Category Archive: The Sense of a Business

 And now…an old friend and associate took issue with my latest blog!

I published a new blog Tuesday the 16th of November that related to service-oriented owner(s) and key staff members failing to maintain a sales pipeline.  I specifically pointed out that database management, new business solicitation, email programs, social networking and phone calls were not part of some company’s ongoing business practices.

My friend and associate reminded me of the story that he had told me many times:  “Never try to teach a duck to sing.  It’s a waste of your time and it annoys the duck!”  His email quote back to me was:  “Tom, we’ve had this conversation many times, you know not to expect creative people to spend time pursuing new business:  they are devoted to their craft, not selling their services.  So, selling their services is a foreign thing they don’t do very well, don’t like to do and it diverts them from what they like and are good at…that’s where they are happy.  that’s what they live for.  Making sales calls are so distasteful, most would rather go out of business rather than have to do it.  It takes a special mindset and a special person to be able to sell themselves or their services; and, oddly that is rarely a creative person.  Strange, isn’t it, Tom?”

I would say to my friend:  “a business cannot survive if ownership only does what ownership wants to do or feels comfortable doing.   Creating and managing a company’s sales pipeline is critical to a company’s success.  There are a set of business practices that have to be managed, either by the owner or delegated by the owner to someone on their staff or contracted to someone.    Very few people in a service-oriented business can depend on referrals to generate enough new business to sustain their company; or, grow their company.   I am reminded of a comment by another friend:  “Acquiring a new client is a temporal moment:  they will leave someday”. 

For my clients, I always study the composition of their client base:  the 80/20 rule as well as the amount of billings each client contributes.  Bankers know this drill well.  One should not have a client represent more than 5% to 8% of your billings; even at those levels, a company is at risk.

I once joked with a client that “service-oriented companies are always one client short”.  They laughed and said, “and…with one less client…they would be out of business”.  Our conversation continued as they remembered when they last acquired a new client…only when they had lost a client….. They, then said, “hmmmm….maybe we should look at that”.

I would be glad to help you “look at that”.

 It was a Friday morning business meeting, the key staff was sitting around the conference table…

Sales had deteriorated; anticipated new business had not materialized and vendors were calling.  Payroll was due that day and very little money existed to pay the firm’s staff.  As a consultant, I was frankly scared for my client and his employees.  The business situation had been shared with the key staff and yet, no one was working “new business”.  No phone calls were being made although each staff member had been given a short list of prospective clients to call and pursue. 

I have found that working new business is the black sheep in a service-oriented business.  This involves uncovering opportunities and then winning over the relationship.  It often does not happen unless the owner(s) or a new business person solicit new relationships.  Seeking new business is foreign to them;  they believe they shouldn’t have to do it.  I have seen many service-oriented businesses fail because the sales pipeline dried up; and, it’s normally because it was not a priority.

During the years that I worked in large corporations, there were healthy budget allocations for research and development and, also, for sales and marketing.  Management realized that cutting edge product development and a serious investment in sales and marketing were critical to business growth.  It is also true for small relationship-based companies; and, the owner(s) rarely invest in business development.  I am often amused when companies buy software like Salesforce but don’t have anyone trained to implement or maintain it.  And, often, I have seen companies invest in lead generation and end up with hundreds of new business leads but the leads sit on someone’s desk and the phone call, the letter, the email to create dialogue never happens. 

I once joked with a client who was suffering from business loss without an active sales pipeline and I said, “what are you waiting for…..a miracle phone call”?

In other situations, management insists that they are going to divide the leads among themselves and hold each other accountable for making calls.   Bah…humbug….that doesn’t happen either.  One of the most revealing insights I have learned in working with entrepreneurs is that they cannot hold their employees accountable because they have not followed through with their own accountability.

If you need help reviewing your new business process and making it the priority it deserves, let’s have coffee.   

 They had retained me to seek other groups to acquire; and, then the phone call came….

They were a relatively new client and had retained me to help them seek out groups that they could acquire.  And, then the phone call came:  they wanted to liquidate their partnership and have one partner buy out the other.  They asked me to facilitatie the buyout.

Even to this day, they are one of the best groups I’ve worked with:  they liked and respected each other, paid their vendors early, had great clients and served their clients well. They treated their employees with respect.  It appeared to be a model partnership.

I pride myself in being sensitive and fair when it comes to a group dissolving or merging with another group.  When one is talking about a simple partnership breaking up, it’s not really that simple.  Historical earnings, gross margin, what was brought in, what was won and by whom, all play a role in trying to determine fair value beyond the equity value on the balance sheet.

After several weeks, we had agreement from both parties.  I felt very comfortable with the document from the attorney and the liquidation process (I have a special attorney relationship that I cherish.  He lets me write the draft and then he cleans it up!  It reduces my client’s attorney fees and allows me to keep the people issues front and center; not just a money deal).

I met the partner who held the greatest number of shares at a local restaurant late in the afternoon.  He and his wife were sitting at a table drinking tea.  Although he was the majority owner, he was willing to walk away from the client relationships and start over.  And, then…another surprise.  His wife asked an interesting question:  “If it is a good deal for both parties,then, if we decided to keep it, wouldn’t it still be a good deal for the other partner as well?”  Needless to say, I was taken back.  I paused, expressed kind of a nervous, awkward giggle and said, “yes, it should be.”  The husband and wife then said, “well, we want to keep the agency.”

I went back to my office and called the other partner, who thought by the end of the day that he would be moving forward with the client relationships and single ownership.  After I told him that his partner did not want to sell but was interested in buying him out (instead), he, too, expressed a nervous, awkward giggle and said, “well…if it was a good deal for both parties, then it is still a good deal for me.”  He signed the papers later that night.  All we did was change the name of the buyer and the seller…and, that was it.

I have come behind many acquisitions/mergers that were poorly done.  Hard feelings, law suits or threats of law suits occurred.  I have a series of tests and intuitive guidelines that I ask both parties to consider in processing their buy/sell agreement.  If you find yourself in a similar situation someday where you can benefit from some sage advice and counsel, I would like to help you.

 Be careful regarding social networking….

I am still struggling with what is and what is not appropriate to share on the internet.

I think my stories of lessons learned are helpful and provide insight into communicating with other professionals.

I think my stories of business problems and embarrassing moments are probably ok; they reflect humanness and a genuine effort to help a client who is upside down.

I think my dachshund, Casey, stories are probably ok and bring some level of humor and hopefully endearment.  After all, if you can’t love a funny looking dog….

I have been to some sites that are considered social networking and would prefer to not see clients or friends or business associates “acting that way.” 

Which reminds me of a great story that was once shared with me by a very successful manufacturer’s rep; he was in his 60’s and had worked all his life to build his business which was selling luggage.  He had a beautiful home and was prosperous.  He and his wife were able to retire and enjoyed traveling; and, they, too, had a dog.  But, he told me about the time that he had gone to visit his #1 customer, a customer who represented over 30% of his income.  They had never met and had talked by phone for years, shared pictures and always talked about getting together.  Then, one summer, they got together.  My friend and his wife went to California to visit his #1 customer and stayed with them for a week.   He thought that              “a good time was had by all.”  Three weeks after he returned from the visit, his #1 customer cancelled his account and would not take his phone calls….  He never knew why.  But he gave me some sage advice:  “keep professional relationships…professional.”

If you would like to talk about affinity building through online marketing and communication, feel free to contact me at  We can talk about how you can move people from suspect to trusted client (or friend).

 I’m sorry Mr. Irwin but we have to turn off the lights….

It was about noon on a Friday, sometime late in the summer, in Fairfield, New Jersey.  In the auditorium, there were over 150 sales persons singing songs about their company and the products that they sold.  It was almost cult-like (one of the executives after playing my cassette of “The Eyes of Texas”… turned to me and said, “Irwin…what in the hell is this…..”working on the railroad?”). 

I was in the office and an electric company guy came in and asked for me.  Turning to him and introducing myself, he then told me he was there to turn off the lights because my client had not paid the electric bill….I think they were three months delinquent.   I asked for the electric company’s phone number and talked to the billing office.  I knew we did not have the money to pay them.  I asked for time and the lady said “no.”  I explained that there were salespersons in the auditorium and if the electricity was turned off, the salespersons would probably quit.  She said she was sorry but without a check brought to the office….right now….there would not be any electricity.  I thought about giving her a hot check but that never really works, it just creates other issues….like district attorneys and future payments will be cashier checks, etc. (today it would be wire transfers).

With a deep sigh, I turned to the “electric man” and asked him to leave without turning off the lights.  He apologized and walked out of the room to the electric box.  I followed.  When he got to the handle to unlock it and turn it off….we looked at each other.   He paused…smiled….put his key back in his pocket and walked out the door without turning off the electricity and without saying anything.  I said thank you as he walked out the door.

In my opinion, the electric man was a brave and caring soul.  He knew he was dealing with more than an electric bill.

 It’s Friday morning, just past midnight, May the 21st, 2010 and I was wondering

My dachshund stories are now #2 to the blog about the failure of us to connect to those who reach out to communicate with us, either through a telephone call, voice mail or letter.  Nothing….black hole….silence.  “Hello…is anybody there?”

Reflecting on the state of the business environment as it is today, I thought: it’s the last work day of the week.  Some will work on Saturday and/or Sunday and go back to work on Monday, tired and still behind.  Others will leave work on Friday at five o’clock and simply think about other things.  Some have their to do lists in order, some never do. 

I am reminded of a good friend who had a high level position at Frito Lay when I worked there.  He normally left between 5:30 and 6:00 while others stayed until 9:00 or 10:00.  But, he was as productive or more so.   I once asked him “how so?”  He said that it was simple.  His manager always had a to do list that could not be achieved and instead of taking responsibility (and guilt) for trying unsuccessfully to complete it, he went to his manager with his list and said, “ok….here’s my list of things to do….which ones have priority?” 

That sensibility also reminds me of the story I heard about Tom Landry when the Cowboys lost to the Green Bay Packers in what is referred to as “The Ice Bowl” when the temperatures were thought to be near 50 degrees below (chill factor).  The Cowboys lost on the last play of the game; and, what did Tom Landry do on the way back to Dallas?  He sat in his airplane seat and read a book.

Another time, I can address the issues of priorities and reconciling one’s self with what has been done and what is still unfinished.  I can quote Robert Peck, Stephen Covey, Wayne Dyer, Tom Hopkins, Gandhi, Jesus, Bill W. and all the others, even Peter Drucker!  But it is interesting how we often saddle ourselves with feeling incomplete with unfinished business and we leave work on Friday without leaving work.

I have a new client who intimated that he owed it to his staff to create a work environment where they could leave work at a normal time, not look back into the evening at what had not been finished and did not have to think about work on the weekend.  I think that is quite a challenge; after all, some of us carry it with us …anyway.  It’s sometimes about us and not about our bosses or management.

At the end of a game or project or difficult client situation or simply at the end of the day….are you able to sit back and simply read a book, if not, maybe I can help you.

 “Where have all the flowers gone?” ….first verse

A close friend read this blog to be and said: ”kind of a downer.  Can you reverse-engineer it so there’s a story of someone who returned a call promptly and something great happened?”  I emailed back that “sometimes a downer is good for people.  It may help them reflect on their own behavior….”

It has been my experience, that there are far too many instances to recount of people not reaching out to each other, even in business situations….

Having worked in the service industry so long, especially marketing communication groups, I‘ve seen the human mistreatment up close.  It always reminds me of the comment by Charles Dickens when he was talking about children:  “aren’t they people, too?”

It goes both ways.  I got a voice mail the other day:  “Tom, are you mad at me?  I have called you three times and you haven’t called me back nor have you responded to my emails.”

But, oh, there are so many times that I have reached out and it is as if the voice mail, the email, even the letter went nowhere.  Hello?

What has happened to us?  Is it because at one time we had secretaries or assistants or the desk next to us (or the mom and dad) that had to answer the phone and take a message that compelled us to communicate “back?”

And with email, it takes….s-e-c-o-n-d-s….you hit reply (or type in their email address) and simply say “got your message, am tied up, let me get back to you, thanks.”  Communication is reciprocated.

I remember once trying to set up a new business appointment for a client who had been the college roommate of an owner of a large Dallas corporation.   “Tom, Dan said for us to call Joann, who is the Marketing Director, to set up an appointment for me to show our capabilities.”  I called and called and, of course, I referred to the owner’s request for her to visit with my client.  All these calls went to voice mail.  No return phone calls for weeks, yes….weeks.  I then called Dan, the owner, and indicated that I was having trouble reaching his Marketing Director.  He put me on hold, walked down the hall and then came back and said, “how about next Tuesday at 10 o’clock?”   When my client and I met with the Marketing Director, I noticed that she did not have a phone on her desk.  It was across the room on a conference table.  I asked her about that and she proudly said, “oh, I never answer my phone and sometimes I never check voice mail.” 

I have a client in Houston, a large agency, and he always seems to take my calls, even leaving a conference room to say, “hey, Bud…can’t talk now….can I call you back?”   That is special.  And, as I understand it, he has always been that way and this has kept him in high esteem with all those that know him.

The people’s  touch….where has it gone for so many of us?

 The Diaphragm People

When I graduated from the General Electric Financial Management Program (Aerospace Electronics, Utica, New York), I was transferred to Charleston , South Carolina as a financial analyst for Large Steam Turbines.  One of my first assignments was to work with the Diaphragm people.

They were in Building #3 and they were from Schenectady, New York.   They were skilled craftsmen, worked with metals and used an automatic template cutter (a process borrowed from the textile industry) and would cut huge plates of steel within 1/16th of a precise specification…automatically.  Looking back…it is kind of amazing and renews my pride in American manufacturing….as it was then. 

They were older and perhaps overly proud, now living in the South but being from New York.  They were working with many former tenant farmers who had been trained at a local technical school to become machinists.

FINANCE, yes, in all caps, is GOD in the General Electric world and I was one of them.  I also was a FMP and that was a very special person in the General Electric world.  I had been recruited and paid by Corporate while “stationed” in Utica, New York.  My new assignment was to work with the Diaphragm people and get them to meet FINANCE’S budgetary guidelines.  They had balked for three years and had not achieved “their numbers” for three years.  An adversary relationship existed between Buildings #1, Building #2 and the Diaphragm people in Building #3.

“Tom…go meet the Diaphragm people and give them their budget numbers….it won’t be a pleasant experience; but, you’ve got to do it.  We have a deadline to report our budgets to Corporate.”  I have always carried a legal pad, so with pad and pen in hand, I walked down the cement road to Building #3.  As I walked in the door, a sense of anxiety overcame me and I took a deep breath.  It was late in the day and a summer shower had just finished (very often in Charleston….a thunderstorm and then everything was sunny and beautiful).   They knew who I was and escorted me into the conference room.  But they began talking and I just listened…and listened.  Three hours later, I had ten pages of notes (but had not given them their budget numbers to sign off on).   I, then  simply said:  “I have some numbers to go over with you but instead, if you will make the time, I will take your lead and see what numbers you feel you can meet and, once we both feel comfortable that those are the numbers you can commit to and meet, I will help you sell  it to FINANCE.” 

We stayed til midnight and then, the next morning at 6:00 a.m., we started again.  This was before lap tops and electronic spreadsheets.  Yes, pencils, calculators and long green sheets taped together!  When we finished the numbers, I understood how they were developed and the reasoning that supported them, I quickly compared them to the FINANCE budget numbers.  They were lower. 

Later that day, I went with the Diaphragm people to the Plant Manager and the Controller and I presented the Diaphragm numbers as if I was one of them.  I explained the logic, the standards and how they would achieve those numbers.  It was quiet and then everyone smiled and said, “ok….these are your numbers….we will hold you to them.”   And the manager of the Diaphragm people then said, “we want to keep having access to Tom and we want him to work with us to make sure we hit our numbers.’

It’s been many years and I am sure most of the Diaphragm people have passed away; but, a sense of pride, respect and friendship was achieved and lasted until I left Charleston three years later.   It was born out of talking, listening and caring enough (on both sides) to achieve a realistic solution that could be embraced, fought for and was achievable.  But probably the greatest value came out of the mutual ownership that was achieved through collaboration.

Is this how you work with your staff and your clients?  If you need help, I can retell my Diaphragm People story (and others that came out of that learning experience).

 “Tom, I’m not going to do it. It will be self-regulating, anyway!”

I have found that certain entrepreneurs ignore business essentials and always feel that “things will turn out…ok.”  But sometimes, they do not.

My client had developed a significant business but experienced serious cash flow issues that could not be overcome, payroll liabilities, landlord issues….those kind of things  They were very talented and I sought another group for them to become part of.  I negotiated a buy out of their debt and they were to become part of another firm.  All employees (and clients) were out of harm’s way. 

In those situations, a consultant does not want to buy the day and give up tomorrow; i.e., sell short and lose the upside.  In negotiating, I wanted a long term agreement with an incentive built in for upside profitability and equity sharing.  The buyer said, “Tom, I’m not going to do that….this will be self-regulating anyway.  At the end of five years, if I want them, I will negotiate an upside for them; and, if they want to contintue to be part of us, they will negotiate fairly with me to achieve that.  If they don’t want to continue, then it doesn’t matter what I am willing to offer them……..whether it be today or in five years.”

He was right.  The group contributed significantly to the growth of the “buyer” but at the end of the five year period, negotiations broke down and they left.  Sometimes, someone thinks they can learn from their previous mistakes only to find that old habits (business practices?) are difficult to modify.  And what happened to the group that had been originally “saved” five years before and then chose to go back out on their own again?  Within a year, they were out of business (again).  This time….no one offered them an umbrella.

do you need help finding dry land, an umbrella or simply someone to talk to?

 “They either leave at five o’clock or at the end of the year!”

“too many times….” I have heard the entrepreneur’s lament:  “here I am….it’s six oclock (or even eight in the morning) and I am the only one here….it gets lonely sometimes….and then I have to worry about payroll and whether they are going to stay with me….”

1.  Small relationship based groups sometimes reach mid-size level but seldom succeed in maintaining employee retention and devotion.

2.  Talented employees often leave after gaining a client’s confidence and, surprise! take the client with them (ignoring non-compete or tortuous interference agreements).

3.  Entrepreneurs become exhausted training and retraining staff, only to see them leave and accept a position with a competitor or start their own group.

4.  In a new business presentation, the prospective client turns to the entrepreneur and says, “you can have my business if you will personally manage it.”

5.  Without business growth, enployees do not feel they have a career ladder.

6.  “Creatives” often become bored working on the same or similar category (the same with account management).

7.  If groups do not remain committed (and successful) at acquiring new business, the special excitement that comes from “the hunt” is lost; and stagnation occurs.  One client once said to me regarding how proactive they used to be in acquiring new business…”hmmm….we used to do that.  I wonder why we quit.”

8.  I have seen various groups retain highly talented employees, others have serious turnover.  One of the primary reasons lies in the selection of employees, not necessarily the way they are managed.

9.  When an employee feels that he/she has a stake in the business and is required to continue their professional development, a favorable shift occurs between the employee and management.

10.  Entrepreneurs are generally self-starters and driven to succeed.  A group must weigh the benefits of hiring self-starters and ensure that they have a career path that facilitates business management responsibilities, professional development and bonuses (not necessarily just money).

11.  I have seen 45 year old entrepeneurs become 60 years old and still not have a transitional management staff that ensures that their legacy and ability to sell their group has been achieved.

If this resonates with you…either as an employer or an employee….let’s have coffee.