An Open Letter for Tax Day

April 15th, 2014

Dear US Congress, States of California, Connecticut, Ohio, Illinois, and North Carolina House of Representatives and Senators, Cities of Brunswick, Fairfield, Lockland, Strongsville, and Twinsburg, and any other taxing authorities I have missed (I’m sure I missed a few. The oversight is not intentional. Please don’t audit me. We can work it out peacefully.),

I have filed all of my tax returns. I don’t know the exact number of pages, but I’m comfortable guessing my business and personal tax returns total well in excess of 1,000 pages. Accompanying all of those returns is the amount of tax owed if it wasn’t paid already.

On a regular basis, I thank my partners in my endeavors – our hard working employees, our loyal customers, our vendors, our bankers, and professional service support. I could go on and on. Without them, I.D. Images would not exist. I’d even like to thank you for the services you provide – defense, safety forces, road maintenance (at least in some of our communities), social safety nets, and numerous other services all of the various government entities provide that make the grand experiment that is the United States of America possible. Many of the services the government provides allow me to do what I do – invest, create jobs, eke out a meager profit, and pay taxes. I am sincere when I say I am truly blessed to be able to do what I do in the country I do it in.

I find it disheartening that I don’t think I’ve ever been thanked by a public official for paying taxes. Somewhere along the way, most of you forgot how the world works. Your salaries and ability to perform services are dependent on people like me paying my taxes. Without us, your jobs would not exist. In fact, to put things in business terms, you all technically work for me and the hundreds of millions of hard working Americans that have money taken out of every paycheck and file tax returns just like me. Virtually everything we buy or do has some tax embedded in it. I know, I know, government employees pay taxes too. But I liken that to my son paying me back for a toy he bought with “his money” earned via an allowance. Yes, he “earned” money doing something I wanted done. But there was no value creation. I gave him $5 to do something and he gave me back the $5 to buy something. Our family is net poorer $5 (albeit with a toy he “had to have”). When government workers pay taxes, the amounts are ultimately being paid by someone who created value in the first place.

Don’t take me the wrong way. I am not an anti-government nutcase. As I wrote above, without a functional government, I couldn’t do what I do. I don’t ask for much. A simple thank you would suffice. If you really care, I propose a private sector holiday. We have lots of government holidays where you all get the day off while those of us in the private sector toil away while being taxed, of course. I propose a day in which all government workers go to work, paid of course. Those of us in the private sector get the day off and the government subsidizes us. I know it’s just taking money out of my right hand and putting it in my left, but it’s the thought that counts! Wait, on second thought, this won’t work. As my fellow business owners know, if we don’t work, we don’t generate revenue. If we don’t generate revenue, we don’t have businesses. That’s not on option for us, or those we fund through our taxes.

If you really want to make me feel better, one group of you would stop portraying me as a greedy SOB and appreciate what I do every day and the other group would recognize that, gasp, the government does do some valuable things. Shutting down the entire government hasn’t accomplished anything except make you look crazy. Perhaps the two parties could even work together to figure out how to make the economic environment conducive to job creation. A good place to start would be reducing the burden of complying with the myriad of tax laws we are forced to follow.

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An Open Letter for Tax Day

Ask the Right Question

April 9th, 2014

I was with some friends and we were sharing funny pet stories. I shared one of my favorite stories about our current dog. A couple of years ago, our dog had a seizure. I took him to the vet to be examined. He’s a medium sized dog, so the veterinarian technician lifted him on the exam table. She was holding him and asked me if he bites. I replied no. The vet then proceeded to take his temperature rectally. He yelped and bit the vet tech. She said, “You told me he doesn’t bite.” I said, “You didn’t ask me if he bites if someone assaults him! I’d bite too if you did that to me!” Fortunately, the vet tech was fine. And the lab/beagle mix we (I mean my wife) rescued is doing fine on medication. He now has a muzzle on when his temperature is taken. And he hasn’t bitten anyone since.

I can laugh now at what happened (and I do quite often). I also think about several lessons in this story. First, standardization is a good idea. Had the vet tech said, “Mr. Gale, we are going to take your dog’s temperature. As a precaution, we are going to put a muzzle on him,” I would be writing about something else. Second, context matters. In the normal course of his life, our dog is pretty well behaved. Crazy, yes, but aggressive, no. He had recently had a seizure, which probably upset him. He was at the vet’s office which is generally not an animal’s favorite place. The vet was going to do something rather uncomfortable to him. Add those up and he probably wouldn’t behave in his normal manner. Third, if you’re going to do something that makes someone uncomfortable, expect an emotionally charged reaction. If you’re going to deliver bad news, don’t expect to be serenaded with love songs.

Most importantly, this entire situation would have been avoided had the question been more specific. If you ask a general question, you are going to get a general answer. If I ask a customer how we are doing, the stock answer will be “Fine,” unless, of course we’ve screwed something up lately. If I ask, “How did Susie answer the phone? Did our product arrive undamaged? Was the print quality what you expected?” I will get specific answers. Generic questions deserve and get generic answers. I’ve learned not to ask my son, “How was school today?” by getting a constant answer of “Fine.” Asking him, “What did you do in math today?” gets a more specific answer (after the obligatory “Not much” that I don’t accept). If you want to know what your customers, employees, or kids really think, ask a specific question. If you want to avoid getting bit by a dog, make sure you explain what you’re going to do to him when asking the owner if he bites.

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Ask the Right Question

Bond. James Bond: Substance Creates an Image

April 2nd, 2014

Those iconic words have been repeated by millions of little boys (and grown men) pretending to be a dapper, intelligent spy that saves the world and gets the girl. My son had a school play today that he had to dress up for. Unfortunately, I was out of town and couldn’t attend. My wife was kind enough to send me a picture of him in his suit and tie with the comment, “He says he feels like James Bond!” I thought about replying about our son’s good looks, good wits, and ability to save the world multiple times coming from me, but decided that would probably lead to a conversation about how an 8 year old has seen every James Bond movie at least once and that wouldn’t be a fun conversation for me.

The Bond image has survived the test of time. Even more impressive, the Bond image transcends cultures, age groups, and even genders. Who doesn’t like James Bond? I spent my plane ride thinking how, after 50 years, several different actors playing him, and dramatic changes in our culture, Bond has remained relevant. The image has stayed strong because Bond’s substance hasn’t changed. Though Sean Connery, George Lazenby, Roger Moore, Timothy Dalton, Pierce Brosnan, and Daniel Craig have all added their own nuances to the character and he has evolved with the times, Bond is still Bond. He’s tough and witty. He’s irreverent. He struggles but ultimately does the right thing. Most importantly, he knows his mission and focuses on accomplishing it.

I’ve thought about that because most companies have mission statements. Most employees and customers have no idea what they are. And we wonder why employees and customers don’t exhibit loyalty. All of our actions should support the mission. If we do that, employees and customers will create the image we want. Focus on substance and the image will follow.

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Bond. James Bond: Substance Creates an Image

Innovation is Rewarded. Execution is Worshiped.

March 26th, 2014

 

I had the opportunity to hear Dan Gilbert speak last night. He founded Quicken Loans and owns the Cleveland Cavaliers, among his many activities, both business and philanthropic. He is known for his “ISMs” which define the culture of the companies he owns. A link to the complete list is below.

One really stood out to me. It is the headline of my blog today. Our business culture in the United States has obsessed over innovation over the last several years. Books, conferences, and careers have been built on the innovation mantra. I admit I’ve gotten caught up in the hype. I have at least 3 different books on innovation sitting on my desk right now. (I’ve read two; I can’t remember if I read the third!) Certainly, the popular press and stock market have rewarded innovators lately, or so it seems. Gilbert’s ISM, Innovation is reward. Execution is worshiped., really tells the entire story. Innovation itself isn’t enough. You need to execute and deliver. Too often, companies (I.D. Images included) come up with good ideas, products, and strategies and they go nowhere. The key is delivering on the ideas, products, and strategies.

In the years I’ve been in the business world, I’ve seen the idea du jour go from quality (Six Sigma) to efficiency (Lean) to customer focus (loyalty work) to innovation. The reality is they’re all necessary for a successful business; but they’re not sufficient. Sufficiency comes from executing all of the wonderful improvements that can come from those initiatives. Execution got a little play a few years ago with Larry Bossidy and Ram Charan’s book (“Execution: The Discipline of Getting Things Done”). Maybe it’s time we refocus our efforts on how critical it is to get things done. Gilbert sums it up nicely with six simple words.

Innovation is Rewarded.  Execution is Worshipped.

http://www.quickenloans.com/press-room/fast-facts/our-isms

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Innovation is Rewarded. Execution is Worshiped.

Sweat the Small Stuff

March 18th, 2014

It never ceases to amaze me what really matters to people. Consider the following 2 situations:

1. We buy a lot of IT products. I do nothing other than sign the checks and trust our IT group knows what they’re doing. One of our IT vendors included a gift certificate to an online wine store in a recent order. Our IT department, remembering I sign the checks and have a bit of a wine addiction, gave it to me. Guess who’s going to get more IT equipment orders from I.D. Images as a result? Our IT guys are convinced their sales rep “did some intense Googling” and figured out I like wine. Maybe or maybe not, but whatever they did, it worked.
2. Our son’s school is doing a fundraiser with a local chocolate company. I ordered a bunch of chocolate and brought it in. I’ve been handing it out to various groups in our headquarters. (Charlotte, Cincinnati, Chicago, Twinsburg – don’t worry, yours is on its way!) The reactions have been unbelievable. It’s a few pieces of chocolate. I remarked to someone today, “Gee, we pay people pretty well, we offer flex time, decent benefits, and no one says thank you. I give you a peanut butter cup and I’m the best boss in the world.” Her reply is unfit for a family friendly blog. Think about chocolate being better than a lot of things. I’m considering dropping our vacation program and bringing in chocolate every week. I think everyone would be happier!

So there is some truth in the statement that the way to man’s (and woman’s) heart is through his (her) stomach. Wine and chocolate make a nice combo. Perhaps we spend too much time looking at data about our compensation structures, benefit packages, and all the other quantifiable stuff consultants tell us is important. We’re all still human. Unexpected surprises (that are positive) and relatively small tokens of appreciation go a long way towards letting people know you care. When people know you care, they care about you. Isn’t that what we want?

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Sweat the Small Stuff

This Sums Up the Problem

March 11th, 2014

I was quite amused by the attention given to a family that called 911 because their cat held them hostage. I’m not making this up:

http://gma.yahoo.com/blogs/abc-blogs/911-call-reveals-ore-family-held-hostage-fat-135526176–abc-news-topstories.html

Yes, it’s quite serious when a cat goes after a 7 month old child (the child is fine). But calling 911? Hiding in a bedroom with the dog? People, it’s a 22 pound house cat, not a lion that escaped from the zoo. As I’ve contemplated this situation, I’m no longer amused. It sums up what is wrong with our world today. Expecting other people to solve our problems is the norm. We have lost the ability to think for ourselves and hence, do for ourselves. Obviously, this family never saw “Old Yeller.” (I still cry when I see that movie.) We used to solve our own problems, as demonstrated in that movie. Society would be a lot better off if people asked themselves, “How can I help myself?” before relying on someone else to solve their problems.

We all share in the blame for the lack of personal accountability that has developed. Certainly, the government has contributed to this issue. So have we as businesses. As we grow, sometimes it makes sense to specialize tasks. With specialization comes the ability to say, “That’s not my job.” Those might be the worst four words in the English language. Much to my chagrin, I’ve heard it recently as we’ve tried to revamp some things at I.D. Images. I’ve challenged myself and our team to redefine our job. Plain and simple, everyone’s job is to take care of the customer. Asking, “Did you help our customer?” eliminates a lot of gray area pretty quickly.

Oh, and if your cat attacks you, do yourself a favor. Get a dog that can handle the cat.

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MACtac: Leadership Requires Tough Decisions

March 5th, 2014

Earlier this week, MACtac announced the closure of its Stow, OH, manufacturing plant. That plant was the start of Bert Morgan’s venture in the 1950s. It’s a tough blow to a region clamoring for good jobs.

I am confident the management team of MACtac and Bemis did not make this decision on a whim. Despite its symbolic importance, the reality is the plant was old and used solvent adhesive technology. As the world changes, companies need to adapt. Those decisions aren’t easy. It’s easy to play Monday morning quarterback, knowing how the game played out, to say, “They should have…” We generally have to make decisions with imperfect information. If we wait until all the facts are available, someone else will have already moved forward and left us behind.

As Jim Collins (“Good to Great” author) so bluntly says, leaders must confront the brutal reality of a situation. The brutal reality is solvent based adhesive technologies are being phased out of our industry. For our industry, that’s a good thing. For the MACtac plant in Stow, OH, that’s a horrible thing. The brutal reality is modernizing that plant was most likely cost prohibitive. The better business decision was to consolidate operations in existing facilities. As I’ve written before, our industry has excess capacity throughout the value chain. The brutal reality is inefficient operations feel that pain first.

To conclude, I have a quotation from Mr. Morgan himself (via the Burton D. Morgan Foundation website, www.bdmorganfoundation.org ). Our industry became great because of people like Mr. Morgan and Stan Avery who weren’t afraid to fail. The companies that continue to take risks (calculated of course) will continue to thrive. The companies willing to confront their brutal realities will continue to thrive as well.

“. . . failure never stopped anyone who was truly determined to succeed. I have found that entrepreneurs’ failures are often more interesting than their successes, and these failures help to develop the character and intelligence that eventually led them to success. An entrepreneur who fails is not stopped. He or she can always try again. And successful entrepreneurs always do.” ~ Burton D. Morgan, Start at the Top (1982)

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MACtac: Leadership Requires Tough Decisions

The Wall of Worry Builds Again

February 26th, 2014

The trend of having no business trend continues. After a strong Q4 and good January, a lot of companies in our industry (including I.D. Images) have seen a slowdown in February. Couple that with some shaky economic numbers and we start to get nervous. Throw in a terrible winter and you’ve got the makings of a full-fledged panic. I hate blaming weather for anything (again, it’s reality that we have to deal with) but the harsh winter has certainly impacted retail sales, which impacts anyone who sells to retail, which impacts anyone who makes labels for retail, which impacts anyone who makes label stock, which impacts paper and chemical companies. I could go on and on.

As I’ve written about before, one of the legacies of the recession is a lack of predictability. It certainly isn’t fun but it’s reality. Companies react much quicker to what is happening to them. As a result, their order patterns more closely resemble demand, which has peaks and valleys, and lacks consistency. Again, we must confront reality. Order sizes are smaller. Orders are more frequent when things are good and less frequent when people are nervous. If have not adjusted your business to those realities, you better do it soon.

RR Donnelly, a pretty good bell weather indicator for my world, just released Q4 earnings that beat analysts’ estimates and issued a positive forecast for 2014. That should be a good sign for the label and print industries. So, no need to panic right now unless you don’t like roller coasters. The ride in 2014 will be bumpy, but when it’s over, I expect a lot of us will say, “That was fun; let’s do it again.” We’ll see growth in 2014.

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The Wall of Worry Builds Again

IOT, RFID, NFC, Labels, and the Minimum Wage Debate

February 19th, 2014

IOT, the Internet of Things, is getting a lot of publicity lately.  With the drop in electronic component part prices, the ubiquity of wifi and high speed wireless networks, and other technological advances, IOT is upon us.  The long dreamed about days of your refrigerator informing your phone you’re running low on milk, placing an automatic order to a delivery firm, and milk arriving before you knew you needed it are not too far off.

The good news is, all of these advances require communication.  RFID and NFC (near field communication) will fill part of that need.  If you are in the label business and aren’t paying attention to RFID and NFC, you better start.  It will also be good for the mundane barcode label.  If it works, it will be used.

What does all this have to do with the minimum wage debate?  As anyone who took economics 101 (or buys generic products the brand on sale) understands, we substitute cheaper for more expensive.  As the cost of labor rises, capital will take the place of labor.  If a machine can do it cheaper, the machine will be used.  That’s good for people who can automate things, not so good for the folks whose jobs can be automated away.  I understand we want to help those at the lower end of the wage spectrum.  Teach them math, english, and technology.  Government mandates on wages won’t help.

The milk example is a classic case of technology replacing labor.  When I was a kid, we had a milkman.  My Mom would put a list out the night before he was due to come.  He’d grab the list and get what he had off his truck and leave it on our porch.  Costs drove that business model to change and the milkman’s job went away.  Technology has replaced the manual processes and created jobs for programmers.  The milkman concept is back, but it will be very automated.

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IOT, RFID, NFC, Labels, and the Minimum Wage Debate

Target, LinkedIn, Brian’s Blog: What’s Next? Are you protected?

February 13th, 2014

Just as Target got hacked and LinkedIn has been duped by people setting up fake profiles, your favorite blog was victimized by unscrupulous hackers.  My blog got attacked by spammers earlier this week, causing our internet host to shut down our website.  We solved the problem by putting in a user verification system before someone is allowed to post a comment.  (It will be live tomorrow – right now, comments are closed.) I should say – we solved the problem for now.

In the Target case, they got credit card numbers and personal information.  With LinkedIn, the fake profilers got valuable information on a lot of people.  Businesses have been built around providing contact information for potential customers.  I don’t know what someone wanted by crashing our website.  It clearly created a business disruption for us, but I’m struggling to figure out what they gained. Either someone was having fun or clicking on the links they posted would have installed malware or something like that.

The openness of the internet, which is its greatest strength – any moron with a keyboard and an internet connection can start blogging, for crying out loud – is also its greatest weakness.  As more and more of us use the internet to conduct business and expose personal data, the risks grow exponentially.  It’s hard to know if we’re protected or not.  Certainly, the bad guys see opportunities.  Make sure you’re a step ahead of them in your business and personal lives.

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Target, LinkedIn, Brian’s Blog: What’s Next?  Are you protected?