On Fridays, It’s Pretty Lonely
On Fridays, It’s Pretty Lonely
These days, it’s the boss who’s in the office while the employees hit the beach.
Good morning!
Here are today’s highlights:
These hacks will help you survive the travel chaos.
As climate risks grow, so will the costs to smaller businesses.
Gene Marks says the climate and health care bill will also hurt small businesses.
The Bernie Sanders of tech CEOs has resigned.
HUMAN RESOURCES
The desire to lead by example has flipped an office tradition: “This used to be the time of year when the person in charge was frequently OOO—if not on vacation then certainly not waiting for the weekend to enjoy the summer sun. In many white-collar industries, such flexibility was one of the perks of seniority in the pre-Covid era. While rank-and-file workers toiled in their cubicles until 5 p.m. on Fridays, executives might tap out a few emails while tanning or make a couple of business calls from the decks of their second homes or boats. They weren’t completely checked out, but they had earned the privilege of mixing work and play. Junior colleagues generally accepted this workplace hegemony. That was then.”
“‘Why are you at your desk and not on Cape Cod or a lake in Maine?’ I asked when Michael Caccese, chairman of K&L Gates in Boston, picked up. ‘We’re trying to encourage our associates and other lawyers to come in,’ he explained. ‘Someone in my position has to lead by example.”
“Mr. Caccese, whose firm has more than 40 locations around the world, told me the Boston office includes roughly 120 lawyers but that maybe a quarter of them were in the building when I called. ‘On Fridays in the summer, it’s pretty lonely.’” READ MORE
BUSINESS TRAVEL
With the travel industry largely in chaos, here are some hacks that can help: “The most important timesaving tech travel tip right now is to avoid apps and websites that book through a third party, even though they can save you money. That’s because if something goes wrong with your flight or hotel room, a middleman is yet another party to deal with, which could lead to even more hours wasted on hold. ‘If you book through a travel agency, you’re asking for trouble,’ said Brian Kelly, the founder of the The Points Guy blog. ‘Go direct. The more people you put in the way, the more complicated things get.’”
“Mr. Kelly’s tool of choice for scoring cheap airfare is Google Flights. With this web tool, he plugs in travel dates and destinations and then toggles on the option to track prices and receive email updates as soon as the airfare plummets. Then he buys the tickets directly through the airline.”
“The next step is to maximize comfort on the plane by getting the best cheap seats. For that, there’s SeatGuru, a web tool that lets travelers plug in their flight number to review an aircraft’s detailed seating chart. It highlights information about the seats, including those with extra legroom, and those with limited recline or overhead storage, which is more detail than the basic diagram that airlines show.”
“Web tools like FlightAware and Flightradar24 give up-to-date information on an aircraft’s precise location and insights into an airline’s track record for on-time arrivals and delays.”
“A bonus tip: Lounges can get very crowded nowadays, so when Mr. Kelly arrives at the airport, he uses the app LoungeBuddy to look up the ones he can slip into easily.” READ MORE
SUSTAINABILITY
As climate risks grow, so will the costs to small businesses: “Small business in particular often operate on thin margins, hustling to fund day-to-day expenses like purchasing inventory or meeting payroll. Many don’t feel they have the luxury to dedicate resources to risk management. But without it, businesses may face additional challenges that will make recovery more costly in the wake of a shock. To explore these dynamics, we studied how Hurricane Harvey affected businesses after it struck Southeast Texas in 2017. Harvey was the costliest event — causing $125 billion in economic damages — in the costliest disaster year for the U.S. in four decades. Climate scientists estimate that the storm was about 30 percent more severe due to climate change, making it an example of how the risks of severe storms are growing.”
“Businesses reported a variety of complications, but the most striking were revenue losses. Almost 90 percent of surveyed businesses reported losing revenue because of Harvey, most commonly in the five-figure range. These revenue losses were caused by employee disruptions, lower customer demand, utility outages, and/or supply chain issues.”
“Fewer firms (about 40 percent) experienced property damage to their building, machinery, and/or inventory. While less common, property damage losses were more costly on average than lost revenue.”
“Only 15 percent of surveyed firms affected by this record-breaking hurricane received a payment from insurance. This low insurance coverage stems from businesses being uninsured for flood and wind damages (e.g., they had insurance that excluded coverage for these perils) and/or businesses insuring their property but not their revenue exposures.” READ MORE
POLICY
Gene Marks thinks the Inflation Reduction Act is going to hurt small businesses: “There will certainly be opportunities for entrepreneurs in the clean energy sector, now that the government will be funding billions in clean energy manufacturing, including the production of solar panels, wind turbines, batteries, and critical minerals processing. It’s good stuff, but it has to be paid for. So who will be paying? It’s not going to be just ‘the wealthy.’ It will be small businesses as well. The Inflation Reduction Act will actually increase inflation — or at least raise the costs and reduce revenues — for many of us and in three big ways.”
“The bill authorizes the government to step up negotiations with pharmaceutical firms to lower prices on medicines and even put a cap on what seniors on Medicare would pay for drugs each year at $2,000. ... But there are still costs, including billions in research and development outlays that help companies create products that save millions of lives, and someone’s going to have to make up the difference. Who? That would be everyone else paying for these products on their private health insurance plans. These would be workers and businesses who share in their employees’ monthly health care premiums.”
“The bill also includes more than $80 billion in funding for the IRS. Part of that funding will be earmarked for hiring tens of thousands of auditors and increasing the number of audits of companies. Many tax experts believe that these efforts will be directed mainly at the nation’s small businesses. ... Just responding to a single notice from the IRS, let alone engaging in a full-blown audit — is an administrative burden for most small businesses. So activity from the agency will only add additional costs for many in the next few years.”
“Finally, the Inflation Reduction Act raises costs for many corporations. The legislation imposes a new corporate minimum tax on companies making more than $1 billion a year and places an excise tax on stock buybacks. When people hear this, they say, ‘Oh, that only applies to the biggest corporations and they can afford this,’ or ‘hey, that’s a tax on the rich so who cares?’ Actually, small businesses care. That’s because small businesses are usually the largest benefactors of big business spending.” READ MORE
MANAGEMENT
Dan Price, the self-styled Bernie Sanders of tech CEOs, has stepped down at Gravity Payments: “Dan Price, who made international headlines seven years ago for his plan to raise the minimum wage at Gravity Payments, resigned Wednesday as CEO of the Seattle-based company. Price tweeted an email sent to employees about his resignation. ‘My No. 1 priority is for our employees to work for the best company in the world, but my presence has become a distraction here,’ he wrote. ‘I also need to step aside from these duties to focus full time on fighting false accusations made against me. I’m not going anywhere.’”
“Price pleaded not guilty in May to misdemeanor charges of assault and reckless driving in connection with an incident in which prosecutors alleged he attempted to kiss a 26-year-old woman in his car and then grabbed her throat when she rebuffed him.” READ MORE
MARKETING
Amazon is testing a feature in its app that would show users a TikTok-style photo and video feed of products for shoppers to share with other users: The portal being tested under the internal name ‘Inspire,’ appears as a diamond widget on the home page of Amazon’s app, according to Israeli-based artificial intelligence firm Watchful Technologies, which has tracked the feature’s use. The widget brings shoppers to a feed that shows a stream of images and videos of products, with shoppers able to like, share and ultimately purchase items. While most of the feed now appears as still pictures, Watchful researchers said the portal also features video content.”
“Amazon’s Inspire ‘could become the kind of really sticky social media way to browse,’ Watchful researcher Daniel Buchuk said. ‘It’s a way of adopting a new social experience on the app.’”
“Meta and Google have launched similar in-app features that closely resemble TikTok’s format.” READ MORE
LOGISTICS
Container rates from China are falling dramatically:
THE 21 HATS PODCAST
This week, Shawn Busse and Paul Downs talk about what they’ve learned from their worst client experiences. Shawn, for example, tells us that he’s come to think about taking on a client much the way he thinks about hiring an employee. And Paul stresses the importance of watching what he says about difficult clients to his employees, because he doesn’t want to encourage a cynical attitude. From bad clients, our conversation shifts to bad partnerships. Even though their own partnerships ended poorly, both Shawn and Paul emphasize that having a partner can be invaluable in getting a business off the ground. In fact, Paul says he might even consider taking on a partner again. Plus, both Shawn and Paul explain why all the talk of recession is not giving them second thoughts about their ambitious marketing plans.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren