What it takes to run a business

Podcast

This week, Kelly Allan—a consultant who specializes in sharing the principles espoused by the late management guru W. Edwards Deming—returns to the podcast for a conversation with Paul Downs, Jay Goltz, and Laura Zander. After World War II, you may recall, Deming was sent to Japan, where he was largely credited with resuscitating the devastated economy. He of course went on to become tremendously influential here, too. And if you read his books or scan his “14 points” for management, it’s clear that many of his lessons are now widely accepted. But not all of them. For example, he encouraged business leaders not to set production quotas, not to hold people accountable—at least not without first holding the process accountable—and not to address employee performance and pay in the same conversation. Some of these issues came up in an episode that Paul, Jay, and Laura taped in December, which is why we decided to invite Kelly, who is chairman of the Advisory Council of the W. Edwards Deming Institute and has his own management consulting business, to join us. The goal was to see if we could figure out what Deming would tell Paul, Jay, and Laura, and whether the three owners would be open to his suggestions. Spoiler alert: Paul’s not really buying it.

This week, Jay Goltz and Dana White talk about their employee handbooks. Do they take them seriously? Or is it just boilerplate? Has anything changed since the pandemic? Is the handbook the place to remind employees that they are hired at will and can be fired at any time with or without a reason? Are there issues that should not be addressed in the handbook? When was the last time they updated it? When was the last time they read it? “Me, personally?” responded Jay. “Actually picked it up and read it?” Yes, Jay, that’s the question. “Years.”

This week, Shawn Busse, Jay Goltz, and William Vanderbloemen discuss whether the old line about hiring slow and firing fast makes sense during a labor shortage. As William puts it, “What if you do have to hire fast? How do you do that? What if you do want to keep people even if you might have wanted to get rid of them before? How do you do that without ruining your culture?” Plus: How do you know it’s really time for someone to go? And what happens when employees share their salaries with each other? Anything good? And as we all binge watch the real life dramas about WeWork and Theranos, the question inevitably arises: Is it still okay to fake it until you make it? And if so, where do you draw the line?

This week, we start with an update of how 21 Hats has been doing since its sale brought new resources and new ambitions (Spoiler alert: It’s not going great!). Then, Dana White tells Shawn Busse and Jay Goltz about the progress she’s made on multiple fronts: attempting to sell franchises to revive her struggling Midtown Detroit location, to open new salons at Fort Bragg and in Dallas, and to secure financing. The owners discuss Dana’s financing options—venture capital, private equity, bank loan—assessing, in Shawn’s words, their “degrees of evil.” Plus: Shawn explains how his views on remote work have been evolving, and Jay explains why he’s tired of being called a tyrant (even though no one’s actually called him that).

This week, Shawn Busse, Paul Downs, and Liz Picarazzi talk pricing, specifically how they use an anchor price—the first number they offer prospective customers. Do they anchor low to avoid scaring anyone away? Or do they anchor high to disqualify unlikely buyers and to make the actual sale price feel more comfortable? Plus: Liz explains the remarkable, dream-come-true, my-product-in-Times Square PR gift she just received. Of course, this is entrepreneurship, so even when dreams come true, there tend to be complications. Liz’s business is getting a wave of publicity at a time when her fabricator in Shanghai has been locked down for almost four weeks. She’s talking to domestic fabricators as well, but they, too, will be dependent on raw materials that have to come from China. It’s a problem, she tells us.