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October 18, 2018

My son Andy is a sports reporter and wrote a cover story this week about a high school cheerleading squad for a team that was losing 40-0 at halftime. It was a great article and needless to say, I am very proud of him. However, the article was much more than about a specific team, but covered the ins and outs of cheerleading, and that is what I want to share here.

Even though the team was losing, the cheerleaders were cheery and led. They did not mope – they were not gloomyleaders. They knew they had to ooze energy and lift the crowd. They believed, and they made it reality, that their gold pom-poms, touchdown smiles, and eternal optimism would be transferred into the audience. Cheerleader Paris Harrington said “We still have to be just as peppy as if they were winning 100-0.” Classmate Nicole Ryan echoed “We approach it the same way as if they were winning. We try to keep spirits up.”

It’s not an accident this cheerleading team from Monroe High School is among the best in the country winning numerous state and national championships and awards. They win because they take everything seriously putting in the practice, training, effort and creating electric excitement around whatever they do, always with an “I-mean business-game face.” Irrespective of the awards, the team’s feedback comes from an excited crowd. It also means mixing up the moves and playing to the crowd as well as staying in great shape and depending on teammates to support and catch them when the moves make that necessary. Cheerleading looks effortless but it is very hard and needs to be carefully coached and choreographed; if it looked hard they would not be successful.

Leaders of a business or any group can learn a lot from cheerleaders – they need to be, and must be, the cheerleaders for their team. The worst thing a leader can do is be a gloomyleader. Like these cheerleaders, they must always be “on” and project a winning feeling and aura. Problems should be left to one-on-one meetings behind not so obviously closed doors or through private venting with a spouse or partner. Businesses are not machines but are organic comprised of individuals who work separately or in teams. Each needs to perform at the top of their ability. Doom and gloom leaders, which unfortunately there are plenty of, do not belong in leadership positions. They need to be cheerleaders spurring on their team to do the best they can do – with electric excitement. They need to take a lesson from cheerleaders, and particularly, the Monroe High School team Andy wrote about.

Some of the above came directly from Andy’s article and here is a link if you want to read the original unexpurgated version:

Retailers that lost their way

October 16, 2018

Yesterday the venerable Sears filed for Bankruptcy protection. It is certainly a tragedy for all of its employees and suppliers. However, anyone patronizing Sears in the recent years cannot be surprised by this. I was one of Sears “former” customers after too many episodes of poor customer experiences.

A few incidents happened to me this past week that also indicate shoddy management that I will relate here. My purpose is to create a wakeup call to others in retailing to pay attention to their customers – because that is what keeps doors open.

I saw a big window display in a Manhattan book store featuring a new book. It looked interesting and I went in to flip through it and then purchase it. Well, I could not find the book anywhere so I asked the manager, who likewise could not find it, so he took one out of the window display and gave it to me. I thanked him and then got on the line to pay for it. There were two people working the registers and at least a dozen people ahead of me on line. I put the book down and left. That night I ordered the book from Amazon with about three clicks and the price was $7.00 lower! No wonder retailing in some sectors are failing.

This weekend I needed special light bulbs and went into one of the hardware superstores. I found the bulbs I needed, but the lumens were decreased from 230 to 170. Everything else was the same. I wanted to ask a sales associate about the difference and could not find anyone. I went to the customer service counter who paged someone. Five minutes later I found a sales associate who wasn’t experienced with those products so he paged someone. Five minutes afterward, someone finally showed up and he did not have a clue what a lumen was. My bad! Why didn’t I just go to Amazon who sells that product? This retailer is supposedly doing well – well we’ll see…

Another experience was with a bank credit card my wife uses that developed a defective chip. Yesterday she went into our local bank branch and they said my wife needed to get help by calling the number on the back of the card, but they offered to help her and called the number for her. After being on hold with periodic “your call is important” messages someone finally picked up. The person in the branch was very helpful assisting my wife and the credit card representative was also courteous and helpful; and she cheerfully said they would send a new card and it should arrive within ten days. Comment: This is a card that most of my wife’s purchases are made with because of the high cash back amounts we receive because we are “premier” customers. So now it won’t be used for ten days. Seems stupid to me that they did not send a new card by overnight or even priority mail. To me, this does not seem like such good customer service.

Another bad experience was in a local fast food chain restaurant that just switched to digital ordering machines in the store. I spent 20 minutes figuring how to maneuver the many screens [I think I got it worked out] but there was no one available to assist me or any other patron. I also tried to order from someone behind the food counter and was told that the machines were the only way I could order. I received a number and only after waiting another 20 minutes and asking where my food was, I was told the electronic sign announcing the in process orders wasn’t working properly but she would process my order – which was done fairly quickly. I am not sure I will go back to that particular store, but might since I am passing this off as a bad manager having a bad day. But if I have the same experience the next time or in another store…..

One final peeve, but this occurred a couple of months ago. We purchased a 15 month bank CD online and when it came due the bank’s interest rate for a 12 month CD was 2% and for an 18 month CD 2.25% but for a 15 month CD the rate was 1.5%. If we did nothing, the CD would have been automatically renewed for the same term as the previous CD at their then current rate. This seems to me like the bank is cheating their customers that rolled over the CD trusting the bank will treat them fairly. I guess this bank, that spends a fortune advertising about “what’s in your pocket” is trying to make my pocket lighter. I doubt I will ever do business again with that bank. How is this good business for them?

Sears is a tragedy, but also seems typical of the disdain I feel many retailers have for their customers. Don’t they understand that retailing is a very competitive business that is being disrupted by Amazon and some others with newer and faster and easier ways to sell and deliver products to their customers?

Regardless of your business, the customer is king and if you don’t treat them as such, market share and sales will rapidly decline.

Public Library IT Magic

October 11, 2018

Radio frequency checkout of library books is a reality. Just put the stack of books you are borrowing on the checkout machine and in less than two seconds they are scanned and charged to your card. Magic? No, just the most current technology. If you try to leave the library with books that have not been checked out, red lights go on with some menacing sounds. I’ve seen it and it is unbelievable!

I am on the board of the East Brunswick Public Library Foundation and the electronic checkout machines, one of which the Foundation donated just eight years ago, have been donated to a local library to make way for this new technology. Jennifer Podolsky, the library director insisted I take a look at how it works and it literally knocked my socks off. She says that this new technology will improve the circulation process and user experience and also internal processes such as counting and verifying the inventory since this can now be done by a librarian walking around the shelves with a wand.

The new system known as radio frequency identification system or RFID uses state of the art technology. To switch to the RFID system nearly 170,000 print and media items in the library collection had to be processed with new RFID tags to identify and track circulation items. This replaces barcodes that have been used for more than 30 years and which replaced the paper and handwriting or rubber stamp process that was used universally before then.

Checking out by stacking can be done for all items in the Library which includes CDs, DVDs and magazines in addition to books. Everything can be stacked together and after the library card is scanned the magic takes place and every item is entered in the library records and user file; a printed receipt can also be requested. A reverse process takes place when the checked out items are returned allowing the materials to recirculate much quicker. Library personnel will still be at the circulation desks to assist users, but it is expected many will be using the self-checkout machines as they see the ease in which it can be operated. Melissa Kuzma, assistant director adds that “the RFID system makes the circulation process much easier, whether it is a customer using a check out or a staff member checking in returns from the book drop.”

The East Brunswick Public Library is one of only two public libraries in New Jersey using this system, but large library systems around the world have also switched to a RFID circulation system including the San Francisco, Salt Lake City and Ottawa Public Library systems and the Vatican Library in Rome. RFID technology is also used for a variety of purposes including tracking medical equipment at hospitals, cashier-free convenience stores run by Amazon and theme park admission at Walt Disney World.

The East Brunswick Public Library (EBPL) is celebrating its 51st anniversary with a Gala sponsored by the Foundation that will be held on October 24, 2018. If you want information about contributing or attending, email me at Also, the EBPL is part of a consortium of 30 public libraries in surrounding areas so users can access books from a far vaster inventory than maintained in their home library.

My first thought when I saw the RFID system work was that it is magic; on reflection it is a sensible adoption and adaption to state of the art technology that can make things much easier for us. Kudos to my local library.

Previous blogs I posted about the EBPL can be accessed at:

Checklist for I-Power Lunch

October 9, 2018

The prior blog on I-Power elicited some emails asking for more details. I referred them to the book. However, I also started writing a step by step process for them and came up with the following checklist. So enjoy the following if you think you want to try the powerful I-Power meetings.

  1. Management selects 5 or 6 people to invite. They can be from the same department or a mixture of departments. They also do not need to know each other. Depending on the size of the company, there can be a series of meetings for multiple groups.
  2. The I-Power meeting will take place over lunch either in a conference room or an offsite restaurant. Also depending upon the company size the meetings can be scheduled throughout the day on the company’s premises. I like the informality of a lunch setting.
  3. Each person attending should bring one or two ideas or comments that would make their job easier, better, more fun or more productive or ways the company can be more efficient or areas where it could save money. Other than that, there is no advance preparation.
  4. Each idea or comment should be written on a single sheet of paper. The size or kind of paper or whether it is hand written or typed doesn’t matter. The pages will be mixed up and chosen randomly.
  5. I try to discuss each comment at the lunch as it is chosen.
  6. The meeting discussions will not be confidential.
  7. The lunch will last about 1 ½ hour.
  8. When the meeting is over the facilitator will either organize a brief verbal summary for company management or owner or prepare a memo summarizing the meeting.
  9. Any ideas brought up that management feels are valid should be considered or acted upon soon afterwards. This starts the accruing of benefits and manifests a positive momentum that the staff will become aware of.

Sample of some of the more generic suggestions and changes that arise from I-Power are

  1. Employees can discuss or bring up unmet needs in their job function and how it can be changed
  2. Unused opportunities and how to use them
  3. Unfulfilled dreams and ways to have them fulfilled
  4. Ways employees think they could grow and improve the business while increasing their value
  5. How the company can be clearer on its promotion and compensation policy
  6. The employer should make available time to permit employee innovation
  7. Performance criticism seems to be very quick and compliments very rare
  8. Criticism is not usually accompanied by ways to improve performance
  9. People with inside jobs are not usually told about the importance of their roles with customers or with interaction with other departments, and they should
  10. An anonymous suggestion box where employees can present ideas, changes and/or complaints should be implemented

The purpose of I-Power is improvement and possibly change, not validation of good or bad practices. I-Power meetings should uncover or disclose suggestions of new ideas, processes and methods that can improve staff and company performance.

I-Power continuous improvement process

October 4, 2018

“I” Power: The Secrets of Great Business in Bad Times was written by two friends, Martin Edelston and Marion Buhagiar, in 1992. The book provides a continuous improvement technique that I have been extremely successful with since learning it from this book. My success was in my practice as well as by facilitating meetings with clients’ staff where it has always led to great ideas and suggestions that were eagerly implemented afterwards.

I-Power gives Martin Edelston’s secret of how he quadrupled his business in just a few years without any increase in personnel. For those who don’t know, Marty was the founder of the Bottom Line, Inc. publishing empire, which includes some of the most successful newsletters in business history and is also one of the world’s largest publishers of non-fiction books.

I-Power is a continuous improvement system that cuts costs, increases sales, decreases employee turnover and makes change easy. Its principles are not difficult to adopt and can be put to work quickly often yielding amazing results.

The I-Power technique creates a mechanism to have staff and employees make suggestions and present ideas that can improve the business and employee engagement and performance. The process calls for a meeting where each person comes with one or two ideas that would make their job either easier or more productive, or where the company could save money or make more money. I suggest limiting the size of the meeting to about six staff and a facilitator and having these meetings over a one and half hour lunch.

Every idea is rewarded nominally just for the idea, with gradually bigger rewards for the better ones. The better ideas should then be implemented, and quickly. If not, those generating them will probably stop offering suggestions. Successful implementation usually breeds additional ideas.

At the end of the meeting, a summary would be either prepared and presented to management or the facilitator would use the information gathered to formulate their recommendations at a meeting with management. Most I-Power lunches are standalone meetings, but I occasionally use the lunches as part of a business retreat.

A byproduct of the I-Power method is the exposure or articulation of unpleasant or unproductive processes or actions employees occasionally encounter. Even though many companies have a “suggestion box” or an open door policy, it is rare when an employee will criticize the boss or what they are told to do even if the comments are constructive. The I-Power meeting provides a forum that brings these issues up.

I-Power creates an atmosphere where ideas are encouraged and rewarded, and where the criticism is presented as a continuous improvement idea. I-Power allows a better and fuller means of communication and a more open dialogue.

“I” comes from the positive approaches that are incorporated in many “I” words including: Ideas, Ingenuity, Invention, Incentive, Individual, Invigorate, Inquisitive, Innovation, Inspiration, Intelligence, Imagination and Improvement.

I have been doing this for many years and have adapted the book’s I-Power process to a style and manner that suits me. If you want to find out more information I wholeheartedly recommend reading the book.

If you would like further information about Marty and my relationship with him, here is a link to a blog I posted soon after he passed away.

Top 5 Dividend Stocks Follow Up

October 2, 2018

The following is an email I received in response to my blog on Thursday and will address the issues raised.

“Your comments focus on the ‘forever’ aspect of the headline. I think it’s at least as significant to those on the cusp of retirement, or already in the midst of it, that the “top 5 dividend paying stocks” would likely be the focus. To avoid invading one’s principal beginning at retirement, I think that income generation is the key. My interest is to identify those stocks with maximum dividend payout, but with “limited” risk, and reviewing performance on a sufficiently frequent basis so that bailing out of a given stock, hopefully before catastrophe hits, is feasible.”

I’ve addressed these important and big picture concerns in previous blogs, but this question pulls together apprehensions of many clients so I will address each of his concerns here with some direct comments.

  • My blog suggested that the “top 5” and “forever” are myths and any desires along those lines should be disregarded.
  • I agree that income generation is a key factor, but not the only factor. Cash flow should be the primary factor.
  • Comment: Cash flow can be comprised of interest, dividends, possible sales of investments (which include bank CDs, bonds and stocks) and possibly cashflow from annuities or even reverse mortgages. Cash flow is a multifaceted project that needs planning and careful design. Retirement accounts provide cash flow in just another form of how the investments are titled and should fall into one of the latter categories except for reverse mortgages. Pensions and Social Security cash flow should be considered but are usually not subject to investment decisions, so are not specifically covered in this type of discussion.
  • As a general rule the stocks with maximum dividend payouts do not have “limited” risk and since there are many types of risks, the risks need to be defined.
  • Comment: High dividend paying stocks typically will not increase in value as much as the owners might want or need them to; will be subject to drops in value based on rising interest rates in the economy; and the dividend payout might not keep up with inflation thereby eroding eventual buying power. Further, with regard to individual stocks, there is no guarantee of the sustainability of the dividends.
  • All individual stocks are subject to specific risks of those companies. I suggest that mutual or index funds are better ways to invest.
  • If you own specific stocks you have to always be “reviewing performance” so you could get out before “catastrophe hits.” This requires you to have greater insights and knowledge than professional traders and the market as a whole. I do not believe this is likely for most of us. One bit of information is that whatever data you will use for your reviews would be old news by the time it gets to you.

Here are links to four blogs I posted in June and July that address the issues covered in today’s blog: Perhaps these would present a better course of action than suggested in the question posited to me.


Top 5 Dividend Paying Stocks You Can Hold Forever

September 27, 2018

If you believe that headline which regularly appears on many cover stories and asset manager research reports, then you can believe almost anything. How about a chance to own the Brooklyn Bridge?

With investing, nothing is guaranteed. Actually, there is one guarantee – you cannot lose money on short term U.S. Treasuries or insured bank certificates of deposits. That’s it. Everything else carries a risk. Of course with short term Treasuries you face a strong possibility to lose over a long period to inflation, so there is a risk to that too, but it is a stealth risk separate from the investment itself.

I wonder how the stocks did that were on previous lists during the last 10 years. Barron’s provides annual updates of their recommendations, that I’ve written about, but very few publications do, and even fewer investment managers. The truth of the matter is that most investment managers turn over their portfolios many times a year so “forever” is in most cases, only a few months, at best. If an investment manager actually believed this and followed this plan, they would not make much money for either of two reasons. If they maintained a static portfolio, their trading fees would be pretty low. If they charged a fee based on the assets under management and their customers saw very little activity for a couple or three years, they would wonder why they are continuing to pay the management fee and likely bail out. One way or another, fees are generated by activity.

This brings me back to alternatives to the “five stocks you should keep forever.” It is a myth. If you are investing in equities for income or growth or a combination of the two, I believe your best bet would be investing in broad based mutual funds including index or exchange traded funds.

Also, forever is a pretty long time but when it comes to stocks, it might not really be that long.