MaxBlog

from the desk of Mary Mershein

Lululemon shares were $2 in 2007. Five years later they were $76 and the company was worth $10 billion. One reason for the growth was the creation of "scarcity" in which stores kept only a limited supply of merchandise. Low inventory levels forced customers to buy or lose out when the item goes out of stock, creating a buying frenzy. Lululemon also rarely sold items on sale, even charging over four times the price of similar items at the competition.
Costco was the first company to grow from zero to $3 billion in sales in less than six years. As of Feb 26, 2012, net sales for the first half year were $44 billion. Similar to Lululemon, Costco carries many items for a very limited time, encouraging customers to buy while they can. Costco does not carry multiple brands or products whose cost is too high, even if it’s a popular brand such as Coca Cola. Costco also does not stock extra bags or packing materials. Products are delivered to stores on shipping pallets and displayed that way, rather than arranged beautifully on shelves. There are also long lineups at the cashiers, hefty membership fees and the inconvenience of buying items in large bulk sizes.
In 1919 the first Loblaws grocery store opened using a new retail concept called self-service, the opposite to the traditional full service. Under full service, store employees fetched items for customers, weighed items and calculated the total purchase. The total was then added to the customer’s account for later payment. Home delivery was usually included free of charge. Under the new self-serve model, customers browsed freely throughout the store, picked-up their own goods without the aid of a staff person and then paid at a central cashier. There was no payment on account or home delivery. As with Lululemon and Costco, popular items might not be in stock to encourage customers to come again. Despite the lack of service, Loblaws is now Canada’s largest grocery store chain. On Dec 31, 2011, Loblaws had annual net earnings of $769 million on revenues of $31.25 billion.
Selling at an inconvenience. Refusing to sell. Selling out. Self-selling. High price selling. Low price selling. Selling directly from shipping pallets. Selling memberships. Creating urgency to buy through scarcity. These are all NOT the typical sales tactics of a traditional retailer where full service with plenty of convenience and a variety of in stock products arranged beautifully on shelves are the norm. Yet, these tactics drove these companies to success.

Accounting does not record sales strategies as having any value even when they are the key success to generating sales and company growth. In contrast, financial statements record inventory. More inventory increases the assets on the balance sheet and the value of the company. Yet it was the lack of inventory which often created the sales frenzy to drive the growth and value of these companies.

How does your company sell its products? Is there plenty on the shelf or limited supply in hot demand? How do you sell yourself?

©2012

Mary Mershein, CA is a professional accountant with a master’s degree in management who believes common sense is our greatest financial analysis. Additional common sense can be found at www.moosemoney.wordpress.com.

Companies don’t need a great leader! from Mary Mershein

Great leaders maximize their own personal goals.

There is nothing wrong with this. However, if the goals of these leaders are not in line with the goals of their company, these great leaders become bad for their company. 
Consider the British newspaper “News of the World” established in 1843. It was the biggest selling English newspaper in the world with a circulation of over 8 million at its peak compared to the Wall Street Journal which had a peak circulation of just over 2 million. 

 In 2007 the editor of News of the World, Clive Goodman, admitted to publishing articles obtained by phone hacking and went to jail. In 2011 the newspaper paid fines to the victims and shut down. The parent company News Corp. made 20% return on investment in 2011. The executives, including CEO Rupert Murdoch, profited while the newspaper was destroyed.

So how does an organization ensure management and the company both want the same thing?

The answer is communication. Rupert Murdoch and the other executives at News Corp. testified before a parliamentary select committee in November 2011 that they were unaware of any wrongdoings.

The higher up a manager is in the organization, the less connection there is with staff. Once you reach the Executive and Board level decision makers receive almost all of their information funneled through a few individuals. Sometimes they employ analyses which cannot show the entire picture of what is truly going on. This is how situations are created where those in charge benefit from the demise of the company.

However, when people talk to people, face-to-face, on a regular basis it is much harder to disguise the truth. There are no numbers to manipulate. There are no one-sided stories. Any deviations between what the company wants and what the individual wants become evident and can be corrected before harm is done.

Companies don’t need a great leader. Great leaders are individuals working towards their own goals.

Companies need fraternities. These fraternities are groups of leaders all working together for a common cause.

And the next time you attend a leadership training course, don’t go alone! Take the Board of Directors and the CEO with you.

©2012

Mary Mershein is a Chartered Accountant with a master’s degree in management who believes common sense is our greatest financial analysis. Additional common sense can be found at www.moosemoney.wordpress.com.

 

In the now famous Steve Jobs commencement address, he offered advice that you have surely heard before: 

“You've got to find what you love…. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work.

And the only way to do great work… is to love what you do.”

All worthy leaders, all great managers, all exceptional employees are doing it for the love. Love drives us. We are energized when we know what we are about and we can focus on what we love – it’s our mission, our purpose, our “gift” to the world. When the going gets tough, it’s the love of our craft, that exercising of our gift, our vision perhaps, that keeps us engaged.

This is why cyberspace superblogger Seth Godin writes continually about art – it’s his shorthand, his code word for “doing what you love,” what you would do even if you weren’t getting paid.

While he was alive, Dutch “post-impressionist” Vincent Van Gough painted over two thousand paintings, including 37 self-portraits from 1886 to 1889 alone.

He could not help it – he had to paint - and yet he did not sell one painting while he was alive. He did not stop; he could not stop as long as he was living.

This is a key to finding out what you love to do – not simply shrug and say “sure I like my work, I like most anything… I’m just a versatile person,” or “I make the best of the situation”

No… the question really is “what can you not stop doing if you are going to be truly you?”

If the “REAL YOU” was going to burst out of your skin like the green hulk, what would the “REAL YOU” be doing – even if you were never going to sell one part of it, never going to make a living from it?

Scott Belsky, author of “Making Ideas Happen” quotes artist Jonathon Harris on one more aspect of acting on our passion.

“Love is the only thing that’s going to pull you through and get you to finish… but here is also a paradoxical and interesting fact: The thing you actually end up making is going to be such a failure compared to the original feeling that you had, the original vision you had. The feeling of it is so pure that you can’t make a real thing that has the same feeling and so you’re inevitably going to be disappointed by it.”

Harris says it’s love that ensures some level of disappointment at the end. And for a time, for the unaware, that may be true. But we can mature, and cope with our feelings of love and imperfection.

After his death from self inflicted gunshot wound, Van Gough’s art was recognized as a national treasure, impacted thousands of artists, and millions of art fans. Self-portrait Without Beard, sold for $71.5 million in 1998 in New York making it one of the most expensive paintings of all time.

It was painted in late September 1889, as a simple gift for his mother, on her birthday.

He did it for love.