If you've just been part of a "Reduction in Force' event

I just finished up my morning coffee which, on Sunday’s is always accompanied by a thorough reading of the Boston Globe. This mornings Globe Magazine has a great article on how to make the best of being out of a job. The article, entitled “From Lemons to Lemonade” can be found here.

A couple of key takeaways from the article:

1. Have a quick mourning period and then get over it. Your not going to be effective in your job hunt if your still bitter about your last one. Actually, I’m sure that is good dating advice as well.
2. Have a plan. I’m always reminded of the infamous words of AkAk’s dad in “One Crazy Summer”. “Without a plan, there’s no attack. No attack, no victory!”
3. If your not having success in finding something in your current field, don’t be afraid to try something different for a while. A temp job can give you the opportunity to do something you’ve always wanted to do. At the very least, it gets you active and earning a little coin. Plus, you never know who your going to meet when you are tending bar, mowing lawns or working retail.
4. Get out there and network. Engage yourself in Facebook, LinkedIn and the other networking sites.

Lastly, don’t spend all day long stalking monster.com, careerbuilder.com and all the other job boards out there. Of course, if your a professional in the reliability engineering and predictive maintenance industry do visit NextUp Careers!

Twittering Away

As many of you who follow me on the blog here know, I have been experimenting with Twitter. My last post about it indicated that I was less than enthused with the medium; I compared it to a fad like a pet rock or a friendship bracelet. This may still prove to be true, but I have been using it with increasing frequency and beginning to see the value in it.

I hate to admit it, but I am now operating two accounts! This is probably absolute madness but there is a method to it. The first account is related to my personal activity and is geared towards me and my Vann Group persona. The second account is for NextUp Careers, our new venture that I posted about the other day. This account is designed to promote NextUp within the Reliability & Predictive Maintenance industry that we are a part of.

So far, I have found this account to be far more useful and fun because I am engaging in a specific community. In doing so, we have a targeted audience that we are communicating with and we are able to promote our service in a way that generates awareness of our activity for those who are generally interested in it. In total, we have attracted 43 followers in the past week and adding more everyday.

What I am also finding out is that twittering on some level is just the random thoughts in your head that you decide to communicate to others whether because you have a need/purpose, or just because you can't help yourself. I find a couple of beers helps!

I'll continue to keep you updated on my twitter adventures, and if you have joined the fad, go ahead and follow me. I'll be sure to reciprocate.

The Education of an Entrepreneur

My first business venture was a lemonade stand which I had on the corner of Laurel and Columba St. It was an okay spot but I realized there was more traffic at the intersection of Columba and Grattan so I moved it. I was probably seven or eight years old.

Around the same time I started delivering papers for the kids in the neighborhood who were older than me and had routes. I helped Michael F. with his morning Republican route, Danny O. with his afternoon Transcript Telegram route and Billy B. with his Sunday route. When Billy went away to college I acquired his route and every Sunday for years my father drove me and my sisters Kim and Pam around while we delivered 125 papers. I had the route until I was 14 and old enough to get a job at Bradlees.

Kim, Pam and I also started a business selling colored salt. We would take chalk and color the sand and then layer it in glass jars. When I couldn't get them to focus on doing what I wanted with the business, I tried to buy them out. I was probably ten or eleven years old.

I also bought and sold baseball and basketball cards. My best return ever is when I bought a box of 1979 Topps basketball cards for $12. It had six Larry Bird/Magic Johnson rookie cards which I was able to sell for $100 a piece. I still dream of that deal!

In high school a couple of my friends and I financed keg parties. We would pool our money, buy a keg and sell cups for $5. Usually a good business where you got your money back and a pretty good profit, except for when the cops showed up. This was my first experience with financial risk.

I started my first company in college, doing research for my fathers clients who needed help finding information. I was also a pretty good writer in a fraternity with many guys who were not so I wrote term papers for $10 a page. My girlfriend at the time and I had a good number of conversations regarding the ethics of such an enterprise but ultimately agreed it was being done in the spirit of brotherhood. I guess she realized the benefits of me having money to take her out to dinner!

In 1999, I started Fisher, Tilton & Vann, Inc. because I realized I didn't do well working for other people. We also acquired Split Rock Capital from Bill Mazzeine. In 2003 we incorporated the Vann Group and in 2004 we acquired Client First Associates. I briefly invested in a property management and landscaping company and have since started several other smaller companies that are in various stages of development.

Despite all of this activity, I never considered myself an entrepreneur because nothing I was involved with was ever designed to scale and therefore, in my mind I wasn't building a company, which is what entrepreneurs do. Over time I have learned that this thinking is incorrect as it does not matter what size a company is, if you have the courage to take a risk your an entrepreneur. Nonetheless today I pleased to announce that I am meeting my old definition of an entrepreneur. Over the coming months within this space and in other places on the web, you will get the opportunity to learn about many of the ventures we will be launching.

In doing so, I want to make it clear that this does not signal a departure from what we do best. Quite the contrary as much of what we are focusing on will be geared towards helping transitional companies unlock their value. This will be done by leveraging the web and social media in ways that will allow us to provide tools and advice to companies across the globe - its going to be exciting!

We've also got great partners who are teaming up with us to make all of this a reality. Partnerships are a hallmark of the Vann Family's history of business success and we are really excited about their involvement. Their operational, industry and technical experience will allow us to do what we do best - make companies (ours and yours) grow.

With that said, I'm pleased to announce our first venture - NextUp Careers. You can link here to the press release for all the details about the first career portal dedicated to helping reliability engineering and predictive maintenance professionals find career opportunities and companies find the right fit. What we are building is pretty amazing, and I'll have a post soon on what makes it unique in the world of web-based job and career sites.

In the meantime, please continue to watch this space for progress on all the exciting things we are up to. Also, please keep us in mind as you think about how your going to transition your business from what it is to what you want it to be. We can't wait to help you.

The World Fiddles

It has been an interesting couple of weeks of world watching. There are three stories of particular note that I have found completely fascinating while abeing absolutely appalled at the response from the media and our political leaders in Washington.

The first is the Jon Stewart and the Daily Show's attempt at getting the media to pay attention to the role of the financial reporting media complex in creating/encouraging the behavior that has led us to this Great Recession. Stewart did a fantastic job in presenting the argument and as this clip shows, he ate Jim Cramer's lunch. However, what I find appalling is that the only reaction has been - "wow, it took a comedian to point this out". While Stewart/Cramer itself should not be a story, the fact that no journalist or media institution has taken on the cause before or after Stewart is appalling. As the stewards of public knowledge, financial networks like CNBC need to take a critical eye towards the actions of companies, not toss them softall questions. And, when they failed in that job, their peers should be the first to call them out on it. Instead, they give sympathy and call Jon Stewart unfair.

The second story that I find equally fascinating and appalling is the story of the AIG bonuses. I am truly embarrassed that this is a story and not for the reasons many of you might think as I am not appalled by the bonuses but the reaction to the bonuses. In saying that I can understand that it appears inappropriate and the amount of compensation over-the-top, we need to keep two things in mind: 1) retention bonuses are a reality when it comes to a crisis situation; and 2) these employees signed a legally binding contract to stay with AIG and see it through this epic disaster. The administration initially recognized point #1 and the rest of us should recognize #2. Consequently, none of the other details of this situation matter.

Since I am not appalled by the bonuses, what does make me cringe about this story ? That would be the grandstanding by the members of Congress and now the administration about their perceived "outrage" over these payments. What they fail to recognize is that their outrage and actions are trampling on one of the most basic foundations of our system of government - written contracts are legally binding.

For those of you who disagree with my position ,think for a moment about how you would conduct your business or how outraged you would be if Congress or the courts told you that the legally binding contract you entered into with good faith won't be honored because Congress was "outraged" over the terms. I doubt any of us would be happy or would be willing to sell a product or perform a service without cash in hand. Why then, should we be outraged by this company (which we as taxpayers own 80% of) or their employees doing what they need to do to save this business? As AIG's CEO noted, spending $165 million to save $1.6 trillion seems like a pretty good deal, especially since we've got $170 billion invested into it!

Unfortunately, what our political leadership doesn't seem to understand is that their actions do not save the U.S. taxpayer money, all they do is cost us money. If our government has no respect for a legally binding contract, how can an investor be confident in the institution they are investing in? Why should investors put money in our financial institutions when we cannot be confident that contracts or promises will be honored? The bottom line for me is that "backed by the full faith and credit of the United States Government" has a lot less value to me today than it did last week.

Lastly, I'm not sure how much of a story it will turn into, but President Obama made a comment last night about his bowling being consistent with the Special Olympics. Appropriate to say? Absolutely not. Something that most Americans would probably say? Absolutely. Is the comment ever said with true malice? Probably not. Yet, I imagine that this will be quite a story, or members of the media or Obama critics will try to make it a story. Why?

Because we would rather fiddle.

Wine & Corned Beef

In the event that you were curious about what to drink with your corned beef and cabbage today besides the obvious answer of beer, the folks over at BNET have the answer. Surprisingly enough, corned beef is as versatile as turkey when it comes to options. Happy St. Patrick's Day!

The Theory of Five

We at the Vann Group are often asked "how bad is it out there" or "how bad is it going to get". The obvious answer is that its "bad" and its "going to get worse for the foreseeable future". However, that really does not answer the question, so I've created a hypothesis based upon my own business experience and what I am seeing in the marketplace.

I'm calling my little hypothesis the "theory of five" even though from a scientific standpoint it really itsn't a theory yet, just a gut feeling, but I like the sound of "theory of five" better than the "hypothesis of five". Anyways, the theory starts on the premise that we have five companies in business at the start of the Great Recession. The question the theory aims to answer is "how many companies will be in business after the recession"? The answer is 70%.

We arrive at this answer as follows. For every five companies we have come across, three are surviving and even growing at some level; 60% of the companies out there are holding their own. Company number 4 is either already out of business or going out of business in relatively short order; 20% of our companies then are the weak link. These are companies that probably never should have been in business or just weren't positioned well enough to weather anything less than calm waters.

That leaves us with one company that is completely on the edge, it can go either way. With good management, a clean balance sheet, a good strategy and a little luck, this company will survive. If any one of these factors tips the wrong way, the Company is probably a goner. So, for the purposes of our theory, I am assuming a 50/50 split on this. If this is correct, that means 3.5 of every 5 companies will survive this recession/depression. Of course, that also means that 3 out of every ten companies will cease to exist once this ends.

Since this is really just a hypothesis, it will be interesting to see whether or not it proves out. I'm inclined to think its probably worst case, but you never know. A recent article in the Providence Journal, highlights some interesting facts about the loss of businesses in Rhode Island, which has been hit harder than any other state so far. The article notes that the number of corporations that disappeared last year increased by 23% over the previous year. A disturbing trend to say the least.

That's the theory of five. Sometime soon, I hope to have a post on what that total number of businesses lost would mean to employment, but until then, let me know your thoughts on my theory.

The Entrepreneur Fix

A recent editorial in the Wall St. Journal has been making the rounds in entrepreneur circles lately. The post, entitled "Entrepreneurs Can Lead Us Out of the Crisis" was penned by Tom Hayes, a Silicon Valley executive and Michael Malone, a writer for ABC News.

The editorial rightly notes that it is entrepreneurs who take the risks that lead to real job creation and it outlines some steps the government should take to encourage entrepreneurship and investment in early stage companies. Many of the idea's appear interesting, particularly the creation of investment accounts similar to a 529 plan, the rescinding of Sarbanes Oxley and the development of a tiered tax structure to encourage early stage investment.

The one that I found particularly interesting and that would really drive job creation across all segments of the economy would be the elimination of payroll taxes for early stage companies. The authors don't elaborate on the specifics of this, but it would be great if the government got behind something like this. Perhaps a company would get to waive payroll taxes for the first three years of their existence or until they've hired a set number of employees. The additional capital it would generate for start ups could be substantial and could also help alleviate some of the credit crunch we are facing right now.

Sadly, it is highly doubtful that our government could be this innovative in their thinking. With that being said, all business owners should support the authors call for a Presidential Summit on Entrepreneurship. The last one was held in 1982! If President Obama can hold a summit on health care, he can host one on Entrepreneurship; after all, entrepreneurs will probably be the people who solve health care.

Brand Loyalty & Your Customer's Value Expectation

Brand Keys, a NY based firm that measures customer loyalty has just published its most recent findings. This mornings Boston Herald has a quick article on some of the key points and notes that Dunkin Donuts had the #1 spot for coffee drinker loyalty, followed by McDonalds, Starbucks and Krispy Kreme. The Starbucks hits keep coming!

When you review the findings, the interesting nugget is that the perception of value received is critical to customer loyalty. No surprise there, but what is surprising is the note that customers no longer perceive it is their personal responsibility to find value, but the brand's responsibility to provide it. However, as the post notes, value and price are not linked:

The brands that won are the beneficiaries of consumers’ new expectations regarding brand value. The most significant shift is a neutralizing of the impact of price. And, believe it or not, this can actually turn out to be good news for brands. While economic news hasn’t been good, these shifts provide opportunities for brands that pay attention to what the consumer really expects and offer meaningful differentiation, will tip the value scales in their direction, because value matters more than ever. More than just price.

What this means for business is that we all must continue to identify the Customer's Value Expectation (CVE) and find unique ways to meet and exceed it. We've developed a great exercise for identifying the CVE and combining it with Blue Ocean Strategy methodology to find those differentiators. If you want to discuss how we can help you with identifying your CVE, let us know, we'll be happy to help.