A 12-Step Business Check-Up

In our latest podcast, Jay Goltz explains how he reviews the performance of his company at the end of the year and then makes plans for the following year: “Let’s turn all the dials.”

Good morning!

Here are today’s highlights:

• For better or for worse holiday parties are back—as are the endless loop of Christmas carols.

• More companies see the monitoring of employees as a tradeoff for remote work.

• Fake product reviews boost a product’s sales by an average of 16 percent.

• And there’s a very real shortage of Santas.

THE 21 HATS PODCAST

Jay Goltz’s 12-Step Business Check-Up: This week, in episode 136, Shawn Busse, Jay Goltz, and Sarah Segal talk about what they hope to accomplish in 2023. Sarah’s moving into new offices, aiming for 20-percent growth, and hoping to land a chocolate company as a client. Shawn’s looking for new space, too, and attempting to reposition his business to shake the corrosive effects of the pandemic. And Jay’s employing a methodical 12-step process to assess how his business is performing: Hiring? Check. Pricing? Needs work. Inventory levels? Way out of line. And then there are his ongoing efforts to mentor his two sons in the business and prepare for the inevitable. These days, Jay tells us, he’s especially careful when getting in front of buses. If you’ve been listening to this podcast, you know our business owners discuss their journeys with unusual candor. But in some episodes we go especially deep. This is one of those episodes.

• You can subscribe to the 21 Hats Podcast wherever you get podcasts.

HUMAN RESOURCES

Especially with the economy turning, some businesses see an opportunity to save with remote workers: “Tammy Browning, president of the outsourcing and consulting group at Kelly Services, the giant staffing agency, says that ‘almost every day’ she’s asked about the potential to hire in places such as these, especially for newly remote roles in billing, finance and technology. ‘Customers are asking us for saturation data, meaning how many people are in the market and how much do they cost,’ says Browning, who oversees 250,000 job placements a year. ‘The pandemic has spread this notion that really you can cast the net as far as you want.’”

• “Pay differentials across the country are allowing employers to save as much as 15 percent on wage bills by hiring remotely, staffing companies say—though they also warn that some of the gaps are narrowing as tight labor markets persist.”

• “Some of [Lorri] Zelman’s [staffing] clients have come to her asking for help in hiring work-from-home recruiters in areas of the U.S. where prevailing salaries are lower, provided they’re still in the same time zone. ‘Look anywhere in the country if they’re willing to take less money,’ is what these businesses are telling her, she says.” READ MORE

Holiday parties are back: “The end of 2022 has been marked by a resurgence of holiday parties after a long pandemic lull. In the past two years, pre-holiday Covid surges prompted the cancellation of many celebrations. Even before the pandemic, December festivities were falling out of favor in part because executives were — and probably still are — concerned about inappropriate conduct brought to light during the #MeToo movement. But this time around, 57 percent of employers are holding end-of-year celebrations — more than double those in 2021 and up from 5 percent in 2020, according to research from outplacement firm Challenger, Gray & Christmas.”

• “Less than 2 percent have stuck with the kind of virtual events that were commonplace during the first year of COVID: at-home champagne delivery, parking lot parties, and Zoom gingerbread house-making workshops.”

• “At least 16 percent of companies, according to the Challenger survey, say parties have come back bigger and more expensive than they were before. With those budgets, employers have hired outside vendors or loaded up the drink menu.”

• “For Shane Stineford, founder of [Massachusetts]-based Creative Events, the current surge of corporate and private gatherings ‘makes 2019, which was a record-breaking year, seem like a walk in the park. I can’t say people were comfortable putting 500 people in the Marriott Copley ballroom last year. Now, it’s happened a few times in a couple of weeks.’” READ MORE 

There’s a shortage of Santas: “Mitch Allen is the founder — and self-described “Head Elf” — of HireSanta.com, one of the world’s largest staffing agencies for holiday entertainers. He recently joined us on a video call from the North Pole (okay, actually Fort Worth, Texas). Donning a green elf suit and fur-lined hat, Allen told us that his industry is overwhelmed with Santa requests. ‘Here at Hire Santa, demand is higher than it’s ever been before,’ Allen says. His company has seen a 125 percent increase in demand for Santa compared to holiday seasons before the pandemic. For every new Santa who wants to work for his company, Allen says, he has 20 clients clamoring for Kris Kringle’s jolly services.”

• “Stephen Arnold is a professional Santa Claus and the president of the International Brotherhood of Real-Bearded Santas. [Yes, a real organization.] ... In 2020, Arnold says, IBRBS saw their membership plummet from around 2000 to 1400.”

• “‘We’ve never seen a drop like that,’ he says. Blame the pandemic. ‘You gotta remember: We’re all a little plump. Most of us are over the age of 60. We’re probably in many cases diabetic. We had a much higher incidence of death. So, yes, a lot of people backed away and decided not to perform.’”

• “‘We here at Hire Santa have been working very hard to replenish the number of Santas,’ Allen says. ‘I've traveled the country this last year, going to Santa schools, speaking at conventions, and really trying to connect with the Santa community to let them know the advantages of being a professional Santa as well as working with Hire Santa.’”

• “Head Elf Allen also says that he sees a trend toward higher wages for Santas. Professional Santas with his company, he says, can earn anywhere between $5,000 and $12,000 during the holiday season, depending on where they live and how much they’re willing to work.” READ MORE

ECOMMERCE

‘Tis the season for fake product reviews: “There’s a decent chance you’ve been duped by fake reviews, written by people who received free products, gift cards, or money in exchange for putting a finger on the scale in favor of certain unscrupulous brands. These reviews proliferate during the holiday shopping season on popular gifts like slippers, watches, and sweaters, according to Saoud Khalifah, CEO of Fakespot, which uses artificial intelligence to identify fraudulent and untrustworthy reviews on sites like Amazon, Walmart and Best Buy. ‘Right before the shopping season starts, we see a huge influx of fake reviews,’ Khalifah said. Activity starts to pick up in late summer, he said. ‘By September and October, the dams are open.’”

• “The product category with the highest percentage of fake reviews on Amazon after Black Friday is slippers, according to Fakespot, which says a whopping 71 percent of those reviews can’t be trusted.”

• “Other popular holiday items that are flooded with fake reviews include sweaters, smartwatch bands, Christmas trees, watches, back massagers and earbud headphones, where more than one third of reviews are unreliable, according to Fakespot.”

• “Fake reviews help boost a product’s sales by an average of 16 percent, according to research done by Brett Hollenbeck, a professor of marketing at University of California, Los Angeles, and his colleagues.” READ MORE

RETAIL

Retail workers have a request: “Christian Graham doesn’t want a lot for Christmas. In fact, there is just one thing he needs. ‘Enough is enough,’ says Mr. Graham about Mariah Carey‘s mega hit, ‘All I Want for Christmas is You,’ which plays incessantly at the Chicago deli where he works. ‘Past a certain point, I might go crazy,’ he says. It is allegedly the most wonderful time of the year, and retail workers are trapped in stores, restaurants, and bars with yuletide anthems blaring on a loop. This shopping season kicked off early and so did the force-fed jolly. Do you hear what I hear? Yes, all day long!”

• “There is something about Christmas classics that make them the gifts that keep on grating. A Reddit thread calls for ‘a moment of silence’ for all ye faithful retail workers who have had it with merry gentlemen and turtle doves.”

• “Rolling Stone ranked the worst 20 Christmas songs last year, and compared a rendition of ‘The Little Drummer Boy’ by Jessica and Ashlee Simpson to ‘musical waterboarding.’”

• “Laura Garrison, the general manager of Stoneleigh P, a bar in Dallas, forbids Ms. Carey’s song before December. ‘She’s the ruler of Christmas and I’m the ruler of this bar,’ Ms. Garrison says. ‘These four walls is mine, baby.’” READ MORE

THE ECONOMY

The rise in consumer prices continues to slow: “U.S. inflation eased significantly to 7.1 percent in November, its slowest pace since the end of 2021, the Labor Department said Tuesday. The Fed has raised its benchmark interest rate this year at the fastest pace since the early 1980s to combat inflation. It is expected to announce on Wednesday a 0.5-percentage-point increase, bringing rates to a range between 4.25 percent and 4.5 percent, the highest level since December 2007.”

• “Overall inflation has eased since the summer as supply bottlenecks have improved. Gasoline prices fell in November, with the national average price of regular unleaded gasoline at $3.26 a gallon on Monday, down by about 50 cents a gallon from a month earlier, according to OPIS, an energy-data and analytics provider.”

• “Prices peaked in mid-June at a record $5.02 a gallon.” READ MORE

TECHNOLOGY

Artificial intelligence is finally having its moment: “For decades starry-eyed technologists have claimed that AI will upend the business world, creating enormous benefits for firms and customers. ... A survey by McKinsey, a consultancy, found that this year 50 percent of firms across the world had tried to use ai in some way, up from 20 percent in 2017. Powerful new ‘foundation’ models are fast moving from the lab to the real world.”

• “ChatGPT, a new AI tool that has recently been released for public testing, is making waves for its ability to craft clever jokes and explain scientific concepts. But excitement is also palpable among corporate users of AI, its developers and those developers’ venture-capital backers.”

• “This autumn, John Deere, a tractor-maker, shipped its first fleet of fully self-driving machines to farmers. The tilling tractors are equipped with six cameras which use artificial intelligence to recognise obstacles and maneuver out of the way. Julian Sanchez, who runs the firm’s emerging-technology unit, estimates that about half the vehicles John Deere sells have some AI capabilities.”

• “When in September Hurricane Ian forced Walmart to shut a large distribution hub, halting the flow of goods to supermarkets in Florida, the retailer used a new AI-powered simulation of its supply chain to reroute deliveries from other hubs and predict how demand for goods would change after the storm.” READ MORE

CLOSING

The Peterboro Basket Company, which is among the nation’s oldest manufacturers and made baskets in New Hampshire for L.L. Bean, Martha Stewart, and Harry & David recently ended production after 168 years in business: “When [Wayne] Dodds announced the shutdown on May 13, he was avalanched with orders for baskets. What hasn’t appeared, for all the interest in heritage brands and American-made goods, is an offer to buy the company. There have been some tire kickers, but due diligence reveals a tangle of issues: a severe labor shortage, the retirement of two experienced supervisors, and a century-old boiler that needs a $90,000 upgrade.”

• “None of these things are beyond fixing by a flush investor. But one thing is: the disappearance of ash trees. The emerald ash borer, the insect pillaging these trees, has reduced the availability of the wood to make the baskets.”

• “‘If you wanted to buy a cookie company and you couldn’t get dough,’ Mr. Dodds said, laughing, ‘how are you going to make cookies?’”

• “The basket factory, in Peterborough, N.H., is solemn and quiet these days. A pair of shop cats nap together in a corner. Five employees remain, the last of hundreds who’ve passed through the company payrolls, leaving baskets and a rich history in their wake.” READ MORE

THE 21 HATS PODCAST: DASHBOARD

Listener Terry Carman had the following reaction to Monday’s Dashboard conversation with Gene about charging by the hour: “When we charged by the hour in our electrical business it was nothing but headaches. The hourly rate seemed so extreme to the average person comparing that rate to their own wages. To be fair the client did not understand the cost of having skilled employees, and if you tried to explain, you were offered cash off the books to lower the rate. Getting past all that, you were constantly monitored by the client, tapping his foot, checking his watch, wanting to take time off the charges for trips to the supplier, truck, or imagined time on the phone. Every job was an issue.”

• “We switched everything to by-the-project billing. Guaranteed pricing, no attempted management of the project by the client, no more problems 97 percent of the time. Three percent of all clients are ‘difficult’ no matter what you do.”

• “We also implemented 100-percent-satisfaction guarantees on both the price (which the client knew before the project started) and the work. We found that removing any risk made the price inconsequential.”

• You can subscribe to the 21 Hats Podcast wherever you get podcasts.

Thanks for reading, everyone. — Loren