Category: Business

London 2012: Why an American Swimming Coach Needs to Shut Up and Why the Olympics is Ridiculous to Begin With

I try to avoid watching the Olympics, given that it encourages the continued exploitation of young kids in sports that nobody really cares about, but for whatever reason, I caught myself watching the other night. And I was quickly reminded why I am at times embarrassed to be American when I’m overseas. I hadn’t really felt this way since Bush left office four years ago, but American swimming coach John Leonard’s comments brought back some ugly flashbacks.

Leonard, who has a history of idiotic, sexist comments, wanted “to be careful about calling it doping,” though essentially accused Chinese gold medalist Ye Shiwen of exactly that. This pissed me off on two levels: firstly, that it’s surely okay that Michael Phelps or Ryan Lochte win EVERY swimming event, shattering world records in the process, and of course would never raise any suspicion of doping. I guess this is because NBC shows us day and night the touching stories of how hard they have worked for this for four years (spare me, please). Apparently, despite building our entire railroad network in helping the US attain its industrial power status in the 19th century, we cannot believe that someone from China could possibly have the same work ethic of some rich, white kids who grew up in suburban swimming pools. Secondly, for Leonard to even say “we want to be very careful about calling it doping” while clearly implying exactly that is just cowardly. If you’re going to say something and try to smear this girl’s hard accomplishment, then at the very least put your neck out there and just say it—don’t dance around your point.

It’s a typical arrogant American attitude in full display, which I go to great lengths to try to downplay when I’m overseas. We’re not all that way, I try to explain, but idiots like Leonard make this very difficult to sustain.

That being said, I’m not really in favor of how the Chinese handle their athletics program either, which is exactly why I’m pretty much anti-Olympics. Let’s be honest—nobody really cares about swimming, from a spectator standpoint. Sure, people watch at the Olympics, but that is solely because of the bigger stage of what the overall competition is. People plan vacations around it, and not to watch a 200m freestyle relay. Soccer, basketball, American football, baseball, hockey, auto racing, and to some extent golf and tennis—these are the sports that have a continued following and can sustain themselves as professional businesses based on fan interest, ticket sales and television demand. Equestrian, swimming, or synchronized diving? I think not.

Yet despite this, I continue to hear stories from the Olympics like the one of China’s gold medal diver Wu Minxia, who had news of her grandparents’ deaths hidden from her for over a year so as not to interfere with her concentration for London. This poor girl was training daily from age 6, and taken from her home and family at 16 to be enrolled in a government aquatic academy. Even her father, who presumably (we hope) had to agree for this to happen, said his family “accepted a long time ago that she doesn’t belong entirely to us,” and that he doesn’t “even dare to think about things like enjoying family happiness.”

For what, may I ask? Is it really worth it for this girl? This is a perfect example of why the Olympics are really for the benefit of everyone but these athletes. In Wu’s case, she has become a gold medalist, which (we hope) will lead to opportunities that she can personally benefit from in the future. But for every Wu, there are hundreds and thousands of other athletes who do not register the same success after going through the same process. Can you imagine what the psychological impact must be on them for being expected to produce the same results and “failing” on the world stage? They are treated like machines that exist solely to bring gold medals back to a country, and if they fail at that, then what good are they, really?

Sure, for some who are clearly participating in the Olympics on their own terms, like the USA men’s basketball stars or Paraguayan track athlete Leryn Franco (who is not even in London to compete, but to boost her modeling career), it is just a fun event with which to further elevate their global celebrity. But the vast majority of these athletes are not rich, visible celebrities. Their hard work and, in cases like Wu Minxia, personal sacrifices, are solely for the benefit of the Olympic television sponsors, the rich IOC, and the corrupt politicians from various countries who can leave their 20-year-old mistresses aside for a  moment to revel in the fact that they are developing a “successful” athletic program.

If the Olympics truly were an amateur event which benefited the athletes who partake, I would be all for it. But unfortunately it’s anything but, and the existence of institutions that take “amateur” athletes from their homes and families and hide news of family tragedies from them in the name of “focused preparation” make this fact painfully evident.

-JG

A Confused Business Model.

I had a first happen to me this week. I strolled out of Samurai Sushi on Vancouver’s Davie Street with a full stomach, as I so often do when I’m in this part of the world, and noticed a clothing shop that caught my eye–which shall remain nameless on this blog for lack of free advertising. As I tried to enter, I was immediately greeted by a super metro/emo shop employee, who asked if I was there to see Fiona (name has been changed).

When I replied that no, I was simply browsing, he explained how Fiona is one of the best in the business, and that she has the magical quality of knowing exactly what every customer will look great in. Confident in my own style, I politely declined a second time and took a step towards a particular shirt that I wanted to investigate further. Apparently, my second decline was a battle cry, as I was told by the clerk that browsing was not allowed in this store. In other words, it’s Fiona or the highway. He also made clear that she knows European styles, as if that was supposed to impress someone who, unbeknownst to him, has already been to Europe 4 times since 2012 began.

Just as I was about to walk out, a middle-aged woman with gray hair stormed at me, and in a heavy-German/Scandinavian accent, asked where I was from. “DC,” I replied…and she immediately told me that she had been to DC, she knows the styles there, etc. Given that I had to get going, I wasn’t interested in a full consultation, and so I continued to exit…to some grumbling under this woman’s breath.

My business mind was churning. I understand that business is all about differentiation, and if this woman does in fact have a gift for styling and wants to sell that service, that’s great for her. I can say for sure that what I experienced was “different”. However, by being so aggressive, she may be alienating two-thirds of her potential client base–especially people like me, who simply don’t like being told what to do or what to like. I can’t recall how many times that I’ve been traveling, walked into a clothing shop that caught my eye, and purchased something (often more expensive than I would have otherwise) on impulse. I kept thinking…if this woman was not interested in any of that sort of retail traffic, but only on her styling services…why would she bother paying rent in one of Vancouver’s pricier neighborhoods? I suspect the average passerby who wanders in is not going to take too kindly to such an aggressive, abrasive sales approach.

I’m curious to find out more about this shop and how it performs. This business must be heavily dependent upon referral business, in which case, it might as well safe itself the pricey rent, and save unaware passersby from a potentially humiliating run-in with the shop’s staff.

-TR

Consulting Firm, Insulting Firm.

Consulting firms.

Ah, yes…the dream employers of 50-75% of undergraduates everywhere. And 75-90% of graduate business students. And why?

Good salaries. Benefits. Frequent flyer miles. Hand-holding. And the all-important “experience on a résumé”.

But have you ever thought about the sheer nature of what a consulting firm provides? Or how they are able to become the shiny employer on the hill for America’s best and brightest?

Salaries? Easy. High billing rates, paid for by the client. Benefits? High billing rates, paid for by the client. Flights and hotels? Travel expenses, paid for by the client.

And hand-holding and experience? Paid for by the…client?

Interesting conundrum, isn’t it?

Think about the business—say it’s a print shop—that hires the consulting firm. What do we know about it? Well, it must have some income history, if it can afford the consulting firm’s fees. And it must have a founder, who must have some kind of expertise in his field. And some moxie, to found the company and partake in an entrepreneurial venture. And some business savvy, to sustain the company to the point at which it hires the consulting firm.

So facing a short-term cash shortage because of overstaffing and a problem in accounts receivable, they put the retainer fee on the table and bring on the consulting firm. Who gets staffed on the project?

A couple of 22-year-old Business majors who just graduated from JMU, a 40-something mid-level manager who has spent the past 16 years with the firm and, for PR purposes, a junior partner in the firm who has an MBA from NYU and has spent 25 years consulting.

Let’s break this down. The two Business majors, while bright, have no experience in the printing business, and no experience running, or even managing, a business. And they are being paid a high billing rate, travel and four-star hotel expenses to tell the print shop business owner with 20 years of experience in the printing industry and the experience of founding and sustaining a business venture (or two) how to run his business.

The mid-level manager has been with the firm for 16 years, working in a variety of practices, but has been staffed on this project to focus on the staffing side. He is ultimately the one who’s going to tell the business owner which positions, and individuals, he can eliminate, even though he has never actually spent any sustained period of time at the company to see who has been playing around online all day, who has contributed the most innovative ideas, and who has the best work ethic. Not the business owner, who has a sample period of several years to make these evaluations.

And the junior partner (with the same concept applying to the mid-level manager) has 25 years of industry experience. What does it say about his business “savvy” to have that much experience, and yet still have the company take 80% of what his work alone earns for the company (since most individual consultants only take home about 20% of the revenue from their billable hours). If you have that much experience, and do not have the business sense or contacts to be able to build your own client base, you most certainly should not be in a position to advise anyone else on how to run a business. It wouldn’t take any start-up capital to go into business as an independent consultant, and with that much experience, it shouldn’t even take any income lapse (as you could be setting up the clientele for your individual break-off even while working for the firm).

Besides these personnel issues, the loyalty of the consulting firm itself is to itself. It is in the best interests of the firm to sustain the greatest amount of business for the longest period of time. So there is no incentive for the firm to try to resolve the issues as quickly and efficiently as possible, as this is costing the firm billable hours and sustained revenue generation.

Just seems like an interesting dynamic. The 20 year business owner paying high retainer fees, billing rates and travel expenses so that the 22-year-olds can get “real life” business experience and frequent-flyer mile-inspired vacations, and the 16- and 25-year consulting firm veterans can continue to rest on their laurels, which aren’t based on any business expertise, as if they had that they would be working independently on similar business. Consulting? Or Charity?

Is there a tax write-off for fees paid consultancies?