Author Archives: Bob MacDonald

Is There Something Foul at Buffalo Wild Wings?

from “If You’re Not Making History, You Are History” by Bob MacDonald

 

The generally accepted norm is that success is difficult to achieve. And indeed it is, but the reality is that retaining success is far more difficult than attaining it. There is a tendency to believe that success is the end of the road, when it is really just a confirmation that you are on the right road. It may seem counter-intuitive, but surviving success is almost always more difficult than surviving failure. Fail and that is the end of it, you can move on, but success demands more and more, and that can lead to what some have called the “agony of success.”

Many prepare to achieve success, but surprisingly few prepare to deal with the way success has a way of weakening the behavior that spawned it. I have seen many individuals and businesses who made yeoman efforts to be successful, only to fall prey to the “agony of success,” once it was achieved.  All too often when an individual or company achieves success, it leads to what may be an unconscious lessening of the passion, commitment and effort that led to success. Without the threat of imminent failure present, the fear of failure dissipates and is often replaced by the curse of complacency.

The only antidote to this malady is to make it your goal to always get better at what you do, if so, you will never fall prey to the feeling that you have made it, because for you, success will be defined by how good you can be, not how good you have been. Continued success means always making history and if you’re not making history, you are history.

Buffalo Wild Wings can be a learning lesson when it comes to dealing with success

Few companies in any industry have enjoyed the growth and success of Buffalo Wild Wings. From a single store opened in 1982, just off the campus of Ohio State, BWW expanded to operate stores in every state and is now an international presence. I joined BWW as a director, just prior to its initial public offering in 2003 and served on the board for over a decade.

It was a heady time of growth. More important, it was profitable growth. During my time on the board over 1,000 new stores were opened and the initial foray into the international market was initiated. Each year increases in sales, revenues and profits were at the top of the “casual dining” segment of the restaurant industry; only outperformed by the steady increase in stock value.

From my perspective as a board member, the entirety of the credit for the success of Buffalo Wild Wings belonged to CEO Sally Smith and the outstanding management team she led. Over a long business career, seldom had I seen a management team as dedicated, hard-working and as creative as was this team.  

But as time went on, I began to be concerned about a mentality of inevitability and entitlement that had crept into the psyche of management and the board. It was not any one thing, but there was an almost imperceptible shift from the feeling that continued success was something to be earned, to something that was preordained. Management and the board began to, even if subconsciously, feel entitled to the benefits of success achieved to date. Those concerns when raised were masked by a steep increase in stock value and continued growth (although the growth had begun to slow) and were, for the most part, ignored.

The company began a steady evolution from an entrepreneurial to a corporate culture. Some evidence of this includes:

  • Senior management began (a fully disclosed and legal) systematic sale of their stock. Management was (and still is) taking its earned reward for past success, but this is the action of a manager, not an entrepreneur who believes there is even greater success in the future. It sends a subtle message to employees and others that management believes best is in the past and, “I am going to take what I can, while the taking is good.”
  • The company began to hire from the outside, rather than making a commitment to identify and develop talent from within. Successful companies maintain success by recognizing the talent of those who are committed to the company and by creating a path to advancement for them. It sends the wrong message to employees, and is a sign of a lazy management, not to commit to developing internal talent.
  • Independent members of the board of directors (only two of whom I respected) began to be more concerned with process and procedure (making sure meetings started and ended on time) and their own personal compensation, rather than challenging management to seek out creative growth options. (It should be noted that all but the two outside directors I felt were qualified have been replaced.)
  • Management and the board seemed to be satisfied with what worked in the past, rather than trying to identify new ways that would work better in the future.

Individually, these and other changes that were taking place, would not impact the success of Buffalo Wild Wings, but taken together, they started a process of deteriorating success that continues today. They may not even recognize it, but the reaction of management in this type of situation is to shift focus from seeking success yet to be achieved, to protecting past success. In short, management becomes defensive rather than aggressive. This mentality rarely works and in reality puts the very future of the company at risk.

Sharks in the water

When a company loses its drive and direction it begins to flail about like a wounded fish in the ocean and that attracts sharks who move in for the kill. Unfortunately, that is the position BWW is in today. There are predator investment groups that prowl the business seas looking for successful but wounded companies. When the target is identified they sweep in, take a big chunk of the company, and then attempt to impose their will on the company. The only objective of these killer sharks is a quick meal of increased stock price and then they move on to the next target; leaving the prey wounded and struggling to survive, which rarely happens.

Unfortunately, this is the plight that Buffalo Wild Wings finds itself in today. Management and the board are spending most of their time attempting to fend off the sharks and this leaves little time to focus on making what was a great company great again. This did not have to happen, but it is a great example of what can result when the management of a company allows itself to fall prey to the “agony of success.”

Diehard Trumpites Have “Special Needs”

 

At a campaign rally in January, 2016, in reference to the blind loyalty of his followers, Trump said, “I could go out on 5th Avenue and shoot someone and I would not lose any votes.” The media (even Fox News) scoffed at his exaggeration, but it turns out that Trump was not that far off. After a tempestuous campaign, an erratic transition period and two months of an administration that could best be compared to bareback bull riding, Trump followers are, if anything, even more hypnotic in their support for him. Even when Trump makes things up from the vapors of his own peripatetic mind, his followers accept them as gospel.

Before we go further, let me acknowledge that I voted for Trump. I did so out of the belief that the establishment status quo was in need of some uncomfortable disruption and Trump was the only “disrupter” in the field of candidates. What I did not vote for was what Trump’s alter ego, Steve Bannon, described as the “deconstruction” of the pillars and institutions of the American government. You make a sick patient better by curing him, not killing him.

Even the most casual observer can see that the early days of the Trump administration have been a full-frontal assault on the fundamental institutions of government – the judicial, legislative and executive branches. At the same time, there has been a concerted effort to consolidate the levers and power of government within the walls of the White House (via Executive Order); much like role model Putin has done in the Kremlin. This attitude was vividly postulated by the wannabe Nazi Youth Leader Steve Miller, the White House advisor and Bannon buddy, who said in a television interview, “that the powers of the president to protect our country are very substantial and will not be questioned.”

And now of course, there is the broken promise to “replace and repeal” Obamacare. After seven years of repeated blood-promises by Republican Congressional leaders and multiple campaign pledges by Trump that if elected, Obamacare would be immediately “repealed and replaced,” that has not happened. After a cartoonish effort failed to fulfill the promise, we are now told, “Obamacare is the law of the land for the foreseeable future.” A lot of excuses have been offered up to explain the failure of the Republican AHC plan, but the bottom line is that this is a failure of leadership and inability to “make a deal.” Leadership and deal making starts at the top.

Then there is the blinding sandstorm of the “Trump-Russian affair.” There may be nothing to the suspected improper contacts – and maybe even collusion – between the Trump campaign and elements of the Russian government, but the circumstantial evidence that has emerged, combined with Watergate-like actions to obfuscate this activity, raises high suspicion. When was the last time so many American officials had so many behind the scenes contact with so many Russian officials?

Under normal circumstances this type of stumbling, bumbling, incoherent start to leadership, would spell doom for any leader at any level, let alone one who is president of the United States, but these are not normal times. The reality is that while Trump’s already low approval rating has declined further, his popularity among the vast majority of those who voted for him is even higher. Indeed, Trump backers want to believe that all of these issues are nothing but a wide conspiracy launched by those in the “deep government” that is intended to besmirch Trump and his agenda.

So what is it that blinds Trump’s die-hard followers to any of his foibles, fabrications and failures? The reality is that Trump followers have “special needs” and he is the only one who has promised to respond to them.

The Lost Generation

The core backers of Trump are part of what could be called the “lost generation.” For virtually their entire lives they have experienced a steady erosion of what has been generically referred to as the “American Dream.” The ideal of the American Dream was that everyone had an equal opportunity to achieve success and financial security through hard work, determination and individual initiative.

From the perspective of the Trump voter they have seen and felt the impact of the American Dream being dismantled step by step. They have seen “globalization” siphon jobs overseas; jobs being lost to immigrants (legal and illegal), their own wages have stagnated or even declined. They have witnessed vast amounts of wealth concentrated in the hands of the few and have suffered from the destruction of the great American middle-class. Not only has the core Trump supporter felt the loss of opportunity, but, even more important, they feel powerless and voiceless against a government that seems designed to work against them and the elite wealthy who do not care about them. Is it any wonder they are frustrated and distrustful of the establishment?

Then along comes Trump      

Give Donald Trump credit. Of the 20-plus individuals who ran for president in 2016, Trump was the only one to recognize, understand, enumerate and connect with the frustration, pain and special needs of millions of Americans. He not only promised to give these individuals a voice, but that he would, “Make America Great Again.” That was a “code phrase” signaling that he would take the country back to the way things were when the American Dream was alive and well. It was, for these people, an irresistible clarion call.  

This was like someone who had never been loved, being told that someone loved them. When someone is starved for love and believes they have found it, little else matters. The one being offered love is willing to blindly ignore any flaws, foibles, fabrications or even the insincerity of the one offering love. This is the case with the die-hard Trump supports.

Unapologetic Trump supporters do not care if he is impulsive, off-the-cuff, an admitted misogynist or one who plays fast and loose with facts and the truth. Trump’s core supporters couldn’t care less if Russia attempted to influence the election or if members of his staff (most likely with his knowledge) colluded with the Russians to fix the election. Even when Trump blames the Democrats for blocking the repeal of Obamacare – even though they had no power to do so – his followers believe him. The bottom line is that Trump has promised those who are frustrated and disenfranchised from the establishment that he will make right the wrongs they have suffered; and that is all they care about. And you really can’t blame them.

If Love is Lost

This is all well and good. It is easy to empathize with those who have been left behind by a rapidly changing economy and world order. One can understand why they would gravitate to the promises of Trump. But what if he ultimately fails to deliver? In the end, even more serious problems and frustrations could arise if, for whatever reason, Trump is unable to deliver on the promises he has made to “Make America Great Again.”

Trump is Right: Healthcare is Complex, but it does not have to be

from “If You’re Not Making History, You Are History” by Bob MacDonald

 

No doubt about it, the healthcare system in America is a mess. Obamacare is not working as intended and the proposed Republican replacement is being castigated, even by Republicans, as potentially even worse. Democrats complain the American Health Care Act (ACA) takes too much away from people who need coverage the most. Republicans who oppose the ACA call it “Obamacare-lite” and complain it does not go far enough to repeal Obamacare; and that it creates an entirely new entitlement program.  

The reality is that resolving the healthcare challenge is simple, but it is made complex because Republicans and Democrats have diametrically divergent views on what the end result should be. In simple terms, the Republicans believe the answer lies in assuring that all Americans have “access” to healthcare coverage, while the Democrats believe the answer lies in assuring that all Americans actually have healthcare coverage. There is a big difference between having access to healthcare coverage that an individual needs but cannot afford and providing the needed coverage, regardless of the ability to pay.

This difference exists because the political leaders have failed to address and resolve the most fundamental healthcare question: Is basic healthcare a right or a privilege?

The Republicans believe that healthcare is a privilege, and thus, so long as there is universal access to healthcare coverage (no matter what form or price), the problem is solved. (It should be noted that prior to becoming president, Trump consistently argued that healthcare coverage is a right.) On the other hand, Democrats take the position that every American citizen, regardless of financial status, has a right to receive basic healthcare.

It is this philosophical difference that motivates the Republicans (believing healthcare is a privilege) to propose in the ACA that Medicaid (the state/federal plan that covers low income citizens) funding be slashed. (This is one of the chief reasons why the Congressional Budget Office estimated that as many as 24 million Americans will lose their coverage under the Republican plan.) Conversely, (believing that healthcare is a right) the Democrats used Obamacare to expand Medicaid that covered 15 million people who previously could not afford coverage of any type.

There can be no effective bipartisan agreement on the best form of a healthcare system, unless or until there is a debate and resolution of the question as to whether healthcare is a basic right of every American citizen or a privilege based on means to pay. If, as a society, we decide that healthcare is indeed a privilege, then the Republican ACA plan will work just fine. If, we as a society decide (as virtually every other industrialized nation has) that basic healthcare, like a basic education, is a natural right of every American citizen, then we can work together in a bipartisan way to find the best way to achieve that goal.

Repeal and Replace Obamacare

Ironically, if it is decided that healthcare is a basic right, it would call for the repeal and replacement of Obamacare, because it has failed to achieve the objective of covering all Americans. But such a replacement would be based on the rights of all, rather than the privilege of a few to have healthcare.

If this approach to repealing and replacing Obamacare is taken, the solution is right in front of us. It is a healthcare system already in operation. It has proven to be effective and efficient; it has high consumer satisfaction and acceptance. Maybe even more important, it is a plan that President Trump has endorsed and pledged to protect.

Taking the complexity out of the healthcare solution.

The simplest and most effective way to solve the healthcare crisis is to merge the Medicare and Medicaid systems into one program that, on a phased in basis, will provide basic health care services to every American citizen, regardless of age, social status or income.

There would be no need to create another bureaucracy. Both of these programs have processes and procedures in place and in point of fact are paying for the health services provided by clinics, hospitals and doctors for millions of Americans age 65 and over, along with millions more of low income citizens. Patients covered by Medicare are free to select any of the 95 percent of the doctors, clinics and hospitals that accept Medicare payments. This is not the government deciding or providing the healthcare, but simply being the “single payer” of the benefits provided.

Of course merging and expanding Medicare and Medicaid into a universal healthcare system can’t be done with a flip of a switch, but an organized phase-in of this system over time for those not currently covered under Medicare or Medicaid could smooth the way. This would allow for Obamacare, along with all other forms of healthcare such as individual and employer group plans, to be repealed and phased out at the same pace the new system is expanded.

Certainly there will be concerns about the cost of such a change, but a number of serious studies have concluded that diverting all expenditures on the current system (federal, state, individual and employer) toward this new system and combining this with premiums, deductibles and co-pays based on income, would create more efficiency and actually be less costly than the current system. President Trump has even made this point in interviews.

Using this approach to fixing the healthcare system could be a win-win for everyone. Trump and the Republicans could fulfill their campaign pledge to repeal and replace Obamacare; Trump could remain consistent in his call for universal healthcare and his pledge to protect Medicare and, most important, all Americans could finally join the millions of citizens of every other industrialized nation in the world for whom basic healthcare is a right of citizenship, not just a privilege for the wealthy.