Paradigm Shifts

At the age of 52 my father announced that he was considering building a large grocery store in the Spokane Valley. He claimed, that if the store he wanted to build was not successful, he could loose everything. Not like he hadn't been on the brink before, but he was younger then and had significantly less net worth at risk. At 57,000 sq. ft. this store would be almost twice the size of our next largest store and would house over $1,000,000.00 in inventory. The interesting thing is, the time was right. There had been changes made over the years that allowed some mitigation of risk, and the concept had proven successful in the Midwest.

About that time a couple of companies entered the market claiming that they could accurately predict the sales of grocery stores of various sizes built on a given location. They had been having some success throughout the country. Before they came along most grocers used their own version of the S.W.A.G. method, (Scientific Wild Ass Guessing).

In addition we had just purchased our first desktop computer, a Burroughs. I don't remember the year but it cost $13,000.00, had very little hard drive, and ran on the dos operating system. Windows did not exist at that time. The thing came with a Multiplan spreadsheet software and over time I taught myself to use it. The spreadsheet made it possible for me to run sales and expense scenarios very rapidly and while that capability may not have actually mitigated risk, it did help us to understand the risk we were undertaking.

Finally, we had made trips to areas of the country where they were building this store concept and my father having experience in building stores had no problem overseeing its construction. At the time the store was under construction I was still managing the Sandpoint store and didn't go to Spokane to help out until it was time to bring in equipment and start stocking the store. Since I had been actively purchasing direct truckloads of merchandise for the Sandpoint store, I also purchased about $500,000.00 in direct truckload merchandise for the grand opening of the Spokane Valley location.

The store was completed, it was the last night before the grand opening. I'd walked around the store that day just to get a feel for it. It felt right, it looked right. Even though I had no knowledge of paradigm shifts, at the time, I suddenly realized I was in the middle of something different. A specific time or window of opportunity that would not last. That night at my Fathers home I suggested that we should start building a second store, of that same concept, in Spokane, right away. I guess he thought that was a little funny when he asked me where we'd get the money. I knew he had a couple grocery store buildings that he'd been leasing out. I just blurted out, sell the Deer Park building if you have to we need to get another one up as quick as we can. Shortly thereafter he did sell the Deer Park building, and we began construction on the Foothills store.

If you understand the history of a certain industry and stay on top of the latest technological advances across industries you can, to some degree, predict the future. Predicting the future is where entrepreneurs stake their claim to fame and fortune. Keep an eye out for paradigm shifts.

Thoughts on Mentors

I struggled a little writing this piece because in some ways it may sound disrespectful. It's not meant to be; it's just what it is.
I can't say I know any natural born mentors, which leaves me to believe that mentors are made, not born. I myself, would not make much of a mentor. I really don't have the patience for it, although I'm sure some clever individual could extract mentoring from me. Personally, I had a fantastic mentor, but it was work. It's not like he came up to me and said come on - let me mentor you. Far from that. I selected my mentor and when it came for the selection process, there was only one clear choice for me, the best in the business. I wanted the best in the grocery business, only later did I discover that his knowledge would encompass all retailing, and to some degree all businesses. That's who I wanted and that's who I trained to become my mentor. I found the secret by mistake one day. My mentor was never really much of a conversationalist, unless you were talking to him about business. I discovered this sometime after I began working for him. I was trying to maintain a conversation with him at his lake home one weekend and discovered that talking business made for rare, easy conversation. Once I knew that was the only thing he really actually loved to talk about, I knew I could build a mentor. Of course I loved talking business as well, so it worked.

As time went by I began to acquire most of the knowledge I needed and began using that knowledge applied to various situations to develop some new tricks of my own. I was gathering information and new techniques from wherever I could whenever I could. As I began to introduce these techniques to my subordinates in an effort to further improve operations my mentor would, at times, let me know I had gone too far. My real problem was that I had not gone far enough. I had found a program developed by Tom Winninger called "Selling in the Supermarket". As a store manager, I had trained my employees using this program and felt that it had be very helpful in improving sales and customer relations. When I was promoted to Operations Manager and given the assignment of training all 500 employees, I used this program as the center piece. One of the key points in this program was asking "open probe" questions, and that extended to answering the telephone. All 500 employees were taught to answer the telephone with an open probe question - "how can I help you?" As it turned out my mentor did not like this telephone greeting so one day he told me he wanted me to have our employees stop answering the phone that way. This of course, was very upsetting to me. I had spend a lot of time and money teaching all 500 employees to ask open probe questions and that training alone had produced some significant sales increases for the company. I tried explaining why they were taught to answer the phone that way and how significant it was to our overall training, but it didn't matter. He wanted it stopped. I had to buy some time to regroup and prepare my sales pitch so I got him to put the matter on hold until he returned from the vacation he was about to take. While he was gone I contemplated the matter and worked on what exactly I was going to say to him when he returned, I was sweating it out though; it wasn't going to be easy. When he returned I had planned to schedule a meeting with him to discuss the topic, but when I called him he wasn't interested. It seems that while he was on vacation the resort he stayed at had been trained to ask open probe questions and in fact he was running into it everywhere he went. I was allowed to continue my training and the employees continued to answer the phone with "how can I help you". One of the greatest things in the world is having a mentor - don't make the mistake of thinking it's going to be easy. My mentor was/is my Father.

Enthusiasm

Let's call this my version of Marley & Me. One of the most important things to take into any project and life is enthusiasm. It's not always easy for humans to maintain that enthusiasm throughout a project let alone life. Not so with my dog Sable. We live on a 7 acre property in Sedona Arizona. There are a lot of lizards on our property and Sable thinks it's her job to find them and kill them. We sort of reinforced that in her when we started taking her down to work at the warehouse each day. We got into this thing of asking her each day if she was ready to go to work. She knows what that means now and each day when we ask her she gets very excited. She'll start jumping up and down, running to the door and then running back to me and back to the door again. Now that's enthusiasm. As long as we're down at the warehouse she'll be out chasing lizards, her little tale stub just wagging like crazy. Funny thing is she rarely ever actually catches a lizard. Still she maintains her enthusiasm for work. You'd think she'd get discouraged, but I guess that never crosses her mind. She knows each day she's going to go to work and do her very best to do her job. Some mornings if we don't go down to the warehouse early enough she'll begin to come to my desk to get me. She'll lead me to the door as if to say come on, we gotta get to work. I ask her to be patient but she just can't contain her enthusiasm. Of course, Sable reminds me to do many things that I should do that I often forget. Before we go to work she always stretches right in front of me as if to remind me, don't forget to stretch. She leads by example, she can certainly show you how to be enthusiastic. Dale Carnegie teaches, "act enthusiastic, and you'll be enthusiastic". I believe enthusiasm is important to success and although it doesn't always seem to come as naturally to me as it does to Sable, I can certainly act enthusiastic until I get myself there. Thanks for the reminders Sabe, you're the best.

Turning A Negative Banker/Partner

For about 12 years I put my entrepreneurial pursuits on hold to help my father with his. I don't think that I'm talking out of turn here because he knows I think he's a little too pessimistic and sometimes negative. I'm the opposite and maybe that's why we were so successful together. In the early 80's he purchased a really bare bones type warehouse market grocery operation in Sandpoint, Idaho. Did I mention I love Idaho? I moved from Spokane to Sandpoint to manage that store, his 3rd at that time. It was immediately the most profitable and was showing steady growth. About the time he had purchased that store another local grocer had sold his store to Safeway and a few years later he decided to build another store just a stones throw away from our old beat up steel warehouse with cement floors. My Father would visit the store about every two weeks from Spokane, we would go over numbers and discuss operational changes. From the time the new store up the street began construction every visit had a similar tone. From my Fathers prospective we were going to loose 35% of our business and no matter how positive I was and no matter what I was doing to prepare, he was convinced, we were going to loose 35% of our business. While all this was going on I was trying to improve customer service by training my employees in "Selling in the Supermarket" and another training program dealing specifically with customers feelings. While I was working on that at the store, at home I was working out pretty hard. I was building up for the fight. I had no misconceptions about what we were, we were never going to be the prettier store, we were the price store. We would win or loose this fight on price and customer service, that's just the way it was. I believed we would win, and my training helped keep me in a positive frame of mind, even with the negativity in my face every other week. On my Fathers last visit before the new store up the street opened he decided he was ready to do what he could to stop our 35% loss in business. He told me on that visit "spend $100,000.00 if you have to, but don't loose market share". Now that put a smile on my face, I had everything I needed to win the war. To make a long story short, the store up the street opened and within two weeks of that I was showing moderate increases again. In that quarter I had spent $52,000.00 of my allotment. Within a couple years the new store closed down, I thought I had the final victory. That's when my Father explained to me that once a store had been built, someone would be occupying it. Sure enough, I had another competitor within a year and we started the cycle over again. Stay positive, work hard, listen to the nay sayer's when you have to, but make sure they are hearing you.

Partner/Banker Negative Energy

Let's start with what not to do, when your partner/banker is flooding your space with negative energy. I heard this story about my Grandfather from a family member. At one time my Grandfather had opened a grocery store in a small town. I guess he borrowed some money from the bank to get it done. One day the banker came in and was giving him a lot of grief because he was behind on his loan payments. At some point Grandpa got fed up and threw the keys to the store to him. He told the banker if he was so damn smart why didn't he go ahead run it himself. Then he walked out. Now, as much as you might want to do this - don't. Grandpa sure gets points from me for that one though.
When I have a negative banker/partner I try to limit contact with them as much as possible to reduce their impact on my Psyche. When I do have to meet with them I try to prepare. I want to flood them with as much positive information as I can. Of course, I listen to what they have to say, but still I won't allow the general negativity to get into my head. If they're talking about all the things that could go wrong, I'm talking about all the things we can do to avoid that outcome. Never let them drag you into that negative thought, the outcome would be bad for both of you.

Energy Positive/Negative

Once you've decided to take the leap, you're going to have to focus all your energy to get the project off the ground. Positive energy = all your thoughts and dreams of success. Negative energy = all your fears and doubts. You have to put the negative energy aside now, It's all got to be positive. I can get a little crazy about negative energy in my space at this stage of the game.
At 25 years old I owned 25% of the first grocery store I ever managed. The store had been owned by a grocery wholesaler that couldn't make it work, so we bought it for $1.00 + inventory. I had hired the employees and we had completed a minor remodel before re-opening the store. I had been working 120 hours a week for a month or so, but we were finally open. One day my wife, was coming into the store and she heard a Frito-Lay vendor, who had just made a delivery to the store, talking to some customers outside. Evidently, he had told them that if the grocery wholesaler couldn't make it work it was a pretty sure bet that we'd fail. Bells and whistles went off in my head when heard this. That my friends was negative energy in my space, and when I'm starting a project I do not tolerate it. The next morning I called the vendors boss and told him I didn't want him in my store anymore. He explained to me that if he couldn't deliver at my store they didn't really have a position for him. To that I replied, "that's really too bad". The problem with negative energy is that if you allow it to, it can seep in. It starts to affect your decision making and the next thing you know you've screwed the whole thing up. In this case I had eliminated the negative energy, the store was successful and is still operating today. I go to great lengths to keep negative energy away from my space when I'm starting a project. Okay, that's pretty simple. What happens when the negative energy is coming from your banker or partner? I'll talk about that in my next post.

More on Risk/Reward or Maybe Just Jumping

I got thinking that my post on Risk/Reward may have given you the impression that being an entrepreneur is about being reckless. Nothing could be further from the truth; an entrepreneur is anything but reckless. One more story and then I'll get off this topic.
The background in my blog header picture is Granite Falls just North of Priest Lake Idaho, one of my favorite places in the world. When I was in college my friends and I used to hike around Granite Falls from time to time. On one of our hikes we climbed up above the main falls and found a smaller water fall that emptied into a small pool about 25' in diameter. That pool spilled over into another pool of about the same size, which emptied into a large pond that fed the main falls. There was access to a cliff ledge about 50' above the upper pool. I had a strong urge to jump from the ledge into the pool, but before I did I had to do a little research. I climbed into the pool and dove down to check the depth and look for any rocks that could be a hazard after I entered the water from the cliff. The depth was fine and there were no hazards in the water. After completing my research I knew the only concerns would be to over jump and hit the rock wall on the far side of the pool, or to under jump and hit the rocks on the cliff I was jumping from. I figured I could do it, so I climbed up to the ledge and jumped. I hit the water pretty close to center pool never even touching bottom. As I came up the current washed me down into the smaller pool below. It was quite a rush. After that, every time we went to Granite Falls we had to go to the upper pool so I could demonstrate the jump to others. Strange thing is, even after my demonstration on how safe it was, I couldn't get anyone else to make the jump. To this day I don't know of anyone that's made that jump except for me, and I've done it dozens of times. Here's the thing. I did my research and accessed the risks before I jumped, just the same as I would with a business venture. In the end I jumped, my friends did not. Now, anyone with any kind of a head on their shoulders can access risks, it's usually the ability to jump that separates the entrepreneurs from the rest of the world.