Author Archive for davonna

The irony of Lincoln’s inspiration for entrepreneurs

It’s been 209 years since the birth of one of the most famous people in history. It’s very likely that people in every developed country on the planet have heard the name Abraham Lincoln, even if they don’t know why.

As the 16th president of the United States of America, it’s generally accepted that Lincoln’s leadership genius made possible the ultimate resolution of one of the greatest conflicts in human history, the American Civil War. And as harsh, prolonged and contentious as that post-war “Reconstruction” was, it resulted in the successful reassembly of the United States, sans slavery. So when you combine all of this with the blessing that the re-United States became to the world for the past century and a half, it isn’t a leap of logic to recognize Lincoln as one of the top two or three individuals in the history of Western Civilization.

As a leader, Lincoln was a risk-taker. So his story is especially important for a special group of contemporary risk-takers, small business owners. Every day along the ownership continuum, from startup to locking up for the last time, Main Street businesses can draw strength and inspiration from the uncomplicated, honest and fierce witness of Lincoln’s character and leadership.

But ironically, as much as Lincoln’s accomplishments put him on a lofty pedestal, it’s his hard times that have also inspired generations of both leaders and followers. Indeed, when you consider just a partial list of painful personal tragedy and loss, plus numerous professional setbacks and failures through which Lincoln persevered, enormous respect and admiration can be the only result. For example:

• He failed in business in 1831 and again in 1833.
• He was defeated for state legislator in 1832.
• His fiancee died in 1835.
• He had a nervous breakdown in 1836.
• He ran for Congress in 1843 and ’48; lost both races.
• He ran for the Senate in 1855 and ’59; lost both races.
• He ran for Vice President in 1856 and lost.
• His wife, Mary Todd, was emotionally unstable.
• He buried two of his four beloved sons.
• He was elected President in 1860 as America’s house divided and dissolved into “a great civil war”.

Reading this list, one is overwhelmed in at least two ways:

1. Sadness - that any one person would experience so many unfortunate things;

2. Admiration - that in the face of such adversity, anyone could recover to accomplish so much.

As 2018 unfolds, if you’re ever tempted to whine because the marketplace licked the red off your candy, go back and reread Lincoln’s failures and setbacks. This time you might feel two other emotions:

1. Shame - that you allowed yourself to lapse into a self-involved pity party;

2. Renewed perseverance – now realizing that, like Lincoln, as long as you’re alive, every new day you show up to work on your business and life could be the day you turn the corner and win the war.
Lincoln taught us that the difference between bold accomplishment and painful setback is often the courage, character, and diligence to persevere.

Write this on a rock … There is no better model of courage, character, and perseverance than Abraham Lincoln. Let his life –the good and the unfortunate – inspire yours. And who knows? It might lead you to inspire others.

Four letters from your big customers

Consider the ancient proverb: “Any chain is only as strong as its weakest link.” This is about four letters with this proverb in mind, sent to small businesses from their corporate customers – two that have been sent and two that will be.

1. Quality

The first letter was born in the 1950s, when the ideas of the godfather of the 20th century quality process, Edwards Deming, reversed “Made in Japan” from a metaphor for cheap into a mark of quality. During the 1980s, after American industrial competitiveness fell behind global competitors, quality processes like ISO and Six Sigma were adopted, returning “Made in America” to a mark of excellence.

By 1990, with their in-house quality act now together, big businesses realized they needed similar commitments from the small business vendors that had increasingly become more like integrated partners. As such, big business needed to know that the support from these partners would at least not diminish the quality expectations of their customers. Consequently, small businesses started receiving letters from those big customers requesting evidence of quality process practices, if not certification, without which there would be no continued, or new contracts.

2. Y2K

The seed for the second letter was planted by computer programmers in the 1960s. When these programmers wrote date codes with six digits, as in 121565, for December 15, 1965, they did so to conserve what was at the time very expensive data storage. However, they didn’t realize they were creating the literally ticking Y2K time bomb.

Around 1995, experts started worrying that when the clock ticked midnight, January 1, 2000, zillions of lines of date-sensitive computer calculations would fail by going back a century – 010100 would revert to January 1, 1900 – instead of rolling forward to 2000. Consequently, the codes in millions of programs had to be fixed. By 1998, small businesses started getting letters from their larger customers requesting evidence of their “Y2K compliance,” without which there would be no new contracts with eight-digit dates.

3. Sustainability

The third letter was born in the middle of the 20th century, when we started realizing that the solution to pollution was not dilution. Since then, environmental stewardship has evolved from not polluting to sustainability. That word – sustainability – essentially means doing more with less, and it includes making waste useful – especially water. It turns out that sustainability is not just the right thing to do. Since it’s been proven that it can also contribute to profitability and a positive corporate image, it’s become a 21st century business best practice.

You may not yet have received a sustainability commitment and practices letter from your corporate customers, but it’s coming. And because of that best practice thing, it will be irrespective of the current state of the geo-political climate change debate. So start thinking about resources usage, including energy, consumables, production waste – especially water. Start documenting your efforts, practices and performance in recycling, reusing, conserving, etc., so when a customer hands you their “Sustainability Letter,” you won’t have that “weak-link in the headlights” look.

4. Cyber-security

Does anyone need a review of the multiple and significant cyber-assaults that have been made on digital assets and records of American business and government in the past few years? Whether from cyber-criminals or cyber-spies, the threat is real, comprehensive, determined, unrelenting and, to date at least, very successful – for the bad guys.

Expect the Trump administration to push for increased cyber-defense measures for the government to an unprecedented degree. Because of the massive level of business that corporate America does with the federal government, a cyber-security partnership will logically be forged, as they collaborate on cyber-practices, expectations, tools, innovations, etc. This will be the most comprehensive commingling of efforts and shared goals by business and government since WWII. So expect your large customers to begin requiring cyber-security practices verification, either by a letter, or in the specifications of an RFP. Your corporate customers are not going to let you be their weak link.

Write this on a rock … Take a lesson from the Quality and Y2K letters. Set yourself up for success by taking action on sustainability and cyber-security. Do it now!

My 2017 Crystal Ball Predictions

1. Here are my 2017 predictions. My 2016 accuracy was 78%. My 16-year record is 73%.

2. After eight years entrenched at barely 2% GDP growth, the U.S. economy will finally exit perpetual recovery mode into expansion status of at least 3% GDP growth.

3. From 2010 to 2016, regulatory pressure increased on businesses by an unprecedented 80% (Gallup). This investment-suppressing pressure will reverse in 2017.

4. The NFIB Index will report small business optimism increasing for the first time in eight years, as the economy responds to pro-business rhetoric and policies from Washington.

5. As the economy grows, small businesses will see increased profitability due to eight years of deleveraging.

6. For the first time in eight years, small businesses will increase business loan requests.

7. Business startups will increase at a rate not seen for several years.

8. Relevant small retailers will benefit as collapsing irrelevant giants, like Sears, Macy’s, etc., create a Main Street retail vacuum only partially filled by e-commerce giants like Amazon.

9. Small business job creation will lag economic growth due in no small part to productivity technology, which has redefined the growth = jobs symbiosis, forever.

10. With workforce participation at a 40-year low, the growing economy will not directly benefit millions of unemployed and underemployed who lack competitive 21st century job skills, like how to make – or even use – productivity technology.

11. Tax reform and regulatory abatement will cause Corporate America to practice more market capitalism on Main Street and less financial capitalism on Wall Street, benefitting the small business sector.

12. More growing businesses will decide to “Stay private” as short-term performance expectations and expensive regulatory pressures associated with “Going public” increasingly conflicts with the prudence of longer-term planning.

13. Inflation will rise organically with a growing economy – not from Fed monetary policy, which inflation chickens will come home to roost later.

14. Partially due to inflation, the Fed will raise interest rates at least twice in 2017.

15. Global pressures, Trump protectionism rhetoric, if not policies, plus rising interest rates will cause the Dow-Jones to end the year closer to 20,000 than 21,000.

16. U.S. oil production will thwart OPEC attempts to increase prices, leaving the year’s average below $60bbl.

17. Although elected as a Republican, Donald Trump is no party ideologue, and will prove equally frustrating for Republicans and Democrats.

18. In repealing and replacing Obamacare, President Trump will be frustrated by Democrats and Republicans.

19. Complete Obamacare replacement will take longer to accomplish than conservatives would like, possibly years.

20. The Obamacare replacement will include broad market-based solutions (re: Enzi Bill, 2006), plus broad tax credits and no mandates.

21. Obamacare elements of guaranteed insurability and extended dependent coverage will be part of the replacement program.

22. Obamacare popularity now polls upside-down at 51 against/44 for (Gallup). Once established for six months, the replacement system will poll net positive.

23. The smoothest governing issue President Trump will have is with the Congressional GOP on business tax reform.

24. Congressional Democrats will play their perennial bargaining chip of increasing the federal minimum wage and President Trump will make that trade for something he wants.

25. President Trump will nominate two Supreme Court Justices in 2017.

26. Trump will manage Putin/Russia, but be greatly challenged by China.

27. The most serious global economic threat will come from issues associated with China’s government-controlled financial/banking system.

28. President Trump will regard cyber-attacks from states such as Russia, China, etc., as de facto acts of war.

29. By the end of 2017, very little, if any of the Mexican border “Wall” will have begun.

30. Hundreds of sanctuary cities will become President Trump’s most challenging domestic issue. The cities will lose, but probably not until after 2017.

31. The Trump administration will only pursue an increased deportation strategy against undocumented, known criminals, but will stop accepting so-called, Syrian refugees.

32. The Obama administration’s undermining of Israel in the U.N. will increase debate intensity about U.S. financial support of the world body.

33. While dealing with Brexit, the Euro Zone will also be challenged when Italy tries to use the 2015 Greek bailout playbook.

34. In defense of his legacy, President Obama will not adopt the precedent of outgoing presidents to stay below the public discourse radar.

35. Within two years, Barack Obama, and/or Hillary Clinton, will be proposed for a high-ranking U.N. position.

36. Senator Joe Manchin (D) from West Virginia, will become a (R).

37. The Alabama defense will deliver the NCAA Division 1 title for The Tide, defeating Clemson in consecutive Championship Games.

Write this on a rock … Buckle up. The Chinese curse, “May you live in interesting times,” will not cover 2017, partially thanks to Twitter.

Sustained small business success requires two kinds of passion

Over the years, as I’ve talked with many a budding entrepreneur about to start their business, it continues to amaze me how many haven’t conducted anywhere close to a prudent amount of research or due diligence on their baby. Indeed, they often act as if they must get their business going … right … now … or … they … will … just … POP!
This kind of impatience is dangerous.
Doing my best to talk them down off the ledge, I walk the fine line of tough love, between slowing them down to the speed of reason and smacking their entrepreneurial passion into a wall.
When would-be small business owners get that far away look in their eyes at this impetuous stage, they have plenty of passion for what the business does. They can’t wait to sell suits, manufacture plastic parts, bake bagels, or (your baby here). And passion for what they want to do is not only a good thing, it’s essential.
But without a healthy interest in - if not an attraction for - business fundamentals, passion has only slightly more value than a dream. In truth, if the balance between your baby and operating fundamentals gets out of whack, that’s when your dream becomes your nightmare. Trust me. I’ve had to make payments on one or two of my nightmares, after the thrill was gone.
This will be on the test: Success as a small business owner requires two kinds of passion:
  1. The love of what you want to do - your baby. If you haven’t been a mother, this is akin to how a mother loves her newborn, and it’s the easy kind. Spoiler alert!  It’s too easy.
  2. This kind of small business passion is less adorable, but in no way less important. This is passion for becoming an operating professional. It makes you dedicated to learning and practicing management fundamentals. If done right, you’ll actually acquire a peaceful acceptance of a return-on-investment timeline that pushes the deferred gratification envelope beyond what you ever thought possible, let alone acceptable.
See, I told you it was less adorable. The closest kin to this kind of passion is that which is required for parents to love their teenagers - during those times when you don’t like them very much, but you still love them … anyway.
It’s critical for a starry-eyed startup to distinguish between, and be dedicated to both passions, because passion for what you sell won’t be enough when:
  • Payables exceed receivables
  • You’re making payroll and there isn’t enough cash because you didn’t manage the cash (”Is it Friday already?!”)
  • When customers are the most difficult
  • When an employee becomes part of the problem
  • When your bank loan request must have current financial statements, including a 12-month cash flow projection showing how the bank will be repaid
  • Your operating derailment here
Brace yourself! This list is like a “What’s inside!” teaser on the cover of a very thick catalog of abiding small business operating challenges. Fending them off will require you to deliver on the management fundamentals you became good at because you had that second kind of passion: you became a high-performing, professional business owner, not just someone who dreamed of being one. You were passionate about what you do, and just as passionate about how you do it.
Write this on a rock … Sustained business success - year after year - requires passion for what you do, AND for how you do it.

In defense of the oft-misunderstood scrooge

This is Jim’s traditional Christmas column.

Some say I’m a scrooge. They might be right.

Here are three exhibits (some say excuses) in my defense of this indictment:

1. The early part of my career was spent in retail. Retailers know what that does to your holiday spirit. There’s a syndrome for everything else; why not one for retail survivors? Let’s call it PTHSS: Post-Traumatic Holiday Shock Syndrome.

2.  Since I don’t wait until the holidays to give someone a gift, I just don’t get all worked up about holiday giving. Not that the ladies mind getting stuff all year (let’s not lose our heads!).  It’s just that they want me to be giddy about giving at Christmas-time. Giddy? Bah! Humbug!

3. As an avowed and devout contrarian it would be antithetical for me to feel obligated to do what everyone else is doing. And if there is one thing that has become part and parcel of the holiday season, it is obligation. For example:

a) If someone gives my significant other and me a last-minute Christmas gift, “Other” feels obligated to reciprocate. I don’t. I’ll do something nice for them in March.

b) After the Christmas cards have been sent, if an incoming card is received from someone not on your list, do you rush to get a card out to them? Not me. Maybe next year. In “The World, According To Blasingame,” giving should be voluntary, not obligatory. In fact, to a scrooge, not reciprocating is endearing.

It’s not that I don’t like the holidays. As a Christian, this is an important time in my faith life. As a capitalist, the importance of holiday spending to our economy is not lost on me. But I just don’t care for what we self-absorbed humans hath wrought on the holiday season. And if that makes me a scrooge, guilty as charged.

So on behalf my misunderstood brethren (this isn’t politically incorrect – apparently, there are no female scrooges), let me clear up a few things:

1. Scrooges can be lovable, huggable, and yes, even cute.

2. It’s a myth that all scrooges are skinflints; some are actually quite generous. But their generosity isn’t obsessive, isn’t tied to a calendar, and doesn’t come with giggles.

3.  Scrooges can be quite caring and compassionate, without saying, “Bless their hearts” over and over.

In order to influence an acquittal, I offer two challenges into evidence; one for me and one for us:

I challenge myself to be more receptive to, and tolerant of, the silly parts of the holiday season, and those who perpetuate the silliness. But please, be patient; the mill of a scrooge grinds slowly.

I challenge us to be more generous, loving, thankful, and spiritual all year long – not just during the holidays. Imagine what would happen if we all practiced peace on earth, goodwill toward everyone, every day. It might sound something like this:

“Let’s help those people right now. Yes! In the middle of July!”

Write this on a rock … Peace to you and yours. Shalom.  Salaam. Que la paz este con ustedes.

5 year-end steps to take while you’re closing out this year

Fourteen hundred and forty - the number of minutes in a day.

Since we can make more money, arguably the greatest challenge of any small business owner is balancing the demands of the forces that compete for those minutes.

“What is the best use of my time right now?” is the constant management question on Main Street. And in no other part of the year are we more time-management challenged than in December, when we’re faced with allocating time to two very powerful management imperatives: The tactical focus on closing out the sales year as strongly as possible, while simultaneously taking strategic steps to set the business up for a fast and clean start on January 1.

In his book, Blue Highways, William “Least Heat Moon” Trogden said his Osage Indian grandfather once told him, “Some things don’t have to be remembered, they remember themselves.” It’s a natural law that the year-end sales push doesn’t have to be remembered, it remembers itself. But as we come to the two-minute drill in the last quarter of the marketplace game our business plays all year, committing precious time and energy to preparing for the future requires the discipline to remember it ourselves.

There are many areas to focus on this month to help you start the New Year clean and fast.  Here are five to get you started.

1. Throw stuff away

Even if you’re not a pack rat like me, you’ve accumulated stuff you don’t use anymore.  For example, one of the markers of a 21st century office is the digital graveyard. Unused or broken computers, monitors, etc., may have some value, so call a tech recycler and convert it into cash. If you can’t sell it, give it away or throw it away, because it’s in your way.

2. Empower producers - cut the dead wood

Year-end is also a great time to take stock of employees who’ve demonstrated leadership and engagement. Recognizing the performance of those individuals will motivate them to a fast start in the New Year.

The only thing worse than firing someone is letting an unproductive employee hold your team’s performance hostage for another year. A byproduct of identifying those who perform is it also shines a light on those who don’t. You owe productive people the most effective organization possible, which means you have to let the unproductive pursue their careers elsewhere.

3. Classify customers

Classify customers by gross profit into four groups, from the most profitable As to the least profitable Ds. Worship the As, cater to the Bs, encourage the Cs and teach the Ds about self-service. When the cost of a customer’s expectations encroaches on your profit margin too much, allow them to join your unproductive employees - elsewhere.

4. Purge inventory

As with customers, take a new look at your products and inventory by identifying the most profitable As to the least profitable Ds. Stock all the As, a few of the Bs and maybe a couple of Cs. But never let a D spend one night under your roof unless it’s paid for. Remember, profitable inventory management means just-in-time, not just-in-case. And write off obsolete and damaged inventory. Take the hit now.

5. A/R reality

Take another hit by writing off uncollectable accounts receivables now, so you can start January with a clean list. A/R write-offs are tax deductions this year, and if you wind up collecting them next year, it’s gravy. The only thing more troubling to a banker than uncollected A/R is a customer who doesn’t have the discipline to deliver a clean balance sheet.

Each New Year deserves to have the maximum opportunity to be successful, so don’t saddle it with obsolescence, waste and bad decisions. By taking these steps - and others from your own list - you’ll prove to yourself, your team you’re your banker that you have the discipline to make the critical decisions for which successful managers are known.

Write this on a rock … Have the discipline to set up your New Year for a clean and fast start.




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