Business 08 October 2018
It was announced yesterday, that in the wake of Starbucks’ Vice Chair Howard Schultz’s departure, the revered company executive Mellody Hobson will be taking his place.
Hobson, who boasts an impressive resume as a previous board member at Estée Lauder, DreamWorks Animation and Groupon, is the latest in a string of strategic post-crisis executive appointments that have caught the attention of true diversity advocates.
While the most recent HR move can, one side, be viewed as a natural promotion for a woman who has her fair share of experience and genuinely deserves it, it can also be looked at as a reaction to what Starbucks has been through in recent weeks. With the entire company taking four hours out of its workday last Tuesday to conduct racial bias training following a racially divisive scandal that caught the nation’s attention, it’s clear that they are under the “wokeness” microscope, and feel compelled to make it publically known, ever so slyly, that steps in the right direction are being made.
“I think Starbucks is sending a strong message in doing this,” Jeff Dickerson, a crisis communications adviser in Atlanta, told the Washington Post. “They’re bucking the trend, because ordinarily when large companies find themselves in this situation, they have counsel who will advise them against" admitting they'd done anything wrong.”
Without wanting to diminish the achievements of this incredibly qualified boss woman, is it perhaps, a little convenient that this appointment was made so close to the disaster that occurred not so long ago? Is this perhaps the most beautifully packaged PR stunt Starbucks has executed, superseding even that of the Unicorn Frappuccino?
Does this harken back to Uber’s genius move to appoint fan favorite Bozoma Saint John to her position as Chief Brand Officer in the wake of Travis Kalanick’s disastrous fall from grace? Is there a semblance of a pattern here?
And while sure, the end justifies the means [meaning we are always happy to see more female representation no matter the reason], wouldn't it be better practice to have women, and diversity as an integral part of the growth of the company from the get-go? Rather than this be a reactionary occurrence when a company is in panic mode, or when facing a crisis that begs a cataclysmic change of company culture, would it not be better to begin developing programs that aid those at a disadvantage entering the workplace?
Talking to Fortune last year, Ursula Burns, the first African-American woman to become CEO of a Fortune 500 company in Xerox, noted that the reason there are so few women of color at the top of the totem pole is because of the schooling in the country. “Not enough are coming out of the education system to get them all the way through to the C-suite,” she said. And while that might be true, the institutionalized bias against women in the workplace is another major contributing factor that goes almost unrecognized.
This self-serving, and somewhat predictable damage control move begs the question: Are these diverse women being promoted because of the mistakes of white men? And if so, why aren’t more companies proactively hiring or promoting diverse women in order to avoid these PR nightmares?
We recently explored the notion that women have been hired or promoted as CEOs of flailing companies, in order to become a scapegoat for a company’s failures. The “glass cliff,” the “glass ceiling’s” younger, more nefarious sibling, represents a situation whereby companies that are in trouble and looking for new leadership, turn to men first to help them out. But when these men, foreseeing a painful career catastrophe, turn them down, they then look to women, who invariably jump at the opportunity to breakthrough the proverbial glass ceiling, and take a job at the helm of a sinking ship.
“I think it’s good that she takes it [the job as CEO],” former Yahoo CEO Carol Bartz told Freakonomics Radio. “I have no problem with that. But it’s not that all of a sudden the boards wake up and say, ‘Oh, there should be a female here.’ … It’s easier to hide behind: ‘Well, of course, that failed, because it was female.’”
So what do the glass ceiling women, like Bartz, and new hires, like Hobson and Saint John have in common? That they weren’t considered before there was a crisis.
3 Min Read
"How did you ever get into a business like that?" people ask me. They're confounded to hear that my product is industrial baler wire—a very unfeminine pursuit, especially in 1975 when I founded my company in the midst of a machismo man's world. It's a long story, but I'll try to shorten it.
I'd never been interested to enter the "man's" world of business, but when I discovered a lucrative opportunity to become my own boss, I couldn't pass it up—even if it involved a non-glamorous product. I'd been fired from my previous job working to become a ladies' clothing buyer and was told at my dismissal, "You just aren't management or corporate material." My primary goal then was to find a career in which nobody had the power to fire me and that provided a comfortable living for my two little girls and myself.
Over the years, I've learned quite a few tough lessons about how to successfully run a business. Below are five essential elements to keep in mind, as well as my story on how I learned them.
Find A Need And Fill It
I gradually became successful at selling various products, which unfortunately weren't profitable enough to get me off the ground, so I asked people what they needed that they couldn't seem to get. One man said, "Honey, I need baler wire. Even the farmers can't get it." I saw happy dollar signs as he talked on and dedicated myself to figuring out the baler wire industry.
I'd never been interested to enter the "man's" world of business, but when I discovered a lucrative opportunity to become my own boss, I couldn't pass it up.
Now forty-five years later, I'm proud to be the founder of Vulcan Wire, Inc., an industrial baler wire company with $10 million of annual sales.
Have Working Capital And Credit
There were many pitfalls along the way to my eventual success. My daughters and I were subsisting from my unemployment checks, erratic alimony and child-support payments, and food stamps. I had no money stashed up to start up a business.
I paid for the first wire with a check for which I had no funds, an illegal act, but I thought it wouldn't matter as long as I made a deposit to cover the deficit before the bank received the check. My expectation was that I'd receive payment immediately upon delivery, for which I used a rented truck.
Little did I know that this Fortune 500 company's modus operandi was to pay all bills thirty or more days after receipts. My customer initially refused to pay on the spot. I told him I would consequently have to return the wire, so he reluctantly decided to call corporate headquarters for this unusual request.
My stomach was in knots the whole time he was gone, because he said it was iffy that corporate would come through. Fifty minutes later, however, he emerged with a check in hand, resentful of the time away from his busy schedule. Stressed, he told me to never again expect another C.O.D. and that any future sale must be on credit. Luckily, I made it to the bank with a few minutes to spare.
Know Your Product Thoroughly
I received a disheartening phone call shortly thereafter: my wire was breaking. This horrible news fueled the fire of my fears. Would I have to reimburse my customer? Would my vendor refuse to reimburse me?
My customer told me to come over and take samples of his good wire to see if I might duplicate it. I did that and educated myself on the necessary qualities.
My primary goal then was to find a career in which nobody had the power to fire me and that provided a comfortable living for my two little girls and myself.
Voila! I found another wire supplier that had the right specifications. By then, I was savvy enough to act as though they would naturally give me thirty-day terms. They did!
More good news: My customer merely threw away all the bad wire I'd sold him, and the new wire worked perfectly; he then gave me leads and a good endorsement. I rapidly gained more wire customers.
Anticipate The Dangers Of Exponential Growth
I had made a depressing discovery. My working capital was inadequate. After I purchased the wire, I had to wait ten to thirty days for a fabricator to get it reconfigured, which became a looming problem. It meant that to maintain a good credit standing, I had to pay for the wire ten to thirty days before my customers paid me.
I was successful on paper but was incredibly cash deprived. In other words, my exponentially growing business was about to implode due to too many sales. Eventually, my increasing sales grew at a slower rate, solving my cash flow problem.
Delegate From The Bottom Up
I learned how to delegate and eventually delegated myself out of the top jobs of CEO, President, CFO, and Vice President of Finance. Now, at seventy-eight years old, I've sold all but a third of Vulcan's stock and am semi-retired with my only job currently serving as Vice President of Stock and Consultant.
In the interim, I survived many obstacles and learned many other lessons, but hopefully these five will get you started and help prevent some of you from having the same struggles that I did. And in the end, I figured it all out, just like you will.