Measuring Up

Redefining loyalty

Employers everywhere continue to discuss how employee loyalty towards their companies has changed over the   years. Many feel that employee loyalty simply doesn't exist anymore. And, it makes them mad.

This New York Times article tried to offer a new twist on this topic by asking the question: Should loyalty be redefined? Although the headline is catchy, this article offers almost no new insights. Instead, it focuses on many redundant topics that we already know and have heard dozens of times.

For example, we know that loyalties are completely different now versus during the 1950s when an employee could be assured of a job and career for life. Now, there is no real job security beyond feeling that most employers still reward based on merit and real results. Meaning: Do great work and you'll probably still have a job (and may just be promoted as well).

We also know that the Baby Boomers have had the toughest time acclimating to this new reality. The article interviews a number of experts (and Boomers) who feel compelled to tell us just how difficult life is as they've been forced to move from job to job over the last few recessionary years. Nothing new there. Once a person in his/her 50s or 60s loses a job, it can be incredibly difficult. Age matters to most and that's a tough pill to swallow.

Perhaps the point that I'm most sick of reading about though is that this new group of Generation Y workers simply have no interest in being loyal to any employer. These young 20-something new entrants to our workforce are accused of generally having few corporate loyalties, little patience and a tendency to complain  about too much work on their plate.

This article tries to redefine loyalty about the Millennials focusing on how they are more faithful to their teams, co-workers, clients and even causes versus the employers they earn a paycheck from. It also highlights how these employees now move quicker from job to job because very few loyalties ever exist.

I can't say that this point isn't true (I've seen it at my own company). But, I also believe that ever since I've been in the workforce (that's more than 20 years), employees have jumped from one company’s cubicle to another. And, it's because many of the same reasons remain consistently true: more money, better opportunities and a lack of interest or challenge in one's current job.

Sure, maybe it's even worse now. But, one thing hasn't changed and this New York Times reporter failed to capture it. Not sure a new definition of loyalty even matters. What's more relevant is whether employers are making sure that employees are really challenged in their jobs. On top of that, it's how they demonstrate growth paths, as well as financial rewards for them so they won't be tempted to leave.

Be it now or 20 years ago, that's what most employees care about. And, while each new generation might be apt to quit their job for another a little quicker than the last, employers can still keep most of their best performers longer by creating fulfillment at work that they can't easily find elsewhere.

Happy Days actors aren’t smiling now

My wife found this news brief this morning. Since our Brand Squared division specializes in licensing, I found it interesting enough to offer some thoughts.

As you can see, it seems like most of the former "Happy Days" sitcom stars (all except Fonzie and Richie Cunningham that is) are more than a little annoyed with CBS these days. That’s the network owner of their former hit TV show "Happy Days". According to a law suit that they filed together, none of them have received a dime of licensing royalties from CBS since the show since it ended almost 30 years ago. These royalties come from merchandise such as lunch boxes, greeting cards, comic books, t-shirts, etc., that all display their likenesses on them. They claim that CBS profited immensely from sales of these products, while they made nothing. And now, they are asking for $10 million in compensation to recoup these losses.

Wow. That’s a lot of Potsie and Ralph Malph lunch box sales.

This blogger thinks that these former actors (and that’s what all of them are), have either gotten plain greedy or just gone crazy because there is no way a Happy Days licensing program would be worth that much $$$,

Does CBS owe Potsie, Ralph and Joanie some dough? You bet. They have a right to a small percentage of the royalties that were generated and taken by CBS. But, it’s hard to imagine that CBS could ever generate $10 million on its own for "Happy Days", much less for all of the hit TV shows it produced over the last 30 years. That’s just a lot of licensing money that doesn’t come so easy for one single property.

In a trade article from last year, CBS reported $340 million in annual merchandise sales to consumers.  After you factor in retail markups and average royalty rates, CBS actually generates about $20 million in annual profit from all properties they license out– "Happy Days", "Survivor", "Price Is Right", "NCIS", and many more.  What would "Happy Days" as a property contribute to that $20 million (when the property was in high demand)? Maybe  5%?  So you have Happy Days generating $1 million in merchandise-related profit annually, when the show was at its peak.  Happy Days was on for 10 years.  Essentially, a forgotten supporting cast with a $10 million lawsuit seeks 100% of what CBS earned (because after all, why should the producers, writers, creators, Richie and Fonzie get a share of that revenue). One might expect that collectively, the former stars could earn upwards of 5 percent on that figure (again being generous). That would equal a combined pay-out of $50,000 among all the parties involved. Clearly, a far cry from the $10 million that is being demanded.

While the publicity surrounding this law suit might unearth other hidden pay outs that CBS (and other networks) has failed to make, it certainly won’t help these desperados collect money that just isn’t theirs.  My estimates are probably off, but within the general ballpark of reality. Therefore, this blogger thinks that the Happy Days crew should put on a happy face, take their fair payout of a few dollars and drop this bogus law suit.

How smart is this man?

Donald Trump is front page news. 

This businessman filled with bravado has us all wondering whether he's really going to make a Presidential run. Or, is this simply a giant ruse that he's created to promote his still popular ‘Apprentice’ show on NBC, while also serving to prop up the value of the Trump brand for a host of other business dealings.

My personal opinion is that this began as a very creative publicity stunt to build TV ratings. But, as media began to listen and widely report about him, ‘The Donald’ saw that a bona fide opportunity existed. Amazingly, the political polls have him steadily rising in popularity to the point where he is now a front runner on the Republican ticket. Some (like this blogger) view this as a sign of just how weak the Republican candidate list is. But, Trump could just play this out until he needs to declare his official run for the office (or not) just to see what options he has along the way.

Donald Trump is arrogant, shows a complete lack of humility and certainly rubs many the wrong way with his outspoken and often controversial viewpoints. His personality and character would be more suited to a third world nation dictator, than the president of any democratic nation. But, he is also very smart.

That's because it really doesn't matter what candidate Trump says. The masses are going to listen and there is almost no downside to what he does and says at this point.

Take as an example his laughable rhetoric on the birther issue surrounding Obama. Only the far right chooses to believe that this could be true. But, by peddling this nonsense to anyone who will listen, Trump now has minted a new loyal base of followers.

How about the Libya issue and what to do with Qaddafi? He was asked this question on ‘The Today Show’ last week. His answer was so comical, yet also refreshing because in stating that he only wants "the oil" or “let's stay out of that mess,” he did something that no real politician would ever do. He spoke the truth. At the same time, this comment served to fan the flames of melodrama around him, serving to create even more exposure, while his new loyalists flocked to watch ‘The Apprentice’ because they need to soak up his energy whenever possible.

Yes, this is what we often call a win/win scenario for Mr. Trump. And, I have to respect how he's created a reality in which his go or no go presidential decision falls squarely around the last and most important season finale of his hit show.

Most blogs and stories on this topic focus around whether this is a big hoax, or if Mr. Trump's views/comments give him a legitimate chance for the nomination. To me, that's all background noise.

Personally, I can't ever see him choosing to run because that means opening up his finances to the world. I could be wrong, but just believe that there are far too many skeletons in his business closet to open up to the world. The negatives far outweigh the positives on this one.

Instead, what I find really interesting is just how long he'll milk this enormous opportunity along the way and the entertainment value that I can take in every time he speaks.

When bankruptcy meant failure

Chapter 11 used to have a shameful and negative connotation in corporate America. Quite simply, it meant failure through bankruptcy.

That was the past, though. For decades, many companies have willfully utilized Chapter 11 protection laws to gain a second chance. We've seen it over and over again. Those over their heads in piles of debt, or companies that simply come close to running out of cash use these bankruptcy laws to erase most (if not all) their obligations and problems.

Even though Chapter 11 filing is used as a business strategy now, it's fair to say that most in the business world still view it as a failure to succeed. That's why I find today's news of Sbarro's bankruptcy filing to be so comical. More to the point, specific comments made by its CEO about this news are just plain odd.

Let's state the facts first. The company is suffering from a serious liquidity crisis. In its current state, it couldn't afford to keep paying off loads of debt, while operating its 1000+ restaurants. What pushed it into Chapter 11 is when Sbarro's financing options died. All of this happened because of recessionary matters which also forced the company to shutter 150 stores.

The bankruptcy will allow Sbarro to shed 195 million in bad debt, coming out of bankruptcy relatively quickly, but not unscathed and certainly not completely healthy as it will owe 175 million to debtors and creditors still.

Yet, its CEO Nicholas McGrane, said in court papers earlier this week, “Sbarro is a strong company that will quickly emerge from Chapter 11 and remain very competitive."

Huh? Is that comment just a tad too optimistic considering the company's current predicament? I mean the company has run out of cash.

It also makes the company's senior management come across as pathetically too optimistic, out of touch with what readers will believe and just plain silly.

Does the company have a bright future? I'm not sure anyone knows that answer. More to the point, if this CEO wants to be taken seriously, he needs to understand an important communication strategy— choose words and tone that are both believable and fit within the current scenario he is dealing with.

We often advise clients on this very issue. I've witnessed many cases where executives just didn't understand that their overly positive statements wouldn't come across well. Often, they were edited or changed to more acceptable language. Clearly that didn't happen in the case of Sbarro's CEO. Unfortunately, it's an egregious mistake.