The Weekly: Edition #93 - April 16th, 2021
First Impressions
"People don't care how much you know, they want to know how much you care." - Teddy Roosevelt
People don't like change. Heck, we don’t like change either. Change is scary. It’s the loss of control and the anxiety of what-ifs. It can mean different hours, responsibilities, and compensation, or even job losses.
But progress, growth, and efficiency only come through change. Change is hard, so first impressions matter. You only get one.
Having purchased more than a dozen companies and experienced the range of emotions, our team at Permanent Equity is sensitive to change and what it means for the entire company. We wanted to offer a few general thoughts on how to approach a big transition, whether you are a new executive hire, the new CEO, or the new owner of a business.
Rule #1 - 'Do No Harm'. Low hanging fruit, big visions, and audacious goals are tempting to talk about, but it's best to leave those until you have humbly learned the status quo, understood the logic behind it, and built sufficient trust. Change is like tugging at a loose string on a ball of yarn, it might come out just fine, or you might inadvertently unravel half of it. The best approach is to ask questions and reserve judgment, while being willing to role up your sleeves when asked.
Rule #2 - Approach the conversation with a humble and supportive attitude. As Teddy Roosevelt once said, no one cares how much you know. They want to know if you care about them. Take this first impression opportunity to show that you do — and actually mean it.
Rule #3 - Be upfront about why other changes may be made, including roles, jobs, compensation, or restructuring. Sometimes change is necessary. It's always best to be honest. Mitigate resistance to change by addressing 'the why' behind the changes and listening to concerns. Address how change will be implemented to give a clear picture of what will be taking place.
Rule #4 - Tell the staff your story and your 'why' but be brief. First impression moments after change are almost always tense. Most people will not hear much after the big changes are announced. They will only be thinking about how the decision affects them, so keep your introduction brief, address their concerns, and be genuine. Don’t try to be funny. It may be tempting to crack a joke to loosen up the crowd, but even if you are an excellent communicator, read the room and understand that people are usually in flight or fight mode. Bring down the temperature through earnest care.
Rule #5 - Address concerns and questions head on. Offer to address any concerns that staff members have and be willing to find the answers if they are not readily available. How you answer their questions and concerns will set the tone for future interactions with your new coworkers, so pause and think before responding. Always offer to meet privately at their convenience. Most people are going to need time to process before being able to formulate their questions.
If you are a new CEO, a new executive, or are buying a business, we hope you find these lessons to be helpful as you approach your new endeavor.
How to optimize your compensation plan (Permanent Equity)
+ "We’d like to say that we have been great on incentives from the get-go, but it’s only time on the front lines and trial and error that have taught us a few things that work (and others that don’t). This essay is an attempt to lay them out in such a way that makes the basic principles easy to apply to your organization in order to better engage your team."
Retailers want smaller stores. So why is Dick’s Sporting Goods testing its biggest one ever? (Forbes)
+ "So I ask these CEO’s, what if, for the same money as you’d pay for the smaller stores you want, you could get stores that are bigger than what you currently have? What would you do with those bigger stores? The most common answer I get is “collaborations,” bringing in other retailers and brands to fill the space and hopefully cross-sell one brand’s products to another brand’s consumers."
How to survive the future of retail (Business of Fashion)
+ "Covid-19 is the commercial equivalent of a meteor impact: an existential, once-in-a-century event that will change the chemical composition of the industry’s atmosphere. The result will be a complete eradication of many retail species, frantic adaptation by others and the rapid growth and evolution of a few. A new class of predator will emerge: an entirely novel, genetically mutated species of retailer that faces few threats. In nature, they’re referred to as apex predators. In retail, they’re called Amazon, Alibaba, Walmart and JD.com."
Brands, Amazon, and the rise of e-marketplaces (Feedvisor)
+ "Indeed, e-marketplaces were the biggest beneficiaries of consumers’ accelerated adoption of e-commerce, driven by the Covid-19 pandemic. In 2020, Amazon grew its e-commerce market share to 39%, while Walmart displaced eBay as the No. 2 online player in the U.S., with 5.8% market share, per eMarketer."
41st semi-annual taking stock with teens survey, Spring 2021 (Piper Sandler)
+ "- 33% of teens hold a part-time job—unchanged from Fall 2020 but below the 37% level in Spring 2020
- Teen “self-reported” spending improved slightly to $2,165—up 1% sequentially; parent contribution was 61%
- Female spend inflecting for clothing +9% Y/Y, strongest Y/Y gain since 2015 (male spending still down)"
Carnival Cruise bookings surge even with fleet sidelined (Bloomberg)
+ "In a quarterly update Wednesday, the company said booking volumes in the first quarter of 2021 were about 90% higher than in the fourth quarter of 2020. Cumulative advanced bookings for next year are ahead of 2019, which was already a particularly strong year."
Joining a startup for the first time? 30 actionable tips from folks who've been there (First Round Review)
+ While this list of advice is aimed at startup employees, many of the nuggets apply in the SMB world as well.
How asynchronous communication could change your workday (BBC)
+ "On one hand, this gives workers more freedom to work in a way that makes sense for our lives. However, some say asynchronous communication is slower and less collaborative, and can make us feel isolated. So, as more companies bang the drum of worker flexibility in the post-pandemic world, should we all expect to operate asynchronously in the future? And how will this change the way we do our jobs?"
Amazon's private labels (Benedict Evans)
+ "Amazon looks at data on what sells on its site, both the first party operation and, perhaps, the third party marketplace (which is 60% of volume), and uses that to commission its own products, which it sells in competition with its suppliers and without necessarily any obvious indication that they come from Amazon. There are hundreds of these ‘Amazon’ brands and thousands of products, competing with the products from Amazon’s suppliers. Some people feel very strongly that this is bad."
Dollar’s share of global reserves sinks to lowest since 1995 (Bloomberg)
+ "The dollar’s share of global currency reserves dropped in the fourth quarter to around 59%, the lowest in 25 years, according to International Monetary Fund data. The slide came in a quarter when a gauge of the greenback fell the most since 2010, and amid questions about how long the dollar can maintain its status as the pre-eminent reserve currency. The Chinese renminbi is transforming into a force to be reckoned with in currency markets, with more yuan changing hands than ever before in London, the world’s leading foreign-exchange center."
The price of lumber is up 193% and is about to spike higher (Fortune)
+ "Lumberyards and homebuilders alike have delayed buying lumber from sawmills in hopes the price of the sky-high commodity would finally come back down to earth. It hasn’t budged, and now the buying rush is on ahead of spring and summer projects. “Clearly mills won the standoff,” Stinson Dean, CEO of Deacon Lumber, told Fortune."
We'd love your help.
If you stumble across something great, send it to weekly@permanentequity.com.
If you know an owner, operator, or someone who works with SMB's, please give us the highest compliment and send them our way. You can find previous The Weekly issues here.