It has been a long time since I have updated this blog. Much as changed, life is simpler here in Montana and much of what interested me to write about along the line previously discussed escapes me these days. While I will not delete this blog, I probably will not update it. If you have enjoyed the style of writing and or are interested in what is going on in my families lives today you may enjoy visiting friends and families site at Myheritage.com the link to the "OurFamilies" site is included here http://ourfamilies.myheritage.com/FP/board.php and you are welcome to visit as a guest. If you like what you see and would like to become a member, just email me at drgossomer@yahoo.com , I'll be happy to send you an invite so you can contribute on the message boards etc.
Thanks to all of you who have supported us though our life transition these past few years!
Dave
My Personal Corporate Icons
As I have now exited the corporate world with the intention of leading a more relaxed , family friendly life, I felt it would be a missed opportunity not to list a few of those who in my professional career had a great influence on my professional development and achievement. Unfortunately as most of us do, I have not stayed current with many of these consummate professionals but in this small way wanted to memorialize the tremendous effect they had on my professional career. Here they are in no particular order but each to me stand out as true professionals that I owe a debt of gratitude and respect.
Wayne Huzinga
Luwigi Salveneski
Steven Zugg
Guy Bob Bushman
George Dean Johnson
Bob Brandon
Craig Wall
Dean Buntrok
Art Bear (My Mentor)
Rich Ungero
Danny Spearman
Walt Pettis
Mike Romer
Mark Gillman
Ned Dickey
Nigel Travis
Mayor Wellington Web
While I have made friends and associates to numerous to mention hereover the years, I would like to recognize and thank them for their contributions and friendship over the years as well. You know who you are, remember, you are all welcome to visit if at any time you are ever in the great outdoors of Montana.
Stock Market Madness
Since "retirement" I have taken control of my 401K plan and my stock portfolio. I have new found respect for good money managers on the market. While I have found it is not difficult to handle the mechanics of trading, there are so many options and variables in play with each that making sense of even individual companies is at times a chore. When combining the market dynamics with those of the companies that trade on them, a truly mad world unfolds.
Back in February, they market was extrodinarily good. I made a few balanced investments in some ETFs (exchange traded funds) and was up 13% in a mater of days. Unfortunately, I rode it through March when the market went down 35% and I lost much (all) of that gain. The market since has been faily flat but I began approaching it with a different strategy. I own a few long term hold stocks in Large Cap companies that pay good dividends but for the most part I am now trading opportunistic stocks based on expected stock splits. To date every stock I have purchased that has indeed announced and subsequently split has paid off. I have even held a couple of them after the split because the run up is still continuing. I have made back all my lost profit even in this flat market and am now up about 18% YTD.
There appear to be several key market triggers beyond those factors inside the companies performance. These are things like federal monetary reports, interest rat announcements, durable goods reports and general market influence of super large company events. I have found it best to take profit in advance of major announcements and sit out periods of quarterly earning statements if there is any indication of weakness. Also as a general rule I have learned to buy most aggressively in extended hours trading early in the week and sell weak positions and take profit in mid session on Thursday as basic rules of the game.
There are many analogies that I could draw between market flucuations and the general madness inside corporate entities but for now I am happy to be on the periphery and experience the commonality as a opportunistic investor. I kind of like the idea of actively participating from afar. The sort term risks may be greater but I can assess and act on them from my deck overlooking the beauty of Montana.
Common Sense Business
I have recently found myself in several discussions both professionally and personally that eventually turned to what I call business basics or common sense business. The discussions often begin about either a experience someone had with a business, or when someone interested in starting or acquiring a business.
Business is about providing a product or service to a customer at a price that provides profit to the seller and a value to the consumer. The unique customer/provider relationship is the key component of any business. While product quality, price competitiveness, and other presentation issues are business productivity enhancers, the people aspect of doing business must be the prime consideration of any growing concern.
It amazes me how often this basic concept is forgotten. Nearly all successful entrepreneurs understand and exercise aggressively consumer relationship building principals when starting up a new venture. No business has ever survived with out a customer base. Since the customer is the foundation and life of any business why is it such a hard concept to propagate among going concerns.
I understand that there are people out there that just do not have the ability to listen, understand, assess, converse, and fulfill the need of a customer. But if a business is not able to successfully propagate the necessity of this process to its people it should not be in business. The propagation of successful consumer relations should not just focus on the CSR (customer service representative) it must be, in some form, a foundational principal of any organization.
I am concluding a business relationship with an individual today base solely on her inability to execute the process. She is a nice person, she intends well, is by no means offensive in anyway but in terms of providing the basic level of service required in her industry, she fails. Why, she doesn't listen well, she doesn't assess what she has herd, she don't communicate consistently and doesn't fulfill the need of her customer. In short she fails at customer service. It wasn't about price, her fees, or the product. It is about service and the customer relationship.
I get asked regularly about how to start or pick a business to develop. I am always hesitant to give advice as building a business, in my opinion, should be a personal interest item. I do, however, give several evaluation points for consideration. Here are a couple:
Decide where you want to be. This means both geographically and in what type of environment are you happiest. Before ever considering a business commitment that will tie one to a location, be sure you want to be where you intend to do business. Secondly, do some self evaluation and figure out the type of environment that you are most comfortable in. It will not necessarily determine the type business to develop, but it will help in planning your role in conducting the business.
Understand the needs of the community in relation to your potential business idea. Community is a fuzzy concept in business today. It refers to the sphere of consumers that can be reached to conduct business with successfully. To often a good business idea is implemented in a way that it is either inconvenient or fails to meet the needs of the community.
Do not fall into the trap of thinking you are the average consumer. Hopefully you are a consumer of the product you plan to promote, but many a failed business focused on a narrow perspective of consumer needs based on what the proprietor needed as a consumer. We are all unique. There are general segmentations among consumers by industry and product but to assume you are the average is a recipe for failure. By the vary nature of the idea of being a business operator, you are not an average consumer.
Understand your competitor and their product supply chain. You must be able to at least meet if not improve on the product offering from a supply, price, and quality perspective.
Develop the foundational principals that will guide your business development. Before a business plan is ever developed, develop foundational principals. These are basic tenants about how you will go about conducting business see my prior post for broader discussion.
Addressing the consumer relationship as a foundational principle is essential. Regardless of the type of foundational principle, it should relate to the basis on which the business is to be formed. It should be in writing and should only be changeable via vote of the controlling committee. Foundational principles are guiding tenants and their propagating should be a part of any business plan.
It is not my intent to lay out a business planning process, rather to recognize that the basics of good business are not complicated. They are common sense. One of my favorite business success speeches is both a book and tape from a now old but effective motivational speaker Zig Ziegler. It is called acres of Diamonds. Many years ago he approached these same basic ideas as a business motivational platform. They are still as true of principals today as they were then. Why does there then seem, at times, to be such a lack of common sense in business today?
Big Money vs. Big Business
Big money and big business generally go hand in hand but things get interesting when the two have different ideas. Such is the case with my former company.
It is just over six months since we parted ways. Since that time I have all but recrafted the direction of my life. Mentally and physically my family and I have progressed to a much better plain. We have clear direction and a path of progression toward our goals.
During the same six months, the remaining executives at the company have continued on a path that, if it demonstrates leadership and direction, gives credence to the upheaval in control of the organization that occurred this week.
The annual shareholders meeting was held as usual but did not go off as usual. The chairman and two of his supporters on the board of directors were ousted by shareholders in favor of instating a billionaire investor and two of his supporters. While in and of itself this overturning of the control of a company is something that rarely occurs without significant ground work, this vote, as stated by the chairman before the vote occurred, was a referendum on his strategy and direction for the company. If so, then the shareholders clearly spoke.
The billionare investor had been critical of the chairman openly for only the past couple of months but in making his remarks, stated what apparently many have been feeling for some time. Shareholders, not even knowing for sure the direction or plans the billionaire, who is not a retailer, would shape for the company, clearly voted for a change, apparently any change.
An upheaval of the sort that occurred this week points to deep set frustration over the direction, leadership and public handling of an organization. It came just two weeks after another round of culling at the company in which another 300 people lost their careers. It will be interesting to see the outcome of the recrafting of the board and if indeed the new board listens to its shareholders. I have an idea of what will happen but as it is not an optimistic idea I will keep it to myself. Rather, I would spend a few minutes musing over what I think should happen.
To set a direction for any business, some foundational principals need to be understood and cherished as cardinal rules. Unfortunately these were cast off long ago in this company's case. I am not sure weather it was with intention or it occurred because during a period of time the senior management turned over multiple times at a pace that left a void in the transfer of knowledge about the foundational principals that the organization was based on. I like to think it was the latter. Regardless, it is not high science. Seasoned business professionals should have the fortitude and presence to both set aside personal agendas and invest time in gaining knowledge to be able to capitalize on the positive foundational principals that built a fledgling company into an empire. As a matter of fiduciary responsibility that should be a regulation. Most of the memory of this company was lost prior to the current administrations arrival though, so without some effort to retrieve the knowledge that had already left the building the foundational principles were already lost.
So what were the foundational principals? They are not secret. They are basic principals of retail consumerism. I cannot deal thoroughly with each one here today but as a categorical list, here is a start.
People - They are what it is all about, both as consumers and those who serve them.
Product - This is what the people want. Have the right product, in abundance, at the right price.
Propagation - The process of establishing the foundational principals of quality and business specific knowledge with those responsible for making decisions throughout the company.
Presentation - This refers to the organization of the processes and assets of the company. It includes but is not limited to store location positioning, the complexity of merchandising, pricing, and even processes of distribution. None should occur independently as their action impacts the outcome of another.
Within these four categories, which are also in priority order, are the basis for foundational principals that are adapted by consumer based businesses throughout the world. Unfortunately in many cases, as in the case of my former company, the larger a business becomes, if it does not have foundational principals to guide it, the priority order begins to shift. Focus and authority is often narrowed and more emphasis is placed on Presentation initiatives while the more important categories including People suffer.
At my former company, basic tenants were at one time well defined and followed successfully. In their basic definition there was the allowance for a fluid changing business model that allowed the company to evolve and adapt to the changing marketplace. Had the basic foundational tenants been adhered to, the company would look very different today. It certainly would have direction and a clearly established path of progression. Unfortunately, as shareholders have noticed, it does not.
I am not sure the company, in its current state, is repairable at this point. The dismantling of the organization has been in progress for a while. Not intentionally, rather it has been in the wayward pride and agendas of individuals who's confidence in themselves and those select supporters of their agenda is misplaced. None of them are bad people. In fact most I have been proud in the past to call friends and acquaintances. But position does not give one knowledge that should overrule the reality of People. When this occurs, the resulting personal pet projects that make a name for oneself are generally not in the best interest of the broader organization.
What I would like to see, is a setting aside of personal agendas and an open honest discussion among the new board, together with the executive committee, that would lay out a reasonable plan to establish some foundational tenants that would guide the company to a new destination what ever that destination is to be. Tenants, based on good consumerism should guide the agenda of the board and executive committee to a common goal. That would be something that has not occurred in my former company in many years.
Those who cannot subscribe to the tenants among the board and senior management should leave. Once the tenants are again established they should be propagated to the People throughout the company. Those who, once informed can make a decision to support and own the guiding principles will progress and those who do not support the tenant will find an organization they are better suited for but at least they can make an informed decision.
Foundational tenants are not goals, mission statements, or milestone measurements that so many executives like to focus on. They are basic beliefs that guide the way an organization behaves and are able to be crafted into supporting structures that drive business processes. For example:
People nearest the consumer, when given appropriate business principles to operate by, are most qualified to make beneficial business process decisions.
This singular tenant, when honored in the company, mandated a drastically different managerial style. It also mandated a much different level of involvement, training of business mechanics, and Propagation than exist in the company at large today. This singular tenant touches every aspect of business right down to the management of available inventory at the local level. It allows for a dynamic informed sales and management force that has the authority to succeed. It mandates that a company spend its resources on propagation and education of the frontline rather than centralizing authority and control which results in the elevation of Presentation initiatives including narrowed personal agendas that are destine for a short term splash but long term failure due to the lack of involvement, understanding and buy-in at the sales and consumer level.
This was just one of several tenants that created a worldwide icon. No such tenants exist today in the company and the result is evident. Billions of dollars have be spent to push Presentation initiatives without the foundational processes in place to ensure their proper development and execution. As a result initiatives, although good ideas, are ineffective in moving the direction of the company.
Each of us as individuals have have foundational tenants weather we formalize them or not. We use them to evaluate situations at significant decision points. The more aware and reliant on those foundational tenants, the clearer the road map for our lives become. It is when we allow distractions and activities inconsistent with our foundational tenants to lead our direction that we become lost, misguided and ineffective.
I allowed myself to be increasingly guided by forces outside my foundational tenants the last years at my former company. Fortunately for my family and myself, I have been able to recover. I am on track once again.
My former company is a much more complicated situation. I had only one ego to contend with. Will the infusion of the billionaire investor wrought a positive change? Time will tell. Will it continue to be big money vs. big business or will some foundational guiding principle emerge? I would love to be a fly on the wall of the next few board meetings.
On second thought, I am more than happy with my current path. Onward to Montana!
Bigger is Better?
I am continually amazed at the social complexity of our society. I have few answers to why things are the way they are but in my musings and wonderment about the world and pace of change, one thing always seems to remain constant. It is an idea that has taken hold of societies around the world and somehow became firmly rooted here at home. It seems to be the essence of the old "keep up with the Jones'" adage. Bigger is better!
Why has this idea permeated almost every aspect of our lives? Even in areas that the idea is not literal it has its influence. For instance, most electronic devices have gotten smaller with the advance of technology, but in order to be salable even the small must have more. More features, better styling, more powerful, more, more, more.
Think for a moment, when did bigger become better? I'm not quite sure but in the 1970's a 1200sf house was huge. A Big Mac really was a big burger. It's hard to believe, I know. What happened?
As I have mentioned in previous posts, I got sucked into this thought process like many people. I remember at some point being told it was the American way. It's not just America though. Almost everywhere in the world the phenomenon is occurring at a increasingly alarming rate. What is the cause? Is it healthy? Is it just human nature, is it the desire to progress? One thing is certain, it has made life more complex.
Some have tried to describe it as materialism, others as progress, I tend to look at it differently these days. I am not on a soapbox to halt the progress of western consumerism but as I recraft the life that I intend to live going forward with my family, I have given pause to what it is that we are trying to accomplish. What is it that should drive our efforts? What is progress? I have come to the conclusion that, regardless of the cause or driving force, the idea of "Bigger is Better" is not a valid success measure or a positive driving force in society.
I have enjoyed the many technological advancements made as much as anyone else. I am hard pressed, however, to successfully apply a ROI or values model that would suggest that the costs to society are worth the advancements made.
Let's take just just one aspect of modern daily life, the ease of distance communication. In 1970, communication for the masses was comprised of TV, radio, mail, and phone. By these media 95% of all distance communication occurred. TV and radio were free. A letter was less than a dime and telephone was considered a managed necessity because of the cost (monthly service was under $8.) Communication advancements have been made in countless ways. Today we enjoy cell phones, internet, cable and satelite TV and Radio. We still have the old telephone but basic service is $30+. We have also arrived at a level of expected immediacy that makes dial up internet access obsolete and free television a novel inconvenience. To achieve an acceptable standard of communication delivery it is almost impossible to spend under $100 a month (a cell phone and high speed internet), and is easy to spend $300 a month for a basic array (cell phone, house phone, cable or satellite television, high speed internet, etc). True, we no longer rent our telephone, but we think nothing of spending thousands of dollars a year on equipment that will be outdated in months. And what have we achieved? Immediacy and options. Along with that we have allowed an infinite amount of commercialism that drives the "bigger is better" phillosoply into our daily lives. Is it worth it? I pay more now for monthly communication services than I paid in the 1980's for my basic living expenses. My first apartment after I got married was $65 a month and it was nice. Today I pay more than that for cellular service.
A couple of years ago, when we moved into the house we are now selling, I didn't hook up the cable TV I actually did, in that I get it on the connection that comes in my cable internet access, but I did not hook any of the TVs to it. Guess what, after a month or two of grumbling my children began to do other things like read, art projects, play board games and generally socialize with with their parents. True, they weren't up to date on the latest sitcom and didn't have to have the latest toy that was being advertised, but I don't think they were or are missing much. In fact, I believe they are better educated, more well rounded and becoming better independent thinkers as a result. I know I am none the worse for having given up the tube. We watch a lot of movies (those we choose to bring into the house) so the T.V.s are still a usable asset.
Have you noticed the number of storage units around? We as a people have so much stuff we can't even fit it in our much larger houses. An average storage unit cost more than double the amount of my apartment in the 1980s. We complain about the cost of living today, yet we have created a living standard and material accumulation cycle that feeds a ever increasing cost of living. Are we really that much better off? I think not.
We have reach a state of disposable materialism. Most goods are cheaper to replace than to repair, from electronics to tools, to the clothing we wear. Most items require specialized training to work on them. Gone are the days you could work on your own car, and the cost of trained labor has skyrocketed. The last auto repair I had done was at a labor rate of $70hr. Again, more than I paid for monthly housing in the 1980s. The car doesn't get me anywhere any faster than did my car in the eighties.
I guess my point is, maybe the living standard we have continually set higher for ourselves is not a point of progress. It may signal defeat. At the rate of "progress" these days, even our two earner household standard cannot keep up pace with the cost of "progress". Shouldn't progress make it easier, less expensive to achieve a desirable standard?
Luckily, in the area of Montana we are building, cable is not available. Phone service is barely available, but I am still trying to figure out how to get acceptable phone and internet service for under $100 a month. We receive better water than our current bottled water from our well for just the cost to pump it. Not having the conveniences of a city in our backyard eliminates a lot of the commercialism and complexity of life. It is only 20 minutes down the road but it is far enough. So am I abndoning progress? When was the last time you walked out on your front step and counted 25 deer walking up the hillside and 30 elk on the next hill over. I did, just last week. And you know what, it didn't cost anything. Maybe "bigger" is just more expensive.
Back to the big City
After a month in the solitude of Montana, were it not for my family, it would have been very difficult to return to Dallas. Even with the cold and unsettled winter like weather in the canyon where our new home is rising out of the ground, the beauty, peace, and solitude is so vastly different than the bustling city that it makes my soul long to linger.
On the other hand, a month away from my family was not easy either. It is kind of funny, I used to travel all over the world for weeks at a time and while I missed them, I guess I had convinced myself that what I was doing for the "company" was important enough to separate me from my family. Why is it that? I didn't marry the company, I didn't create children with the company, yet often I placed a higher priority on it's needs than on that of my own family. This time the separation was really for the benefit of our family's future and while I loved being in Montana, I missed them more than ever. I think that is because I am no longer distracted from what is most important in my life.
Upon returning to the city, I learned that the culling at my former company is still in progress. Several more of my former associates and friends have been released. It is all a part of a scenario that, were it not that it is happening to what was my former life's work, would be intriguing as it appears to be a movie in the making. It has all the critical components. There is now even a battle for control of the company between the current chairman and a billionaire investor who wants control of what he feels has been badly mishandled over the past year. Looking on the surface, on can certainly see his point. A failed bid to purchase the major competitor that resulted in the merger of the number two and three competitors making them even stronger. A lackluster attempt to overtake an online competitor who in the past couple of years has rocked the industry and established themselves as the major competitor of the future. A swing from a $155,000,000 profit in the first quarter of last year to a loss of $55,000,000 last quarter and a complete halt to 18 years of consistent tremendous growth that made the company the worldwide icon it is. It is no wonder someone thinks the company has been mismanaged. On top of all this, the chairman took compensation and bonus along with stock options that were, in the words of the billionaire investor, "unconscionable". Let's just leave it at that, knowing that those bonuses and options could have more than paid for all the job cuts at the company last year. But after all, it is a corporation, not a family. Boy were my priorities misdirected.
Back to reality, my current reality that is. It is nice to be with my family again. Even if it is here in the city. A couple of more months and hopefully we will depart from here to Montana forever. All that is left is to sell our home. Until then, I will be splitting my time between here and there, dismantling a former life here and building a better future for our family there.
For the first time since we have been married, there is becoming a sense of permanence to where we are moving. In the past, we have always moved with the understanding that it was somewhat temporary. You do things differently when you perceive it as permanent. Details that were unimportant previously become important yet items that just needed to be complete in past residences become a part of the future being built so rather than hurrying their completion, they become part of the detail that even if not complete when we move, they will be part of the future reality so taking time to do it right makes short term inconveniences more palatable. It is a very different perspective. One that is lost in the corporate world of today where achievement is measured in days and months, years at the most, not in lifetimes, and certainly not in the growth of an individual or family.
It was six months from my corporate d-day yesterday. I only know that because I foolishly programmed a reminder in my PDA after it happened. Six months, what a difference. Six months of separation from the corporate jungle and six months of healing the soul, moving toward the last best place and our new life. It has been a good six months.
Big Sky vs. Big business
The day before yesterday in the evening I arrived in Montana. I love Big Sky Country! I am here to work with my contractor (my father-in-law) on my new home and shop. As we began to lay forms for the footings on the house yesterday I couldn't help think about the difference between this work, and my former career. In both situations I built things. As head of development for my former company, I was responsible for all store location building, maintenance, repair, etc. Here I am just a tradesman plying a trade. As the executive, I think I may have lifted a hammer twice during my career, yesterday I must have drove a couple of hundred form stakes and did various other jobs.
This new work as a tradesman is a throw back to an earlier life for me. I have always loved to build things. I especially love to work with wood. I had convinced myself that I was still building things as an executive when in reality I was only doing administrative work and decision making. Yesterday was good! Vary hard work, but good. At the end of the day, I was tired, sore, and stress free. It was a great feeling. I realize I am in terrible shape for doing this work even though I exercise regularly. But to be physically tired at the end of the day rather than mentally drained and stressed is, for me a positive change.
Meanwhile back at the firm, at my former company that is, things are grim. They have announced another cutback of home office staff of about 30% (350 jobs). This is on top of all that has occurred since I left. In addition, they have stopped the building of all three brands of stores excepting those that were previously committed. In a public company you grow or fail. A major acquisition that was needed to make earnings this year has failed and the company that was to be acquired went to a direct competitor making them much stronger in the industry. Unfortunately, it does not appear that there is any plan working that will save the companies earnings this year. Not that they are going out of business by any means. Last year we had our best profit year and threw off $637 million in free cash. This year it looks as if that may be cut in half.
It feels good to be in Montana, building a home and a future for my family and myself.
