Category Leadership

The 4^th Could Have Your Enterprise Singing Like The Righteous Brothers

Many business leaders make the mistake of considering partnerships transactional rather than relational.

While transactions are always part of the business equation, a great partnership is more than the sum of everybody’s bottom line. Great leaders consider integrity, competency, communication – the entire sum of the relationship.

In fact, it takes five elements to make a great partnership. No. 4 is the one that can have your enterprise singing like The Righteous Brothers!

1. Look for partners who are competent.
2. Look for partners who have integrity.
3. Look for partners who can communicate clearly.
4. Look for partners who can understand their roles.
5. Look for partners who want to benefit everyone involved.

Look for Partners Who Are Competent

This should go without saying. After all, if your partners cannot fulfill their promise, you, your company and your customers will end up disappointed.

Executives should ensure that all partners have a unique value proposition. All partners should have a high level of competency in that area.

Evaluate their past performance. Examine their track record of meeting commitments and delivering results. Request references.

Even better, interview previous clients or partners to discover insights you’re your potential partner’s reliability and professionalism.

Look for Partners Who Have Integrity

Tompkins Leadership and our sister company, Tompkins Ventures, will only work with partners and clients that have integrity. I mean really high. We don’t want to just follow the laws, regulations and norms of good behavior. We want to rise above.

Observe your potential partner’s behavior over time. Note if they act with honesty, transparency and consistency. Conduct background checks. And again, interviewing previous associates can verify a potential partner’s reputation and ethical standards.

I thought I was in the consulting business for decades. It only took me a few decades to find out how wrong I was. I was in the integrity business, not the consulting business.

My reputation was not because I invented this, foresaw that or wrote dozens of books. My reputation in supply chain and leadership grew because people trusted me.

They knew if I said something, I would bend over backwards or do head flips to make sure my organization got it done.

We say what we do, and then we do what we say.

That consistency over decades allowed us to be successful over time.

The last thing I want to do is work with someone who doesn’t have high integrity. Neither should you.

Look for partners who can communicate clearly

Sometimes people can do the job. They have high integrity. They are very competent.

Unfortunately, many cannot even begin to explain what they do in plain language.

If you cannot explain what you do, how do you expect anybody else to understand what you do?

All business partners must be able to explain their value proposition to people who are not specialists. Whether you are offering supply chain solutions, leadership development or technology expertise, you are going to have to talk to many who do not understand your field.

Look for Partners Who Can Understand Their Roles

Go listen to “You’ve Lost That Lovin’ Feeling” or “Unchained Melody.”

The original Righteous Brothers, Bill Medley and Bobby Hatfield, had contrasting vocal ranges.

Musical experts note that Medley’s bass-baritone voice took the low parts. Hatfield’s tenor, which reached as high as countertenor, handled notes in higher registers. (Yes, I had to research that. I know a lot about leadership and supply chain. With music, I just know how to listen and enjoy.)

The duo each knew exactly their role and how their voice needed to complement each other. That’s what makes their songs so beautiful.

Your partners need to understand and know their roles. You can conduct role-specific discussions or scenarios to evaluate their understanding and readiness.

You want your partner network to synchronize like The Righteous Brothers, not clang like punk rock. (Apologies to all the punk rock fans out there.)

Look for partners who want to benefit everyone involved

Partnerships should be more than the sum of their parts. They should benefit everybody.

So many in business look at Sun Tzu’s The Art of War as a business book.

Business relationships should not mean war. I want everybody involved to win, not to die.

Look for business relationships where everyone can benefit, where everybody either makes money or gets valued services or solutions for the money they spend.

If partners lose and lose, eventually you’ll find your business has nobody to work with.

Want more coaching on how to build great partnerships and networks? I would love to discuss your business goals.

The Antitrust Paradox that Really Isn’t

I began researching Lina Khan in 2017. The current Federal Trade Commission Chair had published “Amazon’s Antitrust Paradox” in the prestigious Yale Law Journal.

The article contended that Amazon used predatory pricing (selling products below cost to drive out competition). Her view was that Amazon aimed to create a monopoly and take unfair advantage of consumers.

My research file on Khan between 2017 and 2021 includes a few articles. Most of them discuss how Khan continued touting this same anti-Amazon theme for the House Judiciary Committee’s Subcommittee on Antitrust, Commerce and Administrative Law.

A Bizarre Line of Thought on Antitrust Law

I found Khan’s whole line of thought between 2017 and 2021 bizarre. I, unlike Khan, am not a lawyer. But my understanding is that antitrust law protects American consumers from deceptive or unfair business practices. The law’s goal is to promote a free and competitive marketplace by challenging anti-competitive mergers and business practices.

The facts in 2017 were that Amazon’s business model was widely embraced. Customers received great service, chose from a great selection of products and paid great prices.

The Amazon model was not new in 2017. It simply expanded Jeff Bezos’ 1994 business model. As a matter of fact, those are the goals of every business: provide great service, selection and prices.

A New FTC Chief – A New Line of Attack

Imagine my shock in 2021 when Khan was named the youngest ever chair of the Federal Trade Commission (FTC).

Clearly, she took this position not to uphold antitrust law but to change it. In her words, the United States needs “a different set of rules.” Not surprisingly, Khan drove the FTC against merger and acquisitions involving “Big Tech.”

Not surprisingly, she lost. Microsoft won the fight to buy Activision Blizzard. The FTC withdrew a case against Meta after negative court rulings.

Now, Khan’s FTC has targeted Amazon with a major antitrust action. Surprise, surprise.

But, wait a minute, it looks like she has changed her tune. She now claims that Amazon’s practices result in higher prices for lower quality products.

So, what exactly is the problem? Is Amazon charging too much (2023) or too little (2017)? Again, it’s bizarre.

Digging deeper into the FTC’s lawsuit against Amazon begets more confusion. At a high level, I categorize the FTC’s concepts into three categories: Don’t all retailers do this? Isn’t this good for the consumer? Don’t customers have a choice?

1. Don’t all retailers do this?

• Amazon uses an algorithm to price items.
• Amazon charges clients to advertise on their site.

If you think other retailers don’t use algorithmic pricing, you have not talked to many retailers. And in general, most business entities charge for advertising. Take a look at your next grocery store receipt. Kroger likely did not print the coupon for the Mexican restaurant next door for free.

2. Isn’t this good for the consumer?

• Amazon highlights low prices.
• Amazon’s prices are routinely lower than prices elsewhere.

This kind of goes back to point No. 1. From time immemorial, many retailers have advertised lower prices. Yes, some upscale retailers advertise that “premium” pricing is worth the extra value and service. But most consumers goods aren’t advertised like BMWs and Porsches.

And whether Amazon’s prices truly are lower depends upon the product. “Free shipping” is not free, and I know examples where the drug store around the corner has lower prices on some goods.

U.S. consumers know how to do price comparisons.

3. Don’t customers have a choice?

• According to the FTC, customers have no choice Amazon is in a business category all be itself – the “online retailer.”

In my view, “online retailer” is a made-up term:

1. First, Amazon has a retail footprint through Whole Foods.
2. Second, Amazon has dipped into the physical store market and, frankly, has not been able to compete.
3. Third, all sales these days are omnichannel.

Yes, Amazon dominates online sales to the tune of a 38% market share. But Amazon has a lot of omnichannel competition. Think Walmart, Costco, The Home Depot, Dicks, etc.

In fact, Walmart generated more revenue in retail sales last year than Amazon. Although that could change in the future – and then change again.

Shoppers are not exclusively online or exclusively in retail stores. They might see something online. Go visit the store. Try it on. Like it and buy it – or not. They’ll try something on in the store. Wait until the next paycheck – and then buy it online.

That point seems to elude every thinker behind the FTC’s lawsuit against Amazon.

If you define the category narrowly enough, like the FTC did, nobody has any competition. What happens if I define the retail landscape as companies whose founder, Jeff, has a shaved head?

It’s only Amazon. No competition.

If You Break Up Amazon, Who’s Next?

The recent FTC lawsuit asks for “structural relief,” a phrase that often translates into a breakup.

Now, don’t get me wrong, I have professionally had some disagreements on some Amazon practices. But just because I disagree does not mean they are illegal.

In fact, I recently warned retailers against relying on Amazon as their one-stop supply chain solution. Better to look for optionality in your warehousing and transportation.

Anyone who thinks that breaking up Amazon is in the best interest of the consumer needs to look at Walmart. Doesn’t the megaretailer’s “Everyday Low Prices” give them an unfair advantage?

And then who’s next? Costco, Kroger, Home Depot and Target?

Bottom line, the FTC needs to focus on enforcing the laws of the land, not trying to rewrite them.

What do you think?

Why a 19^th Century German Philosopher is Still Right

In the ever-evolving landscape of technology, the words of 19th-century philosopher Georg Wilhelm Friedrich Hegel ring truer than ever: “The only thing we learn from history is that we learn nothing from history.” We find ourselves in the midst of another industrial revolution, driven by artificial intelligence, the Internet of Things, machine learning, robotics and more.

Leaders are figuring out how to use these transformative technologies to reshape the way we live, work and play.

Change and Fear

Often in this space, I have stressed that the future will be a departure from the past, not a continuation. That is true.

But sometimes history repeats itself. And that’s happening here. But for business leaders and entrepreneurs, this repeat will be a good thing.

Historically, rapid technological progress has often elicited fear and resistance. People worry that their skills will become obsolete, wages will decline and jobs will vanish. These concerns have surfaced time and time again. Artificial intelligence, particularly generative AI models like ChatGPT, Google Bard and the like, are triggering those same warnings of doom again.

Yet history has consistently demonstrated that these fears are largely unfounded.

Even this time, doomsayers have been light on detailing exactly how artificial intelligence will destroy us., as this New York Times articles points out.

Let’s take the previous Industrial Revolutions one at a time:

The First Industrial Revolution

The First Industrial Revolution, spanning from 1760 to 1840, introduced innovations like the steam engine and textile machines. While these changes raised concerns about job displacement, they ultimately created new employment opportunities and increased productivity.

The Second Industrial Revolution

The Second Industrial Revolution, roughly from 1850 to 1914, saw the mass production of steel and the spread of electricity. Once again, there was resistance to these advancements, but they led to economic growth and the emergence of new industries.

The Third Industrial Revolution

Computers, the internet and mobile phones marked the Third Industrial Revolution. Despite initial resistance, these innovations gave rise to entirely new job categories and significantly improved the quality of life for billions worldwide.

The Fourth Industrial Revolution and AI

Today, as we stand at the cusp of the Fourth Industrial Revolution, fears about artificial intelligence persist. However, if history serves as a guide, these concerns are likely to be proven wrong once more. This revolution will create new opportunities and industries, just as previous ones have.

Recognize the Pattern of Doomsayers and Luddites

Throughout history, the fear of technological advancements replacing workers has recurred.

Yet, these technologies have consistently created more jobs, increased productivity and enhanced the overall standard of living. Acknowledging this pattern is essential when addressing present-day anxieties.

The Luddite movement during the First Industrial Revolution serves as a notable example of resistance to change. They went around destroying looms, fearing that the new technology would destroy their chances at future employment.

While their concerns were valid, technological progress continued, and society adapted.

In contemporary times, a new generation of skeptics has emerged in the face of the Fourth Industrial Revolution. While some advocate for caution, we must recognize the immense promise that AI and automation hold in addressing society’s challenges. These neo-Luddites will be proven wrong – again.

Embrace Change

While concerns about AI safety and ethics are valid, we should not allow fear to hinder progress. The Fourth Industrial Revolution will usher in new job opportunities, enhance productivity and stimulate economic growth.

As we embark on this new era, heed Hegel’s words and learn from history. The weaving loom, electricity and mobile phones ultimately improved our lives and expanded employment opportunities.

I mean, do you really want to go back to sewing all your clothes from scratch? I didn’t think so.

Generative AI promises to improve lives, businesses and the world. Let us approach it with an open mind, diligence and thoughtfulness.

If you’re interested in exploring how progress and technology can benefit leadership in your organization, I would love to talk.

Yes, Consumers Will Spend. Supply Chain Leaders Must Prepare

As the holiday shopping season approaches, one thing is abundantly clear: consumers are gearing up to spend, and the holiday spirit will be in the air.

This anticipated surge in consumer spending is not mere speculation; it’s a trend deeply rooted in long-term consumer behavior data. Surprisingly, despite 2022’s predictions of reduced consumer spending, sales from October to December of that year soared by 8.3% compared to the previous year. Forbes reported a 9.3% increase in nonstore sales, including eCommerce, with some specific categories experiencing a staggering 20% growth.

Many retailers and etailers have pushed early access sales in September and October. Ever since the advent of Amazon Prime Day in 2015, leaders have sought to compete by offering Black Friday in July.

These insightful leadership attempts at demand shaping have reshaped the holiday shopping landscape, extending peak spending beyond the traditional Black Friday and Cyber Monday. In this context, leadership plays a pivotal role in preparing retail, eCommerce and fulfillment operations for the challenges and opportunities of Peak Season 2023.

Warehousing: Well-Prepared – Not Enough

One aspect of preparedness that stands out is warehousing. Over the past year, many companies saw slower sales than expected, which has resulted in accumulations of inventory. The reduction in imports has lessened demand for adding warehousing space. In fact, I do not expect warehousing to be a problem for Peak Season 2023.

However, it’s crucial to recognize that warehousing is just one part of the equation. A comprehensive strategy involves efficiently moving these goods to meet surging consumer demands.

The Challenge: Labor and Transportation

With warehousing under control, insightful leaders need to turn their attention to two critical elements of the supply chain – labor and transportation. In fact, I think supply chain leaders are paying scant attention to those two factors, which could pose significant challenges as we approach peak season.

The labor market has proven unpredictable, with many industries facing worker shortages. For the logistics industry, recruiting and retaining qualified workers remains a daunting task.

Simultaneously, transportation faces its own set of challenges. Escalating fuel prices and logistical complexities make securing reliable transportation more difficult. However, committing to a single transportation solution is risky. A thorough Transportation Diagnostic Evaluation (TDE) can help identify the most suitable approach. Pairing the TDE results with a robust Transportation Management System (TMS) can provide a competitive edge, allowing flexibility and adaptability when demand spikes.

Giants Gearing Up: Amazon and DHL

Recognizing the importance of proactive planning, supply chain leaders at industry giants like Amazon and DHL are addressing their personnel challenges head-on.

Amazon plans to hire an additional 7,600 workers in Nashville and a quarter-million employees across the U.S.

Similarly, DHL eCommerce has inaugurated a $74 million consolidated distribution center near Cincinnati/Northern Kentucky International Airport. This high-tech facility can process 50,000 parcels and packages an hour and unload 20 trucks an hour, streamlining the final mile delivery process. DHL has invested $400 million in U.S. operations to ensure they have the technology, labor and transportation necessary to meet holiday demand effectively – now and for the future.

Your Move: Secure Flexible Solutions Now

At this stage, you likely will not hire a quarter-million workers or open multimillion-dollar distribution facilities.

However, securing flexible labor is achievable. Companies like Task4Pros offer trained warehouse labor in various U.S. locations, with a proven track record of rapid scalability. Unlike many temp agencies, Task4Pros Pros arrive prepared for warehouse work, boasting a 100% fill rate and turnover less than half the industry average.

As mentioned earlier, the synergy of a Transportation Diagnostic Evaluation (TDE) with a Transportation Management System (TMS) is a potent option to navigate the challenges of peak seasons. These solutions can prove invaluable in handling demand spikes efficiently and effectively.

Don’t Wait for the Peak to Hit

In the race to prepare for Peak Season 2023, waiting is not an option. As a supply chain leader, secure flexible labor and transportation solutions now to avoid shipping delays and provide excellent customer service.

Turning the challenges of the holiday season into growth opportunities requires foresight and proactive planning, and Tompkins Leadership is here to help you succeed.

Business Leadership Quotes that Ain’t So

My wife and I watched the 2015 movie “The Big Short” the other night. The protagonists “future proof” their investments by betting big against the housing market before its 2007-2008 collapse. The film about the 2008 collapse of the U.S. housing bubble used an introductory quote from Mark Twain:

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

That quote really spoke to me. It applies just as much to business leadership today as it applied to the failure of the global economy and the Great Recession.

Interestingly, the next morning I went to Quote Investigators, a website that traces quote origins. They found no substantial evidence that Mark Twain ever said or wrote this remark. The earliest similar statement came in 1874 from Josh Billings, a pseudonym of the humorist Henry Wheeler Shaw. Billings wrote, “I honestly believe it is better to know nothing than to know what ain’t so.”

Departing Now: The Old Definition of Future Proof

Well, independent of who said it, the quote takes on a whole new meaning toward future-proofing your business when I add my thought: “It is not what you don’t know that gets you into trouble as much as what you did know 6 months ago that is no longer true.”

This quote reflects back to the reality that from now on, business leadership must look at “future-proofness” in a different way. The future will be a departure from the past, not a projection from the past.

I have been saying this for over 5 years now. And given COVID, Rusia/Ukraine, China/Taiwan, globalization/deglobalization, free trade/tariffs, nearshoring/friendly shoring/reshoring, hurricanes in Los Angeles/drought in Panama, inflation/interest rates, uncertain consumer demand/uncertainty of supply, value of AI or not, peak season or not, inventory overage/shortages, etc., business leaders certainly must realize that uncertainty is the only thing that is certain.

Business Leadership: Building for Success with Insight

The ramifications of perpetual uncertainty were the premise behind my 2022 book Insightful Leadership: In the context about the quote on what “ain’t so,” the insight business leaders have about the future will dictate your ability to future proof your enterprise. What you know about the past will likely dictate failure.

So, it is a good thing Mark Twain did not say what some have attributed to him. And even if he did, in today’s uncertain times he would be wrong.

What Business Leaders Need to Know – By Mark Twain

So, not to spread rumors, but I recently met a retired riverboat pilot on a paddle boat going down the Mississippi River. His complexion was fair. His eyes were blue. He wore a white suit and a bow tie. He sported a striking, bushy white mustache and goatee.

He told me: “The problem today ain’t so much the things that a person thinks he knows, it’s the things he thinks he knows that have changed, and the person does not realize they have changed, and they ain’t no longer so.”

Did I dream that? Seems I remember the person’s last name was Twain. Don’t believe I heard his first name. Maybe I need to go back to Quote Investigator?

Your Enterprise Needs the Benefits of Business Intelligence

Insight is the raw fuel that leaders need to handle today’s business world. Each day’s headlines seem to reveal more disruptions and crises. Despite all the talk of a new normal, each new normal gets quickly swept away by the waves of the future.

Material shortages and labor woes persist. Solid shipping routes face snarls and delays. Fraying trade ties force enterprises to reconsider supply and sourcing.

You need business insight into the future, not data from the past. Tomorrow’s business landscape will be a departure from the past, not a continuation of historical data.

That said, continued technological advances allow insightful leaders to use data to develop business intelligence in ways never envisioned before:

1. Through the Internet of Things (IoT), which can yield data from virtually every facet of your operations.
2. Through artificial intelligence, which helps organize that data in ways that make sense, and
3. Through environmental scanning, which combines all that data and analytics with your human experience to guide your enterprise to profitable success.

1. Business Insights with The Internet of Things and Embedded Business Intelligence

The Internet of Things (IoT) uses sensors to connect devices and objects to embed computer power into everything – vehicles, production machinery, buildings, appliances, you name it.

These interconnected devices yield business insights by harnessing volumes of data. RFID tags allow supply chain pros to track inventory across the globe. Sensors track shipments to detect delays, along with monitoring inventory conditions and damage. Finding out that your cold chain is a bit too hot – and fixing the situation – can be salvation. You don’t want to deliver your customer’s cold goods hot.

Everybody in your product’s value chain – suppliers, manufacturers, distributors, retailers and more – can access real-time data to make quicker decisions, resolve issues proactively and coordinate better during the next inevitable supply chain disruption.

2. Business Insights with Artificial Intelligence

Today’s artificial intelligence and machine learning solutions, from warehouses to digital supply networks, help organize all that data in ways that make more sense.

Warehouses that integrate artificial intelligence, machine learning and the IoT have increased picking efficiency by 20% to 40%. Digital twins run simulations and analyze the data in real time to recommend optimized workflows for picking, putaway, cycle counting, crossdock, loading and unloading – every warehouse operation.

Digital supply networks have yielded double-digit improvements in premium freight costs, overall transportation costs, inventory reduction and reduced manual planning, scheduling and execution management overhead.

A real-time single version of truth connects your entire value chain. Removing boundaries between enterprises links all raw materials/components/parts from their entrance into your end-to-end supply chain until their exit as finished goods. AI autonomously resolves many issues, whether the trouble spot is 23 suppliers upstream or 13 suppliers downstream. Only significant problems get escalated for human intervention.

3. Business Insights with Environmental Scanning

Although they are improving daily, even generative artificial intelligence cannot make every business decision. But combining the insights gained through IoT, AI and ML can supercharge your environmental scanning.

Environmental scanning involves knowing your market, knowing what’s happening, researching and learning even beyond your comfort zone, and asking yourself, “What is going to result in my business changing?”

A great example is the Amazon-Kohl’s partnership, where Kohl’s accepts Amazon returns. Amazon’s environmental scanning revealed that easier returns could lure customers who normally would not buy online. Kohl’s needs foot traffic to drive sales. As described with more detail in my latest book Insightful Leadership, both win.

The partnership started pre-pandemic and continues to be applauded by retail analysts years later. Amazon, for its part, is striking similar deals with other retailers.

Business Intelligence for the Future

Want to learn more about combining the IoT with artificial intelligence with environmental scanning for solid business intelligence? I would love to discuss how your enterprise can benefit.