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Tuesday, November 29, 2016

The Importance of Encouragement

Managers and executives often talk about the benefits of encouragement. In interviews, they often say how encouragement is an important part of their management mantra and many trot out the old saw about “catch someone doing something right.” In the real world, I must say that I have seen far too little of it. A few people fresh from a seminar or sensitivity training session would start praising staffers for insignificant things but that would wear off soon and it was back to business as usual.

Yet managers who do encourage staffers generally do get good results. Sometimes, even great ones.

I am going to tell a story from my childhood that up to now I have never revealed to anyone. It makes my point better than anything I have ever experienced. Here goes:

In the summer of 1957, I celebrated my seventh birthday. Relatives dropped off a few dollars, my aunt in Houston sent me three dollars, and I received a couple of gifts from my parents. It was a really nice day. The next morning, I asked my father if he would drive me to the bank in the village so I could deposit my birthday cash haul. He smiled and a few minutes later we were approaching a teller’s window at the bank. I was so tiny that she could not see me. My dad boosted me up and I handed her my passbook and the $9 I wanted to deposit. She took the deposit but did not seem happy. A minute later she returned with my bankbook having the new entry. She said to both of us, “A small deposit like that. It does not seem worth the effort.” My father got very still. He gave her a withering glance that was far more frightening than any he ever gave me. After a few seconds, he said evenly, “The little boy has good instincts. You should encourage him to bank here.” Visibly flustered, the mean old biddy said, “Of course. Is there anything else I can do for you, Mr. Cole?” Fishing a dollar bill out of his pocket, my father said, “Yes, do you have any silver dollars lying around?” A minute later she returned and handed him a 1924 Peace dollar and he gave her a one dollar bill for it (sic).

In the car, my dad said, “You seem to understand saving better than other seven year olds.” He handed me the silver dollar. “Donny, keep this.” My eyes must have gotten huge. I remember asking him if it were real money. He said yes and told me how as a junior in college he had a summer job working a cement mixer at a construction site. The first week he worked some overtime in the hot Iowa sun and received a pay envelope on Saturday afternoon. It contained two $10 gold pieces, a $5 gold piece and three Peace dollars which he said everyone called cartwheels. A few minutes later I was surely the only seven year old in Rhode Island who knew the difference between fiat money and specie (As an aside, the following spring, my father won the NCAA wrestling championship in his weight class. He had paid his room, board and tuition with his earnings from the cement mixer job. It boggles my mind to think what a soon to be NCAA champion would be given on a campus today!).

When we arrived at home, I did not show my siblings or my Mom my new cartwheel. I made a beeline to the toy safe that my parents had given me for my birthday. It did not look like much but it was made of steel and had a real lock and only I knew the combination (still do). I took the passbook and the Peace dollar and placed them in the safe next to my other prized possessions--my Mickey Mantle, Ted Williams, and Yogi Berra baseball cards and my Bob Cousy and Bill Russell basketball cards.

A few years ago I sold the cards at an auction for a staggering profit. The silver dollar? I still have it. Every 12-18 months, when visiting a safe deposit box, I hold it in my hand for a few moments. More than once, I am not ashamed to admit, my eyes have filled up with tears when I stare at it. I am convinced that my father’s standing up for me to the dismissive teller and his encouraging me to save, changed my life. He set me on a path toward being a private investor that I never veered from for an instant.

So my friends, there has to be someone you know, work with or for, or love who needs some encouragement. Give it freely. It costs you nothing and it just may change someone’s life or career.

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

Sunday, November 20, 2016

Can Doing Nothing Be A Strategy?

Last week, a bright young person asked me the precise question of today’s post. In a slightly indirect way, this leads us in to a brief discussion of the concepts of cost benefit analysis and opportunity cost.

Many times in life and in business we face a tricky situation.  We then generally draw up  a list of factors and calculate what something costs and how it might benefit us. It might be a new job, evaluating a media property, buying a house or a business or moving to a new city. Interestingly, few people seem to attempt to calculate the cost of NOT making the choice. In essence, what happens if we go on as we are?

In answer to the young person’s question, I had a few examples to draw on from my career. Late in 2001, I was asked to provide an analysis of buying some kind of special package or media effort in Salt Lake City for a multi-unit retail client during the 2002 Winter Olympic Games. A team member and I hopped out to Salt Lake City and literally gave them a “baker’s dozen” of options of customized media efforts for the Games. People all listened politely but I could see some unease on their faces with the pricing that each package had. Many had an enormous premium over normal rates for similar efforts in a non-hyped environment. When I came to the recommendation page, someone whispered, “Here it comes.”

The recommendation was DO NOTHING. Our thesis was that with the metro area teeming with tourists, business would pick up on its own and they should pocket the money for later in the year when they might need it to fight a competitive fire. My clients were shocked and thrilled. Sales jumped low double digits during the Games and they were even more delighted and my team had great credibility going forward.

A few years earlier, I was having lunch with a friend in Dallas. He told me about a hot company that he had purchased shares in and strongly advised me to back up a truck and buy as many shares as he had. I went back and researched the company and did not quite understand what they were doing. So, I stuck with my cash and waited for another opportunity. The company was Enron!  In essence, I gained by doing nothing rather than buying shares in the soon to be bankrupt company. I profited by not doing what my friend suggested.

At other times in my life, I did not buy Microsoft, Apple, Facebook at their IPO’s so I had an “opportunity loss” by not getting in to them at the earliest possible moment. Hindsight, of course, is always 20/20.

To conclude, the point to take away is that sometimes doing nothing is the right thing. I looked at thousands of media opportunities over the years and, in reflection, only recommended a small fraction of them and bought even fewer as I could not pull the trigger without client approval.

My young friend’s question was slightly off kilter. Doing nothing is not literally a strategy but it is more often than you might think a wise decision.

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

Monday, November 14, 2016

Tiresome Terms

Over the years, certain turns of phrase have crept in to the American business lexicon. Some are wildly overused; others can be code for something else. We have all heard them and perhaps we still use them even though they are annoying. Here are my pet peeves:

“Think Outside the Box”--why can’t we simply say, “think creatively” or “think differently”

“Give 110%”--total nonsense. You cannot never give more than 100%. Also, most psychologists and others involved in study of humans posit that most of us only use 25-30% of our brainpower.

“Hit the Ground Running”--a worn out cliche if there every was one. Why not say, “get started immediately.”

Synergy--this one perhaps irks me the most and will be the focal point of this brief post.

Back in the 1970’s, media people and advertising folks often talked about a synergistic effect in media plans. The chosen media types in a plan would produce a result where the sum of the individual components would be less than the actual effects on consumer awareness. Certain media types were said to work unusually well together and by receiving messages from different media and, in different ways, the total effect of the campaign was magnified in the eyes and ears of the consumer.

Okay, I can accept synergy in a media mix analysis. Over the last 15 years or so, synergy has been used in a different context--generally it surfaces with mergers or corporate buyouts. These days when I hear the word synergy it means that two companies are getting together. Should they have similar products, services, warehouse or delivery operations, it usually is code for many people losing their jobs.

I have a long standing acquaintance who has been “synergized” three times. He was at an ad agency for many years and was part of the team that departed after the buyout of his shop by a much larger firm. At the time, he told me he was going for a media job as he wanted something more stable. Since then, he has been let go twice due to one corporate buyout and the second a merger. He is getting bitter and was terrified when he heard of the AT&T/Time Warner proposed marriage. Well in to his fifties, he said the following-- “If I get whacked again, I will be virtually unemployable. No one is going to take a chance on me at my age and salary level. My CEO was asked at a staff meeting about the AT&T/Time Warner deal and he said that there were interesting synergies in the merger of the two giants. My young colleagues all nodded. I had to be stone faced.”

The truth is that most mergers end up costing money despite the much discussed “synergies” that will emerge. In the real world, financial and equity analysts usually evaluate a deal by looking at how big a reduction in force will occur and and how much can be saved as a result. Generally speaking, the higher the number, the better. Have you ever noticed when a company does a layoff of 5000-10,000 employees? Invariably, the stock price jumps the next day. That is what synergy is and does. In a free market society, it is inevitable. The victims tend to be those who believed the boss(es) when she spoke about the new, stronger company. Why is it impossible for leaders to speak in plain, American English?

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