I Can’t Have a Handle on Everything
Introduction:
This week, Jay Goltz and Laura Zander talk about the limits of their own management. Once a business gets past a certain size, no owner can do everything or even be aware of everything. But where do you draw the line? Does the owner need to be conversant with most aspects of management, marketing, and finance to oversee the business? This came up, in part, because Jay told us recently that his framing shops routinely ask customers how they learned of the business and that a recent review indicated that his social media efforts were not having an impact. But when asked about those efforts, Jay wasn’t entirely sure what they consisted of or if they even existed. Perhaps surprisingly, it also became clear that Jay wasn’t all that interested in learning more. It was working well enough, he’d concluded, and that was all he needed to know. And that’s the starting point for today’s main conversation. Along the way, we also address such questions as: Where’s the line between being a manager and being a therapist? Do owners need to be passionate about their businesses? What does the phrase “people over profits” really mean? And while “the customer is always right” has become a cliche, is it really a good policy?
— Loren Feldman
Guests:
Jay Goltz is CEO of The Goltz Group.
Laura Zander is CEO of Jimmy Beans Wool.
Producer:
Jess Thoubboron is founder of Blank Word Productions.
Full Episode Transcript:
Loren Feldman:
Welcome Jay and Laura. It’s great to have you here. I want to play a little bit of a game today. I want to see if I can trigger Jay. I’ve gotten pretty good at it. I don’t usually try to do it.
Jay Goltz:
No, you’re gifted Loren, really gifted. You’re selling yourself short.
Loren Feldman:
As listeners to this podcast know, Jay does have some strongly-held beliefs, and we sometimes hit upon topics that you feel strongly about. So today, I want to see if we can dig deeper into a few of those topics and understand what it is that kind of sets Jay off.
Laura Zander:
This sounds like so much fun! [Laughter]
Jay Goltz:
I’m gonna be calm, cool, collected. Nothing’s gonna get me. I’m just gonna be like—
Laura Zander:
Challenge accepted.
Loren Feldman:
Exactly. Before we do that, Laura, we haven’t talked to you in a while. How are you? How’s it going?
Laura Zander:
It’s going. I’ve decided I’m gonna go on sabbatical in a few months. I don’t know if I really will or not, but that’s helping me get through this. I’m going through a tough employee period. And it feels like everything comes in threes, right? So I just found out yesterday that my team, three of my employees, were at a yarn retreat this past weekend. So we had a little booth there. It’s 100 customers, 100 women who are paying big money to stay at this nice resort. And then you have a bunch of different vendors like us who have tables and are supposed to interact with the retreatees, and sell some stuff, and blah, blah, blah.
So anyway, I find out that one of the three team members behaved pretty inappropriately during the event. You know, getting stumbling drunk, not coming to the booth on time, being an hour or two late, being on her phone. There was a presentation one evening about missing Indigenous women. She was in the front row and just rudely FaceTimed somebody and got up and walked out.
And this is somebody who had been written up. She has been written up twice in the last five weeks. I thought she was a great employee a few months ago, and then something just shifted, something changed about six or eight weeks ago. And she’s been coming to work late, been leaving early—she’s on salary—hasn’t been putting in her 40 hours, making tons of mistakes. So, yeah, so that was our fun. That was yesterday.
Loren Feldman:
So what are you doing about that, Laura?
Laura Zander:
We’re gonna let her go. And we just, right before this podcast, the leadership team, we all sat and talked together. I mean, we’ve worked so hard to fix—
Jay Goltz:
Wait, wait, wait. You keep saying “we.” Who’s her manager? It’s not you, I assume?
Laura Zander:
No, it’s not.
Jay Goltz:
So what’s her manager have to say? She’s with her all day long. She knows better than you do, because you’re not there all the time. What does the manager have to say about all this?
Laura Zander:
That we should let her go. Yeah, I mean, we’re all in agreement. She’s the one who’s written her up the last couple times. We’ve had a couple of different verbal conversations. So her work has just gone downhill, and it doesn’t seem to be getting better, even after having multiple conversations.
Loren Feldman:
Did she have any explanation?
Laura Zander:
No, and we haven’t even talked to her about the drinking. At the event, her manager talked to her about the phone usage, and it didn’t change.
Jay Goltz:
You know, there’s always a thin line between being a therapist and being the manager. And I’m not saying you shouldn’t go out of your way for employees and try to be supportive, but there is a line where that’s just not our job. And this sounds like you’ve made a good faith effort to try to fix it. Enough. There is such a thing as enough, because at the next level, you start doing it, and you are their therapist. And now all of a sudden, you find out things that you wish you wouldn’t have known, and now all of a sudden you have a legal responsibility. And it sounds like you’re in the right place.
Laura Zander:
Yeah.
Loren Feldman:
Well, you said things come in threes. This is one.
Jay Goltz:
That’s a stupid phrase. So let’s not even go there. Things don’t necessarily come in threes. Sometimes they come in one. Sometimes they come in fours.
Laura Zander:
But sometimes they do come in threes.
Jay Goltz:
All right, in her case, it sounds like it happened to fit. Okay, go ahead. Tell us your two and three now.
Laura Zander:
So that was that, and then, oh, we received $65,000 worth of materials from our supplier in South Africa, and it’s bad material. So yesterday, we started going through all the data, reporting back to the mill, trying to come up with a solution. Like: “What are we going to do with this bad inventory? How do we send it back? Can we salvage it?”
And then the third thing yesterday that came to a head was our bank. We have been with U.S. Bank for, I don’t know, 15 years or something like that. The couple of guys who have managed our account here in town are phenomenal, nicest guys ever, bend over backwards, super responsive anytime we have a problem or a question. Well, about a year and four months ago, they said, “We’d like you to change your merchant services.” So we’ve been using a merchant processing company for the last 15 years that was a small family-owned business, and we’d always resisted changing to anybody else. It’s a lot of work to change for us because we have a custom-built software system.
So U.S. Bank came to us and said, “Hey, will you change? We’ll give you two months of merchant-processing for free, and you’re going to save. Our rates are about $15,000 a year cheaper than what you’re currently doing.” Okay, okay. You know, we didn’t want to. We didn’t want to, but we did the math, and we’re, like, “All right, this is $30,000 or $40,000. It’s worth it. These rates are not going to change, right? You’re not just hooking us and telling us these are some great rates, and then next year, you’re going to increase the rates?” “Nope, the rates aren’t going to change.” So a couple of weeks ago, I get a letter in the mail. Our rates are going to quadruple.
Jay Goltz:
Oh, for God’s sake.
Laura Zander:
Quadruple. So I go back to them, and I say, “Hey, you know, this sucks. Here’s the email chain of where I asked if the rates were going to change. And you told us, ‘No.’” And it was a different guy. The merchant-services guy was a different sales guy than the people we normally work with. And now he’s not there anymore, and he’s somewhere else. And so they say, “Yeah, sorry. Let’s see what we can do.” So we have multiple conversations. Well, they came back, and they’re like, “The best we can do is doubling your rates instead of quadrupling.”
So we’re just like, “Seriously?” So I sent a note yesterday and talked to them and was just like, “All right, we’re leaving the bank. This is enough.” I pay some of our vendors through auto-pay mechanisms through the bank, and they’ve failed multiple times over the last couple of months. They don’t have an answer for why. Their software’s failing or their technology is failing. We just had an overdraft, like two days ago, because our automatic payment transfer or automatic transfer didn’t happen because they’ve changed something in the software. And so that caused an overdraft. And anyway, so we just said, we’ve completely lost trust. So there’s my third.
Jay Goltz:
Okay, so let me just give you some feedback from my perspective.
Laura Zander:
Unsolicited advice?
Jay Goltz:
No, it is solicited. You’re asking me. Okay, one is, I’ve never used the processor that the bank uses because they’re two different things. And just because it’s good for the bank doesn’t mean it’s good for me. So I’ve always had it separate. So that’s one.
Two is, from my experience, these gigantic banks couldn’t care less about you, me, or any other small business. And I’m not surprised that it fell apart. Because I’ve just found that you’re beyond insignificant to them. No one’s waking up going, “Oh my God, Laura’s changing banks.” So it just seemed like a matter of time before that reared its ugly head. So none of this surprises me.
Laura Zander:
No, it doesn’t. I think what surprised me was how long they were so great and how helpful they have been in the past with our mortgage, with the SBA loan. I mean, they bent over backwards to make that happen, or when it came to the PPP and all that stuff. So they have been phenomenal, which I think is probably the exception.
Jay Goltz:
Yeah, no, it’s unfortunate.
Loren Feldman:
Laura, do you know what you’re going to do for a bank and for merchant services?
Laura Zander:
Merchant services, we’re going to crawl back to the company that we had been with for almost 20 years before this. I mean, you know, we were loyal.
Jay Goltz:
Okay, let’s not say “crawl back.” They’re gonna be happy to have you. It’s not like you’re gonna have to beg them. They’re going to be happy to have you back.
Laura Zander:
Yes, well, we will go back. And then I don’t know about bank-wise. Doug will take care of that, and he’ll figure that out.
Loren Feldman:
Jay, you have another bank story going on right now. Could you give us a quick version of what you’re going through?
Jay Goltz:
The big bank took over my local Chicago bank, and I knew there might be a problem down the road. All of a sudden, in December—I still am writing checks. I’m going to electronic, but at the moment, we were writing checks—and we find out that 40 checks that we took to the post office were stolen. And all of a sudden, they started coming back to the bank. And this is the amazing part: the endorsements. People took a check made out to Acme Company, and Joe Schmo signs on the back and puts it in his bank account. And the bank takes it, and then the bank sends it to my bank, and they pay it! Even though the name on the back isn’t signed by Acme Company. It’s signed by Joe Schmo. They pay the person.
So we immediately shut off the account. And they say, “Okay, you’re gonna have to send us affidavits from every one of these vendors. They’ve got to send you a signature saying, ‘We never received the check.’ And it needs to be notarized.” Oh, okay. So this is the part you wouldn’t know: You’d like to think that your vendors would feel bad and go out of their way to help you out. Okay, well, that was the case in 20-some of them, but 10 of them, it’s like pulling teeth. “Could you just sign?” “Oh, I’m not comfortable doing that.” “Seriously? I’ve been a customer for 25 years.”
So I’ve gotten 39 of them done. I’m still trying to get one of them to sign the stupid piece of paper that simply says, “We never got the check.” And it’s now March. I just got back two of them, the refunds. I’m out 40,000 bucks. Two checks finally got reimbursed from the other banks, but whatever you think about banking, that you think there’s some controls, forget about it. Endorsements apparently are meaningless now. And so I talked to other people and they go, “Oh, yeah, if you Google it, it’s all over the place. They’re stealing them at the post office. They’ve held up some mail people and taken their keys and gotten into the box.”
Loren Feldman:
Could this happen if you were paying with an electronic check?
Jay Goltz:
I don’t think so. So we’re moving to that.
Laura Zander:
So here’s a lesson that I’m taking from this: Being a small business or medium business owner sounds so romantic and sexy. But we spend a ton of our time doing freakin’ admin firefighting, right? I mean, talking with the bank, and figuring out all this stuff—
Jay Goltz:
Yes, because we’re insignificant to the bank. And I should have left the bank a year ago, and I just left now.
Laura Zander:
But how is this building—and this is where Doug gets so frustrated all the time. He’s like, “We’re not working on the business.” I mean, think of all this time that we could have been spending doing [other] stuff. You know, we’re just admin.
Jay Goltz:
Well, listen, if I’m blamed for anything, I should have changed banks earlier, because the new bank would have given me a provisional credit. And the big bank that took over, they couldn’t care less. It’s like, I’m out 40 grand now. And they’re like, “Yeah, you’ll get back most of it. It’ll probably take three or four or five months,” and they’re perfectly comfortable telling you that—even though, keep in mind, they’re the ones who paid the check that had an endorsement that didn’t match. They didn’t even try to write Acme on the back. They wrote their name! I think these are the real people’s names that are stealing the money. They put their actual names on the back and the bank paid it anyway.
Loren Feldman:
So now that I’ve got you warmed up a little bit… [Laughter]
Jay Goltz:
Ooh, you got me. All right. Nicely done.
Loren Feldman:
Thank you. Thank you. Thank you. Let me run a few things by you. Let’s start with this: What do you think of the phrase, “Entrepreneurs should always follow their passion”?
Jay Goltz:
Yeah, that’s such a warm and fuzzy thing. And certainly, there’s passion in business, but the math has to work. And I’ve seen lots of people who followed their passion and lost $300,000, because it just was a bad idea. So stop listening to your friends who go, “Oh my God, these are the best cupcakes I’ve ever eaten. You need to open up a cupcake store. Oh my God, you’ll be a billionaire!” And they open it and find out, “Oops, not really.”
Laura Zander:
That’s like marrying for love, but the guy that you love is a cheater and an alcoholic and a total asshole like 80% of the time. But you love him the other 20%.
Jay Goltz:
Eighty percent of the time. Wow.
Laura Zander:
I’m just making up numbers.
Jay Goltz:
Yeah, sometimes what we love to do, lots of people like to do. And you just can’t make any money at it, because the math doesn’t work.
Loren Feldman:
Jay, I asked you about this, because it kind of came up during our conversations about your thinking about doing an ESOP. It came up with regard to one of your businesses, which is Jayson Home, which is not the business you started with. And you said some things that kind of suggested to me that you don’t quite have the same passion for this business. And yet, it’s been very successful. And I’m just curious how you think about that.
Jay Goltz:
Well, there isn’t anything in the framing business I haven’t done. I mean, that’s what I started with. I love framing. I love turning things into great-looking framed pictures for customers. And there isn’t a part of that business that I haven’t done and enjoyed. The home store was a function of, “Oh, it’s horizontal integration. Oh, the same customers who are getting framing probably would like to buy some furniture. I have some extra space. I think I’ll start a little offshoot over here.”
And then I hired some talented people, and it turned into a pretty big business. No, I don’t have a feel for that business like I do with the framing. I have nothing to do with the whole purchasing and the design or anything else. And no, I’m not even close to as engaged in that business as I am in the framing business.
Loren Feldman:
Even though, we should point out, it’s larger now than your framing business.
Jay Goltz:
Yes, it’s very successful.
Loren Feldman:
It gets a lot of attention. You know, Bobby from Queer Eye buys there.
Jay Goltz:
As an editor said to me, she goes, “Jay, I don’t know how you did it, but you’re nationally known.” Jayson Home is nationally known, and it’s a hot, cool furniture store.
Laura Zander:
I told you I was in Morocco, like on a retreat probably 10 years ago, and UPS came to the door of this retreat center. And there was a box from Jayson Home. And I’m like, “Oh!” This was before I knew you, and so I was just like stalking you. I’m like, “Oh my God, that’s Jay Goltz. That’s his stuff. Like, they even know him in Morocco. He’s so cool. Maybe someday he’ll talk to me.”
Loren Feldman:
And yet, Jay, what I kind of hear you saying is that you would pull out all stops to make sure that Artists Frame Service succeeded and goes on. Whereas you don’t have that same feeling for Jayson Home.
Jay Goltz:
Well, I don’t know. I’m fully committed to Jayson Home. I love the fact that we’ve got happy customers nationally—it’s mostly national. But I certainly don’t have the wherewithal to run it myself, at all. And so it’s just an odd thing. I’m proud of it. I feel great offering what we offer customers, and that they’re thrilled with the store. But no, I can’t go back to the old days of, “I’m gonna go back and start doing the buying.” I can’t do anything over there.
I don’t have the skill-set. I couldn’t go ahead and, “Oh, so and so quit or retired. Well, I’ll just go back to doing that.” I can’t do it. It’s not my thing. So I certainly don’t have the personal knowledge or skill-set to take that business over if I ever needed to. Whereas framing, like I said, I’ve done every single job in there. So yeah, it’s different. I’m fully committed to it, but it certainly would be more difficult for me to figure out how to keep it going if a few key people left. It’s different.
Laura Zander:
For me, I started with being passionate about the product when we started the business, and then, that just evolved into being passionate about business, and being passionate about my team. I mean, it wasn’t so much what I was originally passionate about. I found that I love building the business. I love growing the business. I love exploring. I love taking on new things.
Jay Goltz:
You know, that’s interesting that you say that, because in my case, I am extremely passionate about the people who work at Jayson Home, about supporting them, about helping and being involved with making customers. So I am passionate about the business side of it. I just do not have the same skill-set with the actual product and what we sell.
Loren Feldman:
Jay, I think you’re comfortable talking about this—tell me if you’re not—but the person whose vision this really was left a year or so ago, I think.
Jay Goltz:
Yes.
Loren Feldman:
And for you, that was, I think, a little bit of a crossroads.
Jay Goltz:
I would call it evolution. She was here 29 years, and she decided it was time to move on to something else. And I have an infrastructure that was very strong there. So it was okay. Here’s what I’ve learned. I’ve been in business for 45 years this year. I mean, you’re gonna go through some evolution, and there are going to be some times where some key people leave. And things are different than they were 45 years ago, and things evolve.
I don’t care what business you’re in. When you start out with six employees, it is unlikely when you’re at 60 or 80 or 100 that those six employees are still going to be fitting into what the size of the business is. And sometimes they want to leave. It’s extremely unfortunate and extremely painful sometimes, but sometimes the person outgrows you, and sometimes you outgrow the person. In this case, she had done it a long time. And the situation here changed, and she just decided that it was time to go do her own thing. And I worked out something with her. It was all a soft landing.
Loren Feldman:
So does this mean you really don’t need to be passionate about a business to make it work?
Laura Zander:
I think you need to be passionate about something.
Jay Goltz:
Yes. Right. You do need to be passionate about it. But just because you are passionate doesn’t mean the business is going to succeed, because it just might not be viable.
Laura Zander:
And vice versa. I mean, if you’re going to start a landscaping company, it doesn’t mean you have to be passionate about landscaping. To me, it means you need to be passionate about building a company, or passionate about blah, blah, blah, right?
Jay Goltz:
Well, let’s just say this—which is absolutely the case in my case—I would argue, you’ve got to be passionate to want to take care of customers.
Laura Zander:
Totally.
Jay Goltz:
Which is absolutely the core of why I’m successful. I grew up in my father’s dimestore. I got weaned on taking care of customers. I didn’t know any different. And there are people out there who hate their customers. They complain about their customers. You see them all over the place.
Laura Zander:
All the time.
Loren Feldman:
All right, I’m clearly not triggering you with this one. Let’s move on.
Jay Goltz:
No. Nice try, though.
Loren Feldman:
Let me try another one. This one’s about digital marketing. And actually, it’s something that came up the last time Laura and Dana were on with you. They were both talking about how they’ve used influencer marketing, and they both expressed the opinion that it could work really well for you and your businesses. I think you do it to some extent with Jayson Home, maybe not with picture framing. And when I asked you about that, I felt like you got a little defensive that this is not something that you really want to put your energy into.
Jay Goltz:
I wouldn’t call it defensive, maybe dismissive. [Laughter]
Laura Zander:
I knew you were gonna get defensive about him saying that you get defensive.
Jay Goltz:
Yeah, right. No, I don’t, because being defensive means I feel like you’re attacking me. I don’t feel like you’re attacking me. I just am dismissive of it, because we do it. And I just have not seen any evidence that it’s working.
Laura Zander:
Point, Loren. Loren, you just scored a point—just so you know.
Jay Goltz:
What?!!!!
Loren Feldman:
You were dismissive of it. I think you were a little bit defensive, too. When I asked you, “Well, what are you doing?” Your answer was kind of a quick, “Well, we’re doing stuff.”
Jay Goltz:
Yeah, there’s no question. I would give you the same—I don’t know if defensive is the right word, but the answer is—I know we’re doing a lot of stuff for Jayson. I know it’s working well. I hear about it. I simply don’t have the day-to-day knowledge that I can sit here and tell you what we’re doing or what we’re not doing. Which gets to my point of: I just don’t know every single thing that’s going on in the company.
Laura Zander:
Same.
Jay Goltz:
And some people might go, “Oh, well, that’s terrible.” Yeah, really? It’s working okay for me. I don’t know what to tell you. I’ve got 130 employees. They’re competent. They own their job. They do a great job. I will tell you this, which to me is a litmus test: I’ve been in a business group with six other business owners. Every single month—and I’ve said this to them. At the end of the meeting, I can confidently say to all of them, “Do you know what you all have in common that I don’t? Every one of you is stressed out.”
They would say during the meeting, they’re stressed. I’m not stressed out. I’m not a micromanager. It’s like, it’s okay. I don’t have a total handle, personally, on the digital marketing, but I feel comfortable that my people do. Do I think we’re doing it as best as possible? I’m sure not. Perhaps I need to hire an outside firm or something. But I just can’t have a complete handle on everything. So that part I might be defensive about, if in fact, you were insinuating that I should. Go ahead. I just handed you a tool to use against me.
Loren Feldman:
Thank you. I appreciate that. No, I don’t expect you to be able to handle everything yourself. That doesn’t make any sense at all. And I’m certainly not encouraging you to be a micromanager. But there’s a difference between being able to do it all yourself and being conversant in it. And I don’t think you’ve made the effort to be conversant in digital marketing.
Jay Goltz:
True.
Loren Feldman:
You’re not doing your own taxes either. But you know accounting, and you know what to look for. And I’m curious if maybe it might be worth a little more of your time.
Jay Goltz:
Sure, maybe.
Loren Feldman:
Laura, you are conversant with digital marketing.
Jay Goltz:
She’s 20 years younger than me. Big difference.
Loren Feldman:
Jay, you are smart enough to figure it out. I mean, I understand—
Jay Goltz:
No, no. I have to remind everybody, when I started in business, there was no such thing as a computer on a desk. There were zero computers. She grew up with computers.
Loren Feldman:
I’m right there with you. I understand. She’s a native—certainly, more so than we are.
Laura Zander:
I remember when the microwave came out.
Loren Feldman:
He could do this if he wanted to. And I’m just raising the question.
Jay Goltz:
You’re right, I could do it if I wanted to. I have to decide what I want to do. And I’m in the—
Laura Zander:
I’m on Jay’s side.
Jay Goltz:
I’m just doing whatever makes me happy.
Laura Zander:
And I think that, especially with marketing—we see this in the software world as well—we keep using new terms. And we keep throwing new phrases around: influencer marketing, blah, blah, blah. We’ve been doing fucking influencer marketing for forever—I mean, for at least the last 50 years or 70 years. The format has changed. Maybe it was in print magazines before. And now it’s in Instagram, like—
Loren Feldman:
Wait a second, we should define that, because I—
Laura Zander:
But I just think the principle in a high-level approach is the same. You get someone popular who has an audience to help promote your product. So I think that Jay—
Loren Feldman:
That sounds like you could be referring to celebrity marketing.
Laura Zander:
Exactly.
Loren Feldman:
That is a form of it, for sure. But with social media, you can do something different. For all Jay knows, there are people posting pictures of one of his frames on Instagram, and he could be using that to his advantage. And it doesn’t matter if the person is famous or not. There’s a way to—
Laura Zander:
I just don’t think that’s Jay’s role. I think that that’s tactical.
Loren Feldman:
Not for him to do it himself. But maybe to know whether it’s happening, don’t you think?
Jay Goltz:
Well, I certainly could find out if we’re doing that. I have to tell you, I’m in a new place now. Are you ready? I’m in this phase: I’m in the whatever phase. Like, whatever. You know what? Things are going fine.
Loren Feldman:
That doesn’t sound like you.
Jay Goltz:
No, I’m paying attention to a lot of stuff. I can’t argue with you. I will follow up and find out what we’re doing, all that stuff. But at some point, it’s like, I could spend my whole day hunting around. I don’t know. I will ask. First of all, for Jayson, I feel good that we’re doing the stuff right, because I hear about it all the time. For framing, I know we’re doing stuff. I don’t know that it’s having any impact. I certainly can follow up on it.
Loren Feldman:
That’s what you always say.
Jay Goltz:
There are two pieces to this that you aren’t addressing. One is, we are doing it for Jayson. Artists Frame Service, the framing business, is a local business. It’s just not the same thing. And when you call it influencer marketing, would you include—I’ve got on my website that Architectural Digest said we were the master framing place, and Chicago Magazine named us the best framer in Chicago, so I—
Loren Feldman:
Nope.
Jay Goltz:
Okay, I don’t know that that’s the kind of thing that works on a local basis. I thought you were giving me your best shot. Is that the best you’ve got, Loren. Seriously?
Loren Feldman:
This does work on a local basis, Jay. And I think you’ve proved my point that you haven’t taken the time to really think about this in the way you would with other things involving your business.
Jay Goltz:
Perhaps.
Loren Feldman:
I’m a little surprised that I didn’t get more backup from Laura on this, but I think she’s trying to be nice to you.
Jay Goltz:
Man, I’m feeling a little sorry for you right now, Loren, because you’re not giving your best shot at this. I can think of far more things that would get me triggered than that.
Loren Feldman:
All right, go for it.
Jay Goltz:
Okay, this is the one that’s making me nuts lately: When I read about these companies or the organizations, “Oh, people before profits.” Ugh. Okay, there are clearly some times you should put people over profits. Maybe business has slowed down a little bit. And you could lay some people off, but you don’t. And you hold on to them, because they’re good, solid people who have worked for you for years. And you take a little hit for a while till business comes back or until people leave on their own.
But you can’t always put people over profits. That’s called going bankrupt, because you do have to have profits. So I believe, yes, you need to have profits, and you need to take care of people, the two are not mutually exclusive. And to suggest that you can always put people over profits, it’s just always said by people who don’t run businesses.
Loren Feldman:
Well, let me ask you this: You came up with a really smart, clever phrase that you have used in a number of places, including in blog posts you’ve written when we were at The New York Times. I’ve heard you use it in public speaking. That phrase is, “It’s not the income, it’s the outcome.” Doesn’t that mean something very similar?
Jay Goltz:
There’s an overlay. That simply means that, I’m not suggesting that you shouldn’t have income. That’s part of the outcome. I’m suggesting that all you have to do is read any magazine article by some of these “super successful,” quote unquote, people, and their personal lives are a mess. Their kids don’t talk to them. They’re suing each other. The kids are suing the parents, the parents are suing the kids.
Loren Feldman:
But they’re not the ones talking about people over profits.
Jay Goltz:
No, I’m suggesting you could make money and do some horrible things to the environment, to your family, to the neighborhood. There are lots of people who make lots of money that are despicable human beings. And I wouldn’t call them successful. So I’m saying making money is part of it. No question.
The question is: Did you leave some people better off who worked for you? Were you supportive of your employees? Were you supportive of any social things? Did you take good care of customers where they’re happy? It’s not just profits, but my point is: Profit needs to be one of those things. It’s not just the people.
Laura Zander:
Yeah, because it’s irresponsible otherwise.
Jay Goltz:
You’re gonna go broke. If it’s always people over profit, you go broke.
Loren Feldman:
Nobody says profits aren’t important.
I just think it’s interesting that one of those phrases really triggers you and the other one is sort of something that you’ve adopted as—
Jay Goltz:
My problem is there’s one organization in particular that has said that, and I just find it sad that they’re out there promoting that concept versus saying, “Let’s be responsible. Let’s be responsible to our employees, to our customers. No problem. But to suggest that, somehow, profits are bad, and people are good, which is how I take that. It’s just really—
Loren Feldman:
I think you’re taking it to an extreme. Let’s try something else. You’ve been complaining a lot about bad customer service lately, some of which you’ve experienced personally. At the same time, you hate it when people say the customer is always right.
Jay Goltz:
Yes, I can help with the subtlety of that. If you own a business, using that as a training tool to tell your employees, “The customer’s always right,” is a horrible training method, because they know that’s not true. I say the customer is usually right, because they usually are. And then once in a while they’re not, and it’s just not worth fighting with them. So we’ll just pretend they’re right and take care of it. They’ll go home happy, they’ll come back, they’ll send their friends. And everybody wins. An employee can understand that.
In my case, they pick up their framed picture, they get it home, they come back and go, “You know, I got it home, and I opened it up, and the glass was cracked. I didn’t do anything to it.” Okay, they dropped it. They twisted it. But we don’t go, “No, no, I saw it when it left here.” “Oh, we’re so sorry.” We give them new glass. We don’t fight with the customer.
Every business has a version of that. Laura, you must have a version: “You sent me the yarn and you shorted the order.” Like, we don’t know if they’re making it up or they’re not, but whatever. It’s just not worth fighting with customers. But to suggest it as a training tool, it doesn’t explain the nuance of it. And I will tell you, when you tell employees that, they get it. That makes sense. We’re just going to pretend they’re right. Because for $20, it’s just not worth fighting with them. That’s a good training tool.
Laura Zander:
Yeah, it’s marriage. It’s: What hill do you want to die on?
Jay Goltz:
Yes, and there are very few times—I would never say 100 percent—that it’s worth fighting with the customer. Now, with that being said, I’m not installing $30,000 heating/air conditioning systems to where the customer goes, “I don’t like it. It’s not working.” “Okay, here’s your money back.” So I understand, in some businesses, that might be difficult.
Laura Zander:
How often have you had to fire a customer?
Jay Goltz:
That’s an excellent question. In 45 years, twice.
Laura Zander:
Ah, and were you involved both times?
Jay Goltz:
Yeah. One of them was simple. They brought a picture that had glass on it. The glass was completely shattered, and they wanted it fixed. So we reframed it. And they come to pick it up. And they said, “There’s little scratches on the print. We want you to get us a new print.” And we said, “Well, the glass was shattered.” “Well, it said here on the invoice, ‘Condition okay.’” I go, “Well, I’m sorry they wrote that. They should have said, ‘Glass broken.’ But this is obviously from the broken glass.
So I said to them, “Why don’t you call the moving company? They’re the ones that broke it.” And they said, “We already tried that.” It’s like, really? So I said, “You know what? The glass was shattered here. We didn’t do it. You know it. We know it. You know we didn’t scratch the print. We’re not getting you a new print.” And he goes, “Well, we’re gonna take you to small claims court.” I said, “Okay, sorry you feel that way. I guess we’ll see you there.” And of course, I never saw them again.
There’s a thin line between customer service and selling your soul. And I’m not exaggerating when I tell you: Two times in 45 years. I’m gonna argue, from my experience, the customer usually is right, even if they’re wrong. Maybe they did break it but they didn’t know they broke it. Whatever. There are not that many con artists out there who are trying to screw over the local business owner. I just don’t think that’s a huge problem. And I do see people fighting with customers. You can go on Yelp and see it. It’s incredible. You see the owner of the company get on there and lay into this customer using their own name.
Loren Feldman:
Laura, have you had to fire customers?
Laura Zander:
Yeah, the couple of times that we’ve had to, it’s because they have been abusive. I mean, just verbally inappropriate to our employees. So if there is an issue, whether or not it’s something that we did right or wrong, it doesn’t matter, like the tone and the aggressiveness.
Jay Goltz:
I agree with that. There’s a line where you’ve got to protect your employee—almost never happens.
Laura Zander:
Yep. It’s only happened a handful of times.
Loren Feldman:
All right, my thanks to Jay Goltz and Laura Zander, and of course to our sponsor, the Great Game of Business, which helps businesses implement open-book management and employee ownership. You can learn more at greatgame.com.
