Perform or Perish
I love Business Week.
Has life ever been about black and white or has it always been about being gray? If everything was measured as a winner-take-all game, then the majority of us are sore losers. I am sure you don’t think of yourself as a loser, especially since you’re reading this blog! 
The world of private equity, one that I absolutely do not reside in, is both enigmatic and so mortal at the same time. I know the math that these high level managers blaze through is truly mind-boggling yet fallible. If you talked to any one of them in a casual conversation, you’d be stumped at their knowledge and expertise of financial deals.
Yet even a kid knows that if you stick your hand, even in a tiny flame, that you’re going to burn the @#$ out of your skin. And yet, these private equity honchos crack the whip just like they’ve done in the past years during the downturns and upturns. They do the same things over and over again.
I was somewhat disappointed by the article. It sounded like the author was almost impressed by the motions of this machine – investor cracks whip, overpaid CEO yells at managers, uses complex jargon, work becomes hell for employees, layoffs, company stripped, CEO moves on to next target.
There has been a lot of action in the “let’s take these companies private” to avoid regulatory and public scrutiny either because some of these investors felt that they can truly incorporate change or to just make a quick million here and there in the bargain. Either route seems to emit the same characteristic symptoms of the greed of money. It doesn’t emit anything even remotely related to good business ideas or strategy. Oh no, that one is for the classroom where you’re taught these things but shame on you if you stepped out there and tried to execute on them. And how easy or successful were you when you were nice, motivated with ideas and full of inspiration? Controversy seems to win eyeballs and I am telling you that from personal experience. I could not get a single comment out of any of my readers but when I was “harsh” with my comments on Whizspark, their CEO stepped out to write an entire article (even praising me!). So controversial actions that are in-your-face garner more eyeballs and interest than reasonable, regular actions (Nassim Taleb’s idea of silence of evidence).
One of the companies discussed is Aleris. Revenue doubled to $3.2B but operating income was cut into almost 1/2 thanks to overloaded debt payments. Two days after S&P warned about a possible downgrade in on it’s debt, the CEO shuttered a plant in TN that belonged to one of it’s acquisitions Wabash Alloys. The goal of the owner of this firm, TPG, is to keep the momentum going in order to strip what’s left of the company, of it’s cash and assets. So the books on brand building, customer service and organizational development were just thrown out of the window, neatly replaced by an Excel spread sheet with an IRR formula.
I’m not saying that Aleris was well managed before the purchase by TPG. Maybe it did not have a chance of even having it’s assets sold at good value. That is not the point. The point is that this article breaks up the world into “performers” and “perishers”. I don’t think they’re mutually exclusive. You can be a performer at one time and a perisher at another. The thin line that separates the two is luck. I don’t think we either perform or we perish. We could even perform and perish based on variables that we have no control over.
So while the article is really well written (again, I love BW), I am disappointed that it focused one one aspect of the problem with no commentary on its appropriateness or validity. True, the aim of the article is something other than what I would have hoped it would be, but I don’t think it is valuable to me as a reader. I already know that private equity canines are trained to be watchdogs and not pets. I already know that CEOs like the ones chronicled in the article engage in the same-old-same-old. Tell me something new.
The article on Business Week – Perform or Perish.
Red Sox 2007 Champions!
Need I say more?
The nailbiting finish bottom of the 9th with a 4-3 lead and 2-2 and then the brilliant pitch to slam in that last strike and history was re-written.
I’m reading The Black Swan so I’ll try to interpret the Curse and its recent dismissal and now for the 2nd time. Should be interesting.
New Blog Experiment
It is not like I got bored with Typepad. But as you know, status quo is unacceptable to me! My wife has been (struggling) with WordPress for her two blogs My Truth and Ode2Food and there are some interesting features here compared to Typepad. Plus, Typepad charges $4.95 with very rudimentary blog stats and WordPress is so much better.
Some older posts have their format all funky with differing font sizes and unjustified alignment and I apologize for that problem. Going forward, all my fonts will look as good as this one.
Happy blogging!
Let us all put more butts in seats
Peter, about the bug in your office – it really is me seeing through walls using my Harry Potter Glasses (Platinum version) so sorry for spying on you guys!
I think we both know that my post felt incomplete (I know I did). When I wrote about forward-integrating into those services, it was to question the scalability of a service that will “put more butts into seats”. That post was in my draft for a bit, so I’ll try to stick with the original train of thought.
I don’t know what it feels like to want to host an event and then use WS to drive people to it. I don’t. But to my naive mind, the ability to have reach to a large audience on a local basis, nationally, would be an instant business killer. I’ll take the obvious example – Google. Currently, the calendaring feature is bare. But if they’re able to integrate their enormous database and then 1000s of people get to know about these events then it is possible that they can drive more butts into seats than WS. Or maybe Yellowpages.com might go after it. Evite.com probably can’t compete with WS in the local Boston market. So then the question is – is this a worthwhile market to go after and if yes, then if it is indeed better served as being geographic specific and is WS offering an integrated service for this market?
That is where the points relating to the catering and venue management crept up. And I trailed off oddly and incompletely without offering an explanation and I’m sorry about that Peter.
Let’s assume that if one wants to succeed in the event management space, then the focus must be geographically local, scaling up to an integrated national service. So if I have an event in Worcester, MA then what are some of the additional services that are event-related and integrate-able? I don’t have a clear cut answer, since I cannot relate to WS as Peter does but the point is to develop a strategic train of thought; to think of these questions and not get bogged down by the operational aspects of the business, nor get starry eyed through the coolness of the technology.
Fundamentally, the wheels turned in my head when I want to understand the value of any idea without getting cynical (being cynical comes naturally to all of us). So yes, the more butts brought into more events means more money etc. And maybe even get bought out by a nationwide player looking for a foothold in the Boston area. I don’t know anything more than, hey, here are two good guys who hit on a good idea and are executing on it. Now what?
Thank you for taking the time to write Peter, it shows that you’re a class act. I am excited to see what you guys will do next!
My earlier post on this subject is here.
Working with someone you HATE
It is great and easy to work with people that you like.
You also know how it painful and hard it is to work with people that
you don’t like!
I think one’s true value is demonstrated when he/she can get work done
and better yet, make some money through people they personally don’t
like. For instance, we recently had to let someone go who was
generating quarter of a million dollars in revenue for us. Personally,
the guy was borderline hostile with a pinch of weirdness thrown in for
good measure. When he got canned, I was relieved and sad at the same time. I broke into a smile and then frowned.
But working with people you like, is boring, compared to the
challenge of working with someone you dislike. Think of all the times your
blood boiled when they spoke? You’d dismiss every
idea of theirs as idiotic. Think of your increased heartbeats, palpitations, the sweaty palms and the scowl that grew steadily
on your face; the emotion of being riled up and ready to fight.
I am no guru at this exercise but the first progressive step is to
recognize the value in taming your feelings to let you work with
people you hate. And hate is such a relative term – someone you hate is
someone else’s loved one. So your emotion is merely an illusion that
makes you perceive the person in a certain way. It doesn’t make anyone
bad or good fundamentally. That was decided much earlier on by Nature,
Nurture, whatever etc.
So if you can make ____________ (fill in the blank with any measure of success you like) working with someone you hate, I think that makes you one heck of a smart person. I am honest – there are some people I hate even though I know I shouldn’t, but that is the fallacy of being a human being – conflicting realities. So going back to the guy who got canned – if I can put him to work and make another quarter of a million dollars off of him, then sure, why not? It makes me a better person from all angles (materially, philosophically and spiritually).
Classic “buy me out” idea; they have absolutely no way of monetizing this service but claim: “Yes, we’re building a large-scale, device agnostic, message routing
system—that’s the technical core of Twitter and it has many applications”. MIT Review writes a very neutral article, of course the focus being on the technology. Essentially, a message online can be distributed to many users through their preferred choice of contact, i.e. cell, IM or email.
Update: I realized that this post is incomplete if I don’t preface these comments by saying you need to start reading The Black Swan before you scoff at how technologically shortsighted I am. I belong to the camp that is crying foul at this dotcom mania return. Last time it was about possibilities of the Internet, now it is about “I told you so”. However, history doesn’t determine if this is going to be a success or not. I don’t know. Read the book.
Events and electronic events management
WhizSpark recently tied up with Strategic Auctions Inc. It is in their Simulcast Auctions post. During the Web Innovators Group event, their President said that he is in the business of increasing attendance for events. Disclaimer: I know nothing about their sales or business strategy, these are just my opinions.
I
think the events management space falls some where under PR umbrella,
so anything and everything must look and feel like PR work. I am not
sure I get that at this point from WS. I don’t think they view
themselves as being in PR but view themselves as being in IT. They have
extensive event tracking functions, but that is easily replicable by
off-the-shelf products or custom built code. Have you seen Google Calendar?
It is free (yes, it is not as feature-rich but how long will it take
for the world’s largest database to add a metrics tracking tool?). So
technology-innovation is clearly NOT the differentiator. It never is,
unless you sell consumer electronics or highly-customized business
products/services.
What is the value-innovation being offered? None.
Obviously some people have signed up for the service but is it
sustainable and will it grow large enough, in stable yet quick way?
These are some Qs I’m trying to answer myself and am drawing a blank.
Of course, if a sell-out is the exit strategy then I’m just babbling
here.
I think by forward-integrating into the events management space
creates a viable model. You can never replace an events management
service with technology. Bodies on the ground and intelligent code on
the backend is a powerful combination to orchestrate everything cost
effectively.
Consider this example: Your networking group is having an event. As
an organizer, what do you need to make this event a success? Let’s say
you’re looking to hire a cost-effective service provider since budget’s
are tight. You also want to attract a 1000+ size crowd, will offer a
free buffet and a cash-bar. The venue needs to be in center of town and
the entry fee is $100 per head.
1. Event registration & money management
2. Catering (food and drink) and venue decoration services
3. Venue set up and management
4. Cleanup services (assuming the venue does not offer this service)
5. During-event attendee management
I would set up agreements with 3 catering companies and store their
menu offerings, rates and quantities electronically, tagging them as I
go. I’d also sign up with decoration services (flowers and
event-environment services) and do the same for their rate cards. Ditto
for the rest.
Guest Authors Experiment
You have been sitting on the fringes of the blogosphere with a desire to write and have tons of ideas but don’t have the time to blog. You’ve not been sure on how to create a blog?
NO PROBLEM….
We spend 30 minutes on the phone. Then I propose a draft of our chat. You edit and/or approve. I post the final draft on this blog as a co-author. You’ll get credit for the idea and content. I’ll get credit for the edits and writing.
This model is ideal for mid-to-senior level executives who have a lot to say, but lack the time. If you know someone like this, then please connect us up. You will get credited for it. Please drop me a line. Thanks!
Let’s see how this experiment goes ….
