The American Dilemma and How We Can Fix It

Posts tagged ‘Business’

BAKED IN THE CAKE

Under the heading of Fire Prevention and Safety, Clark County, NV has an ordinance which requires a business owner to post the following sign above their entrance:

“THIS DOOR TO REMAIN UNLOCKED DURING BUSINESS HOURS”

Obviously, the business is not required merely to post the sign but to comply with its meaning.  That seems somewhat laughable since, if you own a business, locking out the public from access would tend to discourage people from entering your premises and buying your product.  And I have never had an experience where I walked into a business and a guard locked the door behind me refusing to allow me to leave until I had purchased something.  Nonetheless, I’m sure that the rule, if not thought through completely, was enacted with the best of intentions.

Of course, we have many laws on the books which were enacted with the best of intentions but whose unintended consequences were so problematic that they had to be amended or repealed entirely.  The Constitutional amendment beginning Prohibition is one example which comes to mind.

Oregon has a law which prohibits a business from discriminating against a wide array of protected “classes,” one of which is homosexuals.  An administrative law judge found bakers Melissa and Aaron Klein guilty of violating that law and infringing on the rights of two lesbian women who wanted to place an order with them to bake a wedding cake to celebrate their nuptials.  The Kleins declined to do so because they have religious beliefs that they believe would be compromised by participating in a gay wedding.  The two women brought suit and were awarded $135,000 under their claim of having experienced 88 different forms of “mental-rape” as a result of the Kleins’ refusal to provide their cake.

As might be expected, the ALJ’s decision was trumpeted both by the left and the members of the BGLQT community (I’ve re-ordered LGBTQ alphabetically so that there is no implication that one subcomponent is more important than any other) as a triumph for fairness, and on the right was predictably denounced as an attack on Christian faith.  In the final analysis, I suspect that both sides on this issue may prove to be wrong.  What may be at risk in decisions like this is the ability, for whatever reason, for people to hold an opinion and to act on it which is in contradiction to that held by the vocal minority.  What is in jeopardy is not freedom of thought or freedom of speech but freedom itself, at its most essential level.

I respect the Kleins standing on their principles.  Personally, as a Christian, I do not feel that their providing a cake for a gay wedding would have been a tacit endorsement of gay marriage.   But in any “anything goes” world it is unusual to find people who still try to conduct their lives based on principle.

Every business owner has to balance morality with profitability.  The left portrays business people as being greedy,  only mindful of profits at the expense of their employees who are generally categorized by them as being overworked and underpaid.  The fact that the Kleins would decline to bake a wedding cake for this lesbian wedding undermines that theory.  If business owners are strictly and solely motivated by profit then turning down a profitable order makes absolutely no sense.  It is for that reason that we should give weight to their stated belief that in their view, participating in the ceremony by baking a wedding cake was something that they could not do in conscience.

But there is another reason the Kleins, their views on homosexuality being openly known, might have made a wise business decision, one not based on their religious faith.

Let’s take the case of a family restaurant owned by a Mormon family.  One evening, a man staggers through the door.  His breath reeks of alcohol and he clings to the hostess station near the door to try to stabilize himself.  By anyone’s standards he is obviously drunk.

The owner of the restaurant comes over to him but before he can say anything, the drunken patron starts yelling that he wants coffee and he wants to eat.

The owner explains that he is a Mormon and based on his religious beliefs does not serve coffee in his establishment.  The man again shouts out that he wants coffee and food.  By now, the families in the restaurant have stopped eating and everyone is watching this encounter near the front door.

The owner politely suggests that the patron does not appear to be sober and out of concern for him offers to call him a taxi so that he can get home safely.  But instead of following this kindly advice, he sees an empty seat at a table where a husband and wife and three children are eating and he staggers over to the table and flops into the vacant chair, reiterating his demand for coffee and food.  In frustration, the owner calls the police who arrive swiftly and arrest the patron for being drunk and disorderly and remove him from the restaurant in handcuffs.

Now if most people were empaneled on a jury and these facts were presented in evidence as the state’s case why this man should be punished for his disruptive behavior, I suspect they would vote to convict.  The fact that Mormons don’t consume alcohol or coffee would have played no factor in the evidentiary presentation.

But let’s replay that same scenario with only one change.  The drunk patron comes into the restaurant and he is wearing a T-shirt that has a Rainbow Flag on it and above and below are written the words GAY PRIDE.

Several weeks go by and suddenly a man shows up at the restaurant with a summons which he delivers to the owner.  The patron who was removed from the restaurant has filed suit because he claims that he was refused service for the sole reason that he was a gay male.

In some respect, filing a law suit to “bring about social change” is the ultimate and easily accessed methodology for those whose lives are otherwise too mundane to warrant their very own “reality TV show”.  And the potential to score a big payday while having to pay nothing out of pocket for your contingency case – well, that’s just icing on the cake.

It costs just as much to defend yourself if you’re innocent or guilty.  Filing a law suit is, in the view of many, the path to riches more than it is a path to justice.  Given the current mania of juries awarding ridiculous punitive damages, perhaps hoping they will set a precedent if one day they should be the plaintiff in a similar case, it’s hard to know how a jury would decide the case.

Returning to the Kleins who were and are candid on their view of homosexuality, I would think that one of the things that should concern them in the future is, that even if they were to modify their view that providing a wedding cake for a gay wedding is an endorsement of gay marriage, they should take caution.  Returning to my premise that people sue other people whether or not there is a basis in fact, let’s consider the following scenario.

Another gay couple asks the Kleins to bake them a cake for their nuptials.  The Kleins have decided to be guided by the synoptic Gospel advice to “Render unto Caesar the things that are Caesar’s and to God the things that are God’s”.  So they agree to prepare the cake the couple selects.

On the appointed day they deliver a beautiful cake.  The ceremony ends and the guests retire to the banquet.  But the couple is dissatisfied with the cake they ordered.  So they file suit, claiming that the cake didn’t meet their expectations and that the Kleins purposely sabotaged their happy day because despite recanting on their views, they found a way to ruin the happy couple’s celebration by preparing a cake that was not up to standards.

Is this an unlikely scenario – a right wing conspiracy theory?  Well, possibly so.  Or perhaps, given today’s PC climate and verdicts that emanate from jury nullification, maybe it’s the kind of case whose outcome is already baked in the cake.

WATCHING OUR WASTELINE

If you run a small business, one of your most important concerns is how to provide your clients with quality services and products and, at the same time, maximize your businesses’ profits.  By profits, I mean what you wind up taking home for yourself and your family – after the government gets its mandatory cut.

To many, the term profit is a dirty word.  They portray the typical businessman as a middle aged, jowly white man wearing a napkin tucked under his chin as he prepares to feast on the livers of the workers whom he employs.  Their mindset is that the way your typical businessman improves his profits is by taking unfair advantage of his employees.  Obviously, he is not one of the touchy-feely “good guys” which is how they perceive themselves

Perhaps there are people who operate their businesses that way – but not for long.  A free market gives everyone choices – and that includes those who work for businesses, small and large.  In a healthy financial environment, the intelligent employee will seek out the best employment opportunity and eagerly exit that sort of environment.

The problem with the ghoulish picture of the profit-driven business owner which is in vogue is that those who have captured this image have little or no experience with the way a successful business actually works.  While ignorance of the law is no excuse if we infract one, apparently that same principle does not apply when it comes to describing business.

Let’s return to the underlying premise of the left that making a profit is something that is inherently bad.  Their theory is that it is government that should be the distributor of all that is good and holy and wisely metes out to its citizens that amount of goods and services which is in their best interest.  But where does government get the funds to accomplish this noble mission?  In large measure, it comes from the profits of businesses which it taxes.  No profits, no taxes.

Then consider the company that consistently loses money.  Let’s pretend it happens to be the bank where you have your accounts.  Ultimately, one day you show up at the ATM and find that your funds are frozen while the FDIC figures out which profitable bank it can cajole into taking over from those who mis-managed this institution.

There is no business that can sustain or would tolerate a management team that loses money year after year.  That is to say, there is no privately owned business that would or could do that.  But there is one business that does not perceive itself as needing to follow the rules of profit and loss.  That business is government.

The recent partial shutdown of some government departments sheds some interesting insight into how government “works.”  While much of the media attention is focused on the closing of our National Parks and the disruption to the lives of tourists who planned trips there, less attention has been paid to the fact that this is not the first time such a shutdown has occurred and plans had previously been made to identify “essential personnel” to keep government functioning on a limited basis.  One of those departments is the Environmental Protection Agency.

The EPA has the responsibility of protecting us from environmental damage – most of which, it believes, is induced by mankind.

It is the EPA which has had significant input in blocking the Keystone Pipeline, which would create thousands of jobs and help to make America completely energy independent of the countries from which we import oil and which are hostile to us.

It is the EPA which has created regulations which effectively will kill the coal industry, eliminating thousands of jobs and raising the cost to consumers whose energy needs are provided by burning coal.

It is the EPA which has identified the number of its staff who are “essential.”  By their own statement, of the approximately 20,000 EPA employees, only 7% of them are “essential.”  But the agency has stated that in order to “effectively enforce” all the regulations that it has created, it needs to hire an additional 230,000 people to get the job done – at a cost of $21 Billion per year.

Maybe there is something positive that will come out of the partial government shutdown.  Perhaps it will force us to look at the way we spend money on supernumerary people and programs.  Perhaps we will pull our belts one notch tighter and constrict our wasteline just a little bit.  But I have to tell you, I really doubt it.

TRANSFORMATION

It was only a matter of time and the transformation was inevitable.  Those with a WIIFM (What’s In It For Me) mindset are rapidly becoming the LGIFT people.  That, by the way, stands for “Let’s Get It From Them”.  If they have not come to understand that there is no such thing as a “FREE LUNCH”, they’re darn sure that having eaten, they don’t want to be the ones to pay the check.

But reality is starting to take root in those among this group with IQ’s that are greater than your average snapping turtle’s.  Sadly, that only comprises a small percentage of this collective.  (My apologies to snapping turtles everywhere).

Apparently those who are the targets of the collective’s “wealth-equalization” strategy never saw the T-Shirt which said, “When rape is inevitable, lean back and enjoy it.”  And darn those curmudgeons, they’re not going to go down without a fight.

So now that the election’s over and we know what we’re stuck with for the next few years, business people are finally able to lay out some strategies.  And here’s what is happening:

*** Hostess Brands, Inc. has filed for bankruptcy.  The company manufactures “Twinkies” and “Wonder Bread” among other “food” products.

I never ate a Twinkie but I have seen people pop them in their mouths and looked at the pseudo-creamlike insides as it oozed around the outer pastry container – which is why I have never eaten a Twinkie.  And as to “Wonder Bread”, I remember as a kid Mom saying, “It’s a wonder they’re allowed to call it bread.”

Net result of failing to reach an accord with the Baker’s Union representing Hostess’ workers:

Probably an improvement in the general health of those who eat this stuff and may no longer find it on their grocery store’s shelves;

Hostess will lay off 18,500 full-time employees.  (Oh, by the way, the Baker’s Union that refused to budge on the principle of WIIFM only represents 5,600 people – so they were effectively able to deprive an additional 12,900 working class stiffs of their jobs).

Way to go, folks.  Did I hear someone say, “Union, Yes!?”

*** Obamacare, though 13 months from full implementation is starting to take it’s toll:

This morning at the dog park, one of my friends who is 74 mentioned that he had received a letter on Saturday from his primary doctor that effective 01/01/13 he will no longer treat patients who are insured through Medicare.  You can be darn tootin’ sure that millions of elderly patients will be getting that similar notification.

I guess that’s okay.  We know that “end of life” medical costs represent by far the greatest medical expenditures a person will typically experience during her few brief years on planet Earth.  So if we merely let the elderly die through neglect we can save all that money – not to mention future Social Security payments they might have received.  Now that’s one heck of a way to try to get our financial and healthcare system back on track;

There is good news in this.  Obviously, the funeral industry will be a major beneficiary of these deaths – so that may provide an opportunity for those Hostess workers who are getting laid off.  How long can it be before we start seeing ads from those on-line Universities offering training in “Mortuary Science?”  I just wonder how they will provide the “hands on” training necessary over the internet.;

Those evil doers that run companies are, of course, taking defensive measures that any rational person would.  They are cutting the hours of formerly full-time employees and making them part-time to avoid having to cover them with the proscribed insurance that Obamacare mandates.  So employees who are now covered with insurance will lose this benefit and will have to find and pay for it on their own (with a reduced income) or will have to pay a tax for not having insurance and will have to rely on Medicaid for their health needs.  Good luck having a decent quality of life with those choices.

To make matters worse, insurance premiums are going to skyrocket.  They have to in order to accommodate the influx of new, unhealthy patients who will be added to the rolls.  If you apply the same lack of logic to auto insurance as Obamacare applies to health insurance, what would you, a careful driver with a twenty year-long record of no tickets or accidents think if suddenly your auto insurance company advised that because now, all drivers are “equal” risks, your premium is going to quadruple since they have to insure people at the same rate as you, who have been arrested multiple times with DUI’s on their record?  The phrase “p*ssed off” comes to mind.

Well there still is good news I could find in this scenario.  At least one CEO of a major casualty insurance company, Peter B. Lewis of Progressive Insurance, a major Obama contributor, might see a significant increase in his company’s bottom line.  And the better good news is that Flo wouldn’t have to apply to an online University to get training in Mortuary Science.

But let’s do just a quick recap on the situation of the average now full-time, soon to be part-time employee:

She will take a pay cut of approximately one-third of her income;

She will now be forced to pay for insurance out of her own pocket at rates that are far higher than those today, which are already unaffordable;

Failing that, she will have to pay a $695 penalty to the government on her tax return for not having insurance;

The only healthcare available to her will be Medicaid – arguably only one or two steps better than going to a witch doctor – and thus will add to the burgeoning cost of that program which is already bankrupt;

And she will now probably qualify for assistance for food stamps because of her reduced income – another program that is rapidly bankrupting and enslaving us both financially and morally.

What’s not to like?

I see a few hands being raised on the left side of the auditorium.

“Yes, sir?  Do you have a question or comment?”

“I think it’s disgusting that those fat cat, money grubbing people who own companies are going to lay-off or reduce the hours of workers just because of their own selfish self-interest.”  (I cleaned up and deleted the expletives in this statement as this blog is designed for a general audience.)

“Do you, sir?  As I understand your statement, you object to their doing what they believe is in their own best self-interest?  But let me ask you – isn’t that exactly what you and millions of people who share your view did when you voted for a President who created this whole mess?  You thought it would be a good thing for YOU.  So why should anyone else act any differently?”

At this point a significant contingent of those in attendance left the room.  So to those remaining, let me offer a suggestion.

Just so we know what we’re really dealing with, I propose renaming the President’s healthcare bill to what it really is:  “The Obama-I-Couldn’t-Care-Less Act.”  Because less care is what we really can all expect – and the lower you are now on the financial totem pole, the worse it’s going to be for you.

Mark my words.

THE SWEAT SHOP (PART THREE)

Allow me to introduce John Morse.  He was the owner of our employment agency.  He had pulled himself up by his bootstraps.  Mr. Morse rarely came in the office because he was now working on mergers and acquisitions and had turned over the day to day operations to his son Ray.  But when he did come in it was because he was displeased with either his son or his son’s staff’s performance – and ultimately that filtered down to us.

It was my fourth week with the agency when Mr. Morse made his first arrival.  He was in time for the morning degradation.  That day I got to be one of the degraded.  So after Bill Richards had chastised us in his usual manner, Mr. Morse took over the reins.  Mr. Richards was a pussycat by comparison to the rant that ensued.

I can’t say that my home environment was puritanical, but I don’t recall ever hearing my parents swear – and they taught me in that way as well.  Obviously, Mr. Morse’s background was different

As he began his diatribe I discovered that he would have been unable to speak had it not been for the word f*ck – in all its multiple forms.  The word appeared in every sentence he spoke – often a few times in the same sentence.  I figured he liked that word – a lot.

I didn’t like Mr. Morse very much.  What was worse – he scared me.

Apparently the reason for this visit was that Mr. Morse was not happy about the productivity of the firm’s employment counselors.  We were collectively behind on the amount of business that he had set forth in his business plan.  According to Mr. Morse, “We were low life f*cking scum and he was there to kick our asses.”  On hearing that statement I involuntarily put my hand on mine to guard it from his abuse.

Well, the rant ended after about ten minutes.  I’m still not sure if I breathed at all while it was going on.  I was too startled.  This was my introduction to what I presumed was the real world of business – and I thought to myself, “What in the name of all that is holy are you doing here?”

My employment agency was one of the largest in Chicago with over seventy personnel consultants.  To our minds large generally implies good.  So I couldn’t help thinking, “If this is the way that a good agency is run, what must it be like to work at a bad one?”  That thought also frightened me.

Well, as I’ve said earlier in this series, I was young and foolish.  After the rant ended I thought about how my father conducted his business and how he respected his employees.  The contrast between these two management styles was cosmic.

On the one hand you had a tyrant – on the other a compassionate soul.  I decided, for better or for worse, for richer or poorer, I would try to emulate dad rather than Mr. Morse if I ever owned my own business.

I didn’t make any placements that week but I had a few things going which I hoped might close the following one.  I have to admit to a bit of childish confliction as I realized that three quarters of the revenue I would generate would go to Mr. Morse.

But then I thought that I was doing this to help people improve their careers – and I was doing this to make a living.  As I focused on those two things it made it all seem okay to me.  Well, at least it made it seem better.

About ten years later I had established my own firm and we were doing well.  I heard from one of my colleagues in the industry that Mr. Morse had died.  As he put it, “No one other than some of his immediate family came to the funeral.”

I didn’t like Mr. Morse.  But I felt sorry for him when I heard that.  What a sad and lonely way to live – and die.

THE SWEAT SHOP (PART TWO)

It was my second Friday at the employment agency.  Just before quitting time the head of the Administration Division came around and handed me my paycheck for the previous week.  I was ecstatic.  The check was for the net amount of $63.45.  I would deposit it the following day in my checking account, nearly doubling my balance.

I decided I would cash a small check, perhaps fifteen dollars to get me through the week to my next paycheck.  Let’s see, $3.50 for bus fare and $11.50 for food and everything else.  That would work.  One of the local supermarkets was running a special on Campbell’s Cream of Tomato Soup at ten cents a can.  I ate a lot of tomato soup in those days.  The soup was affordable.  It was the Saltines that put a bit of a crimp in my budget.

Together with my check Bill Richards, the Admin boss handed me a booklet.  It had been put together by the State of Illinois Department of Registration and Education.  Apparently the state regulated the industry of finding people jobs – and I would be required to take a test to make sure that I understood the rules.  This would cost me twenty dollars – nearly a third of my take home pay.  But if I were to continue with my firm beyond thirty days, I had no choice.

I read through the material on the bus on my way home.  (It was a small booklet).  And I took the practice exam.  Other than one question which covered the Illinois Statute which allowed the department to regulate those in my new industry, anyone with a third grade education and a little common sense could easily have passed this exam.  The passing grade was 70%.

I wasn’t concerned about being able to pass the test.  I was a little miffed at the cost of doing so.  At the time, as I understood it, the generally accepted amount to bribe an Illinois Inspector for the DMV so that a person would get a passing grade on the actual driving test behind the wheel of a car was only two dollars.

But I rationalized, this was an investment in a career – not just the ability legally to sit behind the wheel of a vehicle wreaking who knows what damage on fellow motorists and unsuspecting pedestrians.  So I spent the money and became a “licensed personnel consultant”.

Week three was the week I made my first placement.  She was a young Filipino lady who had several years of experience in general accounting with a lumber company in her home land.  The fee came to $420 and I was entitled, as my commission, to a whopping 22% of that amount.  This would cover my draw for a week.

Of course, that commission would only be paid after my firm had received the check and after the 30 day guarantee we offered had expired.  Naturally,  by that time I would have accrued many more weeks of draw so I would never see a dime of the commission.  It was obvious to me that I needed to pick up the pace if I were ever to get beyond my minimum wage.

I also discovered that the best time to recruit new applicants was at night when they could speak freely from home.  Most of the recruiters set aside two or three nights a week to do just that.  And although the agency allowed us to work late, they didn’t pay us for the time we spent beyond our official hours.  But it was the only way to succeed at the business.

This created a bit of a conflict with my home schedule.  My Irish Setter, Finney needed to be walked and fed.  So to accommodate him I left the office exactly at five o’clock, grabbed the bus home which took about thirty minutes.  Then I took Finney out and gave him his supper.  Then I drove back to the office which only took me fifteen minutes.

By the time I returned it was about six thirty and the meters no longer had to be fed so I could find a spot on the street to park.  Then I would work until about nine thirty calling new applicants and confirming interviews for the next day with people whom I had arranged to be “Sent Out”.

I began to develop a nice backlog of people who were either being interviewed or for whom I had scheduled interviews over the next few days.  In fact I even had hopes of hitting “bonus territory”.  The firm would increase my commission to 27% if I were successful in bringing $2000 or more “cash in” during any given month.  That would mean another $21 in commission for my first placement.  And you can buy a lot of cream of tomato soup with that at ten cents a can.

One of the fellows I recruited was working for Arthur Andersen on their audit staff.  Having a candidate from AA was like having a line of credit at Continental Bank – as good as gold.  Of course, that was before Continental Bank went bankrupt and Arthur Andersen went out of business.  This applicant was the crème de la crème of accountants – and we had a job opening which he both fit and in which he was interested.

It was protocol that the person who had listed a position be the contact between our agency and the firm that was doing the hiring.  So I had to present my applicant to Manny Carver, the guy who had secured the job listing.  That put me back just a moment.

Manny was a little gruff and somewhat rough around the edges, befitting his background as a man who had served a number of years in jail for armed robbery.  Apparently the State of Illinois didn’t care so much about your felony record as they did about being able to pass their exam and pay them the twenty dollars.

Since most of our positions were listed with multiple employment agencies, time was always of the essence.  We had a lot of competition.  So the first thing after our “morning meeting” (my numbers were all white so I didn’t have to stand up that day and be humiliated), I went over to Manny with my applicant’s information and the Job Order that Manny had secured.

I started to tell Manny about him.  He looked at me with the look of a man who was sizing up a store for a heist.  Then he interrupted me and used his favorite expression, “Look, let’s get the BS out of the business.  Can this turkey do the job?”  Manny used the elongated form of BS in employing this sentence.

I said, “Yes he can.”

“Alright,” Manny said.  “Leave his card with me and I’ll pitch him.  When can he go?”

As it happened my applicant got the job.  I was happy for him because it was a great career move with a lot of opportunity.  And I admit to being bedazzled as I calculated my 22% (perhaps 27%) commission of the $1,020 fee.

The best part of the story is that this applicant and I hit it off on a personal level.  When I started my executive search firm four years later he became one of my firm’s best clients.  We maintained that business relationship for over twenty years and our personal relationship until today.

THE SWEAT SHOP (PART ONE)

One summer while in college I decided to stay in Chicago rather than go back to the Big Apple.  I was looking for a job to pay my way for the next quarter in school and happened upon an ad in The Chicago Tribune.  I called, made an appointment for an interview and was delighted that I was hired.

I would be working as a counselor in an employment agency – working on commission finding people jobs.  I liked the idea that my earnings were only limited by my ability – and I liked the idea that I would be helping people.  I was also overly impressed with myself that on my first job interview I had been selected.  I was young and foolish.

So the next Monday I showed up bright and early, eager to begin my new career – only to discover that I was one of ten people the firm had hired.  Apparently, breathing and being able to dial a telephone were the primary requirements for employment.  But undaunted, I listened to the man who was in charge of training give his stimulating introductory message.

He pointed to an extensive series of filing cabinets and said, “Those are the dead files.  Those people were contacted in the past and were looking for jobs.  Call them up and find out if any of them are still looking.  Now get to work.”

I was a little dazzled at the brevity of the introduction to the business and I felt an emptiness inside my stomach as I, together with my other nine colleagues proceeded to march over to the “dead files” and begin our work.

The firm placed people in three categories.  The first, the one to which I had been assigned, was called “Administration.”  Our focus was on accounting personnel.  Then there was a Technical Division which dealt with engineers and finally, a Computer Division, dealing with people who were in IT – although that acronym had not yet been invented.  We were still at a stage where punch cards were state of the art.

So I took my very large pile of former applicants to my assigned desk where I introduced myself to the other three people who occupied our group of four desks.  None of them seemed too impressed to meet me.

I began reviewing the applications to get some sense of the person’s background and buying time to consider what I would say to them that would sound half-way intelligent and professional.  I thought I would listen to my three more experienced co-workers to hear their presentations.  But as I was doing that, the training manager came by and instructed me to get to work with the words, “Get on the phone.  We’re not paying you to do nothing.”  (I should add that I was on minimum wage draw versus my commissions).

So I got on the phone and called the first twenty applicants.  None of them was interested in making a job change.  Of course, the fact that I had called them at work and they might not have had the privacy to discuss their true feelings might have been the reason for their responses.

Well, as the week went on I got a little smoother in my presentation and more comfortable asking total strangers if I could change their lives.  Of course, I hadn’t earned a cent beyond my minimum wage draw which I would receive the following Friday but I felt I was making progress.  My desk mates actually talked to me – a little.   That ended my first week.

On Monday I went back to work – only to discover that seven of my classmates who had started the previous week had quit.  The three of us remaining had the opportunity to watch the “training manager” introduce the business to a brand new class of recruits.

During week two I realized that the agency had added a new requirement to my responsibilities – as I was now thoroughly grounded in the business.  I had a daily responsibility both to arrange three interviews (we called them “Send Outs”) and to pick up two new jobs (Job Orders) on which my fellow recruiters in administration and I could work.

There were three large boards on the wall, one for each division and all of our names were there.  The boards contained columns labeled SO JO (daily) SO JO (cumulative monthly) and Placements (the amount of money that a recruiter had been able to bill that month for putting people to work).

My discovery this second week was that the boards were updated daily.  If you had made your quota for the day in one of the categories your number was posted with a white plastic number.  If you were behind for the day, the color of the plastic was red.  The same applied to the cumulative monthly figures.

If it happened that you were behind in any category (that is to say posted in red) your day started with the manager of the division telling you to rise and would deliver a brief oration explaining that, “You are worthless and can be replaced at the drop of a hat.”  This was called motivation.  It motivated a lot of the recruiters.

I learned that rather than experience the humiliation of being the subject of the morning meeting a lot of the recruiters fabricated either the “send outs” or “job orders” they had picked up the previous day, hoping to make up for them the next day.  This is called “betting on the come.”

Well, I learned to steel myself for the morning shellacking on those days when I was behind quota.  I hated it but I realized that it was going to be a brief experience and I would get over it.  I kept my eye on the prize and actually did very well, once I got the hang of it.

My third month I was the top biller for my division and won the monthly “Best In Sales Award”.  This entitled me to having my name posted on a plaque and getting a free pass to the three dollar luncheon buffet at the restaurant in our building.  (It was actually pretty decent).

Although I had accepted the position as a summer job, this experience later caused me to open my own executive search business which occupied twenty-one years of my life.

I ran it a little differently.

ON FACEBOOK AND MARKETING

If you have read anything about how to market goods or services in today’s cyber world, you are bound to find the following statement:  “You need to be on the social networks.”

Well, before delving into what all of that means let’s take a step back in time and see how things were done before we were all internet connected.  (This was at a time when snail mail was the only mail).

I remember picking up the current copy of “Galaxy Science Fiction Magazine” and quickly reading all the stories.  I was fourteen at the time.  At the back of the issue were some advertisements – one of which promised that if I only sent them $2.95 they would turn me into the most successful mail order marketer that either the Milky Way or Andromeda Galaxy had ever seen.  So, of course, I sent off for this information.

Well, about two weeks later I received a packet of material which was poorly printed and talked in vague generalities about finding a product which appealed to a large group of people, stocking an inventory and, of course purchasing a mailing list from their company.  The information was general in nature and essentially useless.  I learned a lesson.

I learned another lesson shortly afterward.  Most of the money that was made in mail order was made by people selling other people information on how to be successful in mail order.

Years later, one of the applicants of my executive search business who had met with me and given me her resume was involved with a company which sold its products, water filters, through a system known as Multi-Level Marketing.  The concept was a simple one and had, in my mind, a great deal of validity.

As this lady, Janet pointed out, a company could distribute its products via two means.  One was by paying to advertise those products in magazines, radio and television.  Or they could use “word of mouth” advertising which is where MLM came into the picture.

Janet went on to cite a number of successful companies which had grown to their present size by using the MLM model.  Among these were Amway, Avon Products and Nu Skin.

Instead of spending money advertising their product, her company took the money it saved and paid it to its distributors.  But the real benefit and potential for those distributors came not only from the profit on their personal sales of water filters, but that they would earn an override on people they brought into the company as distributors and on people that those distributors brought into the company.  I believe this went on for five generations of distributors – but the details really don’t matter – all MLM companies have similar sorts of compensation plans.  It’s the principle of how they operate that I am trying to communicate to you.

I saw nothing wrong with that logic and I was particularly impressed with Janet’s statement (which I did check out) that the MLM industry had created more millionaires than any other in the history of mankind.  That was a very powerful argument for why I should want to get involved.  Incidentally, that data was courtesy of the Direct Selling Association – the trade group to which MLM companies belong.

So Janet invited me to an “opportunity meeting” and I attended and became a water filter distributor.  I purchased the requisite number of filters to get started and I became part of her “down line”.  Over a period of months I sold those filters and recruited people who became part of my down line and on whom I earned a small commission.  I made my money back and then some, but I am not sure if the time that I invested would have come out to the minimum wage at the time.

I learned two lessons from this experience.

First, if you were going to make money in MLM you needed to have a product which was consumable and for which there would be regular repeat business.  That is why so many companies in the industry sell vitamins or detergents or beauty care products.

Second, the people who had become millionaires because of MLM were people who had probably started in another MLM company or perhaps several, had built a large down line with those companies – sometimes numbering twenty or thirty thousand – and then when a new MLM company came along with a new product would jump to that company, bringing their down line with them and making a huge profit from that single transaction and the sales which ensued the first few months after the new product began being marketed.

A third lesson, but one which I already knew was that we all say that we want to be successful – but few of us are willing to put forth the effort necessary to accomplish that.  I figured that if I recruited five distributors to help build our business, only one would have the gumption to stick with it.  I was wrong.  It was more like one out of ten.  We all know the old saw, “A chain is only as good as its weakest link”.  It is very true and it applies directly to MLM companies and the people who join up.

Early this week after last Friday’s Facebook IPO, some negative news has been circulating about whether the company really has the potential to be the profit maker it has been touted to be.  The reason I bring this into this post is because I see a tremendous similarity between the social network companies and MLM companies.  Remember today’s current advice on internet marketing – you have to be on the social networks in order to succeed.  Facebook now has 900 Million active users – but that still represents less than 15% of the people on earth – so they obviously have room to grow.

Because of the similarity in marketing strategies between the social networks and MLM, I tried to give you some background on the latter.  Odds are that you already know about the former.  And having prepared you in that way would like to present the ultimate MLM company and show you how the results are destined to turn out.

If you don’t believe that we have an obsession with youth and beauty, you have only to turn on your television after regular programming is done for the day.  You are most likely to encounter at least one infomercial for some beauty cream product, some dietary supplement to help you lose weight or a program of aerobic instruction which will help you tone and firm.  We have been concerned about looking good and feeling good and living longer at least since Ponce de Leon began his quest for the Fountain of Youth.

So I present “Eternal Life” – the latest release in MLM companies.  Here’s the product and the marketing plan.

Eternal Life has developed an amazing pill.  The day you take your first dose any and all ailments which you have acquired will be cured.  If you have missing teeth, they will be replaced with healthy new ones.  If you have failing kidneys, they will be repaired.  If you have cancer it will cease to be.  No matter what ailment you have it will be gone.  (Do you think there would be a large market for this product?  But,  as they say on the infomercials, “Wait.  There’s more – much, much more).

In addition to eradicating all your infirmities, each day you take the pill, a year of aging will disappear from your appearance – until you look as you did when you were twenty-five and you will continue to look that age as long as you take your daily pill and meet the other two requirements for being a distributor.

First, you must pay one dollar a month for the Eternal Life supplement.

Second, you must recruit one (but only one) new distributor per month.

The downside to this relationship is that if you fail to meet both these obligations, you will again begin to age but at a rate of five years per day and the ultimate consequence, of course, will be death.

Of course, you as the first distributor eagerly sign up for this program.  Your lumbago and rheumatoid arthritis have been bothering you no end – and you once again look forward to being able to eat corn on the cob without everything slipping under your dentures.  You are 85 years old.

So you take your first pill and, just as advertised, no more pain and your original teeth are in place.  As you continue to take your daily dose of Eternal Life the changes to your appearance start to manifest themselves to everyone at the retirement community where you and Zelda have moved.  Mrs. Warchinsky keeps complimenting you on how good you’re looking – “What are you doing to yourself?  You look like a 60 year old.”

At the end of the month, naturally your recruit your wife Zelda into the program and each of you pay your dollar for the month’s dosage.  Of course, Zelda experiences the exact same results you did.  (The people in the retirement community can talk about nothing other than your transformation).  They all want to know what’s going on.  But you keep silent so that you are not overrun by a horde of people in wheel chairs each wanting to sign up.

At the end of one year, you’ve ushered in to the program your dearest relatives and closest friends – as have those you recruited.  There are now, out of earth’s teeming seven billion population, a mere 2,048 people who have benefited from Eternal Life’s product.

You obviously want to continue your relationship with this miracle product – as do all the people you and they have signed up – and at the end of year two, you are surprised that the number of Eternal Life consumers has grown to a substantial 8,050,688.  That is the power of monthly doubling.  But, not to worry, you’re less than ten percent the size of Facebook.

And then comes year three.  Things move along smoothly until month eight.  In order for everyone to meet their obligation they would need to recruit 2.2 billion people, making a total group of over 4.4 billion.  The only problem is that more than half the world’s  population is under the age of 25.  So many of the participants fail in their contractual obligation and begin to see the entire process reverse.  The next month, there is no one on earth left to recruit.  In a month, half of us are dead of old age.

In some parts of town this marketing strategy is known as a Ponzi scheme.  On Wall Street, the polite – but no less damning phrase – refers to this as “The Greater Fool Theory”.

Will Facebook be able to continue its growth infinitely.  The answer, of course, is no.  It can’t do that because there is not an infinite supply of new subscribers.  So the question is can it find new revenue sources for which its users are willing to pay?  For example, what about a modest “user” fee to maintain an account – say five dollars per month.  Even if it lost half its users, that would still result in an annual revenue stream of $25 Billion.

Will Facebook adopt that strategy?  Well, nobody yet knows.  But it is clear that now that it is a publically traded company it is going to have to adapt from its original model.  We’ll see how they do that.

Meanwhile, it’s time for me to take my magic pill.

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