Date: Tue, 26 May 1998 17:00:10 -0500 
Subject: Crouser Report #190; May 24, 1998, Part 1
To: martin@lata.net

Crouser Report OnLine Copyright 1998 Thomas P. Crouser, Sunday, May 24, 1998 -
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*****
Crouser Report #190; May 24, 1998
Right-Hand-Other-Person
Transmitted from Charleston, West Virginia
*****
INDEX: May's Crouser Report is about the Right-Hand-Other-Person, the
indispensable soul the owner abdicated, er delegated, their problems to in
this Memorial Day weekend edition of the Crouser Report Online.
***
Quick trip to Chicagoland this week where we caught a full-fledged rainbow at
Crown Point, just south of Merrillville, Indiana. Told the blonde lady, that
You know we see more things by accident than a lot of folks do on purpose.
Well, that's led to Tom and Pamela's America coming soon to www.crouser.com.
Just a place for us to put our snap shots of scenes from sea to shining sea.
Might also see some print shops in there too. Anyway, our first couple of
shots will be available to you this coming weekend at our web site.
***
Travelog: Heading to Florida on Tuesday and then into Dallas on Thursday for
the Dallas Show, May 29-31st. I'm doing a seminar on Friday morning the 29th
then we will see you at our booth the rest of the time. Stop by and say
howdy to the blonde woman. Get a copy of Dead Printer Working at a special
show price. That's this coming weekend!

Other upcoming events:
1998 Production Management Conference for clients, June 3-6th in Pittsburgh
Ontario Chapter of NAQP, June 13th in Toronto, Ontario, Canada
Signal Graphics convention in Vail, Colorado on June 27th
NAQP Print Image meeting and show, Chicago July 23rd to 25th
1998 Print Shop Sales Conference for clients, August 5th - 8th in Pittsburgh
***
May 1998

Dear Friends . . .

Owners don't start out to abdicate their responsibility, but that is what
happens when owners turn their business over to a Right-Hand-Other-Person. How
it starts out is that the owner isn't organized or organizes around people
rather than functions. The owner is being beat up by customers and/or workers
and is looking for some relief. Then someone comes along who will take
problems off the owner's shoulders. Let me take care of that, boss, you're
working too hard. It doesn't matter whether this person is qualified or not.
What matters to the owner is this person has the right attitude. They
understand the owner has more important things to do than to deal with
customers and workers. The owner should be pondering. Studying. Doing
important stuff. Deciding where the printing industry will be in ten years.
Identifying emerging technologies and implementing them within this
organization. as one owner told me. What could be wrong with that? Nothing,
as long as there is not a crisis for this is not an organization which will
withstand adversity.

This organizational style is usually adopted when things are headed up. Sales
are up. Cash is up. Profit may or may not be up, but that doesn't matter since
the cash churn is on the upswing. Profits, it is assumed, can not be far
behind. Unfortunately, this organization can't be controlled for it is not an
organization. Rather, it is a thrusting of the chaos down one level. The owner
reports to no one. Right Hand reports to the owner and everyone else reports
to Right Hand. In doing so, the owner turns over the destiny of their family
to Right Hand for these are family-based businesses where it is the assets of
the family that are at risk if the business doesn't perform.

If Right Hand gets upset, all sorts of things can happen. They can leave and
start their own shop stealing your best customers. They can poison the work
team. They can tell your suppliers bad things. They can steal your money. They
can run off your good workers. And, if they are really successful, they can do
this after the owner has become so far removed from the real work of the
company and so dependent upon Right Hand, that it's easier to allow Right Hand
to just have what they want.

This is far removed from a real organization around functions. In these Right
Hand types of shops, the owner commonly accepts no responsibility to report to
anyone. All work is done for the benefit of the owner rather than the
customer. The owner runs the checkbook. The owner deals with some nice
customers and frequently has Friends of the Owner as customers who are allowed
to abuse workers. The owner is all knowing, but isn't asked a lot of
questions. The owner deals with the big picture only and frequently leaves
details to everyone else. The owner prepares the marketing plan and deals with
advertising, however, has only sent out one or two direct mail pieces within
the last twelve months and has not thanked their top 25 customers for their
business in the past two years. The owners, in this scenario, frequently make
deliveries and delude themselves that this is a sales call.

In this scenario, Right Hand serves several very useful purposes. Right Hand
deals with the slovenly customers. Most of the time they order all the
materials, takes in orders, gets costs of special stock and gives estimates.
They try to price the way the owner would price unless, of course, they feel
it is wrong and then they price the way they think they should price. They
generally make sure the printing and binding is done.

Like the owner would have done before the chaos was thrust down, Right Hand
spends a lot of time praying the typesetter is not in one of those moods.
Right hand also deals with equipment breakdowns and schedules by crisis while
training by osmosis. Just like the owner use to do which allows the owner to
deal with important things. And, in Right Hand's biggest significant duty,
they keep the workers and customers away from the owner. Right Hand is a
buffer from reality so the owner can get some peace and quiet to think.

In these organizations, I have seen accounting systems and computer systems
purchased by Right Hand with no input from the owner. The owner, of course,
has input in equipment decisions because they like to buy equipment. But, the
result is the owner gets further and further away from what is really going on
in the business while thinking how lucky they are to have a person like Right
Hand around.

A real complication is if Right Hand is not the upstanding citizen the owner
thinks they are which I saw in one memorable case. In that case, Right Hand
was bullying other workers into silence. He was able to do that because the
owner wasn't stepping up to their responsibilities. In short, the owner showed
up everyday at noon. Right Hand therefore showed up by eleven-thirty. No work
was truly done until then. The owner didn't do anything about this situation
because the owner didn't want to deal with the problems or do real work. The
owner was a hostage. He knew it, but didn't want to change his lifestyle to
deal with it. However, he will have to someday. Why? Organizations of this
type can succeed only until they run into significant adversity.

When you find a one over one relationship, one of the positions is redundant
and should be eliminated.

Who does the Owner Report To, Anyway?

One of the many significant issues of organization is that the person running
the business fulfills a function. Owner's own, they don't do. Functions do.
You can have many owners of a business, like General Motors, but you can only
have one person filling the function to run the business. A General Manager
(President, CEO, etc.) runs a business on behalf of the stockholders in
businesses where the capital was raised in equity markets. In smaller
businesses, where the assets at risk belong to the family, the General Manager
runs the business on behalf of the stakeholders.

A stakeholder is anyone who actually owns a part of a small business plus
anyone else whose assets are at stake. Usually this is the spouse and non-
emancipated children (not yet on their own) of the founder. It would usually
(but not absolutely always) include emancipated offspring who work in the
business. It also includes anyone who has loaned money to the business if they
are not in the business of commercial lending. So, parents, friends and
acquaintances that have been hit up for money are also stakeholders.

And it is these stakeholders who actually own the small business regardless of
what the incorporation papers say. Don't believe me? Ask a divorce attorney.
And this is the key point. Most business owners think they report to no one.
It ain't so. The person running the business has a fiduciary responsibility to
protect, defend and grow the assets of the stakeholders as well as to report
the progress of such to them. Everybody reports to somebody.

It is the family's time, money, and resources, which goes into the small
business. It is the family's pension fund, health insurance and vacation time
the family could have had which is invested. It is the family's cash,
including college funds for the kids and their spouse's retirement. It is the
income the family rightfully should expect. And it is the responsibility of
the person running the business to obtain a return on investment for that
family, not continue to throw the family's resources at a lost cause.

The small business is not the founder's business and the founder can not just
do with the business what they please. The business belongs to the
stakeholders. Much like the land of the family farm, we hold these businesses
in trust for future generations. For either the business itself, or the cash
it brings when sold, is an asset that can be passed from one generation to the
next.

It is for this reason that the stalwart of the family, the business founder,
has no more right to rape, pillage or flit away the family business asset than
they do to plow the farm with salt. How dare a founder not do those things
that are important in favor of doing those things that are most fun.

And, it is for this reason that the first step in organizing your shop is to
recognize that ownership is not an operating function and that the person
running the shop reports to the stakeholders and is responsible for
performance. AND, if the print shop is not returning more time and more money
to the family than they would receive otherwise, then we need to fix it or go
get real jobs.
Sad, but True, Story

One founder opened a print shop with his wife. They couldn't agree on things
so he took money (assets) from the family's first shop and opened a second
down the road with his brother where he works on a daily basis. The wife had
nothing to do with it, he said. The second shop, as many do, didn't work out
so well. So the wife's shop started doing the printing for the second. Only
thing is the husband-founder won't allow the wife's shop to invoice the
second shop for the printing they do for them. The founder's brother in the
second shop earns more than the founder's wife earns. But, then he's a boy,
you know.

If We Can't Fix It Now, When Can We?

U.S. Jobless Rate Plunges to 4.3% Lowest Since 1970 That was a headline on
the front page of The New York Times (Saturday, May 9, 1998). Tight Labor
Market Is For Real. CEOs See No Loosening Before End of Century. That was a
headline on the front page of the Investor's Business Daily (Monday, May 11,
1998). My thoughts turn to print shops, many of whom are still not doing well
in this day of unprecedented economic growth. Many of us still seem to think
that increasing our sales is the answer to our cash problems. But, in order to
increase sales, we have to have people to do the work. Yet, we are in one of
the tightest labor markets in modern times and there is no prediction of
relief until after 2000. Why not raise prices and do less work for more money?

If we can't make money in this economy, then what will have to change for us
to be able to make money? Sine waves are a part of nature (things go up and
things go down - from electric current to the stock market).

We Put Performance IN Performance Groups

The Crouser & Associates Performance Groups are composed of non-competing
printers from throughout the country whom Pamela and I meet with every six
months. The purpose of these groups is to help printers achieve their goals
and learn the business side of printing. Our program provides business
training, personal development, coaching and peer review specifically related
to our industry. There is no other program like it anywhere. We start by
sending an evaluation team to your shop for a review. That's followed by our
General Manager's basic training program and on-site annual evaluations in
addition to working with your assigned group and our staff. Additionally,
specific training conferences are held each year in production, sales and
general management.

Does it work? One current participant writes: Besides the emotional boost,
belonging to one of your Performance Groups is paying off financially as well.
The difference in profits from one years to the next is running about $70,000
to the plus. (Reference available on request.) Want to know more? Call (304)
342-5100. Upcoming groups forming in Chicago and San Francisco. Affordable and
productive.

Happy Trails,

Tom and Pamela Crouser

P.S.    One person has to be in charge. You can't divide authority and have
any left. Randall Price.
*****
P.P.S. And then there is the internet, a.k.a. jokenet. Yes, I get the pass
along jokes just like you do, but now and again, there is one where strikes
home. So, here it is. It's How to Know when you have finished Your MBA.

Subj:   Fwd: FW: YOU KNOW YOU HAVE FINISHED YOUR MBA WHEN
From:   TarHeel
To:     TomCrouser

        YOU KNOW YOU HAVE FINISHED YOUR MBA WHEN:

 1. You ask the waiter what the restaurant's core competencies are.
 2. You decide to re-org your family into a 'team-based organization.'
 3. You refer to dating as test marketing.
 4. You can spell 'paradigm.'
 5. You actually know what a paradigm is.
 6. You understand your airline's fare structure.
 7. You write executive summaries on your love letters.
 8. You think it is actually efficient to write a ten-page paper with six
other people you do not know.
 9. You believe you never have any problems in your life, just 'issues' and
'improvement opportunities.'
 10. You know every single piece of clip art in PowerPoint.
 11. You calculate your own personal cost of capital.
 12. You explain to your bank manager that you prefer to think of yourself as
'highly leveraged' as opposed to 'in debt'.
 13. You can explain to someone the difference between 're-engineering',
'down-sizing', 'right-sizing', and 'firing people'.
 14. You actually believe your explanation in number 13.
 15. You refer to your previous life as 'my sunk costs.'
 16. Your three meals a day are a 'morning consumption function', a 'noontime
consumption function', and an 'evening consumption function.'
 17. You refer to your significant other as 'my co-CEO.'
 18. Your favorite stories begin 'Bob Jones, VP of Marketing, sat at his desk
and stared out the window...'
 19. You start to feel sorry for Dilbert's boss.
 20. You believe the best tables and graphs take an hour to comprehend.
 21. You refer to divorce as 'divestiture.'
 22. Your favorite artist is the one who does the dot drawings for the
Wall Street Journal.
 23. None of your favorite publications have cartoons.
 24. You account for your tuition as a capital expenditure instead of an
expense.
 25. You insist that you do some more market research before you and your
spouse produce another child.
 26. At your last family reunion, you wanted to have an emergency meeting
about their brand equity.
 27. You decided the only way to afford a house is to call your fellow alumni
and offer to name a room after them if they help with the down payment.
 28. Your 'deliverable' for Sunday evening is clean laundry and paid bills.
 29. You use the term 'value-added' without falling down laughing.
 30. You ask the car salesman if the car comes with a whiteboard and internet
connection.
 31. You give constructive feedback to your dog.

Until next week, may all of your trails be happy ones.

Tom and Pamela Crouser