Andy Birol

Cleveland entrepreneur and incisive commentator Andy Birol jumps into the Cool Cleveland monthly mix, examining our city's conflicting business attitudes, habits, practices with examples of success and failure. He'll challenge whether or not the status quo is constructive, and report on results these combined factors have on companies and the business environment in Cleveland. Read the first installment of Birol's Business here.

Cool Cleveland: You’ve been hired by a lot of large Cleveland-area corporations to help improve their bottom line...

Andy Birol: My market is comprised of explicitly business owners and privately-held companies. Owners are special, 'cause they are the only people in the company who can set the direction of the organization to achieve results. Everyone else in the organization has the job of meeting their boss’ objectives and covering their ass. That’s a part of the problem in this town. We have a Father-Knows-Best environment, where everyone is meeting someone else’s objectives, rather than gaining results.

When do these Cleveland businesses usually start looking for help? How bad does it have to get before they give you a call?
They call me for three reasons. One, they see opportunity and they are optimistic: the glass is half full. Two, their firms are in the middle of transition: father to son, or founder to professional manager, and that transition is so distracting, so I get called in to make sure the voice of the customer is heard above the testosterone. Third is what I call “intervention” or “triage,” where a firm has to re-focus in order to grow.

How bad does it have to get before you get the call?
Hopefully when it’s not too late. I can help them when they are bleeding from the nose, but not when they are bleeding from the ears. They must have a positive cash flow or they have to have retained earnings. You know that movie, Weekend At Bernie’s? If they are a Bernie Business, and they are walking around dead, then I can’t help them.

In what specific areas of business do you find Cleveland businesses need assistance (finance, administration, marketing, sales…)?
One of the biggest areas is getting the manufacturer’s attention off the shop floor and onto the playing field, the marketplace. You go into many manufacturing firms around here, and what do you see on the walls? You see pictures of their products, or an aerial view of the facility. You rarely see photos of their customers. They rely heavily on ISO [International Standards Organization], which focuses you on creating such standard approaches to business, that it makes...

It commoditizes you?
It levels the playing field so much so that the buyer can make a decision solely on price. That leads me to the second thing I see around Cleveland: companies around here are not willing to differentiate themselves based on their best and highest use. That trademarked term is when a company looks at what they’re good at doing, what they like doing, and what they’ve been valued for doing by the marketplace. Can you imagine yourself [Cool Cleveland], for example, working for The Plain Dealer? You’ve spent your time differentiating yourself, while a lot of companies have spent their time homogenizing themselves.

What else do you see among Cleveland businesses regarding how they feel about themselves?
I see too many companies not confident enough to charge enough for the value they are providing. There are a lot of self-esteem issues with companies that don’t feel confident enough to provide a premium service and get paid for it. There’s a sense of “We’re not worthy.”

Same as our civic sense of who we are, this lack of confidence...
Exactly. Why would you have a conference on poverty? You should have a conference on wealth. I would have gone to that one. They majority of what I do is move them from ambivalence and apprehension to confidence and conviction. It’s like the Wizard of Oz, we have the courage, we just have to know and realize we have the courage. The fact that we’re so philanthropic as a region is a form of co-dependence. It’s like we’d rather help other people rather than fix ourselves. Instead of doing good by doing well, it’s like, "It is OK we are not doing well, because we’re helping others." There’s a cache to it. I’ve said it before, “Show me a good loser, and I’ll show you a loser.”

How bad does it have to get in Cleveland before we realize that the large corporations are gone forever from our region, and we need to focus on entrepreneurialism?
I think the pain of change has to finally be less than the pain of not changing. The longer we believe that the cavalry is coming over the hill, the longer we can delay the personal empowerment that we need.

What would help that realization along?
I think the most important thing is, when it really comes down to it, you are going to make a better boss than following someone else’s direction. You have to realize that you can’t do it any worse than anyone else. My article this week talks about how this election is showing how both parties are not around to address our needs. The cavalry is not going to come.

It seems like there is never a tipping point in Cleveland; we continue to suffer terminal embarrassment, but we never get enough bad news to make us change.

There is no “we.” The answer is “you.” You remember Candide by Voltaire or Being There with Peter Sellers? You wonder where the tipping point is. I hope to God it’s not riots in the streets. There’s a historical view that the wealthy become a target. The problem is, we have this sense that someone has to be so credentialed and so endorsed and validated before anyone will take them seriously. I once heard Jack Kahl [former CEO of Manco] complain in a speech that in Cleveland, because he did not found a billion-dollar company, he wasn’t seen as one of the big dogs. We’re so terrified of being wrong, so we keep looking for this 100% risk-free champion we can embrace. I say, “lose the dream.”

Your business has been in the Weatherhead 100, as one of the fastest-growing area businesses for the past three years. How have you been able to grow in a very challenging environment?
By delivering on my positioning as a contrarian and totally focusing on and delivering growth for my clients. The second thing is building a brand and shameless self-promotion. This town is very meek, and I’ve always said, “I am the brand,” and I’m going to have a proof of concept, and I deliver and I shout it from the ramparts.

As a region, we seem to be meek, and we’re afraid to boast or be prideful, or to sell ourselves. I go to San Francisco, and the weather sucks, but they use it to their advantage and play it up. What is it about Cleveland that makes it impossible for us to promote ourselves properly?
I think it’s a combination of the ethnic roots; it may be the union heritage, where we just don’t believe that we are deserving of the best. You go to a fine restaurant in this town, and the people that work there don’t act like a medium-rare steak means red in the middle and warm. We don’t have high standards. It’s not a meritocracy...

It’s a mediocracy...
I fear for this town if the economy really does improve, and we have interlopers come in to compete with our low standards here, and they steal share away.

Not just chains and Wal-Marts, but a more fundamental industry....
Even Wal-Mart, they have done a lot of things right. Everytime you see that little yellow ball bounce, they are squashing another local manufacturer. Rather than competing with that, compete on service. Wal-Mart is about to become the 20th biggest bank in America when they get permission to put banks in their stores.

What does that mean for us?
We often don’t say in this town, “Why not?” We get way too defensive. I walk my own talk. For a growth consultant to win a growth award three times in a row. My home is structured to serve the entrepreneurial market, as opposed to the corporate market.

Your new column for Cool Cleveland will focus on a wide range of business issues that have some relationship to Cleveland. What kinds of topics do you expect to cover?
A lot of examples of success and failure. This town needs an avalanche of evidence of the good, the bad and the ugly. I’m going to always challenge whether or not the status quo is constructive, because often it is destructive. I’m going to continue to provoke people into taking a stand. Right now, there’s too much time spent grabbing consensus and covering the risk, assuming the glass is half-empty. I’ve refused to participate in the recession. It has very little to do with what I do. People here continually blame things, and in many cases, that’s just not valid. Even in the basic industries of steel and plastic and rubber. It’s not like people have stopped consuming those things, but we haven’t figured out how to make money. It’s not like the things that this region made have disappeared. We just haven’t figured out how to add value and make money. It’s like foreign cars. There are companies that know how to make foreign cars here and make money. Did you see the Lexus dealer out by the airport?

The one on Brookpark Road?
Right. They put $2 million into their lobby, with cappuccino machines and Golden Tee video games, and then they flipped around and sold the dealership for $80 million. The point is, we didn’t make the car here, but look at all the money being made in selling and servicing the car. And we’re so pessimistic here in this region about finding ways to make value.

Do you think entrepreneurs are made or born?
I think a majority of them are the kind that don’t belong in corporate America. First and foremost they are rebels. The good news is, there are so many kinds of entrepreneurs, and there’s more than one way to do it. People have bought companies, and with franchises, they don’t even have to do that. They’re not made or born, they are self-sufficient, they have confidence and conviction. Most of them are control freaks, and most of them have ADD [Attention Deficit Disorder], and that’s a good thing, because they are able to get a lot of things done at the same time. But this town breeds compliance and “know your place.”

Whether entrepreneurs are made or born, with what specific skills do we as a region need to be training our entrepreneurs-in-waiting?
Get out of their way, encourage contrarians, encourage risk-takers, encourage and celebrate their success, especially if they fail. On the coasts, starting an entrepreneurial venture and failing is a merit badge. In Cleveland, it’s a scarlet letter.

That hangs around your neck for the rest of your career...
'Cause it shows you didn’t know your place; entrepreneurs make their own place. Mostly because they don’t fit anyplace else. I was fired four times, and I started and failed at two other businesses.

Maybe we need a Festival of Failure.
The notion of failure is growth. But around here it's seen as terminal. If we don’t learn how to fail and get up again...we don’t learn about the iterative nature of risk and failure. It’s all about growth.

As a consultant, I’ve been asked many times to write a business plan or a marketing plan for a company or organization, which then sits on the shelf unimplemented and probably unread. As a consultant, how do you insure that your consulting work doesn’t go unheeded, or is there nothing you can do except cash the check?
First, I rarely write business plans. I think they are documents that are written for detached outsiders. Business plans don’t make a business grow. I spend my time developing confidence and conviction, by standing in my client’s face until it gets done. I consider my consulting to be a full-contact sport.

So how do you find clients when this region is so risk-averse?
There are enough people out there like Popeye who say, “I’ve had all I can stands, I can’t stands no more.” Popeye: he’s the original Zen-master.

Andy Birol is the owner of Birol Growth Consulting http://www.AndyBirol.com

Read the first installment of Birol's Business here

Interview & images by Thomas Mulready (:divend:)