Monthly Archives: November 2019

Who’s Imitating Whom

 

In previous posts, I have made the case that sometimes life or politics imitates art, sports and too frequently movies.  And on a couple of rare occasions, I have suggested politics imitates business.  However, my current assignment teaching entrepreneurship in Milan has reminded me the relationship between leader and follower can be a two-way street.

In 2011, I researched and wrote a teaching case, I used to demonstrate how entrepreneurial behavior could be applied to virtually any discipline.  The case involved a decision by Bob Ortega, the owner of a regional Mexican food manufacturer, to expand his business nationally, competing against the two major players in the market.  The choice depended on several factors: product differentiation, raising the necessary capital to build the necessary national marketing and distribution infrastructure and whether he had the a support system willing to back his ambition.

The case opens with the following quote attributed to E. J. Dionne without identifying him as an opinion writer for the Washington Post.

A good entrepreneur triumphs by adapting to the times and taking advantage of opportunities as they come. A great entrepreneur anticipates openings others don’t see and creates possibilities that were not there before.

Once students finish discussing the case, I share my dirty, little secret.  There is no Bob Ortega.  The case is about Barack Obama’s decision to challenge Hillary Clinton for the 2008 Democratic nomination for president.  Dionne’s actual quote referred to politicians, not entrepreneurs.  Instead of market share expressed in dollars, the currency in the case is votes.

Related imageThis nexus between entrepreneurial and political decision making resurfaced last week while teaching a Harvard Business School case titled, “Starbucks Customer Service.”  The decision facing CEO Howard Shultz (yes, the same Howard Shultz of short-lived presidential ambition) is whether to invest up to $40 million in additional labor to address increasing consumer dissatisfaction.  The decline in customer gratification was the result of the company’s own success.  As a broader client base emerged, Starbucks faced competing needs between their original “sit and sip” patrons and the growing “grab and go” crowd.

The supporting documents which accompany this teaching case are data-heavy from which we can ascertain several facts.

  • Highly satisfied customers are more likely to drop in three more times per month than other customers.
  • Highly satisfied customers spend more per visit than other customers.
  • The increased revenue from highly satisfied customers over time more than justifies the additional investment in labor.

But that raised the most important question.  How many customers would you have to move from the “so-so” category to “highly satisfied” category to break even (i.e. cover the additional labor cost)?  The answer was 67 per store or just less than three percent of the  average annual per store clientele.  As Obama once said about calling out neo-Nazis as bad people, “How hard can that be?”

Which, as all things eventually do, brings us to the 2020 election.  Think of Wisconsin, Michigan and Pennsylvania as Starbucks.  Democratic voters became increasingly disappointed with the level of customer service and decided to buy their coffee somewhere else.  Unfortunately, the new brewer-in-chief had no knowledge of what it takes to run a roastery.  So, as we approach 2020, the Democratic Party faces the exact same situation as Starbucks in 2002.  They have two very different customer categories.  Instead of “sit and sip” versus “grab and go,” they have left of center moderates and progressives wanting to lead a political revolution.

Shultz’ targeted investment in labor solved his business’ problem.   The extra person behind the counter meant baristas could still spend time schmoozing with the lingerers without holding up those who wanted their java NOW.  After laying out the numbers, here’s the bottom-line question I ask students.  “Is influencing 67 people doable?”  And the answer is, “Of course it’s doable.”

Folks, we’re not talking about three percent in these three battleground states.  In Michigan, we’re talking about 0.3 percent.  Pennsylvania, 1.2 percent.  And Wisconsin, 1.0 percent.  “How hard can that be?”  If the Democratic Party, in the age of Trump, regardless of the nominee cannot find a way to move such a small percentage of voters from the Republican to Democratic column, they have a bigger problem than voter suppression, foreign interference and social media.

Take a lesson from Starbucks.  Find solutions that address the legitimate customer service needs of both factions within the party.  When it comes to health care, talk about a public option which mirrors Medicare while allowing those who want to stay with their employer based coverage or private insurer to do so.  On gun control, you have a consensus on two issues, universal background checks and red flag laws.  The NRA will bitch and moan, but their own members overwhelming support these initiatives.  And you don’t have to promise free everything.  You just need to make a limited number of strategic investments.  For example, do you think climate change advocates would oppose investments to retrain coal workers to build solar panels and wind generators?

Maybe, instead of debating each other, the remaining Democratic candidates could sit down over a cup of coffee and figure this out.

A VETERANS DAY POSTSCRIPT: 

The sacrifice our men and women make every day to keep us safe in an uncertain and dangerous world is normally something I would not joke about.  But this Veterans Day, I cannot pass up the chance to point out a synchronistic moment that could only occur in Trump World.  It began with release of an excerpt for Junior’s book Triggered, in which he shares his thoughts while watching his father lay a wreath at the Tomb of the Unknown Soldier.

In that moment, I also thought of all the attacks we’d already suffered as a family, and about all the sacrifices we’d have to make to help my father succeed — voluntarily giving up a huge chunk of our business and all international deals to avoid the appearance that we were ‘profiting off the office.

Junior much be taking Yiddish lessons from Jared because he certainly seems to know the meaning of the word CHUTZPAH.

Image result for baby trump balloon knifedBut then we had an angry Trumpster attack the inflated Baby Trump balloon with a knife at the Alabama-LSU football game Saturday.  When I saw this picture of the deflated caricature, I could not help but think, “Junior, now that’s what I call sacrifice.”  Baby Trump gave his life for the resistance.  And is more deserving of a purple heart than Junior’s father who accepted one from a veteran at a campaign rally without even stubbing a bone spur.

For what it’s worth.
Dr. ESP

 

Castle of the King

In the era of Trump, commentators regularly draw on a chess metaphor to describe the tactics employed by the Trumpists and those eager to end this national nightmare.  How many times, following one of Donald Trump’s self-inflicted wounds, do we hear, “The Democrats are playing chess, while Trump is playing checkers.”  I wish it were that simply.  Especially when Trump claims Article II of the Constitution allows him to ANYTHING he wants.  Is that not the checkers equivalent of reaching the opponent’s side of the board and demanding, “King ME!”

However, now that the formal impeachment process is underway, there is no question both sides are playing chess.  So, let me set up the game before examining the two sides’ strategies.  On one side we have Trump who begins the game with a king (Trump) and 15 pawns, and I need not tell you these are the WHITE pieces.  On the opposing side is House Speaker Nancy Pelosi (the queen) and Adam Schiff (the king), and at the moment, a traditional array of players (bishops, knights, etc.) with one exception.  The rooks are yet to be identified.

The match began with a classic move by one of the black knights, an anonymous whistleblower, who foreshadowed every subsequent move.  As expected, several of Trump’s pawns countered this opening claiming “deep state” and “hearsay.”  Yet one move and response does not a chess match make as the game is now in its fifth week.

To demonstrate how complex and tense play has become we need only look at the moves of Lt. Colonel Alexander Vindman and just retired National Security Advisor Tim Morrison.  Vindman is the second black knight, coming to the rescue by quashing Trumps’ first defensive move that every account of the July 25 phone call was hearsay.  Plus he provided the seemingly damaging testimony that the publicly released “transcript” of the July 25 conversation with Ukraine President Zelensky is less than exhaustive.

Three days later, Trumpists on the Intelligence Committee claimed Morrison had testified the phone summary was more complete than Vindman avowed, and while he questioned Trump’s ethics, he did not believe the withholding of arms for dirt on the Bidens was illegal.  By calling this witness, had the black king Schiff fallen into a trap set by Trump’s pawns?  Did he not see this coming?

Or, was this the move that sets up mate and checkmate?  Did Schiff know Morrison would contradict Vindman, and welcomed his testimony?  Here is one possibility.  Trumpists are using Morrison’s testimony to again call for a halt to further impeachment proceedings.  Have Schiff and Pelosi set a trap and are preparing to call their bluff?  Imagine Pelosi now challenging the Trumpists to either stand up or shut up.

Regardless of which side you may be on, the worst possible outcome is a draw.  The white king must either be exonerated or vanquished.  And here we now sit with two versions of the same story: one that the released summary of the July 25 call with Zelensky is incomplete and the other claiming it is substantially accurate.  Both cannot be true.  There is only one way to discover the truth.  Demand the white king release the actual transcript, the one we now know was inappropriately remanded to a code-word secured server.

If Morrison is correct we will agree to drop the impeachment inquiry.  If, however, the transcript goes beyond the summary, and further documents a quid pro quo, House and Senate Trumpists must agree to support an article of impeachment charging obstruction of justice. even if you do not agree Trump violated his oath of office or abused his power.

Now one might find this a bit risky.  I do not.  Vindman had no doubt the summary omitted key information.  He even detailed to whom and when he made the case to re-insert the deleted material.  In contrast, Morrison cloaked his testimony concerning the validity of the summary with the phrase, “I do not recall…”   As any defense lawyer will tell you, “I do not recall…” is a time-tested means to avoid a perjury charge, the equivalent of a get out of jail free card in Monopoly.  Remember, Trump’s shill Gordon Sondland used the same language during his original congressional deposition.  Until every subsequent witness contradicted his testimony.  And yesterday Sondland informed the intelligence committee his recollection of the events surrounding the Ukraine quid pro quo have magically improved with the aid of the statements by Vindman and others.

Which brings us back to the case of the missing black rooks.  These pieces have a unique role in chess through a move called “castling,” during which the king moves to the corner of the board and is protected on his flank by one of the rooks.  In the coming days, expect a rook to emerge in the form of a Trump insider who forever dispels the narrative that impeachment is a left-wing conspiracy which Schiff has choreographed.

To some extent, Sondland’s amending his previous testimony serves this purpose.  But we should not be surprised if more people audition for the part as the legal jeopardy in which Trump operatives find themselves becomes apparent.  In other words, in this 2019 version of chess, white pawns can easily be transformed into black rooks.

Forget Fischer versus Spassky.  Or IBM’s Big Blue versus Kasparov.  By the end of the year, there may be a new grand master.  And as any chess expert will tell you, it is hard to win a match when all you have left are pawns.

For what it’s worth.
Dr. ESP

The Toxic Avenger

 

Related imageIf there were not a 1984 (coincidence?) b-movie called “The Toxic Avenger,” I would risk trademark infringement to use it for the title of my latest screenplay about the state of the vox populi in 2019.  The IMDB description would read, “A highly unpopular political leader wins reelection vanquishing his toxic opponent.”

Dr. ESP, what are you trying to tell us?  Looking back at 2016, are you suggesting Donald Trump was in the lead role with Hillary Clinton as the opponent?  Or is it a warning that a far left candidate like Bernie Sanders or Elizabeth Warren could usher in a repeat of 2016?

None of the above.  In fact, the movie is not even about the United States.  Instead, my goal is to get Americans to pay more attention to the upcoming Parliamentary election in Great Britain.  If you want to know what November, 2020, might look like, we are being given not just a trailer, but a complete sneak preview.

British Prime Minister Boris Johnson was forced to call an early general election (don’t we wish!) when he failed to reach an agreement on Brexit terms from either Parliament or the European Union (EU).  Despite this inability to deliver on a promise, his Conservative Party remains the odds-on favorite to retain control of the House of Commons and for Johnson to continue his push for Great Britain to leave the EU.

All this, despite the latest polling on Brexit found, given a chance to re-vote, 49 percent of British citizens would choose to remain in the EU, compared to 40 percent who favor a divoce from their continental neighbors.  Likewise, when YouGov.com polled Brits concerning the prime minister’s job approval, 54 percent disapproved of his performance while only 38 percent approved.  (Do those numbers sound familiar?)  Yet, yesterday’s YouGov.com poll of voter sentiment suggests the Conservative Party would win by 12 percentage points if the election was held now.

That makes as much sense as Trump with a 54.4 disapproval rating (FiveThirtyEight average) having an even chance of re-election.  But it does when you look at Johnson’s toxic opponent, leader of the Labour Party Jeremy Corbyn.  According to a September MORI poll, Corbyn has a disapproval rating of 75 percent, including a 41 percent negative rating by citizens who self-identify as members of the Labour Party.  Imagine if Trump had that lack of Republican support.  Moscow Mitch would offer to pay for the moving van.

One constituency which has contributed to Corbyn’s high negatives is the Jewish community or as the London-based Times of Israel calls it “the kosher vote.”  British Jews are worried about an increase in anti-Semitism and see the Corbyn-led Labour Party as soft on the issue.  This should be a red alert for members of the Labour party who relied on overwhelming Jewish support for Tony Blair to reverse decades of Conservative Party rule.  This is not about ideology.  As the Times of Israel reports:

There are signs, however, that Jewish support for the Tories rests more on antipathy to Labour than affection for Johnson’s party. Last week’s Jewish Chronicle poll showed that 42% of Jews — a figure which rose to 57% among 18-34 year-olds — said they would consider voting Labour if Corbyn wasn’t leader.

The major difference between Britain and American is the existence of third parties.  Disaffection with Labour has not translated into higher Tory membership.  Instead the trend has been a dramatic increase in support for the center-left, anti-Brexit Liberal Democratic Party.  And initial election polls suggest the Liberal Democrats have a chance of winning seats in Parliament currently held by both Conservative and Labour candidates.

So, pay attention Americans.  One toxic candidate can shift support in a single election as was the case when Teresa May defeated Corbyn in the last British general election.  Two toxic candidates can accelerate the rise of a third party foreshadowing the third time this century the chief executive of the United States fails to win a plurality, much less a majority, of the popular vote.  Something to consider as primary voting begins in Iowa three months from this Sunday.

For what it’s worth.
Dr. ESP