Phil Hauck's TEC Blog

Tuesday, November 19, 2013

Jones/West Point on Aghanistan Challenges

     David Jones, a career military officer who now teaches "character development" at West Point, was in Green Bay last week to speak at the annual ethics banquet chaired by the American Foundation of Counseling Services ... and he also spoke to a group at St. Norbert College.
     Recently, he spent a year in Afghanistan working with the officials there who are trying to create that country's version of a military academy.  Previously we did that for Iraq.  His reflections aren't positive:
     •  The country is full of bribery at all levels ... from within families clear up to the highest levels.  Indeed, he couldn't trust the academic transcripts of applicants because they were often changed due to payoffs ... and he could observe cheating on the military academy entrance exams themselves. There were 2700 applying for 400 spots.
     •  We asked our interpreters, "What percent of the national police force do you believe is corrupt?"  The responses ranged from 60% to 80% ... in THE institution which should have NO corruption.  Indeed, Jones said that the military considers that they will obtain the equivalent of 25% of their salary from bribery.
      •  Here's one form they don't consider bribery.  Military officers will stop people on the sidewalks and prevent them from passing.  The expected payoff is the equivalent of $10.  They don't consider it bribery because they didn't ask for it; the payoff just happens when they stop people.
      How do you deal with that?  Somehow, he said, you have to figure out how to teach within their culture and expectations.  Otherwise, they won't accept your messages.

David Luck, ABC Supply, on Core Values ...

        It took me eight years of being a TEC Chair to figure out that the hard stuff is much, much easier to make happen if the soft stuff is in place.
David Luck, who has grown ABC Supply, Beloit, by $3 billion dollars since 2007, confirmed that in spades at a recent St. Norbert CEO Breakfast & Strategy presentation.  ABC Supply at $5 billion is the nation's largest distributor of external construction supplies, and was founded by entrepreneur Ken Hendricks in the early 1980s.  It is now 100% owned by his wife.
In 2007, Hendricks died in a tragic accident at his home.  "Ken never talked business with people.  He always talked about his vision for the company, and how employees and customers need to be treated."
"After he died, I began a lengthy tour of the company's regions and stores to learn how they were looking at Ken's death and our management team.  I would spend each day talking with employees, and then we would have dinner together that evening.  It was those dinner conversations that were the key, when they felt more comfortable talking.  I learned that they were comfortable with the management team, which had been in place since I got there in 1998, and the direction of the company. What they were worried about was whether the company would "feel" the same.  Whether we would "feel" the same kept coming up, dinner after dinner.  Once we recognized that, we knew what we had to do.
"When we got back to Beloit, we called a senior team meeting to download what each of us felt were the "core values" that Ken would espouse and protect.  They hadn't been written down before.  It took us only ten minutes.  Some things were subsets of others.  We didn't create them.  We "discovered" them.
"What we came up with were:
Work Hard --- Have Fun
Entrepreneurial Spirit
Give Back
American Pride
(Today, there is a booklet with a page dedicated to describing what each of these means.)
"Our huge management meeting was coming up, where all the managers were gathered for our five-day session.  We took the first three days of that to do nothing but present and discuss the Core Values … and how they needed to be continued as part and parcel of how we manage.  How they must be who we are.  How they must continue to create our "feel."
"You have to understand the context of the times.  As a nation, we were slipping fast into the Great Recession … and construction had plummeted.  We were in trouble.  But …
"Once we reaffirmed Ken's Core Values … and  everyone knew that the "feel" of the company wouldn't change … we got on a roll.  Over the next five years, we more than doubled the size of our business, adding $3 billion in revenues.  
"That's the power of Core Values."

What Changes, What Doesn't
Luck makes several other important points:
•  Everyone must understand what changes and what doesn't.  What Doesn't Change:  Core Values, Core Purpose and Visionary Goal.  What Does Change: Mission, and Strategic Goals.
•  The Number One reason to LEAD with Core Values:  They are the Catalyst that enables Change!  When people know the "feel" of the company won't change, they are far more willing to experiment with the other types of change that drive success in the specific marketplace … not only go-to-market strategies, but even certain behaviors that constitute Culture that must change.

Other of his points:
•  Cultures of stores in various parts of the country can be different, as long as the driving Core Values are similar.  That's why hiring to the Core Values first is absolutely critical.  You must know that the person already has habits/beliefs consistent with them, or neither the person nor the organization will thrive.  Culture can be shaped as needed, but always with the foundation of the Core Values.
•  Of the Core Values, Respect is the most important.  They are all borne of Ken's frustrations … as a high school dropout who went into the roofing business and felt his suppliers could have treated him better … and in understanding what customers wanted.
•  Managers are charged and evaluated on three things, in this order:  Employee Engagement, Customer Engagement … and then Financial Performance.  We know that if Financial Performance is low, but Employee and Custoemr Engagement scores are high, then Financial Performance is only a matter of time.  When you live and treat people according to our Core Values … and are driven by our Core Purpose … then you'll be in a position where customers will almost throw money at you.
•  Core Purpose is your reason for being other than making money.  It's the Passion that you're also good at.  ABC's is:  "promoting and preserving the American Dream by helping people accomplish the extraordinary - based on our fundamental belief that every person has within themselves (sic) the ability to do great things.:"
•  And Mission:  "ABC's mission is to be the biggest, best, and easiest service company distributing select exterior building products.  We will be recognized as an "employee first" company producing world-class associate engagement, customer engagement, and financial results."

About David Luck
He's an Alabaman with loyalties to Auburn, where three times a year he returns to teach a high level class on strategy.  He feels that today's young people are as sharp as ever, and will do what's necessary to reverse the negatives of the current leadership generation.  Prior to joining ABC Supply in 1998, he was president of the gigantic Firestone Tire retail organization.  "Ken had been recruiting me for a year, and I finally told him that I am a "redneck" at heart, in a good sense … like hunting fishing, balance of life, pickups, core of America.  And he told me 'Heck, is that all?  We have more rednecks in northern Wisconsin than you can shake a stick at!'  So, I feel comfortable here today."

Monday, November 18, 2013

Sick Care Industry Stats

Recently, courtesy of TEC member Mark Herzog of Holy Family Memorial hospital system in Manitowoc, I sat in on a webinar sponsored by the American Hospital Assn., featuring commentary by industry expert Don McDaniel of Sage Growth consultants, Baltimore.  Among his points:
•  Right now, the patient pays about 13 cents of each dollar's cost of caring for him/her.  (In 1980, the patient incurred about 50 cents of each dollar.)  So, 87% is paid by Third Parties.  Very little incentive for the patient to understand and control costs.  With Health Savings Accounts, that is changing ... slowly.
•  Cost of our whole medical system is about $9,500 per every man, woman and baby ... about double the global average.
•  Sharply skewed!  5% of the population incurs 45% of the costs ... mostly in senior years.  But healthy lifestyle behaviors significantly reduce the medical costs incurred in those senior years.  The next 20% incur 35% of the costs ... and the bottom 75% incur only 20%.
•  In the last 20 years, health care productivity (despite all the technology advancements) has actually declined by 0.6%.  Its spending increased 2.3% annually, while employee growth increased even faster at 2.9%.  In contrast, Manufacturing output increased 2.6% on average annually, on an actual decline in manufacturing employment ... suggesting a productivity increase of 4.2%.
•  An un-publicized reason for delaying the Employer mandate a year was the inability to figure out how to account for self-employeds, partnerships and S-Corps, which are all employers but taxed and accounted for as individuals.
•  Massachusetts as a predictor for ObamaCare:  While insurance coverage of the state populace was increased, its cost increases have maintained it as the most expensive state in the nation.  Also, Waiting Time for appointments with Specialists has increased significantly.
•  The federal regulators will have a difficult time going forward building in private sector cost-saving improvements into the ObamaCare regulatory network.

On ObamaCare (just to get your interest!)

Among the fascinating bigger issues here is the one about how and whether we can absorb large-scale, complex legislation ... a la Sarbanes-Oxley, Dodd-Frank and ObamaCare.  They have incredible amounts of "unintended consequences" that are very negative.
Consider these quotes ... and then click on the New York Times column by Ross Douthat of Nov. 16 that also looks at points from Jonathan Rauch's 1999 book (Yes, 1999!), Government's End.

By James Madison, in Fedralist No. 62 (1788):
"It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood ..."

By WSJ columnist Holman Jenkins (3/23/13):
"The argument for limited government is really an argument for not overburdening politicians.  Leave as much as possible to the market, to the law of contracts, to the courts.  Don't pile up on politicians more and more impossible choices they have to make on our behalf."

By NYT columnist Ross Douthat (11/16/13):
See the attached file, including ...
" .. Because our government spends and regulates so much ...
"... influence sprawls into so many walks of life ...
"... so many clients and beneficiaries and interest groups depend on its programs and policies ...
"... structural, not ideological ...
"... grows stronger the longer it's embedded in the federal apparatus, gaining constituents and interest group support ...

On Lily Tomlin and ...

       On a recent Saturday evening, I drove to Manitowoc and experienced 73-year-old Lily Tomlin in her one-woman show.  It was really, really good.  No notes for almost two hours, and she went from informal talk about Manitowoc to all sorts of tidbit quotes that a comedian does, as well as her many skits.  With only one person in her retinue ... the sound guy who absolutely on cue whenever it was programmed would provide his light changes, videos and sounds.
       Some excerpts that I wrote down ... from her 60-minute first act, 35-minute second act, and 15-minutes responding to written questions (about Dolly Parton, Jane Fonda and Christiane Amanpour).

•  During the part on Women's Lib:  "What came first?  Was it the person who founded SHEboygan ... or the one who founded MANitowoc?"  
•  A lot of her "liberal" comments and jokes got good applause, so at one point she asked, "Are we sure I'm not in Madison?"
•  "It's tough to be cynical these days.  You can't keep up!"
•  "Then there's stuff my mother told me that really aren't true.  Like 'Enough is enough'.  And, 'They wouldn't be in Washington if they didn't know what they were doing.'"
•  "The next Chapter in our nation's history is going to be Chapter 11."
•  "There's so much Identity Theft going on these days, that it's hard not to be scammed.  It hasn't happened to me, and I keep wondering 'Aren't I worth it?'"
•  "You know, 'oil' is usually identified by its source.  Like Peanut Oil.  And Olive Oil.  So, what about Baby Oil?"
•  In one of her skits, she portrays a six-year-old.  "Her mother asked, 'Why is the box of Animal Crackers empty?'  So, she explained that what happened was that the Animals all got mad at each other and started eating each other, and that's why they're all gone."  "Sounds simple enough, but after my show, an 8-year-old came backstage to tell me 'If that's so, there should be one left!"

Fascinating stuff:
I get a daily blog called, which has very interesting stuff, like ...
•  We think we think independently, but we really don't.  We are VERY influenced regarding our thinking by the reactions of the people around us.  Illustrative Point:  In a 1984 debate, Pres. Reagan made a funny remark about his challenger, former VP Walter Mondale.  Those who HEARD the audience's favorable applause thought it was very funny, and Reagan won the debate.  Those who had the applause reaction held from them felt that Mondale won the debate.

NEW Manufacturing Alliance conference takeaways ...

Recently, I attended the NEW Manufacturing Alliance conference in Green Bay, and had these takeaways from speakers:

•  The Midwest Manufacturing community's main options over the next few years:
-- Become like Germany:  Cutting edge, aggressive, global, investing ... or ...
-- Become like Scandinavia:  Competent, innovative, welcoming, global.
Which will it be?  Business Leaders will decide this, not politicians.

From Mike Weller, CEO of Miller Electric
•  What's holding us back?  Using the same strategies we used several years ago, and today ... both externally in how we approach the marketplace, and internally in how we engage our people to be proactive and innovative.  We're typically noticing and dealing proactively with the external, but not so well with the changed ways in which the workforce needs to operate, its evolving "culture."
•  Regarding Engagement:  Tell employees WHY you are making a change.  Tell them the Business Case so they understand.  Clear down to the "lowest" level.
•  80/20 Rule:  80% of results come from 20% of the effort.  Not hard to figure out where the 80% is coming from.  Stop serving at least half of the rest!
•  The Challenges are Transaction Activity, Product Variability ... and the resulting Complexity.  Drive Complexity out of what you do, especially as it involves the bottom half of your customer base.  

From Steve Van Remortel, SN Advisors and author of Stop Selling Vanilla Ice Cream
      The most important thing you do is to develop and implement your Core Competencies, what you provide as value.  You already "make your competencies tangible" to your current customers, but you must figure out how to do it with prospective customers.  That's a worthy challenge, because most of us (including your competitors) don't do it!  How can you create a "core competence experience" for prospectives?
      Also, since you've articulated your Core Competencies and the organization knows what they are, do you make them a focal point of all talent development?  

Tuesday, September 3, 2013

Great Blue Zones COMPANY Success!

   As we know, many organizations care about creating a fitness/wellness culture because it improves the quality of employees' lives, cuts medical costs, increases energy, and adds to profitability.  But they're not sure how ... so don't create the excitement that can come with it.
   Click on the following, and see what one company in Minneapolis did using the Blue Zones concepts.  This is in only SIX MONTHS!
    (I know, the 19% increase in profitability is probably a bit misleading ... but we do know that greater energy does result in greater productivity and effectiveness.)
"We grew our bottom line revenue 19% year over year during that Blue Zone initiative time frame," said Gwen Martin, founder of Numberworks.

     Generally, the Blue Zones organizations work with communities, but they're now structuring themselves to work with individual companies, apparently like Google.
     For more information:

Monday, September 2, 2013

On Medical Cost Middlemen

     Great article in recent WSJ regarding how a doctor worked with a patient to reduce his surgery cost from $20,000 down to $3,000. The hospital quoted a charge of $20,000 (his share, after insurance) based on the patient's insurance-negotiated pricing. He rebelled and told the doctor he was cancelling. The doctor worked with the anesthesiologist, and another hospital's outpatient department, and got it done for $3,000 (all out-of-pocket; no use of insurance).
     The lesson: Eliminating middlemen wherever possible will greatly reduce our costs ... probably in many "industries." When the provider works directly with the patient/consumer, with ability of the patient/consumer to pay, great pricing can be worked out. Middlemen de-personalizes the process, and hikes costs.
     Here's the link:


No, not jobs.  "Jobs:  The Movie"  About Steve Jobs
It's not a great film, but what it does do is demonstrate the importance of a Leader CLEARLY and FORCEFULLY expressing the MISSION of the organization.  The CAUSE.  WHY we're doing what we're doing.  He does it in spades ... all the time ... sometimes brutally!
People want to buy in to what you are doing emotionally!  Allow them to do it.

On Wisconsin's Low Job Creation ...

Much has been said about Governor Walker's pledge to create 250,000 jobs coming out of the downturn.  During his administration, about 70,000 jobs have been added on a net basis, about half of what was lost in the downturn years prior.  Early in the recovery, our job creation rate was in the 40s of the 50 states, but last year ended at a rate in the 20s, and we finished the year at 33.  We're still progressing well ... but not as well as we'd like. So, why?
First of all, Governors/Mayors/Presidents/Legislatures don't create jobs.  They work together to put in the environment that will foster/incent people to want to create businesses that can grow and need workers.  Or not.
So, I asked "those who know" why we're not doing really well.
One theme is that much is now in place in Wisconsin, but it's also in place in other states ... and they are more appealing and effective.  It's a question of degree.  We're doing most of the right things, just not as well ... either due to culture or situation.
Their answers:
1.  We have a very high percentage of manufacturing jobs, which took the biggest recession hit.  Productivity increased, so they're being added back at a slower rate.
2.  We're not a Right To Work state ... meaning that if your company is unionized, that all workers must belong to that union.  24 states are, and they happen to be most of the fastest-growing.  Where would you locate a new business/office/plant?
3.  We're still not a strong state for rapid siting and permitting requirements, slowing and defeating expansion decisions regarding Wisconsin.
4. More of the jobs we create are low tech (not low skilled!), not the higher-paying, hard-to-duplicate high tech jobs.
A recent study also noted that from a productivity standpoint, Wisconsin ranks lower.  Work ethic is good, but it's not everything.
We do have much going for us; we're focusing where studies say we should to achieve growth.  We just need more entrepreneurialism, more world-class operators.

Tuesday, August 6, 2013

Chautauqua: An Overload of Stimulation

Recently, Kitty and I had a chance to spend time with good friends who are regulars at the Chautauqua Institution in New York State, an intellectual/spiritual/arts paradise on the shores of Lake Chautauqua in New York State since 1874.  (See  It creates nine theme weeks each summer within programming for symphony, opera, theater, books, religion and exercise at a place with no cars allowed.  Our theme week was:  "Markets, Morals and the Social Contract".  They bring in experts, many of them famous, to speak on the theme ... as well as arranging more than 40 events daily to meet all interests.
Some of our takeaways from very stimulating and dynamic speakers:

Michael Sandel, Harvard's "rock star ethicist"
•  There are very few things that money can't buy.  You can hire people to stand in line for you so you don't have to (  In Santa Barbara, as a prisoner you can buy an upgrade in your accommodations.  We've drifted from being a market economy, a tool for organizing productive activity, to a market society, where everything is up for sale.
•  If wealth provides access to only a few luxury things, it doesn't matter much.  But when it influences the big things in life for all of us, then inequality matters more.
•  At a certain point, money changes perception of what's good.  Should kids be paid to read books:  Reading as an essential intellectual endeavour in itself, vs. pay me to do it.  A Swedish audience was asked, would you be willing to live near a nuclear waste site?  51% said Yes.  Now, if we offered you 6,000 Euro to do it, would you?  Only 25% said Yes.
•  Today, perhaps too often, we are yielding the responsibility for a moral decision/behavior to a market value, allowing a pride-money decision to determine validity/value.  We have fallen out of the habit of reasoning.
•  Our country was founded on philosophies, not economics.

E.J. Dionne, Washington Post columnist
•  What are our core values that shouldn't be compromised by money?  For children, education, food and health care.
•  We are constantly tempering morality with money, and individuality with community.
•  Markets work, but only when they are enforced by moral limits (some of which are defined by government regulations).
•  Capitalism is great at serving needs where demand is sufficient to allow a profit.  But, what about insurance for sick older people?  
•  What is a FAIR rule or regulation?  One where there are no exceptions.  No corruption or payoffs or "special considerations" to insiders.
•  If liberty is to thrive, we must make each other's condition our own.

David Brooks, New York Times columnist
•  Augustin writes of the two worlds we are considering this week as represented by Adam I and Adam II.  The contrasts:  Success vs. Love/Redemption.  Accomplishment vs. Understanding.  Economics (input leads to output, investment leads to return) vs. Moral (give to receive, surrender to gain strength, conquer craving, to find yourself you have to lose yourself).  Too much we live in the world of Adam I and let it dominate Adam II.  Not good.
•  No person can achieve mastery on his/her own.
•  Defeating weakness means quieting the self ... finding the external strengths you need, finding your Purpose.
•  It's ironical:  You build your internal self by understanding outside your self.
•  You can't teach the heart in the classroom.  The heart is developed by experiences, by living.
•  What feels good today?  There is lots of social repair going on.  We've gotten really good about blending people from around the world into our organizations and structures.  Socially we're in pretty good shape.  Politically we have a problem, but social movements usually will take precedence.
•  Per Aristotle:  1.  Develop your Habits ... small things within your control, and do them well ... morally well.  (Remember people's names!)  2.  Be around good people, and copy them.  Be a Model!

Ali Velshi, commentator who is moving from CNN to Al Jazeera America in August
•  Markets, the essence of Capitalism, are amoral structures, which can be used for good or ill.  We make it moral by surrounding it with regulations and habits that we consider moral.  They are important, because in their uncompromised state they have brought more to more people than any other system in the history of mankind.
•  Two moral values are essential to markets/capitalism:  Justice and Equality.  (Equality in the sense of equal access to the marketplace; not equality of reward/output/takeaway.)  Government's role is to translate the will of the people into regulations which bring appropriate morality to capitalism.  What's bad, what compromises its integrity, and deflates people's confidence in the system ... is when regulations are created to benefit one group at the expense of another ... instead of benefitting everyone.  Another is when the representatives of Government benefit from doing the regulation they put in place for the benefit of special groups.  That corruption creates injustice and inequality ... and diminishes the effectiveness of markets/capitalism.  We've gone overboard with that today.  Other countries are much worse.
•  Is it criminal for a CEO to make several hundred times the income of the lowest workers?  
•  It's our job to turn markets to the social good that we need them to ... insuring a better society.  Balance between individualism and community.
•  Bangladesh:  Low wage workers in unsafe conditions in poor countries ... vs. the income the business provides that wouldn't be available otherwise.
•  Government becomes the problem ... SubPrime Mortgages:  In the past, wouldn't have happened because the issuing bank would have been on the hook.  (Self-interest!)  But, then mortgages could be sold to a government entity (which turns around and packages them as derivatives, which can themselves become losers), allowing the bank to book profits while passing on a "moral hazard" (the likelihood of default).
•  Human nature is a bit dishonest, so we need to have regulations in place.  Regulations tip the scales against one party for another party ... but that second party should be society, not any "special interest."
•  The challenge:  Protect Ambition while Protecting the Weak.

Tom Kinnear, University of Michigan Business School professor
•  Sometimes we don't like the results of markets, yielding prices too high because supply doesn't meet demand.  Think gasoline.
•  Too often, "negative externalities" aren't priced into the system ... such as pollution by plants.  These are called "market failures."
•  Three types of markets:  1.  Products/Services, where money is made for most people.  2.  Capital/Savings ... Reduction of savings via government deficits, trade deficits, and consumer spending without accompanying saving ... hurts our ability to invest because we must borrow.  3.  Financial ... Takes money from the product/service market and invests it in financial instruments.  Very easy to make a lot of money there by behaving badly over a short period of time.  Didn't happen in Canada because banks there are reasonably regulated and behave morally.
•  Unjust regulation:  Can't buy a car on the internet because of dealer lobbying against it.
•  Messing with markets:  Washington DC legislates a $12.50 living wage, so Walmart pulls out, costing an estimated savings of $2500 annually for a poor family.
•  Keynes:  We have it all wrong.  Go back to his writing.  What he advocated was deficit spending ONLY for capital projects that would produce fully-offsetting income later ... for nothing else.  Not for entitlement projects and many earmarks that have no payoff.
•  This past recession/depression was different.  It was an Asset Value Deflation recession, not a Reduced Spending one.

All interesting comments.  At least thought-provoking, because the relationship/tipping point between unfettered markets and regulated ones is unclear ... our public debate.

Chautauqua: An Election Spending Proposal

Kitty and I had a chance to spend several days at the Chautauqua Institution in New York State several weeks ago.  It's an intellectual/spiritual/arts paradise.  If you've never heard of it, go to
Among the speakers we absorbed, in a week whose theme was "Markets, Morals and the Social Contract," was former Federal Elections Commission chairman Trevor Potter, a Republican who is furious at the amounts of dollars spent on elections and to "influence" (read 'buy') our federal legislators.
(We also heard a number of other speakers, some one this topic, some not ... and my notes from them are in the next Post.  We also heard symphony concerts, recitals, rehearsals, and much more.)
Ultimately, he pointed us to nine efforts he feels we should take to control this influence that are constitutional ... pushing back against the Citizens United Supreme Court decision.  They are detailed below, and in writeups about the Anti-Corruption Act that he and others are co-sponsoring.  The idea is that no legislator will sponsor these changes unless WE, the electorate, demand it.  It starts with us.  (  To access his organization:
Among the points in his presentation:
•  Only 1/3 of 1% of the electorate (not the population) contribute at least $200 to candidates in the election cycle.  Of these, only 600 give 90% of the dollars raised ... which totaled almost $7 billion in 2012.
•  On an average day, a Congressperson allocates FOUR of the 10-hour days to fund-raising contacting.  
•  New Committee Chairs saw a 74% increase to their campaign funds from industry PACs.

The Nine Efforts of the Anti-Corruption Act proposal:
1.  Stop Politicians From Taking Bribes.
•  Prohibit members of Congress fromsoliciting and receiving contributions from any industry or entity they regulate, including those industries' lobbyists.  Prohibit all fundraising during Congressional working hours.   Statistics indicate a new Committee chair immediately gets a 74% increase on average in contributions from those impacted by the Committee.

2.  Limit SuperPac Contributions and "Coordination".
•  Require SuperPacs to abide by the same contribution limits as other political committees.   Right now, they can spent unlimited money influencing elections as long as there is not direct coordination with a candidate's campaign.

3.  Prevent Job Offers As Bribes.
•  Close the "revolving door" where elected representatives and their staff sell their legislative power in exchange for high-paying jobs when they leave office.  Create a "cooling off" period on private employment that will last 6 years for all Congress members and all senior staff (currently 2 years for Senators, 1 year for House members and senior staff).

4.  Call All People Who Lobby, Lobbyists.
•  Significantly expand the definition of and register all lobbyists to preventinfluencers from skirting the rules.  Today's definition of who must register as a lobbyist is weak.

5.  Limit Lobbyist donations.
•  Limit the amount that lobbyists and their clients can contribute to $500 per year.  Federal contractors are already banned from contributing to campaigns.  There are numerous other ways they get around the rules, too.

6.  End Secret Money.
•  Mandate full transparency.  Require any organization that spends $10,000 or more on advertisements to elect or defeat federal candidates to file a disclosure report within 24 hours.  Elections are being flooded with secret money funneled through "501c" organizations that aren't required to disclose donors' names, and contribute to the SuperPacs.

7.  Empower All Voters With A Tax Rebate.
•  Create a $100 Tax Rebate for qualified contributions to federal candidates, political parties and political committees.  This will flood elections with small-donor contributions.  Politicians depend on less than 0.1% of the population for their funding.

8.  Disclose "Bundling".
•  Require federal candidates to disclose the names of individuals who "bundle" contributions for the specific candidate.

9.  Enforce The Rules.
•  Federal agencies routinely fail to enforce the anti-corruptions rules that already exist because their leadership are appointed by those they are supposed to regulate.

Tuesday, July 9, 2013

Random TEC Member Insights ...
•  I've been very surprised  to learn recently how far 3-D printing has developed!  I thought it was just a technical concept which would have impact far into the future, but now I find it's being USED today ... and I found out that two of my members, fairly large, high tech operations, already have and are using them.
•  Getting a lot of good PR from members who are involved with the E-Business Consortium coordinated through UW-Madison.  A great learning opportunity, with thrusts for technical understanding, marketing, and social media.  Several hundred company members, including all the forward-looking ones in the state.  Great sharing/learning mechanism.  Go to
•  Several members are talking about how high tech companies are organizing their work areas on the two coasts.  Whereas we're still into cubicles, they're organizing work groups with no panels or walls; people work in close proximity with each other, with frequent interaction.  Energy, they say, is palpable when you're nearby.  Everyone helping each other, interacting, working towards the goal.
•  ObamaCare:  A lot of analyzing and waiting going on.  But one action step being taken by MORE THAN A FEW:  To set the effective date of their next annual insuror agreement BEFORE Jan. 1, so that it extends a year to late next year.  Buys time to see how the initial thrusts of ObamaCare shake out.
•  We're used to talking about salespeople as either Hunters or Farmers ... Hunters driven to find the next customer, Farmers are the account servicing people.  Now, I'm hearing about Carpenters ... not in sales, but the type of person who gathers materials and does the job!  A Farmer has to plan much further ahead, dealing with the ambiguities of seed availability, weather, fertilizers/weed chemicals.  All this is important in the interviewing process, to make sure you're getting a habit/mentality that fits the job needs.   Requires open-ended questions, where you know the responses you're seeking.
•  At one meeting, got onto the topic of company picnics and lack of attendance.  Opinions were that some people like them, and others don’t ... so do it for those that do.  Regarding “Holiday” parties, one success story was to have it at noontime on a day the afternoon would be free, for employees only, and have a program and treats.
•  TEC members are attuned to following the economic forecasts of Brian Beaulieu and his team at ItR Economics in New Hampshire.  Right now, we're watching his forecasts of a boom in 2015/2016 followed by a downturn in 2017/2018 ... and how the current energy explosion (fracked natural gas) would impact it.  View was that subsidized alternative power would continue, but never be a major energy factor for the U.S.  Lower cost energy would be offset by implications of the federal debt debacle.  He's also forecasting a global debacle eventually due to so many countries letting their welfare states drive incredibly increasing deficits, and creating a financial/economic doomsday.
•  Safety:  A new member reports that he fosters workers to build a collage of photos of family members and remembrances at work ... as a reminder of why they want to go home in a safe condition every day.  They also publicize photos of unsafe conditions.
There's lots more ... for next time!

Monday, July 8, 2013

Executive "Presence"
    Just about every conversation a leader or speaker has, the intent is to convey information in an impactful way that will move an opinion or belief.  Studies show that what we say is only 7% of the impact, that 55% of the impact is how you present yourself, and 38% is how you say what you say.  In effect, you can't be your normal self.  If you want to be a leader, you have to have a "presence" that impacts.
    Gwen Resick-Rennich of Colorado is a TEC presenter who provides these pointers in her workshops with members:

•  Start with a Story, and a Bang!  Don’t explain what you want to talk about, as we often do; Don’t provide initial perspective.  Instead, tell a very short story that tells about the Pain that you will be talking about, the Pain that they recognize.  That immediately gets to the audience’s emotions, and commands their attention.  Then ... you can provide additional perspective.
-- Also, at the end, end with a Story that is a Bang(!) as well ... that further illustrates your main point.
-- Even use Stories to illustrate your solutions.  Describe what the solution will look like, feel like, experience like.
-- Make the Stories PERSONAL to you ... explaining “what you’re on!”
-- Stories are SHORT ... 30-60 seconds.
-- Exhibit PASSION!
•  Indeed, if you can’t exhibit PASSION:  Don’t show up!
•  Space Fillers (“Um,” “Uhh,” etc.) ALWAYS diminish effectiveness.  Have others tell you when you use them inadvertently.  They tell your audience you’re not prepared, haven’t been thoughtful ... both characteristics you want to convey the opposite of.
-- Replace them with .... SILENCE!  Silence makes you appear thoughtful, even impactful!  Even creates Drama.
•  If what you are conveying is analytical ... and much of what a CEO explains is (what the P&L is saying, why the market will allow our expansion, what competitors are doing that will allow a price increase, etc.) ... then you need more VOICE VARIETY ... emphasizing important words.
-- Includes putting “feeling” into words ... by minorly “stretching” them out.
•  The Content:  Make sure how you talk is ALL ABOUT “THEM” ... how your audience will be better off.  It’s not about you.  Period.
-- Asking a question is good:  “What kind of risk did you take?”  Even if rhetorical.
•  Projection:  Get POP.  Now ... Is    The ... Time ... For ... Change!
•  Articulation:  The Brain wants Completion.  Both in what it observes and what it hears.  So, DRESS completely (buttoned, zipped, together).  FINISH your words ... ALL the letters.
•  Eye Contact:  Small groups, make contact with each individual for 1-1.5 seconds.  Large groups, look at each quadrant for 5 seconds.
•  Physical Presence:  Be Solid/Upright ... and OPEN.  Shoulders wide, arms bent and hands gesturing; At worst, one hand in a pocket, never two.
•  Movement is good ... but not too much.  Don’t sway.  Don’t constantly be moving.  It distracts the brain’s concentration on your messaging.
•  “Rehearse” = Re-Hear!  Do it again, and again, and again ... until ...

In addition, Gwen provides a handout with additional key points.  They are:
1.  People receive too much information.  Provide no more than THREE concepts in a 30-min. presentation.
2.  People’s attention and retention spans are short.  So, stick to Guideline #1.
3.  Effective speaking requires not only good content, but also some ENTERTAINMENT.  Can be physical ... but also “light additions.”  “Why is the word for ‘one syllable’ “monosyllabic”?  “What are the first four letters of “analytical”?
4. The very reason for a presentation is to convince the audience, to change thinking.  Early, cue the benefits/advantages for the audience members ... WIIFY.  “What’s In It For You.”

On Wisconsin's Low Job Creation ...
Much has been said about Governor Walker's pledge to create 250,000 jobs coming out of the downturn.  During his administration, about 70,000 jobs have been added on a net basis, about half of what was lost in the downturn years prior.  Once our job creation rate was in the 40s of the 50 states, but recent improvement has us at 33rd.  Still, not good.  So, why?
First of all, Governors/Mayors/Presidents don't create jobs.  They work with legislatures to put in the environment that will foster/incent people to want to create businesses that can grow and need workers.  Or not.
So, I asked "those who know" why we're doing so poorly.
One theme is that much is now in place in Wisconsin, but it's also in place in other states ... and they are more appealing and effective.  It's a question of degree.  We're doing most of the right things, just not as well ... either due to culture or situation.
Their answers:
1.  We have a very high percentage of manufacturing jobs, which took the biggest recession hit.  Productivity increased, so they're being added back at a slower rate.
2.  We're not a Right To Work state ... meaning that if your company is unionized, that all workers must belong to that union.  24 states are, and they happen to be most of the fastest-growing.  Where would you locate a new business/office/plant?
3.  We're still not a strong state for rapid siting and permitting requirements, slowing and defeating expansion decisions regarding Wisconsin.
4. More of the jobs we create are low tech, not the higher-paying, hard-to-duplicate high tech jobs.
A recent study also noted that from a productivity standpoint, Wisconsin ranks lower.
We do have much going for us; we're focusing where studies say we should to achieve growth.  We just need more entrepreneurialism, more world-class operators.

Thursday, May 30, 2013

John Bergstrom On Developing His Bergstrom Customer Experience Culture

John Bergstrom, principal and co-founder of the more than 30 Bergstrom auto dealerships in Northeast Wisconsin, which are on the cusp of reaching $1 billion in annual volume this year, has an organization famed for its consistency of high customer service experiences.  While they have been refined and customized for situational reasons over the years since they purchased the first dealership in 1982, there is a set of values ... each of which is grounded in a story ... that drives how each of the 1290 employees is expected to treat customers (and each other). 
He expressed these in a presentation this Noon to the Green Bay Chamber's CEO Roundtable group.  

Here are some of his points:
•  The values are based on his very Catholic and Scandinavian mother, who ran a family of five kids and a father who worked for his uncles selling pulp.  From her, he got the idea that everyone will be a "Guest."  Every Sunday at 4 PM, the extended Bergstrom family was invited to gather at their home ... and the kids were grilled in advance to welcome each family member, shake their hands, say Welcome and Thanks For Coming.  Another time, John received a phone call from his Cub Scout Packmaster giving him some information, and he forgot to say Thank You.  His mother whomped him, saying that the Packmaster was taking his valuable time to help him out, and he must be respectful!
•  Note that the Values stated below make up the Bergstrom Customer Experience Culture that John and Dick have inculcated ... and that they are articulated in SPECIFIC BEHAVIORS!!  (What are the specific BEHAVIORS that make up the top 5-8 elements of your organization Culture??)
•  He began his presentation by talking about a recent day, when he was involved in three significant events ... none of them remarkable ... but each representing a group of people actively trying to make Northeast Wisconsin a better place to be ... just naturally, as a HABIT.  It wasn't remarkable.  It was what they DO.
•  After graduating from Marquette, he became a used car salesman ... and then with his brother borrowed $40,000 and opened a bar (one of more than 80 in the area)!  How could they be distinctive?  They took their Mom's suggestion ... and made it a point for their seven employees to try to remember as many patrons' names as possible, and what each drank.  They made it a contest, and applied memory techniques.  They got to where between the seven of them they knew 80% of the clientele and what they drank.  At one point, the police closed them down because too many people were in the bar.
•  They opened additional bars, not as successfully ... and eventually sold them to buy a hotel, and then an auto dealership.  Entrepreneurial!  Following are some of the Values that make up the cultural that makes the organization successful today.  Each is told as part of an actual STORY, which makes them more memorable!

1.  Greet everyone.  Shake their hands, look them in the eye ... and try to get their name.  "I'm John.  What is your name?"
2.  Ask about their lives ... but don't dwell on the drudgery of life.  If they ask about yours, stay positive.
3.  Pay attention to that ONE person.  Make that person the sole focus of your attention.  Make him/her feel valued.
4.  Weekly, the staff will meet ... not to talk about sales and expenses and profits ... but about the Customer Experience!
5.  If the customer or prospect is a mother with kids, they get priority.  Go into the parking lot and help them out.  After the experience, accompany them to their car.  Carry what they have if appropriate.  Why?  Because everyone has a hectic life, especially a mother with kids.  At 10 PM that evening, when all is quiet, she will go on Facebook or the internet and tell her friends about her day, especially the wonderful experiences she had.  We want to be part of that.
6.  At the conclusion of the discussion, say Thank You.  Twice!
7.  As a boss, never be special.  Do everything you ask your employees to do.
8.  Take advantage of every opportunity to participate in making a customer's day brighter ... and in fixing a specific problem, especially if it involves your product or service.  If you do it well, not ingratiatingly, just naturally ... the word will spread!

•  They employ Mystery Shoppers to sample the service levels of every operation monthly:  Service, Parts, Body Shop, New Cars, Used Cars.  The experiences are compiled and graded ... and ranked.  And discussed.  "What opportunity do we have to be even better?"
•  At the end, he told several other stories that represented how leaders convey values through their actions, setting the Cultural Behavior expectations.
•  And he ended with, "That's Our Story!"  
It's all about your Stories.

Saturday, March 30, 2013

Rational Conservative Meanderings ...

A Medicaid Cost Reduction Idea ...
A tiny Oregon experiment may be showing the way to a more effective way than just covering the costs ... getting people "better" so they don't need the system as often.  At a health system in tiny Bend, Oregon, which has 144 people utilizing the Emergency Room more than 14 times a year under Medicaid, they've provided "behavioral improvement specialists"  (social workers) to work with the 60 % of the 144 willing to be worked with ... and have cut the ER visits in half and saved more than $3,000 per person per year.  It's providing personal attention to help the high users develop better lifestyle/habits that keep them out of the sick care system.

On the Street
•  ALL TEC members I talk with will NOT take advantage of the ObamaCare penalty (paying it and moving employees to the individual exchange).  They feel they have a moral responsibility to continue coverage since they can afford it competitively ... reserving a final judgment until they see the impact of actual exchange costs.
•  I talked recently with a tuned-in local observer who knows of a 65-person employer, with low margins who employees low-wage workforce, will cut employees hours to 29 so that he doesn't have to provide health insurance.  This may be the bigger "unintended consequence"; there have been stories in the media about companies with low margin products and services planning to do this.

Harry Dent Redux (and Mark Parrot)
     Remember Harry Dent's Age/Demographics way of looking at economic growth ... that we are driven by our age/time in our lives to be consuming certain things given our lot in life?  In our 30s and 40s we're major consumers of housing, education and cars.  But beginning about age 50, we switch to saving to pay down debt and save for retirement, spending less on major stuff.  
     The last of the Baby Boomers are now passing age 50 ... so that massive purchasing power isn't any more.  Do you think that is part of our sluggish recovery?  Duh!
On Health Insurance/Medicare paperwork:
•  A friend of mine who runs a small independent provider is retiring.  "If the objective of Medicare was to run me out of business with excess paperwork and aggravation, they have succeeded.  I want no more of it.  For every five minutes I spend with a patient, I have to hire someone to spend an hour dealing with the back-and-forth of insurors and Medicare."
•  Another friend, talking with his primary doctor:  "Cost Savings?  I'll tell you about cost savings.  At this location, we have 12 physicians ... and 50 people who deal with the paperwork."

Advance head Fred Monique on our local economic development competitiveness:
No, we're not as good as we think.  Here's the truth:
     1.  Not a Right To Work state, which would attract business expansion.
     2.  Incentives to relocate here are weak, comparatively.  "We lost Bass Pro Shops because we wouldn't provide a tax break."  (It's businesses that create jobs, using last year's profits to fund development of new jobs.  Why are they taxed on their income at all?)_
     3.  Our sites and permitting requirements are less than favorable.
     4.  Our state efforts are "inward-focused," not externally-focused.
     5.  We're not great for Young Professionals ... fast-growing, exciting businesses.
     6.  At home, we need to provide more support for Second Stage companies ... those with $2-to-$50 million, and growing ... strategic alliances, leadership education, etc.
But ...
     We're very good for families ... low cost of living, low housing costs, low crime, good schools.
     Very good for entrepreneurs.
Nationally, we're in the bottom quartile of areas:  Our missing components are Right To Work, investment companies, and a research Institution.

Meanderings ...
•  Legislators, almost by definition, are not leaders.  It's the role of LEADERS to provide the Vision ... and the Guidelines!  Then, legislators can create the programs within those guidelines.
•  High taxes and many, complex regulations are THE major indicators of "Crony Capitalism", a bastardization of the economic system that results in today's distrust.  Regulations always have winners and losers, and taxes take from losers and reward winners (sometimes the general public, oftimes special interests).  These always demoralize and de-energize ... the feeling that the game is stacked against me if I become entrepreneurial and take risks.  Which brings us to this great quote ...
•  "The argument for limited government is really an argument for not overburdening politicians.  Leave as much as possible to the market, to the law of contracts, to the courts.  Don't pile up on politicians more and more impossible choices they have to make on our behalf."  By WSJ columnist Holman Jenkins on March 23.

2016 Election: Susan and Ole ...

The year is 2016 and the U.S. has just elected the first woman president, who happens to be from Wisconsin. A few days after the election, the president-elect, whose name is Susan, calls her Father, Ole, and says, 'So, Dad, I assume you will be coming to my inauguration?' 'I don't tink so. It's an 18 hour drive."   'Don't worry about it Dad, I'll send Air Force One, and a limousine will pick you up at your door.'   'I don't know. Everybody will be so fancy. Vhat vould your mother vear?'   'Oh Dad,' replies Susan, 'I'll make sure she has a wonderful gown custom-made by the best designer in Washington.' 'Honey,' Ole complains, 'you know I can't eat dose rich foods you eat. Do day serve tap beer?'   The President-to-be responds, 'Don't worry Dad. The entire affair will be handled by the best caterer in Washington; I'll ensure your meals are salt free. You and Mom just have to be there.'   
So Ole reluctantly agrees and on January 20, 2017, Susan is being sworn in as President of the United States. In the front row sits the new president's Dad and Mom. Dad recognizing the senator sitting next to him leans over and whispers, 'You see dat woman over dare wit her hand on da Bible, becoming President of da United States?'   The Senator whispers back, 'You bet I do.'  
Ole says proudly, "Her brother played football for da Green Bay Packers."

Highest Effiency: 90 Minutes at a Time

Working in 90-minute intervals turns out to be a prescription for maximizing productivity. Professor K. Anders Ericsson and his colleagues at Florida State University have studied elite performers, including musicians, athletes, actors and chess players. In each of these fields, Dr. Ericsson found that the best performers typically practice in uninterrupted sessions that last no more than 90 minutes. They begin in the morning, take a break between sessions, and rarely work for more than four and a half hours in any given day. ...
Along the way, I learned that it’s not how long, but how well, you renew that matters most in terms of performance. Even renewal requires practice. The more rapidly and deeply I learned to quiet my mind and relax my body, the more restored I felt afterward. For one of the breaks, I ran. This generated mental and emotional renewal, but also turned out to be a time in which some of my best ideas came to me, unbidden. Writing just four and half hours a day, I completed both books in less than six months and spent my afternoons on less demanding work. ...
By managing energy more skillfully, it’s possible to get more done, in less time, more sustainably. In a decade, no one has ever chosen to leave the company. Our secret is simple — and generally applicable. When we’re renewing, we’re truly renewing, so when we’re working, we can really work.
                                   -- Tony Schwartz, CEO of The Energy Project, in a New York Times column (2/10/13)

On Change Management/Culture

My long-time TEC III member, Mitch Weckop, CEO of Skyline Technologies, made a great  presentation to a meeting of the local Servant Leadership group recently, regarding his learnings on how to make change happen.  They are not only about process, but also about the cultural items that ingrain a low performing culture and inhibit the movement to the needed one.  You have to recognize and change them ... to make change happen!  The essence of his remarks:

Most people have frustrations and want to change things. CEOs certainly do. And so do VPs,
managers, directors, salespeople, accounts payable processors, machine operators and ... And not just
at work ... in personal lives, and in the community.
And we can. But you have to make sure it's something you're passionate about (because
changing other people's habits is very, very hard), and that it's something you can directly impact.
(Forget about world hunger, the national debt, etc.). And, that directly impacts you (because that's
what will sustain your passion).

First of all, he says, you have to map out your process. Here it is:
1. Identify the Current Reality, especially the negative or sub-optimal result it is achieving.
2. Document the Reality you would Like To Have. What would it "look like" in broad
descriptors, especially the positive results it is providing.
3. Identify the "Rubber Bands" that are keeping the current culture intact. This will be a long
list of specifics ... things that need to be changed.
4. Identify the Work required to Break those Rubber Bands. Not only do you list here the
details of the New Reality (usually opposites of what"s listed in #3), but the specific
Challenges you will have in making them happen. Identifying the "barriers" is important,
because then you think about how to overcome them; you are less surprised when you
encounter them, and more confident because you have a plan. What's very important is
knowing that when you try to change someone else's habits, there is much pullback.
Eventually, most will come around, but some won't and they will be very publicly vocal.
You have to be firm and resistant.
5. Finally, Prioritize what you will do By Quarter. You can't start everything at once. Start
with a few, very few, and fight to get them to work. As people get comfortable with them,
they will be more accepting of your next changes at a faster pace. You'll also be learning
about how to make these things happen. Having the time schedule in place gives you
confidence that there is a foreseeable completion ... even though it will go slower than you
think, and the schedule will be lengthened.
Developing this Process Map doesn't take long ... just a few thoughtful hours or days by your
core group of people who will be masterminding it. At a transportation company, Weckop's 5-person
senior team developed the process in little more than an hour.
What takes long is implementing it. At the transportation company, it took three years to
achieve the New Reality described on the Process Map.

Here are things you have to look for, because they are CULTURAL ... meaning they are
ingrained, even invisible habits and processes that fight AGAINST change. Your current culture
wants to perpetuate itself, and is designed to do so.
So, you must identify and change the cultural elements that are retarding change. Here is
what to look for:
1. Stories. Your organization has stories that are perpetuating the current reality. They talk
about the world that was, lifting it up, celebrating it. You don't want to kill those stories,
because they are part of the legacy, but you need to initiate NEW STORIES ... ones that
describe the new reality, the new vision, the new rewards that you want the organization
to embrace. Look at your desired reality, and tell the story of how you developed it ... and
tell it OFTEN! There will soon be sub-stories, new ones that get created on your journey.
Craft them carefully, and tell them, too. Weckop says, "Be very intentional about the
stories you need to tell. They must be compelling, and justify your new vision."
2. Language: BE intentional about your descriptors. Make them more compelling than the
current ones. Example: Employee titles. Receptionist has become Ambassador and Mgr,
First Impressions. More and more have become Technicians or Technical Consultants.
3. Artifacts: There are all sorts of things around the office and plant that support or are
memories of the old culture. Remove them, and replace them with something new,
ideally emblematic of the new culture. Start with vending machines with high fat content
4. Status: Who gets special parking places? Certainly not executives. Customers for
certain. Then, nobody ... egalitarian? Or an employee who got a special award or
5. Symbols of Success: "My office has more ceiling or floor tiles than yours, so ..." Better:
Who gets selected to go to special training, to visit customers, etc.!
6. Taboos: Look for Taboos that are counter-productive. We should be doing them. Then,
begin the fight to change that cultural element.
7. Rituals: What happens all the time that reinforces the old way, the old guard, the old
culture? Locate it. Change or replace it .. to what you need now. Create new rituals that
reflect the new regime. Could be simple things ... like a new approach to the employee
8. Rewards: Whom and when do you reward? For seniority? No. People who are taking
you in the new direction, at a faster speed than others! Make sure there is a
Principles/Values check ... but that's a 'cost of entry,' not a gainer.
Says Weckop: "Find where your passion is about something that needs to change, and go for