Chicken Little and Ten Bucks for Butter

If you consume news at all, you know the general tone is fear and concern. The pandemic is far from over despite full stadiums at sporting events and airports no longer asking about covid symptoms. The world's population is about to go over 8 billion and there are about half a million or so new cases every day. Some would said that is a small percentage; I say it's lot of people.

The affect of the pandemic is showing up at the gas pump, the grocery store, and everywhere else we buy stuff. The "R-word" is dominating pontificators' commentaries while we pay $10 for butter and in my country of Canada, somewhere between $1.60 and $2 for a litre of gas.  

It is strange that almost all of my clients are desperate to find employees and yet the news reports say we are in a financial crunch. Perhaps millions have opted to try and become a TikTok star in lieu of actual work?

Meanwhile this happened.

There have been 13 recessions since World War II which is defined by a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. I'm not completely sure why that means we should run for the bunker for fear the sky may actually land on us.

Some of the companies which were founded during global recessions include; Disney, HP, Netflix, Microsoft, Uber, Pinterest, General Electric, HBO, WhatsApp, Ford, Revlon, Ocean Spray, IBM, Airbnb, American Airlines, Dominos, Instagram, General Motors, Hyatt Hotels, FedEx, and iRobot - which Amazon acquired this past summer for $1.7B. 

What about us?

How does that affect you and me while we live our lives, get by, and not fear our next paycheck is in jeopardy like it was over the past three years? Well, I'm still here to write this post and you're still here to read it, so let's keep going. 

While Chicken Little worries about the sky falling on her head, we have survived worse. We might have to drive less and eat less butter, but community has never been more important than it is right now. So while the experts opine about the next 12 months, perhaps we can do something to make life a bit brighter.

Ask someone how we can help them.

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Sleeping Satellites

Is this the beginning of the end?

This is not news, this is not even shocking, and this has been on the way long before the economic downturn that is being used as the reason for all faltering businesses these days.

Bad business plans, crushing expenditures and time constraints will affect any company during any economic climate.

Satellite radio – as we know it – may be on the way out

This is bad news for investors and customers. Sirius and XM have spent millions attempting to beat terrestrial radio at their own game. They have done countless radio and television campaigns, purchased major sponsorship affiliations; hired Howard Stern for $100M U.S. a year, while offering hundreds of crystal clear “commercial free” radio choices.

The now merged venture is drowning in debt.

It was announced yesterday that Sirius XM is going to file for bankruptcy protection on Tuesday. The fingers are pointing in all directions on this mess.

This was not a newsflash for company officials this week. They have known the costs and timeline since inception. The price tag on a satellite is $1.5 to 2 Billion and building hundreds of audio entertainment choices then market them is an enormously costly endeavor.

To believe that Sirius XM management wasn’t aware is like saying that the people running AIG didn’t know about the problems until they were 80 Billion in debt. Wouldn't alarms go off at around (say) the 10-15 Billion mark?

A quote here from Business Week:
The few poor souls who still hold Sirius XM (SIRI) stock may get poorer still. "I'll lose $1 million," says Michael Hartleib, a longtime activist shareholder. "They completely destroyed a perfectly viable company." Shares of the company closed at 11.39¢ on Feb. 10 after The New York Times said the company is preparing for a possible filing for Chapter 11 protection from creditors. Sirius declined to comment on the report.

I have given the radio industry over two decades of my life, and it is one of my true loves. Radio can be immediate, can react quickly and can create magic.

But if you start a business with no money, convince a bank to lend you some, then rack up your line of credit miles past your company’s ability to see the top of the pile, it is doubtful that you will be able to build quickly enough to write black ink.

Sirius XM have balloon payments due this year in the millions - and there just isn't the money to pay them.

Subscription based radio remains a foreign idea to most people and the offering has to be sweeter. Tell me why I need to buy gear and pay a monthly fee. Apple seems to have found a way to do that.

Add to that, the troubles in the auto industry which is where a significant number of pre-installed units were giving listeners an introduction to the services. Less cars sold, less new listeners.

Other issues for radio include: dwindling younger demos listening to satellite or terrestrial radio as well as consistent and better content. A morning show and music all day isn't enough. And there is a large percentage of people under 20 whose lives don't include radio. Younger becomes older and older becomes the target audience very quickly.

More from the Business Week article:
A bankruptcy filing by Sirius XM would have widespread implications not just for holders of the satellite radio company's debt and shares, but also for millions of listeners and for the celebrities like Howard Stern whose fat paychecks have made it harder for the company to pay its other bills.

A lot has been said about the Stern contract and the price of satellites in the atmosphere and the debt load. At the core of the issue are the discussions that took place at that first meeting when the idea began.

Too often companies attempt to retro blame some unforeseen factor. Satellite radio is a cool idea, but not an overnight fix or quick money grab. Anyone who claims they didn’t know that is not being completely honest with themselves.

What are your thoughts about satellite radio? Tried it? Like it?

Do you want Sirius XM to survive?

km

Everything Is Awesome

There, problem solved. After reading yet another gloomy story about the worldwide economy, I thought it was time for a little positive thought.

In any situation, you have two options – look at the half-full or half-empty scenario. It’s not always easy, few among us can always be positive.

Most are afraid these days because of the money crunch or recession or correction. It matters not whether it’s real or imagined, personal or global; it is affecting virtually every aspect of business these days.

I saw a piece on 60 Minutes last night featuring Ted Turner who is the single biggest land owner in the United States. During the heady days of the Turner-AOL-Time-Warner merger, he became the company’s largest shareholder. Years later he had lost $7 Billion. That’s one man’s personal wealth, decimated by one business deal and the dot.com bust.

Does that make you or me poorer? Does it make you want to be more cautious in any business transaction? If Turner had made $7 Billion and the economy was soaring, would we be more creative and adventurous?

The time for integrated business models is now more than ever. We must find solutions together; client and supplier, customer and provider, you and me.

Start the conversation with thoughts of how you can help them, rather than how they can help you and see what magic may happen. Integration is not simply melding two business ideas or concepts together, it begins with open discussion from day one.

km

Leadership

“People want leadership. In the absence of genuine leadership, they'll listen to anyone who steps up to the microphone. They're so thirsty for it they'll crawl through the desert to a mirage and when they discover there is no water, they will drink the sand.” ~ "The American President" 1995

The U.S. Presidential election has not been about the economy, conflicts around the world, mergers, banks, gas prices, the recession, or spending. It has been about looking for someone to lead.

It will be many more hours before Barack Obama is elected the next President of the United States but the tension seems thicker today than in the last two years of campaigning. This is it, time to step up and prove all the things promised.

If the over 600 polls are correct, the Democrats will have the next four years to clean up the mess. If the polls are correct, there will be more people out today to vote than in any other election in American history.

This is not about whether people will lose their house or pay their credit cards. This is about leadership. The nicest car in the world is useless without a straight frame or axles, the best laid plans are empty without action, and it takes leadership and a vision to carry it off.

“Management is doing things right, leadership is doing the right things” ~ Peter F. Drucker

The mistake most make is to think one person in front of the line is leadership. If it takes a village to raise a child then it takes a team to build a company or country.

The Boss says “Go”; the leader says “Let’s Go” ~ H. Gordon Selfridge

Barack Obama is not making up a game plan on his own; he has a strong experienced team working with him.

Once the balloons fall and the champagne consumed, my hope is that what is left is leadership. And when we have strong leadership in anything we do, we're halfway there. If not, we will drink the sand.

km