Archive for category Leadership

Quintessential President George H.W. Bush

With the passing of the 41st President of the United States, President George H.W. Bush, his death brings us closer to the loss of all the brave men and women who embodied The Great Generation. The life lessons, that so many of us have learned from our fathers and mothers, farther-in-law and mother-in-law, grandfathers and grandmothers, aunts and uncles, along with all the millions of others who were part of The Great Generation;  passed onto us are indeed countless.

The past few days I’ve heard and seen those who were close to our 41st President share stories of his great strength and character. One of those was that of Samuel Palmisano, the former Chairman, President and Chief Executive Officer of IBM, who is a close friend of the Bush Family. Mr. Palmisano shared the contents of a handwritten letter written in 2009 on the personal stationary of George Bush. The contents of the letter were read on television.

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George Bush

              I cannot single out the greatest challenge in my life. I have had a lot of challenges and my advice to young people might be as follows

  1. Don’t get down when your life takes a bad turn. Out of adversity comes challenge and often success.
  2. Don’t blame others for your setbacks.
  3. When things go well, always give credit to others.
  4. Don’t talk all the time – Listen to your friends and mentors and learn from them.
  5. Don’t brag about yourself. Let others point out your virtues, your strong points.
  6. Give someone else a hand. When a friend is hurting show that friend you care.
  7. Nobody likes an overbearing big shot.
  8. As you succeed be kind to people. Thank those who help you along the way.
  9. Don’t be afraid to shed a tear when your heart is broken because a friend is hurting.
  10. Say your prayers!!

George Bush

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Regardless of whether you’re young or old, in business, sports, politics, academia, these are amazing words recommending how to live one’s life.

RIP

Just sayin’.

GHWB Letter 2009 Advice to Young People

Passing the White House

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Ideas

In the highly charged political environment we live in today we see a growing division regarding differing ideas and views. I’m sure you’ve seen how new ideas or viewpoints offered by some aren’t really appreciated, acknowledged or even allowed when they differ (e.g. Kanye West / @KanyeWest) from what’s expected. There seems to be no room to find a middle ground any more; we’ve lost the ability to have civil and open debate of ideas. When you turn on cable news, read Twitter feeds and even when you have conversations with friends and relatives about countless topics, today’s vitriol has become pervasive. If you aren’t in lockstep with others you’re often castigated, ridiculed and left on the outside looking in. A form of groupthink. Merriam-Webster Dictionary defines groupthink as,

“a pattern of thought characterized by self-deception, forced manufacture of consent, and conformity to group values and ethics”

GroupThink 2

Historically in business most companies operated in a groupthink mode. Autocratic, dictatorial company owners or management with no interest in opposing views or new ideas. Perhaps you worked for a company like this during your career or maybe work for a company today that stifles new ideas? That style may have worked once upon a time, but not in today’s business environment.

Over a 10-year span beginning in 1990 I had the great fortune to work with a small, boutique consulting firm based in California while I was an executive at Belron International Ltd. Everyone I worked with at the consulting firm, from the principal to all the associates, brought tremendous value to company meetings they attended or facilitated. With their help teams openly discussed issues the business was facing, and we were encouraged to fully consider and debate all ideas to find the best way forward. The firm espoused that there were “No Bad Ideas (NBI)”. Out-of-the-box thinking. A key to using NBI is that it cultivated the opportunity for all participants to feel comfortable suggesting highly creative or unconventional ideas without the chance of being mocked by peers. When you remove the fear of being ridiculed for what might be viewed as a controversial idea in a meeting, you unlock infinite opportunities and options. It’s amazing to see what can be accomplished in an NBI environment. The firm provided tremendous value to me, as well as the companies I was responsible for managing.

While working at the company the Chairman, as well as the President/CEO of the organization (at that time) were both key influencers in my career. They used a similar concept to NBI in meetings. Everyone was encouraged to raise contrarian viewpoints to ensure that as many ideas as possible were raised and considered. When offering a contrarian or unconventional idea during meetings we were told to start with “I’m just practicing, but what if……”

Participants could raise ideas without fear, regardless of how outrageous the ideas may have been viewed, as all participants in the discussion were “just practicing”. The outcomes of meetings where we used just practicing always provided better options or alternatives to determine the best path forward for the company.

I’ve used NBI and just practicing with great success for almost 30 years in other organizations. I suggest leaders embrace NBI and just practicing within your teams to maximize opportunities for success. Respectful listening and learning never ends and any organization could benefit from using these techniques.

Just sayin’.

 

p.s. Today, all of those with whom I worked with at that consulting firm have gone their separate ways and each have had and continue to have amazing individual careers. So, thank you, Selwyn, John, David, Jim and Brian for NBI, along with the support you all provided. Thank you to Ronnie and John for just practicing.

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Mentoring and Leadership

You may or have seen this short YouTube video (link below) titled:

Steve Kerr Explains How Steph Curry Has Changed the League

Kerr Curry

It is a great example of mentoring and leadership. The video shows a series of vignettes highlighting interactions between National Basketball Association (NBA) Head Coach Steve Kerr of the Golden State Warriors (also a former NBA player) and his remarkable NBA superstar player Steph Curry. The interactions between this great coach and player are amazing to watch.

There isn’t much you can add to the power of Steve Kerr’s words of encouragement to his superstar guard. You could argue that Steph Curry was destined for an amazing career in the NBA based on his natural talents and the very hard work he has put into ensuring that he is able to give his best every game, but Coach Kerr should be given credit for helping him achieve even more.

If you provide similar positive reinforcement like Steve Kerr with the people that work for you, imagine how great a company you will have. Of course, the reality is that not all managers or company owners are good mentors or leaders. Nor are all employees’ top performers. That doesn’t mean that you can’t spend time encouraging everyone to get the best that you can out of those that report to you or work for your company.

I’ve worked for good and bad bosses. I’m sure you have as well. The best one for me was unquestionably John Mason, the President and Chief Executive Officer at Belron from 1989 – 2000. The good ones tend to delegate authority ruthlessly with confidence. The bad ones? Well, Geoffrey James, a Contributing Editor for Inc. Magazine and Inc.com wrote a great article titled “5 Traits of a Micromanager (and How to Fix Them)”. Mr. James writes that those five traits are:

  1. Measuring too many things.
  2. Monitoring too closely.
  3. Building too much consensus.
  4. Intervening too much.
  5. Setting too many priorities.

Hopefully those aren’t traits you possess if you’re a boss, but perhaps you recognize them as traits in your boss?

So, if you’re a leader and mentor I would strive to be like Steve Kerr. He has the qualities I would want to have.

Just sayin’.

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Using Data as Actionable Information

Does your company provide customers with amazing reporting that presents them actionable or unique information derived from your analysis of their data? If you don’t you’re missing a great opportunity to highlight the value that your organization can bring by presenting data they either haven’t thought about or don’t access to help improve performance.

I received an email from Uber® that detailed my rides during the past year. Most of the information wasn’t actionable, but it was interesting. I learned that I traveled 285.25 miles via Uber® in 2017. I was labeled a “Weekday Warrior” suggesting that most of my rides took place between 6 a.m. – 10 a.m. and 4 p.m. – 6 p.m. on weekdays. Their take was I was using Uber® for rush hour, happy hour, heading to a morning meeting or a ride to the airport and they were right. I used Uber® in 11 different cities with the highest use in Boston. I don’t live in Boston, but they told me that most international air travel from Boston is to London. Who knew? I learned that I signed up for Uber® 1,396 days ago and my average rating of drivers was 4.82 out of 5. I guess I’ve been impressed with most of them.

Uber

Uber® also informed me that Los Angeles riders provide the highest satisfaction ratings for drivers across the World, Tampa uses Uber Eats® most often and that New York stands out as the city with the most late-night and weekend rides. Miami had the most mobile telephones that go MIA (pun intended) in an Uber®, the top tourist destination was The Eiffel Tower and Chinese is the most ordered food in the United States, Burritos in Asia and Europe, along with Tacos in Latin America via Uber Eats®.

Uber 2

Now I’m not sure that any of this information is meaningful or actionable for me, but when you provide your customers with unique information that you track which you believe is important and that could be useful to them in bettering their business you add value. Can you provide a unique perspective that shows the value that you bring? Adding value to your customer is a key component to finding success for your company. By differentiating your value proposition to your customers, you help separate your company from your competitors. So, if you’re not using data to provide your customers with information that can improve their business you’re missing out on a great opportunity to improve yours.

Here’s hoping your 2018 is a very successful one!!

2018

Just sayin’.

 

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Nationwide Windscreen Services – A Leader in Auto Glass Replacements of Vehicles with Advanced Driver Assistance Systems (ADAS)

If you’re in the automotive industry you’ll know that the complexities of Advanced Driver Assistance Systems (ADAS) technologies are being utilized on more and more Original Equipment Manufacturer (OEM) vehicles rolling off assembly lines around the globe. What does ADAS mean to drivers buying or leasing OEM vehicles? As an article published by the research and consulting firm McKinsey & Company titled “Advanced driver-assistance systems: Challenges and opportunities ahead” explains,

“Demand for advanced driver-assistance systems (ADAS)—those that help with monitoring, warning, braking, and steering tasks—is expected to increase over the next decade, fuelled largely by regulatory and consumer interest in safety applications that protect drivers and reduce accidents. For instance, both the European Union and the United States are mandating that all vehicles be equipped with autonomous emergency-braking systems and forward-collision warning systems by 2020. A recent McKinsey survey also suggests that car buyers are becoming even more interested in ADAS applications that promote comfort and economy, such as those that assist with parking or monitoring blind spots.”

Another article titled “Driver Assistance System Market to Grow..” that appeared in the online Digital Journal stated,

“Increasing government regulations such as mandating usage of driver assistance systems in the vehicle and emerging high-end vehicles market in developing countries has an important quotient in the growth of driver assistance system market. In the coming years, it is expected that the driver assistance system market will advance with higher growth rate as compared to previous years. The current challenges for the market are training the professionals on the software due to its complex and expensive features. Therefore, steadily changing process of manual workflow to digital workflow, will result in long-term benefit when the advance features of driver assistance system services are implemented and would be used on regular basis by various industries.”

Consumers buying vehicles with this technology onboard, who will require aftermarket services that could alter the original calibration of ADAS technology, will need to be aware of the importance of choosing service companies that are not only knowledgeable on these safety systems, but that also have service technicians equipped and proficient on the use of all required tools to ensure that the ADAS technology works properly. It’s critical that OEM car manufacturers, companies developing ADAS technology, governments, along with a myriad of automotive aftermarket service industries work together to ensure consumers are kept safe.

One aftermarket service organization in the auto glass repair and replacement (AGRR) industry in the United Kingdom is a leader in ensuring consumer safety. That company is Nationwide Windscreen Services (NWS). NWS began in 2006 and in just over a decade they have 70+ locations that provide auto glass repair and replacements, with 500+ mobile fitting vans and 600+ staff offering a 24/7/365 call center operation and service coverage to insurance, fleet and consumers across the United Kingdom.

ADAS NWS 1

NWS has taken dramatic steps to ensure that the replacements they do are done properly. On August 1, 2015, NWS opened its first ADAS center in Leicester, England, and Stuart Sole, Managing Director of NWS said:

“The windscreen of the future will no longer be a piece of glass protecting occupants from the elements and offering structural support for the vehicle, safety systems are being developed with driver aids to help avoid collisions and accidents. Advanced Driver Assistance Systems technology will manage the cruise control, automotive braking, adaptive lighting, GPS, smart phone, lane departure warning cameras, collision avoidance system. This technology continues to influence vehicle design at a great pace, with more and more of these systems being introduced onto new vehicles. NWS will continue to invest in future technology within the automotive glazing industry; ensuring that the NWS customer base continues to receive a market leading product in all areas of our business.”

Since opening their first ADAS service center in 2015, NWS has invested more than £ 300,000 (US$ 380,000 prox) to ensure that NWS provides proper calibration when required on replacements that have ADAS technology. Today NWS is fully capable of providing recalibration for replacements which require this service across their platform. NWS has been awarded the Lloyd’s Register Quality Assurance ISO 9001 for their processes.

Quality Assusrance NSW

I asked Philip Homer, Operations Director at Nationwide Windscreen Services, who has responsibility for developing the service delivery model at the company to answer a few questions regarding the commitment to the safety of their customers at the time of replacement and when recalibration is required:

  1. You’ve made a huge commitment to safety in time and treasure to ensure that you provide a complete drive-away solution when you complete a replacement for customers whose vehicles have ADAS technology. What drove you to decide to provide a solution internally versus utilizing the OEM dealer network after you replaced a glass where ADAS was involved?

Answer: A one stop solution for the driver and vehicle down time, standardised pricing throughout the United Kingdom. Assurance for fleet and insurers that the vehicle has been calibrated following a replacement.

  1. I’m sure that you spent a great deal of time researching the best solution for your customers. What is the name of the recalibration system that you chose and what were the main reasons you chose their equipment?

Answer: Hella Gutman – We feel their system is the most practical available at present providing a solution for static or dynamic calibration. The equipment also prints off a certificate to confirm a successful calibration.

Hella also provide training for our technicians at their facility in Banbury Oxfordshire, once completed the technician is also issued with a certificate to confirm that they have attended a training session and competent in how to use the equipment.

ADAS NWS 2

  1. Are you able to complete recalibration with the Hella Gutmann equipment that you’ve chosen on all vehicles in your marketplace?

Answer: Approximately 75% of vehicles requiring some attention can be calibrated using the equipment we use.

  1. Within the United Kingdom are there AGRR installation and/or automotive recalibration standards that have been determined and approved by a governing body that your company follows?

Answer: We are not associated to any governing body but do feel we have considerable experience in the field as we were the first to market in the UK.

  1. You’ve received the Lloyd’s Register Quality Assurance ISO9001 rating. What does this mean to your company and staff?

 Answer: We have been accredited by Lloyds QA for over five years and our team are very proud of this accreditation. We are currently working towards ISO9001 // 2015.

  1. Do you provide recalibration services at each of your centers? Do you also provide the service on a mobile basis?

Answer: We currently have twenty sites across the UK and during 2017-2018 we are planning additional sites in strategic locations

  1. What is the time required for completing recalibration – shortest, longest and average?

Answer: Approximately forty-five minutes for static or dynamic calibration.

  1. Do you charge customers for recalibration? How much do you charge for a recalibration? Are you able to bill insurance and fleet customers for this service or do the customers pay for the recalibration directly?

Answer: Our standard price is in the region of £130.00 (US$ 165.00 prox) plus vat. We have a number of billing routes into insurance or fleet customers

  1. When you complete a recalibration is it always 100% effective? How do you know that a proper recalibration has been completed?

Answer: We have had a small number of unsuccessful calibration. This has been largely down to the relevant software release. In the event that we are unable to recalibrate we would advise the driver to take their vehicle to a franchised OEM dealership.

  1. NWS is committed to providing this service to your customers. For those companies in other parts of the world who are interested in providing a similar service to their customers and wonder what the return-on-investment is, can you tell me how long will it take you to get a return on your investment?

Answer: Provided you have access to the vehicle park you should have no problem in obtaining an ROI in under 12 months.

  1. Do you provide this service for other AGRR companies that you compete with or does NWS make the service available solely to your customers?

Answer: This is under discussion now as we feel if has further potential.

  1. ADAS has been called an interim technology. Do you feel this is the case and, if so, what do you think will replace it?

Answer: We have been informed that the technology is at stage three and the vehicle manufacturers or those providing the equipment are aiming for fully autonomous vehicles which would be stage five.

  1. How have you been able to determine which makes and models require recalibration?

Answer: Manufacturers with an ADAS enabled windscreen, but on several occasions they aren’t activated or the camera mounting has been blanked off. We feel that the best identification point is by the technician during installation

  1. How do you handle makes/models where the vehicle owner is instructed to only use the OEM car dealership for calibration?

Answer: We have a robust process in place to organise any calibration should we need to use a franchised dealership. However, we would always recommend a calibration to be carried out during the glass installation to avoid any inconvenience to the driver.

  1. How knowledgeable do you find consumers are about ADAS and the need for recalibration?

Answer: Their understanding is gaining momentum largely due to the vehicle manufacturer selling the driver aid technology as a safety feature

  1. How have you educated your insurance and fleet customers, as well as consumers of the importance of proper recalibration of ADAS after you’ve completed a replacement?

Answer: Yes, we feel have taken an active role in educating the insurance and fleet sectors. We have presented to number of customers and a “best practice” session at the 2016 Fleet Management Live event at NEC in Birmingham.

  1. Are there any learnings from your experience with providing a complete ADAS solution to your customers in the United Kingdom that you can share with other auto glass companies interested in recalibration systems?

Answer: Good technical support is the key to successful calibration in the initial stages of use.

Thank you for taking the time to answer the questions that I’ve asked today Philip. The commitment that Nationwide Windscreen Services has made to customers they serve is highly commendable and provides a roadmap to AGRR companies that are looking to provide an ADAS solution for vehicles with this technology that requires recalibration after the installation. The commitment that NWS has made in investing in calibration equipment, employee training and facilities allowing the company to deliver a complete ADAS solution to is highly commendable and delivers a strong statement that safety is paramount to their customers. Congratulations to you and your company for being a leader in the industry.

As more and more OEM vehicles have ADAS technology onboard we need to ensure that aftermarket automotive companies are fully prepared to properly recalibrate vehicles they service if recalibration is required. The consequences could be life or death for consumers when an automotive aftermarket company provides service and doesn’t recalibrate the vehicle when required. Is your company taking the proper steps to ensure that you’re fully prepared?

Just sayin’.

 

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20 Years Ago

Twenty years ago today the United States subsidiary of Belron International Ltd. (Belron) operating under the trade name of Windshields America (WA) merged with Joe Kellman’s U.S. Auto Glass (USAG)/Globe Glass & Mirror (GG&M) companies to form a company named Vistar. The second and third largest automotive glass repair and replacement (AGRR) businesses merged on February 26, 1996. If memory serves me WA had 274 stores in 43 states and the retail arm of Kellman’s two companies, GG&M had approximately 200+ locations in maybe 20+ states. USAG was the network call center arm of the business covering all 50 states. The merger provided Belron with a majority shareholding in Vistar, but management control fell to USAG/GGA. WA had annualized sales at the time of approximately $ 225,000,000+ and USAG/GG&A had annualized sales were approximately $ 200,000,000+ so as one sales totaled $ 425,000,000+ with approximately 500 store locations.

At the same time Safelite Auto Glass (SAG) was the largest AGRR company in the United States both in the number of stores and total sales. SAG had well over 500 stores and sales of approximately $ 500,000,000+. So if you had been able to combine the largest AGRR company together with the second and third largest AGRR company’s sales would have been over approximately $ 925,000,000 in 1996. A very tidy sum by anyone’s measure. The race was on two determine who could become the true market leader in the United States AGRR industry.

Lo and behold just two and one half years later on December 17, 1997 the shareholders of Vistar and SAG decided that they could achieve their market goals better together than apart so they agreed to merge. SAG at the time was owned by the Boston based private equity firm Thomas H. Lee Partners. When the merger took place Belron received the largest shareholding followed by Thomas H. Lee Partners and Joe Kellman. After the merger Vistar was absorbed by SAG with SAG and Thomas H. Lee Partners holding management control.

As you would expect, when in just 1 year 9 months 21 days the three leading companies in any industry merge, attempting to bring together three distinctly different cultures would be a big challenge. Especially when the largest and smallest shareholders of the new SAG didn’t have management control even though they had considerably more experience in operating AGRR companies than the shareholder with control. I’m not going to delve deeply into what happened next, but the newly formed company lasted just 2 years 5 months 23 days before heading into bankruptcy via a Security and Exchange Commission filing on June 9, 2000. As reported at the time a SAG spokesperson said,

“In papers filed in U.S. Bankruptcy Court in Wilmington, Delaware Friday, Safelite, based in Columbus, Ohio — with 500 U.S. locations — listed $ 559.2 million in assets and $ 591.4 million in debts. A spokeswoman for closely held Safelite, Dee Uttermohlen, said the Chapter 11 filing was related to a debt-load from an acquisition three years ago–but added that the company has been renegotiating debt with creditors.”1

So with that bit of historical background of the two mergers that took place in 1996 and 1997, along with the fallout from those mergers with the subsequent bankruptcy in 2000; I read with interest the 2015 financial results released by Belgium based D’Iteren n.v., majority shareholder of Belron International (and its subsidiary SAG). SAG’s 2015 sales, as per a SAG press release from February 3, 2016 (follow link), are $ 1,500,000,000 ($ 1.5 BILLION). That certainly sounds like a lot of sales doesn’t it?

Looking back to the total sales of WA plus USAG/GGA plus SAG in 1996 ($ 925,000,000+) and reading the sales that was reported today for SAG (remembering that the company now comprises WA, USAG/GGA and SAG) I found it surprising. Very surprising. DollarTimes.com calculates the value of a dollar in one year and adds the cost of inflation to determine that value to today’s dollar. Using the DollarTimes calculator you will find that $ 1.00 in 1996 would equate to a value of $ 1.54 today. The site shows an annual inflation of 2.18% or a total inflation of 54.09% over the past 20 years. When you calculate the 1996 value of $ 925,000,000, today’s value is worth $ 1,425,313,518. So when you look at SAG’s reported 2015 sales against the 1996 sales you see a real growth of 5.24%.

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There has certainly been a lot that has happened in the AGRR industry in the United States over the past 20 years. While SAG has faced a number of challenges over the past 20 years they have always come out somewhat unscathed. Bankruptcy, legislative issues, what have you they seem to always come out on top. But in real dollar growth they’ve seen a 5.24% increase in sales. Seems small doesn’t it?

But arguably there is a problem if you only look at the growth in sales dollars over the past 20 years. Sales figures really don’t take into consideration calculating the effect of the large increase in windshield repairs that existed in 1996 versus today. Nor does it take into consideration the price compression that was wrought on the industry in the late 1990’s and early 2000’s by the insurance industry. Determining what those two factors have in the calculation of real sales growth is difficult as it requires you to look at both the industry’s and SAG’s 1996 mix of products sales and customer versus that mix today. SAG and Belron unquestionably know what those factors mean to the performance of the company, but I’ll leave that for speculation and debate by you.

In my looking back over the past 20 years I’m taking a positive spin as you can see that today there are competitors both old and new that are busy chasing SAG. Be they local, statewide, regional or national competitors; there are countless companies working hard to take on SAG and its position in the AGRR space. There are AGRR retailers, alliances, networks, collision and glass companies, internet platforms chasing after consumers, insurers and commercial customers alike that need the services that the AGRR industry provides. Competition abounds and although it is always difficult to take the throne from the market leader, you’ve got to continue to try at the local, statewide, regional or national level if you want your company to find success in the industry with you’ve chosen to compete.

So when you look back 20 years ago to today at the AGRR industry and at what the landscape was like then versus what it is like today, what comes to my mind is a joke about a pony attributed to President Ronald Reagan.

“Worried that their son was too optimistic, the parents of a little boy took him to a psychiatrist. Trying to dampen the boy’s spirits, the psychiatrist showed him into a room piled high with nothing but horse manure. Yet instead of displaying distaste, the little boy clambered to the top of the pile, dropped to all fours, and began digging. ‘What do you think you’re doing?’ the psychiatrist asked. ‘With all this manure,’ the little boy replied, beaming, ‘there must be a pony in here somewhere.'”

I admit that I’m an eternal optimistic and I always see the pony in the room, but I think that opportunities abound for those who want to take on any leader in any industry. Never give up. Never.
Just sayin’.

 

1. Desert News article titled “Safelite Glass files for bankruptcy after listing $591 million in debts”

2. http://www.tomfishburne.com / http://www.marketcartoonist.com

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Credibility Leads to Success

It really doesn’t matter what it is you do in life, to find long-term success in your chosen field or business you have to have the skill set to adapt and find solutions to the problems you and your business face. To be able to continually build on successes and achieve goals that you’ve set for yourself, or those that your boss or board-of-directors have set for you and/or the business, is key to finding long-term success. That then earns you credibility.

 

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How do you achieve credibility? There are a lot of ways to do so, but as a mentor once told me years ago, that way was to “fulfill the promise”. “Fulfill the promise” meant delivering on the budgeted fiscal year revenue and EBITDA that we developed for the company. The person who told me that was the President and Chief Executive Officer (CEO) of a multi-national company and I reported to him as President and CEO of the U.S. division. He taught me a great business and life lesson.

By surrounding myself with a talented team of like-minded individuals, together we fulfilled the promise year after year. That gave us credibility. Credibility provided greater influence in moving the business forward. Credibility also provided us flexibility to pursue new business opportunities, money for acquisitions to further the growth of the company and to build innovative software solutions that provided us with greater success. The key is that you have to work continually to fulfill the promise. It’s not an easy task but it’s the only way secure the future for yourself and the team.

Ultimately when you establish credibility, gain influence and flexibility in what it is you do you will find that new opportunities abound. It really doesn’t matter what it is you do in your life, if you have credibility it speaks to the ability to inspire others.

“In government institutions and in teaching, you need to inspire confidence. To achieve credibility, you have to very clearly explain what you are doing and why. The same principles apply to businesses.”

Janet L. Yellen, Chair of the Board of Governors of the Federal Reserve System

When you have credibility you gain influence. Your ideas and views have greater meaning and weight, which will help shape the direction of the company that you work.

“Leadership is not about a title or a designation. It’s about impact, influence and inspiration. Impact involves getting results, influence is about spreading the passion you have for your work, and you have to inspire team-mates and customers.”

Robin S. Sharma, Author

With credibility you also gain flexibility.

“What is clear is that business leaders must commit to champion change – to be transparent about their goals for change, to align their incentives systems to drive the change, and to make sure their work environments are flexible in a way that allows men and women who choose to work to be able to achieve all of their potential.”

Beth A. Brooke, Global Vice Chair – Public Policy, Ernst & Young

So working to gain and then maintaining credibility should serve you well in whatever endeavor you choose. Credibility is achieved when the actions you’ve taken allow others to believe in you as a leader.

Just sayin’.

 

EBITDA – earnings before interest, taxes, depreciation and amortization

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What’s Your Formula for Success?

Is there a formula that you use to measure success in your career or to measure the performance of employees of your company that determines the success you achieve? What are the metrics or goals that you follow to measure success (or failure) that drives (inhibits) sales and profits for you company? Having metrics is obviously critical to ensure that employees know what is required of them allowing companies to be successful.

Sports are another example of the importance of metrics and formulas managers and coaches use to ensure success. If you like basketball you’ll know who Rick Majerus was (he passed away in 2012). He attempted to be a walk-on college basketball player for the Marquette Golden Eagles in 1967, but didn’t get a chance to play. Instead he became a student assistant at Marquette. After being an assistant coach to Al McGuire for 11 years; Majerus went on to become a head coach at Marquette, then to Ball State, Utah State and ending his coaching career at Saint Louis. Majerus had a short stint as an assistant coach with the Milwaukee Bucks in the late 1980’s.

During his coaching career he developed a statistics formula he believed a college basketball team needed to achieve in order to be successful. Majerus developed a metric he called the “165 Formula”. It combined three key game statistics that were added together for each individual player on the team. He totaled each player’s shooting percentage during the season for field goals, 3 pointers and free throws; believing that a successful team needed at least one of his players have these three stats add up to a total of 165. Over his coaching career Majerus won over 70% of his games, so he must have found players that he felt could hit his magical 165.

There are a lot of ways to achieve success on the basketball court. Just take a look at men’s college basketball’s current AP number one ranked team the University of Kentucky Wildcat’s. How many players does Coach John Calipari (Coach Cal) have that meet Majerus’ formula? Take a look at the graph below and you’ll see how many.

Now let’s take a look at the team that I follow, the University of Illinois Fighting Illini men’s basketball team to see how they compare against The 165 Formula. As you will see in the picture below (from the game versus the Hampton University Pirates  on 12/17/2014), the Illini have four players that beat the formula. Great!

165 Formula

After last Saturday’s game versus the Ohio State Buckeye’s, the season statistics for the Fighting Illini’s six leading players show that Rice, Hill, Eguw and Nunn continue to exceed the formula target of 165.

Fighting Illini
Name FG % FT % 3-PT % Total
Rayvonte Rice 49.7 79.7 45.5 174.9
Malcolm Hill 53.2 73.3 41.7 168.2
Nnanna Egwu 50.0 87.5 36.8 174.3
Kendrick Nunn 44.2 90.9 42.9 178.0
Ahmad Starks 36.1 88.9 32.2 157.2
Aaron Crosby 30.1 84.0 33.3 147.4
Average as of 1/3/2015 166.7

U of I Fighting Illini Statistics for 104-2015 Season

So the Fighting Illini has a record of 10 wins versus 4 losses for the year and they are not currently ranked in the AP Top 25 and they’ve lost their first two Big 10 Conference games. You’d think they’d either be ranked or winning conference games with four starters with numbers that exceed 165 as per The 165 Formula Rick Majerus felt was needed for success. Perhaps Illini Head Coach John Groce thinks that they are successful? I’m guessing not as much as he’d like.

Now let’s compare the Fighting Illini to the number one ranked team in men’s college basketball, the Kentucky Wildcats. How many players do the Wildcat’s have that meet the Majerus 165 Formula? Well…..just one.

Kentucky Wildcats
Name FG % FT % 3-PT % Total
Aaron Harrison 37.0 66.7 27.3 131.0
Andrew Harrison 36.7 77.8 32.1 146.6
Karl-Anthony Towns 51.9 74.3 20.0 146.2
Willie Cauley-Stein 60.7 60.5 0.0 121.2
Tyler Ulis 51.1 80.0 52.2 183.3
Dakari Johnson 60.5 56.7 0.0 117.2
Average of 1/3/2015 140.9

University of Kentucky Wildcats Statistics for 2014-2015

As you can see the one player on the Wildcats that scored a 165 using the Majerus formula is Tyler Ulis. He became a starter after Alex Poythress was injured after the 10th game of the season so his stats may be an outlier. The Wildcat’s had already found phenomenal success prior to Ulis getting more playing time. With the Wildcat’s averaging 140.9 points (110.4 if you take out Ulis) to the formula and the Illini averaging 166.7 points there must be more to achieving success. Besides the entire team of players performing at a level it also takes the head coach, assistant coaches, trainers and doctors to achieve success. You can add to the mix scouts, recruiters, training facilities, athletic director, along with support from students and alumni. So Coach Cal has obviously found his formula to achieve success at the University of Kentucky. He’s surrounded himself with the best players, along with the all the best people and resources needed to support the team.

So John Calipari (along with Rick Majerus) obviously found a formula that he has used to find success in his career. It’s the same in business isn’t it? Don’t we all want to be Coach Cal? To achieve a consistent level of success you need to develop your own formula. But a key ingredient is the need to surround yourself with the best people, the best team you can find to help you find great success for your organization. It doesn’t really matter what your business is, if you don’t have great people it’s going to be more challenging for you to find success against those you compete with in the marketplace.

Just sayin’.

Previous blogs on the importance of assembling a great team:

                What’s Your Line-up? – December 26, 2012

                What’s Your Line-up? – “Updated” – January 17, 2014

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A Bump in the Road?

D’Ieteren, the parent of auto glass repair and replacement (AGRR) behemoth Belron, offered some insight into the current state of affairs at Belron in a press release last Friday. Even the strong can have some problems. The title of the press release was, “Annual impairment testing and profitability improvement measures / Update on group’s FY 2014 outlook / Early views on 2015” You can download the release via this link. It provides some interesting insight.

When you read the details of the press release pay particular attention to the section titled ”IMPAIRMENT AND RESTRUCTURING CHARGES”. This section provides an in-depth discussion of the non-cash charges and actions that D’Ieteren is taking.

First of all the release states that “Since 2010, Belron has been facing adverse market conditions in the UK with the vehicle glass repair and replacement market down by circa 40% over the period (-12% in 2014) together with price deflation. This has led to an erosion in profitability during the period.”

A “EUR 89 million non-cash goodwill impairment charge is therefore required.” (Definition of impairment charge by www.investopedia.com)

“Belron entered the Chinese market in 2009 and expanded its network to 39 branches through a number of acquisitions, all of the businesses having both a wholesale glass and a fitting activity.”

“Experience to date has shown that Belron’s high business standards were not compatible with the carrying out of a profitable wholesale business in the region. Given the relative size of this activity in many of the existing branches, the discontinuation of the wholesale business means that these are no longer viable in the long term and will be either closed or sold. Following the closure of 31 non-profitable locations, Belron’s footprint in China will be concentrated on 8 branches.”

“This change will result in EUR 7 million unusual costs as well as a non-cash goodwill impairment charge of EUR 9 million, all provided for at year-end.”

“In Italy, following a decline in the vehicle glass repair and replacement market of circa 8% in 2014 and the decision of one of the major insurance partners to cease its collaboration and to establish its own network for fulfilling glass claims during the year, Belron has decided to implement a number of efficiency improvement measures. This will encompass merging the back offices of Carglass Italy and Doctor Glass, its franchise operation, as well as reducing administrative work in several branches thanks to the roll out of the new remote advisor system. The resulting EUR 4 million unusual costs will be fully provided for at the end of this year and will generate savings that should partially compensate for the reduction in sales.”

“In the Netherlands, vehicle glass repair and replacement market has halved in the last 5 years following the roll out of a new road surfacing technology that resulted in the vehicle glass breakage rate reverting to the European average while it was previously significantly higher. Profit improvement measures are currently being implemented both centrally and in the field operations that will require EUR 4 million unusual costs to be fully provided for at the end of this year.”

“In addition to its classical fitting business, Carglass Germany runs a separate activity offering glass repair and replacement for heavy commercial vehicles, notably buses and coaches. The profitability of this business has deteriorated in recent years due to the contraction in this market segment and will be negative by EUR 3.5 million in 2014. The decision has been made to close this business for total unusual costs of EUR 9 million.“

The value of the goodwill allocated to Brazil (EUR 20 million) is still under review.”

In the press release section titled, “TRADING UPDATE FOR THE PERIOD ENDING 30 NOVEMBER 2014” you’ll read the following:

“At Belron, year-to-date sales were up 1.3% on 2013 at the end of November, consisting of a 0.4% organic increase and 2.1% growth from acquisitions, partially offset by a 0.8% negative currency translation effect and a 0.4% decline due to fewer trading days. Total repair and replacement jobs have increased by 1.7% to 10.3 million.”

“In Europe, despite share growth, sales were down 4.8%, consisting of an organic decline of 6.6% due to severe market declines following an exceptionally mild 2013-2014 winter weather in Northern Europe, and a 0.6% decline due to fewer trading days, partially offset by 1.8% growth from acquisitions and a 0.6% positive currency impact.”

“Outside of Europe, sales were up 8.3%, consisting of an organic growth of 8.4% predominantly due to the extreme winter weather in the eastern US at the beginning of the year, and 2.5% growth from acquisitions, partially offset by a 2.4% negative currency translation effect and a 0.2% decline due to fewer trading days.”

During the early to mid 1990’s I held senior management positions at Windshields America, Belron’s retail subsidiary in the United States. I was fortunate to have worked with the greatest group of people that I’d ever had the opportunity to have been associated; the company grew from 50+ stores to 274 stores with exceptional sales and bottom line performance. Great people make all the difference in any organization. (December 16, 2012 blog post “What’s Your Line-up?”) The growth in store count and profitability was made possible by the performance of Autoglass. The Managing Director of Autoglass rightly boasted at the time that his company was providing the fuel (British pound profits) to help drive the growth of Windshields America and other areas of the world of Belron. True. It wasn’t his choice, but it was his view that he could have used those profits to further the goals that he had for Autoglass in the United Kingdom. Possibly true. Perhaps today Safelite profits could be diverted to help Belron around the world? If that does happen Safelite would have less money to spend in the United States to further their goals. Also a possibility.

So this week when you have a few minutes to consider the “strengths, weaknesses, opportunities and threats” (SWOT analysis) that could affect your business in the upcoming year and decide on what actions you will take to ensure that 2015 achieves the success you desire, know that even the dominate player in the AGRR industry in the world is having their share of problems. Some of their problems are market driven, so not necessarily self-inflicted. But some of them are strategic and tactic driven, so those are self-inflicted. Regardless they are not going away so don’t rejoice, but there is hope.

Just sayin’.

 

EPSON scanner image

Courtesy of http://www.TomFishburne.com

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Employees vs. Robots

I was reading an article that appeared in Tuesday’s USAToday with the headline – “Amazon puts 15,000 robots to work on Cyber Monday”. 15,000?!?! The Kiva Systems robots do tasks that historically have been done by some number of Amazons 88,400 employees. Robots picking products that are purchased online by consumers that then need to be shipped to them from Amazon fulfillment centers across the globe cost some number of people jobs. Using Kiva robots obviously provides great value to Amazon shareholders since they don’t require a human resource department to oversee payroll, other benefits such as medical and dental plans, vacation days, sick days, etc.. But this can’t be good for union and hourly workers.

Automation Robots vs People

 

Robots are obviously taking over or facilitating any number of manual jobs that historically have been done by employees. Amazon’s use of robots brings the product(s) ordered online and stored in shelf bins to a packer for shipping. Once the purchased item is delivered to the packer the robot returns the shelf bin back to where it belongs awaiting the next task. These robots have certainly saved Amazon the cost of workers who provided this service. The article says that Amazon spent $ 775 million for the Kiva robots and that, “The robots are part of a complex software and hardware system that simplifies picking and packing at warehouses that contain literally millions of items.” The article doesn’t mention that each robot, and the systems that supports them, cost an average of $ 51,667. Payscale.com estimates that the average Amazon employee salary cost is in a range of $ 50,098 – $ 122,195. After Amazon’s initial investment in the Kiva robots there would be ongoing costs for maintenance, repairs, replacements and of course those whose job it is to manage the 15,000 robots, but Amazon obviously did all the internal analysis and studies to see that the return on investment was well worth the $ 775 million.

The advent of using robots isn’t new, but with robots taking over responsibilities of human pickers at Amazon and the use of robots across countless industries and companies the potential loss of unskilled or low skill jobs could be devastating. Taking place at the same time is the strong push by some city and state governments to increase the minimum wage through legislation. Somehow there seems to be a potential disconnect.

Redwood.com compiled a report titled “The Top 10 Reasons Businesses Demand Enterprise-Level Automation”. Reason #2 in this report is:

“Happy and Productive Employees

Automated tasks keep people—who can get bored or irritated by doing repetitive tasks—free from drudgery. It also liberates them to do more strategic and valuable activities for the company. Automation lies at the core of all of our modern conveniences. Machines are made to do repetitive, boring tasks—without complaining.”

You can see where the use of robots and/or automation that is rapidly taking over or helping employees in their jobs providing cost reductions and greater shareholder value for companies who utilize them, but I’m guessing that most employees would prefer being “bored or irritated” and not “free from drudgery” versus not having a job. Certainly there are countless jobs that won’t be taken over by robots, but is your job completely safe from being replaced by a robot so that you can be freed to do something else? I’m guessing the Amazon employees that were picking products for packing at one time thought so.

If you’re a business owner or in management with responsibility for delivering shareholder value you have to continually be looking for ways to cut costs and increase value just as Amazon has done. There are countless jobs that aren’t going to be replaced by robots, but are there robots that can help you improve the productivity of your employees making their jobs easier and provide greater shareholder value? As companies compete against each other for business at a local, regional, national or international basis; looking for the slightest advantage against industry competitors the answer has to be yes. What are you doing to take any advantage available and ensure that you continue to grow and prosper in your industry?

Just sayin’.

 

 

 

 

Sources:

www.usatoday.com

http://www.usatoday.com/story/tech/2014/12/01/robots-amazon-kiva-fulfillment-centers-cyber-monday/19725229/

www.kivasystems.com

http://www.kivasystems.com/about-us-the-kiva-approach/

www.amazon.com

http://www.amazon.com/Locations-Careers/b?ie=UTF8&node=239366011

http://www.amazon.com/Inside-Careers-Homepage/b?node=239367011

www.payscale.com

http://www.payscale.com/research/US/Employer=Amazon.com_Inc/Salary#by_Yearly_Sales

www.wikipedia.com

http://en.wikipedia.org/wiki/Pick_and_pack

www.Redwood.com

“The Top 10 Reasons Businesses Demand Enterprise-Level Automation”

 

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