Why Those Big Carrots Are Often Rotten...

Recently (last year) I engaged in a discussion with a client about their desire to sell to a large retail chain. We had a spirited debate and calculated the impact a year's worth of sales might have on their business. After some chalkboard math and rampant skewed assumptions, we determined that the company would grow revenue 300% year-over-year and carry a net operating profit forward on that line of sales of roughly 4%. The volume, no question, was impressive. The effort, and the qualifications to make it happen, were dramatically more intense than what the client envisioned. Fast forward 1 year and the client has abandoned the large retail chain. Why? It was simply too much for them to handle as a small company. The NOP they targeted at 4% was actually 1.5% and the volume they hoped for was 40% of projected. Overall, their business did grow revenue, however, it cost them plenty elsewhere. What happened?

The first thing the client admitted to was that they were not adequately staffed to support the sales. Staff were scrambling to accommodate additional work but were buried in regulatory requirements that they were unfamiliar with and had to learn, as well as left their existing duties on simmer with an occasional stir. Staff were overwhelmed, and a rapid hiring process delivered unqualified folks that did not represent the culture or values the company had built itself on.

Client saw existing business suffering a loss in sales, and inventory positions were damaged greatly. As this remarkable opportunity began to unfold, internally they began to implode. Sales teams were not meeting goals elsewhere as they had no product to ship, and the large volume retailer spawned a backlash from existing clients as they now had to compete on an even greater level of price slashes and inventory position. Overall, the company was struggling to maintain both business segments simultaneously. This also created a division, and resentment, by the sales staff working on legacy clients vs. those on the mass market side.

Cash was swallowed up by the demand for inventory by the retailer. All the investment dollars the company had squirreled away quickly evaporated into low margin sales and drove the business into an anemic cash mode. Payroll was difficult to meet, and A/P began to drag out, creating issues with vendors and damaging their otherwise stellar reputation.

So all of this sounds really crappy, right? What seemed so great turned into a gold plated turd overnight, and the company licked it's wounds for a few months before recovering enough to be able to regain the trust of their existing market. Yes, it did not turn out the way they hoped, however, it did have a silver lining. Within a few months of launching the ill-fated campaign the company received interest from a competitor in selling their market share to them. The competitor feared that this new mass market strategy would kill their business, and rather than fight it, they opened conversations on merging their business into the other for very agreeable terms. It also attracted an investment partner. This was great, but not the best part of the story. Through the process and difficulties uprising from this endeavor, they recommitted themselves to the principles that made them great in the first place. They circled back to innovation in market vs. revenue, and as a result doubled their head count and grew sales 4x. It a took a planned departure from their original strategy to solidify their focus, but they were better for it in the end.

The moral of the story is that if you want to swim in the ocean with the big fish, you better have a safe escape plan. Be prepared, know when to cut bait, and make sure to remember where you came from.

The Maker Profile by Wallace MacGregor

"The Maker. Our newest fascination with a leather clad bearded hipster wallet making craftopian. After liberal arts college dropout Micah traveled through Costa Rica on a gluten free expedition, he spent a few weeks on his cousin Brenda's couch in PDX researching airport carpets and the affects on travelers of sub-saharan African heritage. Micah said it was important work and he was being commissioned by grant monies generated from a government research fund for sons of left-handed longshoreman. Micah had a drive to craft the best wallet known to man. He sought sustainable materials and holistic sewing contractors and vegan-only designers and publicly decreed it so. He built tri-folds and bi-folds and upside down folds and a line for women, too. He branded it perfectly flawed and set out to PR the world to its knees and succeeded. Micah had built an elaborate structure of subs and contractors and held a few well-paid in quinoa and kale chip employees that were fiercely loyal and would fight Donald Trump's hair at the drop of a hat. Micah revered the sewing needle and would spew forth repugnant core-bonded thread knowledge at his later-night tapas parties with craft cocktails served in mason jars and stirred with a hatchet recently stained with sap from a doug fir. His friends were engrossed in Micah's splendor and the local magazines lust for more Micah, even so far as to censor Bernie Sanders' latest speech to a paragraph of obscurity. The beat lived on for 3 years of snowballing leather dust and a pop-up shop fell from the sky to turn into a retail phenomenon on the Alberta corridor where the line-ups for frozen dairy began to look like a crowd at a passé sporting event. All this next to Micah where his Honduran grown cotton fair trade sans child labor crew neck ($69) hung vibrantly from vintage rusted pipes repurposed from the school where his mom's cousin's uncle Jim went to school. Every turn told a story of triumph and the message became more than the product and soon a new Micah appeared with fairer trade cotton from a land where Nat Geo might have written about and it became too hip not to be bearded and so Micah sold out to his employees in what was known as the right thing to do always."

-Wallace MacGregor, 2015

The Trouble With Dogs

Dogs are so perfect in so many ways. I love them. I never did as a child. I do now, though. I love my dog and I know he loves me. He's the first to greet me and the last to leave my side. He's special and caring and loving and awesome. The trouble with him is that he is sick. He has cancer. Not anything curable, either. Best I can do is wait it out and love that little guy with all my heart. The trouble with dogs is that we grow so attached and it is hard to let go. The trouble with dogs is that they are family. The trouble with dogs is that they just don't stick around long enough. Love you Chance. Hope that rainbow bridge doesn't come too soon...

A Return to Thought

Over 2 months since I posted anything. Whoops! Got busy. School is about to begin for the kids and some of my friends are sending theirs away to college. So great to see all the new beginnings and chapters closed and others opened. If there is one thing I might do again it would be to explore a bit more when I was younger. See more of the world. I have been fortunate to see a small section of foreign lands, however small, yet I have learned so much from such a small sampling overall. Each new surrounding is a fantastic opportunity for growth. My kids haven't seen a lot yet. I am worried sometimes they will grow up myopic by default and not learn to see how different each culture, each region, and each society are. There are dark places everywhere, and from seeing those we learn to appreciate the luxuries we engage in here in the US. How easy it is to start a business here - Not easy to succeed but easy to at least originate and start. Then again, if I were in inner Detroit 5 years ago, I might suggest otherwise. We do not always appreciate these things here in the US and take them for granted. I believe it is in our nature to become complacent, comfortable, take the easy path. Go somewhere different that is stark in contrast and perhaps a lesson, one that will stay with you, is inherent in the visit. I will take my kids to that place where they can learn that lesson. It is what I need to do, at least for my sake. This hot, dry, arid summer is turning our skies into smoke filled hazes that filter the view in way that looks like aging science class movies I remember as a kid. The lack of water in the west has forced me to think different again. Seems the comfort is lessening and the urgency great. I might suggest we all reexamine our surroundings and assess what is important. Never know when uncertainty might strike. Same goes for business. What's your disaster plan? Do you have one? Do you need one? Do you care about one?

Stress Is My Normal

So for this post, it goes without saying, stress has become a normal for too many of us. We are worried about money, careers, our kids, their kids, our parents, our pets, our clients, our bosses, our employees, and any host of other people or things that seem to weave within the fabric of our lives. Stress is our new normal. We wear it like a badge of honor. We embrace it and protect it and promote it until it is a dependent child with a short leash. We become addicted to it, and it becomes us. Three things I find to deflect the stressful stress: 1. Music. Either I play it on my guitar or I listen to it. It is an almost instant release. A must to defeat the disease of stress. 2. Exercise. I have always been relieved of this demon with a good run, long walk, or other form of exercise. Simple, effective, and always a rewarding endeavor. 3. Fishing. Yes, I know, this sounds more like evading the issue, but there is always something therapeutic in the art of fishing for me. Your activity may be knitting, drawing, or something else, but if it is a passion it will prevail and return your emotional self to balance. We can all use to eliminate some stress. Find your buttons and push them, and get to living healthier, stress-less lives.

Makers & Artisans Explode, So How About We Teach Our Youth?

It's all the rage. DIY in-house tinkering and crafting and building and making. We are, at our most primitive, innovators as humans. We find ways to improve our quality of life as often as we can or need to our of necessity. So it should come as no surprise we have identified this skill set as a proposed profession as well. While, I admit, the two are not necessarily an apples-to-apples match, they are both born out of our curiosity, will, and desire to live better. The 'Maker' movement, the 'Artisan' movement, etc. are the new terms we use for an always developing group of individuals, etc. that are spawning nationwide, and worldwide for that matter, dedicated to learning, practicing, and perfecting a craft. Every day as I walk downtown, read the paper (yes, I am old school,) or see a tweet regarding a new Maker or Artisan or Crafty-person I am reminded that we are, at the essence of our being, people that love to explore new horizons. I sincerely wish our educational system were supportive of this, rather than the K-12 institutional complex of standardized testing and trail leading to nausea-inducing Scantrons filled with #2 pencil rectangular shapes. I believe we should develop each Maker from childhood, giving each of us an introduction to our own hands-on abilities and creative instincts. This does not mean we create a society of small batch artisan crafty heads - it means we allow some instinctual capabilities to resonate internally, and somewhere along the way each child develops their own identity with what they are comfortable with, and allow them to excel if that is a path they feel good about. Why do we not teach arts and crafts? Why do we focus on STEM? Ingenuity and innovation are not limited to scientific applications, rather, I would argue they are uniquely attached to each other in advancing one another, both in the equipment and the mindset. Perhaps, this newly named movement will refocus our educational efforts and realize the value in continuing arts, trades, and skilled craftsman that may or may not need an educational path through traditional 4 year institutions. Where are the apprenticeship programs that are available to all? They rarely exist today, and that is a shame. Time to shift the mentality in this country and get away from such narrowly focused attention to mandated testing criteria.

Making The Leap

Every month I am confronted by the reluctant entrepreneur regarding taking that next leap into their own business. So often the risks build an obstacle in front of them they feel too large to contend with. If you are going to be an entrepreneur, you better be comfortable with risk. The only folks that don't think some risk is agreeable are those in static coma, or bankers. You will at some point be forced to stretch your neck across that line, and hope like heck your head does not roll. But if it does roll, and most likely it will at some time, get your best needle and thread out and sew it back on. You will be wiser and more mature for your next venture outside. Take the leap of faith. You will never know if it was a good idea unless you try. I suggest weighing your own constitution first, and if it allows, go for it. If you aren't feeling it, wait. It may come later in life, or never at all, but at least you followed your instinct and made decisions you can live with. If you go to bed wondering every night 'what could have been,' you may have to force yourself to jump from the ledge. It's OK, there are many of us out there that are waiting to catch you and help you back up.