What’s Wrong With Retail?

During 2020, 12,200 retail stores closed, up from 9,300 store closures in 2019. Another 5,700 retailers closed their doors in 2018, and 8,000 closed in 2017. That is a total of 35,200 stores over a four-year timeframe. Experts have offered several reasons for this trend including the growth of e-commerce as well as the opening of too many stores in years past. Certainly, these are likely factors in the struggles experienced by the retail industry. But there are some basic and fundamental reasons as well. Entrepreneurs would do well to pay attention to how these basics and fundamentals could have an impact on every business – whether retail or otherwise.

We recently traveled several miles to a large national furniture home store in search of a particular kind of lamp we wanted to purchase. When we arrived, there was a grand total of one salesperson on the showroom floor and he was working with a family that appeared to be pondering a significant purchase. I cannot say that I blame him for focusing all his attention on a customer that would earn him a very nice commission. Unfortunately, he did not even acknowledge us or try to find another salesperson to assist us. We waited approximately 20 minutes and then I began wandering the store and came across another salesperson who was arranging a display. He didn’t even ask if I needed help until I finally told him we had questions and would appreciate speaking with a salesperson. I then showed him the lamps that were exactly what we needed and asked him to ring up the sale and we would take the lamps home with us. Not so fast, he responded. The store did not keep lamps in stock and would have to order them. I asked if we could just buy the floor models and he said no. If they did that, they would not have anything to display on the floor. He then informed me that it would be about four weeks before the lamps would be delivered. Disappointed, we told him that we would order them online from a different supplier which we did – and had them three days later.

A friend of ours related another story which she said she has encountered several times. She recently visited a large national department store chain in a local mall. As happens so often, there were no salespeople on the floor, and she had to go looking for them – sound familiar? Once found, the salespeople (remember, this happened on numerous occasions) were uncaring and unknowledgeable. She wanted to try on different clothing items only to find the dressing rooms filthy to the point that she did not want to use them.

Finally, we periodically patronize a large national household goods store. This chain purportedly sells everything under the sun. And yet, we always leave with at least one or two very common items remaining on our shopping list. Why? Because the items are not in stock for one reason or another. We have tracked down sales associates who tell us that if it is not on the shelves, they do not have it. This was understandable during COVID-19, but the problem was occurring well before the pandemic.

So, let’s review. A large retailer does not carry floor items in stock so that customers can take their purchases with them. In fact, a customer must wait longer to receive such items from the store than if they make the purchases through an e-commerce site. Several large, national retailers do not have adequate sales associates available to help customers. And, in several cases the sales associates they do have are of no help. Finally, cleanliness in a few cases is apparently not on anyone’s “To Do” list.

Let’s be clear. There are many retail establishments that are doing it correctly. Home Depot and Lowe’s have plenty of friendly and knowledgeable sales associates who are instantly available to assist. This is not an indictment of the retail industry as a whole. But the fact that so many large, national chains are falling short is baffling – especially considering the existential threat posed by e-commerce.

As entrepreneurs we should understand how critical the customer experience is to our success. This is certainly an obvious statement; so why are so many businesses continuing to fall short with the basics and fundamentals? I am sure as you read this that you can relate your own examples of the disappointing encounters you have had in the retail sector. Just remember to make sure that your customers aren’t saying the same things about your business.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Premium-Priced Entrepreneur

What do the following have in common? A To’ak Chocolate Bar, Sapporo’s Space Barley Beer, the Shure KSE1500 Electrostatic Earphone System, the Rolls Royce Phantom Serenity automobile, and the Bunn Tiger XL Super-Auto Espresso Machine? OK, here is a hint. The chocolate bar costs $260; the beer retails at $110 per six pack; the earphone system costs $2,999; the Rolls Royce runs $1.1 million, and the Bunn coffee machine is $12,000. It is obvious that all are ultra-premium products. A Hershey Bar at Sam’s Club can be purchased for $.57. A six-pack of Bud Light is about seven bucks. For less than $20 you can buy Philips SHE3590 earphones. A Toyota Corolla will set you back $18,500, and a Mr. Coffee BVMC-SJX33GT-AM 12-Cup Programmable Coffee Maker with Thermal Carafe Option is available on Amazon.com for $18.26 – and in a chrome finish no less!

You may be thinking “A chocolate bar is a chocolate bar,” right? And why would anyone want to drink a beer that costs $18.33 – would it really taste 1,467% better than a Bud Light because that is the cost differential! Isn’t driving from Point A to Point B basically the same whether it’s in a Corolla or a Rolls? Why is there so much of a difference between a regular product and a premium one?

In nearly every industry there is always a product or service that commands a premium price. In this extremely competitive world in which we live, how can this be? There are a lot of wannabes when it comes to premium products, but most come up short. As entrepreneurs we want to look for the opportunity to create a premium product or service that generate huge margins and burnish our reputation. So, what do we do?

Let’s look at the primary elements that comprise a premium product or service. Certainly, Quality is at the top of this list. The Rolls Royce Phantom Serenity is amazing in the category of quality. A Gearheads.org write-up had this to say, “The interior of the car received exceptionally crafted elements that are probably the most perfectly sculpted and crafted elements in the car world. Bloom effect and bloom motifs that are scattered throughout the cabin are applied by artists using a squirrel hairbrush. The extent of lunacy of perfection went so far that Rolls-Royce imported a specially woven silk from Suzhou in China and integrate it throughout the cabin. Bloom effect was added onto the silk as well and Rolls-Royce officially published information that painting one silk panel with bloom effect required 600 working hours. You have read that right too. Basically, a man should work fifteen weeks straight to make a perfect blossom motif on only one silk covered panel.”

Another component attributable to the premium label is that of Features. Listen to this about the Shure KSE1500 from the Shure website. “Offers five EQ presets, four customizable EQ settings, and Bypass Mode which bypasses digital processing for pure analog audio enjoyment. Features high-resolution 24/96 ADC/DAC, aligning with the Japan Audio Society High-Resolution requirements for both analog-to-digital and digital-to-analog conversion. Works with any earphones or headphones with a 3.5 mm jack; compatible with Mac, PC, iOS, and Android devices. Includes paired earphones and amplifier (not compatible with other earphones or amplifiers), charger, Lightning® and OTG cables, two 1/8″ cables, 1/4″ adapter, airline adapter, attenuator, cable clip, two security bands, cleaning cloth, case and user guide.” If I wanted a set of premium earphones, I would be impressed with such a wide array of meaningful features.

The final primary facet of a premium product (or service) revolves around Brand. Sometimes a brand can be so legendary that it overshadows the actual product. There is no doubt that a Rolls Royce is exquisite in terms of quality, but the Rolls brand is so steeped in a tradition of luxury that just about any automobile it produces will be perceived as an ultra-premium vehicle.

We entrepreneurs would do well to study premium products and services and model them to the greatest extent possible in our own organizations. Too often companies charge higher prices just because it costs more to produce whatever they are selling rather than providing true value to the customer. When we give premium value to our customers, we are well on our way to achieving a level of product or service differentiation that commands a premium price.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Incremental Entrepreneur

The drive from New York to Los Angeles covers 2,791.8 miles. Or put another way, that is 176,888,448 inches. And to show you that I am not playing favorites – for those of you who prefer the metric scale, the New York to LA trip spans 449,295,541.2 centimeters. Why the obsession with inches (or centimeters)? Simply put, it is about progress. Totally confused? Let me explain.    

We all know that progress is “a movement toward a goal or to a further or higher stage,” according to most dictionaries. We entrepreneurs hold a steadfast belief that progress is the Holy Grail, and wheel spinning will send us spiraling into a major funk. Even progress that seems too slow to us can be cause for great angst. I certainly stand before you guilty as charged! But here is what I have learned. Sweeping change may not be lasting. Here is an example. Suppose that our business begins to grow at a very rapid pace. Year-over-year our top line revenues (fueled by sales) increases 35% to 50%. What a wonderful problem to have – right? Well, rapid growth comes with a price. Often, there is not time to lay a solid foundation of systems and processes. We are just go-go-go all the time. And the success masks over the rickety infrastructure that may have been installed in haphazard fashion.

Let us look at another example. We are negotiating a new contract with a vendor that has proposed taking over our entire human resources function. There could be a substantial savings involved. But this is a big leap, and what if it does not work? How do we rebuild our HR operation? Would making a change force us to hire another outsource provider because re-starting our internal HR department would be too difficult?  

There is something to be said for embracing incremental change. I am not saying that taking the inch-by-inch approach is right for every situation. There is no doubt that there are situations where making a big, honkin’ impact is the right thing to do. But I know that too often I want everything at once in nearly every circumstance. And of course, this leads to mounting frustration when it does not happen to my liking. I have written before about patience – a gene that is absent for most entrepreneurs. Embracing incremental change is not all about patience, however.

Incremental change can be plain smart business. Take the example of the outsourcing of the HR function. Perhaps there would be a way to dip our toe in the water with the vendor. Maybe we outsource a portion of the HR function on a test basis and evaluate the results. If after sufficient time we feel comfortable, maybe we move another portion of the HR function (or even the rest of it). Maybe rather than grow at 50% per year we throttle back to 25% or 30%, and intentionally invest resources in building a solid infrastructure. Instead of rolling out an entirely new sales training program, we prioritize our weakest areas and develop training around them. The ultimate goal would be to implement a new sales training program, but over the course of 18 to 24 months.

As much as we want everything to happen right now, sometimes we are better served by making change inch-by-inch. We take what the market will give us. We take the gains that our team can generate. Sure, it is nice to score a touchdown with a 103-yard punt return in 11 seconds. But we score the same seven points when we grind out positive yards. Yes, sometimes we achieve a first down with just an inch or two to spare. If we are in it for the long haul, the incremental approach may even be more rewarding because our wins are not the result of a fluke or a lucky break. We know how to win.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The “Looker” Entrepreneur

I knew a person who always seemed to have a black cloud following over his head. He encountered some of the most bizarre situations I have ever known. His drive to work regularly was a harrowing experience. I would hear tales of near-death situations involving rogue drivers forcing him off the road. Then there was the incident at the sporting goods store. He tried to return an item he purchased and got into a massive fight with the store that involved an ongoing string of e-mails and phone calls. Finally, he always seemed to be feuding with a friend. The reasons were so banal that I never figured what was really the problem.

At one point I dug in a little deeper to try and understand why this individual was always struggling so much. And guess what I found? He had an LFT problem. If you have not figured it out by now, LFT means Looking for Trouble. He was continually loaded for bear and saw a conspiracy against him every time he turned around. Turns out he was a very aggressive driver (I rode with him once and he scared the bejabbers out of me). He could be very demanding so I imagine that in a retail store he might have been inclined to run roughshod over the salesclerk. He told me that his motto was to “expect the unexpected” and be ready to “play offense.”  

Going through life with an LFT mindset must be depressing. And it is an attitude that’s pure poison for entrepreneurs. I can see preparing for the unexpected, but intentionally expecting something bad to happen seems like it could become a self-fulfilling prophecy. I truly believe that if we see conflict and strife in every situation then that is how we will live. Those types of thoughts are like a magnet. 

I can count on two or three fingers the number of times I have had close calls in my car. I know I am vigilant when it comes to driving and while alert, I am not “waiting for the other shoe to drop.” In other words, I do not believe that there is someone out there looking to make my driving experience a miserable one. As an entrepreneur I am aware that there may be others who are looking to gain an unfair advantage. But I do not obsess on this awareness. Instead, I go into each situation with the belief that the person across the table from me is going to deal honorably and I know that we will find a mutually acceptable conclusion to our interaction.

Life is so much better when we are in an LFG mode. LFG? Looking for Good.Do not be fooled by this approach. It is not naïve or Pollyanna-ish. LFG is relatively simple. We look for the good in every experience and with every person. This type of thought is also like a magnet. When we Look for Trouble, we find it. When we Look for Good . . . we find it! It does not mean that I am going to walk down a dark alley in a big city and flash a big roll of Benjamins! After all I am not bulletproof. But it does mean that until someone proves me wrong, I am going to choose to see a positive outcome in whatever I am doing.

The entrepreneur who wakes up in the morning with a siege mentality and wonders who or what is going to come at him today, is in trouble before his feet hit the floor. By contrast, the entrepreneur who wakes up and knows that today is going to be positive and productive has just set the stage for a great day. Oh sure, there will be challenges because that’s just life. But the challenges are so much easier to resolve when we do not have a nagging belief that there is someone hiding around the corner ready to whack us in the kneecap. 

So, which will it be – LFT or LFG? The choice is 100% ours to make. There is no conspiracy. And there is no “other shoe” about to drop.  

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The O-Fer Entrepreneur

In baseball the stat line for a hitter who strikes out, flies out or grounds out in all his at-bats during a game is shown as 0 – 4 or 0 – 5. The stat sheet for a basketball player who continually shoots and misses without scoring a point might show 0 – 7 or 0 – 10. In athletic terms this is an O-fer . . . O for 4 or O for 5 . . . O-fer. Going O-fer is an ignominious experience and generally brings on scorn from the fans. In 1922, Babe Ruth faced St. Louis Browns’ pitcher Hub Pruett. The first 14 at-bats for the Babe resulted in 10 strikeouts and two walks. During the 1922 World Series, Babe Ruth hit one single and one double in 17 trips to the plate. Arguably one of the greatest players to ever step on the diamond, Babe Ruth struck out 1,330 times. That was fewer than other baseball luminaries such as Barry Bonds (1,539), Mark McGwire (1,596), Mickey Mantle (1,710), Alex Rodriquez (2,287) and Reggie Jackson (2,597). Any student of the game will tell you that all of these players were some of the best in the history of baseball.

There is another side to the story. Ruth had 2,214 Runs Batted In (RBI); Bonds had 1,996; McGwire had 1,414; Mantle had 1,509; Rodriguez had 2,086, and Jackson had 1,702. And each smacked a lot of home runs during their respective careers – Ruth (714); Bonds (762); McGwire (583); Mantle (536); Rodriguez (696) and Jackson (563). I know this is a lot of statistics and if you are not a baseball fan you may not fully understand the astounding nature of these feats. But there is a point to all of this. In life we do strikeout. Baseball players strikeout. Entrepreneurs strike out. Salespeople strike out. Going O-fer is just part of the game.     

What matters is how we deal with going O-fer. When we flameout do we play the victim and blame someone else? Or do we examine our technique as well as the surrounding circumstances and look for ways to tweak our “form?” How easy would it have been for these great baseball players to have let their propensity to strikeout destroy their careers? Instead, they did something else. They figured out how to take the strikeout experience and find a way to hit the ball out of the park in a future plate appearance. Babe Ruth was number 118 in lifetime strikeouts, but he was number two in RBIs. I find this fascinating. Here is a man who drove in far more runs than he struck out – yet he had a lot of strikeouts over the course of his career.  

I listened to a podcast recently about a venture capital firm that was launching its first fund. The principals were doing the typical road show and calling on prospective investors in multiple markets. They would typically be gone for a week at a time – one week they made 25 meetings in Boston, Chicago, Atlanta, Miami, and New York. During that week they were O-fer through 22 meetings. Imagine how this might feel! Yet, on their final day, they went three-for-three and netted tens of millions of dollars in commitments.

There’s more than just resilience at work here. It is critical to understand that going O-fer is just part of the game. It does not mean the game is over. With each new meeting, pitch, visit or idea, we are starting zero to zero. It is a tie game. I have learned not to look at O-fer beyond zero to zero. If we do not win the last at-bat we simply start over with the next one. We remember the instructive elements from the encounter and discard all emotion as we make the pitch again to the next customer. We only lose if we stop playing the game. We know in our bones that eventually we will hit a home run or an RBI. So, we keep playing the game.

If we understand that O-fer is just part of the game and can maintain our positive energy, we can erase our doubts and feelings of limitation. This sets us up to ultimately connect with the ball and score consistently.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The “Danger Will Robinson” Entrepreneur

Lost in Space was a classic television show broadcast on CBS between 1965 and 1968. A young Billy Mumy played the part of Will Robinson who regularly interacted with the Robot. For those of you too young to remember, the plot centered on a modern-day Swiss Family Robinson, marooned in space where the goal was to somehow figure out how to return to Earth. I enjoyed watching this show in black and white, and later in color, while Will and his family would constantly encounter misadventures. One of the most epic lines was spoken in a raised voice by the Robot – “Danger Will Robinson; Danger!” whenever Will was about to be eaten by some exotic space creature, or step into an abyss that lay below some cosmic quicksand.

We entrepreneurs need our own version of the Robot to help us avoid many of the missteps that we encounter in our daily lives. One such opportunity for disaster comes when we are in the middle of negotiating. In my world, we are always buying and selling apartment properties. Let’s use the acquisition of one such property as the example for this blog. The property in question seems to perfectly fit our acquisition strategy. The location is right, the property age falls within the target timeframe, the unit mix is perfect and historical data shows a very strong operation for the past several years. But . . . the price is significantly higher than we can pay to generate the return on investment we are seeking.

We negotiate back and forth. Offers and counteroffers ensue, but we just are not quite at the price we are looking for. Here is where we need the Robot to save us from ourselves. There is a psychological threshold at which point we are committed to getting the deal done. We are vulnerable at this point to being taken advantage of. Maybe we start looking at our projections again and tinker with the annual rent increase percentage we initially underwrote. When we do this, the numbers work, and we can close the deal. Yet are the new rent increase projections realistic? Or are we simply looking for a way to rationalize the adjustment? I have certainly done it before. My reasoning went like this, “The standard 3% increase on this property is approximately $25 per month. Another .5% pushes the rent up by $29 per month. A renter isn’t going to balk at $29 any more than at $25, so I’m comfortable using an annual rent increase factor of 3.5%.” Now, it is very possible that this line of reasoning is sound. But it is important to understand the motivation behind it. Are we modifying our projections just to get the deal done, or are we really being ultra-conservative and there really is not going to be a problem with the rent increase tweak?

There is a fine line to walk between being creative to successfully complete a negotiation and allowing our emotions to drive the terms and conditions that we are willing to accept. By establishing strategic parameters in advance, we can avoid becoming vulnerable to doing a bad deal. For example, we will only acquire an apartment property that is of sufficient size that we are not compelled to purchase a second or third property in the same market just to gain management efficiencies and economies of scale. It is also important to remember to separate business negotiations from personal ones. Buying a piece of artwork for a personal residence is an emotional decision and it is acceptable to allow emotions to enter into the negotiations. Making a business acquisition of some sort should be completely divorced of emotion in all but the rarest instances.

In a business negotiation understanding where the line is between sound decision making and being vulnerable to manipulation, is critical. Establishing strategic parameters before the negotiations commence and then sticking to them during the negotiating process, will help us avoid crossing this line.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Collaborative Entrepreneur

Nike’s corporate tag line is “Just Do It.” And that could be the tag line for many companies of all sizes. Leaders at all levels send the message of “Just Do It” to their “charges.” This notion boils down to a command and control style of management. And I probably do not need to point out how poorly this approach works with today’s Millennial workforce. We Boomers grew up in this environment and may tend to continue its practice. Perhaps it is time for something different.

I know that many entrepreneurs agree in principle with a more collaborative style of leadership. Yet, the language that is used may belie this agreement. Examine the following statement that rolls up many of the words used into a massive contradiction with collaboration. Mr. Smith is a senior executive with the ABC Company and he’s describing a recent business win for his company.

My employees really came through with this project. I have a hundred people working under me and every one of them did their jobs like they were supposed to. I set their goals and they achieved them. I’ve been focused on this opportunity for a long time. I love winning this way!”

At first blush Mr. Smith seems to be giving credit for the win to others. But the way he says it indicates that he is not yet a convert to a more enlightened style of leadership. Note the highlighted words. Clearly, he is in charge here and other people have done his bidding.

Entrepreneurs can change this narrative. When we are comfortable in our own skin, we are easily able to eliminate the unhealthy aspects of our ego from our interactions with others. It is often the case that having to take the credit for an accomplishment or reinforcing the fact that we were “at the top of the food chain” is a result of our own lack of confidence or some other insecurity. With our new level of comfort, we relax, smile, and become totally humble.

Here is another version of the previous statement. Mr. Doe is a senior executive with XYZ, Inc. and is celebrating a recent success.

“The XYZ team is amazing! They worked together to establish the goal and drew upon our Core Values to develop a winning strategy. We are so appreciative of each and every one of the hundred team members who worked tirelessly on this project for more than a year. Their commitment, dedication and creativity are the reasons for our success.”

Sounds a little different doesn’t it? There is not a single mention of the words “I,” “me” or “my.” The word “employee” has been replaced with “team member.” Mr. Doe simply delivers the message without allowing his ego to enter the picture. Clearly, Mr. Doe’s team members work “with” him – not “under” him. I have written before about how we need to be intentional about modifying our vernacular away from “I,” “me,” and “my,” and changing to “we,” “us,” and “our.”  

Collaborative leadership is not decision making by committee – as a leader we still make the ultimate critical decisions. Collaborative leadership is about seeking out team members and listening to their thoughts and ideas. It is valuing others as human beings and the contribution they make to the enterprise. It is about having empathy and creating a culture of respect. And it is about using the words we say as a reflection of all these factors.

When we think about what we write and say we can ask ourselves this simple question – “Do my words focus the spotlight on me or on others?” Doing so helps us move away from the old command and control approach of the past.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The “My Word is My Bond” Entrepreneur

This blog is a bit of a lament. I grew up in my industry during the 1970s and 1980s when a handshake was still as meaningful as written documentation. The proverbial handshake was not necessarily a legal contract, but it might as well have been. Once we gave our word, nothing could change the follow-through on our intent. Legal documentation was merely a formality and there was not a lot of haggling over the verbiage. Sadly, this notion of “my word is my bond” has diminished in recent times.

We recently sold two large apartment communities that were part of our portfolio for several years. We went through a painstaking process of listing the properties for sale with a national brokerage firm. The properties were marketed extensively, and we issued a call for offers. Dozens of offers were received, and we opted to have further discussions with the top ten bidders. Then we made a call for “best and final” offers. Once those offers were received, we interviewed the top four bidders and determined a winner. We then told the winners verbally that we were accepting their best and final bid. In both instances, one of the unsuccessful bidders reached out within 24-hours and increased their offer. In one case, the increase was $250,000, and in the other case it was $750,000 higher. In our minds there was no decision to be made. We had already given our word to the initial winning bidders and we had no problem staying with their offers, even though it cost us $1 million.

Contrast that with a situation that occurred with another of our business units. This business is involved in the syndication of historic tax credits. We offered term sheets to a developer who verbally accepted our offer and confirmed the acceptance in an e-mail. A couple of weeks passed, and we had not received a return of the term sheets signed by the developer. When we reached out to the developer he apologized and said that he had decided to accept an offer from another tax credit syndicator. Legally, he had every right to do this. But it certainly left a sour taste in our mouths. For sure, his word was not his bond, and he did not even have the courtesy to let us know without being prompted.

It all boils down to the simple yet powerful premise of Integrity. Our company embraces five Core Values, one of which is Integrity. We are proud of the fact that we can demonstrate in real time that we practice what we preach. Integrity used to be a foundational principle for entrepreneurship. I believe that it still is, but it has become devalued – especially where the almighty dollar is involved. The problem is compounded by the fact that too many businesses throw around terms such as “integrity” and “honesty” but fail to deliver on them. Hearing Honest Harry yap about how you can trust him to sell you a car at “$1 over invoice” has caused society to tune out.

So, what do we do about this sad fact of life? At this point, I do not really care about whether I can believe that the word of other entrepreneurs is their bond. Instead, we will just keep doing things the old-fashioned way. If I tell you something, you can believe it whether we have a legal document or not. Hopefully, you will treat me the same way. If I screw-up, I will step up and make it right whether I have a legal document compelling me to do so or not. I cannot count the number of times over the course of my career this has happened – at a cost of literally millions of dollars. This may not be the smartest business decision, but it is the right thing to do, and I can sleep at night.

At the end of the day, as entrepreneurs we should want to be judged by the character we display over the course of our careers rather than the amount of money we will have made.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Vengeful Entrepreneur

Something happened in the entrepreneurial world that is so strange that I literally did a double take. Here is what was reported in the New York Times on May 25, 2016.

“A billionaire Silicon Valley entrepreneur was outed as being gay by a media organization. His friends suffered at the hands of the same gossip site. Nearly a decade later, the entrepreneur secretly financed a lawsuit to try to put the media company out of business.”

“That is the back story to a legal case that had already grabbed headlines: The wrestler Hulk Hogan sued Gawker Media for invasion of privacy after it published a sex tape, and a Florida jury recently awarded the wrestler, whose real name is Terry Gene Bollea, $140 million.”

“What the jury — and the public — did not know was that Mr. Bollea had a secret benefactor paying about $10 million for the lawsuit: Peter Thiel, a co-founder of PayPal and one of the earliest investors in Facebook.”

We have all heard the phrase, “don’t get mad – get even.” I think this example takes the concept to a whole new level.  Ultimately Gawker filed for bankruptcy, so I suppose that Thiel achieved his objective. Thiel claims that his financing of lawsuits against the company was about deterrence rather than revenge. But that is a bit hard to swallow. Several issues surface with this situation including whether it is right for wealthy people to use lawsuits to attack free speech. But that is a subject for others to discuss. The focal point for this blog is how we as entrepreneurs choose to react when we perceive that others have been unfair with us.

Undoubtedly, we have all experienced a time when the Golden Rule was taken out of the drawer and used to beat rather than measure us. And when this happens our first instinct may be to fight the injustice that we have experienced. Thoughts cross our minds like, “we’ll sue,” or “let’s steal one of their clients or employees.” This is perfectly natural . . . and totally unproductive. Of course, there are situations where it is perfectly valid to take legal action. But doing so out of revenge or spite may not be in our best interest.

I am making no judgment about Peter Thiel. But I know for myself that even a hint of vengeance in my persona is a very bad thing. Vengeance is nothing but negative energy which can lead to all sorts of undesirable consequences. Why take a chance on attracting illness, loss of relationships, financial hardship, and other unfavorable outcomes because we dwell in the negativity of revenge? Instead, why not focus on the goals and objectives at hand and deny the temptation to wander down the payback path? Rather than looking for retribution, look to use the injustice as a powerful incentive to succeed.

The English philosopher Francis Bacon once said, “A man that studieth revenge, keeps his own wounds green, which otherwise would heal.” In other words, wallowing in revenge keeps reminding us of our negative experience. It crowds out other thoughts and feelings that might be the new idea we need or the solution to a problem we have been seeking. The pursuit of punishment and retaliation keep us stuck in neutral and prevents us from moving forward. Competition is tough enough these days – why allow our competitors to lap us while we are stuck in the metaphorical pit stop of vengeance?

As entrepreneurs we fortunately make our own choices. Choosing not to accept the negative emotions that are associated with unfair or unjust treatment puts us that much closer to prize which we desire.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Entrepreneur and the Bus

“Tom’s personal preferences on his footballs are something that he can talk about in much better detail and information than I could possibly provide,” Belichick said, “I can tell you that in my entire coaching career, I have never talked to any player (or) staff member, about football air pressure.” This is a quote from a press conference held by New England Patriots coach Bill Belichick during which he spoke about Patriots quarterback Tom Brady and the infamous “Deflategate” case. What just happened here?

This was a classic case of someone being “thrown under the bus.” In this instance it was very public and left some massive tire marks. In an entrepreneurial environment this is pure poison. Throwing someone under the bus destroys team spirit and leads to major internal trust issues.

As children, we tend to point fingers at others rather than accept responsibility for ourselves. The blame game was in full swing and a normal aspect of childhood. We should have seen its destructive nature then and refrained from carrying it into adulthood. How often have you heard something like this? “Our revenues are down because the salespeople didn’t move enough of our product.” Or “The contract was late being delivered to the client because my administrative assistant was sick.” And how about, “I’m sorry we delivered poor customer service – I’m going to fire John Doe whom you spoke to on the phone.”

Wow! These are some heavy-duty statements and perfect examples of what it looks like to be thrown under the bus. They are also perfect examples of scapegoating, finger-pointing, excuse-making and general lack of accountability. At all costs, the speaker wants to distance himself from what went wrong. It is obvious that this is not enlightened leadership. How simple it would be to change a few words and ultimately the whole message. Consider these alternatives. “We’re pulling the whole team together to identify a new strategy to increase revenues.” No one is being blamed here and a positive step has been identified. “I’m very sorry the contract was late. Please let us know if there is anything that needs to be changed.” The client does not really care why the contract was late. Thus, a heartfelt apology is all that needs to be said. “I’m sorry our customer service wasn’t satisfactory. What else can we do to make this right?” Again, a straightforward apology and no one is blamed.

Teams become strong when each member knows everyone has his or her back. What if clearly someone screwed up and makes the whole team look bad? Shouldn’t that person be held accountable? This is a fair question, and the answer is yes to accountability. But as leaders, we should never publicly do so – to a customer or in front of the whole team. Individual issues should be dealt with individually. We accomplish nothing when we embarrass a member of a team in front of others. Not only does that team member resent such treatment, but the other members become afraid of making mistakes for fear of being called out in similar fashion. Rather than move forward with positive energy, the team then becomes tentative and apprehensive.

A respected leader will always take one for the team. He or she understands that an individual failure is a team failure. The failure could have happened because the team member did not have the training or the resources to succeed. It could have happened because systems and processes within the organization were broken. Perhaps there was a lack of communication or understanding. And it is possible that the organization failed because it placed a bet on a team member that really was not qualified for the job. Rarely is failure isolated to a specific individual. Recognizing this, the strong leader will resist the temptation to single out an individual and instead accept responsibility on behalf of the entire enterprise.

Being thrown under the bus is humiliating and painful. People want to work within companies that create a climate of trust and avoid blaming individuals for problems when they arise.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.