An Asymmetric Conflict

Our state, our nation, and our larger world are under attack by the Covid-19 virus. Many have likened it to a war, and there are certainly similarities. I know a thing or two about warfare and strategy. While the analogy only goes so far, there are some lessons here.

The virus could be seen as "asymmetric warfare", which essentially is an attack by an enemy who uses far different tactics than you are prepared for, causing enormous initial damage. The German use of long range rockets against the British during WWII illustrates how devastating this type of warfare can be. It also gives us clues as to how to win.

Asymmetric warfare has devastating psychological and 2nd order effects, and that is exactly what is happening to us right now.
The economic toll is staggering, and desperation is creeping in. Our lives have become a battlefield, and our people are being hurt in more ways than just the main attack of the sickness. We must incorporate this fact as we develop our strategy for victory.

It's possible to believe the Covid-19 virus is deadly, and still believe that we need a plan for bringing segments of our economy online.

A plan means documented benchmarks for exactly how we will get back to business based on the actual conditions.
A plan includes specific segments of the economy, specific regions of the state, and specific actions that will be taken based on measurements.
A plan includes contingencies for rolling back quickly in the event of unforeseen negative events, as well as acceleration in the event things turn out better than expected.

The data clearly shows that certain segments of the population are most at risk. Let's protect them with vigilance. We have indications that the virus is more pervasive than originally thought, let's examine what this means in terms of the death rate and incorporate into our calculations. Data shows that social distancing is working, let's maintain safety precautions as we start to resume some limited activities. Our hospitals have capacity, our testing and PPE supplies are getting better every day. Let's bring our data, our experience, our knowledge to bear on the enemy. Let's remember our brothers and sisters who are being devastated economically by being completely shut down as well as those who are sick.

The challenge is more complex than arguments over completely opening up, or staying shut down until the virus is completely gone. In short, we need a strategy to fight an enemy leveraging asymmetric warfare. What is needed is far beyond a simple "frontal attack", or a "retreat and hide" tactic. We know how to fight kinetic wars against innovative enemies. Let's use our skill, wisdom, and experience in that terrible realm to bring victory in this conflict. This is our time, our opportunity to rise to the occasion as previous generations have done with courage, innovation, and firm resolve.

A Business Leader's Guide to Planning in a Crisis Environment

If you're a business owner or leader right now, this is probably one of the most difficult times of your life.  Your family, your employees, clients, suppliers, and an entire eco-system of partners and related businesses all look to you for leadership. The weight of responsibility can be crushing, and it's something many people can't understand unless they've been there.

As a business owner and CEO for many years, I understand because I've felt the crush. The economic aspect of this crisis is bad, probably worse than anything we've seen in our lifetime. The good news is that we will get to the other side of it. Even though it may feel like the end of the world, I can guarantee you that it is not. At some point, we will return to normal operations. Whether it's 2 months or 2 years, every tough situation has a beginning and an end, including this crisis.

So, what kind of actions would I suggest for leaders who are bringing their organizations through this crisis?

Obviously, there are many different potential courses of action and strategies available. What works for one business might not be appropriate for another. Over the years, I've found that a defined planning process to help bring structure to what could be chaos is helpful, and I've outlined once such process below. Hopefully in these recommendations you can find something to help you to craft your own strategy to guide your firm through these turbulent times. As always, as you are working through a crisis, it's important to take care of your physical, mental, and spiritual fitness daily - exercise, read, and pray/meditate. Even though those things are critical, I won't dwell on them. Instead, let's jump right into to the planning process.

1. Evaluate your position. Take stock of the situation, with as little emotion as possible. In order to come through this successfully, you need to have a realistic assessment of exactly where you are. You most likely won't have all the information you need, but use what you have, and make your best educated guess as to the rest. There are seven key areas I'd recommend for evaluation:

• Cash - What does your cash position look like? Work on your cash flow projections. How much reserves do you have? How much inventory? How strong are your lines of credit? Will you need your investors to pitch in with a capital call? How are your personal lines of credit? Home Equity? 401K withdrawal? Credit cards? What government assistance programs might be helpful?
• Clients - How are they being impacted? What do their prospects look like? Any chance of them leaving you with bad debt? Now is the time to communicate very clearly with them and set expectations. Will they be able to pay you?
• Vendors and suppliers - How are they communicating with you? Are they still living up to their agreements? Will they be able to provide the flexibility you need?
• Expenses - Which expenses are variable (changing based on volume), and which are fixed? (like a set lease agreement) Which can be cut? Review your entire Profit/Loss statement and examine each expense carefully.
• Team members - How has staffing been impacted? How is their morale? Examine metrics for each department and employee to see if the changing business climate has impacted their utilization and function. Are there areas where their freed up time can be put to use for other functions?
• Operations - What are the core functions of your business? What operations are critical to those core functions? How has the new reality of working during the virus outbreak changed your operation? Can your team members work from home? Is remote work as productive?
• Market - How has your market changed, and what will it look like over the next 12 months? How is demand for your products and services changing? How are client expectations changing? How are your competitors adapting?

Once you have a realistic picture of your current situation, we need to project what the economic environment is going to look like for the coming year for your specific business. Use the results of your situational evaluation, together with your appraisal of the current and possible future threat environment to build 3 scenarios for what the next year looks like.

• Best case
• Worse Case
• Most likely case

2. Consider all of your potential courses of action. Brainstorm every action you can think of, even the ones that may seem ridiculous. Sit down with your leadership team and list out all of the possible actions you could take at this time. For each course of action, detail out the potential benefits and risks of each one in each of the three scenarios you developed.

A few questions to get your creativity flowing:

• Are there functions that can be put "on hold" until they can be restarted?
• How can cash be preserved?
• Are there areas you can find deals, such as real estate or equipment?
• Can you negotiate discounts with suppliers?
• Would clients be open to discount offers if they guarantee purchase volume?
• How can staffing cuts be avoided or delayed?
• Are there new lines of business that could be profitable in the new environment?
• Are there existing lines of business that will be a drag on operations and cash?
• If you need to cut expenses, where can you do it without hurting your core business value proposition?
• How can you build alliances with other business owner? Are there ways to cooperate, share resources and information?

3. Compare all of your courses of action, discuss the relative merits of each, and rank them in order of preference. Use this ranking to decide on your preferred plan. The plan won't be perfect, and there will be risks and tradeoffs, but by comparing all possible courses of action, you will be selecting the  plan that has the best chance of being successful.

4. Document your plan. Hopefully, you have a written business plan for the year. If so, use the information and projections you made in the first step to update it. If a written plan wasn't something you ever completed, now is the time to do it. Even a simple plan is better than nothing at all. It is critical to write it down. Your plan should contain the important relevant modifications and be simple to understand so that every employee down to the most junior team member can explain it.

5. Communicate your plan to your team. Explain in detail how you'll execute on it as a team. Be honest about the risks as well as the potential benefits. Take time to make sure the plan is thoroughly understood. Have your team explain the plan back to you to make sure it is understood. Spend plenty of time answering questions and going through the "what if" scenarios.

6. Communicate essential elements of your plan to those outside of your organization that need to know. At this time, it's critical to keep up good communications so everyone is informed and in the loop on what to expect. Create a communications cadence matrix that includes clients, vendors, and employees. Each of these groups should know what to expect from you and your firm during this crisis. Try and keep up a regular cadence of communication, even if you don't have anything new to report. This will generate confidence that someone is firmly in charge and "on watch" as the situation evolves.

7. Execute the plan. Now is the time to get moving. Have your leaders put the plan into action, and check in with them as often as appropriate to see how they are doing. Meet weekly at a minimum to evaluate results and discuss any new information that should be incorporated into future operations.

I wish you all the best as you work through this. Our economy depends on leaders like you having the courage to face this situation and make the best of it. As a leader on the front lines of the economic aspect of this battle, your actions will have a lasting impact on the lives of many. I am grateful for you and those like you across our nation who will ultimately guide us out of this economic meltdown into a new period of growth and prosperity.

Economic Impact of the Corona Virus

The economic impact of this Corona virus is going to put our economy into a deep ditch, but it will pass. A quick recovery could be helped along by a special tax relief package targeted at the middle class and small business owners. This would provide the stimulus needed to generate confidence, security, and operating cash for both consumers and businesses.

Justification?  Operating capital is the lifeblood of any company. A mature, profitable, well run business will build up substantial cash reserves and credit lines over years of operations to get through a downturn. I always liked to have the ability to make 3 months' worth of payroll even in a worst case scenario. The danger comes in with an economic slowdown like I lived through in 2008-2009. We had been in an expansion phase and had started up a new line of business that had great promise, but wasn't yet profitable. We were plowing operating cash into it, creating jobs and revenue, but it took time to build credibility in the new market and land the substantial projects that we knew we could win. We were leaning forward very hard into growth because we believed in the people and the market. It was a good business, and we were a profitable company, but the investment in growth strained our cash flow. 

Of course, there are always options for financing growth, but organic financing through profit was our first choice. Then the slowdown hit. Some large clients slow payed bills, some went out of business, and a few cancelled contracts. It happened so quickly there was little time to adjust. Credit became incredibly tight, and financing was nowhere to be found. So, what to do? We were only a few weeks from running out of cash to meet payroll and tax requirements. We could have cut 20 jobs and contracted to a safe size, which would have been the textbook solution. That would have put 20 people on unemployment payments and possibly other government assistance. Luckily, I had some home equity I was able to tap and give us the capital needed to get by. In my instance we were very fortunate, and my thrift in early years paid off. However, if I hadn't already had that equity line in place, I wouldn't have been able to get it. We would have either gone out of business, or had massive layoffs. Both of those options would have had a cascade of bad impacts downstream for both our employees, clients, and vendors. It would have also been costly to tax dollars in the form of government assistance. At that point, I had been in business for 12 years. Many business haven't been around that long, and it makes it even tougher for them. 

Now, if the government had come in with an offer of tax relief  through a one-time reduction on personal income tax rate, it would have immediately helped the situation and taken off pressure. It would have been much less expensive to everyone concerned. I say personal income because most profits in SMBs flow through to the owners because of the structure most often used by small businesses. So, it wouldn't have helped the large corporations with deep pockets and the resources to weather the storm. Rather, it would have freed up money for those business owners who were risking everything to keep jobs in place and keep the economy moving. It would also have resulted in tax refunds for more middle class people, who would spend the refunds, injecting much needed cash into the economy. I'd be the first to say you don't want government picking winners and losers in the economy, but it seems like a little stimulus could prevent a lot of suffering. An across the board personal tax rate reduction seems a fair way to do it, benefiting both consumers and small business owners. I see today that the Fed just announced a half point interest rate decrease, and I think that is also a very helpful action.

A CEO's Approach to Problem Solving

Problems don't go away because money is thrown at them, they often get worse.

 Long term solutions are best developed by a planning process that blends innovation, accountability, and fiscal discipline with strategic investment. Results can then be monitored, evaluated, and incorporated into the next planning cycle. The critical question of, "how do we drive accountability and evaluate results?"  is what is often missing from government programs.

Want better government? Actively support better candidates. Every like, comment, share, and donation is a nail in the coffin of the current dysfunction. Thanks to all for your support and encouragement!

Potential Dangers of Artificial Intelligence and Robotics

Why should you be concerned about the potential misuse of Artificial Intelligence (AI) and robotics?
Imagine that someone creates a program to sweep through all social media accounts and make a list of everyone who shared a certain post or video, or liked posts by a certain person.
The list would include not only their name, but their picture, and phone number. This information is then loaded into a database and used to create a target list. AI could also be designed to target certain demographics (skin color, age, gender, etc)
A plane flies over a city and drops out 100,000 small drones, about the size of a hummingbird, but each with a camera, a "phone finder app", and facial recognition technology (like your iphone has).Each drone also includes a single explosive charge designed to detonate once within 1 inch of the target's head, or when the AI determines a door or window needs to be blown open so other drones can fly through. The drones talk to each other, identify the location of targets, and transmit a "mission accomplished" signal a millisecond before eliminating the target.
In a few hours, an entire class of people who believe a certain idea or belong to a certain group could be eliminated.
Farfetched? Not at all. Each component of the technology I described available now. It's just a matter of who gets their hands on it and decides to carry out an attack. These are the types of issues we need to be prepared to deal with in the next decade, and right now we are far behind.

https://youtu.be/GFD_Cgr2zho

Lessons Learned from History

Several folks have asked me if I've been following the impeachment. Honest truth - No, it's political circus that stokes the flames of divisiveness and further pushes us to the extremes. I am, however, thoroughly enjoying my latest deep dive into Roman history, because our government was patterned after, and has many of the same weaknesses as their Republic.
Was Marius or Sulla right? Caesar or Pompey? Octavian or Marc Anthony? Did the Gracchi brothers push social change too far, too fast? With the benefit of hindsight, does it even matter? I would say the true lesson is that hubris, ego, lust for power, and the inability to find common ground led to a steady decline in civil discourse, the rule of law, and the stability of the Republic. "What has been will be again, what has been done will be done again; There is nothing new under the sun". History bears witness to this fact, the only question is whether we learn from the blood stained dust of a ruined Republic and get our act together before we are lost.

https://www.washingtonpost.com/entertainment/books/the-age-of-caesar-a-fresh-look-at-the-key-players-in-a-time-of-historic-unrest/2017/02/01/8c47df12-e49f-11e6-ba11-63c4b4fb5a63_story.html

A Shared Legacy of Values - Let's Do Government Better!

I grew up in a Southern Democratic household. My family believed in the party that brought us electricity through the TVA, infrastructure and jobs through the CCC, and national leadership during WWII. When I registered to vote, it was naturally as a Democrat. (I was attacked for this recently by a politician trying to dig up dirt on me. I guess that was all he could find.)

I switched my affiliation soon after college because I was inspired by Ronald Reagan's courage in standing up to the Soviet Union, and his vision and implementation of a revitalized America. I am a proud Republican, and I am dedicated to the Constitution I swore to protect as a Marine.

I believe there are good folks in both parties who earnestly want what's best for our country, and that the extremes don't represent the vast majority of our people. We owe it to those who have gone before, and to those who will come after, to work together to leave our home a better place than we found it.

Our party has a long history of supporting the causes and values that Americans identify with. From the faith in freedom of Abraham Lincoln to the trust busting and environmental protection of Teddy Roosevelt, to the vision and courage of Ronald Reagan that inspired me. Here in North Carolina, Governor Jim Martin showed us just what it meant to lead with vision and accomplish lofty goals. (driven on I40 lately?)

Let's reclaim the noble legacy that we all share: trust, maturity, dedication to country, courage, and ability to work together as Americans. Let's resist the urge to be forced to the extremes by those who seek to use fear as a weapon. Let's change the tone, and let's start right here in NC District 17. Let's do government better! www.Cav4NC.com

Carolinas IT Transition

Around a quarter of a century ago, I was given a vision of a company that was to be created. It was to be a different kind of company in many ways from others that existed at the time. From a focus on employee quality of life, to a foundation of integrity in all things, to an unparalleled level of technical expertise. We would flip the equation, put our team members first, provide them the leadership and structure to enable them to take care of our clients, and trust them to provide an exceptional experience for our clients. We would grow with a focus on stability and commitment to the team, understanding the importance of success to the families each team member represented.

I was blessed with a wife of strong faith, who kept us going with her teacher's salary when I only had enough money to pay employees, and who prayed fervently for our team to successfully come through the storms. She not only put up with my Marine Deployments around the world, but kept "home operations" running while I spent all-nighters at client sites, Saturdays doing business planning, and weeks traveling.  I also had a strong group of friends who advised and supported me along the way. I'd like to thank all of you for your support over the years as Carolinas IT has grown. Together, we've made it through tough times, regrouped after our setbacks, and celebrated our victories. Our business started as a family, and continued through the years with a mission, vision, and values that reflected our beliefs and faith.

Our CIT family has steadily grown and moved forward as team members joined and thrived. We've seen our children grow from birth to college and beyond (and join our team in several cases), and friends move on to new challenges. Throughout it all, I've had the honor of guiding this ship through the sometimes turbulent waters of technology and business in a hyper competitive environment of growth and disruption.

Just as our children grow to a point where they need experiences and opportunities that parents can't provide at home, businesses sometimes grow to where they need outside resources, structure, and expertise to continue to reach their full potential. Earlier this year I realized that Carolinas IT had reached that point, and it was time for me to evaluate partnering for continued growth, opportunity, and success for the team. I found such a partner in Logically, based in Portland, Maine.

I first became acquainted with Logically three years ago, as they were members of a national peer group I have been attending. From the beginning it was clear that their executives shared many of the same values and vision that have been the foundation of our company. As they obtained private equity funding to grow into a nationwide service provider powerhouse, they became the obvious choice as a partner for growth.  In early November, Logically completed an acquisition of Carolinas IT. Since that time, we have been working to integrate our operations, coordinate with our clients, and orient forward to the future.

As excited as I am about the opportunities this partnership will provide, I will not be continuing on the journey in a formal capacity. As I evaluated my role and the incredible capabilities of my senior leaders, as well as the professional and capable leadership of Logically, it was clear to me that it was time to step aside and let others navigate forward. After December 31st of this year, I will no longer be a formal part of the team, although my heart will always be with those who go forward.  It has been my honor to serve this team as a leader, and I continue to be humbled by the professionalism and dedication of the staff ever day as they advance the mission.

Elizabeth and I are excited about what the future holds and look forward to continuing to serve in new capacities as guided by the Holy Spirit. It is with sincere and heartfelt appreciation that I thank you for your support, prayers, and countless kindnesses over the years, both large and small but all very much a part of our success.

Windows 10 Clipboard is Great!

Windows 10 has many new features, but one that I find myself using the most often is the expanded clipboard. Where previous versions allowed you to clip pictures and paste into a document, presentation, or email, the new version keeps history of your clips and allows you to choose which clip to paste. Here's how it works:

Be sure to enable the feature first:
Start > Settings > System > Clipboard
Set "Clipboard History" to "On"


Now, you can clip a picture, text, or anything else on your screen to the clipboard by pressing the following key combination, pressing each in order and holding down until you have all three pressed:
Shift - Windows Key - "S"

Your screen will darken, and you'll notice a small cross.  Put that cross on the top left of what you want to clip, and hold down your left mouse button, and drag it to select the region you want to clip. Stop pressing the left mouse button once you've selected what you intent to clip, and the image will go to the clipboard.

Now you have a choice.
You can go into the document or email where you want to paste the clip, and press: Ctrl - "V" (Press the Ctrl key first and hold it, then press the "V" key)
or
You can press  the Windows key, then "V" in the same manner, and choose which clip from the clipboard you want to paste. When you select the clip it will automatically be pasted into your document, wherever you have placed the cursor.


Bonus info: If you want to save the clip as a graphics file, just paste into Powerpoint, right click on the image, and select "Save As Picture". You can save it as a .jpg, .png, .gif, or other graphics format. This is a quick and easy way to quickly save things for posting on social media.

Have fun!
Mark

The DoD "JEDI" Project is a Bad Idea

The Pentagon's plan to award a contract worth an estimated 10 Billion dollars over the next decade to Amazon or Microsoft should be of grave concern to anyone who cares about our nation's security. The contact is set to be awarded by the end of August, 2019.

Cyber is the next generation battlefield, it will be central to the outcome of the next conflict. Once this contract is implemented we won't even be managing our most critical asset, our information and the compute that powers it. The flow and control of information is the new measure of military capability, and we do not possess the overwhelming dominance we do in the kinetic warfare dimension.  We are "one of the many" in the cyber world, with only a slight advantage relative to those who would do us harm.

In the 4th century AD, the Roman Empire had a problem. The resources required to guard their far reaching territory stretched their existing legions, and the legions themselves became more expensive to train, outfit, and maintain. A series of Emperors saw it as easier to hire Germanic tribes to plug gaps than to outfit and maintain the type of loyal, Roman led army that had protected them for a thousand years. It started slowly at first, but before long, Rome had outsourced much of their military capability. The Germanic tribes were fierce fighters, and quickly learned Roman tactics and adopted elements of Roman culture. Before long, the balance of power shifted, and the Germanic leaders wielded as much power as the Emperor himself.  In 476, Germanic Chief  Odoacer deposed the Emperor Romulus Augustulus and made himself king, effectively bringing an end to the Western Roman Empire.

Outsourcing to the tech giants is the equivalent of the Romans outsourcing protection to the Germanic tribes. It may sound like a convenient idea, but as time passes we'll regret the decision.

Why does the idea of outsourcing our computing resource to either of these two big tech companies concern me?

• Migrating a massive network like the DoD's to the cloud is like going in the roach motel, once you go in, you don't come out. We'll be stuck, and extracting us in the event we aren't satisfied will be a massive undertaking.
• The corporations are effectively monopolies. They act, look, and operate exactly like the organizations that President Theodore Roosevelt worked so hard to break up for good reason - their concentration of power is not healthy for our nation or our people. This deal provides these monopolies with funding, resources, and power that will make them stronger than many nations in terms of influence.
• Both are worth over a trillion dollars, making them two of the most valuable companies in the world. They don't need to get larger. https://www.wraltechwire.com/2019/07/11/as-tech-stocks-soar-amazon-cracks-1-trillion-in-value-joining-neighbor-microsoft/?
• I deal with Microsoft often, and I compete against Amazon in the cloud. I know what these companies are capable of, and it's not in our interests to trust them. They aren't patriotic and they don't have the nation's best interests at heart. They care about profit and the do what they can get away with regardless of the impact.
• Both have a history of outages (unforced errors). I'm concerned that they won't be able to handle an aggressive attack by a peer competitor with equal technological capabilities. https://www.readitquik.com/articles/cloud-3/top-7-aws-outages-that-wreaked-havoc/
• Both have a history of Tax dodging and meddling in government affairs

https://www.seattletimes.com/business/microsoft/how-microsoft-parks-profits-offshore-to-pare-its-tax-bill/

https://fortune.com/2018/11/21/amazon-hq2-tax-breaks-subsidies/

Both corporations are multi-national operations with substantial presence in countries that are potential enemies, employing foreign nationals in areas of high responsibility and authority. Who is to say a high level executive with loyalty elsewhere couldn't override security protocols to access the network? He would already have access to adjacent resources, and that's over half of the battle for an experienced hacker.

We know that Amazon has a cozy relationship with China, and shares cloud technology with them. https://www.wsj.com/articles/amazon-to-sell-its-china-cloud-computing-business-1510628802

By outsourcing our critical classified networks, we will lose core competencies and skills to manage secure networks in DoD. The NMCI program to outsource the unclassified network decimated the technical skill of Marine network specialists. Techs coming out of the Corps used to have solid experience. Now they think basic user creation and administration is network engineering. It most definitely is not. We have already lost substantial technical expertise in our ranks due to outsourcing.

I'm not opposed to leveraging civilian expertise on a contract basis, or to outsource some functionality to American based companies, but to put all our eggs in the safe keeping of Amazon or Microsoft seems short sighted. Nevertheless, this contract will be awarded, and time will tell what the resulting effects to our national security will be. It is my sincere desire that my analysis is not correct.

So You Want To Start a Business? A Note To 23-Year-Old Me Part 4

4. You must continue to improve as a leader, and it won't be easy. Obviously, leadership is critical to a startup. Leaders set the tone, inspire, guide, and have the vision for what the organization will look like and what it will accomplish. The leadership lessons learned through the Marine Corps form the nucleus of my personal leadership style to this day. 

Many people have a perception that Marine Corps leadership is all about yelling and screaming, but after initial training, that couldn't be further from the truth. The Corps is a continuous series of lessons in how to motivate and guide your team in accomplishing their mission in the most effective manner possible, whatever that mission may be. It can be intense, and is typically direct, but in my experience, good leaders handle the task with a calm, firm professionalism that is the hallmark of the battle tested leadership principles in practice since 1775. Marines all operate from a baseline of values that allow us to quickly get in sync with each other in fast moving circumstances.  There is no better leadership training than spending a few years as a Marine.  The foundations of leadership I learned from the Corps served me well after my transition to leading a startup.

Coming off of active duty, I made assumptions that if I could lead Marines I could lead anyone, that my own personal leadership was sufficient to the task at hand, and I could focus on growth and profitability more than my continued development as a leader. I also made positive assumptions about the presence of core values, work ethic, open communication, and emotional resilience of those that I would lead in the civilian workforce.

I soon learned that in order to survive  I had to continue to evolve as a leader to meet the changing demands of a new environment. I was floored the first time I asked a team member about a missed expectation in a straightforward manner, and was met with a passionate mix of defiance, insubordination, and blame. I wasn't prepared for such a reaction, and the disciplinary tools I would have had in the Corps were unfortunately not an option. So, I had to take a hard look at myself and evaluate my effectiveness. I realized I needed to adjust my approach to reflect a much different environment.

The change was subtle, but the impact was striking. High standards, values centric, time tested principles remained unchanged. Focus on accomplishing the mission in the most effective manner remained, but effectiveness became the operative concept, and this required a change in communications tactics.  I learned to ask a lot of questions in a non-threatening way to get to the truth, and hopefully get the team member to see it as well. I made good use of the phrase, "Tell me more about that..." I worked diligently to improve communications skills and facilitate honest feedback. From holding office hours to leadership evaluations, to regular all hands meetings to keep everyone in the loop, open communication became a priority. I added flexibility to my style in recognition that what motivates one person might overwhelm or frustrate someone else.  Effectiveness had to overshadow my ego that boldly proclaimed, "I am who I am and the world must deal with it."

The issue of how to handle different perceptions and definitions of values required decisive action. Rather than assume the team operated from and agreed on our shared values, we worked through identification of our core values, as well as our vision (purpose) and mission (objectives). These became a focal point for all of our operations. If we ran into a question of how to best move forward, it was often helpful to refer back to them and see what course of action synchronized best.

These efforts were humbling, required sometimes painful introspection, and didn't happen overnight.  The truth is that the process continues even now, as leadership is a skill that requires constant refinement. Effective leaders constantly evaluate themselves, and if you don't struggle daily as a leader, then I would say that you most likely aren't getting the most out of yourself or your team. Leadership in a startup stripped away all of the institutional authority and support structure I had in the Corps. I had to handle recruiting, service delivery, sales, salary negotiations, and training, while worrying about taxes, cash flow, and dozens of other tasks.  I didn't have the hundreds of years of tradition, shared values, or leadership structure filled with wise, experienced veterans to serve as mentors and guides. My team members could "vote with their feet" at the worst possible moment for any reason at all, unlike Marines who were usually on a four year hitch.

As the company grew in size and scope, my personal role in directly accomplishing critical tasks would by necessity be reduced as I adapted more and more to depending on others. The requirement to coordinate, synchronize, and guide their efforts became even more critical at the same time it became more difficult due to increased operational scale and tempo. The solution was familiar - leadership. I had to develop other leaders in the organization and delegate more operational tasks to facilitate growth. Once again, I had to evolve and improve.

Even though being a leader can be challenging, remember that challenges lead to growth in many areas of your life. Growth doesn't happen when you do the same thing day in and day out the same way. Healthy organizations as well as individuals continuously adapt to new circumstances to gain a competitive edge. Take heart and don't be discouraged, it's to be expected. Remember that Moses, one of the most effective leaders in history, got so frustrated with his situation that he felt the burden of leadership was too much for him. (Numbers 11:11-15)

Here are a few additional points I would tell my 23 year old self. These may sound a little pessimistic, but these tips would have saved me a lot of trouble early on. 

• Team members will come from many different backgrounds, and they all bring experience that impacts how they operate, think, and perceive their surroundings. Some good, some not so good.
• Don't assume everyone shares your values. Anything you absolutely need everyone in sync on should be documented and instilled into your team so there is no room for misunderstanding.
• No amount of training is going to fix poor values. There can be no compromise in this area.
• Some operate by the motto, "My goal is to do as little work as possible, while demanding as much pay as I can get until I find the next opportunity." This is not acceptable.
• The incompetent usually don't realize they are incompetent.
• People don't change all that much. You can't take a "C" player and turn them into an "A" player. The best you can hope for is to coach and polish them to a "B". If you expect to get more from them than that, you'll both end up frustrated. Screen diligently before bringing someone on the team, it's your responsibility to make sure they are a fit.
• Personality conflicts and drama are often used to mask poor performance.
• Don't make assumptions about activity levels and performance. Spot checks and supervision should occur frequently to ensure quality and high standards. Once trust is established, these can be less frequent, but early on they are critical to maintaining a culture of excellence, setting proper expectations, and providing feedback. This type of coaching is much different from micromanagement, which entails telling someone exactly how to do a task, and then constantly watching them to make sure they do it exactly as prescribed. If someone requires micromanagement to perform, they aren't someone you need on the team.

So You Want To Start a Business? A Note To 23-Year-Old Me Part 3

Continued from Part 2. https://markcavaliero.blogspot.com/2019/04/so-you-want-to-start-business-note-to.htm

3. The importance of setting goals, creating projections, and conducting realistic planning.  Business is chaotic, every day will bring surprises and new challenges. There is absolutely no way you can anticipate everything you're going to have to deal with, but do as much as you can to project your thoughts forward in time to visualize what the future looks like. This ability to visualize helps you to "shape the action" and be prepared. (page 86) Even if you didn't foresee the specific situation, the planning process with have helped hone your ability to think logically and creatively through potential challenges, and this will help you navigate the unexpected. As explained in "The Seven Habits of Highly Successful People", the concept of "Begin with the end in mind" is a great way to start. Think about what you want your business to look like in the future at various milestones, and then use your planning process to fill in the gaps and answer the question, "how".  Set SMART goals for the organization as a whole, and then work with each group in your company to come up with specific goals for them that support the organizational objectives.

Planning should incorporate sales, marketing, delivery, cash flow, credit management, staffing, expenses, and training at a minimum. Your list will be unique to your business, and will grow along with your experience. These items are all interrelated, so your planning should be as detailed as possible. Think about seasonal variations like holidays, three-payroll months, and impact of the snowstorms and hurricanes you know are likely to occur. Understand that in a services business, some months are going to be impacted by vacation (your team as well as client decision makers) more than others. Develop a refined cash management projection that incorporates payroll, vendor payments, taxes, etc. as far as out as possible. Your projections won't be perfect, and at first it will be extremely difficult and time consuming. 

Capture the outputs of your planning, organize it, and write it down. Give everyone on the team a chance to review, comment, and  provide input, then finalize and publish it as your annual plan. Brief everyone in the organization, and rally them around hitting the goals. Show them how the goals are realistic, achievable, and how they snap in to the corporate vision. Let them know how progress with be measured and rewarded.

At the end of a month, review your projections for that month. Examine what was accurate, and what wasn't. Document it, discuss with your team, and incorporate into your next planning cycle. Over time, you and your leaders will get better at the projections and they will become surprisingly accurate. This will make you stronger and more competitive. You'll have an easier time dealing with the unexpected because you have reduced the areas of possible surprise.

There is a bias in business today towards, and a sense of near celebration around failure…popular business culture will tell you if you haven't had at least one failed business, you aren't a true entrepreneur. I reject this. As a business owner, people are counting on you for their wages that they use to support their families. Your vendors, clients, and partners have all put their faith in you. Failure shouldn't be "one of many possible outcomes", it should be the absolute last resort when all else has failed and there's nothing more that can be done. People will get hurt, and you should work every day with a passion, serious intensity, and sense of urgency that recognizes the very personal cost of failure. The truth of the matter is that by accepting the distinct risks of failure into your planning process, you will have a much better chance of avoiding it. The danger that kills many business is often the one they simply refused to acknowledge during their planning.

Excerpt from Chapter One - Echos of April 9th

      ...

    In the early 70s in central North Carolina, the scars from the Civil War were still apparent. Not so much in the landscape, which had escaped the worst of the fighting, but in the generational poverty that had come over the South.  The war had taken the healthiest, most ambitious, and spirited young men off to fight in dreadful battles. Their blood soaked the ground of places like Chancellorsville, Gettysburg, Richmond, and Manassas.  By most estimates, North Carolina sent more men to fight for the Confederacy than any other state, some figures have it at over 2 million, and many of them never returned. When a generation of a region's best men are taken over the span of a few exceptionally deadly, violent years, it leaves damage far deeper than the initial heartache and loss. Gone were the future husbands, fathers, and grandfathers. Farms fell into disrepair, criminals and scoundrels often went unchecked.

            My Great-Grandfather Alfred's uncle Henry had been a private and fought with the Confederates in Northern Virginia. At some point in the campaign, young Henry had an accident and got one of his toes shot off. The exact details of what happened and how are lost to history, but he was in the ranks at Appomattox on April 9^th, 1865, when General Robert E. Lee recognized the cause was lost and surrendered his forces to US General Ulysses S. Grant. The once mighty army of Northern Virginia had been beaten decisively, and the men doubtlessly expected their fate to be years of starvation and disease in a desolate prison camp for the crime of treason against the United States. Approximately 28,000 Confederates surrendered, which would trigger a collapse of Southern military opposition throughout the breakaway states. In a wise and generous gesture, the terms of surrender were lenient. In exchange for oaths of loyalty, Grant had graciously granted parole to the men. Instead of languishing for years in prison camps, they would be allowed to return to their homes. Officers could keep their sidearms, horses, and personal baggage. Men could keep their horses and mules to work the fields, so they could provide food for their families. Lee was given food from Union supplies for his now starving men. Grant’s sensible decisions were in keeping with the spirit of the words from Lincoln's second inaugural address only a few weeks earlier. "With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation's wounds, to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations."

Grant’s adjutant, Ely Parker, was the one to write out the surrender document. Parker was Native American from the Senaca Tribe. Recognizing his heritage, General Lee quipped that "It is good to have one real American here." Parker replied, "Sir, we are all Americans." 

After his parole, Henry made the long trek home to North Carolina carrying a small bundle that held his toe. It rested in a jar of vinegar at the family farmhouse for many years. My grandmother told me she had seen it sitting on a shelf in the corner cupboard when she was a young girl, but by the time I arrived it was long gone.

Unfortunately for the South, President Lincoln’s vision of a healing reunification died with him six days after Lee’s surrender. The inarguably just war to cleanse the nation of slavery had been settled on the field of battle, but atonement for the bloodshed that polluted the land was yet to come. In a tragedy for the young nation, an assassin had chosen Lincoln to pay the cost. In this version of the Biblical redemption story, Abraham himself would be placed on the alter. There would be no redeeming ram caught in the bushes. The South descended into the chaos and resentment of the Reconstruction era.

“My Captain does not answer, his lips are pale and still,

My father does not feel my arm, he has no pulse nor will,

The ship is anchor’d safe and sound, its voyage closed and done,

From fearful trip the victor ship comes in with object won;

Exult O shores, and ring O bells!

But I with mournful tread,

Walk the deck my Captain lies,

Fallen cold and dead.”

 Walt Whitman

So You Want To Start a Business? A Note To 23-Year-Old Me Part 2

Continued from Part 1 https://markcavaliero.blogspot.com/2019/03/so-you-want-to-start-business-note-to.html

2. Learn some basic accounting terms and use them as tools. You understand the importance of delivering a great service and an outstanding customer experience, and you're going to get excited about promoting and growing your business. I know the last thing you want to do is to slow down, crack open a book (or open a browser these days), and spend time learning accounting terms. Do it anyway, make time for it because it will keep you away from danger as well as accelerate your success. Don't think you can just delegate this to your accountant or business partner because it is "accounting stuff". I want you to understand the following concepts at a minimum. Gross profit (GP), Gross Margin (GM), EBITDA, SG&A, Income Statement, Balance sheet, and Statement of Cash Flows.

These terms will be the measures that you will use to get a realistic picture of how your business is doing. Think of them like gauges on an airplane. They tell you how fast you are moving, how high you are flying, how steep you're climbing (or descending), and how much fuel you have. Learn what levers and controls you can adjust in your business to impact each of these measures. Study them intensely after you close each month, and make adjustments to get the results you want. If you aren't seeing reports of these measures each month, this is an indicator of a big problem in how you run your business, and it's every bit as important as the customer facing aspect. If you aren't getting a timely and accurate close to each month, it's an even bigger indicator of problems. Failure to pay attention to these measures is like trying to fly an airplane blindfolded. Failure to get a solid month close is like flying the airplane blindfolded, hearing an alarm, and doing nothing about it.

Use these terms to develop a core set of Key Performance Indicators (KPIs), that you can rally your team around. Make information on these KPIs accessible to the team, and use them to set goals and incentives. Not only will KPIs help you understand what is working and what isn't, but they will help you project forward into the future. If you want to grow successfully, these projections will become critical. More about projections in part 3.

So You Want To Start a Business? A Note To 23-Year-Old Me Part 1

I was twenty-three when the first elements of my business plan started coming together. In the years since that time, I've learned some valuable and difficult lessons about founding, leading, and growing a company from the ground up. I recently came across some notes I made back then, and the thought crossed my mind that I sure wish I could go back and tell that guy a few things. This series of blog posts will cover the first five things that I'd share with someone about to embark on the adventure of starting a company. Here's number one.

1. The importance of capital and cash flow. Working capital (cash) is the lifeblood of a company.  Run short of it, and your business will suffer. The adage that "cash is king" is true. You can have the most ambitious growth plan or most brilliant idea in the world, but if you get to the third quarter of operations and you can't make payroll or pay your taxes, you'll be in deep trouble. Our system is known as capitalism for a reason, business operations require capital, and much more of it than you'd think. Most good entrepreneurs focus on "we need to turn a profit". Wise entrepreneurs understand that even if you turn a profit, if you are leading a growing firm your profit most likely won't be enough to fuel your growth by itself. You should be prepared for years of reviewing your financial reports, seeing a profit, and knowing that profit will need to be left in the company in order to power growth. The faster your growth rate, the more cash your business will need. In a services business, the cost of labor will be your largest expense, and salary is only a part of it. Health insurance, payroll tax, furniture, computers, software licenses, vacation, training costs, and a seemingly never ending list of other expenses will make you understand the saying that, "our people are our largest asset" from a whole new perspective. For planning purposes, multiply the cost of salary by 1.4 to get a better idea of the true cost of a team member.

There's a lag between when you will need to hire people and when they are profitable. This lag takes cash to bridge. Cash from outside sources will be expensive, so it's always better to self fund it if possible. You'll need to become an expert at forecasting, and you'll need to develop this skill in your subordinate leaders. Sometimes you'll pay a new hire for months and then realize it's not a good fit. As time goes on you'll get better at spotting this early and avoiding it altogether, but it will still happen. The need for working capital isn't just an early stage concern, the need will increase in direct correlation to the growth of your organization. It is entirely possible in a growing business to finish the year with 1 million in earnings and still have to borrow money to continue operations. Be ready for this and expect it, you'll need to establish good relationships with a bank, and this will take time. They won't talk with you at first, but once you build up a track record of success. Know that you'll most likely have to go without a salary for long stretches of time. Prepare your family and your personal finances for this so you can get through it. Home equity lines of credit and credit card debt are your backup financing. Get used to putting it all on the line continually. You'll be signing for and personally guaranteeing all of the company's debt and legal obligations as well (such as payroll tax), so get comfortable with the idea of being personally accountable for all of it. People will count on you, so you better show wisdom and maturity in your every decision, action, and conversation.

Oh, and by the way, remember those earnings that you left in the company? You'll need to pay about a third of that to the government in taxes. This will need to be in the form of cash.

Profile of Courage

“This story shall the good man teach his son;
And Crispin Crispian shall ne'er go by,
From this day to the ending of the world,
But we in it shall be rememberèd—
We few, we happy few, we band of brothers;
For he to-day that sheds his blood with me
Shall be my brother; be he ne'er so vile…”

 William Shakesphere

On the late afternoon of March 30th, 1967, Marine 2nd Lieutenant John Paul Bobo silently led his men from the Third Marine Division through the cool darkness of the Quang Tri Province in the Republic of Vietnam. The Summer season, with its hot, sticky nights and torrential downpours had not yet arrived. Even though he was only 24 years old, by this time he was only a few months short of completing his year long tour. The young man from Niagara Falls, New York had become a combat hardened veteran whose courage and fortitude had been tested in the far off, deadly land where the torturous conflict raged. His unit had been tasked with conducting a night ambush against the North Vietnamese Army (NVA) forces operating in the area.  While establishing their ambush positions, they were attacked by a larger NVA force armed with heavy machine guns, automatic rifles, grenades, and mortars. 
With murderous enemy fire pouring in, deafening explosions sending razor sharp shrapnel through the air, and men on both sides screaming in agony and rage, he quickly organized the Marines into a hasty defense, moving to each pocket of men and directing their fire towards the enemy. The weapons of his platoon included hand held rockets that could inflict a devastating toll even on well dug in positions, and when that team was taken out by enemy fire, he quickly organized Marines to replace them to fire the rockets at an NVA heavy machine gun position. In the midst of a raging hurricane of violence and death, Lieutenant Bobo continued to direct his men, unleashing deadly torrents of fire and high explosives at the enemy. A high arcing NVA mortar round whistled down through the trees, impacting just a few feet from where he was standing. The resulting explosion was at once mind numbingly violent and deadly. Lieutenant Bobo's lower right leg was jaggedly blown from his body, resulting in stream of blood pulsing over a tangle of ragged bone, muscles, and tendons. An improvised tourniquet made from a web belt was applied to slow the bleeding, and Company 1stSgt Raymond Rogers directed the badly injured Lieutenant to be evacuated out of the fight. 
Regaining his senses after the shock of the wound, the young Lieutenant refused to leave the battle. Incredibly, he grabbed a shotgun, jammed the remaining charred stump of his leg into the dirt to slow the continued bleeding, and continued the fight, delivering a hail of devastating fire against the oncoming enemy trying to push through into the Marine's position. Inspired by his heroic efforts, his men continued their valiant stand, eventually turning the tide and repulsed the attack. During the fight, 1stSgt Rogers was also wounded, and an NVA soldier stood over him to deliver the final blow. Lt Bobo killed the enemy soldier and many others charging their position. At some point in the chaos, Lieutenant Bobo fell, mortally wounded. Soon after the battle, his Battalion Commander recommended him for the nation's highest award, the Medal of Honor. The recommendation for the Medal of Honor had a long journey up the chain of command and through the Department of Defense before it would eventually be signed by the President Johnson. The award was presented to his parents by Secretary of the Navy Paul Ignatius at the Marine Barracks in Washington, D.C. in August of 1968.