Featured Coaching Excerpt - Notes & Transcript, Part 1
Notable Quotable: "Trust is essential to running a successful business, but it's important to remember that everybody has an agenda - one that may not match yours. This applies to people you ask to research your major decisions. When you're thinking of making any major decision, it always pays to do your own research to get the real facts. There's never any danger of being too informed." - Jack Nadel
Lesson Nugget: When you do your own research you know what the endgame is.
Notable Quotable: "To succeed, jump as quickly at opportunities as you do to conclusions." - Benjamin Frankin (One of America's Founding Fathers and prolific inventor)
Lesson Nugget: It is very important to know the labor laws of each geographic area that you are interested in doing business in.
Definition Magician: European Union - An association of European nations formed in 1993 for the purpose of achieving political and economic integration.
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-So they were sitting there losing literally millions of dollars.
-Jack, in your book, "The Evolution of the Entrepreneur," you write, "Trust is essential to running a successful business, but it's important to remember that everybody has an agenda-- one that may not match yours. This applies to people you asked to research your major decisions."
"When you're thinking of making any major decision, it always pays to do your own research to get the real facts. There's never any danger of being too informed. My friend, why is it so important to do our own research, as opposed to letting somebody else do it for you?
-Well, when you do your own research, you know what you have in mind. You know what your end game is, the trail you're willing to follow. You know about yourself, and nobody else can take that from you, plus your point of view from where you're sitting in the commercial world.
For example, a very simple thing, we used to exhibit at all the national bank shows. And we'd go around the country, wherever they had a show. And it always paid, and it always was profitable. And it was terrific. And I love the bang shows.
I had one of my account executives come to me and say, they're staging a show in Texas, and I want to exhibit there. So what percentage of the business that we've done has come out of Texas? Oh, he says, 60%, 70%. OK, let me just check it through. When I went to the books and found the actual numbers, it was about 15%.
-Which is close to 60.
-Close to 60.
-Well, it was to his interest, because he loved the whole Texas experience. And he was developing his own clientele at the same time.
CLAY CLARK: Oh.
-Which is fun. Always part of the company, there's one thing that I had, that if someone worked for us, they worked exclusively for Jack Nadel. But on doing my own research, I said, we'd lose money on doing this kind of exhibit. It doesn't make sense for us.
So me doing the research, knowing I had to put those numbers in front of who we actually did, I could get a pretty good idea of what to expect. Maybe something wonderful happened, but I don't count on that.
-Have you ever done something that was-- do you have an example of where you delegated the research, and you just made an unbelievably stupid decision? Have you ever had that happen, where you just made a real bonehead decision as a result of letting somebody else research for you?
-I certainly did.
CLAY CLARK: Would you mind sharing? Is that OK?
-Well, I can share it now as a laugh. I wasn't laughing that much. When we were in the pen business and were manufacturing pens, and ultimately we were shipping the pens to Europe, that came as an accident.
Because I went to Europe, went to a trade show, met some of the manufacturers. And one of the people that took care me said, well, you obviously know about ballpoint pens. I said, well, I manufacture them.
And he says, like what? And I carried the one that happened to be the hottest selling item we had. And he said, how much is that? And I said, well, we sell it to the distributor $0.15.
He said $0.50? That's fantastic. I said, no, $0.15, 1-5. He said, I don't believe it. He said, well, why don't you-- can I represent you in Europe? I said, well, how many pens are you going to sell at that deal, at that price?
You won't believe it. I'll sell millions of pens. Well, it was one of those big promises that came true. He sold millions of pens. He did very well. So the following year he came to me, why don't we actually import the parts and assemble the pens in Europe, and I can give better delivery, the tariff is lower, and the cost of the pen would be lower.
So it makes sense that, where's the best place? Well, the Italian distributor would be at the perfect spot. So I talked to the Italian distributor. He was all peaches and cream.
He thought it would be a great part of lasagna. We did great with it. So we did. And we proceeded to lose money, because I didn't investigate it myself. For example, I'm sitting there one cold day-- they were mostly cold-- and I get a call from an official who tells that I'm breaking the law.
CLAY CLARK: Yeah.
-I said, how? I said, I didn't know it was against the law to lose money. No, you're breaking the law, he says. In Italy, you have to employ at least 25% of your force with either veterans or handicapped people.
CLAY CLARK: Oh, really?
-And there are several other things that went in there that made it really very unfriendly for a free-flowing business. And I said-- here I am, and I hadn't done the research.
And I realized it was not a friendly government at that time, to business. They had these old rules which were very, very tough to handle. And it just going to work.
-So I think the moral of the story is, you have to do your own research or you might end up breaking Italian labor laws? Is that the nugget there?
-That's the nugget that came out of that. We broke Italian labor law. And I think the way we fixed it could have been an action movie.
CLAY CLARK: Really?
-I said, well, let's find other quarters. And we found a very suitable place in the south of France that had a completely different set of laws. That was before the European market, before the EU.
So it checked out. It sounded good. I said, I think we should move to the South of France. Besides which, I love the South of France. It's part of my own enjoyment, too, that was.
CLAY CLARK: Yeah. You gotta do that.
-Yeah. You gotta think of the pleasure that you get out of it. But fortunately, the week before, Singer Sewing machines had had a similar situation. It was moving from Turin, which is the city I was in.
And the labor force came in and sat in the offices and the factory and didn't allow a thing to be moved. So they were sitting there losing literally millions of dollars.
CLAY CLARK: Wow.
And I said, well, I can't do that. So then I did my own research, too. I decided to move in the dead of night, steal my own factory-- which I did-- hired French longshoremen, French trucks.
-Put it on boats and trucks?
-Then, they came in like a motion picture. And we loaded the stuff out at 12 o'clock midnight on Christmas Eve.
-That's right. They weren't watching it. But still, at 2 o'clock in the morning, the Italian came and was pointing guns. So once more, we've got to show them that we were moving, and it was legitimate, and that we had a lease in another locality. We didn't tell them it was France. And they let us go.
The story is, we both did terrific business in France. But I could not have-- we would have lost our shirt in Italy. I love Italy. I love Italians. I love the opera. I love everything that goes on there.
As a matter of fact, when I was doing business in Italy, it's like living in the middle of a grand opera. There's a lot of enthusiasm, a lot of stuff that takes place. But it turned out that I should not I have opened in Italy. I should have done the research, and I didn't.