These days there is a great deal of debate raging around the topic of manufacturing, with many former and aspiring manufacturing centers looking to attract factory investment from the worlds multinational corporations.
At this very moment I am in a hotel in Bangkok, which is seemingly the only place in town where one can escape the barrage of stakeholders extolling the advantages of opening a factory in Thailand. Their reasoning is not unfounded, and it does not take much looking around to see the fertile ground where upon the next global manufacturing powerhouse may arise.
In the movie Who Framed Roger Rabbit, we witness our protagonist, Eddie Valiant, order a “scotch on the rocks” from a cartoon waiter and we laugh when the waiter returns with a glass that contains scotch and, literally, rocks.
This humorous aside illustrates a very important lesson about conducting business in foreign lands: The context of the conversation matters just as much as, if not more than, the subject matter.
That’s usually the first piece of advice that I give to would-be expatriates, and it is one that I, throughout my career, continue to keep in the forefront of my mind. I’ve become good at reciting PO box addresses as if they were my home address, at answering calls from my bank at 1AM because I’m unable to explain that yes I still have my same california number but it’s a skype number and I’m on the other side of the world, and at saying good morning to colleagues on a conference call when for you it’s late a night. Through it all, expats will find themselves bowing to the immovable force of a world built to think and act locally, despite the catchy slogans on posters at our corporate headquarters.
I still remember my first international fixture sourcing trip. Way back in 2005, I traveled with the founder of my previous employer (a fixture manufacturer) to China to explore our asian sourcing options. I remember it well because it left an impression on me that I will never forget. In a few weeks of being on the ground, and visiting suppliers, I left knowing that we had seen the future; this is where manufacturing was gravitating now, and it was only going to accelerate in the future. I also remember how “in over my head” I felt when trying to conduct business in a place where I knew almost nothing of the language, culture, or expectations. Read more
They say that those who do not learn from history are doomed to repeat it.
In the light of Best Buy’s recent decision to pull out of China and Turkey, one is led to conclude that there is still a lot of opportunity for the retailers of today to learn from the lessons of the past. It is doubly frustrating when you believe, as I do, that the very behaviors that led to the success of Best Buy in the United States would have been helpful to duplicate in their entry to china. Read more
It’s now officially less than a month until South By Southwest and in honor of the conference I wanted to share a little snippet that up until very recently was included in my speech this year. I had to cut it out, so I’d like to share it with you here. This was especially aimed at those of you that may be attending the conference for the first time, and formed the intro to my presentation. Keep in mind this was a “first draft” and still a bit rough around the edges.
You know, On the first day of my first year attending South By Southwest, I had the good fortune to go out to lunch with some of the awesome folks from Brazen Careerist. During lunch, over a few pints of Guinness a very wise woman in that group (I’m looking at you, Sydney) gave us first timers some great advice. Specifically she told us about how it would feel to leave south by southwest and go back to the <airquotes> real world </airquotes>. As she described the depression that we feel during the re-entry process, My first thought was, “so, about how many of those Guinness’s have you had so far?”. but a few weeks later I knew exactly what she meant.
And so my advice to you is this:
You have to work at it, inspiration doesn’t always come easy out there in the real world.
It’s easy to be inspired here. South By Southwest is inspiring wholly because of all of the amazing, Read more
My wife and I just returned from a trip to New York to visit with my family, and while there we managed to spend one of our days in New York City, where I grew up.
(my family just recently realized that I have nearly reached the point where I have not lived in New York for as long as I lived in New York, and they took this opportunity to remind me of this newly discovered fact several times. Thanks mom!)
We had a chance to have dinner with some friends, who asked my wife what quintessential “New York Things” had I taken her to see. She quickly responded by recounting our first trip to New York, which we spent riding the subway and visiting every Best Buy in Manhattan, along with a few other smaller retailers. In hindsight, probably not the best first impression that I could have provided, however, it serves as a great metaphor for the motivations that drive me as a retail design thinker. I am passionate about what I do. A little too much at times.
I started my career in manufacturing, designing and building merchandising solutions, Read more
For me blogging has had an impact in two significant ways. First, as a blogger, blogging to me is a cathartic experience. Sometimes when you see your words in print you find a new way to look at them, and other times the very act of getting the words out of your head is a cleansing experience itself. Sometimes a comment from someone else is all you need to change your perspective. Second, blogging has allowed me to find many other members of the tech community who both mirror and oppose my viewpoint. Having so many people putting their real feelings and opinions online makes for a fascinating read, and offers perspectives that you could not get from any mainstream media outlet. Full Disclosure: I still start my day with the newspaper (not the digital kind) and a cup of coffee.
I started blogging a long time ago but for the past half a decade, I had taken a break from blogging to focus on my career; I was traveling around the world, and I just never seemed to have the time to dedicate to getting my thoughts out of my head. About six months ago, I decided to leave my employer and put an end to what was, in reality, five solid years of traveling around the world, and return to San Diego to take some time off and focus on my MBA. Well, the time off part was not entirely by choice, but hey that’s how it worked out and, it turns out, was a blessing in disguise, due to the increased course load last semester.
Upon my return to San Diego, I started searching for other blogs and tech community members, first to find out what was going on in the community and second to search for job leads. Although I am a still searching for that “dare to be employed” opportunity, I gained something far greater. As it turns out, San Diego has developed one of the most active tech communities this side of Silicon Valley, and very soon I found myself attending tweetups and geek bonfires, and other tech events. I have had a great time getting to know many of the local and national technology celebrities that call San Diego home and I am continuously amazed at the level of community that I sense from almost everyone involved.
I realized that spending 5 years on the road had deprived me of a very important component in my life, a community of peers. Through my return to the blogging community, I have found my community of peers and equals, some of whom have become friends not just within in the online community, but offline as well.
By now just about every news outlet and blogger has penned an article debunking the press release from Circuit City citing “decreased consumer spending” and “unfavorable economy”. After all, it is hard to believe that the economy pummeled Circuit City while sparing Best Buy.
Over the course of the past few days, I’ve read a multitude of articles citing poor real estate selection, exit from the appliance business, placing too much importance on flat panel TV margins, and the like as the “true reasons” for their demise. I think it is far more simple, and far more sinister. Circuit City lost the game because they failed to tap their most powerful resource: their people. They didn’t listen. They didn’t engage their employees or their customers. Circuit city has tens of thousands of employees in their stores and many of these employees are within the lucrative target demographics and value propositions which Circuit City was chasing. Yet time and again, Circuit City failed to engage these associates to help them drive innovation from the store level upward. Decisions were all made “at corporate”, giving employees very little ownership of the company. This type of quasi-military structure worked half a century ago when Circuit City started, but it has no place in the modern workplace.
There was an important lesson that should have been taken away from the DIVX experiment which Circuit City undertook in the late 90s, and that lesson is, now that people can communicate easily over the Internet, the backlash from a determined community of users can affect your business very negatively. Here, the most powerful consumer electronics company in the world (at the time) lost over 100 Million dollars, mostly attributable to the vigilance of a few Internet home theater forums. The lesson here is, no matter how much money you spend, or how you try to spin the story, it is your customers that will define you. Your only choice now is whether you want to be a part of the conversation or not.
Customer driven innovation is the embodiment of this stream of thought; the way to be successful with your customers is to listen to them and let their demands mold who you become as a company. Just as a determined group of internet users can harm you, a group of customer evangelists can build your brand from the outside in. Some retailers have caught on; they let store associates and managers make decisions to help their stores address local market demand; they drive change in the reverse of their supply chain, from the bottom up; even Walmart does this to a certain degree. The dawn of the social media era has been embraced by these same retailers. These days, it is not uncommon for customers to exchange Twitter messages with C-level executives, or interact with them on their blogs. Circuit City’s blog and twitter account amounted to little more than thinly veiled marketing efforts.
On March 28th 2007, Circuit City famously sacked their 3,400 most experienced, most passionate, and most highly paid workers. Both outside and inside the company the message was clear: “we do not value our associates very highly”. Internally, another subtle vibe was likely felt, which was “don’t rise to high, or be paid too well, or you’ll get the ax as well”. Neither one is conducive to employees working hard or trying to get ahead; any undergrad business major can tell you, the way to motivate your employees is to give them the impression (real or otherwise) that their hard work will be rewarded with higher pay and promotions. So if we break for a quick logic lesson:
If [Work Hard] implies [Higher Salary]
If [Higher Salary] implies [You Will Be Fired]
[Work Hard] implies [You Will Be Fired]
And that, dear friends, is why most Circuit City employees were paid $8.00 per hour to play solitaire.
The DIVX lesson really should have come up as the board considered the plan to sack these workers. Someone should have stood up and said, “but the people will lash out at us for this, and you all remember what happened last time, with that DIVX thing, right gentlemen?” But nobody stood up; everyone believed, naively so, that customers and employees would just stand there and take it. Wrong. In true freakanomics style, Circuit City misjudged the environment they were in, and once again, made a strategic misstep which saved 3.5 million dollars in the short term in exchange for bankrupting the company in the long term.
So what does this all boil down to? The same thing my father gets in trouble for all the time: Not listening. Circuit City failed to listen to their associates, they failed to listen to their customers and they ignored their critics. They failed to embrace change. Even before social media was “cool”, Circuit City failed to listen to their employees, they failed to engage their customers in meaningful dialog. They led from the top, while ignoring the bottom. They neglected to engagee their customers in dialog. They foolishly thought that just because they were once a case study in “Good to Great”, they were imune to failure. When business textbook authors write their chapter on the danger of organizational silos, I think Circuit City would make a great case study.