Management / Keil Hubert: The Mall-Tease Falcon
Keil Hubert: The Mall-Tease Falcon
10 August 2015 |
Americans adore charismatic leaders and will gleefully follow them into ruin. Business Technology's resident U.S. blogger Keil Hubert argues that a responsible business needs charming rogues… and equally needs cold-hearted rationalists to keep the rogues safely in check.
When asked what attributes make a great business leader, most Americans would say ‘charisma’. They’d certainly get charisma on their list before listing attributes like ‘cynical’, ‘skeptical’ or ‘cautious’. We place great stock in personal magnetism and infectious optimism; that’s part of our collective sense of cultural identity.
We tend to disproportionately value fervor over fairness, charm over compassion, and roguish joie de vivre over reliability. It’s all part of our ‘cowboy ethos’ – the national myth that we’ve cultivated for ourselves to rationalize why we break rules, embrace risk, and defy the odds. Everyone wants to be the Bold Hero; no one wants to be the Dependable Teammate.
I spend a lot of time talking about culture in my columns, because culture has a massive warping effect on perceptions and decision-making in the workplace. I’m fascinated by how and why people rationalize their actions. A great deal of success in cyber security depends on understanding people. Just like it is in beat policing: you can buy all of the shiny security devices you want, but they’ll never fully take the place of a savvy human being who knows the operating environment and understands how to interpret the clues that he or she perceives. Culture fundamentally twists how we understand what we see and hear.
Along those lines, American culture tends to exalt highly-charismatic characters and quickly forgive them both their faults and their failures. We revere the people who fill us with grand visions of success and stroke our fragile egos. As a terribly depressing example of this, take a jaded look at the cavalcade of clowns contending for the next US presidential election.
Still, we Americans often realize (in our darker moments of sober self-reflection) that our yearning for charismatic leaders often does us more harm than good. We want the slick sales guy, even though we know (deep down) that said sales guy is probably full of crap, and is likely to take advantage of our enthusiasm. This idea has embedded itself deeply into American popular culture. We have well-established tropes for television and movies concerning tent-revival preachers, charming salesmen, sleazy con artists, bent politicians, and all manner of smarmy ne’er-do-wells. We know that a person possessing an excess of charisma is likely to be too good to be true… but we often can’t help but love them for what we want them to be. We want our leaders to possess the complete package: good looks, smooth charm, fiery passion, grand vision, and unflappable confidence.
Of course, what we want is rarely what we need. Long-term success in the commercial sector requires more rational sang-froid than searing interpersonal heat. Charismatic teammates are great fun to have on the team… but they need to be kept in check by responsible adults. I confess that I’ve played both roles in the workplace. As much as I enjoy the heck out of ‘inspiring the troops’, I recognize that my temperament lends itself more to being the team’s token wet blanket. It’s not a glamorous role, but it’s darned necessary. It’s also really hard to do well, since most people resent being told that their exhilarating vision for riches and fame might not be grounded in reality.
This isn’t a new thing by any stretch. If you’re a fan of Noir cinema, you’ll probably remember the scene in The Maltese Falcon when Sam Spade’s cynical secretary Effie Perine counseled him: ‘Look at me, Sam… You worry me. You always think you know what you’re doing but you’re too slick for your own good, and someday you’re going to find it out.’ Spade listened, but didn’t heed her advice … the exact same way that thousands of business leaders every day listen to – and subsequently ignore – their subordinates’ spot-on words of warning.
A great example of this phenomenon took place a few years after I launched my boutique consulting company. I’d gotten into business specifically to help one of my former co-workers complete a backlog of consulting contracts that we’d both been involved in prior to being laid off from Yahoo. After that opportunity dissipated, I pivoted to provide technical support and systems integration work for Apple users in predominantly-PC corporate environments. The niche fit my interests.
At the time, there were eleven small businesses serving the Apple user community in the Dallas Fort Worth metro area. The Fortune 500 clients in the area were already well-served by the Big 5 consulting behemoths; us small operators served small and medium businesses that couldn’t afford the major players’ $350/hour bill rate. As chance would have it, most of us business owners knew one another: back then, Apple required all of us to be certified and registered before they’d endorse us as ‘partners’. We all made it a point to meet up regularly to compare notes, to strengthen personal relationships, and to hand off opportunities to whomever could best solve a client’s problem.
During one of our meetings, a relative newcomer to our brotherly circle  tried to champion a new joint venture idea. He’d noticed that a new strip mall had opened up on the Fort Worth side of DFW Airport, and thought that this would be a perfect spot for an Apple-themed retail support centre. The idea sort of made sense at the time; all of the new Apple Retail Stores were a long ways away in Dallas County. There was only one physical store serving Apple users in all of Tarrant County  and they were located in far south Fort Worth, making it a pain in the neck for affluent consumers in our area to get quick service.
The new fellow (let’s call him ‘Bob’) spent about three quarters of our working luncheon trying to drum up support for his plan, and he worked the room like a salesman. Bob glided from seat to seat so that he could make eye contact with everyone. He grasped people’s shoulders while he talked, and pitched his lovely baritone at just the right volume to command our attention. As a former amateur stage actor, I admired Bob’s technique. The guy knew how to put on a show.
We’d all chip in a proportional amount for the rent, Bob said, so that no one entrepreneur had to shoulder the cost on his own. We’d get a generic sign with an Apple-approved logo on it that was highly visible from the motorway. Our shared store would be balanced 50:50 between retail sales and consulting. Half of our floor space would be dedicated to a classroom where customers could bring their Apple products in. We’d take turns staffing the store, he said, and we’d all share in the bounty.
Bob was full of zeal. His eyes were bright, his tone was up-beat, and his vision of future revenue was tantalizing. The man was working his natural charisma for all it was worth. The other entrepreneurs were all nodding along. Everyone seemed entranced.
Well, no; make that almost everyone. I thought that Bob was… let’s say ‘overly optimistic’. That’s a much kinder phrase than ‘hopelessly naïve’.
I left the luncheon feeling disquieted and a bit sad; I was convinced that Bob’s high-flying retail plan (while enticing) simply wasn’t going to work. One of the other business owners – an old friend of mine named Craig – intercepted me at my car and asked me point-blank whether or not I intended to get in on the action. I said ‘no’, and offered my counterargument.
At the time, there were only four ways that our companies were making money:
- Perform warranty repairs on consumers’ and businesses’ hardware products on Apple’s behalf under their AppleCare warranty umbrella.
- Troubleshoot (and sometimes repair) those same consumers’ and businesses’ hardware products that were out of warranty eligibility.
- Sell new Apple products over the phone or via an online storefronts, albeit with a very small markup, and
- Consult to people about how best to use their existing Apple products.
The harsh reality, I said, was that none of us were actually breaking even. We’d talked about our relative success (or lack thereof) in the previous meeting. All of our small businesses were making money, but none of us were making enough for us to live on. It wasn’t a matter of the market space being too small; the problem was that our margins were so damned small on each job that we could waste weeks on a difficult engagement earning the equivalent of less than minimum wage (and that’s when we got paid at all). That was why (I confided) I was walking away from methods one through three entirely to focus exclusively on method four – for the higher margins.
If, I said, we accepted that the niche that we were all competing in wasn’t lucrative enough to sustain all of us at our current rate of production, we needed then to take a hard look at how much additional revenue we’d generate from adding a physical location to our arsenal. That meant addressing the harsh realities underlying our business model.
I’d been monitoring the local market for several years, and had noticed that consumers weren’t buying Apple kit at full retail if they could help it. Buyers went to traditional brick-and-mortar retailers like CompUSA to examine the gear that they thought they wanted – and then they purchased that gear online wherever they could get a better deal than MSRP (often anywhere from 2-20 per cent less, depending on the age of the device they wanted). We simply couldn’t compete with Apple itself and we sure couldn’t compete with the Value-Added Resellers where most businesses shopped. So, the odds that our equipment sales would significantly increase seemed… unrealistic. 
The opportunity to host classes and mimic the Apple Retail Stores’ ‘Genius Bar’ support model sounded great for connecting with the public… but Apple gave away its specialty advice for free as a cost of doing business. If we tried that, we’d be losing money with every event. If we tried to charge consumers for our time, we’d get some business… but would it be enough to cover the rent?
Further, the overwhelming majority of the paying work we did took place at consumers’ homes and at small businesses’ offices. We went where the problem was, rather than force people to come to us. Assuming that no one was crazy enough to give up that pillar of his business, it meant that each ‘partner’ could either staff the shop, or could go perform paying work – they couldn’t do both.
Finally, the cost of maintaining a storefront wasn’t a casual expense; the landlord would want his or her rent every month, no matter how we were getting along financially. So would the ISP, the power company, the city tax collector, and everyone else that was entitled to a piece of our action. Spreading the cost of the enterprise among ten or so people would reduce each person’s share, but only for as long as all of the partners were paying their fair share. The first partner to quit would inflict his share of the endeavor onto all of the others (without their consent). Each partner that abandoned his part of the operation would put proportionately greater stress on the remaining partners until the load became unbearable for everyone – worse, the guys left ‘holding the bag’ when it all came apart could have their brands and credit ratings ruined.
When you put all of those factors together, I said, it seemed like business suicide to get involved in Bob’s storefront. I assessed it as too much unnecessary risk for too little promise of reward. Craig thought about it for a few minutes, nodded sheepishly, and said that he agreed. He confided that he really wanted the man’s glorious dream to come true, but he couldn’t make the facts fit the fantasy. I told him that I agreed – it would be great… for a while… until the economic reality of our situation caught up with us.
As far as I know, the Apple support companies’ collective never did move forward on their mall storefront idea. It didn’t matter; two years later, eight of the nine small companies who’d said that they were on-board with Bob’s idea were out of business (including Bob’s). A few years later, the field was down to just Craig and me – and I’d completely exited the consumer niche to focus exclusively on security research and consulting. I’d been partially right: the local market simply couldn’t support more than one full-time Apple support business. I got out gracefully, before things went to crap.
As for Bob, I didn’t harbour any ill will towards the man. I didn’t know him well, but I felt strongly that he was sincere about what he thought the strip mall could do for all of us. Could he have been scamming us all? Sure; he could have had an undisclosed financial interest in the property or any number of other crooked schemes. I do often write about crooks, cheats, and outright baddies. In this case, the Bob du jour was probably just a well-meaning and high-flying fool. 
What made Bob (slightly) dangerous was his emphasis on leading with personal charisma instead of fact-driven research: Bob was suave, and he was compelling enough to lead an entire posse of confederates right over the edge of an easily-avoidable metaphorical cliff. I suspect that if we’d bought into his retail plan, we’d likely have all found ourselves following his lead, eyes fixed firmly on the sky, when the ground suddenly fell out from under us. What’s worse (to me) is that Bob was so infectiously enthusiastic that we probably all would still have been whooping and laughing when the gravity of our plight inevitably caught up with us.
 All of the small business owners in our niche were men. I don’t know why that was, but it seemed peculiar – even for the tech sector.
 They were called Hardin Computer, and they’re still around. Nice folks.
 I say ‘we’ here even though my company never sell hardware. Nine of the other small businesses did. That made it a collective challenge.
 Meant in the kindest possible definition of the word.
Keil Hubert is a retired U.S. Air Force ‘Cyberspace Operations’ officer, with over ten years of military command experience. He currently consults on business, security and technology issues in Texas. He’s built dot-com start-ups for KPMG Consulting, created an in-house consulting practice for Yahoo!, and helped to launch four small businesses (including his own).
Keil’s experience creating and leading IT teams in the defense, healthcare, media, government and non-profit sectors has afforded him an eclectic perspective on the integration of business needs, technical services and creative employee development… This serves him well as Business Technology’s resident U.S. blogger.