dear. I seem to be falling short.

Nevertheless, my belief is that generous giving, both of the spirit and of finances, is ultimately the most selfish of actions. My deepest hope for my company Corporate Rain International is that it institutionally embody the selfishness of deep kindness, unsentimental compassion, and communicated grace for all it touches. Including myself.

Mary McCarthy famously said of Lillian Hellman, “Every word she writes is a lie–and that includes ‘and’ and ‘the’.” In terms of his conclusions, that pretty much describes the depth of my disagreement with Paul Krugman, columnist for the New York Times.

I disagree with just about every opinion Paul Krugman voices. I am a believer in the free market, he seems to be a committed socialist. I am  a fiscal conservative with a fierce belief in balanced budgets, he an unapologetic Keynesian. I feel the current health care reform bill will be catastrophic for small business and employment, he feels it is salvific. (Note his most recent op-ed in the December 4 New York Times.)

Nevertheless, I view Paul Krugman as by far the most useful popular economic writer out there. He has a real didactic gift for simply explaining his process, analyses, and conclusions. I would love to have him as a professor (which he is at Princeton University). He’s a damn good (and unpretentious) writer.  He’s just a terrific explainer. He illuminates the most byzantine financial matters with a clarifying ease that is most helpful to me as an entrepreneur seeking to understand the world macro-economic picture.

I bring this up because I increasingly notice people of both liberal and conservative persuasions are losing a fair-minded and objective openness to quality argumentation.

It is a practical value for an entrepreneur to constantly be open to new thoughts, to consider the discomforting. For me, one way to enforce this discipline is to actively read and engage with those I disagree with. I really try to keep my firm, Corporate Rain, a forum for open discussion with colleagues and employees. Healthy dialogue and disagreement in a corporate community is creative and energizing. It fosters a frisson of aliveness and passion.

That said, ultimately there is only one boss, and, in the immortal word of Mel Brooks, “It’s good to be  King.”

There was a thoughtful essay by Peggy Noonan in the Wall Street Journal last weekend (November 14/15).  She feels that much current political rhetoric from the Obama White House is both condescending and convoluted.  She speaks to the point that the public wants direct talk.  She says, “Politicians in general no longer assume that we all operate on the same intellectual level, with roughly the same amount of common sense”. She quotes the actor Jack Webb on the old TV show Dragnet, playing Detective Joe Friday, “All we want are the facts, ma’am”. Ms. Noonan recognizes there is a strong universal longing in the current political body politic for simple talk and clear explanation.

But, for me, there is a larger lesson in Ms. Noonan’s useful essay.  And it is one that is applicable to both sales and entrepreneurship.

I am asked almost daily to strategize sales campaigns for my clients at Corporate Rain International. (My company specializes in initiating the sales process with high-level executives).  Often the biggest part of my consultative job is convincing clients to simplify their message.  More than half of the initial sales job is articulating a clear value that can solve a problem (i.e. increase profit, reduce cost, gain market share, etc.) for a potential buyer.  The complex brilliance of my clients is often of little interest to their audience.  Winnowing down a simple core value can often seem a process of almost insulting oversimplification to a client who has poured their heart and soul and essence into a product or service.  Yet it is only the final result that is the compelling factor in initiating a dialogue leading to a sale.

A buyer is interested in an end result, an outcome.  (“All we want are the facts, ma’am”).  If the result is compelling and clear, the client will then be enthused to explore the rococo details of how the sausage is made.  Otherwise — not.