Business In Washington - Business Operations & Management Consulting

Yesterday, I heard unhappy news. Nordic Tugs, a highly respected Burlington boat building company, announced it is closing its Burlington manufacturing plant. Their outstanding boats are clearly a luxury purchase, and one that is not selling in these difficult, uncertain economic times. This is billed as a temporary closure “forced by the ongoing effects of the Great Recession”, according to their press release. They are not closing the business entirely and are hoping to resume building in the future.

I’ve had the pleasure of being onboard a Nordic Tug, so this news made me sad on more than one level. Most importantly for this blog post, it is an example worth considering in the context of our economy and what is being proposed to help it. I speak of tax increases, particularly the drive to raise taxes for the “wealthy”.

There are two specific tax increases to consider here. First, there is the upcoming expiration of the Bush tax cuts, which will result in a huge, across the board tax increase as of January 1, 2011. (No, the Bush tax cuts were decidedly NOT just for the richest 1%. That is a political lie that has been repeated so often, and not challenged enough, that many believe it as truth. It is not.) There is talk of a delay, but there is also much talk of delaying all but the taxes that fall on the “wealthy”. Second, there is an initiative on the Washington State ballot, proposed by Bill Gates Sr., that would initiate an income tax, again on the so-called “wealthy”. This one bothers me on two levels. The first, that it is a blatant end run around our state constitution which expressly prohibits an income tax, I will set aside for the moment. The second problem it shares with the national debate on the Bush tax cuts, namely allowing them to expire for the “wealthy”.

Why use that word in quotes? Because when you are talking about taxes, “wealthy” is a concept that depends on who defines it at the moment. It is also a fluid term that absolutely will change in time. To support that statement, one has only to read up on the history of the Federal Income Tax.

I am really tired of the class warfare rhetoric! This is America where everyone is supposed to have the opportunity to become really successful and wealthy by virtue of creativity, entrepreneurship and old-fashioned hard work. Why must we continually punish that success with ever higher taxes? Punish a behavior and you will get less of it. Reward it, and you will get more. We are currently rewarding non-work and punishing success. This is a really bad idea!!!

These two proposals, Federal and State, both set the bar for “wealthy” around the $250,000 per year mark, if I remember correctly. At that level, you hit two key constituencies that will get you more results just like the closing of Nordic Tug. Let me explain.

First, you will punish small business owners, a large proportion of who pay taxes at individual rates rather than corporate, since they are subchapter S corporations. Tax them more and you slowly kill the goose that has laid the golden American entrepreneurship egg throughout our history – that job creating machine that has fueled our amazing economic success.

Second, taxing the people with disposable income, i.e. those evil rich people, and they can’t buy things. That kills the market for products like Nordic Tugs. Now, before our natural envy of people with money kicks in, remember that their consumption is the fuel in the engine of that job creating machine.

A lot of people lost their jobs when Nordic Tug closed its plant, dedicated and highly skilled workers who took personal pride in creating a quality product. Contemplate that for a while before jumping to the conclusion that taxing the rich is a good idea.

Some words make their way into the English language that absolutely should not. One of these is the unfortunate product of a crime, namely verbicide. The perpetrators took the noun “incentive” and twisted it into an awkward verb - “incentivize.” I have heard this abomination one time too many in recent days, so I decided to delve into my dictionaries. Naturally, as The Word Cop, I have lots of them.

I started with the largest, thickest dictionary on my shelf – Webster’s New Universal Unabridged Dictionary. That’s “unabridged”, i.e. left alone, not shortened, nothing left out. Sounded like the right source to me.

What did I find? I found the venerable, and correct, noun – “incentive”. No reference to “incentivize”, or even “incent”, which is a shortened version that at least sounds better, if just as incorrect.

I moved on to The American Heritage Dictionary of the English Language. This was the dictionary my mother gave me in the 1960’s. It made a big splash at the time because it included all the naughty words, the swear words, and the four-letter words. Mother, being an English teacher, got a kick out of handing out dictionaries to both of her kids and all of her nieces and nephews on Christmas Day. (To the dismay of her siblings and siblings-in-law, she also informed each child that they could look up swear words in that dictionary. To her delight – no dismay here - , they all dove right in.)

Any dictionary that includes four-letter words ought to include newer English creations, Americanisms and/or slang, right? Wrong. No “incentivize” and no “incent”. (It does include many other interesting words, however. I can still remember the day, shortly after the Christmas of the Dictionaries, when Mother called to me from the kitchen, “Margaret, look up chicken shit.” You can imagine the rest and, yes, it is there.)

I turned next to the World Wide Web. How did we ever exist without this resource? Here, I was more successful. They list newly created words, bastardized expressions, and illegitimate results of crimes such as verbicide. Dictionary.com defined it as a verb meaning “to give incentives to”. They added that it originated in 1965-70 and was an “Americanism”. (Is that good or bad? Maybe it depends on which side of the pond you are on.) They also quoted the World English Dictionary (their source being Collins English Dictionary), which defined it much the same, but spelled it “incentivise”.

Then I found www.onelook.com. Jackpot! They obligingly search multiple dictionaries and present the searcher with a handy list of links. I worked my way down the list. Most indicated that the word originated in the business world, that source of so many examples of bad English, and that it was created in the 1960’s or 1970’s, then shortened in the 80’s or 90’s to “incent”.

Beginning to get bored with the repetitious list, I worked my way down to the Urban Dictionary, www.urbandictionary.com. This one made my day, to quote Dirty Harry. They listed a couple of helpful definitions, along with examples of usage. Let me share at least one. You can surf over for more. First, their definition:

“A corporate-jargon non-word meaning “motivate,” coined in 1968. Some 10 years later, it was shortened to the equally annoying verb “incent.” Unfortunately, both are recognized by both Merriam-Webster and the OED. The only respectable form of the word is the noun “incentive.”

And now, the example:

“I would like to motivate him to never say “incentivize” again by telling him I will rip his windpipe out of his throat the next time I hear him say it.”

I roared with laughter! My husband entered my office for explanations and to share the laugh. My thanks to the Urban Dictionary! I will be surfing over there again, let me assure you. Of course, The Word Cop would never threaten such violence!

“Go ahead. Make my day……….”

Management is an under-appreciated skill. Yet nothing will make a workplace more unpleasant, even downright miserable, than poor management. Sadly, it is something I see far too much.

Part art as well as science, the ability to work well with subordinates isn’t something that should be taken for granted. Business owners, if you want a productive workplace, with loyal employees who deliver great work and stay with the company, pay attention to your first line managers. Make sure they get the guidance and training they need.

One of the more difficult tasks any supervisor or first line manager faces is delivering bad news to an employee. That news can range from “you didn’t do that right” to “you’re fired” and still be challenging. I got over the hump as new manager by reminding myself that, if I didn’t tell the employee he/she was doing something wrong and give them a chance to fix it, I was doing them a grave disservice.

Why do managers hesitate to say anything? The most basic reason is fear of confrontation. I believe this is the reason most times. I like to believe that people are basically good at heart and wouldn’t stoop to ignoring an employee in order to make him/her miserable enough to leave. Not only is this rather sadistic, it is counterproductive to the company. Poorly performing employees can do a lot of damage, both in their own jobs and by creating a miserable work environment for others.

My message to managers: Have the courage and the compassion to be direct with your employees. Don’t sidestep issues. They will fester and grow like cancers. If you need help delivering the bad news, get some. Talk to a business coach, a fellow manager, your own manager, an HR specialist. Think through your delivery carefully and rehearse it. The first time you have to do this will be the worst. It will get better with time.

Ultimately, your employees will appreciate your honesty and your guidance.

I usually keep my entries in this blog focused on business, but for once I must break my own rule.

Today I learned of the untimely passing of George Shangrow, gifted Seattle musician and conductor. He was killed yesterday in a car crash on Highway 20 near Winthrop, in a driving rainstorm. He was only 59.

Many of my current friends and colleagues may not know this, but I began my career as a professional musician. After leaving music for the business world, I continued to pursue my music after work. I was privileged to perform many times with George and Orchestra Seattle/Seattle Chamber Singers. I worked with many other conductors in the Seattle area, too, and George was by far the best. He was so incredibly gifted that the rest of us had to scramble to keep up with him. He needed to be reminded occasionally that we needed a little more rehearsal than he did. Highly intelligent, George was also an incredible character. Working with him was a truly unique, challenging and entertaining experience

One of my most treasured memories was a performance of Mendelssohn’s Elijah. There is one movement that ends with a long decrescendo, slowly trailing off into hushed silence. George conducted it perfectly and the choir and orchestra followed. We froze at the end, as all good performers will, to prolong the effect. For a fraction of a second, the silence held. Then we heard it - an audible snore. We all choked - silently. I was in the choir, facing George. The look on his face as he attempted to maintain control was utterly priceless. I will never forget it. And I will never forget George.

My deepest condolences to his family and friends! Go with God, George. You will be missed.

Margaret Wright Purvine
Cellist & Mezzo Soprano, OS/SCS in the 1990’s

I have no intention of preaching politics here. Truly. I do have very strong political views, so this may be tough. I may not be able to prevent some of them from leaking into my words. Please bear with me! To the best of my ability, I will keep this as non-partisan as possible.

Rather than politics, my message today is one of awareness and preparedness. This isn’t something Americans, especially business people and business owners, can ignore. There is a tsunami of tax increases building, the first wave scheduled to make landfall on January 1, 2011. My message to my readers: Be aware and take action as appropriate. (Yes, that may include political action. I will leave that up to each of you.)

The tax cuts enacted during the Bush administration are expiring in January of 2011. Contrary to popular myth and political sound bites, these tax cuts were NOT just for the rich. They were across the board cuts in tax rates. All of these end in January, because the current Congress and Administration have chosen to allow it.

In addition to the tax rate increases (the bottom rate, for example, will go from 10% back to 15%), the corrections made to the marriage penalty expire. Married couples with both spouses working and making similar amounts of money will wind up being taxed more because they are married.

Another biggie is the Estate Tax, also commonly called the death tax. The rate goes back to 55%, if I remember correctly. In addition, if your estate tops $1 million (a very low ceiling when you consider the value of real estate in this area), you will have to pay Estate Tax. This number used to be about $5 million, if memory serves. (I promise to check exact numbers in a later post. Time presses this morning, but I want to initiate this topic without delay!)

I have two huge issues with the Estate Tax. (Sorry, but the opinion just had to creep in.) First, it is blatantly unfair. Those dollars have already been taxed during the deceased’s life time, with income tax, property tax, and capital gains taxes. Why tax them again? Second, this tax nails small business owners. Without careful tax planning and succession planning, many heirs wind up losing family farms and businesses because they can’t pay the taxes. The value is in land, fixtures, equipment, etc., all the things needed to run the business, not in cash. Many must liquidate critical assets or sell the business to raise the cash to pay the tax bill! Now, exactly how is this going to benefit our economy and the jobs picture, especially given that small businesses make up the lion’s share of the job creating engine of our economy? So, my major beef here is that this tax is really stupid!

Now, I realize that governments at all levels in this country are hurting for dollars, big time. Many are way past cutting fat out of their budgets and are slicing deeply into muscle. But time and again, they prove that raising taxes does NOT put more money into their treasuries. Au contraire. Taxes dampen the economy still further, resulting in less income, property, etc. to tax, so tax revenues drop. Read your history!

In contrast, tax cuts allow our economy to take off, producing more income and ultimately bringing more into the government coffers, even though they are collecting it at a lower rate. Again, history has proven this over and over. Now, isn’t a booming economy with lots more jobs and dollars for everyone, including government, the real goal?

Please, gentle readers, forgive this opinionated and VERY concerned blogger and give all of this some serious thought. We must all prepare for the coming onslaught. And, as appropriate, we must take action.

We have just celebrated a Glorious Fourth, the anniversary of the founding of our country. We celebrated with hot dogs, S’mores, chips, lemonade and beer, maybe even a few veggies to assuage our guilt. We joined friends for games, good company, good food, and fabulous fireworks. It was a great party weekend, with firecrackers going off well into the night.

As an old-fashioned American patriot who finds it difficult to sing the Star Spangled Banner without choking up, I also celebrate by contemplating the founding of this country, the incredibly difficult and bloody struggle of our War for Independence, and the courage and wisdom of our founding fathers as they laid out a form of government.

Perhaps the greatest of the founding fathers was George Washington. So I took some time today to look up some of his words to share with my readers. First, on the subject of commerce, he had this to say, from a letter to Benjamin Harrison on October 10, 1784:

“A people… who are possessed of the spirit of commerce, who see and who will pursue their advantages may achieve almost anything.”

To me, this speaks to the spirit of entrepreneurship. With energy and an environment that encourages commerce, a person can do great things. And in this country, we have!

On trade, he said this in his Farewell Address, September 19, 1796:

“Harmony, liberal intercourse with all Nations, are recommended by policy, humanity and interest. But even our Commercial policy should hold an equal and impartial hand: neither seeking nor granting exclusive favours or preferences; consulting the natural course of things; diffusing and diversifying by gentle means the streams of Commerce, but forcing nothing; establishing with Powers so disposed; in order to give trade a stable course.”

Sound like a recommendation for a stable economy - regulation by “gentle means”, “forcing nothing”. Words of wisdom for Washington D.C.? Especially now as the pendulum is swinging from too little regulation to way too much?

In a letter to the Marquis de Lafayette, dated June 19, 1788, he said this:

“I hope, some day or another, we shall become a storehouse and granary for the world.”

We have. Let’s not lose it!

Let me close with a couple more quotes from our first, and one of our greatest Presidents, George Washington, a man I greatly admire.

From his Annual Message, December 1793:

“If we desire to secure peace, one of the most powerful instruments of our rising prosperity, it must be known, that we are at all times ready for War.”

One more from his Farewell Address, September 19, 1796, words about Patriotism:

“Citizens by birth or choice of a common country, that country has a right to concentrate your affections. The name of American, which belongs to you, in your national capacity, must always exalt the just pride of Patriotism, more than any appellation derived from local discriminations.”

Amen. Happy Birthday, America!

I just received an email newsletter from a local business (who shall remain nameless, but not blameless) with this statement: “SMILE your on CAMERA!” I groaned and decided it was time for a blog entry. This was one time too many. Ignore the poor punctuation, with the badly needed but missing comma after the word “SMILE”. It’s the misuse of “your” that has caused me pain.

The last time I saw this blatant error was on a sewing show. I love to sew and am addicted to the Saturday morning quilting and sewing shows on PBS. The show in question was focused on a project combining quilting and embroidery. It used the following saying (with their spelling): “In the crazy quilt of life, I’m glad your in my block.” The mistake stuck out like a sore thumb to me, but apparently the show hostess and guest both missed it. This was not only printed, but machine embroidered on a detailed project - on silk, no less. I winced.

This isn’t that hard, folks! “Your” is a possessive. Your stuff. Your project. Your whatever. “You’re” is a contraction of “you are”. Very simple, right? It amazes me how often these two very different words are mistakenly interchanged. Perhaps it’s because spell checkers don’t catch this.

The Word Cop sympathizes with the challenge of correct word usage and spelling in a rich and complex language such as English. But she also deplores the sloppiness that allows so many errors, and in business documents! Lots of us do spot these errors, and what kind of impression are we likely to have of your business?

Business owners, take heed!

I read a fascinating article in the Wall Street Journal - Why Gen-Y Johnny Can’t Read Nonverbal Cues.

The basic premise is that Gen-Y’ers are so caught up in social networking, all of which is written, that they haven’t picked up on the non-verbal cues that are basic to courtesy when meeting face-to-face. The author, Prof. Mark Bauerlein, states the following:

“We live in a culture where young people - outfitted with iPhone and laptop and devoting hours every evening from age 10 onward to messaging of one kind and another - are ever less likely to develop the “silent fluency” that comes from face-to-face interaction. It is a skill that we all must learn, in actual social setting, from people (often older) who are adept in the idiom.”

Tied into this is the split attention inherent in constant multi-tasking. Ever attended a meeting during which attendees appear to devote more attention to their “Crackberries” than to the speaker? They may think they are being more efficient. What they are actually being is rude.

Time to reincarnate Miss Manners? Perhaps, although strict adherence to old-fashioned etiquette rules can be extreme. It might be better to use our opportunities, when observing such behavior, for teachable moments. When we do so, we should strive to be courteous and diplomatic ourselves, not judgmental or high-handed. Lead by example.

Take a moment to read the comments as well as the article. It was interesting to note that the stronger notes from authors disagreeing with Prof. Bauerlein, tended to come from some of those Gen-Y’ers. They have some viable points and we should all listen to the input.

My bottom line is this. Excellent communication skills - written, verbal, and nonverbal - are critical for success in our world. Add courtesy to the mix and you have something truly effective. We can all agree on that.

I get the biggest kick out of hearing new words, at least words that are new to me. The best part of Bill O’Reilly’s show on Fox News is his word of the day, always tied to sending him email. “When you write to us, don’t be _________!” There, he plugs in his latest favorite or new discovery.

Examples: Blatherskite. Pedantic. Lugubrious.

What’s not to love?

I also love to hear new definitions of words or word origins, usually spun for laughs rather than true facts. Take the word “politics”. I recently heard someone (maybe Dennis Miller? Not sure. My apologies for the shaky attribution!) break this down into “poli” meaning “many” and “tics”, meaning blood sucking nits. I roared.

Political commentary is rife with new words, distorted words and obscure words used by the more erudite speakers. I recently heard a political speech by someone in high political office described as “abstract, vapid, and self-absorbed”. Isn’t that wonderful? When did you last hear the word “vapid” in conversation? (I will leave this reference nameless, in the interest of avoiding offense. Some people are so sensitive and my interest is in the words, not the politics. My apologies to the brilliant commentator!)

Heard any interesting ones yourself lately? Please share them! The Word Cop looks forward to hearing from you.

As I have watched the economy tank and our government react and overreact, I keep having flashbacks to the 1970’s. There was a lot more to the 70’s than bell-bottom jeans, leisure suits, sideburns, double-knits and green shag carpet. It was a terrible economic time.

I finished college in 1975 and took my two degrees into an abysmal job market. I found something, but struggled for several years before finding a good job, one that I stayed with for 15+ years. During the early years of my career, I did what all young professionals do. I tried to succeed at my job, build up some savings, find a life partner, and establish myself personally and professionally.

However, it was a tough time to do this. Inflation ate up every salary increase and limited my savings. I wanted to buy my first house, but the market stayed one step ahead of me in spite of my efforts as housing prices and mortgage rates soared. It took me until the 1980’s to make the leap into the housing market. I managed to obtain a mortgage at the eye-popping rate of 13.5%, and for the time this was a good deal! The resulting PITI house payment took more than half my monthly income.

For some time now, as I have observed our current economic crisis, I see a 1970s redux in the near future. And it isn’t pretty! There is an excellent opinion piece in today’s Wall Street Journal written by Arthur Laffer of “Laffer Curve” fame. He is also one of the authors of the recent book, “The End of Prosperity”. I have read part of it. It is excellent and scary.

I urge my readers to take a look at Mr. Laffer’s article. Press here to read it.

I look forward to hearing your comments!