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.

 

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

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!

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 10^th 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

The Future in the Automotive Aftermarket Industry

For me, listening to keynote speaker Tony Aquila, CEO of Solera Holdings, Inc. at Auto Glass Week in Baltimore was most interesting. He led Solera’s purchase of LYNX Services, GTS and GLAXIS from owners Pittsburgh Glass Works LLC and PPG Industries, Inc. earlier this year. Tony’s accomplishments are considerable, especially considering that he grew up sweeping floors working in his uncle’s body shop and he has a 9^th grade education. You have to be incredibly impressed by the guy.

The “Strategic Focus” web page for the company states, “Solera is the world’s leading provider of software and services to the automobile insurance claims processing industry.” (Link to corporate history) Solera will certainly be changing the world of auto glass repair and replacement (AGRR) with innovative software solutions that will simplify the claims handling process surrounding glass repair and replacement. The organization has the potential to affect the way all consumers and influencers ultimately buy AGRR products and services dramatically. Depending upon the vision and direction Solera heads automotive aftermarket parts and service providers, including the auto glass repair and replacement industry (along with the collision repair industry and parts distribution industry) could be in for some big changes. It’s all about taking out market inefficiencies and reducing costs associated with those inefficiencies.

Just look at the AGRR industry. To ensure that service level expectations of the consumer is ultimately met, any software program would need to have access to the real-time inventory level of any supplier or distributor warehouses in the area, the inventory levels of any AGRR shop or technician in the vicinity vying for repairs or replacements, along with the schedules of all technicians available to properly repair or replace the part.

Imagine when an auto glass replacement is required, if it would be possible for the software program to instantly search for the part determining which supplier(s), distributor(s) or AGRR shop(s) has (have) the part in stock; perhaps ranked by cost for the part while finding the best auto glass replacement technician suited to properly install the part; when and where the consumer wants it installed. With that capability you then have to start asking some questions like:

Once the software program has all of the information required to start processing an auto glass replacement, who or what company is directly buying and paying for the part(s) required?

It could be:

1. The AGRR shop or technician facilitating the replacement or
2. Maybe the customer’s insurance company or
3. If it’s a cash job the consumer could pay.

Which of the three above pays for any part required is important to determine the all-in price to be paid for replacement parts, along with the price paid for required installation supplies and labor.

So which organization determines the pricing level for the various scenarios outlined above?

Who is buying and paying for the part and installation supplies required?

Who is paying for the technician to install the part?

Answers to these and many other questions will give you an idea as to where the industry could be heading. There will be changes coming and margins are probably going to change in the AGRR industry in the near future. And probably not for the better.

What is it you’re doing to be prepared for the future?

Just sayin’.

Courtesy of TomFishburne.com – Marketoonist.com©

Vehicle Miles Driven Improving?

You may have seen statistics recently relating to the increase in miles driven in July 2014 versus July 2013. Seemingly great news for any business in the retail automotive repair industry as miles driven is one of the key drivers that affect the industry and any increase is a positive indicator. As shown on the United States Department of Transportation Federal Highway Administration web site[1],

“Travel on all roads and streets changed by 1.5% (4.0 billion vehicle miles) for July 2014 as compared with July 2013.”

Region	Total Travel	Percentage Change
North-East	38.3	0.0
South-Atlantic	55.4	2.4
North-Central	61.1	1.3
South-Gulf	53.4	2.2
West	58.6	1.3

o    Estimated Vehicle-Miles of Travel by Region – July 2014 – (in Billions)

o    Change in Traffic as compared to same month last year.

Great news it would seem. The governmental web site further shows that,

“Cumulative Travel for 2014 changed by 0.6% (10.1 billion vehicle miles).

That sounds like continued improvement and more great news for the industry, but perhaps not…..

In the Thursday, September 18, 2014 edition of the USAToday™ a small graph was shown in the USA SNAPSHOTS® section on the front page with the header “USA’s driving stalled” (click link). According to Advisor Perspectives, the organization that provided the information shown on the graph, miles driven in the United States:

 

 “Adjusted for population growth, January to June miles driven this year are down 8.5% since 2007 peak”

 

Down 8.5%! That certainly isn’t great news for automotive retailers. You can read the article titled “Vehicle Miles Driven: A Structural Change in Our Driving Behavior“, that was written by Doug Short for Advisor Perspectives that was the source of the information on the declining number in its entirety by following this link (click here). The article takes an in-depth look at how miles driven are being affected by gasoline prices, changes in driving behavior, the effects of an aging population, unemployment trends and changes in the ways we interact with one another due to ever changing improvements in communication technologies.

 

Miles driven, along with weather and the economy are the three key drivers[2] for the automotive retail industry. How have these three key drivers been affecting your business? Based on Mr. Short’s perspective on miles driven, automotive retailers will have to rely on improvements in the economy and favorable weather to offset a real decrease in miles driven to help drive growth. You’re going to need to take greater advantage of your push and pull marketing strategy to attract customers.

If you have a desire to continue to grow your business (and who wouldn’t) into the future; it would seem advisable to work hard on ways to differentiate and separate yourself from your competitors. The decline in the miles driven has certainly had an effect on volumes to date and will unquestionably continue to influence the automotive retail industry going forward. With declining miles driven the opportunities for replacing or repairing damaged auto glass, for collision repairs, for tire replacements, oil changes, etc. will also obviously continue to decline. It’s critical for smaller retailers to find new ways to attract customers just as the large market leaders aggressively pursue those same customers with name brand awareness campaigns. Now is not the time for complacency.

 

Just sayin’.

 

Courtesy of TomFishburne.com

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[1] http://www.fhwa.dot.gov/policyinformation/travel_monitoring/14jultvt/

[2] Just Sayin’ Blog – Winds at Our Backs? – Part II

 

 

 

Just Sayin’ Blog – Rube Goldberg Machines and Business

I was recently sitting in an airport waiting for a flight and for 30 minutes I stood mesmerized watching an amazing sculpture designed by George Rhodes known as a ball machine. This wasn’t the first time I’ve seen one of these ball machine sculptures. The first one of Rhodes designs I saw was in the late 1980’s while walking through a terminal at Boston Logan Airport. I remember almost missing my flight watching and listening to the sculpture. This Rhodes sculpture at another airport attracted young and old alike. The sculpture really doesn’t serve any practical purpose, but is an intriguing piece of kinetic art. It’s hard to pull yourself away from watching all that is going on – a sculpture that often uses a combination of drums, cymbals, gongs and depending on your point of view makes either a virtual cacophony or euphony of sounds.

In a way these sculptures remind me of a Rube Goldberg machine. Wikipedia defines a Rube Goldberg machine as follows:

“A Rube Goldberg machine is a contraption, invention, device or apparatus that is deliberately over-engineered or overdone to perform a very simple task in a very complicated fashion, usually including a chain reaction. The expression is named after American cartoonist and inventor Rube Goldberg (1883–1970).”

An Example:

Rube Goldberg Guinness World Record by Purdue Society of Professional Engineers

________

While watching the steel balls that roll endlessly though the intricate Rhodes sculpture I started thinking about examples of how some businesses work effortlessly and continuously in a similar endless fashion. Businesses that provide the same exacting levels of customer service and delivery of a product (or products) over and over again that are a key to success. Some businesses have developed very simple processes to find success while other companies tend to overcomplicate processes in an attempt to achieve success.

While at the sculpture I was holding a Starbucks coffee and that company certainly comes to mind as a business that invariably delivers both simple and very complicated orders efficiently and effectively. This Seattle based company that got its start almost 40 years ago has today become the largest coffeehouse with over 23,000 locations in 64+ countries. I just order a Venti black coffee when standing in line at Starbucks. I can never tell if the barista is happy or somehow saddened by my straightforward order. A Huffington Post blog titled “The Most Obnoxious Starbucks Drink Orders“ details some of the complicated orders at Starbucks such as a ‘Venti Iced Skinny Hazelnut Macchiato, Sugar-Free Syrup, Extra Shot, Light Ice, No Whip’. Now that order would be a challenge to any barista fulfilling Starbucks “delicious, handcrafted beverages” mantra. It makes me smile when I hear someone standing in line ordering a similar concoction. It really doesn’t matter where in the United States or the world you place your order; Starbucks seems to always deliver the same level of consistent service regardless of the local. The company has obviously spent a great deal of time and effort in perfecting the delivery of consistent levels of service, but it all seems pretty simple to the casual observer ordering coffee. Everyone knows that you’re going to have to wait a bit when ordering one of the “delicious, handcrafted beverages” mentioned earlier versus my Venti black coffee order, but those who order the complicated drinks don’t mind. They know they are going to be rewarded with a delicious drink made to order by a barista that has perfected his or her craft. In plain sight the platform seems pretty simple. Do you think that behind the curtain there resides a Rube Goldberg machine? Doubtful.

Can you think of other businesses which deliver products consistently in a simple straightforward manner? Maybe FedEx, Amazon.com or even MacDonald’s could come to mind. Fortune Magazine lists 50 of the “World’s Most Admired Companies” and the top 5 are:

1. Apple
2. Amazon.com
3. Google
4. Berkshire Hathaway
5. Starbucks

I’m sure you’d agree that each of these companies is the polar opposite of a Rube Goldberg.

I’ve worked in a business or two that have taken great steps to simplify business processes through employee training and the use of technology in an effort to reduce back office costs that keep company investments focusing on people and growing the platform. And I’ve worked in a business or two that seems compelled to use a Rube Goldberg machine mentality. I think that those who insist on making simple processes overly complicated could find greater success by streamlining operating procedures, but as long as shareholders are pleased with the return on investment, changes in operating styles aren’t likely to happen. In a highly competitive industry companies that are overcomplicated ultimately could be disadvantaged versus others in the same industry that have found ways to reduce the Rube Goldberg machine mentality.

Do you know of businesses in your industry which operate more like a Rube Goldberg machine (deliberately over-engineered or overdone to perform a very simple task)? I’m sure that you do. Noted management doyen Peter Drucker is quoted as saying:

“Only three things happen naturally in organizations: friction, confusion and underperformance. Everything else requires leadership.”

It has to be frustrating for people who work for companies that use complicated procedures or policies in an industry where other companies have found a simpler way of delivering the same service. I’m sure you can come up with some examples in your industry.

So, what’s it like at the company you’re working? Does your company operate more like an Apple, Amazon.com, Google, Berkshire Hathaway and Starbucks; or does it operate more like a Rube Goldberg? Imagine the potential for those companies that operate using a Rube Goldberg machine mentality that pivot to find a better way to provide the services or products they offer. If you look at your company and think you see an area of the business that might resemble a Rube Goldberg machine, perhaps you should seek ways to make it a little less complicated. Isn’t that what leadership is all about?

Just sayin’.

Memorial Day – A Debt of Gratitude

Interment of Major General Jesse M. Allen

Memorial Day celebrates the men and women who gave their lives in service to the Armed Forces of the United States of America. The debt of gratitude that we owe each of those who have fallen and who have given the ultimate sacrifice is a debt that cannot be repaid. Since the start of the Revolutionary War in 1775 there have been over 1,354,664 Americans who have died in service to our country. Memorial Day gives us all the opportunity to honor those who have died while serving the country by remembrances.

In 2012 my uncle, Retired Air Force Major General Jesse M. Allen, died. He served in both the Army and Air Force. His military service began in 1942 when he enlisted after high school and was sent to Europe during World War II. He was buried at Arlington National Cemetery earlier this month and he had a rather storied combat career serving in World War II, the Korean War and in the Viet Nam War. During the Korean and Viet Nam Wars he flew over 237 combat missions. My uncle was known to say that “If you can dream it you can become it” as he entered the service as a private and rose to the rank of major general when he retired after 30 years of service.

This day of remembrance also gives us an opportunity to recognize and honor all who serve and have served the Armed Forces of the United States. We certainly owe a debt of gratitude to every American who chose to serve and Memorial Day is an appropriate time to do so. Although I did not serve, there have been a number of my family members who have honorably served over the years starting with Ethan Allen, the leader of the Green Mountain Boys in Vermont during the Revolutionary War. Both my father and brother served as combat pilots. I am very proud of their service.

I did not have the honor to serve, but if you have served in the Armed Forces or have family or friends who have served I’m sure that you are proud of your own service or the service that others have given to our country. Today is a great day to remember and give thanks for that service.

I have had the great honor to have worked with many people in my career who honorably served their country and I would like to thank them again for their service. The lessons that those who serve learn about loyalty, leadership, honor, integrity, and personal ethics and these are assets that they are able to build upon and utilize throughout their lives. One does not have to serve in the Armed Forces to have learned these important attributes, but those who have served have a great sense of what these values mean both on a personal and professional level.

We should all be thankful on Memorial Day for individuals who choose to serve their country by joining the military to help protect us so that we can live in a safe and secure country. I know that on this day I am very proud of my family members who have served and those that serve today. I want to thank them for their sacrifices in service to our great nation.

I hope that you take the time to give thanks for their service and sacrifice as well.

Just Sayin’…..    

Meaningful Quotes – Harbaugh, Hogan and Einstein

“Attack this day with an enthusiasm unknown to mankind.” – Jack Harbaugh

“Attack this day with an enthusiasm unknown to mankind”, is what the father of two current National Football League (NFL) head coaches said to them when he dropped them off for school each morning as they were growing up. That father is Jack Harbaugh and he is the proud father of Jim Harbaugh – head coach of the San Francisco 49ers and John Harbaugh – head coach of the Baltimore Ravens. Based on the careers of both Jim and John it is apparent that their father’s entreat to them each school day provided them with the drive to be successful.

In these difficult times that many in business face, Jack Harbaugh’s advice to his sons should resonate with everyone. Enthusiasm (or passion) for what it is you’ve chosen to do in life is critical, especially if you want to be successful. It may be difficult to maintain your enthusiasm when you look around at the competitive landscape; and if you’re going to survive and grow your company not only do you have to be enthusiastic, but everyone in your company needs to exhibit the same trait. Every organization, regardless of the size, needs a leader or leaders that can help guide it through the ups and downs that surely will take place over the life of a business and help instill the enthusiasm that Jack Harbaugh instilled in his sons. Without enthusiasm, you’re doomed.

 

“There are three ways to beat somebody. Out work ‘em. Out think ‘em. Then you intimidate them. Its part of the game.” Ben Hogan, professional golfer

In his era Ben Hogan was one of the great golfers and as a child and as an adult suffered adversity which he was able to overcome. At an early age he suffered the loss of his father due to suicide and to help his family earn money he took a job as a caddie. His golf career was put on hold for three years while he served during World War II and a few years after he returned to professional golf; he and his wife were involved in a near-fatal car accident in 1949 where he sustained multiple fractures to his pelvis, collar bone, ribs and an ankle. His doctors told him that he may never walk again and that his professional golfing career was over. Not only did he walk again, but he went on to win on the professional tour and win big. Ben won 63 professional golf tournaments during his career. I think he mastered the three ways to win.

At any level in team sports coaches try to put together a group of individuals that can work together cohesively toward the ultimate goal of winning. In business, leaders and managers work toward the same goal. In business putting together a diverse group of individuals who can accomplish the various goals that the company sets is what drives success. As Ben Hogan said, to be successful at what you do you need to work hard and come up with strategies that will enable you (and your team) to win. The third way Ben used to win was to intimidate his opponents through pressure. Pressure is a factor that exists in all sports.

What I like about Ben Hogan’s quote is that you can relate it to the business world. To me it embodies the idea that even if you’re business is smaller than those with whom you compete; you can still be successful by being good at your work and by “Being Smart”. Success can be seen by fellow competitors in the marketplace as a form of intimidation or more importantly respect. Regardless of the size of your business, most often when you “out work ‘em and out think ‘em” you’ll find success. Use all three ways to your advantage as Ben Hogan said, “Its part of the game.”

 

 

“Insanity: doing the same thing over and over again and expecting different results.” Albert Einstein

 

This quote, attributed to Albert Einstein, often is used to describe a business practice/strategy or two that a company never seems to change even though the business environment that the company operates is constantly changing or evolving. Over the years I’ve used the quote a number of times while trying to make a point in a business discussion with a supplier, T.P.A., employee and others. I’ve also used it while talking to one or more of my family members or friends. Perhaps you have too.

 

Often, when you’re just too close to something that you just can’t see the problem, you need someone close to you that you can trust who can tell you what they see that you’re doing in your business that’s not working. Something you’ve been doing “over and over again” while getting the same result? I’m going to guess that there are many. We tend to take a “if it ain’t broke don’t fix it” approach to things we’ve done over the years that have historically worked. Einstein’s quote is very simple and straightforward. Are there things in your business that you could perhaps take another look and do a little differently to improve the performance of your business? If you make a change you may get the same result, but if you’re not willing to try; how will you ever know?

 

Just Sayin’.