"One of these types of executives is represented by people who rendered certain services in the past... These are the people who do not consider it their duty to fulfill the decisions of the Party and of the Government, and who thus destroy the foundations of Party and state discipline... They Presume that the Soviet Government will not have the courage to touch them, because of their past services. These over-conceited aristocrats think that they are irreplaceable... What is to be done with executives of this kind? They must unhesitatingly be removed from their leading posts, irrespective of past services."
Joseph Stalin (January 1934)
The Frustrated CFO's commentary:
Usually all my posts are accompanied by pictures, but not this one - I don't put up photos of mass murderers. Yet, I think that this quote tragically confirms my observation that entities, organizations, and systems can survive even after the most valuable, irreplaceable individuals are removed. In this speech, delivered during the 17th Congress of the Bolsheviks Party, Stalin has laid the grounds for the Great Purge that was about to exterminate millions of the best and the brightest Russian citizens - political, economic, scientific, military, industrial, and cultural elite. In fact, the eliminations started with the members of the said Congress, nicknamed by historians the Congress of the Condemned because two thirds of the people present during the oration were executed within the next three years. Without them and without the continuously murdered and imprisoned in camps workers, agrarians, engineers, doctors, scientists, poets, writers, musicians, etc. the country was getting darker, poorer, more corrupt, and less educated. But it's still there, on the map. Even after the break up of the Soviet Union it's still the largest damn country in the world.
This is what always happens with severely responsible and talented people who take pride in the quality of their work and apply themselves hard, regardless of the rewards and recognition, material or otherwise: They do an extraordinary job in every function they are assigned, they show initiative and undertake tasks beyond their scope of responsibility, they set their own lofty goals and high performance standards, they pull off feats of creativity and miracles of ingenuity. Truly they accomplish things that no one else would in their place.
More frequently than not they don't run around screaming about their achievements - after all, they simply cannot operate any other way and they don't care that nobody asked them to be like that. They themselves know that they are the best. Plus, people around them acknowledge such efforts in one way or another - subordinates show respect, peers get testy, etc. And the bosses? They either don't notice anything, because their heads are usually up their asses, or they are too limited to appreciate the ace-level pilotage they are witnessing.
As someone afflicted by this condition, I can assert that there is nothing healthy about it. Privately wallowing in the knowledge that you are "simply the best" and that your work ethic is a cut above everyone else's, while not being adequately rewarded for your efforts, is nothing more than an addiction to one's own ego. It's vanity of the worst kind, because it violates the principles of objectivism and merit-based recognition. And, like any addiction, it is accompanied by a couple of supplemental attributes.
One of them is the inevitable development of passive-aggressive behavior: no matter how many times a person is going to say that she does it for the sake of her own self-satisfaction, something deep inside wants to be celebrated for the extraordinary abilities, efforts, and results. This secret desire is in a constant fight with an extreme dislike of boasting. Thus, the feelings and impulses get mostly suppressed and come out in the form of classic indirect hostility and resentment.
Another attribute is the illusion of irreplaceability. The tormented crazies convince themselves that without them the company will not be able to survive; that everything will fall apart and go to hell. They believe that there is no way somebody else could be found to fill their shoes. And why not? Nowadays, people like that are quite rare. It's most likely that, if an employee in question leaves on her own accord or is let go for some reason (because she becomes unaffordable or her attitude becomes unbearable), the employer will never ever have someone that good in the same position. But does it really mean that losing these truly invaluable workers is an incurable disaster? Are they really irreplaceable? Let me answer this question by doing what I frequently do - relating the readers to an example from popular culture.
In case you have not had a chance to check out the Netflix/Lionsgate's co-production Orange Is the New Black, I urge you to do so - trust me, you will not regret it. The show's creator, Jenji Kohan (widely known for her Showtime offspring, Weeds), is a member of a still rare breed of entertainment developers, who is able to focus on female characters without reducing the finished product to gender-specific genres. Orange is the New Black takes place in a women's federal prison, and its ratio of male to female characters is about 1:10. Yet, 47% of IMDb users who rated Orange is the New Black (8.5 stars overall) were males.
One of the primary characters in the first season of the show is an inmate of Russian origin, Galina "Red" Reznikov (Kate Mulgrew). This formidable woman runs... no, she rules the prison's kitchen and has an influence on pretty much the entire social canvas of the place. By the show's start she has apparently been there for years and assumed a role of a Godmother for a tight circle of her "daughters." She can be a real bitch, and a newbie should think twice before contradicting her. But the truth is she is doing a remarkable job, keeping her fellow convicts and the staff fed and even rewarded with treats under the conditions of ever-shrinking budget, broken fridge, and oppressive hostility from some nasty guards. As early as the 5th episode, it is impossible for the audience to imagine the kitchen without Red. Obviously, she herself thinks she is irreplaceable.
Guess what? Towards the end of the season, the combination of some people's foolishness and others' unsavory scheming gets her kicked off the throne and out of the kitchen. So, what happens? Do the lights go out in the mess hall forever? Do the prisoners get shipped to another facility to be fed? Nah ah! Another head cook is found right there in the general population and installed in front of the range; she brings in her own crew; the cooking continues somehow. True, there are no more yogurt favors, the menu is severely skewed towards Latin-American cuisine, and even the oatmeal comes out spicy. But the plates are not empty, people are not starving. Life goes on, while Red is driving herself insane with displacement anger.
So, the answer to the above question is: No, you are not irreplaceable. It may take a whole team of less adequate and more expensive people to pick up your tasks. And collectively they will accomplish less and it will not be brilliant, but it will be just good enough for the business to continue, at least in the short run. Let me assure you that nothing will fall apart, because doing things half-assed and with little care has become a widespread norm. Everyone accepts poor quality at a higher cost nowadays, and so will your bosses. And you, with your talents, skills and unsolicited attempts to jump over the high-standard bars, are just an ego freak.
Today, our minds automatically go to facebook, Twitter, Instagram, etc. when someone uses the words "social network." The Rudin/Sorkin/Fincher team made a movie about Mark "I-violate-your-constitutional-rights" Zuckerberg and used those words as a title!
And it's absolutely ridiculous, because establishing and maintaining connections with friends and "the right people" have been vital for the human species since, like, forever. Folks have always built their settlements, villages, towns, and cities with designated places for meetings. Back in the day (and I don't mean the 1980s), households accepted visitors on certain days of the week; and even on a random day one could come by and leave a calling card with the family's help. And who can deny that, ever since the first Industrial Revolution, the patterns of commercial and financial developments were determined by the who-knows-who principle. It's just that the outreach was far more limited.
Of course, the magnitude of Internet networking is breathtaking. In the early 1990s, when the Internet has connected all seven continents, the miracle of instant world-wide access to knowledge, culture, entertainment, or people was the most important and alluring aspect of this new technology for me. I still experience a thrill every time I look at this blog's dashboard and see that during the last 24 hours my posts have been read not just at home, but also in Denmark, Canada, Germany, South Africa, UK, Vietnam, Australia, Portugal, Spain, India, France, and Taiwan. I love it.
Yet, I hate facebook and Twitter. Okay, push your eyebrows back down and let me explain. I don't hate social networking per se: It's convenient to receive updates on your favorite artists and it's important for business: I've been on LinkedIn since the times it operated exclusively on the basis of professional invitations. But I abhor the contemporary "social network" phenomenon and what it represents: the unrestrained hunger for attention, the vile combination of pathological exhibitionism and a sickly kind of voyeurism; the violation of privacy and the desire to be violated. I cannot stand the stalking by exes, the spying by employers, the snooping by the government agencies - all that shit.
That said, there are some companies with one or another form of social networking at their cores, which I consider not only healthy, but also greatly important due to their positive impact on the commercial environment, especially the consumer sector. I'm not naive and I don't think that any of the entrepreneurs behind these businesses consciously elected to influence the quality of goods and services. Most likely they simply shaped their business models utilizing the exploding patterns of collective participation in the Internet experience, but in the process they unwittingly created an influential force that has a power of strengthening and weakening businesses.
In 1979, Tim and Nina Zagat started imploring their friends into scoring restaurants they visited, eventually turning their social pastime into a ranking business, which was bought by Google in 2011 for a reported $151 million. Being an old-fashioned medium from the start, however, it remained the same under the new high-tech ownership: It's still unclear how the rankings are formulated.
It was Pierre Omidyar's hobby-project turned international conglomerate with an annual revenue of $14 billion, aka eBay that pioneered the concept of building market-place reputations based on the fully-disclosed opinions of the "community members," i.e. users of the eBay services. While everyone was screaming (understandably so) that people will cheat, lie and steal, eBay founders stuck to the most fundamental of the commercial principles: in order to succeed you need to keep your ratings high, because one unresolved accusation of unsavory practices may kill your future transactions for good. It's like what G.W. Bush said, "Fool me once, shame on you. Fool me - you can't get fooled again."
Today, thanks to rating algorithms utilized by various online businesses, we came to rely on communal ratings and individual opinions whenever we buy electronics, computers, household appliances, books, or select entertainment on Netflix, or order food delivery on Seamless, or pick a hotel on TripAdvisor, or make decisions about telecommunications providers. Many of us not only peruse the viewpoints of others, but also actively participate in the polling process by sharing our own thoughts about this or that product, service, establishment, thus affecting a new system of commercial quality control.
It is safe to say, in my opinion, that Yelp has become a flagship of the communal marketing model. Again, not because the ideas of commercial quality control and merit-based rewards are so important to them, but for the sake of the advertising income ($138 million in 2012). Nevertheless, assessing performance and assigning rewards (aka ratings) is exactly what "yelpers" (members expressing their opinions) do.
A few unique traits place Yelp, Inc. in the avant-garde of this movement. They encompass a wide spectrum of consumer services. Right now you can find referrals on businesses in 20 main categories - from restaurants to religious organizations, further subdivided into specialties. In less than 10 years they have achieved an international magnitude. The listings are essentially combined efforts: detailed information about the business is provided by the commercial participants themselves (for a fee) and consumers supply their reviews, photos, and ratings. The search engine is geographically oriented allowing users to find what's around them on the map.
Also, Yelp, Inc. claims that they use an "aggressive" reviews filter, which rejects posts that are suspected to be biased or false. As a result, according to their public releases, about 25% of entries are being dismissed. And I can appreciate that. Like I said, rendering communal judgments on commercial establishments is a serious matter: ultimately it has a power of affecting the livelihood of individual businessmen. So, the filtering is great as long as Yelp conducts their selections, rejections, and other manipulations fairly and without prejudice.
Unfortunately, as with everything touched by greed, the communal quality control as executed by Yelp, Inc. may be seriously misused. While I was writing this piece, TypePad's "related-posts" function has presented me with a few reports (including the one attached below) accusing Yelp of manipulating reviews in exchange for business clients' participation in the site's advertising programs (you can also read about it on Wikipedia). And that's criminal. Not only because it's nothing short of blackmail, but also because, by using individual consumers' personal and freely expressed opinions in this unsavory process, Yelp corrupts the participants' intellectual property and constitutional rights. I sure as hell hope that these accusations are not true. If they are, yelpers should file a class-action suit to bar Yelp, Inc. from using their reviews as the means of racketeering.
"Televisions are idiot boxes. DVRs are idiots' helpers. We are the idiots. We're quite willingly giving them a part of ourselves: we teach them our tastes, our preferences, just so that they would know which program to record; never once stopping to consider the fact that our selections can be used to profile us."
Considering how persistently we refer to our planet as a "small" and "inter-connected" world, it's remarkable to what extent every single country differs from others - even from the immediate neighbors, let alone those separated by oceans, social structures, wealth, religion, culture, etc. And as someone who's been in international business practically all of her career, I am inclined to say that some of the most disparate, incompatible, and frequently irreconcilable national distinctions are the tax laws.
There is a tremendous variation in rules and rates used by governments in order to hack away a chunk of revenues from native, resident, and even passing-through individuals and businesses. Moreover, the relationships between the national tax legislatures are so complicated, they make international tax attorneys into some of the richest bloodsucking professionals. This bullshit, frequently dictated by nationalism, makes the lives of international businesses and cosmopolitan persons alike very complicated and overly expensive. More frequently than not human and artificial taxpayers (thouse who don't cheat and try to avoid going to jail for ridiculous violations) end up paying double, triple, and quadruple taxes.
I personally know people who gave up their US citizenship in order to avoid giving away their entire wealth to multiple governments. Even though, as a financial professional, I totally support their decisions, it always made the patriot in me very sad. But the fact that an American treasure, Tina Turner, will be Swiss now in the name of tax savings - that's just heartbreaking, granted she has been residentially foreign to her homeland for the past 18 years. (By the way, my mind simply refuses to deal with Gerard Depardieu's becoming a Russian).
Robert Wood's article for Forbes (see the link below) is not necessarily the most coherent, but it's relatively brief and full of illuminating numbers that many of my readers will find interesting. Enjoy it!
As I mentioned in my travel reflections, it is not enough to treat my visit to Seattle's Slate Coffee Roasters as just another thing I did during my trip to the West Coast in August. The place definitely deserves its own dedicated post.
I personally know espresso aficionados who are obsessed with Slate, and I can totally understand why: Even if you are a jaded connoisseur, you will have a novel, unforgettable experience here. From the very beginning, Slate's founders conceptualized their business out of three exceptional building blocks: niche high-quality raw materials, superior preparation techniques, and singular finished products.
Conceived and founded by Chelsea Walker in a partnership with her brother and mother, Slate was born two years ago, in November 2011. It started its life in an Airstream trailer strategically positioned in Seattle's Capitol Hill. Now, transplanted to one of Seattle's northwestern neighborhoods, Ballard, the establishment continues to cultivate the same aesthetics of grace and elegance that inspired the founders to start the business in the first place. It applies to everything: the offerings, the methods, the decor, the ambiance, the hospitality, even the service sets.
What fascinates me the most is that this young woman did exactly what I advocate all young people to do. She found something that she (a) feels the most passionately about; (b) has talent for; and (c) knows well how to do, both technically and commercially. She utilized her reputation as an innovative espresso barista to solicit valuable advice from local coffee-business celebrities and went full force after her entrepreneurial dream, attacking the odds on all fronts: Her business model includes the wholesale of Slate's roasts to other coffee boutiques (so far 9 locations in Washington, California, Massachusetts, and Illinois), the online store selling the current selection of beans as well as a few signature coffee implements, a coffee subscription, and, of course, the bar itself, where you can experience the magic firsthand and then leave with a bag of the fresh roast you've just tasted.
Everything in Slate Coffee Roasters is unique. The uncluttered decor complements the minimalist menu very well: There are no lattes, cappuccinos, macchiatos, frappes, and such other potions here. The only espresso-based drinks you can get are, well, espresso - either neat or cut with milk, in various proportions. The rest are hot or cold-brewed coffees - usually from no more than 3 or 4 sources. The coffee bean is treated here as a tropical fruit that it actually is. So, just like good wine makers, Slate folks pursue rich bouquets and go after small-batch sources that harvest the most flavorful products: a 1500-farmers estate in Kenya, a specific lot on a Panama estate populated exclusively by Gesha trees, an Ethiopian co-op, etc.
The single-source beans are roasted in house twice a month in 15-kilo lots. Slate abandoned the tradition of the deeply roasted espressos and goes light on the heat for the sake of preserving the flavors. In order to provide the bar's customers with an unadulterated experience, no sugar or any other sweeteners are offered. They use non-homogenized local-farm milk here - so sweet and real, you feel happy for the cows that gave it away, and the desire to taste it on its own motivates some people (me!) to order the full Espresso Deconstructed set twice in a row. If you do like something solid to complement your espresso or coffee, you should try the hand-dipped in chocolate... no, not conventionally dried orange peels, but syrup-soaked fresh orange slices. It only makes sense that these exquisite offerings are served in a bar (rather than the common coffee house) setting, with espresso presented in designer stemware. Other straight coffees are brewed to perfection in a variety of methods expertly matched to specific beans.
Of course, when judged by the field's elite, this, for a lack of better words, artistic and somewhat rebellious approach to the provisioning of coffee-based beverages, elicits high recognition and praise: Many a West Coast barista know of Slate; the wonderful Brandon Paul Weaver, who's been at Slate from the start, won the 2013 North West Regional Brewers Cup; and Slate's team captured the title of America's Best Coffee House 2013 in Seattle, which, considering the city's history with the drink, is a feat, especially for such a young establishment.
It goes without saying that all these elements set Slate apart from the rest of Seattle's coffee scene and theoretically should've given them a tremendous competitive advantage. Yet, the company struggles commercially. And it is my strong opinion that it has a lot to do with its geographical location - not just the remote Ballard specifically, but Seattle altogether. Of course, the bar has its own devotees, who come in all the time (some are even willing to fly cross-country just to feel the magical brews on their lips), but, generally speaking, there are simply not enough people to generate a steady stream of clientele to the counter. There is no question in my mind that the good people of Slate would be so much better off in a place famous for its unyielding hyperactivity.
Yes, New York City is the most competitive place on this planet. And yes, it is especially true for the majority of food establishments - according to Business Insider, 80% of restaurants here close in their first year of operation. It makes total sense to me: you've got to do something extraordinary to survive here as yet another deli, a French or Italian restaurant, a Japanese sushi bar, or a Chinese take-out. That said, the field of designer espresso is pretty barren. Well, we maybe have about 20 highly rated specialized places - a ridiculously small number for NYC! Yet, people with really discriminating tastes still complain that it is impossible to get a good espresso in New York.
The top places in competitions and recognition by connoisseurs are great, but at the end of the day, for a consumer-dependent establishment it's all about the statistics of public exposure: the more people pass a place, the higher the number of those who will enter. And only then can you start wowing them with your miracles, hopefully achieving a sufficient level of the customer retention: In order to succeed a small coffee-bar business needs a steady 10-people line during the morning, lunch, and coffee-break rushes. Alternatively, this particular business can position itself as an exclusive Art House of Espresso with people coming in specifically for the Slate's religious experience and willing to pay exorbitant prices for it. Neither possibility, unfortunately, is going to present itself in Ballard.
To illustrate how the statistical probabilities are impacted by geographical locations, let me use an analogy from my recent music experience: Royal Canoe, a great small band from Winnipeg, Manitoba (don't jump to Wikipedia - they are not there) primarily performs at alternative festivals and small peripheral venues with, let's say, 50-300 people capacity. What is the probability that someone who sees them at The Garrison in Toronto (capacity 270) will go out of their way to attend their concert in Brooklyn? I'd say, close to zero. But on 09/14 they opened for Alt-J at NYC's Hammerstein Ballroom (GA Floor capacity 3400, plus galleries) and I know of at least 5 people (two independent groups), who went to Canada specifically to see them play again. And there might have been more. And even if only 10% of the live audience buys t-shirts and CDs, it translates to 27 music lovers in Toronto, but at least 400 in NYC.
Numbers - they don't lie. So, is it surprising that at this moment Slate has only 28 reviews on Yelp, while Lucid Cafe (even though a very nice place, but no award winner or espresso breath-taker) located 4 blocks from Grand Central has 93?
What I hope for is that Slate's current operations will create enough momentum to ignite in owners the desire to solidify their success and branch out to the busiest spot in the world, the city that never sleeps and, therefore, is in a dire need of Chelsea Walker's heavenly concoctions. Plus, we have the highest concentration of people who adore the high-end, luxurious, elite products and services. So, see you in New York?!
