Mark Kolier’s Blog

Archive for the ‘Best business practices’ Category

But it hasn’t quite worked out that way.

Last week’s news from Pepsi-Cola CEO Indra Nooyi that the company was planning to cut (for a change they did not use the word ‘layoff’ so these folks are not coming back) 8,700 workers http://www.investorplace.com/2012/02/pepsico-to-cut-8700-workers/ was greeted with little surprise. The total number will be achieved over several years and represents roughly 3% of Pepsi’s global workforce.

Companies reducing their workforces are in no short supply since the ‘Great Recession’ began in 2008. For the people that manage to hang onto their jobs, the constant cutbacks only mean they will continue to be required to do more with less – people that is. Longer hours, more responsibility await for those that remain.

Worker productivity as a result of technology (starting with computers) here in the United States as well as around the globe has enabled the jobs of many to be inherited by the fewer. This too should not be met with much surprise but for whatever reasons befuddle both economists and politicians.

Why would a company want to grow from a total employee standpoint? Everyone who’s anyone in business knows that employees are expensive. The industrial revolution was the beginning of less relevance for employees.

Think about accounting and bookkeeping today versus forty years ago? Bookkeeping was a laborious process of physically entering data into a ledger with a good old-fashioned writing utensil like a pen or pencil which today has been replaced by electronic spreadsheets and computer applications. How much faster and more accurate (well, not always more accurate) is today’s bookkeeper versus one from 1972? Three times faster? Four or five times faster? Do you need more or fewer employees to perform the tasks? The ability to use fewer people to do the same or more work goes straight to the company bottom line.

Why hasn’t the explosion in productivity resulted in the creation of more new ‘new’ jobs? After all eight years ago who would have thought there would be a job such as social media community managers? And that the need for them would become so important? The problem is that the rate of old ‘old’ job loss is far greater than the creation of new ‘new’ jobs. Entrepreneurs like Mark Zuckerberg and even Groupon’s CEO Andrew Mason have helped create thousands of new ‘new’ jobs.

Groupon in fact is a very labor intensive business at present with salespeople all over the U.S. as well as other countries. You can bet the folks at Groupon are desperately looking for ways to automate the sales process so that they can dispense with the sales employees who are really nothing more than a necessary evil.

The government can do things to help create jobs like the ones that would be part of repairing the nation’s infrastructure. Most of those would be new old jobs and many of those jobs would not necessarily be long-term sustainable. The government (it has been said), can also help create favorable conditions to attract entrepreneurial people who then would be inclined take a chance in starting a company with what could be a next great idea. However that is much easier said than done.

It’s also easy (and obvious) to say that education, training, and re-training are essential to preparing people to operate in the new economy with the new ‘new’ jobs. The old ‘old’ jobs are not coming back. Steve Jobs even said so.

Who out there these days is working fewer hours and is making more money at the same time?

I have looked at many resumes over the years. Most of them are conventionally boring as if a resume writing service had advised the candidate to play it safe. Consequently most resumes are anything but memorable.

Your resume should supposedly be updated continuously. There are several reasons for this suggestion but my sense is that having an updated resume ready for anything saves you the anguish of having to update things from your career over the past however many years. And if you are anything like me you probably don’t have a resume at all. I’ve not had a resume updated or otherwise for more than two decades. But having an up to date LinkedIn profile (for me) suffices as a living and breathing version of my work history and interests – that’s pretty much what a resume does don’t you think?

I don’t necessarily regularly update content related to my work experience but even there I do change things periodically to update what I’ve been working on, new skills and projects etc. Since I am not currently looking for a job why do I keep my LinkedIn profile updated? The primary reason is that I want people have the ability to get a sense of what I have done (work experience and projects), like to do (groups I am in) and people with whom I associate. It also is a place where I consistently post content and comments on things that I find to be of interest. A traditional paper or email resume seems so limiting.

How about having a video of you talking about what you have done and can do on your LinkedIn profile? But be prepared to update that video from time to time to keep the content fresh! A LinkedIn profile is self-reported (at least most of them are) as is a resume. But as I have said many times, whenever I have a first business conversation or correspondence with someone I immediately check on their LinkedIn profile. Even if I cannot see all that much because I am not connected it does give me a sense of background, work history and schooling, not all that much less than a resume! In fact when I go to LinkedIn and see that someone does NOT have a LinkedIn profile I am both surprised and a bit aggravated.

I will admit my LinkedIn profile is far from exemplary and in no way should be taken as any kind of standard. But it has so much more about me than any resume ever would.

What do you think? Will resumes go the way of the fax machine?

Less than two weeks ago I made my first trip to IKEA. I realize that this puts me far into the minority and now that I have been there truly EVERYONE has been to an IKEA – or so it seems. My wife and I went to IKEA as the one snowstorm this year was waning, as she we figured it might not be as crowded as it usually was (she had been to an IKEA before). She was right and we parked near the entrance.

Prior to making the 40 minute car trip my wife went online and sketched out a couple of ideas she had for a wall unit and printed them out. We were going to try to make our own wall unit and from what I could tell it would be relatively inexpensive. That’s the first reason people go to IKEA right? I mean that the merchandise is for the most part contemporary, modular, fairly well made (to me more sort of an upscale particle board) and there are choices in colors and finishes.

We were able to find someone to help us narrow our choices based upon what we sketched out. Apparently finding someone to help in IKEA is no small accomplishment. He was a very nice septuagenarian (or at least it seemed like that), somewhat computer literate and very earnestly tried to help us. It took quite a while. The computer system was cumbersome and not all that user-friendly (my wife noticed that as well when she was attempting to design something). Once we finally found something we thought we might like it turned out that IKEA had discontinued the line so had we bought the material in stock (which it wasn’t) we would have not been able to replace anything going forward.

We had been in the store for 90 minutes (seemed longer to a guy like me who is a buyer and not a shopper) and like many people came up empty. In fact had we decided on a purchase, the ‘IKEA way’ is for us to go downstairs, pull the material we wanted off the warehouse shelves (like doors and cabinets) and roll it up to a register to pay. After that we would have had to arrange for delivery since we were not going to be able to fit it all in our car. I was assured by my wife that process (had we undertaken it) would have taken another hour. Whatever happened to time is money?

But then it got aggravating – that is, trying to get out of the store. Like Connecticut based Stew Leonard’s, IKEA has you trudge around and around the store through aisles and aisles of products (none of which were of interest), just to get to the exit. No exaggeration – at least ten minutes of going around thinking (hoping?) we were close to getting out only to see yet another turn down another aisle. I kept thinking I sure hope the fire sprinklers work well since if there ever was a fire there was no way you were getting out in time.

I had much higher hopes as the IKEA brand perception I had going in was much different than what I had going out. People seem to love IKEA.

But again I ask – what is it about IKEA?

Newly hired Ron Johnson, recently of Apple, has taken the reins as new CEO at 99 year old retailer J.C. Penney. It was called Golden Rule Store prior to 1913 having been founded in 1902 by James Cash Penney (I guess his parents had a sense of humor). Mr. Johnson was the brainchild behind Apple Stores and Genius Bars and has taken on a fairly monumental challenge to refurbish a true American institutional brand. Prior to his stint at Apple Mr. Johnson was with Target so he has retail big box experience. An article in Daily Finance offers a good background http://aol.it/ifrUoG.

Mr. Johnson unveiled Penney’s new strategy and logo this week (a square signifying a square deal). One of his first moves is to eliminate the seemingly unending promotions and sales. In fact J.C. Penney had 590 such promotions and sales in 2011. He also will be streamlining pricing to be more consistent, around 40 percent off previous prices, all the time. And as reported in Macnn.com – http://bit.ly/A5gC3X when sales happen, they will be month-long events, and the company will strive to offer “great prices” on items every day. It will also price items in whole numbers, meaning a $20 price instead of $19.99.

I have written (unflatteringly) recently about the trials and tribulations at Sears http://wp.me/pJX7l-y6 and while I’ve not set foot in a J.C. Penney store (at least not that I can recall which says something in and of itself) in a year or so, I feel Mr. Johnson has got the right stuff and is saying and doing the right things to refurbish the J.C. Penney brand.

Having a brand stand for something and have that position understood by consumers is the challenge that Mr. Johnson is taking head on. I like that. He’s also avowed to invest $80 million a month in advertising and promotion. I like that too!

What’s your take on J.C. Penney? Is it a tired brand beyond repair?

It’s an election year here in the United States. 2012 will also mark changes in the Chinese government as well. The backdrop to all of this is a seemingly constant stream of rhetoric from the U.S. that China has unfair trade practices. President Obama made reference to that in his State of the Union message this past Tuesday calling for the creation of a new trade enforcement unit that will be tasked with investigating unfair trade practices in countries, he said, “like China”. Both President Obama and the Chinese government know that any punitive action as a result of this investigation is highly unlikely.

I’ve been to China a handful of times over the past two years and our company is doing business by helping Chinese companies in the U.S. as well as helping U.S. companies enter the Chinese market. I’ve learned a great deal and have much more to learn in the coming years. However I have learned a number of very important things. Here are three to think about:

1) The Chinese will not be pushed around. It’s like when you are being yelled at by someone and you eventually just tune out. Jumping up and down demanding that China accede on trade practices and currency valuations will have little or no impact on how China will act.

2) Win-win does not mean the same thing to the Chinese as it does to Americans. I can hardly count the number of times I’ve had a Chinese businessperson tell me Win-Win right? With a smile and a handshake. Win-win to the Chinese means the company wants you (the U.S. side of the venture) to take all the risk in helping them develop their business in the U.S., and for the most part, non-major Chinese companies are unwilling to invest any money in developing the U.S. market. This should not be all that surprising given that just a little over thirty years ago the notion of marketing and advertising was as foreign as – well, a free society.

3) It is an understatement to say that it takes patience to have your China market strategies bear fruit. When I tell my Chinese associates and U.S. expatriates that we’ve been able to gain client engagements in China in less than two years they are amazed and impressed. For me it feels as if it’s taken a really long time with constant work, some missteps and changes in strategy. I’ve been told repeatedly that having success in anything less than three years is unusual.

I believe most Americans are smart, smart enough to realize that starting a trade war with China will not help the U.S. get its goods and services into the fast-growing market any faster. Yes of course we all desire a level playing field and at the same time it’s frustrating to have to deal with the subsidization of Chinese enterprises by the PRC government. However the U.S. and other western countries will be far more successful if they try to find more collaborative methods to effect policy when it comes to the Chinese.

The Chinese are not focused on helping the west rebound from its financial difficulties. China has its own problems. But the Chinese are aware that they are holding the right cards at the moment. That China will continue to try to exploit its hand should come as no surprise to anyone.

But somehow that doesn’t seem to be the case. Do you think I am being naïve? Practical? Neither? Both?