Several months ago, I had the opportunity to guest lecture at the University of Pittsburgh’s Joseph M. Katz Graduate School of Business. A prominent attorney in Pittsburgh, who also happens to be a close friend, teaches a class on business law as an adjunct professor, and he thought having his students hear about an actual business person’s experience would offer a different perspective than the textbooks.
At first, I was hesitant to accept the invitation. How would I, a retired produce guy, compare to an accomplished attorney or some of the other professors? I hadn’t been inside a classroom in more than 40 years — and even back then, I was certainly nowhere near the front of the room. After thinking about it for a few days, my friend’s offer to buy me dinner after the class sealed the deal.
I didn’t prepare a formal lecture. Instead, I brought a single page filled with bullet points listing subjects I wanted to discuss. I introduced myself to the class by telling them I probably had the least impressive C.V. of anyone ever to lecture in that room, but I hoped they would benefit in some way from my “real-world experience.”
I gave the students a quick background about myself, my company and the produce business in general. I highlighted changes over the years that impacted how business was done, and noted the major shift in retail that the industry now faced. After noting that most likely, those in front of me would not wind up in the produce business, I began to talk about some of the most important and widely applicable lessons I learned in my years in business.
The first, and probably most important lesson, is one often attributed to American humorist Will Rogers. Rogers coined the Law of Holes: “If you find yourself in a hole, stop digging.” Though most of us have already heard this before, it is no less important. I’ve been guilty of “digging” a few times myself over the years, and have seen many others do the same.
Continuing to throw good money after bad by repeating questionable business strategies is just digging oneself deeper into that hole. The deeper you get, the more difficult it is to get out. I’ve watched as people combine two underperforming business units into one in hopes of gaining synergies and efficiencies required to save them both. In cases such as these, the hole just gets bigger faster, and neither unit survives. Perhaps a better solution would have been to shut down both divisions in attempt to eliminate additional losses.
Excitement around a deal can often cloud an individual’s ability to focus clearly.
Lesson number two I credit to my late brother, Ken Siger, who had one of the sharpest business minds I have ever known. One of Ken’s favorite sayings that pertained to business was: “The most important deals I’ve ever done were the ones I walked away from.” Ken did merger and acquisition work for Alcoa when the former Soviet Union collapsed. He was involved in some major acquisitions, including the purchase of Hungary’s national aluminum business from the government.
Shortly after the deal in Hungary, Ken’s company considered acquiring one of South America’s largest aluminum plants, which was also being pursued by an international competitor. Members of Ken’s team were excited about the deal, and were spurred on by the understanding that if Alcoa didn’t make the deal, the competitor would wind up with the prize. Ken’s level head, along with his “Spock-like” ability to analyze without emotion, helped him make the decision to pull out of the negotiations, despite objections from some of his colleagues. The competitor made the deal with unfavorable terms and suffered financially for many years before selling the plant at a loss.
Excitement around a deal can often cloud an individual’s ability to focus clearly. A team working on a potential transaction invests time, energy and financial resources to get the deal done. No one wants to put a lot of effort into a project only to come up empty. The longer people focus on consummating a deal, the greater the chance they lose the ability to evaluate it objectively. It’s important to take a step back and to focus on the deal, not the excitement surrounding it.
Lesson three I learned from a successful entrepreneur with multiple business interests in western Pennsylvania. He calls it “the 24-hour rule,” and it applies not only in business, but in his personal life, too. When something happens that sets you off, don’t pick up the phone or fire off an immediate email [or tweet, Mr. President] while you are upset. Invoke the 24-hour rule. Allow yourself the ability to sleep on what happened, and respond after you’ve had a chance to calm down. This time may also allow you to learn a bit more about the situation that might change your perspective. Over the years, the 24-hour rule has saved me money, business relationships and probably a few friendships.
Alan Siger is chairman of Siger Group LLC, offering consulting services in business strategy, logistics, and operations to the produce industry. Prior to selling Consumers Produce in 2014, Siger spent more than four decades growing Consumers into a major regional distributor. Active in issues affecting the produce industry throughout his career, Siger is a former president of the United Fresh Produce Association.