Have you ever witnessed a crime being committed within close proximity to you?  How did you react? Were you scared by the atrocity and immobilized – unable to respond? Did you pounce like a jaguar nabbing its prey ready to thwart the action? Or did you just say to yourself, “Is that guy really stealing a book from this bookstore?”

Welcome to Swimming in the Flood; a podcast where develop the resilient leader’s mindset by navigating difficult currents in business. My name is Trent Theroux.

I was standing in a kiosk in the Louis Armstrong airport in New Orleans. I had given a speech earlier in the morning and I was flying home. The kiosk was your typical airport sundries store that included a wall of books and magazines. Unlike many of these stores, we were in the actual aisle way, not inside a store. I was perusing some paperbacks next to a 60-something gentleman sporting a thin greyish beard and wearing a sharp navy blue blazer. We stood next to each other for no more than a minute before he took the book he was examining and stuffed it inside his jacket under his left arm.

I was stunned. Did I just witness someone stealing or was he putting it there to hold it while he shopped more? Nope. He took a direct line into the aisle way and started walking towards his gate. I was appalled and angry. My immediate reaction was to do my civic duty and stop this book thief. I took three steps towards the aisle way before I realized that I was conspicuously holding a new, unpaid for book. I went back to the shelf – placed my book down – and chased after the thief.

This older man must have been skilled in the art of evading authorities because within a matter of 20 seconds since stealing the book he was gone. I hurried down the aisle searching for his navy blue blazer – his most distinguishable feature. I reached the end of the concourse and began to double back. As you can infer from this retelling, I’m no Jason Bourne. I began to double back when I saw him handing his boarding pass to the airline agent. I was prepared to yell, “Stop! Book Thief.”

In the nanosecond between thinking of my action and actually yelling a huge red flag waved in front in me reading, “People who yell in airports do not make their flights on-time.” So, I watched him board – with his stolen book.

Waiting for my flight, I was reflecting on the incident trying to understand why the gentleman, decided to go Winona Ryder rummaging through Sak’s 5th Avenue. From all appearances, he has means. So, why reduce yourself to shoplifting?

My thoughts then turned to my reaction. Why was I appalled at something he was doing? Why did it bother me that he was stealing a book from a store? I wasn’t the one stealing. I try to develop resilient leader’s mindsets, but this was a hard question and I didn’t have an immediate answer.

I broke the question down to the premise that stealing would violate my sense of integrity. And his stealing was such an affront to my moral code that I was left with the visceral response to hunt him down – and potentially handcuff him to the airplane gateway – and beat a confession out of him – with the book he stole. But, that’s just me.

I am now going to give you my unscientific, non-peer reviewed, resilient leader theory on integrity.  Are you ready? Got your pencils out? Here it is: Stop at the red light after midnight. You heard it. Stop at the red light after midnight.  This theory has been endorsed by one Catholic high school English teacher.

The theory is simple. My sophomore year English teacher, Mrs. Johnson, told a story about her husband that made me want to emulate him. She said that they were driving home one evening at about one o’clock in the morning and approached a light turning red. Her husband stopped the car and waited for the light to cycle back to green. Mrs. Johnson said that there was no one near the intersection. In fact, no on anywhere to be seen. She admitted that she would have gone through the light as it really wasn’t directing any traffic. Her husband chose to wait. And follow the law.

There was a message in that story about integrity for me.

Quick show of hands how many of you have driven through a red light when there was no one around? My Magic Mirror tells me that quite a few of you have? It’s perfectly rational to drive through the red light. Heck, the light’s function is to regulate traffic. There is no traffic. Hence, there is nothing to regulate. That’s the definition of Socratic logic.

But, he waited. His value system rose higher than the logic that he was the only driver on the road. Mr. Johnson displayed his integrity and respect for the law over the expedience and logic of the system. Resilient leaders demonstrate integrity. I’m not saying that every resilient leader should stop at the light at one in the morning. No, I am saying that resilient leaders have a code of ethics they follow and that they should be true to that code.

Do you know the name Andrew Fastow? This man will not be considered a resilient leader.  Fastow was the Chief Financial Officer of Enron. You remember Enron. They famously went bankrupt in 2001 shortly after their stock price hit an all-time high.  Fastow was the engineer of how to manipulate financial statements to inflate quarterly earnings while hiding the company’s true financial position. Here is an example of their shenanigans. The story is called the Nigerian Barge Deal. No – I’m serious. It’s known as the Nigerian Barge Deal.

Fastow calls his banker at Merrill Lynch on December 29th and says, “Bob, I’m going to sell you some oil tankers today.”  Bob was confused. “But, I don’t want any oil tankers.” “Oh, you’re going to want these oil tankers.” “Andy, I’m a banker. We lend money. What do I need oil tankers for?” “Bob, I’ve got these oil tankers in Nigeria that I need to sell today, before year end.  Now, here’s the deal. You buy the tankers from me today for $12 million. And, on June 1st, I will buy the tankers back from you for $15 million.  How does that sound?” “Let me get this straight, Andy, you want to sell me $12 million worth of oil tankers and you want to buy them back six months later $15 million?”  “That’s right. I will put it writing to guarantee the repurchase.”

That transaction actually happened! I kid you not. You might ask, “How does someone make money on that transaction?” Good question. Quick accounting refresher for you. When you sell an asset you record the gain or loss on that asset by subtracting the sale price from the book value. The trick here is that the tankers were fully depreciated, thus had zero book value. The entire transaction was a gain for Enron and could be recorded as such on their quarterly financials. A scam right? Not quite.

Fastow is the antithesis of a resilient leader.  Fastow was fast and loose with the rules of Special Purpose Entities and spent much of his time obfuscating Enron’s true financial position.  Fastow was the Chief Financial Officer of a multi-billion-dollar business. The position should be held by someone an appropriate level of integrity.  Not some flim-flam artist.

This chicanery was so blatant that the US government changed the rules for tax returns. Now, a CEO and the CFO sign the tax return, under the penalty of perjury, meaning that if you commit these kinds of acts then you will go to prison. Fastow was sentenced to six years in prison for his actions. And, if I were the judge I would have put the book thief in the cell next to him. – And give him nothing to read.

Folks, thank you for listening to Swimming in the Flood. Resilient leaders face challenging currents and it is tough navigating, but with one tack or another we can get there together. You can find more podcasts and videos on my website at www.trenttheroux.com. Music today is from Bensound. If you enjoyed today’s show, please tell a friend, leave a comment…subscribe. I would be happy to discuss speaking at your next conference or event. Just write to me at info@trenttheroux.com.  I look forward to getting together next week.

 

Did you know that I was connected to the mob? We don’t like to talk about that around here, but it’s true. I’m no made man or on the inside. I’ve just used my friend to handle a few sensitive jobs in…real estate. Oh, you’ve never heard of the real estate crime syndicate? Maybe because they like to keep it in the family.

Welcome to Swimming in the Flood; a podcast where develop the resilient leader’s mindset by navigating difficult currents in business. My name is Trent Theroux.

Extortion is the practice of obtaining something, especially money, through force or threats. This sounds a lot to me like… the real estate industry. If you want protection in your real estate business then you need to pay for the protection of MLS, the multiple listing service. This is the database utilized by the National Association of Realtors. It was created in 1975 and had the same effect on real estate that the Volstead Act (the constitutional amendment prohibiting alcohol) had on crime, both created powerful organizations with the ability to make their enemies sleep with the fishes. In MLS, each listing would be uploaded in the database and was accessible only to realtors who paid the fees for access.

Because realtors had this monopoly on information they were able to charge a healthy, standard fee of 6%. Six percent of each transaction dollar went into the realtor’s coffers as a tax for their services. Did you know that in 2005, the Justice Department sues the National Association of Realtors over anti-competitive practices? The language of the suit was the same as for racketeering. They were sued because the NAR withheld listing from web portals, they were locked in outdated business models and discouraged price competition.

Before the internet, the realtors may well have earned their fee. They might have had to drive a family around viewing houses over four or five weekends until they found one that they liked. The sellers required this level of effort to get potential buyers into their house and were willing to pay for access to the realtor’s buyer connections because they didn’t have another way to attract buyers in large numbers.

I want to go off on a tangent. My family wanted to sell our house ten years ago. It was a great house in a great town. The family wanted to live in a different neighborhood and it was up to me to sell the house. So, I call my realtor friend and told her to crank up the machine it was time to sell. She told me that because we were friends she would able to talk her boss down to only a 5% commission. I thanked her, but as a developing resilient leader I was always seeking ways to improve outcomes for all parties. I believe that people work best when good incentives are around. I’m not talking just about money there are plenty of incentives to motivate people, but in the real estate business…money is the motivator. I thought about the commission structure. My target to sell the house was $500,000. At the “friends and family” rate of 5% that would cost me $25,000. But here was the real rub. If we sold the house for $490,000…$10,000 less than target the difference would only cost her $500. That seemed insane. There was no incentive to get to my target…just incentive to get close enough. For the sake of time and effort, she could cut the price by $50,000 and it wouldn’t cost her much at all.

I thought about ways to maneuver around this disincentive and I asked her, “What would happen if I put a sign on my front lawn advertising that the house was for sale at $400,000?  “She said that someone would bring cash in a bag that day. I said right. Then, I don’t need you for the first $400,000 of the sale. I only need you for anything more than $400,000.  I said let’s make this deal… for every dollar we sell the house over $400,000 I will pay you a commission of 25%. That way if we hit the target of $500 you will be paid the same, but if you can get me even a little more, then you would be earning at a far greater rate.

I thought this was a brilliant way to improve the pie for both parties. I had a higher probability of achieving my goal and the realtor would be properly incentivized to overachieve. I may have patted myself on the back as I was describing the details. The realtor struggled to understand the concept. I explain it again and I explained it to her boss, who rejected it saying that they couldn’t do that type of transaction. Two other real estate companies rejected my idea as well. They couldn’t do it that way. The real reason is not that they couldn’t do it that way it was that they WOULDN’T do it that way. It was a choice. And, a bad one for achieving the customer’s (in this case me) objectives.

I am now going to give you my unscientific, non-peer reviewed, resilient leader theory on outdated business models and restraint of competition.  Are you ready? Got your pencils out? Here it is: Always face the door when you’re eating at a restaurant. You heard it. Always face the door when eating at a restaurant. This theory has been endorsed by at least three deceased members of the Colombo crime family.

The theory is simple. If you are not paying attention to where your competition is coming from it’s easy to get two in the back of the head. While the National Association of Realtors were keeping their heads down and controlling their racket, the internet developed and with it paths for increasing competition. With the advent of sites like Zillow and Trulia, buyers had options to reduce the transaction costs.

Billy Joel had it right, “the good ole days weren’t always good and tomorrow ain’t as bad as it seems.” Resilient leaders need to be prepared for technological and business model changes that are coming…that will be an eventuality. Trying to strong arm the past doesn’t work.

In 1971, Frances Ford Coppola was in the process of shooting the movie The Godfather. The Italian-American Civil Rights League wanted the production halted because they were tired of seeing Italians portrayed as thugs in movies. Now, the Italia-American League we no bunch of do-gooders, but rather was founded by Joseph Colombo, head of the Colombo one of the five families of New York.  Colombo’s men began harassing the production crew; sending intimidating notes, breaking windows, stealing equipment – being a general disruption. Mob controlled unions refused to let Coppola film in certain neighborhoods.

Eventually, Paramount set up a meeting with the mob to understand what they wanted. Colombo had only one demand. He did not want the movie to use the term mafia. This was going to be an easy deal to negotiate for Paramount because the screenplay referenced the term once. Once! So, the agreement was made, and the word mafia was never uttered in the greatest mafia movie of all time.

Following the deal, gangsters started showing up at production sites offering tips on how to act more gangster-like. One of the Colombo family was actually cast as Carlo Rizzi, the son-in-law of The Godfather. Progress was coming and progress was made.  The story changed a little on June 28th, 1971. As production was winding down, a hitman shot Joseph Colombo in the head.  I guess that progress doesn’t come for everyone.

Folks, thank you for listening to Swimming in the Flood. Resilient leaders face challenging currents and it is tough navigating, but with one tack or another we can get there together. You can find more podcasts and videos on my website at www.trenttheroux.com. Music today is from Bensound. If you enjoyed today’s show, please tell a friend, leave a comment…subscribe. I would be happy to discuss speaking at your next conference or event. Just write to me at info@trenttheroux.com. I look forward to getting together next week. It’s an offer you can’t refuse.

How often do you shave your legs? Make them silky smooth? Take your time to carefully maneuver around the knees with delicacy not to get any nicks? I’m sorry. I should clarify. I’m speaking to the men in the audience? How often do you shave your legs?

Welcome to Swimming in the Flood; a podcast where we develop resilient leaders and navigate the difficult currents in business. My name is Trent Theroux.

Okay. That was a bizarre enough question. Sorry. Here’s my line of thinking. There are three reasons I can comprehend why a man would shave his legs. He is a bicyclist. He is a swimmer. Or, he has some other fashion reason. Let’s exclude the last one for today and stick to the cyclist and the swimmer. Why are these two types of gentlemen shaving their legs? The cyclist shaves to manage the potential for road rash in the unfortunate event of an accident. Tending to wounds on shaven legs is easier and more hygienic.

The swimmer shaves his legs to gain a smoother feel in the water. By shaving away the top layer of the skin, the swimmer becomes hypersensitive to the water in an effort to maximize efficiency, reduce drag, and improve speed.

Did you notice the difference in the two gentlemen performing the same act? One shaves for prevention and the other shaves for performance. Profoundly different reasons for taking the same action. Quick show of hands to the men in the audience. How many of you have shaved your legs? My magic mirror shows me that there are a lot of hands raised, but most likely for fashionable reasons.

Can we find another place where an event like shaving occurs? Taking the exact same action for entirely opposite reasons?

Jack Welch, most notably the former CEO of General Electric, wrote in his book Straight From The Gut about the concept of differentiation. Simply put, employees should be vigorously evaluated on a regular basis. Those employees should then be slotted into one of three categories. Good/Average/Poor. The good employees, approximately 20% should be slotted into the fastest growing jobs with the opportunity to achieve exceedingly high compensation. They are going to perform at the top 20% whether they are coached or incentivized – they are just naturally that good. The middle 70% are managed differently. Welch wrote, “This group of people are enormously valuable to any company; you simply cannot function without their skills, energy and commitment. This group is all about training and positive feedback.” Finally, the bottom 10%. Welch does not sugar coat here. The bottom 10% should go. If your company has candid conversations and a rigorous performance evaluation process, this group will know who they are. By Welch’s rule you need to regularly shave off a portion of your staff.

I’m going to go off on a tangent here, but before I do I want to give you this disclaimer; the next story involves a serious psychological and emotional issue for teenagers which I neither condone nor endorse. I’m just telling you the facts…or how I remember them from 35 years ago.

During the swimming state championships in my junior year of high school, I raced in the 100 backstroke. This was a trials and final meet, which means that everyone swims in the trials and the top 16 swim in the finals later that night. The top eight in the finals and the lower eight in the consolation finals. During the trials I placed ninth. A horrible position. My coach called the consolation finals the banana heat and now I was the big banana. I was not going to swim with the big boys that night and have a shot at the podium. And, from my position the only place I could go was down if I wasn’t faster. I was disappointed and pissed at myself for not swimming faster, not trying harder, not training more, pissed because I was sixteen and had raging acne and pissed because my parents weren’t letting me drive. In short, I was a teenager.

There was four hours between the end of trials and the finals. God bless my parents. They stayed at the meet the entire day without complaint. Me? All I did was complain. That’s what teenagers do.

Twenty minutes before my race I was showering and reshaving. There was a single blade disposable razor left on the soap dish. I had already shaved myself the night before, but was now seeking an edge to win this final race of the year. I was not a hirsute teen. I didn’t have 5:00 shadow or stubble for that matter, but I did shave on occasion. I lathered up and stripped the top layer of skin off my arms, chest and started working on my legs when I cut myself. It was more than a nick it was a gusher. Blood flowed down my shin towards my foot. I put my leg under the shower to rinse and felt the sting of the water on the open wound. Quixotically, I took pleasure from the sting and the pain. I pressed the razor against my other leg and opened a cut there. The pain doubled but was drowned out by the exhilaration I felt from the self-mutilation. I proceeded to open cuts on both thighs, both arms and across my stomach. Each cut was just deep enough to allow blood to flow out at a measured rate. I dropped the razor back where I found it and strode out to the competition pool; a swimming stigmata.

As I approached the starting blocks, I caught the eye of the competitor in the lane next to me. He was my nemesis from my High School’s arch rival. The look he gave me as I approached the blocks revealed the depths of lunacy in which I was engaged. I didn’t acknowledge him. I just leaned over into his lane and squeezed a few drops of blood from my arm into the water. He watched this act and just stood on the deck questioning whether it was even healthy to enter the pool. My crimson blood dissolved quickly into the chlorinated water, but there were still traces when the starter called us into the water. I felt the electricity of being stung by eels as my seven slices were exposed to the chlorine. As I remember this scene in my mind it is becoming clearer and clearer to me…..sometimes I’m a pretty sick bastard. Let’s get back on track. But before I do there are two things you should know. First, I’m not condoning cutting as a solution to problems. It was wrong and never happened again. Second, and most importantly, the swimmer who’s lane I squeezed my blood into – became a dear friend at college – and also became the godfather to my daughter, David Hardy.

I am now going to give you my unscientific, non-peer reviewed theory on differentiation. Are you ready? Got your pencils out? Here it is: Prune your roses. You heard it right! Prune your roses. It has been endorsed by at nearly all of your local FTD florists. Here’s how it works.

According to Better Home & Gardens, there are three primary reasons to prune your roses. First is health. By removing dead or damaged canes the air circulation will improve helping the continued growth of new buds. Second is appearance. Bushy Modern roses need help to maintain their compact, open form. Cutting off spent flowers encourages plants to rebloom. The third reason to prune is for control. Some roses grow with wild abandon. Trimming rose bushes removes diseased and dead stems reducing the overall size of the plant but leaving it in a stronger position to grow more beautifully.

Me? I have a black thumb. You should never let me get close to your roses. They’ll wither and writhe in fear just knowing I’m in the flower bed.

Jack Welch was a master at pruning his roses, some of that to the detriment of General Electric’s rank and file. It is hard to dispute the success he had in transforming his company from an out of control vine into a flower with a healthy bloom. Jack wrote that “failure to differentiate among employees and holding on to bottom tier performers is actually the cruelest form of management there is.” I see it as cruel to the company and the employees who have the strength and aptitude to carry it forward. And, I see it as cruel to the bottom tier employees because they might be in a place that is uncomfortable for them to work and missing out great opportunities elsewhere. Confess this to yourself… You differentiate now. You rank your employees in your head based on their abilities. You know which employee you would pick first in a kickball game. The difference between Welch and most managers is that he was willing to act on those instincts or assessments.

Resilient leaders need to be willing to wield pruning shears for the sake of the entire rose bush or at least be handy with a Gillette Mach 3 to work on those legs.

Folks, thank you for listening to Swimming in the Flood where we try to develop resilient leaders. It’s tough navigating life’s currents but with one tack or another we can get there together. You can find more podcasts and videos on my website at www.trenttheroux.com. Music today is from Bensound. If you enjoyed today’s show, please tell a friend, leave a comment or subscribe. I would be happy to discuss speaking at your organization’s next event. Just drop me a line at. info@trenttheroux.com. I look forward to getting together next week. See you.

 

Have you ever ordered a Vente Pumpkin Latte with eight shots of espresso, seven pumps of pumpkin syrup, a pump of maple pecan sauce, almond drink warm, light caramel drizzle, light cinnamon dollop topping….wait there’s still more… light foam, salt topping, autumn sugar topping, extra vanilla powder, extra pumpkin topping and light whip? Have you ever ordered this? What type of selfish bastard does this to a poor barista?

(Music) Welcome to Swimming in the Flood; a podcast where we develop resilient leaders and navigate the difficult currents in business. My name is Trent Theroux.

This was an actual Starbucks order made by a man in New York City. Do you think he could tell the difference between seven pumps of pumpkin syrup or six? The passive-aggressive in me would love to have been the barista, “psst…let’s piss this guy off. Only give him five pumps of pumpkin. Let’s see if he goes postal.” I struggle to believe that our palates are so refined that one derives pleasure from the precise measurements he requested. I think he likes showing off. I think he derives pleasure from holding up the line so the others can see him order the “light cinnamon dollop topping.”

It serves Starbucks right to have lines backed up if they allow these types of orders. In fact, Starbucks strategy elicits this exact type of customer experience. They want customers to try to create new products and combinations to help them foster growth of same store sales. It’s a simple strategy poured out one overpriced, over-ordered cup at a time.

Resilient leaders face many challenges among which is how to retain current customers and secondly how to attract new customers.

One of the most common strategies for growth is to create new products. I saw a billboard on my drive to work this morning advertising Orange & Vanilla Coke. Someone described the taste to me as having an orange creamsicle without the brain freeze. Here’s a rundown of the new products and some marketing gimmicks Coca-Cola has made in the past thirty plus years. 1982 introduce Diet Coke, 1983 introduce caffeine free, 1985 introduce new coke (we could have a whole podcast about that), 1986 introduce cherry coke. Then a long break. 2001 introduce coke with lemon, 2002 introduce vanilla coke (revamped and reintroduced in 2007), 2005 introduce coke zero, 2012 comes coke labels with names (never once did I see a Trent) , 2013 coke labels with song lyrics, 2014 coke-cola life with green can labels, 2018 4 new flavors of diet coke with minimalist styled silver cans. Now, the creamsicles. That is a tremendous amount of effort to maintain relevance in a declining market.

The resilient leaders of Coke face two concerns here. First, carbonated beverages are dying. How do we keep cash cows on life support? How often can we hit them with the paddles? Clear. Second, how do we hone in on what the markets want and provide more of it?

There are companies that take the exact opposite approach of Coke. Companies that will analyze their product offering to determine which Stock Keeping Units (SKUs) are under-performing and endeavor to remove those. Clorox comes to mind. Ten years ago they performed an analysis and determined that 30% of their SKUs were under-performing sales volume and profit targets, 30%. Clorox undertook a process to establish a glide path for the under-performing products. Cross functional team met monthly to evaluate each of these products. Each was given a color code. Green represented that they were exceeding targets, yellow represented that they were within 5% of target and red represented that the managers shouldn’t buy milk with a long expiration date. After three years of product rationalization, more than 90% of Clorox’s SKUs met or exceeded volume and profit targets. Retail sales per SKUs grew by more than 25%, and net customer sales per SKU nearly doubled. The more they focused, the more they were able to better allocate their corporate resources.

I’m going to go off on a tangent here about Clorox. A few months after my daughter was born I was given an assignment. Looking back it may have been the first assignment I was given since conception so I didn’t want to make a mistake. My assignment was to go grocery shopping. Jennifer wasn’t feeling well and the new family needed supplies. She gave me a grocery list and directions to the supermarket, which I was pretty thankful for the directions. I took my list and along with the cart started to make my way through the supermarket. Shopping for a family was very different from shopping for myself. Only a year earlier as a bachelor, I would have walked into a supermarket moseyed to the frozen food aisle, picked out a pizza on sale, paid and left. Maybe take some toilet paper on the way. Nothing too complicated. The next day, I would figure out what to eat then…and if I needed more toilet paper. But now, I’m trying to figure out diapers and produce and family size servings of chicken stuffing. This was exhausting. But nothing compared to the second to last aisle. I have been going up and down each aisle picking out everything on the list, cross referencing against the coupons I was given or matching brand names. The second to last aisle would change all that and make me wish to be stuck in the center of a horror movie, or a convention of ex-girlfriends arguing about my inadequacies. The last item on my list was laundry detergent.
I turned into the second to last aisle which had a large sign reading laundry detergent. I was looking for laundry detergent. All was good…until…I looked at the laundry detergents (plural). My mother always told me that I thought my clothes were cleaned by the laundry fairy. I’m pretty sure she was being sarcastic, but I was a little slow on the uptake as a teenager. Now I was faced with a wall of laundry detergents from which to select. Quick show of hands. How many different types of laundry detergents would you expect to find at your local supermarket? Hmmm? I’ll give you how many I counted in a minute. Their marketing frustrated me. Did I need color safe? Did I want all purpose? Food stains? How about cold temperatures? Grass stains? Combined with fabric softener? Should it have a teddy bear on the label? Maybe a NASCAR Chevy Monte Carlo? Liquid? Powder? Family size? Economy package? The choices seemed endless. My mind couldn’t take the overload.

Maybe it wasn’t just the laundry detergent…it could have been the new baby…or the new baby that doesn’t sleep…or the new house we just moved into…or the new furniture to furnish the new house…or the new marriage…or maybe I just wasn’t qualified to decide which laundry detergent would satisfy my family’s needs.

The answer to my previous question is twenty-seven. There were twenty seven different varieties of laundry detergent to choose from. I counted them all. Then, I read the labels on the back of each to determine the differences. I read them and took mental notes and here’s what I learned. Over 95% of the ingredients were exactly the same. 95% of these bottles contained the exact same materials. Fraternal twins don’t have that high of a genetic match! It was the same crap in different bottles. I spent over forty-five minutes in this section of the aisle to determine that it didn’t matter what I bought. They all would work the exact same. If I could only convince Jennifer of that. Hmmm…Still I didn’t want to bring home an incorrect brand.

I am now going to give you my unscientific, non-peer reviewed theory on minimizing SKUs. Are you ready? Got your pencils out? Here it is. Cheese and Ham. You heard it right. Cheese and Ham. It was endorsed by at least one 1930s punch drunk pugilistic wiseguy. Here is how it works. In the early 1990s, my office was in an old industrial revolution age mill alongside a raging river. The original guard shack was converted into a lunchtime commissary managed by Frankie No-Last Name, just Frankie. He was a lower weight class boxer back in the 1930s before someone threw a punch to the side of his head and – hey, you want a pickle with dat. Every day he would have three sandwiches available for you to choose from, Ham and Cheese (the everyday staple). The second sandwich varied by day Tuesdays was turkey, Friday was tuna. The third sandwich was cheese and ham. He would call these out to you. “Hey Frankie, whatta you got?” “We gots ham and cheese, we gots tuna and we gots cheese and ham.” It cracked us up every day. Cheese and ham. He actually wrote out in order ham and cheese, tuna, cheese and ham. The cheese properly spelled with a Z. Frankie thought that too much variety in life wasn’t a “good ting.” Limit their choices, but give them good food and they will be satisfied.

There was a great joke from the old sitcom, All in the Family. Meathead asked, “If everything today is new and improved, what was it before old and lousy?” That joke was made nearly 50 years ago and is still pertinent today. Everything doesn’t need to be new and improved to be of value. Sometimes resilient leaders need to accept that the products you brought to market are strong and don’t need to be tricked out like a car in Pimp My Ride.
Hey Frankie, why don’t you give me the tuna along with a coke and no pumps of pumpkin spice syrup? “And yeah, I want a pickle with dat?”

Folks, thank you for listening to Swimming in the Flood. Resilient leaders face challenging choices and it’s tough navigating life’s currents but with one tack or another we can get there together. If you like this podcast check out some of our previous ones. You can find more podcasts and videos on my website at www.trenttheroux.com. If you enjoyed today’s show, please tell a friend, leave a comment…subscribe. I would be happy to discuss speaking at your next conference or event. Please write to me at info@trenttheroux.com. I look forward to getting together next week. See ya.

Have you ever witnessed an execution? Watched someone walk down the green mile? Was it gruesome and sickening? Were you in the audience? Were you the one pulling the levers? Or were you strapped into Old Sparky?

Welcome to Swimming in the Flood; a podcast where we navigate the difficult currents in business and life. My name is Trent Theroux.

I’m looking at the top row of my bookshelf which is holding ten business management books. Of the ten, six have the word execute or execution in the title. There are over 2,000 pages about execution on my bookshelf. Why so many? This is a small bookshelf. How many books and pages are there in my town library 20,000, or in the library of congress 2,000,000?  Two million pages about execution. It’s almost ridiculous. Just for some perspective. Einstein’s Special Theory of Relativity is only 17 pages, and that includes the mathematical formulas. Einstein theorizes and wins a Nobel Prize on the space time continuum in what is tantamount to a pamphlet compared to the tomes collecting dust on my bookshelf. Or the thousands I don’t know about in the library of congress.

Are each of these authors right? The authors on my bookshelf have all have written about ways to execute a strategy, but are they really different?  One of the books on my shelf is titled Execution: The Discipline of Getting Things Done by Larry Bossidy, former Chairman and CEO of Honeywell and Allied Signal. He wrote, “Execution has to be a part of a company’s strategy and its goals. It is the missing link between aspirations and results. As such, it is a major – indeed, the major – job of a business leader. If you don’t know how to execute, the whole of your effort as a leader will always be less than the sum of its parts.”

Wow! Just wow! That is seriously profound. I wish I could have watched him execute someone. Bossidy’s track record of success at Allied Signal in the aerospace industry during the 1990s was hugely impressive. Allied Signal had 31 consecutive quarters of earnings-per-share growth of 13% or more. Under his tenure, the stock was an 8-bagger (Peter Lynch slang for: it grew eight-fold).  

Larry also wrote, “An environment of fast growth can cover a multitude of sins, but an era of slow growth will magnify every shortcoming of every person in the business, especially the leaders.” Another very true statement.

I’m sure that you’ve watched some executions go horribly wrong. And when they do people get fired, laid off, businesses close. My first job out of college was working for Bank of New England in the mortgage foreclosure department. If you have heard of BNE don’t worry you are not behind the times. It went bankrupt in 1991, just a month after I left. (No snickering please…its wasn’t me.) In 1985, BNE was involved in a case which went to the Supreme Court challenging a law prohibiting interstate bank holding companies.  BNE won the case then went on a buying spree. They bought Connecticut Bank & Trust, Connecticut Trust & Safe, Hartford Trust, Phoenix Trust, Maine National Bank and some smaller ones over a five year period. The year I arrived at the bank it was rolling, having earned a $74 million profit. The next year when I left they lost $1.2 billion. The question is why?

Their strategy to acquire banks made them a national player and rival to Bank of America and Citibank. Where they failed was in executing the integration strategy, particularly in the lending departments. Their failure to control their lending practices led to numerous bad investments in real estate. Now, this was the time of the historic Savings & Loan collapse. Real estate plummeted in 1990 leading to a minor recession and BNE got caught in the wash. On the plus side, my foreclosure department was humming.  

I’m going to go off on a quick tangent here. The foreclosure department had an incentive plan which offered paid days off based on the number of houses we could foreclose. During normal times, we might have been able to earn 1 or 2 a year. During the recession, I was earning 2 per month. I’m a scoreboard-oriented guy and this plan was ripe for the picking. Foreclosures became a numbers game devoid of any emotion…for me. The pitch was simple. We prepared the documents, got the court orders, sent a U-haul and Marshall Tucker and his band, and can’t you see the house belongs to the bank.  

If you think I’m sick for doing this job…oh well, if I’m in for a little of this story it might be all the way. I will apologize for my youthful ambition in advance. This was the era of dot matrix printers. I would print tombstones with the foreclosee’s name and the eviction date and post these on the walls of my office. But, that wasn’t good enough. I had a large map of New England on the wall facing me. With every foreclosure, I would go to the map and affix a smiley face sticker on the town where I just took back a house. By the time I left the bank you would have thought my office was the happiest place in the world based on all the smiley faces.

I worked hard at my job to get the extra days off. I was good at my job. And, the management of the bank made my job easy because they did not execute their strategy properly. They were giving house loans away to boost their balance sheet. And, in the end it was tragic for the bank…and more so the poor people whose houses I reclaimed.

Quick show of hands. How many of you worked for a company that failed to execute a grand strategy? My magic mirror shows me that quite a number of you have your hands raised. There is a small manufacturing company near me that struggles with execution. Tell me if this sounds familiar to you. The president walks into a meeting and outlines a change in strategy and what she wants implemented. Then walks out to handle another pressing item. Two weeks later she is frustrated that the changes did not get implemented the way she envisioned and makes yet another change. Sound familiar?

That’s similar to the executioner flipping the switch for just a few seconds…buzz…you got ringing in your ears and a little shock. That’s not execution. It is closer to getting a weekly shock therapy treatment from Nurse Ratched.  

I am now going to give you my unscientific, non-peer reviewed theory on execution. Are you ready? Got your pencils out? Here it is: Blue’s Clues.  You heard it right!  Blue’s Clues.  It has been endorsed by at least one floppy haired host in a striped shirt and baggy khaki pants. Blue’s Clues was the revolutionary children’s show that aired on Nickelodeon in the 90’s and 2000s. The show’s format was to have the live action host, Steve, follow his dog Blue through the house uncovering three clues about what the dog wanted to do. Simple right? And for those of you with children in their mid-teens to early twenties it should sound familiar.

Here’s how it relates to execution. The show was designed to let children solve a puzzle from three clues. Most preschoolers struggled with the puzzles when they watched the show for the first time. However, the brilliance of Nickelodeon was that they showed the same episode every day for a week! By the end of the week the children gained the confidence to solve the puzzles on their own. In their test marketing children were even shouting to Steve where the clues were! By repeating the message the children knew what to expect and how to perform.

Blue’s Clues is a great divergence from what I see in many management teams where the strategy is delivered and left for the unprepared to execute on their own.  Strategy is only one component in the organization’s heartbeat. The consistent and persistent follow through in the delivery of the strategic message is critical to achieving the strategic goals. One and done is the same as over and out.

I encourage you… if you’re going to be an executioner…be a good one. Get the job done right. Work hard enough to have your employees shouting out the answers to you…or scream when it’s mail time. Like on Blue’s Clues. I love mail time.

Folks, thank you for listening to Swimming in the Flood. It’s tough navigating life’s currents but with one tact or another we can get there together. You can find more podcasts and videos on my website at www.trenttheroux.com. Music today is from Bensound. If you enjoyed today’s show, please tell a friend, leave a comment or subscribe. If there is a topic you would like me to explore shoot me an email at info@trenttheroux.com. I look forward to getting together next week. See you.