Gourmet Magazine: Right Ingredients. Wrong Recipe.

The announcement today that Condé Nast has decided to shut down Gourmet Magazine after 68 years was a stark and startling reminder that even great brands go stale.

In the moment its demise was announced, Gourmet was revered by the professional and privately passionate alike. Jean-Georges Vongerichten, regarded as one of the most celebrated chefs on the planet is a fan. And a subscriber. As are 978,000 others. A number that has stayed relatively unchanged for a decade. Indeed, Jean-Georges attributes his success to Gourmet’s prestige. “It helped make me what I am today.”

How then does a 68 year old institution with the power to make or break the world’s greatest restauranteurs, become a memory?

There are two reasons. One we talk about a great deal. One we do not.

The first is that Gourmet failed to understand the essence of its value to consumers. Not as a magazine. But as an authenticator of taste. Sensory and subjective alike. Regardless of the medium. Or the calendar.

Absent that understanding, Gourmet did not bring us Yelp.  Foursquare. Or even an iPhone Gourmet app. They gave us information. Great information. But on their terms. Not ours. As Jean-Georges explained, “Even I look up information on restaurants on the Internet when I travel, to see what's good or bad."

The second, is that McKinsey, the consultants brought in to analyze the state of Conde Nast concluded that Gourmet was better dead than alive. A decision that suggests a failure to see the possibility of repurposing the value of a 68 year old iconic brand. Or an unwillingness to re-invest in it by its owner.

A waste. By consultant and corporation alike.

And unnecessary if you take time to understand why you’re really in business in the first place.
 

Money Can't Buy You Love

Chris and I were in Bloomingdale's in Manhattan last week. It was the first time either of us had stepped inside in two decades.

It's possible we'll go again. If we live to be 100.

Bloomingdale's used to be IT. When I last lived here in the early 80s it was a destination filled with atmosphere, attitide, aspiration and Big Brown Bags.

Today all that's left is the attitude.

Bloomingdale's owns Macy's. Who own Thanksgiving. And large parts of Christmas. Well, one street's worth.

Macy's is spending several millions of dollars refurbishing Bloomie's. Construction is everywhere. Which gives the impression for a few minutes that something is happening.

It is.

Money is being wasted. Display case fulls at a time. Because regardless of what they stock, Bloomingdale's staff is singularly uninterested in selling it.

In a twenty minute excursion we asked for help from five different people. To say we were an inconvenience would be to suggest that root canal during love making is a distraction. And the person who smiled at us most warmly? The man who held the door open as we left. As he pulled it closed we turned, half expecting to see the staff offer us a collective grimace before returning to the pursuits we had clearly interrupted.

Building a better business means making sure what and where you're selling comes after who you're selling to.

Because once they've walked out the door, all the fresh paint in the world won't bring them back.

Sshhh

I mentioned in a blog last week that we have hired a consultant.

His name is Alan Weiss. I call him the Consultant’s Consultant.

We met last Friday in New York. We talked for an hour.

But one thirty second exchange justified the entire expense. And it was entirely obvious.

When working with a customer, talk about their problems. Not your solutions. How else will you know if the former requires the latter.

Simple. Obvious. And guilty as charged.

Building a better business is based on knowing what you’re talking about.

And knowing enough not to talk about it until you’ve discovered if or how it’s relevant.

Enough said.

Self-Belief

One of the traits we talk about with every company we work with is the value of transparency. With your customers and your staff.

This is often greeted by resistance. Strong resistance. As though pulling back the curtain will reveal the Wizard of Oz.

A lack of self-belief that we work hard to correct.

A better business is not defined by what you do. But how you do it. And in a service business, value is a subjective equation whose point of differentiation is often the confidence with which the service is provided.

Telling you what I'm going to do and then doing it is confidence built on capability. The best kind of business model. And one that spreads reputations quickly.

I was going to describe this using a story that my friend Jerry Solomon told me the other day. He beat me to it this morning. Since it was his story I can't complain about that.

So instead, I'll save the time of writing it myself and suggest you go to his blog to read it.

Ah, delegation.

Thinking on The Run

The return of the NFL to a couch near you shines a spotlight on an attribute that separates great athletes from also rans.

Thinking clearly under pressure.

Building a better business asks the same of you. The ability to isolate the important from the irrelevant no matter how loudly the latter is yelling.

Doing so demands you get and keep perspective. Which requires answering two questions.

1. What does your business do that your customers can’t do without?

2. Will what I’m doing today help us do it better?

If you’re not certain you know the answer to 1, the answer to 2 is just a guess.

A strategy that will quickly make the answer to either question irrelevant.

Value. The End.

If being liked is important to you, don’t manage a business.

Management is part art. And part science. A complicated equation with subtle shifts and eddies.

In our early days at the Whitehouse we focused first on being liked. We’d never managed a staff of any size before and we worried in case we were doing it wrong.

So we tried to make sure our staff saw us as one of them. Then we tried to make sure clients saw us as their peers as well.

Doing it wrong squared.

Like follows trust and respect. In that order. The first test applied by staff and customers alike is do they trust you ‘get it’. ‘It’ comes in many forms, but your customers and staff are there for a reason. And they want to know if you’re there for the same one.

After nine years at Loch Lomond we knew why we were there. And when we arrived for our stay in the Fall of 2007, we wanted to know whether the new management team was there for the same reasons.

Eight days later we were pretty sure they weren’t.

The Club’s new President was a man called Niall Flanagan. We were fans of his predecessor, Keith Williams. And after nine years, we knew Keith had the same views of value as we did.

I don’t believe any one person is indispensable to a well designed organization. But after nine years, the transition from one management team to another needs to be sensitively and pro-actively handled.

This one was butchered.

The announcement of Keith’s departure was a two line by-line in the Club newsletter. Which set the phone and email lines buzzing. Human nature, I’m afraid. In the absence of your story, your staff and customers will come up with their own, fueled by any kernel of information. Needless to say, by the time we arrived the stories were rampant and our antenna were up. We were watching for changes. And we found them in abundance.

Most glaring to me was that in eight days, I met Niall once. Chris has never met him. I ran into him by accident in reception. He said hello. Referenced the fact that they had agreed to match a room rate I had requested. And hurried off. He was, I thought, uncomfortable. Or disinterested. Or irritated. Or all of the above.

I decided that he definitely wasn’t there for the same reasons I was.

Taking care of your customers is an art form. A year earlier I had asked whether, on our eight day trip in early October, the Club would honor their discounted October room rates for the first two nights that fell in September. It was confirmed within twenty minutes. This year the same request had also been honored. It had taken three days and several follow up inquiries on my part.

It’s hard to quantify frustration. But when your customers start trying to, you’re already losing.

The fact that Niall’s only point of personal connection with me was to mention what I saw as a begrudging concession earned neither my trust or my respect. When I saw him in the bar over the next few days, it was always sitting in the corner with a group of members, having a drink. We weren’t invited, introduced or acknowledged.

Perception is fact. And my perception had been framed to look for change. I had a bias. I had a narrative. And Niall gave me a lot of evidence to support it.

For twenty-one months I carried that bias with me. This was not my Loch Lomond. And Niall Flanagan was not my President.

The value of providing your customers with visceral as well as practical experiences is that they take visceral with them. And as summer draws to a close each year, my thoughts turn to Loch Lomond.

It’s been two years since we were last there but we continue to receive regular newsletters. Last month’s contained a Fall Package. A lesson in staying in contact with even disaffected customers. People and circumstances change.

Visceral met economic value met Tim’s 50th birthday and our 11th Anniversary.

Expecting nothing I contacted the Club to see whether rooms were available. They were. Only one problem. Our membership is ‘in suspension’. The result of our refusal to pay dues to a Club that had changed so dramatically on our last trip.

Perception is reality. And my perception about Loch Lomond is based on three pillars. None of the staff I know is there any more. The Club’s economic situation is massively uncertain. And Niall’s management philosophy does not deliver an experience I value for the cost of remaining a member.

The first perception is not, I discovered, entirely true. My reservation request was replied to by Alison Rodgers whom we have known since our second visit. And Willie still works in the Locker Room, and Bert is the new head golf pro. We have known all of them for a number of years.

The Club’s economic condition is unquestionably in transition. But it isn’t likely to improve unless the Members get behind it. A point Niall made to me in an exchange of emails last week.

That exchange started after Alison passed on my approach to the Club’s management. Based on my previous experience with Niall, I expected nothing.

When the contact I received came from the Club’s Finance Manager, I knew that in expecting nothing I had actually set the bar too high.

A Club offering an exclusive, service-oriented experience does not serve its strategy well by having its Finance Manager correspond with ten year members about their disaffection with the Club.

Acquiring new customers is essential to every business in the world. The cost of doing so is one of its most significant expenses. But when you’re losing ten year customers out the back door at the same time, you’re writing an equation that returns ‘False’ as its conclusion.

I explained our background. Our lousy experience in 2007. And our unwillingness to pay dues until we could experience Loch Lomond 2.0 for ourselves. I was immediately offered a concession in light of our history. We could pay our 2008 dues and they would confirm our October reservation. I declined.

In response, I was told this was as big a concession as could be made because this was what other members had been offered.

If you’re going to offer a customer a concession, do so. But don’t offer a policy dressed up as a concession. It just alienates your customers further.

I thanked him for his time, told him I thought there were some valuable lessons for my blog in all this. And moved on.

The next day I got an email from Niall. He restated his position, assured me that the Club was better than ever, and hoped I would reconsider.

I explained that my one stay under his management had been closer to a Marriott by the Loch experience, detailed my issues, and told him I’d raised his management approach with the Club’s owners in 2007. In my view, his determination to extract £3,500 in dues before allowing me to return to see the evidence for myself was short-sighted. But it was his policy and he was entitled to apply it as he wished.

He replied with a long and thoughtful email which included a letter from a member describing his visit to Loch Lomond this summer. It was filled with specific examples of very high levels of service and fulsome praise for individual members of staff. It also included a series of quotes from some of the world’s leading golfers about the state of the course.

I told him I could have written both the letter and the golf course endorsement myself until 2007. But that based on what he’d provided us last time, I wasn’t taking the bet again. Fool me once....

If he was so confident in the experience we would now have, why, I suggested, didn’t he pay our 2008 dues himself. If our stay was as advertised, I would reimburse him and pay the 2009 dues as well. If not, he’d have made his own investment in Loch Lomond.

‘It can’t be more important to me than it is to you,’ is a favorite reference point of mine. And paying a business for the opportunity to give them a second chance falls firmly into that camp.

I hit send. And waited.

Speed of response has value. Sometimes as much as the response. Niall’s took 12 minutes.

He accepted. And raised me by offering to also reimburse us for any specific service we were dissatisfied with during our stay.

I would have bet the £3,500 dues he would have declined.

A lesson that there is no such thing as a sure thing. And that most of the time, articulating a win-win scenario is the first step to creating one.

We shall see if that’s the case here. We confirmed our reservations for October yesterday. And I’m looking forward to going back to Loch Lomond more than I can say.

I’m also looking forward to giving Niall a second chance. With an open mind.

A win win. Who would have thought it possible?

Talk about value.

Value. Part 4

Love has value.

Young. Romantic. Self. Unrequited. True. Exaggerated. Passing.

In all its forms, love wakes us in the morning and sends us to bed at night. And in between we spend our time trying to find more of it. In the work we do. The places we go. The people we seek approval from. Even when they are ourselves.

Like everything else, love’s value changes based on circumstances.

When things are going well, we become confident and need it less. Confidence means we see ourselves differently. The first step to being seen differently.

Troubled times increase our demand for love. The result is a palpable shift from I love this to I love you. In this economy, interpersonal beats inanimate.

Which matters a lot when you run a business.

A couple of weeks ago I was struck by a Facebook status update on my wall. As the person left for vacation, the update read, ‘Free at last. Free at last.’

What struck me most about this visceral post was that the person owns their own business. Has built it over a number of years into a significant enterprise. Has a lot of people working for them. And wanted desperately to escape for a while. Desperately.

Understandable. This year above all others.

But if this person had asked, I might have suggested that expressing their relief at being set free from their own company in such impassioned terms would probably cause every one of their employees to re-evaluate their own feelings about coming to work.

We determine value in part based on the value systems of others. And if the person who owns the company can’t wait to get out the door, the rest of us will stop and wonder for a moment if maybe they know something we don’t.

As a leader, I can’t define your values. I can only shape the presentation of what is important to me and hope you adopt them yourself. Once I’ve described separation from the company as freedom, it’s hard to reframe long days and short nights as anything other than imprisonment.

It’s a long way from there to loving where you work.

There was a lot about owning and running my own business that I loved, even if the traits that I found lovable ebbed and flowed with the company’s evolution.

Loch Lomond, however, was utterly consistent in the feelings it invoked in me every time we returned. And if you can have an affair with a place, I was openly and willingly unfaithful with that corner of Scotland.

Like all great affairs, it couldn’t last.

In the spring of 2007 we got word that the Club’s owners had changed management. There was no official announcement. Just the rumor mill.

Organizations of all sizes are staggeringly inept at managing announcements of change they think will be unpopular. There is extraordinary value in getting ahead of a story openly and transparently. Your customers and staff are smart people. If you don’t tell them the truth, they’ll get it from somewhere. And if they don’t, they don’t care very much about your organizations. Both are bad scenarios.

We arrived at Loch Lomond in the Fall of 2007 for our twentieth visit, hoping for the best but expecting less. In fact we got substantially worse than that.

The Club had been established on the premise that an international membership would be allowed to stay a limited number of days each year. As the economics of the Club had become more difficult, those restrictions were released and the rapidly expanding group of local members were now treating the place as their local club. The place was jammed, and facilities designed for a limited number of people in an intimate setting were overrun.

The staff tried to keep up, and were embarrassed that they could not. Availability issues meant we had to change rooms four times in five nights. Our guests three. On two evenings we couldn’t get a table for dinner until ten pm. On two others we were chased out by the noise and the crowd at the bar. And as a final straw, Chris’s mother was pushed aside as she tried to walk into the ladies room by a very drunk Scandinavian man wearing a kilt. His justification that he was, “wearing a skirt,” did not help. Nor did the staff's explanation that there was a big wedding upstairs. We were awake til past 2am with the sounds of the celebrations. It seemed a long way from the 15 people that has attended ours.

When we got the flyer under the door about the end of season sale in the Pro Shop, it was clear that the new driving value at Loch Lomond was cash.

In four short days, a nine year long affair had turned into a tawdry fling with a floozy who wanted the money left on the dresser. We fell out of love. And left.

I wrote to the owners. They responded. And we had a series of conversations in which they said the changes were a work in progress. They would report back.

Six months of silence ensued followed by the announcement that the bank had stepped in and taken over the club’s finances. All those years of wondering how the club could make the numbers work had met the credit crunch. A significant operating loss and a debt-ridden balance sheet, meant things would have to change.

We looked at the money we had invested. Looked at our history at the Club. And looked at our most recent experience. Suddenly the picture looked entirely different. And spending more money on annual dues seemed folly.

Regardless of what happened at the Club, we made a decision. We wouldn’t put more money into Loch Lomond under this management team or the bank’s financial stewardship,

It just wasn’t worth it.

We spent eighteen months sitting on the sidelines as the lines were politely but firmly drawn. Member’s Association versus the Bank. We sat on the sidelines, resigned to the fact that our money was lost, our Club was gone, and we would never go back to the bonnie banks of Loch Lomond.

Until a month ago.

Value - Part 3

Cost and value are tricky things because they won’t stand still.

Last year, when all of America was complaining about the price of a gallon of gas there were at least two groups who weren't.

Those who read that, adjusted for inflation, a $4.00 gallon costs less in real terms than the 28 cents charged in 1958.

And those who spend enough time in the United Kingdom buying petrol at $10.00 a gallon to think that $4.00 is a pretty good deal.

For most of us, doubling the price of gas had little impact on our habit of driving everywhere. That was because the convenience of driving was more valuable than the extra expense. But it was also because habits have value too. One of which is not having to think about them. A potential change first has to cross the threshold of being worthy of thought. A value system in and of itself.

We had stopped thinking about what it cost to belong to Loch Lomond about a second after the gatekeeper greeted us that first day. And by the time we returned for our third visit, Loch Lomond had become a habit. For the next five years, we showed up Spring and Fall. And in between thought only of the next time.

We met Loch Lomond’s owner, Lyle Anderson, briefly in our second year. Doing so confirmed that the vision articulated in the Club’s written correspondence was reflective of Lyle’s personal love of the place. Limited and sensitive development that would create long term economic viability, while maintaining the intimate atmosphere we valued so much.

Lyle owned a number of big U.S. golf resorts. Truthfully, the kinds of places that have never appealed to us except occasionally as someone else’s guests. But their success
reassured us whenever we started to wonder how Loch Lomond’s economics could possibly work.

The Club sits on 1000 acres on a 999 year lease from the Clan Colquhoun. The definition of a long term strategy. The course had been built before Lyle bought the place from the bank of Scotland, its previous developer having gone bust.

Lyle saw value in the ground that had been laid, figured out what it would take to restore Rossdhu House, the Carriage House and the Garden Cottages, added antique furniture, luxurious fabrics, a high powered management team, first-class marketing and administrative support and must have come up with a huge red number. Huge. And very red.

For the first six years of our $5,000 membership, the annual dues were $1,800 and the 23 rooms cost between £250 and £400 a night. We were conscious of all this because the Club was clearly costing a lot more to run than the revenue that equation could generate. ‘It’s a loss leader for Lyle.” “It’s where he wants to retire.” “He just loves the place. Money’s not important to him.” Rumors abounded among members and staff alike. In every case we all wanted reassurance that this magical place could go on just as it was.

The truth, of course, was it couldn’t. And in early 2004 it was announced that a membership Conversion Plan was underway.

It came in the form of the single most beautiful sales piece I have ever seen. A cloth bound, membership book in its own presentation box containing some of the most stunning photographs of Loch Lomond. Interspersed among the pages were details of the new membership structure.

The Club offered two choices. Pay $75,000 and convert into a full equity membership that in theory would provide a return on your investment in five years.

Or enjoy one final year at the Club and leave.

I know we talked about it. But not for very long. We couldn’t imagine life without Loch Lomond. Our business was doing well. The Club would finance the payment. We’d get a return on our investment. And there’d be half as many members. It would be better than ever.

In six years, an angst ridden $5,000 decision had become a no-brainer at 80 grand.

Inflation and relative economic circumstances play a big part in determining value. But as you get older, how and where you spend your time has a bigger role to play. As does with whom. And in today’s world, privacy comes with a price. I value privacy more than exclusivity. It’s an important distinction in building a business. Particularly one selling a service.

Emotional forces are powerful drivers of value as well. And giving something up requires humility as well as discipline. But in a competitive world, humility is a scarce resource.

To be successful requires a healthy amount of self confidence. Without humility that can turns into short-sightedness. And sometimes arrogance. Bad traits in business and life.

If you bring humility to work with you every day, taking its restraining forces with you on vacation can be hard to do. And perhaps unhealthy. ‘I deserve this,’ is powerful fuel for the entrepreneur from time to time. Payment for some of the challenges faced and overcome.

Leaving Loch Lomond would on some level have been a statement of failure. That we couldn’t afford it. Or didn’t deserve it. Whatever the matrix of value we used to decide to convert, the ticker tape output said “do it.”

So we did. And the results were spectacular.

Over the next three years the Club opened beautiful new rooms in hidden parts of the grounds. A world class spa was built in the Walled Garden. An amazing, sanctuary of a place with a water treatment pool that I quickly dubbed ‘the womb’ for the security and tranquility it provided. The service got even more personal, the result of a bond formed with some of the people who helped us through 9/11 which we watched live on CNN from our room in Rossdhu.

Connections like that are hard to quantify. So we didn’t. We just acknowledged their value and were grateful to be able to come back.

Funny how things change.

Value - Part 2

I don’t remember when I first asked Chris to marry me. But it was some considerable time before she said yes. Considerable as in years. Two at least.

When she finally did so it was in a middle seat in coach on a late afternoon flight from LAX to Chicago. As settings go it was less than romantic. A shortcoming that our wedding more than made up for.

Four months after we first walked up the stairs of Rossdhu House, we made the journey again.

This time as bride and groom.

Accompanied by falling rose petals and the sound of bagpipes.

Both were a surprise.

In a day of blurred memories, this moment stands out. In part because it was the culmination of so much and I've never felt more present. In part because the thoughtfulness of the Club's management to provide two touches we had not asked for, framed the moment and made it a memory.

A lesson that big value can be built on small things.

Rossdhu is the ancestral home of the Clan Colquhoun. Built in the 16th Century, it is regarded locally as the ‘new’ house, and sits proudly and gracefully in the most prominent position within 1000 acres.

The ruins of the stark, defensively positioned castle it replaced still exist behind what is now the 18th green. Dramatic contrast of the values of the times in which each was built.

The transformation of the Colquhoun estate from fortress to playground happened as a tango. Periods of peace and calm interspersed by betrayal, black magic, murder and tragedy. Mary Queen of Scots visited twice, Queen Victoria once. As did Bill Clinton.

When the former President came to stay, he was given lodging at the Bed and Breakfast down the road in Luss, the rooms at Loch Lomond all being occupied by members, and the Club’s management being unwilling to dislocate any of us for a non-member.

Value is the foundation of any business that succeeds over the long term. People spend money based on a complex series of personal equations that we use to determine what something is worth.

Those equations are fluid, and some are more elastic than others. Aspiration, scarcity, social esteem, personal esteem, and need all play a role. As you move up the value chain (or perhaps down - a debate in and of itself), exclusivity quickly becomes an essential component of a pricing philosophy. And a Club that values my residence over that of a former President of the United States is winning the exclusivity equation.

Our wedding reception was held in the Green and White Dining room. It is one of my favorite rooms in the world, in both design and personal context, and we had thought carefully about how to set it up for the evening’s festivities. On the morning of our wedding three hours of intensive work by several members of staff ensured the room was prepared exactly as we had asked.

They spent three more hours that afternoon entirely re-doing it at the suggestion of the Club’s management, who came to us with what they thought was a better plan.

To care as much as your customers about the quality of their experience is the goal of every service business. To deliver that requires a set of values and a view of the big picture that are very rare.

The Club did what we asked. They did it perfectly. And then they wanted to do it better. There are books and theses on building customer loyalty. None taught me as much as that afternoon.

For the next six years we came back to Loch Lomond every Spring and every Fall. There are one hundred year old rhododendron bushes throughout the grounds. Many as tall as trees. I would live in Scotland for a lot of reasons. The people and the scenery being the first two. In that order. Fish and chips would come a close third. But a rhododendron the size of a small house in late May takes some beating.

At first we came alone, as though inviting the outside world would somehow burst the magical bubble that surrounded every visit. But over time we started to bring guests. Sitting over dinner in Chicago as we extended the invitation, we would wax lyrical about the Club. In every case, we were told later, our friends were certain there was no possibility that our description could be matched by the reality. In every case, within a day or arrival, we were told we had failed to do it justice.

Describing physical beauty or capability is much easier than describing experience. And experience, the application of beauty or benefit, is what determines value.

In the case of Loch Lomond, what defined the experience was the people. People who genuinely cared as much about your experience as you did. Mark, Ian, Keith, Trish, Donald, Colin, Jamie, Scott, Pat, Jim, Jim, Jane, Gemma, Damian, Willie, Willie, Alison and Billy. Billy was the head chef who made it a point to make me an apple pie whenever he heard I was coming, and whose staff was so well trained that at my first breakfast after arrival, and every meal thereafter, soy butter replaced the dairy butter to which I am allergic. No request. No reminder. Every time. Which was sometimes seven months since the last time.

There is a rattan carpet on the back stairs at Rossdhu that took us from our room, past reception and down into the locker room and Spike’s Bar. I can feel the carpet under my golf shoes as I write, on my way down to breakfast before teeing off. Bacon, sausage, grilled tomatoes and black tea. And the Times.

It was like coming home. Better than home. We were made to feel like Lords of the Estate of Luss. And we tried to honor that by being benevolent ones. Grateful ones. And we counted the days between visits.

At some point during each stay, conversation between us and our guests turned to wondering about the business practicalities of all this. The rooms were expensive, and I had to keep reminding Chris that the five full bottles of Moulton Brown products that we were encouraged to take on our departure, and the complimentary bottle of Port that met us on our arrival were not ‘free.’ Quickly, however, they became part of the value expectation of each stay and a point of reference of the Club’s commitment to quality.

But the $5,000 initiation fee had begun to worry us in a different way. And as we came to experience the Club’s commitment to quality throughout the facilities and the world class golf course that had first attracted us, we began to speculate how the Club's owners could pay for all this.

It turns out, we weren’t the only ones doing those calculations.

Value - Part 1

In the spring of 1998, Chris and I joined a golf club in Scotland sight unseen. That is, I had seen it on television and read about it in a book. It looked and sounded extraordinary.

The initiation fee was $5,000, plus two letters of recommendation. I worried about both. Marriage was finally in the air and this was an expense and a distraction. Would it be worth it?

As humans, everything we do is based on a value matrix. Time and money are the most common. But we apply value to every moment of our existence. Is it better to be asleep or awake. To listen to music or news. Classic or rock. To eat now or later. Well or carelessly. To listen or ignore.

Each demands a judgement. And as a species, and as individuals, we have developed a sophisticated matrix that allows us to make decisions and move forward, or not, thousands of times a day. It happens at light speed and you’re using it at this moment, and this moment, and this one.

Thank you.

For deciding it's worth coming a little further with me.

At the core of this matrix are definitions of value. Sometimes sophisticated. Sometimes simplistic. Some are static. Some are fluid. Some are provided. Like the law. Some are personal. The trick is knowing when to re-assess them. A value equation in itself.

In early 1998, we plugged $5,000 and two letters of recommendation into our value matrix, added a magazine article we had just found about the Club to the soup and stirred.

Three months later we drove up to the guard gates for the first time as members and, without introduction, were greeted by eleven words. Eleven words which set a standard that, for the next nine years, never wavered.

“Ah, Mr Day. Welcome to Loch Lomond. We’ve been expecting you.”

First impressions are powerful. And set a tone. They define value instantly and reinforce it over time. As a business owner, your first impression is one of your most valuable assets. Making it powerful is under-valued by most entrepreneurs.

This, however, was a first impression of magical proportions. Our first visit. A rented car. No photograph. And four months before Google existed. As owners of a service business we were mesmerized by this small but powerful feat of customer connection.

Loch Lomond, we were soon to discover, was a place where magic happened on a regular basis. A breathtaking, romantic, timeless place where dreams came true. A real life Brigadoon. With the added benefit of five star facilities and six star service.

Driving into the stunning grounds on that first afternoon, past two of the most beautiful golf holes I had ever seen - the hills as backdrop to one and the Loch as backdrop to the other - I started to worry there had been a mistake. Could we really be members of this?

Aspiration is a delicate attribute for a business to instill and maintain. Too much and you seem aloof and disinterested. Too little and it becomes cheap glitz. Affected and inauthentic. Creating an aspirational brand requires taste. Maintaining one requires sensitivity and judgment.

As we parked the car, desperately trying to hide the accumulated sweet wrappers and empty Coke bottles of a three hour cross-country drive, we sat for a second and looked at each other. ‘Can you believe this?’ Chris asked, straight faced. I shook my head. ‘Let’s leave the stuff in the car for now until they actually let us check in,” she suggested.

When the pair of matching Range Rovers suddenly screeched to a halt on either side of our car - one for us and one for the luggage - the choice was taken out of our hands. Nonchalantly, we tried to act as though this was how we arrived everywhere we went.

Moments later we were deposited gently at a set of stone steps that led up to the most magnificent Georgian mansion I have still ever seen.

One man stepped forward from the phalanx of uniformed staff. “Mr and Mrs Day. My name’s Robert. Welcome to Rossdhu.”

He turned and led the way up. And after a moment’s hesitation, we followed. As we reached the imposing front doors, I stopped to survey the sweeping views of the Loch. ‘It’s quite something, isn’t it,” said Robert proudly.

I nodded and glanced at Chris. She smiled.

“Robert,” I said, summoning up my most casual voice. “Do you do weddings?”

In Their Own Words

Having a guiding philosophy by which to run your business every day is a powerful homing device in a forest full of distractions.

For Chris and I, it has long been the Terence Conran quote, "Stay Humble and Nervous."

In the choking economic climate we are living in today, an excess of either can be disastrous.

Humility is a valuable attribute in times of excess. But when the world is inwardly focused, it takes much more effort to attract someone's attention.

And at a time when everyone is hesitant, waiting for something to happen will ensure that at best you're part of the crowd.

Neither is a platform for creating the future you want.

In our case, we have long since accepted that we are skilled in what we do. But inept in communicating that fact. We would much rather talk about someone else's potential.

We have also come to realize that until we face the problem, we are the biggest obstacle we face.

Cometh the need, cometh the Mother of Invention.

In this case, Justin Spooner and Simon Hopkins of Double Shot Consulting. (Even doctors need doctors.) As I've mentioned before, no one understands the possibilities of digital strategies like they do.

In this case, they turned the problem simply and elegantly on its head. If you don't talk effectively about your work, they said. Ask the people that do. Your clients.

So we did. And they have. The first pieces are on our website. Or on Youtube. In the process we put ourselves on camera and found a part of ourselves we didn't know existed.

As a lesson in looking at a problem from a different perspective it's powerful.

As a reminder that we're fortunate to work with amazing clients, it's unbeatable.

Change. Part 2.

Chicago is an incredible city. Calm and stunningly beautiful. A rare combination.

In summer, Lake Michigan stretches as far as the eye can see, a cooling influence on hot, hazy days. In winter, I have seen steam rise from its frozen surface, the ice warmer than the ambient air that surrounds it. A reminder of the power of context.

I’ve lived here for more than half my life. I love London. It’s where I grew up. But Chicago defined me in a different way. I was once described as a Midwestern boy with an English accent. There’s some truth to that.

When, in the summer of 2007 we decided to take our house off the market and stay in Chicago, we did so because the present was much clearer to us than the future.

When it came time to make that decision, leaving looked like loss. Of the known, the comfortable, the easy. Without an anchor against which to pull yourself forward, it’s easy to hold the future at arm’s length. Some people add a long pole to that equation, pushing hard against the unknown.

The truth, of course, is that the future is coming regardless. And the decisions we make today for ease and lowered stress charge high interest rates. There’s no thirty year fixed option on the price of reality. It’s a balloon note which always come due when you’re least able to pay.

We passed a long, lazy summer, relieved that we could stop worrying about what came next. Faced with a difficult decision, I have come to realize this is how many people operate. The pot gets stirred, the debate engaged, the alternatives analyzed and then, with careful justification, the status quo maintained.

If it walks like a decision and talks like a decision, it must be a decision. Except of course, it isn’t. It’s rationalized fear and the support of inertia. And neither business nor life are well served by their influence.

Seven months later, we realized our original instinct to shake things up had been right, and in January of 2008 we re-listed the house. I started to commute to Manhattan each week, a practice that got old by the second trip.

We were thrilled and fully engaged in self congratulation when we received an offer on the house in late March. For more than we had turned down a year earlier.

The buyer by all accounts had money, taste and style. He shared values that are important to us. He owned a dog, was a supporter of PAWS Chicago and, importantly, was in love with our house.

We did the deal quickly. There was only one issue. He wanted to close sooner than we had a place to move to. And though he had a condo to sell, we were told by everyone involved he could do so at any time. His building was prestigious. His apartment stunning. His views of Lake Michigan mesmerizing. It was our need to delay the closing by sixty days that was the problem.

As good negotiators, we found a compromise, the contract was signed, and we went about preparing for our move.

The trick to a negotiation is keeping your eye on all the possibilities. Not just the outcomes you want.

Sometimes, as we were to soon to be reminded, the best lessons are the most expensive.

Bullys Beware

Self interest is everywhere.

Actually, it always has been. But in recent weeks it’s become markedly more obvious. And more destructive.

Which is what happens when bullys have control.

Power is a transient, temporary phenomenon. What you do with it while you have it has a disproportionately large effect on two things: your future and your legacy.

So, nothing big.

In the last twelve months two things have happened to massively shift balances of power. The global economy collapsed. And social networking exploded. Those who had money now have much less. And those who were silent, now have a voice.

The first has been manifested in the advertising industry where agencies, thrashing blindly in the death throes of an archaic business model, try to suck the life out of everyone beneath them in the food chain.

Not satisfied with ‘Sequential Liability’, some agency holding companies are now trying to impose contracts that give them the right to decide not to pay their suppliers. At any point in the production process. For any reason.

Talk about faith based relationships.

Since most agencies rarely make the first contractually obligated payment before the vendor is expected to start working, the billion dollar agency now has the vendor funding virtually every project. With no guarantee of payment. Ever.

In Vegas it’s called gambling. But at least there the house posts the odds. And the rules.

In other places it’s called abuse. But as long as the victim keeps coming back for more, nothing much changes.

What’s happening in Iran makes for an interesting contrast.

There, a thirty year-long, one-sided relationship is shifting as we watch, thanks to the power of social networking. Suddenly, those who suffer have a means to give voice and encouragement to like-minded others. And the didactic instructions of a ‘supreme ruler’ are no longer so menacing. Nor so supreme.

Fiction is littered with bullies who were toppled by the apparently inferior oppressed. David and Goliath. Jack and the Beanstalk. The War of the Worlds. The outcome of each a reflection of the underlying sense of balance on which the world operates. And those who smirk at the lessons of fiction ignore the reality on which they are based.

History is being written as we speak. On a global stage in Iran. And in the small, and self-important world of advertising.

But in each case the outcome will ultimately be the same.

And it will not be the bully who wins.

Value 1 Recession 0

A quick thought. I'm struck tonight by dramatic evidence of the value of innovation.

At the conclusion of the worst six month economy any of us are likely to live through, Apple just announced the launch of their new iPhone. It contains 100 new features.

They also launched a new series of laptops with a seven hour battery that will retain its recharging capacity for five years.

We've come to expect these kinds of innovations, wrapped in simple, elegant design. And we find such value in their products that we continue to buy them, even when money is tight.

The result is that Apple just concluded the best non-Holiday sales quarter in their history. $8.2 billion. Their share price which stood at $85.33 in December has gained 85% to $144.67.

Oh, and they did all this while their founder and CEO was on medical leave.

Proof positive that even in economic catastrophe, people will pay for that in which they find value.

How much have your sales increased in the last six months?

Jump In

Breaking news this morning that the unemployment rate is beginning to turn around.

Running a better business means combining empirical information and instinct.

Based on that, I think this is as deep as the talent pool gets. In every industry, incredible people are looking for new opportunities.

If you think there is even a one in one hundred chance you might need to add someone this year, now is the time to go looking.

In our lifetimes, there will never be a better moment.

Four Changes A Business Shouldn’t Make

There are many things you should be doing as a business owner at the moment.

Here are four you should not.

1. Charging Less For The Same Service.

This is a one-way ticket. Once you give more for less you establish a new normal. There is no way back from that.

Instead, look at your business from your customer’s eyes. What’s valuable to them? Charge for that. And replace the things that aren’t valuable to them with things that are.

2. Trying To Be Something You’re Not

Understand what you do. Which is not always obvious when you're involved in the day to day.

The best way to make sure you really know is to ask your customers why they use you. If you refuse to accept platitudes and the easy answers, you'll gain incredible insight.

Once you really know what makes you great in the eyes of your customers, look for other ways to use that expertise.

This will do two things.

Grow your business against your fundamental strengths - always the strongest platform. 

And prevent you from getting involved in trendy areas that seem like a good idea, but which are almost always expensive distractions.

3. Cutting By Cost or By Experience or By Position.

Every company has its own view about how to cut overhead. In my experience, they almost always use the wrong one. Assuming you've reached the point where salary cuts just aren't enough then there's one simple method you should apply.

Cut by value. What someone costs is not the criteria. What each employee is worth, is. We've developed a Value Matrix™ to help our clients do this. You should have something similar.

 
4. Jumping Into Social Media Without A Strategy.

It’s time consuming to do it well. And not everyone should be doing it.

If you’re going to get into the white-water rapids of social media, you need to understand how you're going to benefit by doing so.

Then if you decide it's worth it to you, get in. With purpose.