GUNS IN AMERICA: THE ELEPHANT IN THE ROOM

 

 

I have four lovely granddaughters ranging from 4 to 8 years old, I nearly lost one son in a car accident years ago, and another son wrote many articles for Newsweek about school shootings. That’s the context for how heartsick I am about the Connecticut shootings. I’m also sick to my stomach over political leaders who’ve shown zero leadership on passing minimal sensible gun-management laws. Laws governing toys and cars are more stringent.

There will be the familiar cries of politicizing this issue in the wake of tragedy yet I agree with The Washington Post’s Ezra Klein. He says conservatives’ “calls for silence” is politicization in and of itself, to protect their political construct and keep the status quo (loose gun laws), knowing that given time, the tragedy will recede.

This has nothing to do with the millions of wonderful hunters and sportsmen or those who have a gun in their home to protect themselves. By and large this group is responsible. National Rifle Association (NRA) leadership is another story.

Republicans are brazen about this issue. Until Friday, Democrats’ (including the presidents’) silence on guns has equaled complicity, even while America’s mayors and police departments outside the Washington bubble constantly make noise for better gun management.

Help me understand this:

·         On September 11, 2001, nearly 3000 Americans were killed in terrorist attacks and our politicians started two wars and spent 6000 lives (50,000 wounded) and trillions of tax-payer dollars

·         Every year, 11,000 Americans are killed in gun-related homicides and our politicians are silent

Nor do I understand this: 

People kill people. Guns don’t kill people.

It’s what opponents of minimal gun management measures always say. The old saw is that murder sprees are caused by crazy people. Indeed, mentally ill people commit most mass murders … and they’re aided by the most efficient machine ever invented to express hate, a gun.

Psychopaths sure do use knives, too … and they’re much less efficient. Ironically, in Japan on the same day as the Newtown shooting, a man attacked a school with a knife because he couldn’t get a gun. He injured 22 people, and no one was killed. 

Moreover, we aren’t the only country with mentally ill citizens. But we are the only large advanced country littered with guns and bereft of adequate laws to regulate them. The result? The average industrialized country experiences a per capita rate of gun violence that’s 4-5 times less than America’s.

But, the demographic times, as Bob Dylan might say, they are a-changin’.

Till now, the guns issue has been a political winner for Republicans. They could scare voters, 40 percent of whom own guns, into thinking that sensible gun management laws would really do nothing less than pry away their guns. Rural, white, male voters (assisted by NRA leadership) overwhelmingly supported pro-gun candidates who generally won in the past. All that changed in November.

Candidates supported by the NRA, which targets tight races against vocal pro-gun management candidates, lost six of seven races. As rural, white males decline as a percentage of the electorate, the Republicans are, at their peril, polishing their extremist brand that’s already perceived by a chunk of the electorate as anti-women, anti-science (on climate change), pro-polluter, anti-immigrant, and anti-African American (new poll tax laws).

Republicans will also be known as pro-murder as long as they oppose sensible, safe gun-management regulation.

The day before the Newtown shootings, Lindsay Graham and John McCain said nothing was wrong with the status quo on gun regulation. How could someone brave out what McCain did in Vietnam yet turn so cowardly in the face of the NRA? Until Newtown, virtually all Republicans and most Democrats cowered at the thought of discussing this issue. Harsh as it is to say, I believe our politicians have blood on their hands as this death toll marches on—32 people die of homicidal gunshot wounds every day.

New York City Mayor Mike Bloomberg, Piers Morgan, and Bob Costas are three courageous people who brave criticism and speak about this white elephant in the front room while everyone else pretends it isn’t there. I’m sorry to say that I supported the Brady Center for the Prevention of Gun Violence for many years only to stop 8 years ago because the NRA kept winning on every issue and progress seemed hopeless. Newtown moved me back into action.

I’m writing checks totally $10,000 from the Gegax Family Foundation to various gun management non-profits. I encourage you to: a) send what you can as well; b) call or write to your representatives and demand action; and c) tell anyone you can how you feel. Do not remain silent. Speak up to honor the 11,000 Americans killed by guns each year and for the 20 Newtown first and second graders.

When you do, keep in mind the Big Four Commonsense Measures that the NRA opposes despite the fact that they wouldn’t affect hunters, sportsmen, and responsible adults who keep guns in their homes for protection.

Partially from The Coalition to Prevent Gun Violence website:

Assault/ Semi-automatic/ High Clip Capacity Weapons

Assault weapons possess features specifically designed by the world's militaries to make it easier for the shooter to fire sustained, high-volume rounds into a wide area. America's weak gun laws allowed these weapons to enter the civilian marketplace and criminals quickly learned how to exploit their military features. Early estimates are that the Connecticut shooter was able to fire over a hundred rounds in two minutes at women and children. Congress let the ten-year assault rifle ban expire in 2004.

Gun Show Loophole

The Gun Show Loophole allows criminals and others prohibited from gun ownership to buy guns from unlicensed dealers at shows without undergoing background checks. It is estimated that 40 percent of all guns are purchased this way. What good are background checks at licensed dealers if the bad guys know they can go to a show to avoid a background check?

Microstamping

Microstamping is a technology that stamps the serial number of a gun onto expended cartridge cases recovered at a crime scene. It is an invaluable tool for solving gun-related crimes. Why make it harder for our hard working law enforcement officers to do their job?

Concerns about Concealed Carry

The NRA claims that concealed carry permit holders are the most law-abiding citizens in America. This may be true in many cases but it’s apparent that the screening process in most states does little or nothing to stop dangerous individuals from obtaining permits to carry concealed handguns.

AMC Theaters Gets Blockbuster'ed

I just saw a great example of a company—the theater chain AMC—become irrelevant overnight. AMC is big so let me explain. AMC La Jolla Theater just north of San Diego has always had big lines and tons of business. Mary and I have stood in them for years. Then a month ago, ArcLight La Jolla opened with a vastly superior business model: Pre-selected seating, comfy seats, lush lobby and theaters, alcohol, better food options, more and friendlier employees. 

Result? According to our eyes and an AMC employee, AMC La Jolla has lost half its business in one month. What was their response a month into ArcLight's incursion into their territory? (After all, AMC had 18 months notice that ArcLight  was coming.)

AMC simply hung a sign at its theater saying they had more comfy seats on the way. Sorry, AMC. Too little, too late. Kansas City-based AMC used to be a leader. Now it looks like a weak follower.

You have to prepare for competition like you're going to war. When I had Tires Plus, we got 18 months notice that Sears subsidiary, National Tire Chain (NTB) was invading our home base of Minneapolis-St. Paul. What did we do? Took multiple competitive espionage trips to their stores in other markets and upgraded our stores and people to insure NTB had zero edge when they arrived. In addition, during NTB's grand opening we had our biggest promotion of the year and slashed our tire prices. Result? NTB closed all five of their stores, packed up, and left the Twin Cities 24 months after arriving.

No matter how big AMC is (they were recently bought by a Chinese company), whomever the CEO of AMC is should be fired for being asleep at the switch. If what happened in La Jolla happens in other markets, ArcLight (or Icon or Alamo) will play Netflix to AMC's Blockbuster.

In the meantime, Mary and I will enjoy our movie nights at ArcLight La Jolla.

Grading the Boss

It's great armchair sport, grading the president's first 200 days or 300 days—or in the case of President Obama his first major political gamble, health care reform. Grades land all over the board depending on one's ideology or access to facts. Although objective observation generates the most accurate grades. All this got me to wondering how small business leaders could objectively observe and grade ourselves—our pluses, our developmental needs. It's important to know those grades.


When is the last time you evaluated your own performance? How did it look? What did you do about it? It sure ain't easy to get good evaluations. We beat up on ourselves too much or ignore faults altogether because that's less painful. Denial and rationalization can rush in when we turn inward.

Here's a quick primer on self-evaluation. I found many angles on this when I was Head Coach (aka, CEO) of Tires Plus, the 150-store retail chain I cofounded and sold to Bridgestone. I did an annual performance review of myself and added that to feedback from people who reported to me, submitted anonymously to our HR director. 

I still chuckle about the reaction this got from people a few years ago at the American Management Association's CEO Conference in Quebec. When I mentioned feedback I got from an employee review other CEO's were appalled that I had allowed my employees to talk about me like that. Ignorance is not bliss, I told them. I'd rather know what employees are thinking and saying and make corrections based on valid criticism. That's how you avoid the Emperor-has-no-clothes syndrome.

Another evaluation tool I've always used is coaching myself on the run. "Nice job, Tom, on your helpful interaction with and advice to Charles," I'd say to myself. Or: ‘‘Uh-oh, Tom. You got defensive again when John gave you feedback." It's healthy to talk yourself via objective self-observation.

You can also fix on how you're doing by candidly asking people around you, "What do you like about what I'm doing? How can I improve?" Sure, at first they'll hesitate to tell "the boss" what she's doing wrong. But if you lead with the pluses, and keep repeating, you’ll pan some gold.

Indeed, it's fine to grade presidents and employees but not to the exclusion of grading yourself. No one knows you better.

Crazy CEO Pay Kills the Goose that Lays the Golden Egg

Now we have a "Compensation Czar."

Yesterday President Obama named Washington attorney Kenneth Feinberg "special master for compensation." How did we get to a point where the federal czar pool included somebody who has to watch Corporate America's cookie jar?

Amid the chatter about poorly rated subprime mortgage bonds, financial weapons of mass destruction and loony corporate and consumer leverage, CEO and senior management pay hasn't come in for an appropriate amount of blame for our Great Recession.

It’s sad that it has come to this. But maybe it’s the lesser of two evils. I'm hardly playing fast and loose with the word crazy to characterize the recent history of CEO pay. The ratio of CEO pay (salary, bonus, stock grants) to average worker pay was 24-to-1 in 1965, according to a 2005 Wall Street Journal report. In 2005, it had reached 262-to-1. (My pay was 8-to-1 when I was CEO of a $200 million per year retailer.)

You may ask, So what if these ratios are stratospheric? (You may also ask why I didn't pay myself more, a subject for a later post.) Companies have various stakeholders: CEO and senior management, line employees, customers, shareholders, the community in which they operate. If the CEO and senior management take a large stake, it has to shrink the stakes of the other stakeholders.

It's hard to take the stakes away from the customer since management competes every day with its rivals on price and quality. That leaves employees, shareholders and the community getting shafted. Employees, especially the lowest paid, are the most vulnerable. Before the crash, CEO’s engineered huge pay increases as they vigorously fought increases in the minimum-wage that hadn't budged for a decade (see Barbara Ehrenreich's "Nickel and Dimed"). The irony that must be lost on CEO's and boards is that the declining real wages eviscerate their customer base.

Golden Goose, meet Death.

Meantime, the official memo from the corner office says that capitalism is so darn fair. Indeed, capitalism is fair ... unless the egos and greed of CEO’s and senior management go unchecked. Then we have feudalism masked as capitalism; serfs working for overlords.

Shareholders feel the sting as well. For those who have made enough lately to pay expenses and taxes AND make investments, crazy executive pay has hurt their 401(k)'s and mutual funds. Anyone who invested in an index fund tied to, say, the S&P 500, has lost 27 percent over the last ten years.

Massive bonuses and stock grants without claw-backs encouraged reckless investing that led to 2008's crash.

Finally, communities lose when executive pay eats into the share of profits that they often earn from their “pillars of the community.”

The good news? Thanks in part to Warren Buffet's crusade more and more boards feel shareholder and community pressure to make sure that CEO’s and senior management don’t win at the expense of everyone else. One day, maybe CEO's will learn that, as my dad always used to say, pigs get fat and hogs get slaughtered.

[NEXT BLOG: How to terminate in an age of downsizing.]

Cut Costs (Not Your Own Throat)

Cost cutting is as common as spring showers when the economy goes south or your company starts missing plan. It's smart to get out in front—aggressively—in tight times. That said, you gotta know what to cut and what leave alone. What to cut?

Absolute waste. It's stuff like note paper and things like extra, unused phone minutes. Ask employees for their cost-cutting ideas. They know where the waste is buried better than you do.

Overly expensive purchases. Try to get three bids on practically everything you buy, especially large expenses—and even on small, ongoing expenses.

Employees. Grade your employees' performance and potential on a scale from A to F. Then book a candid talk with whomever you graded below a B, or with whomever isn't trending in that direction. Sensitively and firmly free up their futures. Consider salting their duties into other positions before opening the positions to hire.

The P&L statement. Go down your expenses line by line for other ideas. Utilities? Can you crank down the thermostat 5 degrees for savings?

But beware of cutting into bone. By that I mean, triple-check that cuts don't accidentally lower revenue or simply shift costs. Seriously ponder before cutting the following.

Marketing. The advertising and P.R. expense lines are favorite whipping boys when business is hurting. The problem is that down times are when you need your name out there more than ever. Otherwise revenue will fall further. Certainly, stay within industry guidelines (generally 4 to 5 percent of sales) and measure which efforts are effective (the web makes this easier than ever). Hard times also open up opportunities to negotiate harder since you have leverage over desperate media outlets.

Education. This is the lifeblood of your company, essentially no different from R&D. Less of this means more ineffective and uninspired employees. Do. Not. Cut.

Technology. Yep, hold these expenses to a specific ROI but be very careful with cuts. Reductions here generally mean you'll wind up needing more humans doing what the technology would've done. Further, you'll lose valuable reporting tools, essential for strategic thinking.

Bottom line: Cut, yes. But cut with care and understanding. That will help profits and get you pointed north again.

Social Capitalism: The New Market Philosophy?

Suddenly it dawned on me in the midst of a recent meeting of Deepak Chopra's Evolutionary Leaders: What we're missing is a market philosophy called social capitalism. People are hammering capitalism and socialism a lot these days. Yet when I think of socialism's root word, I think of sociability or something good for society. Webster defines socially-minded as "actively interested in the well-being of society as a whole."

I like that. But I don't like the definition of socialism: "an economic or political theory advocating government ownership and administration of the means of production and distribution of goods." That's not in the best interest of society.

Nor do I want feudalistic capitalism or feudalism masked as capitalism. But that's where the last 40 years have taken us. The wealth gap between the workers and the bosses is one of the most reliable metrics of healthy capitalism. The exact ratio is CEO pay-to-average worker pay, a ratio that 38 short years ago was 28-to-1.

Great by me if a CEO makes 28 times the average wage of his employees. Responsibility deserves rewards. At the company I founded, Tires Plus Stores, my pay was 10 times what my average employee made. Fast forward to 2005's ratio, a whopping 465-to-1.

Remember, capitalism is a system of wealth distribution that's both determined by private citizens and affected by worker productivity. Recall the old line, the harder we work the more we get paid? Despite ballooning productivity the last 40 years, non-executive workers' real wages are down 5 percent during the same period CEO pay has exploded from 28-to-1 to 465-to-1.

Corner office fat cats are coining a new expression of greed: pigs get fat and the middle class gets slaughtered. Falling wages, loose credit, high interest rates and predatory advertising (among other things) eviscerated the middle class. Through this lens the recent consumer collapse feels like karma. In a nice little bit of symmetry, a consumer pullback causes retailers to cut back on distributors and manufacturers run by -- you guessed it -- those selfsame fat cats.

Yet here's the rub. When you and I get into trouble we're reminded that Bill Clinton ended welfare as we know it. Pitty the needy. But when business falls off and big corporations get into trouble we taxpayers bail them out, whether or not we like it. Sounds like socialism for the rich and capitalism for the rest to me.

Bottom line: I'm a capitalist so long as corporate leaders are actively interested in the well being of society as a whole. Neither feudal capitalism nor corporate socialism is in society's best interest. Which brings me back to my epiphany. Maybe social capitalism is the way to organize our society.

To Regulate, or Not to Regulate. That is the Question.

Whither regulation? Lots of debate on this. With firms crumbling left and right, especially in banking, the most unlikely characters are jumping into the regulation bed together. Imagine Ayn Rand and Karl Marx canoodling in a corner at Smith & Wollensky's.

On the right, many in the government-is-the-problem crowd suddenly want the feds to step in and support the free-falling markets. On the left, many in the government-is-the-answer crowd are loath to bail out a bunch of Wall Street fat cats.

The history of regulation shows it swings back and forth like the pendulum of a grandfather clock. Typically, regulation is light until stability grows into instability as excesses grow and consequences settle in. It's all invisible until suddenly one morning the consequences crash through our kitchen windows. (Note: Adam Smith's "invisible hand," made famous in his 1776 "Wealth of Nations," referred not to federal intervention in the markets but to the societal benefits of people behaving in their own interests.)

Next: Government flies from sleep into overreaction: "We must regulate!" As time goes by and we feel the benefits of some regulation, "the regulated" begin crying that they're so manifestly pure in interest and intent that they no longer deserve the chains of regulation. It isn't in their interest to acknowledge that regulation helped stabilize things to begin with, and they count on the short collective memory of the citizenry to forget it.

Soon the people have allowed their representatives to water down regulation. After a short-lived honeymoon of good behavior, history shows that too many swashbuckling CEO's sidestep former laws that had become rules that were now, really, simple recommendations (weren't they?).

Always, we fail to understand the mind of the business leader. Most honed their competitive mettle in sports—much of it healthy, like doing their best, learning to lose gracefully, good sportsmanship. But many competitive people take one particularly bad principle from the lockerroom to the boardroom: The tendency to stay just a shade within the rules and when nobody's looking, Katie bar the door.

When basketball refs aren't calling fouls the competitive player will foul more to stop his opponent. When the refs don’t call the fouls, you don't exactly hear the culprit yelling, “Hey, ref, you missed that last foul! I really hacked him good!” Not gonna happen.

In the business world, leaders ignore boundaries if there's no regulator around and they're pressed to gain every edge to beat quarterly expectations. Guidelines fade fast when they feel pressure to perform (with kid’s expensive schools, hefty house payments). The rationalization defense mechanism kicks in: Those aren’t really rules.

Ironically, regulation is good for business. It's good medicine, whether preventing or curing disease. While they don’t like the taste, without it business can’t help itself from wallowing in the mud, forgetting the old line about pigs getting fat and hogs getting slaughtered.

Recent abuse is so bad that the medicine needs to be industrial strength yet sensible enough to restore confidence in our institutions and rebuild their balance sheets. We got through much the same mess with the mortgage-inspired S&L crisis of the '80s. Let’s hope our memories are a little longer this time around.