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Friday, April 29, 2016

The Grit Factor in Business

Over the last few years, there has been much made of “grit” as being an important factor in an individual’s success. Psychologist Angela Duckworth of the University of Pennsylvania defines psychological grit as “perseverance and passion for long term goals.”

For years, we have talked about athletes or soldiers with grit. Now, it is taking a more prominent place in discussion of the business world. Success books have often touted IQ, natural talent and social intelligence as keys to success. Yet, people with grit appear to be different. They somehow find a way to create their own future regardless of obstacles.

The world is full of talented people. Yet, few really succeed. Many have great promise and an almost instinctive skill at certain fields. They are not lazy but do not throw themselves headlong in to the project. To me, they just do not love it enough and are not willing to devote the time and energy to break through the pack and stand out.

Grit is what sets many successful people apart in the business world. The best definition that I have seen from several sources is: “Grit is the tendency to sustain interest in an effort toward very long-term goals. It equips individuals to pursue especially challenging aims over years and even decades.”

People with grit seem to be content to pursue something against all odds. They seem to love what they are doing, do not complain and are flexible when setbacks occur. Senior managers often tell me that their favorite employees are those with grit. You cannot spot that in interviews--it shows itself on the job and may take a while to make itself evident. Some years back, I was involved in a new business pitch that involved three offices of a company. We worked like hell to put together a great pitch and it was genuinely good. The business went elsewhere. One of my colleagues, whom many would consider a tough guy, was depressed for weeks. Another associate, told me after a beer, “Okay, we did not get it. Next month, we have prospect X.” Several days later, we all met in tough guy’s office. He was still ranting about the lost business. As we left, my gritty partner said, “Can you believe how Mr. Big is still sucking his thumb over the loss. Let’s move on.” And, we did!

People with grit are fierce competitors. My best example from sports is the legendary golfer, Ben Hogan. He came from a tough background in Texas. Allegedly, his father committed suicide in front of eight year old Ben. Many said that made him quiet and introspective. A small man, he struggled to make it on the PGA Tour. He had an incurable hook and had to crawl back in shame to Fort Worth three times flat-broke after unsuccessful attempts to make a living as a pro golfer. Finally, after more practice than anyone in his era, he straightened out his drives and began to win. Then, a tragic car accident almost cost him his life. Doctors initially doubted that he would walk again. That did not stop Ben. He came back to win a total of nine PGA majors and, in 1953, he won the Masters, British Open and the US Open. Walking was painful but he never gave up. When asked what his secret was, he said simply, “It is in the dirt.” In other words, practice. Late in his life I saw a TV interview where he said he just loved to practice.

Some have grit and quietly have great success. I met a man over 30 years ago who asked me about my philosophy of investing. We talked over a long lunch. He told me that he purchased utilities--electric, gas, water and telephone. His rules were only buy those that raise their dividends each year and only add when their price has dropped 20% or more. He told me years later that he stopped talking to people about it as they told him he was too conservative. Well, he missed the dot.com crash and even in the 2008-2009 debacle, his dividend income continued to rise. Today, he sits on a mini-empire of utilities and sleeps soundly. You will never see his name in the press as he does not own more than 5% of any publicly traded company. He lives in modest elegance but is low key about everything he does. He stubbornly stayed the course for three decades and besides his wife, the IRS, and a few friends such as I, no one knows of his spectacular success.

The day we first had lunch, he asked me what my favorite book was. I was mildly embarrassed and told him that it was “The Little Engine that Could.” He laughed and said “I like that one, too, but my favorite is The Tortoise and the Hare.”

If you meet someone or hire something who has authentic grit, follow them. You are very likely to benefit.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Friday, April 8, 2016

Agency Overtime Woes?

A week ago, April 1st, THE WALL STREET JOURNAL published an article discussing the new policy set to be released by the Labor Department that would require businesses to pay overtime to any workers time over 40 hours/week if their salaries were less than $50,440 per year. It was hoped that the change would go in to effect in July.

The current limit is $23,660 per year. According to the American Association of Advertising Agencies some 25% of ad agency employees make less than $50,400 per year. That got my attention. So, I sent out an e-mail on the 2nd to a number of small and mid-sized agency principals asking for their reaction to the proposed change. Several of them forwarded both the Journal article and my question to friends or associates who also ran shops.

The results were striking and, with their permission under the cloak of anonymity, here are some selected comments:

1) “It is bad enough that Bernie Sanders is running around the US calling for an immediate $15 per hour wage for all employees. He does not realize that some small businesses simply cannot do it. If McDonald’s does it, they would have to tack on much higher prices. At least others who favor a minimum wage hike want to do it gradually. I am all for helping lower paid employees. To go from pay overtime to those earning less than $23,660 up to those under $50,400 in one step is something that we cannot adjust to overnight. Phase it in over several years and we can live with it.”

2) “Our CFO said ignore it until someone calls us on it. That is crazy. We cannot ignore a federal dictate. I am sorting through how we could manage it. It is very tricky.”

3) “Don, you and I have talked for years about how agencies pay starvation wages at first, work people like hell, and then reward them after a few years. We all know that roughly one third of newcomers quit and go in to another industry, one third are not up to it and we ask/tell them to leave, and one third love it and make a career of it. Why do I have to pay extra to people who will not stay with us?

4) “We have a young creative who seems to have that spark that we love to see in spades. His problem is that he is B.S. artist par excellence. He is new to town (a mid-sized one), knows no one so his whole life revolves around the shop. Each day he bounces around and talks to almost everyone in the agency. Around 3-4 pm, he settles down and gets to work. Often he stays to 8-9 pm. Our creative chief finds him annoying but he does appear to have real talent. I am paying him $36,000 now. If this guideline goes in to effect, I do not want to jump him to $50,000 immediately. Maybe take him up to $40,000. Yet he will claim that he is putting in 15 or more overtime hours per week. What he needs is a girlfriend. :)

5) “A young lady on our team is very accurate in all she does. The issue is that she works at a snail’s pace. She never leaves at 5:30. Most nights she is there an extra two hours. When our management comes in on weekends to work on new business, she is often there for a few more hours. It is not that she lacks intelligence. She just does EVERYTHING very deliberately. Candidly, she is not worth $50,000+ at this time. Were we to pay her overtime, she might make $60,000. I am not sure how to deal with this”.

Others used pretty strong language to say that people would work slowly or play on their computers a bit to earn the overtime. One mentioned that “clubhouse lawyers” (every firm has at least one) will tell people to pad their hours to earn more.

What do you think? Working at an ad agency IS different from most types of businesses. I recall witnessing creatives who appeared to look out the window all day deliver breakthrough executions time after time. It is not the same thing as working behind a fast food counter or any type of retail or industrial operation.

What do you think?

If you would like to respond directly, you may post a message on the blog or e-mail me at doncolemedia@gmail.com