Minding My Own Business

Ideas that go Trump in the night

February 27, 2007

I'll admit it. I watch "The Apprentice". Guilty as charged. I have seen every episode of every season of the darn show, following groups of overcaffeinated Type-A contestants vying to win sponsor-oriented "business" tasks assigned to them by Donald Trump (and the show's producers) in the hopes of winning a quarter of a million dollar apprenticeship from the world's unequivocally greatest self-promoter himself. Like most of the millions of others who have been similarly roped in by NBC, I firmly believe - scratch that, I have no doubt - that I could outperform every single individual who has ever appeared on the show. By outperform, I am of course referring to outclassing their business performance, not their petty gamesmanship, eye-dagger throwing, fashion statements, and serious world class brown-nosing, which I suppose is what prevents me from actually applying. Well, that, and the idea of fourteen weeks of self-imposed isolation, scrutiny, having to sign a waiver acknowledging the producer's right to edit the show for dramatic effect (i.e., cut-and-paste jobs to create heroes, villains and comic relief), and, of course, being contractually bound to insert the cliché "stepping up to the plate" into each conversation.

But perhaps that's the genius of the concept: the humbling of supposed overachievers at the altar of fame, fortune and the seemingly random whims of the ego-driven Donald and the ratings-conscious producers. Perhaps within this subtext lies the true goal of "The Apprentice" - to publicly probe a classic socio-economic question with ramifications that reach far deeper that just the business world, but into the core of capitalism itself. And on a broader, philosophic level, questioning the essence of democracy as has been espoused and practiced for the last half century, distinguishing between equal opportunity and equal capability.

The very first of the truths that the Declaration of Independence finds to be self-evident is that "all men are created equal." Unfortunately for the literalists, this is blatantly untrue, and has unfairly pumped up more hopes and dreams than "American Idol". Because all people are not created equal. Not by a long shot.

Human beings are complex constructions, the synthesis of nature (genetics), nurture (upbringing), and an immeasurable soulful dimension that can be ascribed either to divine touch or the randomness of cosmic chaos. Regardless, these components are not uniformly distributed among newborn babies worldwide, making every human being most definitively distinct. And once two people are distinct, they cannot be equal.

This is not just theoretical. Differences in appearance, intelligence, personality, heritage, and genetics make equality absolutely impossible. Attempting to treat unequals as equals usually results in disappointment at a minimum, or in sheer futility, as centuries of failed social engineering can attest. With the irony that only the truly well intentioned can provide, the United States Supreme Court agreed with this premise when it ruled against the legitimacy of separate but equal academic institutions, although the results of that ruling actually encouraged the treatment of unequals as equals. Consider it biblically: Cain and Abel, children from an identical, untainted gene pool and environment, weren't equal. So what chance does anyone else have of being equal?

But let's leave the social commentary to the academics, philosophers and politicians, and instead focus on a particular element of the inequality issue within the context of business. As the exercises in "The Apprentice" posit, what happens if you give two people the same amount of money to start a business, and provide each the identical product to manufacture and sell? You can strive to level the proverbial playing field ad infinitum, but these two people will never, ever do things identically, and will never produce identical results. Even if they both succeed, their successes will differ. And we intuitively understand why. Sinatra and Elvis both topped the charts with "My Way", but no one on this planet would ever confuse the two versions.

For our purposes, the question we would like to see answered is why some businesses thrive while others flounder. And as a corrolary, why do some executives succeed in situations where others fail? Perhaps the best approach to this question is to address the reasons that a business loses money.

The questions

First, let's look at the company's offering - its product or service - and dissect its legitimacy. Does it fill a need in the marketplace, or is it something no one wants or uses? Are its targeted customers prepared to pay the price charged for it? If the answer to either of these questions is not unequivocally yes, then this business is based on an innately bad concept, and is fundamentally flawed. Success is impossible.

Second, is the offering a relative commodity or is it unique and differentiated? Here, it is important to distinguish between what the seller considers unique and what is unique in the eye of the buyer. (Hint: They are rarely identical!) If the company is offering a relative commodity, unless it has a sustainable operational advantage that enables it to operate securely as the low-cost provider, the business in its current state is by definition terminally ill.

Third, does the business know how to attract and keep customers? Consider this example: If you go online, you can find Sony products sold directly by Sony, as well as by dozens of online merchants. Why would you ever buy a Sony product from a reseller when you could buy it directly from Sony? Perhaps because of purchasing and stocking efficiencies, a reseller can save you a few dollars. Perhaps they have quicker delivery. Perhaps they sell thousands of other products and offer you the advantages of one-stop shopping. But if they make the buying process more difficult for you than does Sony, or if they reduce the level of service or the efficacy of warrantees, how can they expect to achieve a successful business model? Customer retention is and always has been about making life better and easier for your customer. Or, to put it another way, regardless of industry, market or product, all companies are in the business of customer satisfaction.

The answer

This brings us to the core of most failing companies: Management. Once you get beyond product and service, a company's destiny is the product of its managerial decision making. And we are not talking financial alchemy here. Management skills, however unquantifiable, are a talent as real as hitting a 95 mph fastball or bisecting a fairway with a 350 yard drive.

In practical terms, evaluating a manager cannot be done on paper. Resumes, regardless of their accuracy, are merely tools to utilize in the pursuit of the right manager. I've seen many resumes over the years with virtually identical credentials - but never for one moment did I assume that the candidates were equal. A Harvard MBA may be an indicator of something, but no more a guarantee of management skills than intramural hockey captaincy.

Aristotle claimed that "we are what we repeatedly do. Excellence, then, is not an act, but habit." Isn't it amazing how some managers can go from company to company and find success at each stop, while others always seem to be in the wrong place at the wrong time? This is the theory that "The Apprentice" purports to examine.

In business circles, we fête the turnaround specialist who saves failing companies. But we don't even have a word to describe his counterpart who poisons healthy organizations.

Just as good managers can turn around bad companies, poor managers can ruin good companies. Managers are rarely interchangeable; even with similar skill sets, they have different capabilities. For the good of your company, if you have a manager who isn't producing the desired results, regardless of his or her credentials and track records, remember that past performance is no indicator of future success, and take a cue from the Donald and say those two rejuvenating words: "You're Fired!"

Elisha Tropper is president and CEO of T3 Associates, a New York based strategic consulting firm, and the former president of Prestige Label, a North Carolina converter.
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