Latest "Leadership" Posts
The first issue of Playboy, published in December of 1953. (Photo credit: Wikipedia)
Hugh Hefner’s brainchild, Playboy, is out to reinvent itself. Will less smut mean more money-making deals?
Scott Flanders, 55, is the first CEO outside of the Hefner family to run the privately held Playboy Enterprises Inc. Flanders has shrunk the staff by 75 percent, outsourced much of the business, and moved company headquarters from its historic home in Chicago to Los Angeles.
After 60 years of American hedonism, Playboy is moving away from the seedier aspects of the brand and morphing into a licensing company. Flanders’ goal is to build an upscale lifestyle brand around an iconic bunny logo.
The new Playboy is both smaller and more profitable. The corporate home is filled with dealmakers but devoid of bunnies and playmates.
Playboy sold its TV channels and digital properties to Internet porn giant Manwin, according to the Wall Street Journal, and struck partnership deals with art and fashion leaders like Dolce & Gabbana to reposition the brand. Long barred from Apple’s digital storefronts because of its titillating past, Playboy will create a nudity free app for the iPhone that features lifestyle tips, beautiful women and articles from the magazine.
Playboy still has a ways to go to achieve the profitability it needs to satisfy its bankers and private equity owners. More licensing deals will help, but what Playboy doesn’t know about their brand might hurt them.
Probe for Your Own Vulnerable Spots
Not knowing your real reputation in the marketplace can kill deals.
LONDON, UNITED KINGDOM – FEBRUARY 15: A bottle of H.J. Heinz Co. Tomato Ketchup on February 15, 2013 in London, England. Billionaire investor Warren Buffett's Berkshire Hathaway is is teaming up with the Brazilian investment group 3G Capital to buy H.J. Heinz Co. for 23.3 billion USD. (Image credit: Getty Images via @daylife)
Warren Buffett makes no secret of his love for hamburgers, french fries and Cherry Coke. When his doctor told him he needed to eat better or exercise more, he chose exercise: “The lesser of two evils.”
Now Buffett can have his fill of condiments for those burger plates. His Berkshire Hathaway has teamed with Jorge Lemann’s 3G Capital to buy HJ Heinz Co. for $23.3 billion, one of the richest deals ever in the food industry according to the Wall Street Journal. Sold in 200 countries, the wide array of brands include Heinz ketchup and sauces, Ore-Ida french fries, Bagel Bites mini-pizzas and even Weight Watchers SmartOnes meals.
Buffett, 82, was seeking deals after his company amassed a cash pile of $45 billion. Buffett has bet big on food before through equity investments in Coca-Cola and purchases of See’s Candies, Mars and Dairy Queen. Now he can add another Logo Deal: an iconic ketchup maker that traces its roots to the 1860s.
How to Pursue a Logo Deal Strategy
Regardless of your business, there is a Logo Deal Strategy opportunity for you somewhere. If that’s the end you’re shooting for, pick your ultimate target. Make it a company that is big in size and big in name.
In-n-Out-burger—eating (Photo credit: Marshall Astor – Food Fetishist)
America’s youngest female billionaire is a burger heiress and she has plenty of suitors. Lynsi Torres, the 30-year-old president and sole owner of the successful In-N-Out Burger chain, is not looking to get married. But she may be hunting for a deal to sell her company in five years.
Her family expanded In-N-Out from a single drive through hamburger stand in 1948 in Southern California into a fast-food empire worth $1.1 billion, according to a recent Bloomberg News feature on the low-profile Torres.
The restaurant chain has a rabid fan base, which one industry analyst calls a “kind of cu
lt following.” Because In-N-Out is a private company, any financial estimate is based on speculation. That being said, the closely held firm has 280 units in five states and probably has sales around $600 million a year. A Harvard Business Review article in 2005 estimates the company enjoys 20 percent profit margins.
Many companies would love to gobble up In-N-Out. That includes burger aficionado Warren Buffett, who according to the UCLA business school website, told a group of visiting students back in 2005 that he hungered to own the chain.
Torres came to control In-N-Out after a series of family deaths. She controls the firm that a trust gave her half ownership when she turned 30, and will give her full control when she turns 35. Whether Torres, a mother of twins, will want to maintain control in five years is the billion-dollar question.
Blackberry, formerly Research in Motion CEO Thorsten Heins, and singer Alicia Keys officially unveil the BlackBerry 10 mobile platform as well as two new devices January 30, 2013 at the New York City Launch at Pier 36. (Image credit: AFP/Getty Images via @daylife)
There was a time we were so addicted we used to call them Crackberrys.
Before the iPhone arrived on the scene in 2007, the first smart phone that hooked many of us was the BlackBerry. Legions of BlackBerry addicts couldn’t resist the fix of easily checking company email whenever, wherever they went.
A grim joke went like this. How do you know when a corporate executive dies? When the BlackBerry drops from his hand.
Now BlackBerry is on the hunt to recapture its mojo. In fact BlackBerry maker Research in Motion (RIM) is making a bet-the-company move to lure us away from our new obsessions: namely, Apple’s iPhone and Google’s Android phone. This is an “all in” bet symbolized by the decision to even change the company name to BlackBerry.
The new BlackBerry is an all-touch device running on a new operating system. Sorry Crackberry diehards, that physical keyboard you loved so much is gone, replaced by a virtual keyboard.
The old operating system was great for email but a poor platform for app developers. As any iPhone or Android user knows, apps are where it’s at.
How to Win Friends and Influence Partners
So BlackBerry is going to need to make many deals if this bet is to pay off.
Hooters (Photo credit: Wikipedia)
Getting your prospect to say “If it were me…” might be the best path to removing a stigma that is holding up your deal.
When Chief Executive Officer Terry Marks was hired in 2011 to make over the Hooters chain, he found women were steering clear for more reasons than buxom waitresses in tight uniforms. Wives and girlfriends also avoided Hooters because the menu was stale, the restaurants were dated and the food was overpriced.
Can Marks, a former Coca-Cola exec, remove the Hooters stigma so men aren’t embarrassed to put the chain on an expense account and women aren’t as quick to veto a meal there? Attracting women is critical because Hooters is facing strong competition from other so-called breastaurants including Tilted Kilt Pub & Eatery and Twin Peaks.
To convince the females that Hooters is going from frat frenzy to family friendly, Marks needs to change the conversations about the restaurants. Perhaps advertising that gets women to say, “If it were me, I would change the menu and make it more up to date.” “If it were me, I would add more lunch deals.” “If it were me, I would redecorate the restaurants and make them more appealing to women, like bringing light into the restaurants.”
Then Marks and team can show that Hooters is taking all these steps.
Recommend the questions you want prospects to ask
Maybe you need to reposition your brand in the mind of the prospect to land a deal. The conversations you want to encourage are those that begin “If it were me….”
These are the words that you want to plant into your prospect’s ears.
“Bartering has been around since the dawn of human existence,” says Michael Dalton Johnson. “It’s a smart and easy way to get what you need by trading something you have. Bartering is especially smart in today’s economy.”
Maybe they don’t teach bartering at business school, but it is part of the curriculum at the school of hard knocks. And Johnson is proud of his alma mater.
“Who would you rather be lost in the woods with, Albert Einstein or Davey Crockett?” asks Johnson, author of the recent McGraw-Hill business book “Rules of the Hunt.”
Johnson’s point is street smarts are often preferable to book smarts. His book is in the tradition of real-world, street saavy works like “Swim with the Sharks Without Being Eaten Alive,” by Harvey MacKay, and “What They Don’t Teach You in Harvard Business School,” by the late Mark McCormack.
At the age of 15, Johnson dropped out of high school to take a full-time job. He joined the Army at age 17. After his service in the military, he worked as a ranch hand, factory worker, and construction laborer before venturing into the business world. He has never taken a business course and brings an unpretentious outsider’s view to the subject of business.
“Rules of the Hunt” has much to say about deal-making subjects, including negotiating and motivating people. One of the subjects he covers is bartering, an often overlooked topic.
According to Barter News Weekly, almost one-third of all small businesses in the U.S. and 65 percent of corporations listed on the NYSE are involved in some form of bartering.
Hostess Cake on the Sidewalk (Photo credit: Ezra.Wolfe)
Good news for junk food junkies. Hostess Brands has final approval from a bankruptcy judge to seek suitors, setting the stage for Twinkies, Wonder Bread and Ding Dongs to find a second life with new owners.
Hostess said in court that it’s in talks with over 100 potential buyers for its brands that have disappeared from store shelves. This once-in-a-lifetime deal-making opportunity will allow some fortunate company to snap up an iconic multi-billion dollar brand without the burden of debt or the costly labor contracts.
Because the bread business has been consolidating over the last few decades, the deal for Hostess may come down to the three major players that are left: industry leader Grupo Bimbo SA; No. 2 Flowers Foods; and good old Pepperidge Farm, which is owned by Campbell Soup Co. The competition to make a sweet deal for Hostess will be intense.
Bring On the Murder Board
If you are faced with intense deal making competition we recommend you prepare with a Murder Board: a committee of selected peers and teachers, preparing a student for oral exams by posing anticipated questions to the student and then providing a critique of the answers. This same process is now used by politicians who are preparing for debates, and we hope you will use it for preparing for key presentations. (Warren Buffett has his own version of a Murder Board: that would be his partner and vice-chairman, Charlie Munger.)
To get the most out of your Murder Board, follow this framework:
“From the time you get up in the morning until the time you go to bed at night, you are continually negotiating, communicating, persuading others to cooperate with you to do the things that you want them to do,” says negotiating expert Brian Tracy, top-selling author of more than 45 books.
Tracy lives to see the world and has traveled and worked in over 80 countries on six continents, and speaks four languages. He estimates more than five million people have heard him speak
Prior to becoming an internationally known keynote speaker and seminar leader, Tracy was the chief operating officer of a $265 million development company. He has had successful careers in sales and marketing, investments, real estate development and syndication, importation, distribution, and he continues to provide high level consulting to several billion-dollar plus corporations in strategic planning and organizational development.
Five Ways to Better Deals
Tracy has studied, researched, written and spoken for 30 years in the fields of economics, history, business, philosophy and psychology. Culled from this research, here are his five top tips for making deals:
- Prepare thoroughly. The most important negotiating tactic is thorough and complete preparation in advance of the negotiation or discussion. Before I go into a negotiation, I know exactly who I am speaking with and precisely which points I would like to discuss.
- Deal making never stops. Negotiation is the way that individuals with differing values and interests find constructive ways to live and work together in harmony. The ability to negotiate successfully with exemplary interpersonal skills is essential to success in all your interactions with other people.
English: Abraham Lincoln, the sixteenth President of the United States. Latviešu: Abrahams Linkolns, sešpadsmitais ASV prezidents. Српски / Srpski: Абрахам Линколн, шеснаести председник Сједињених Америчких Држава. (Photo credit: Wikipedia)
A seven-year-old book about deal making in the White House, “Team of Rivals: The Political Genius of Abraham Lincoln” by Doris Kearns Goodwin, has climbed back on the best-seller list.
Credit has to go to Steven Spielberg‘s megahit movie “Lincoln,” about the deal making behind the passage of the 13th Amendment, outlawing slavery. Goodwin, a Pulitzer Prize-winning historian, is struck by how much the film, based in part on her book, has “become part of a national conversation.”
Three Deal Making Lessons from Lincoln
One of the aspects being discussed is what “Honest Abe” was willing to do to make a deal. Congressman Thaddeus Stevens has a movie line that sums it all up: “The greatest measure of the 19th century,” he says, “was passed by corruption, aided and abetted by the purest man in America.”
We don’t recommend corrupt politics to make a deal. But that doesn’t mean you have to play fair either. Here are some strategies:
- Make them a one-more-time offer. If a deal is important but seems lost, don’t give up even though it appears your final offer was rejected. Now, we do not recommend anything underhanded, like the film’s trio of dubious lobbyists that are responsible for outright corrupt deal making, as they are authorized by Secretary of State William Seward, and later by Lincoln himself, to offer patronage jobs in return for votes.
Burlington Northern Santa Fe 5754 GE ES44AC (AC4400EV) (Photo credit: Wikipedia)
How long does it take to pitch a $26.5 billion deal? About a day, if you are ready.
If Warren Buffett decides to strike, he doesn’t strike with half measures. When Buffett chose to make an elephant-sized railroad deal, he did not hesitate. That’s why in 2009 a man worth about $44 billion was willing to spend $26.5 billion to acquire the 77.5 percent of Burlington Northern Santa Fe that he did not already own. We were told by a BNSF executive that Buffett brought up the jumbo deal idea to the CEO just one day before the board meeting.
The next year Warren Buffett said he had almost $40 billion more to spend. The “elephant gun is reloaded, and my trigger finger is itchy” he said in his annual letter to shareholders.
But was the BNSF deal just peanuts for Buffett? Actually it was an all-in bet during a fearful time for the economy. In the BNSF boardroom Buffett must have done an excellent job of taking fear off the table. In our book “How to Close a Deal Like Warren Buffett” we discuss how important it is to remove fear from the mind of prospects.
One of the biggest fears prospects usually have is a quite simple question: “How do we get started?” They’re now poised at the end of a cliff and a deep chasm. They can see the other side and implementation of your solution. But between now and then is a huge chasm they cannot cross in their imagination.