Teddy Kennedy would not have been tolerant of lip synchers in his midst.

This last week, a top professional I know admitted to a guilty pleasure: She had been to the Britney Spears concert the night before at Madison Square Garden (she was a fan). Naturally, I had to learn more about what a Britney Spears show was like!  My colleague said she had a wonderful time; it was an exciting show, very entertaining, but that it appeared as if Ms Spears lip synched all but one of the songs and only twice did the pop star even bother to address with the audience.  Yet even after all that, yes, my business associate said she would certainly attend another “live” Britney Spears show in the future.
This last week we also all learned about Senator Ted Kennedy’s passing. Say what you will about his politics, the scandal at Chappaquiddick or anything else regarding his life, but by all accounts Senator Kennedy was passionate about his work, sincere in his beliefs, and truly genuine. Consider this one tribute from Edward Rollins, someone who certainly didn’t share many of Senator Kennedy’s views:
http://www.cnn.com/2009/POLITICS/08/26/rollins.kennedy.gop/index.html.

As I went about my day-to-day business affairs this past week I couldn’t help but connect what I unfortunately encountered to Britney Spears’ re-emergence and Senator Kennedy’s death (strange--but read on).

Edward M. Kennedy earned respect, particularly by his adversaries, because he held strong beliefs and was focused on driving results he thought to be important. He was at the eye of many legislative storms, but he built extraordinary working relationships over the course of a nearly 50 year career in the senate. Similar to the work team I wrote about back August 27th, he forced others to bring their best game and they brought out no less the same from him. By contrast, Britney Spears fans seem to not only tolerate the apparent lip synching portions of a live concert,  they enthusiastically cheer it.

The workplace remains dominated by too many people who physically show up to work each day, but who don’t bring the same intellectual or emotional commitment. I truly hope that we mourn the death of one man and not the passing of a much-needed approach to one’s work. To me, the best way to remember and honor Edward M. Kennedy of Massachusetts is by adopting the same principled, passionate, collaborative and results-oriented energy to our careers as he did and perhaps become less tolerant of the lip synchers in our midst.

Who would have guessed: August -- a prime time for engineering high rates of sustainable growth.

Although I’ve always been told that not much business gets transacted mid-late August because everyone is on vacation, I’ve always found August to be a particularly productive month. Not only has August 2009 not been an exception, my experiences this month tell me that there’s heightened focus and purpose in the business world…clearly a very positive leading indicator! I’d like to use the remainder of this space to relate my highlight for the week to the encouraging signs I’m seeing in general.

Presented with an opportunity to launch a new business line, a company I’ve been working with (that defines the word “conservative”) had the good sense to pursue the initiative with cautious optimism. The company assembled a project team that did more than simply evaluate the venture’s worthiness. This cross-functional team was comprised of members that brought subject matter expertise and a strong willingness to challenge every assumption. From day one it was clear that this was a highly capable group of professionals and it soon became even more evident that this team has uncommon maturity. Members didn’t make the process easy on one another, yet at no time did any meeting devolve into finger-pointing, egoism or turf protection. This team collaborated in a most impressive way: each member demanded goal-oriented excellence from himself and his peers.

Along the way, the project sponsor had moments of doubt—even thought at least one participant was going to do everything he could to kill the initiative. As it turned out the (apparently) most negative group member proved to be the driving force for transforming concept to reality. Had any member, particularly the project sponsor, lost sight of the business objective; had anyone reacted to legitimate business challenges in a personal rather than professional way; had they lacked individual and collective commitment to the absolute best work product theirs would have been abandoned like so many other excellent ideas unfortunately are in Corporate America. Without the sincere efforts of the team’s toughest critic, their high-potential initiative would ultimately fall short of its objectives. This team set a very fast pace, accomplished a great deal in a short period of time, yet all had to keep up with other job responsibilities. They never missed a meeting, none of the participants ever came unprepared, and none allowed other responsibilities to be slighted either.

As they practiced it, collaboration wasn’t pandering nor was it about compromise. Theirs was collaboration as I believe it is intended to be: each sum intensely driven to create a superb whole. Though they did ask the question that is on everyone’s mind these days, “is this the right economic climate to try something new?” They didn’t obsess on that ever present excuse in most business environments today and they also concluded that the best remedy for poor results is growth and growth will come from innovation. As more companies and project teams adopt the “We Must!” mentality, removing all vestiges of finding reasons why not to do something (always the easiest path) economic vitality will overwhelm anything that has ailed us.

I was privileged to work with this group and what they did, in August no less, is the model for engineering high rates of sustainable growth for many years to come.

Change the person or change the person.

Driving institutional change requires far more than executive buy-in to the concept, leaders themselves must set the fast pace through their own performance. Particularly when the stakes are high, when a company has urgent matters to solve, I know of no better method than: change the person or change the person.

This approach allows organizations to rehabilitate real talent that simply requires assistance yet also allows for terminating those who may be too myopic or incapable of professional growth. Either outcome also reinforces positive company attributes because transformed professionals are able to instill growth & development throughout a company while terminations become so obvious to all they can be conducted without friction, fear and raw emotions typically associated with a high-profile dismissal.

When properly conducted, changing the person or changing the person is anything but a long drawn-out affair. Driven by clear-cut objectives, evaluated through meaningful performance metrics and measures as a highly collaborative effort I find it’s rather easy to quickly get to the proper destination.

This morning I concluded a brief project for a company that has had significant problems in a small but once highly profitable manufacturing division. While the business unit VP had once been a rising star in the company, corporate executives were so convinced he was now their biggest impediment to restoring profitability they had apparently made up their minds to terminate him quite a while ago.

However, fearing nobody else in the organization could step up and not having a detailed understanding of the division’s daily sales and operations themselves, parent company executives allowed a condemned man to stay in his role until they could find the right time and figure out what to do. During my initial meeting with corporate leadership, I introduced the change the person or change the person concept and got the typical response: “Oh, you can’t teach this old dog new tricks…he’ll never change…”

Though I must admit the first couple of days were tense and this VP was highly suspicious about my stated intentions, it didn’t take long for him to distinguish himself. He was clearly a very bright, very motivated, very committed, and very willing top-tier professional who had encountered market conditions, competitive forces and performance pressures unlike anything he had ever before experienced in his career. He wasn’t unwilling to learn and change; in fact that was the furthest thing from the truth! He just didn’t know how, and because what had once worked for him was now failing he had lost total confidence in himself. Perhaps more telling, his initial distrust about my role was really about his now distant relationship with corporate executives.

By working closely together in this intense process we quickly discovered a number of revenue-building and cost-improving measures that were successfully instituted. August will be the division’s first break-even month in roughly 2 years and all indicators are they’re on track to eek out profitable months for the remainder of 2009. Though a far cry from the business unit’s best days they are on course to get there. And because the division’s leader has successfully transformed himself he’s now requiring the same from all staff which is why I’m quite confident they will once again be the parent company’s darling much sooner than anyone realizes. I’m equally certain that they would be much further behind, quite possibly on the road to eventual company shut-down, if we just focused on changing the person when the company already had its best VP in that role…he just needed help and direction so he could change.

Individual and collective commitment to excellence matters most.

I must admit that I had to be dragged kicking & screaming by Laurie Pehar Borsh (a truly top tier professional in her field, you can learn more about her business by visiting http://www.ecmgusa.com/ or http://www.personalprproductions.com/) to actually write this blog. Since its inception, I’ve often wondered whether or not anyone was actually reading it. Well, I’ve erased all these doubts thanks to the avalanche of feedback I’ve gotten over Saturday’s “Ted” entry. Maybe it’s the only interesting thing I’ve ever written, but as a result of the reaction I’ve gotten to “Ted” I will use today’s space to set several records straight.

First and foremost I will not allow this blog space (or anything associated with it) to be utilized by people who are trying to settle their own scores. Some people have attempted to post comments alleging someone they know is "Ted"…those will not be permitted here. I write about the situations I encounter because I swim in the deep end of the pool; not many are overly experienced in the deep end nor are they particularly comfortable there. If I can help others navigate their way through these treacherous waters it’s my privilege. In today’s volatile economy we are all better if we can learn from one another, share our useful experiences, and dig out (without the need for government intervention).

I’m amazed at how many people have contacted me to guess who "Ted" is.

I’ve heard from people I don’t know submitting names I’ve never heard of (thank you for reading this blog, by the way---I hope you find it interesting and helpful).

I’ve heard from former and current colleagues with their wild guesses.

Heck, I’ve even heard from at least one guy who insists HE IS "Ted" even though Saturday’s post doesn’t even closely resemble my involvement in his affairs (in this instance, I don’t recall the last time we had lunch or the last time we spoke for 2 consecutive hours…just for openers).

I am as shocked as I likely find it telling that everyone seems to know a "Ted," and some might even see themselves in "Ted." The point of this piece was not to publicly pick on an individual who temporarily re-entered my life after a long absence nor is it intended to provide rumor mill material for amateur Tom Ruskins of the world (another plug: Tom Ruskin is Founder/CEO of CMP Group, http://www.cmp-group.com/, a top-notch investigative and protection agency).

So why are so many people fixated on "Ted" and how do they seem to know far more of them than I ever conceived? I don’t know every motivation or detail, but I’m going to take a stab at it nonetheless.

It starts with one of my core business premises: FUNDAMENTALS RULE. There have been and there remain way too many businesses across too many sectors that are so lacking in fundamentals, in their desperation to get out of urgent trouble they make matters worse. "Ted" apparently hit a universal nerve because a not insignificant number of readers are either working with or for companies that are caught in the vicious cycle of fundamental-less businesses.

Keep in mind that "Ted" was written as part of my Blog Trilogy with August 6th’s “Cultivating Major League Talent” as the opening act. Much of the thinking here has been inspired by one of the most insightful and brilliant people I know, Rich Thau Founder/CEO Presentation Testing (http://www.presentationtesting.com/). Rich and his company do phenomenal work. You may have read about one of his most topical projects in the current Business Week edition. If not, here’s a link: http://www.businessweek.com/magazine/content/09_33/c4143btw375952.htm?campaign_id=rss_null. During a recent discussion with Rich he mentioned that an area he’s personally very interested in is education because it is the foundation for building and maintaining the nation’s competitive edge. EXACTLY!

An abandonment of fundamentals layered over a poorly educated workforce—at all levels—is the recipe for disaster that, I believe, conspires to create business conditions too many of you relate to.

An education is certainly what we get from attending school, but I find continuing and practical application of the many lessons we learn (best evidenced by serious ongoing personal/professional improvement) is most meaningful. The point is we can’t cultivate major league talent if organizations do not instill learning and doing cultures.

Companies can’t expect to post solid results if employees are ill-equipped to contribute, especially in the more competitive global economy. Economies will suffer if bankers stray from sound underwriting principles where the after-effects, among others, are lack of capital, available credit, and unacceptable rates of unemployment.

Undoubtedly stemming from Apollo 11’s 40th year anniversary last month I’ve heard the phrase“If we can put a man on the moon, why can’t we….{fill in the blank with your favorite subject}?” more than I’ve heard it in quite some time. Perhaps an oversimplification, but the catalyst for putting a man on the moon was President Kennedy’s memorable phrase from his September 12, 1962 speech at Rice University: “We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not only because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.” In other words, it takes a focused, educated, tempered-in-fundamentals effort to come close to achieving any goal.

My Blog Trilogy was intended to echo JFK’s words and apply them to business, at least among those who honor me by even occasionally reading my posts. As evidenced by the response I got to “Ted,” there are too many among us, in responsible positions or otherwise, who have unfortunately chosen the opposite path by doing what’s easy and looking for short-cuts.

Building and sustaining achievement is hard, but by following the right formula it's as achievable as it is rewarding. Trying to figure out who "Ted" is, in my opinion, becomes yet another example of obsessing on the easy and unimportant; what matters is our individual and collective commitment to excellence.

Toxic CEO Ted Provides a Lesson: How NOT to Run a Business

He said he really needed to speak with me about an urgent matter.

He said he needed at least a couple hours and would buy me lunch if I helped him work through the problem.

He said he had nobody else he could turn to and because we have totally different business philosophies he really needed me even though he knew I had no respect for him.

He said he needed a friend.

Maybe I was more curious than I was motivated to help, but I couldn’t refuse this invitation. So I met with this CEO for a privately-held firm, and for purposes of this post we’ll call him Ted.

Ted is one of naturally brightest people I know and at a very young age he built a formidable company. But Ted used his native intelligence to constantly scheme and find ways to make money by really bending the rules; reneging on agreements, overcharging customers in hopes they wouldn’t notice, and engaging in several other unethical and possibly even illegal tactics.

Ted is a lazy guy, he would much rather use his God-given brainpower to find the easy way rather than pushing himself to really build something. So Ted is probably the dumbest person I know. I will say this though, from time-to-rime, especially when he was caught in one of his schemes, he did try to clean his ethics and practices up. Although I hadn’t been in touch with Ted for a long time I was rather certain that these periodic spasms of operating integrity never lasted very long.

Ted has always believed he was able to make a great deal of money by always outsmarting everyone else. This also allowed Ted to not work very hard and because he had found a handful of employees that served as trusted accomplices Ted could enjoy a life of leisure funded by a steady stream of what I can only consider to be ill-gotten income. Ted had always said the reason he wanted to run his own company was it would allow him to “make a lot of money”. Furthermore, Ted created a company culture that was addicted to the same.

Ted’s willing accomplices extended to more than just low-skilled low-talent employees that would do his (literally) dirty work to draw a paycheck; a paycheck that was always far greater than anything any of them could have ever dreamt imaginable. Because Ted’s company routinely posted impressive top-line growth for most of this decade lenders were tripping all over themselves to give him money.

There are many excellent small/mid-sized companies that are being choked to death today because banks aren’t lending; the unemployment rate is indescribably scary because these cash-starved companies can’t financially maintain a workforce. In large part, Ted and others like him are the root cause. In larger part, the bankers who ignored fundamentals are really to blame for the mess. But that’s not what Ted wanted to talk to me about.

As a man who built a business based solely on short-term thinking and taking obnoxious short-cuts, current economic conditions have accelerated and highlighted Ted’s many corporate shortcomings. Dependent on equally short-term thinking bankers who were no longer there for him, some calling in major loans early, his business was being squeezed. Competitors were taking business away from him at eye-popping rates; some customers disappeared quietly, others have litigated. His company was bleeding at such a furious pace he had to significantly cut back on staff and when even that wasn’t enough to cover his growing financial shortfalls he had to impose radical salary reductions for remaining employees. His low-skilled low-talent staff hadn’t developed real professional capability; they were doing what the boss told them and drawing hefty paychecks in return…until now. But that’s not what Ted wanted to talk to me about either.

No, Ted’s urgent matter was that he had just uncovered a ring within his organization, comprised of the most trusted of his inner-circle staff, where his employees were selling his company data to competitors and, of course pocketing these ill-gotten gains themselves. Ted was angry about this but as I listened to him he was clearly more hurt. After all, how could they do this to him!?!? How could they not show Ted the loyalty due him since he had taken such good care of them all these years, especially at a time when he most needed them!?!?!??!

What he initially said he wanted from me was advice on what he should do. Should he prosecute all for industrial espionage? Or should he get some to turn over on others and just make examples of a few (the few would be those he liked the least anyhow)? But as Ted kept talking he then said, “But I can’t really do anything can I? They all know too much and they might get me in trouble.” In truth what he really wanted was a forum to rant and engage in one of his most common practices: self-justification and putting the blame elsewhere.

I gave Ted the couple of hours he requested and I don’t think I said more than 20 words the whole time. Yes, Ted said he wanted my helpful advice but he really didn’t, and if actually asked I wouldn’t have told him anything he wanted to hear. Of course we both knew this going in to that lunch meeting.

Ted was distressed because his employees were disloyal and did despicable things to him. It seems to me that in this case, these despicable employees showed themselves to be totally loyal to Ted: they acted exactly the way they had seen him and conducted themselves as he has. For a brief period of time Ted thought he had it all, thought he had figured it out better than anyone ever could. Forever, Ted will be toxic.

About all this new sales enablement technology---The MOST knowledgeable AND experienced sales person is still MOST effective.

Shortly after reading the brilliant Gerhard Gschwandtner’s most recent blog post, http://sellingpower.typepad.com/gg/2009/07/is-sales-enablement-just-lipstick-on-a-knowledge-management-pig.html, I received a follow-up phone call from a sales person trying to rekindle my interest in purchasing sales enablement technology. His pitch was the now-familiar “clone your top sales performers through our capabilities.” To support his value proposition, he cited several highly recognizable companies that had purchased his product. Naturally he was unable to furnish examples where his company had created an army of successful sales clones. Indeed, even his super-charged company apparently does not have a sales force of 100% top sales performers.

I’ve long believed that a highly knowledgeable sales person is a more effective sales person, something I covered in my July 27th post. To further illustrate my credentials on this subject, a CEO for one of the nation’s leading surgical device distributorships recently forwarded a copy of an email he sent to his staff. It so happens that this CEO once worked with me, and his recent companywide email included the following:

“The region I was a part of was led by Mike Berman. It was here, I learned the power and responsibility of leadership to create the culture that would drive their regional sales force to beat these industry titans. Berman regularly read 10 newspapers a day, continually educated us.”

Needless to say, he and I worked together several years ago and the “Industry Titans” he writes of are FedEx and UPS; newspapers have long been replaced by the Internet. As a longtime practitioner for knowledge-based selling, well before it was known as “sales enablement,” I’m no less enthusiastic about it than I was back then. In fact, I’m certain it’s even more critical to a sales person’s success than ever before. But the mere suggestion that a highly-researched sales person is destined to be a high performer is pure rubbish in my view.

So as I listened to this highly enthusiastic sales enablement sales guy talk about his product, and after I spoke to one of his company’s reference accounts, I could draw no other conclusion that this highly useful capability is being bought and sold as some kind of a one-size-fits-all short-cut to success. Ultimately, that always ends in disaster and I look forward to learning about client retention rates for the sales enablement providers in a year from now (and I am willing to take bets what they will look like so please contact me if you want in on the action!) I’ve always been in awe of and will forever be in awe of top sales performers.

Any true top performing sales person has to be offended by the very notion that their breadth of knowledge and skill can be replicated through a software application and companies that buy this premise are simply out of touch with the hard work and continuous effort required to reach, let alone maintain, top sales performer status. Sales enablement vendors lose credibility with me when they overstate what their useful technology can do. Again, rather than selling to help a (prospective) customer really succeed in their field, these suppliers are apparently intent on just posting another sale themselves.

Whenever I’ve challenged anyone from the sales enablement companies on this the typical response is “oh, you just don’t get it.” Well, the sad truth is as much as anyone, I do get it, always have! But rather than embracing the technology being offered I’m staying away for the reasons covered in my July 9th post: GET REAL! Undoubtedly, the calculator has been a CFO’s blessing--just as effective use of sales enablement capabilities can be a most useful tool for a sales person. Having worked with several excellent and not-so-excellent CFO’s in my career I am most confident the difference wasn’t found in the choice of calculator. The right professional with the right tool and the right commitment to her/his craft will always be a top performer and this is earned, never cloned. And if it were this easy, Cody Ransom would be in uniform for this weekend’s Yankee/Red Sox series.

Cultivating major league business talent requires more than natural gifts.

Prior to yesterday’s game the Yankees designated Cody Ransom for assignment. Now if I were writing a sports column, taking up space to report about dumping a journeyman player from a first place team that starts a critical 4 game series against their biggest rival would redefine absurd. But this isn’t a sports column and the 33 year old Cody Ransom who has spent the vast majority of his career as a minor leaguer is a relevant metaphorical business topic. I refer to Cody Ransom not as someone who has posted an anemic .233 lifetime major league batting average over 197 games played, but as Cody Ransom a truly phenomenal athlete….this Cody Ransom: http://www.youtube.com/watch?v=JqjUJJ86VV0

It’s easy to forget that even the most marginal professional ballplayer is a special athlete. To me it’s unfortunate that too many don’t recognize that cultivating major league business talent requires more than natural gifts.

Troubled economic conditions have a way of accelerating or shining a very bright spotlight on problems that had been there, but remained unaddressed during more favorable climates. These underlying issues were always there; all too often they were ignored or left unaddressed. As a result of my own professional focus I get to see this more than most, particularly the disastrous after-effects.

I’m more convinced than ever that the depths and dimensions of corporate volatility are created and solidified when conditions appear to be optimal. Rather than challenging the most gifted employees to continually improve, all too often, management makes excuses for their high-potential as well as their (apparently) high-performing employees.

In my opinion, instead of demanding excellence on all levels, most notably ethics and judgment, management—perhaps unintentionally— often fosters environments that encourage short-cuts and short-term action. As a result, knowledge and skill does not have the opportunity to become fully developed, especially at the levels required to excel in today’s more competitive and more educated, global economy.

It takes more than Cody Ransom’s awesome natural ability to make for a productive major league player just as it takes far more than having the right foundational components to develop an excellent business professional.

This past week I had two distinctly different and rather incredible experiences that compelled me to write about Cody Ransom getting cut by the Yankees and relating it in this highly generalized for business piece. My next two posts will speak to both these situations, each highly relevant to anyone in any business that intends to build sustainable high-performance organizations. Stay tuned.

Debunking and moving beyond the good old needs-based selling myth and more...

Everyone recognizes that growth is the best remedy for reversing sluggish performance, but I’m less certain enough business leaders really know how to inspire growth or exactly where their organizations might be lacking.

Continuing my “Fundamentals Rule” theme, I’d like to focus on sales excellence this week by summarizing a project I just concluded for a small business services company that has dramatically turned the growth corner by improving sales performance.

Because my sales strategies and tactics deviate from the convention, I’m used to the initial skepticism that always greets me in a new assignment! This latest project was no exception, but we were able to more rapidly transform the organization thanks to the commitment of the sales force and an executive team determined to fight for their company’s survival.

In less than 2 quarters they have gone from negative year-over-year growth to posting record sales months in June & July; the corporate pipeline shows August and September will shatter the prior month’s records!

Though there are several nuances explaining their great transformation I will focus on one aspect that typically causes the initial skepticism and because it is also a core point to creating these unsurpassed results: debunking and moving beyond needs-based selling.

At best, a sales force that “sells to the (prospective) customer’s needs” is selling to lagging indicators. By very definition, needs are determined by yesterday’s news--not nearly sharp enough or fast enough to truly solve a (prospective) customer’s compelling business issues! But in these turbulent economic times, a great majority of targeted customers (even at the most senior levels) have a difficult time figuring out where their business even stands in its competitive industry making it rather difficult to properly articulate needs.

Consequently, needs-based selling invariably leads the discussion to price and is a primary cause for commoditization. In practice, needs-based selling is purely a tactical exercise and as a process it is now so familiar to all that what should be a critical dialogue takes on a recognizable pattern between sales person and buying influence.

Fundamentally, needs-based selling is all wrong for today’s economy and in my view it’s the biggest culprit for poor sales performance.

I showed my client (as a company) how to replace the purely tactical lagging indicator needs-based selling with the more strategic, forward-looking method of selling to leading indicators.

This process focuses on the prospect’s current and anticipated business conditions. While it is collaborative and fully integrates all aspects of the prospect’s business, it forces the sales professional to take a leadership position.

My client’s sales force became so good at this so quickly they not only are growing a record clips they are also charging a premium for their services.

Working extremely hard and closely together, we also debunked a second myth: in recessions, customers will always buy on price.

My experience shows, and my client’s success further validates, organizations that create unrivaled value will always be in great demand--particularly when their targeted market needs help.

The last myth debunked (and one I hear all the time) is “you don’t know our sales force, they will never change the way they do things, we’ll try it and support it, but it’s tough to teach our old dogs new tricks.”

Respectfully, I find that an unfortunate number of senior management teams just don’t know their sales force and unwittingly institutionalize mediocrity by continually underestimating what can be achieved.

There was a time when the sales profession migrated from feature/function product-pitching to needs-based selling: the late 1970’s and early 1980’s. I don’t believe it’s coincidental that was also a period of great economic uncertainly and distress.

I preach what I practice and I am utterly convinced that companies must compel their sales forces to adopt a leading indicator style of selling.

My client did it so superbly that I’ve also achieved a primary project milestone: produce swift, significant & sustained results so they can carry on without me.

Congratulations Goldman Sachs (Employees)

Though I’m not the first in line to congratulate Goldman Sachs for their 2nd quarter earnings, I’m one of the loudest voices cheering them on because Goldman’s performance validates the principal business philosophies and convictions I write about in this space every week. And although I don’t want to appear callous or clueless about the need to effectively manage all stakeholders, it dawns on me that the great story about a great company’s great results is quickly turning into something ugly: compensation and bonus.

Clearly, Goldman’s employees identified and fixed problems in their business, recognized where they could grow to capitalize on current market conditions, set a course of action, and then superbly executed on their plans.

What’s not to like, what’s not to applaud, and what’s not to compensate?

Goldman is setting a standard, showing a way, superbly demonstrating that the right people doing the right job the right way will not simply overcome miserable economic conditions they will shine. This is production that deserves to be recognized and rewarded not tarnished by attention-seeking politicians or a battered public that has been rocked in every conceivable way the past year-and-a-half or so.

Goldman is an inspiration, a strong reinforcement that greatness is often defined by overcoming adversity and always measured by output. Handsomely compensating Goldman employees for their production should be the greatest encouragement for those who are struggling right now…something that should keep them going through these tough times because epic reversals of fortune can and do still happen.

Sure, Goldman benefited from government assistance, but isn't their ability to wisely use the monies they received, pay it back, and achieve as they have a “you couldn't have planned it any better” moment?

The people that made this happen each undoubtedly pushed themselves and made personal sacrifices to make Goldman Sachs’ 2nd quarter 2009 as stellar as it was. These people should be properly compensated for what they did and will likely continue to do.

Here’s one small measure of what I mean: each morning I commute into Grand Central Station on Metro North from CT on the 4:22. From there, it’s the 4 or 5 subway to Wall Street where my office is. There's a regular crowd on this early morning commute and, conservatively, I’d say at least 15% of the people I see every morning are carrying a Goldman Sachs emblazoned briefcase/laptop bag.

However Goldman Sachs decides to split 2nd quarter bonus money is their business and no matter how much gets doled out, their employees have at least earned every penny of it! It’s the proverbial ray of sunlight on this cloudy economic day and my best hope is that many more US companies will soon be faced with the same problems Goldman Sachs currently has: properly compensating their excellent staff for a job well done while motivating them to do even better going forward. Congratulations Goldman Sachs Employees--job well done.

Fundamentals Rule: Just GET REAL!

June’s unemployment figures are no less chilling for me a week after they were released as they were right before this nation celebrated Independence Day. I can’t think of a more important, complex, or daunting challenge than getting the country back to work…meaningful, productive, rewarding-on-all-levels employment that is best created by well-run companies.

Typically I solve business problems and introduce initiatives that create well-run organizations by focusing on the illness” rather than the symptoms. But I'll go against my own grain to briefly focus on what I believe to be the leading symptom creating today’s illnesses, in my view best captured in this CNBC news report: http://www.cnbc.com/id/31801817

Actually, the symptom can be found in the article’s opening 4 words, “Baseball legend Lenny Dykstra….” Baseball legend? Don’t get me wrong, Dykstra was a fine major league player who played on some of the more interesting teams in recent memory, but a career .285 hitter is no legend. It was only a few years ago that “Nails” Dykstra was hailed as the single greatest investment mind by the breathless media, but further inspection and longer-running results suggest this was all myth.

At minimum, creating jobs, building high-performance organizations, maintaining competitive edges all require hard work, great skill, real knowledge, and willingness to inspect-to-improve. However, the evidence shows too many would much prefer to skip past all this by finding some easy way with some short answers or slogans. Nationally, this is not “change you can believe in” but “delusions you can be scared by”.

To me, prematurely anointing Lenny Dykstra an investment savant or now branding him as a legendary player is in the same category as rating agencies rating their customers’ financial products, disclaimers where there used to be warranties, excuses where there used to be commitment, and much more. On several occasions I’ve reinforced my strong belief that fundamentals rule and of these the most basic as well as necessary is: get real.

Best to tell the Emperor he has no clothes before it's too late

Leave it to The King Of Pop's ex-wife to put meaningful perspective on this just-completed strange week when she revealed her then-husband confided he'd probably end up like her father, The King Of Rock & Roll.

Of course this makes me wonder if South Carolina Governor Mark Sanford had similar premonitions that he'd wind up like another once-powerful southern politician, Wilbur Mills, whose career was also derailed by a relationship with an Argentinian--Fanne Foxe. Between the onslaught of news about Michael Jackson's tragic death and the unfortunately shrinking coverage of the comical Governor Sanford I had time to read an email from a former employee who was excited about a new career opportunity because he really liked his prospective boss and is certain he'd "learn an awful lot." Nice to see Chris is still committed to learning because when I wasn't doing all this reading, I was once again immersed in meetings at a company that apparently prefers to pretend rather than really make the necessary changes in its business.

Michael Jackson had some of the smartest, most sincere, loyal advisors ever assembled. As far as the public has been concerned, Elvis' 1977 death was a summer stunner, just like his future son-in-law's summer 2009 passing is. But apparently those who were "on the inside" are not overly surprised. Similarly, you can't tell me that a state governor can actually disappear for an extended period of time without anyone knowing it. I wouldn't have believed this before the Internet and I certainly am not buying it in this day and age.

So....how!??! And why is it that few actually attempt to or even do learn????? I'm truly convinced "History repeats itself" is a true cliche thanks to the stupid, lazy and gutless.

Reinforced by the company I referred to in the 3rd paragraph--one that will die a tragic death which will be greeted with the same shock for its suddenness as Michael Jackson's was last week or Elvis Presley's was 32 years prior--otherwise smart and capable people lack the courage to do their jobs.

Instead of telling executive management about all the company problems and screw-ups they are presenting news executive management wants to hear in a way they want to hear it. They're all convinced the company is perched for a wonderful rebound "when the economy picks up" (which, by golly, they're all certain is happening right now!). Meanwhile they're rotting from within and are unlikely to see Labor Day.

When will serious minded professionals really learn that the embarrassment is not telling the Emperor he has no clothes, but in allowing senseless repeat performances of untimely and unnecessary mistakes?

The Fundamentals Rule

At this point I’m not sure which is harder to get a handle on: Where the economy really is? or Which of the expert opinions are accurate? I’m no economist nor do I have radical breakthrough theories, but based on my business experiences I at least have a credible viewpoint that is consistently applied. Fundamentals rule.

The current economic mess and events leading up to it was created by individuals and organizations convinced they had figured out ways to either ignore or redefine fundamentals. Of course the most notable of these modern-day business Icarus’ initiatives was sub-prime mortgages. In this interconnected global economy even sound businesses have been crippled by the residual effects of “Corporate Camp Run A-muck”. However, not every company ignored fundamentals which is why there remain glimmers of good news that are roundly reported and featured by the popular business press.

I’ve had the benefit of working across a wide range of business/professional services sectors and also consulting for some of the world’s largest manufacturers. And while I respect that each company and every industry has certain nuances, the driving fundamentals are always the same. Organizations that have stayed true to these fundamentals are more than holding their own even under the direst economic conditions while those that are renewing their commitment to sound business principles are inching their way back. However, companies that have not yet fully (re)discovered fundamentals do so at their own peril.

As always, there’s an interesting and useful conflict that must be managed. While sound fundamentals always ground and drive a business, companies that operate in an extreme mindset may also become less innovative. Progress and growth is fueled by innovation; management’s most critical responsibility is to foster innovation yet honor fundamentals by not allowing a company to become mindlessly reckless. Icarus may have been a tragic Greek mythology figure, but at the same time his story didn’t deter the Wright Brothers.

Innovation, guided by fundamentals, creates sound, secure and sustained success. The mixed signals we’re getting about where the economy currently--“The Worst is Over,” “We Haven’t Hit Bottom Yet,” etc.—reported on a daily basis is my cue that the struggle between fundamentals and flying too close to the sun continues. But in the end, fundamentals always rule.

Hiding Behind Voicemail. An Alarming Trend in Business?

It could be that I’ve been ridiculously slow to make this connection, but I’ve now pulled together enough evidence from a broad enough range of sources where it has finally dawned on even me: the tools designed to facilitate interaction, improve service, and further connect companies and employees to all stakeholders are having quite the opposite effect. Though we’ve all rolled our eyes when yet another of our calls roll to voicemail or have experienced the frustration of an unanswered email, the problem is worsening and my analysis shows it’s costing companies real revenues in a market that’s not particularly inviting.

Most recently one of the absolutely finest professional service providers I know, someone who has a distinguished track record producing instant results for his clients, is a man of uncommon character, and has real solutions for companies that are struggling, reported that the vast majority of his outbound phone calls are disappearing into the black hole of voicemail. He typically deals only with senior executives and his experience is telling him that a growing number of people he’s trying to reach are, in his words, “hiding behind voicemail.” One of his indicators is the timing and volume of calls he gets back, especially when compared to history (this is someone who keeps detailed statistics on everything). It’s closely related to my experiences in other areas.

I’ve spent my entire career in business/professional services, and I get up close and personal looks at many different companies in this broadly defined industry. And while every company’s mission statement and annual report gives passionate lip-service to a commitment to service, what’s happening on the front lines is anything but. Undoubtedly the nervous-wreck of an economy has everyone more on edge and customers are putting more bite into their calls to (vendor) customer service lines, but on a regular basis I am finding “hiding behind voicemail” is routine. Most damaging is that when I dig deeper into situations where a client service/sales/customer service employee dodged a call, I’m finding they are taking cues from more senior management; an alarming trend. At a time when companies can strengthen their relationships by standing up in the face of adversity they are allowing themselves to be more vulnerable to competition because throughout the ranks employees are shrinking away or hiding.

Here’s a contrast:

As a way to fix a business that was fast losing credibility in its market I had to terminate several unsavory sales people, each having questionable business practices and ethics. One of the sales people I terminated responded to losing his high-income position by posting untrue and really demented stuff about the company and me personally on the Internet. Of course this individual used a pseudonym to excoriate me in what amounts to one of the most incredible role reversals of all-time (it’s kind of like Bonnie & Clyde accusing the Texas and Louisiana officers of murder). My way of dealing with it was to reply to this post by using my name, putting my entire contact information out in the public domain and asking anyone who wished to speak with me to please call; I never got one inquiry and the brief moment of stupidity quickly faded away. Now compare that to this scenario.

Senior management at a company I’ve done business with had to communicate a very sensitive message to their end-user customers; something so critical that executives personally spent a great deal of time on this matter. I know these executives extremely well and they have always passionately stated their strong belief that, though theirs might be a national company, it’s as personal and community-based a field as there is. This company happens to be a technology leader, has all the customer data imaginable, and despite all the tools at their disposal, despite their planning for the critical communication, and despite their stated deep commitment to something deeper than “mass customization”, they sent out a letter that was unsigned and opened with a “Dear Sir/Madam” salutation! Needless to say, they have lost control for the situation…but I guess their silver lining is none of the executives involved will have to hide behind voicemail because, other than a general customer service number, recipients wouldn’t even know who to call. Now if you were the customer service rep getting a call from a frustrated/confused/angry customer who got a letter like this, knowing how your executives hid from their responsibilities, how would you handle the flood of calls?

Successful Companies MUST Depend on a Fully Functioning High-Performance Organization

Last night the local CBS News affiliate (Channel 2 in NY) Consumer Reporter ran a fascinating story regarding “sneaky and persistent debt collectors”: http://wcbstv.com/consumer/debt.collection.federal.2.1032181.html

I’m all for protecting individual rights, especially privacy, and especially obeying the laws, but at the same time exactly why are collectors resorting to any means necessary to do their jobs and collect money owed to their companies or clients?

In recent years I’ve worked with several companies that have outrageously high and unfortunately growing open accounts receivables and there’s a detectable pattern: Rather than owning up to delinquencies or trying to work with creditors, too many delinquent customers are either hiding from their obligations or becoming belligerent.

Look, I know good people and good companies are victims of a horrible economy, overwhelmed by events they can’t control, but I just can’t look at this as some “Attack of the Relentless Debt Collectors” either. Whether consumers or businesses have unintentionally taken on more debt they can handle, are they still not accountable for decisions they made? And if a collector isn’t able to engage the borrower in constructive dialogue is the collector supposed to abandon her/his professional responsibilities?

I’m sure there are collectors and collection agencies that go way too far, but this CBS Channel 2 report reinforces what I believe lies at the heart of so many of today’s problems: an unwillingness to accept personal responsibility and professional accountability.

The same people that make their unpaid debt more an issue of “relentless debt collectors” than the fact that collection agencies collected an astonishing $40 billion in debt show up at work with the same distant attitude about contributing to their company’s success.

Sadly, I see this way too often and one of the toughest parts in any of my assignments is reorienting these people to a performance/production imperative. Though apparently disconnected, I see same the root causes and story lines being applied in the public outrage regarding “overpaid executives."

It’s much easier to single out a CEO or a handful of executives in a struggling business, but successful companies depend on a fully functioning high-performance organization. A company is a collection of its parts and it’s impossible to cultivate a successful whole when sums don’t accept personal responsibility and professional accountability.

Can someone do a truly awful job by doing a good job?

It will probably take me many beers and many years to find an answer to the question that has been troubling me these past few weeks:

“Can someone do a truly awful job by doing a good job?”

Because the subject of my question is me and a team of people I’ve worked closely with, it’s led to many a sleepless night. Let me explain, and by all means if you can help me come to grips with this I’d really like to hear from you.

As you may or may not already know (and if you read my bio you will now), I work with and in businesses that have issues. In one particular case a naturally gifted entrepreneur quickly grew a privately-held company that set new records for having issues. Pick a discipline, function, legal, structural, financial, strategic or any tactical matter and you would have found severe issues in this company.

My role and mandate was and still is to engineer swift, significant and sustainable results and against this mountain of problems I (once again) had the benefit of working with a small team of highly focused and competent professionals that systematically resolved and reversed the bad trends plaguing this company. Because these matters needed to be dealt with urgently and expertly, recognizing company ownership would not be well-suited to actively participate as they were given status updates, progress reports, and ultimately the results everyone was looking for. By all accounts and measures, a good job by all!

However, rather than learning invaluable lessons that would serve the company and its stakeholders well into the future, and instead of recognizing the good fortune of a re-engineered healthy business where there had been dysfunction, a company ownership’s conclusion from the many corporate near-death experiences was sequentially: (a) the problems must not have been that bad because they were fixed quickly and apparently easily, (b) there would always be a capable clean-up crew available to instantly fix anything that might confront the company, (c) the company is simply blessed, (d) the company is better than and smarter than everyone else and is therefore invisible, indeed bullet-proof.

Consequently, ownership not only reverted to the business methodologies that got it into trouble in the first place they did so with an exaggerated vengeance. A truly horrible job, because what had been built proved not to be sustainable and in my world Harry Truman’s “the buck stops here” sign/slogan makes me fully accountable that we successfully climbed a huge mountain and then watched a corporate suicide leap.

Reflecting on it, had we failed along the way with one or a few of the initiatives and, had the company felt real pain at an interval or more, real lessons would have been learned and this would be a thriving company.

Stop the "Duck and Cover" Mentality: We Need Leadership to Conquer Today's Business Challenges.

I have a couple of client situations that can only be defined as the highest of high stakes. My client companies—totally uninvolved with one another—are separately in the fight for their lives with respective business partners that has the potential to destroy all parties involved. Even if I were permitted to go into great detail, there’s not enough Blog or Twitter space to fully tell these complex stories. But these stories are very much related to many others plaguing businesses today: (a) accelerated trouble resulting from broader economic pressures, (b) lack of organizational expertise solving serious problems, (c) ineffective leadership, unable to master growing volatility.

More than ever before I’m asked the same question by a growing number of people: “how do we handle the mounting problems in our business, what should we read, where can we learn what to do?” While I always try to avoid giving off-the-cuff simple answers to complex questions, as I work with my clients to solve their apparently inexorable problems and get a deeper understanding of others’ business dilemmas, I believe the best reference guide for executives today may not come from the business library or business history at all.

Study The Cuban Missile Crisis from the fall 1962 when the world came absurdly close to a nuclear war. A combination of inexperience, fear, bravado, talking at rather than to other parties (particularly opposition), miscalculation, escalation (things looked absolutely bleak when a U2 plane was shot down over Cuba October 27th), solved by October 28th by brave leadership that allowed themselves to get past the posturing and find resolution.

I was too young to remember anything from those scary 14 days in October 1962, but I vividly remember the air raid drills we routinely conducted in elementary school…just in case. From what I am seeing lately, too many executives are dealing with today’s serious business challenges like the worst of the Cuban Missile Crisis moments and too many employees are doing a corporate version of “duck and cover” drills--when today’s business climate calls for leadership that is ready, willing and able to conquer today’s challenges.

Leno Brought Comic Relief to a "Temporary Willmington Condition"

Leno brings comic relief: "5/11/2009 10:15:00 AM
by GARY HUFFENBERGER Staff Writer - Willmington News Journal, Willmington, Ohio
Jay Leno, center, held a meet-and-greet Sunday prior to the evening show. Here he was joined by two Wilmingtonians, Mark Rembert (left) and Taylor Stuckert, who are leading the Energize Clinton County initiative as well as contributing in other ways to the effort to alleviate the economic hardships in the area, where Clinton County has a 12.5 percent unemployment rate and Highland County a 14.5 percent jobless rate, according to the most recent data. (News Journal Photo/Gary Huffenberger)

I’m an uncomfortable flier even in the best conditions, which is why I’ll never forget my first flight to Wilmington (OH) in the jump seat of an Airborne Express YS-11, situated between an open toilet and containers of packages and envelopes. I was a raw entry-level sales rep for a company that had either the (a) nerve, (b) desperation, (c) vision, (d) stupidity to transform itself from a traditional variable cost air freight forwarder to an integrated fixed cost carrier in an era of double-digit inflation and interest rates.

I remember boarding the pride of Airborne’s fleet back then—a World War II vintage turbo that served all of metro NY—and looking across Newark Airport’s tarmac at Federal Express’, Emery Air Freight’s, Purolator Courier’s fancy fleets of jets feeling a bit envious but mostly nasty angry. We were a nobody company daring to compete with well entrenched extremely well run and respected businesses. Within 5 years of that flight on a rickety YS-11 Airborne was not only much larger than Emery and Purolator, we had become the clear cut 3rd largest industry player to FedEx and UPS.

From the senior executives in Airborne’s Seattle headquarters to the part-time package sorters in Wilmington, we had a warrior culture of energized and aligned people committed to winning. Especially by comparison to the others, our lack of resources became the point of competitive pride and spirit; buttons senior management always knew how to press.

Though there are many examples, another Airborne moment seared into my memory is an afternoon I spent taking the company President & COO—Bob Brazier—to client and prospect meetings when I was managing the Chicago office. We had done extremely well in Chicago, I had the privilege of working with a team of exceptional professionals, and as we passed all the Airborne customer buildings I made sure to point that fact out to Brazier. After about 10 minutes of this, and I must say it was impressive because we were in very fertile Airborne territory, Bob deadpanned “yeah Mike, you really brought Federal to their knees, I hear they’re about to close up in the Midwest, maybe nationally.”

No matter how far we might have come from a single YS-11 serving the tri-state NY area the culture would never allow for celebration because that would naturally lead to complacency and then disaster. Though there are many clichés that get under my skin, none is more bothersome than “to make money you gotta spend money”. I grew up at Airborne from an entry level sales rep to a senior manager, and in the roughly 15 years spending money was taboo. Yet we outgrew the competition and made money. Sure, our lack of marketing to rival FedEx or UPS was also a cause for envy, but it further stoked our competitive nasty angry attitude.

In 2003 DHL acquired Airborne promising to take the company to the next level by spending money to make money. Though I had left Airborne a few years prior I kept in close contact and everyone was excited about “DHL and their deep pockets”, relieved that the intense never satisfied Airborne management style would be replaced by a kinder and gentler DHL.. Among the many things I learned at Airborne was “to make money you gotta have aligned management building a purposeful culture with universal understanding of what the mission is”. All DHL’s investment in Airborne could never make up for the culture that eroded over the past half decade or so.

Jay Leno is incorrect when he says, “’these are pretty resilient people’”…no, these are Airborne people and they are the toughest and most resilient people I know. To those who lived it and know... the saddest thing is: “Leno Brings Comic Relief” to Wilmington Ohio. Yet those of us who lived it and know it have the true confidence that "all of this" should and will be a painful, but temporary condition.

Springsteen a CEO? I'd like to say he sets quite an example!

I attended my first Springsteen concert over 30 years ago, I went to my first NYYankee game over 40 years ago, and it would be fair to say I’m rather passionate about both.

But as I was driving home from Monday night’s “heart-stoppin’, pants-droppin’, earth-shockin’, hard-rockin’, booty-shakin’, earth-quakin’, love-makin’, Viagra-takin’, history-makin’, legendary E Street Band’s" concert at the Nassau Coliseum listening to the final few innings of another predictably mediocre Yankee game, I couldn’t help but think about how much I got for my $110 ticket and how little Yankee fans get by now paying as much as $2500 for their seat. Oh the new Yankee Stadium is spectacular and for $2500 you get parking privileges, free food & drink, and a rather luxurious seat while Rome’s Coliseum is in slightly better shape than Nassau’s. The NY Yankees—like so many other businesses—lost sight of their value proposition, what’s important, and how real brand loyalty is solidified.

The Boss—Springsteen, not Steinbrenner—is nearly 60 years old. Last night it looked like he was battling a cold, but neither age nor feeling a bit under the weather stopped him from putting out the high-energy, truly professional performance anyone who has ever seen him knows to expect. In the +30 years I’ve never seen a bad Springsteen show. In the month of April the Yanks have lost by scores of 11-2, 15-5, 10-2, 22-4, 16-11 (blowing a 6 run lead in the process!)…on 21 games played. Roughly 25% of the time they take their stage, these Yankees haven’t even competed.

Where Springsteen never miscalculates his audience and what they expect, the NY Yankees—like many other businesses—have miscalculated an awful lot. Like many businesses these Yankees blame some of their attendance/unsold luxury seat problems on “the economy”, as if they were poor, innocent victims of events they couldn’t control. Fact is, I’d more readily spend $2500 to see Bruce Springsteen and the East Street Band without free food and the like than I would pay $110 to see this Yankee team with all the trappings…just as I’ve paid much more to purchase the 3 Acura’s we own than the inferior product put out by GM, Ford or Chrysler.

Last week I spoke to a CEO for a roughly $50 million company in a highly competitive industry who was moaning about the margin compression in his field, how the tough economy was hurting his business, how distressed he was about the state of business affairs, and how disappointed he is in his poorly performing staff. When I asked him about his client interactions I was shocked but not surprised when he said “I’ve never met any of our customers”. Though these are difficult times, there are some high-performing companies across every business category and I find a very consistent correlation: executives that are deeply connected to the front lines and involved with the core elements of their business—starting with the customer—run companies that consistently achieve while those who insulate themselves from the action rise and fall by forces they neither understand nor control.

While NY Yankee executives sit in their fancy ownership box peering over a stadium with too many empty seats as the Red Sox beat their brains in one more time, Bruce Springsteen is working every corner of the stage, shaking hands with and making direct connections to his loyal fans.

More to Life (in Business) than Deals.

Yesterday morning, I received an unexpected phone call from a former colleague I haven't spoken with in about a year. He wanted to talk about the planning exercise I ran at his company through a few years ago, and he opened our call by shouting: “I got it!”

My caller friend, you see, was one of the top performers at a high-flying financial services firm I did a project for. The planning exercise encompassed all aspects of business strategy and organizational construct. Mind you, my caller friend (like most in the room at that time!), thought the project was utterly useless. In the go-go days of 2006, I vividly remember him saying: “Who needs this stuff? All we need to do is deals. That’s it, just do deals…that’s what we live for…everything else is just a waste of time.”

Fortunately, his company ownership and executive management recognized there was more to running a successful business than a series of transactions and so they instituted measures that have served them particularly well to this point.

As the economy has melted down, their company is more than holding its own. In fact, the gentleman who called me this morning was so put off by the organizational changes being made back then, never accepted there was anything more to life than deals, left the company to start his own venture.

The true purpose of his call yesterday morning? While he and his partners had done pretty well they were now really struggling and he thought about it, and NOW they’d like me to do a project for them. Yup, that same comprehensive strategic planning exercise he had "no use for" a few years ago s now something he really does need after all. To me, this is the best sign that the global economy is heading back in the right direction!

SCH's Edward Lampert Looks for Normalcy in an Abnormal Business Environment

I just can’t accept that the vast majority of business professionals I run into these days believe that today’s economic environment is normal. I have a hard time believing that these people have not read a newspaper, looked at a declining investment portfolio or a 401(k), or that their companies have not been even slightly jolted by the worst financial conditions in anyone’s memory (or longer).

Given all this, I have enormous respect for other credentialed professionals and their great command, knowledge and skill, but most people’s functional expertise, their industry expertise, and their range of experiences tend to be most suited for normalcy.

My particular industry-interest, if you will, is Volatility. There aren’t many of us out there who have this expressed interest and I invite another business to take advantage of someone who produces results in these circumstances as a matter of routine. I offer a track record of achievement in “undermining volatility” across a range of industries for a quarter century. My normalcy is high achievement when there is abnormalcy.

On that note, I was completely inspired by Edward Lampert’s incredible annual letter to Sears Holdings Corporation (SHC)’s shareholders earlier this year (you can read it here on Scribd.com). He told it like it is and did not pull any punches. Perhaps that’s why Mr Lampert is who he is and why SHC is likely to overcome its challenges…as long as his organization can truly respond to his challenges and execute in line with his directives. In his letter Mr Lampert invites those who believe they can contribute to SHC’s success to contact him. At the exact time I was reading this I was also having my own Sears experience as a consumer, and it got me thinking:

I live in Connecticut, but we also have a NY condo I stay at 1 or 2 nights a week to cut a 1 ¼ hour commute into 18 minutes from Manhattan. My daughter is getting her masters at Columbia University so she is living at the apartment fulltime. Unfortunately, sometime in December one of us broke the microwave oven…which was originally purchased from Sears. She called Sears service to have a technician come and repair it…service is one of Sears’ greatest value points.

For 6 consecutive Saturday’s Sears arranged to send a technician to the condo. For 6 consecutive Saturday’s they called mid-afternoon to inform her the tech was too busy and would be unable to make it to the apartment. So already the Sears value proposition is undermined.

On the 7th Saturday the service guy came, looked at the microwave and said it would cost $450 to fix. Clearly, a dumb idea to spend $450 to fix something we could buy for roughly the same amount. So the technician gave her coupons, one for $75 that could be applied against a purchase of a new microwave from Sears to offset the cost of their service call, and the other a 20% coupon to buy a new appliance. I picked up these coupons when I stayed at our condo last Wednesday (3/4). On Saturday 3/7 my wife and I went to the Sears store in the closest mall to our house in CT.

The store clerk was a very nice and helpful man, but when he saw these coupons he had no idea what to do with them. He acknowledged we could only buy an appliance in their store (not from a Sears service technician), but said he didn’t think the store could honor these coupons because they came from service. So he went and got his manager who was equally perplexed. That manager brought over another manager and the 3 of them, along with my wife, spent the next 45 minutes or so trying to solve this incredible problem…which they couldn’t (the best suggestion was: buy a microwave in the store, then send a letter to corporate attaching the coupons and hope they would send us a rebate).

Now, mind you, this was taking place at the exact same time Circuit City—with a store ¼ mile away—was liquidating their inventory, including microwaves. And since every other store knew people were going to buy Circuit City going out of business merchandise many were offering “we will match any Circuit City price” or other discounts. Sears? They chewed up my time and couldn’t figure out how to handle their own coupons from a couple that was intent on buying only from them!

This all brought me back to the concepts of normalcy, abnormalcy, volatility, and Mr Lampert’s stated intentions. A typical employee who wants the job, needs the job, will do anything and everything (s)he can to never let stories like my Sears service and shopping experience surface because the potential for getting “in trouble” far outweighs potential gain for fixing problems. I submit that Mr Lampert (in fact for anyone else serious about winning in the disturbed business climate) will find the talent he seeks by recruiting professionals that bring the added benefit of not caring about politics, turf, CYA, or anything else a traditional employee is most conscious of. He wants people up to his challenge, with a track record of results, with transferrable skills AND one who won’t let the typical bs get in the way. From my own experience, the professionals he seeks are looking to achieve greatness, not find jobs.