Tag Archives: management

Banking Etiquette

Banks have gotten a bad rap over the past year or so.  But in truth, they are the linchpin of our financial livelihood as entrepreneurs.  If you accept credit cards, you need a bank.  If you pay payroll taxes, you need a bank.  If you want to pay your employees using direct deposit (or even the quaint paycheck), you need a bank.  Most vendors still require that you pay them using a check.

Banks also can provide loans for businesses.  These can be asset based loans, lines of credit, mortgages, long and short term.  And this is where businesses can get into trouble.

While most business owners think of their checking accounts and loan accounts as separate entities, the banks do not.  So if you have missed a couple of payments or have just exceeded your loan covenants, the bank can, without warning, clear out your accounts to fulfill the terms of your loan agreements.  And if you have a personal guarantee, they can tap into any personal accounts you might have at the same institution.  Talk about a kick to the head…

I have a few suggestions to try to make this less of a potential issue for you:

  1. Build a good relationship with your banker.  Meet quarterly with him or her.  Take them into your business and explain what goes on.  For sure, tell them the good news when you sign a big deal, but just as critically, let them know when things aren’t going so well.  The more you communicate with them the better you will be.
  2. Don’t put all your eggs in one basket.  Keep your personal accounts at a separate bank.  Keep transactional money at the primary bank, but keep other long term cash somewhere else.
  3. Understand your loan covenants.
  4. If you don’t hear from your banker, or they don’t return your calls, don’t consider this a good thing.  The last time I heard about the money transferring process was 2 weeks after hearing “Oh yeah, I haven’t heard from my banker at BigBank in 6 months.  I’m guessing that they have forgotten about us.  They must have bigger fish to fry.”

When this happens, everyone gets upset at the bank.  How could they do this?  In reality, the bank is just trying to forestall the worst outcome for the bank, a complete loss of the capital that they have provided to the customer. They figure something is better than nothing.  And the entrepreneur needs to understand that that is a potential outcome of the deal that they made when they accepted the cash.

The Impact of a Recommendation

I had the opportunity recently to fill out an unconventional bio for a company that wanted to get some info on me.  Besides the usual, where did you work and what degrees you have earned, this bio asked questions like “What did you learn from your mother?” and “When you were a child, what do you most remember about playing?”.  Interesting questions, but the one that stumped me for a bit was “What do people say about you?”.

Now I have heard a lot of what people say about me (and not heard probably lots more).  But it is hard to put that down on a bio, without either sounding incredibly pompous or wishy washy.  I could ask people to recommend me on LinkedIn and get some of that feedback, but in general, the recommendations on LinkedIn are very white bread and don’t really give the flavor that I was trying to provide. I could give snippets of client thank you letters or performance reviews, but that too was not really what I was trying to provide as part of this bio.

And then I remembered the goofy exercise that we did at a previous employer.  I was working as a director of a professional services group.  I was one of 7 directors and it was the best working group that I had ever been on.  Not that we always agreed, but there was a dynamic quality to our interactions. For one of our offsite meetings, our Recruiting Director had the wild idea of having each of us write a short paragraph extolling the virtues of each of the other members, as a sort of recommendation. We all thought — there she goes again, new agey, touchy feely stuff, but we did it. She then collated them and provided each of us with a full version of our recommendations, without attribution.  It was a tremendous insight to see how others saw us. In some cases it was obvious who wrote the recommendation, but in others, I still have no idea.  What I was left with, though, was a composite of how I have impacted others.  I have kept that sheet in a special place.

And it was to that place that I went when I had to create my bio.


  • Sometimes the most goofy sounding exercises can give you true value over the same old stuff.
  • Take an opportunity to write a short note to people (handwritten, if possible) to tell them about how them have impacted your life.  You have no idea how important this could be to someone’s day, life, ego, career.
  • If you are a manager of a team and want to make the team more cohesive, try this exercise.  I can guarantee that everyone will get something out of it.  Don’t forget to include yourself in this.  You can nominate someone else to receive the recommendations for you, so that they remain anonymous.

I yam what I yam!

There are so many great one line catchphrases that have come to us from cartoons.  But one of my favorites is from Popeye — I yam what I yam, and that’s all that I yam.  One of the things that I have learned over the years is that you have to know what you are, what your strengths are and look to enhance them, rather than look at trying to solve every weakness.

In business too, we seem this same dynamic.  Too many successful companies are looking for the newest thing when they have a good thing right in their own companies.

In Chicago, WGN Radio is a powerhouse.  It has a 50,000 watt transmitter that allows its signal to be heard in 37 states.  It is always in the top 2 in terms of market revenue.  If you asked anyone in the city what the demographic of the radio station’s listener was, they would know: it was an older, white, mixed politically, educationally advanced audience.  The station was a throwback to old times.  The announcers still read commercials live.  It had personalities who were engaging and a devoted audience for those personalities. The station had the ability to do indepth shows on topics that others could not. In short, it held its own place as a unique place on the radio dial.  But then Sam Zell bought the Tribune Company and with it, WGN Radio. In short order, their morning drive time host retired.  This was not a surprise — the host had planned his retirement for over 6 months.  Management named one of their afternoon hosts as the new morning host.  After 6 months, they moved him into a spot that they created by firing the hosts of a unique morning show directed at women that had been on the air for 20 years and had a hugely loyal following.  In the meantime, they fired the hosts of unique shows that focused on money, pets and gardening and replaced them with what the rest of the world sees in talk radio – bigoted, loudmouthed talk radio guys.  I am convinced that although WGN had a good thing going with their market, the moves that they made will make them a middle of the road player. By going after the coveted demographic segment (men 25-45), they will be indistinguishable from all of the other stations out there. The latest numbers are not in, but my prediction is that they will be trending in the wrong direction.

Consumers are looking for what you can bring to the table. They like knowing who you are and what you can do for them. Bring them something different, but don’t bring something different to an audience that is not yours.  Don’t be like everyone else.  Know what you are and bring it – better, faster, cheaper – but bring it.

Entrepreneurs as superheroes

Entrepreneurs in our world are venerated for their risk-taking and innovation skills.  It is always a great story to tell when an entrepreneur is successful.  But we must be careful to ensure that we recognize and applaud the skills that got the entrepreneur to the success and understand that most entrepreneurs cannot do it on their own.

Let’s take a few examples.  Steve Jobs is rightly considered an entrepreneur.  When he and Steve Wozniak developed the Apple I computer, they came up with a radical new approach to delivering personal computers.  Steve Wozniak developed the hardware and software and Steve Jobs sold the vision.  Over time, Steve Jobs became the design guru and leads Apple in the development of unique products.  But this grand picture wouldn’t have happened without a man named Mike Markkula. Mike was the initial angel investor in Apple and served as the first president.  It was his leadership that gave both Steves the ability to do their best and allowed Apple to grow.

Another famous entrepreneur is Oprah Winfrey.  She is famous for her TV show, movies, magazine, XM Radio channel, Oprah.com and her tremendous philanthropy work.  She is the master of her domain, keeping on top of all of the vehicles that bear her name.  But if it wasn’t for Jeff Jacobs, an entertainment lawyer, CEO and 10% owner of  Harpo, Inc. (Oprah’s master organization) who runs the businesses, she would not be able to “be Oprah”.

Bill Gates is another entrepreneur who was fantastic at some details, but didn’t have a particularly strong business background.  Bill was able to understand the state of technology and envision a world where every desk would have a computer running Microsoft products on them.  True innovation, absolutely.  But it required Steve Ballmer, Microsoft’s  first business manager to bring the company to the heights to which it ultimately reached.

Too many entrepreneurs have watched Oprah Winfrey (or Steve Jobs or Bill Gates) and thought that they needed to do everything themselves.  Some people chicken out because they know they don’t have all the skills and discount the ones they do have.  Others continue through this phase expecting somehow to become Superman (or Superwoman) and manage all aspects of running a business by themselves.  Neither of these solutions is optimum.

Entrepreneurs need to be open to get a helping hand in developing their business.  Sometimes they can get free advice to help them along.  But more often, they need to understand that they will need to pay to get the highest level of support.  Sometimes it is cash and other times equity. In all cases, it is better to have 50% of a million dollar idea than 100% of a failure.

The real test of the entrepreneur is how much they are willing to sacrifice to see their idea become a success.  Find those folks who have skills where you are lacking.  Sell them on your vision and get them to help you deliver.  You will be the richer for it.

Who is your Customer?

Jeff Leitner writes about the questions that you should be asking when you start your business. They include: What is the pain that you are trying to relieve? and What one thing are you trying to sell?.  Both of these are great questions, but I would like to add another to your list.  It is, at once more basic and for some of us, it is a no brainer.  But be careful, the answers might surprise you.

The question is Who is your customer?  Yes, who are you trying to make your products or services for. The reason it is important is that if you truly know who your customer is, you can design the company’s products and processes to support that customer to the best extent. Let’s take a look at some examples to see where this could go.

Pharmaceutical companies – The customer is the patient who needs the medication, right?  Well, if that is the case then why do they sell to the doctors, who do not buy the product, but authorize (through prescriptions) others to purchase the drugs.  I’d have to say that the doctors are the customers.  They pharmaceutical companies do everything they can to influence the doctors and dabble in consumer education, hoping that the patient will be able to demand a certain drug from the doctor.  But the doctor is still the customer, because the buying power remains with them.

Physicians – While we are on the topic of medicine, who are your typical physician’s customers?  It seems you have two choices, either the patient or the insurance companies.  Based upon the way that most doctor’s offices are run, it is obvious that the insurance companies are their main customer.  Everything that the physicians do is designed to make sure that the insurance company gets what it needs.  The patient is the one who allows the doctor to get paid, but the gatekeeper is the insurance company. Concierge care (I love that description) has started to catch on in wealthy areas.  Basically, the doctor does not take insurance and charges an annual membership fee to his or her patient base.  Does this exclude people who must use insurance to cover their health needs?  Yes, of course.  But it allows the doctor to change the customer relationship from the insurance carriers to the patient.

Google – Who is Google’s customer?  Good question.  Google sold over $22 Billion worth of services in the last 12 months.  Most of that came from advertising.  So, of course, Google’s customer would be the advertisers who pay for the services.  Not so fast. I would venture that the users, not the advertisers are Google’s customers.  Most of the new things that Google rolls out are enhancements to the user experience and they are focused on making the world’s information available to everyone.  If they added an additional advertising service, they might increase revenues a little, but if they stopped providing excellent search (and other) services, the advertising would dry up very quickly.

This is all critical as you are building your business.  If you design your business around the wrong customer, you will never see the full benefits that you could be getting.  Think through this question (and Jeff’s above) as you start to build your business plan.  There are significant benefits for not taking the easy road and just picking the customer that everyone expects.  You may be able to garner a much more substantial or lucrative (see physicians above) customer base from a group of folks who are not supported by other organizations.

I would love to hear about more cases where you believe that the customer is not exactly the end user.  Contribute in the comments.

How we interact with email

I remember when I was young, my mom used to write all of her friends letters on real paper and put them into the mail.  She would get handwritten responses that she could keep and treasure.  We could identify the letters from this friend by the foreign stamps and from that one by the color of ink she habitually used.

Many people have written about the lost art of writing letters.  I don’t want to argue the merits of that topic right here, although a handwritten thank you card can work wonders.  It is always interested me to read the letters between historical figures.  You can get a better picture of the people behind the public persona by reading the conversation between two people. If you have those paper documents, you can keep an archive.  This archive can then become the basis for understanding and illumination.

Today, what I want to discuss is how we can manage our communications today, especially email.

For a while there, it seemed that email was totally fungible.  I don’t have my emails from 1999 or 2000 or even 2004.  Yes, I know that they are probably out there somewhere on some archive in at old ISP (remember this for when you write something that you shouldn’t have), but certainly not in a place that can be accessed easily by my biographer in 50 years.

Google Mail has changed this for me in a big way.  It can be the same with other on-line, cloud based email services. The search capabilities and large storage capacity of these services allow you to search for old correspondence in a way that is much more helpful than reading those old piles of handwritten letters.  Don’t remember the site that had that neat financial tool?  Just search your archived mail.  How did we resolve that board question?  Review all of the relevant documents from one screen. Google gives you over 7 gigabytes of storage (and counting) in each mailbox, so that you can keep all of your emails in one place.

The challenge with this is that besides search, the tools available to help you mine the information in your Gmail archive are limited.  Sure, there are labels and filters.  Labels are great in the abstract, but as you get significant amount of mail, it becomes difficult to tag each email before archiving.  Filters can help with the labeling, but you have to know the circumstances for which you need a filter before you need a filter.  I’m sure that there are a lot of you organized types who put both to good use.  But me, I’m not so much on the organized side of things. So, what can one do?

We tend to think that the young among us are most technologically centered.  They can quickly adjust to different tools and utilize social networking to the max to achieve their goals.  However, it is interesting to note that several of the young entrepreneurs that I am mentoring have mentioned in recent meetings about the difficulties that they have responding in a timely fashion to the deluge of emails that they receive every day.

The reason that this came up was in relation to an article I read on Gigaom about Why Email Clients Need to Change?.  My email box does not look like Alistair’s, but I have the same types of problems with an email deluge. His ideas on adding features to our email clients that help us make better use of both our incoming mail and our archived mail make a lot of sense to me.

How do you manage your email?  Do you keep everything or are you a deleter? Would the tools mentioned in Alistair’s article be helpful to you?  Do you have any others that you want to add?

Business, Economy and Fun

Business: Seth Godin put together a good resource page to help those of us who are graphically challenged find our way in the world.

Economy: Normally, I wouldn’t take Penn Jillette’s economic advice, but he does have some good points about skidding and crashing and hoping that our leaders know the difference.

Fun: As the father of a 19 year-old and a 14 year-old, sometimes I wonder where the time has gone.  Amy Flanagan sure helped me remember how far technologically we have come in 16 years.

Economy: Several weeks ago I wrote asking why corporate CEO’s weren’t going for the PR play of telling the world that they would not lay anyone off this year.  Mark Cuban tells us the reason and what we can do about it.  Granted he is only one voice, but it makes sense.

Management and Motivation

Management: I was catching up a back issue of Fast Company magazine.  In the December/January issue, there were a couple of very interesting articles. The first was a report on how John Chambers is changing the corporate culture at Cisco, a $26B company.  By developing  a decentralized decisionmaking structure, Cisco has been able to generate significant new business in a fraction of the time that it used to.  The second article talked about the future of solar energy, both thin-film and photovoltaic technologies.  The future for these technologies is very (excuse the pun) bright.

Management: I am continually amazed by the lack of leadership in the big corporate executive suites.  From Wall Street to Detroit to San Jose, it seems the only lesson they know is “Where’s Mine?”.  These titans of industry are now regarded by the average American as being slightly less honest and ethical than the average attorney.
Why is it that no corporate leader has said “We will not lay anyone off this year.”?  “We may have to reduce our profit levels from what Wall Street expects, but we are willing to take that hit for our employees and our nation. We’re all in this together.”  Wouldn’t this have enormous strategic value?
Then, we have Larry Summers, by all accounts a smart guy.  He was a former Treasury Secretary, then president of Harvard, now Director of the White House’s National Economic Council.  He has made the determination that AIG must pay $165M in bonuses to the derivative traders that were at the heart of the Wall Street collapse. Sure seems like sticking it to the shareholders in AIG (that’s us, if you weren’t paying attention, the US government owns 80% of AIG).

Three different points of view on this topic: Aaron Zelinsky writes about a creative way that the government can classify these bonuses as to make it a little more palatable to the owners. Another idea has been floated by Matt Miller, who wrote about another idea to help the AIG traders and executives get a little backbone. Eliot Spitzer took a more skeptical view on Slate.

Motivation: The Freakonomics blog tells the story of why basketball teams that are behind by one point at halftime have a higher game winning percentage.