Business Blog 2.0

Larry Peterson, the professional basketball player, came to me for help buying an auto dealership, when his real problem was that he had abdicated all personal responsibility for his money. After a great deal of indecision, Larry fired the business manager who had led him to the brink of financial ruin. I helped him find an accountant and financial planner to clean up his financial life and teach him how to handle his own money. Larry stopped playing entrepreneur and, upon his retirement from the NBA, found a job doing something he knew: being a television commentator for basketball games. After two years in television Larry took a job as an assistant coach. He then moved into the front office of the team and became assistant general manager.

Linda Birnbaum and Marilyn Jenrette, the art gallery owners, had come to me for help in cleaning up ownership issues, when their real problem was that the business was starving for more revenue. When I pointed out how dire their business finances really were, Linda and Marilyn instantly set aside the issues that had divided them. They launched a successful new marketing plan and within six months had recruited a handful of new artists, one of whom, a sculptor who makes somewhat disturbing life-size statues of himself, has become quite popular. Once the business was on a surer foundation, Linda met with her ex-husband, Paul, who was happy to sell his shares for little more than his initial investment. Marilyn bought Paul’s twenty-five percent share, and another twenty-five percent from Linda, and today they are equal partners, formally as well as practically.

Gloria Crenshaw had come to me with the fear of being impoverished, but she actually was too embarrassed to let anyone know her financial ignorance. In order to help Gloria overcome her embarrassment I had her meet with a very down-to-earth female financial planner I’d worked with in the past. The planner had the patience to take Gloria step by step through all the adjustments she needed to make in her finances in order to become independent. Gloria has sold the Park Avenue apartment and used the proceeds to buy a smaller but still lovely apartment in Florida. The planner has also revamped Gloria’s investment portfolio so it generates sufficient income for her to live comfortably.

Henrietta Sitney had believed she couldn’t afford to move, when actually the problem was that her roommate, Jean, couldn’t afford to stay in the apartment without her. This was actually the toughest of all four problems to overcome. Henrietta’s daughter Cheryl and I worked very hard at trying to get Henrietta to see that she had to put herself first; that, in fact, she had no choice, since she wouldn’t be able to afford the apartment any longer. We had very little success. It was actually Jean who finally turned Henrietta around. After a long talk with Cheryl, Jean called her nephew in Oregon and arranged to move into an adult home near his house, freeing Henrietta from her perceived obligation. Henrietta now lives in an adult community in California, ten minutes from Cheryl’s house.

The more comfortable a person is, psychologically and physically, the more relaxed he’ll be and the more ready he’ll be to trust someone else. Showing that you care about a person’s psychological and physical comfort does as much as actually contributing to their comfort. This is one instance where it really is the thought that counts. For instance, you are never going to be able to make someone who comes to your office feel totally at home. However, by making the effort, you do enough to get them to trust you. Your efforts to make other people comfortable may go further than just asking if they want something to drink or if they’d like to use the bathroom. Take the case of Ronnie Taylor.

Ronnie was the thirty-seven-year-old son of one of my connecticut neighbors. He had just taken over the accounting department of a small manufacturing company located in New York’s Hudson Valley. Ronnie had spent ten years at a “big five” accounting firm prior to joining the company. He had been recruited by a schoolmate, whose family were the majority shareholders of the business. The plan was for Ronnie to take over the financial operations of the firm within two years, when his friend was scheduled to take over management. The problem was their plan didn’t take into account the chairman, his friend’s seventy-eight-year-old father.

The older man was willing but not eager to hand over the management reins to his son. However, he was digging in his heels about turning over the purse strings to Ronnie. The more Ronnie told me about the older man, the more it was clear he was deeply proud of his business. Still, his health was failing. He had lost hearing in one ear and was having trouble seeing. But because he was so proud, everyone in the company pretended not to notice. Ronnie and I decided that could be our opportunity. Starting the next week, Ronnie printed out the weekly reports in a larger typeface. When they met together, Ronnie made sure to stand or sit on the side of the older man’s good ear. However, he never said anything about it, nor called any attention to his actions … he just started doing them. After three months the older man had taken to calling Ronnie his “adopted son” and had become the primary advocate of his taking over as chief financial officer

Focus, clarity, and knowledge will together solve many problems. But another element is needed to guarantee success: trust. Unfortunately, in today’s fast-paced business world there isn’t enough time for trust to develop naturally. Instead, you need to expedite it by showing, through a host of measures including your language, action, garb, and timing, that you care about everyone else you need to help solve your problem.

John Stavros remains one of the most difficult clients with whom I’ve ever had to work. In his midseventies when I first met him, John was short and muscular. His deeply tanned, leathery face was set off by a full head of white hair. A flamboyant dresser, he prided himself on his brightly colored suits and matching ascots. He regaled everyone he met with the tale of how, alone, and with nothing more than the clothes on his back, he came to this country from Greece at the age of twelve. He began his business career by selling gyros from a pushcart across the street from St. Patrick’s Cathedral in Manhattan, and through his hard work and genius, John actually used that word, built up an empire of diners and catering halls. John punctuated his tale with four letter words and repeated finger pokes in the chest. While his story was inspiring, it was unpleasant to hear him tell it. . . over and over.

John had come to me because he had heard I had a good track record of negotiating with banks. His relationship with his bank certainly needed some help. John’s bank had made quite a bit of money with him over the years. They had financed his restaurant acquisitions and expansions, as well as his forays into catering. The problems began when he started a massive remodeling program on his catering facility. Buying this sprawling architectural monstrosity, located on a major commercial thoroughfare in an affluent suburb, wasn’t enough for John. He had to remake it in his own image. Garish was the word I politely used to describe the result. Financial quagmire was the phrase the bankers used.

Since John had no patience for those who didn’t share his taste or views, he hadn’t even bothered to speak with the increasingly nervous bankers. Costs kept running higher, the schedule kept being pushed back, and John’s representatives kept coming back to the bank for more. Like most bankers, John’s were loath to write off a loan, particularly a large one, so they continued to lend him enough money to keep the debt on the books. They did try to exert some influence, however. But whenever they would telephone or come to John’s office they were treated contemptuously. When told they were at the office, John would curse, loud enough for them to hear. When he did come out to see them he would say he was too busy to talk to them, and would suggest that one of his staff show them around. Even bankers have their limits. They sent John’s accountant a letter announcing their intention of calling his lines of credit within six months. That’s when his office called me.

After hearing the -whole story from the accountant, John was, of course, too busy to see me, I insisted on a personal meeting with John. Figuring I had nothing to lose by being bold, I laid it on the line with John. His bankers simply didn’t trust him anymore. He was treating them like minions, pushing them around, and not even bothering to hide his disdain for them. They weren’t his minions, I pointed out. In fact, it was within their power to destroy John’s entire operation, the string of pushcarts, the chain of diners, and yes, even his colossus catering hall. He needed to rebuild their trust in him. He had to show them that he respected them and even cared for them. And he needed to start right then. I held my breath and prepared for an onslaught. The curses did indeed come, but this time they were self-directed. Of course, after ripping himself to shreds he did finally turn to excoriating the bankers. But by then he’d run out of his better epithets. Luckily when he turned to me he was totally out of ammunition. All he did was ask what he should do.

Every week for the next six months, John and I attended meetings at the bank’s headquarters. I had John dress in a conservative blue suit with white shirt and a red tie rather than an ascot. I worked with him for two hours before each meeting on exactly how to be deferential to the bankers. I have to say that John worked as hard at holding his tongue as he did in building his fortune. He prayed for ten minutes before every meeting in an effort to calm down. After the first four meetings, the bankers were still unmoved. They thought John’s transformation was a sham. After the second month of meetings they were still unconvinced, but were willing to listen to our proposals. After the third month they were a bit more open to negotiating. Then in the middle of the fourth month the ice broke. They and John actually shared some unforced, unplanned pleasantries. At the end of five months the restructuring deal was on the table. And after six months a deal was signed