Author Archives: Kevin Kelly

Emerald Packaging Immigration Raid Retold by CNN Money

imagesA few months ago CNN Money called.  They asked to do a story about the impact of n and Customs Enforcement (ICE) raid we suffered over five years ago.  How could I refuse?  The new Trump administration had made immigration enforcement one of its main planks.  We had an obligation to show what that meant for business. Thanks to what ICE calls an “audit” we lost 10% of our workforce. Most of them had 15 years or more experience with us, so out the door went some of our most accomplished operators and technicians.  We’ve never really recovered.  New employees, though good, don’t replace the knowledge we lost.  Plus as we expanded, that talent wasn’t here to run our new machines.

But CNN Money went further.  They told the story of an employee caught up in the mess.  They found one of our best, Miguel Gonzales, a technician who had logged over 20 years with us.  Miguel made a radical decision when he lost his job. Sick of hiding in the United States, constantly worried a knock on his door would come one night, he returned to Mexico.    He, his wife and three children — none of the kids had ever lived there — up and left.  His move profoundly impacted his family.  CNN Money tells that story with feeling that puts a human face on our country’s broken and arcane immigration system.

The article comes in three parts:  Emerald Packaging’s story, then Miguel’s, then the impact on the children told through one of his daughters.  If nothing else watch the video that details the family’s story. It’s deeply moving.

Click on the link below.  It’ll take you into the story.  This isn’t alt-news.  The story’s real, true, and cries out for answers.

http://money.cnn.com/news/undocumented/#undocumented

James P. Kelly: March 18, 1930 – August 31, 2016

jpkI haven’t posted anything since March because for most of that period my father’s deterioration due to metastasized melanoma overwhelmed me.  I want to begin again by posting my eulogy (one of four) and my remembrance delivered at a St. Joseph Notre Dame High School financial aid fundraiser. Given that so much of life over these months has been dominated by caring for him and then grieving his death, posting these tribute seems a fitting way back to writing.

Eulogy Delivered at Funeral September 10, 2016

The chronology of Dad’s death couldn’t be more mundane.  Immunotherapy treatment at UCSF for metastasized Melanoma begins in November.  The drug fails.  His undaunted oncologist Dr. Adil Daud then tries an immunotherapy medication that leaves Dad horribly sick from March to June.  But it seems to work.  His tumors have shrunk.  Surgery looks like an option.  But on July 12 a CT Scan shows cancer has colonized his liver.  His condition quickly worsens but an experimental therapy gives him a two week renaissance. He works out three times the second week, dines with friends, enjoys lunches at Claremont Country Club, and drives his visiting brother to the airport at 5:00 a.m. Then everything falls apart.  On August 20 the cancer takes over. To the shock and dismay of Dr. Daud, Dad’s condition worsens rapidly until eleven days later, surrounded by family, he dies.

Yet those final weeks were anything but commonplace.  Dad emerged in ways never imagined.  He became himself, only more so.  Blessed with time despite his steep decline, he deepened his intimacy with family, sharing his love for us. His Irish temper vanished. Phone calls and emails poured in from people telling him how much he meant to them. They came from friends, relatives, Emerald Packaging employees, and around the world.  He had touched many lives, even transformed them, and now people returned the favor, letting him know his life greatly mattered.  He had time for heartfelt good-byes with friends.  He gave back, as always, this time to medical research by allowing UCSF to biopsy his liver, so they could discover why his tumors resisted treatment, and perhaps develop new drugs that would allow others to live.  Approaching death this man who used strength and drive to succeed in life deployed that same strength to accept fate, and die with a grace and dignity that transformed those present.

His acceptance of death awed me.  Until Thursday August 25, despite the circumstantial evidence, he believed he had several months to live at the very least.  He thought he could fight the disease like he had fought against the odds to rise from an Irish tenement to great success. But that evening his doctors told him his liver and kidneys were failing.  I informed him a CT Scan showed rapid tumor growth.  “You aren’t going to get better,” I said.  “You are dying.”  I am sure those words stung but he demanded honesty.  He had lived that way.  I left that evening afraid I would return the next day to a depressed man.  Instead by sunrise he had accepted death.  “I am ready to go,” he said.  “I have no regrets. I built a business, married the right woman, raised a good family, and contributed where I could.  If I can’t be cured, it is what it is. I just hope I’ve done enough to get to Heaven.” His response left me flatfooted. First, if he hadn’t done enough to get to Heaven, who had?  Second, to me strength had always meant fighting.  That’s what he taught.  Now he redefined strength into acceptance, even surrender. He started teaching his family how to die.

Immediately Dad’s friends and family members mobilized.  The phone calls and emails buoyed his spirits.  This man who had mentored so many, who had helped those in need, who brought humor and loyalty to friendships, had little idea of the love that surrounded him.  Now it poured over him.  Mom came each morning and held his hand for hours.  His grandchildren, who he loved beyond words, flew in from college, called from Berlin and Cleveland, and sat at his bedside, holding his hands, talking to him, even on Tuesday evening, when he could no longer speak, only reply with a weak hand squeeze or slight smile.  His niece Kelly Anne Lynn left her job in New York to nurse him, as did Margaret Masterson, our adopted cousin.  Last Rites, surrounded by family, comforted him, and eased whatever anxiety might be left.  He died on August 31, a few minutes after his sister Mary arrived at his bedside, his rapid breathing slowly calming to nothing.  I do not pretend he did not suffer, but it was infinitely short, and merciful.  Two hours after his death 14 family members kept watch over him. On a hospital floor where so many suffered alone, Dad did not and even nurses who had not worked with him remarked he must have been a special man.

He was a special man.  Dad not only looked out for his family, he looked out for his community in ways most people don’t.  On his deathbed he asked that we continue to “give back” by helping those less fortunate than ourselves as we were already doing. Dad contributed in so many ways to so many different organizations my mind reels. I have no idea where he found time to be a husband, father and businessman but he did. He virtually rebuilt St. Joseph Notre Dame High School, both donating and raising funds.  He served on the board of trustees of Holy Names University for years, and raised money there too.  Next Step Learning Center, St. John’s University of New York, Bishop O’Dowd High School and Family-Aid for Catholic Education benefited from his determination to repay the debt he believed he owed Catholic schools for helping him get a start in life.  I think most importantly he started a company that today employs 250 people, allowing parents to provide for their children.  Emerald Packaging was his pride and joy.  Not only for the wealth it gave his family, but what it allowed him to do for others. With all he gave, he certainly finished the race, kept the faith. Undoubtedly the crown of righteousness is his.

“Love is most nearly itself when here and now cease to matter,” the poet T.S. Eliot wrote in the Four Quartets.  Dad has died.  His love remains, and it is timeless.  Through our tears, our grief, our mourning he comforts us.  He calls us forward, into a deeper communion with family, friends and community.  What a great legacy, what a wonderful challenge, worthy of the man who accepted death without fear, and saw it not as an end, but a beginning.

Remembrance Delivered at St Joseph Notre Dame High School Fundraiser October 15, 2016

Before I begin I want to make something clear.  We are celebrating our father’s life tonight because he died.  But if Mom died first we would be celebrating her’s and Dad would be sitting at the table.  Anything Dad did for this school would not have been done without her full support, and in many cases without her active participation.  This school owes a debt to her as much as to Dad. Our celebration tonight really is a celebration of what they did together, not Dad alone.

Someone once quipped marrying Jim Kelly was the best thing Rosaleen Collins ever did for St. Joseph Notre Dame High School.   Like any pithy statement, it’s at least partly true.  Dad’s dedication to this school was complete.  He deeply wanted it to succeed.  No doubt the fact that Mom and their children went here provided some inspiration.  Mom’s prodding to get involved certainly helped given the influence she had with him.  I also know that Dad had a soft spot for the underdog, for the second-in-line.  He disliked the local bully, Bishop O’Dowd, instinctively. He hated that O’Dowd was pulling students from Alameda to Oakland, students who rightfully should attend the Catholic school in their backyard.

So when SJND, stuck with ancient facilities and grappling with falling enrollment, called he threw himself into the task of the makeover. Dad raised money, gave money, hit up his kids for money until the transformation was complete. By the end SJND boasted the best campus in the East Bay, with a cutting-edge science center, a new arts building and state-of-the-art classrooms.  I note though that the credit for the Marionist Hall bathroom redo belongs entirely to the next generation, who not unsurprisingly refused naming rights.

SJND wasn’t the only school that benefitted from Dad’s efforts.  He raised money for his alma mater St. John’s University in New York, in fact it was the Vicentians who mentored him in fund raising, Holy Names University, where Mom graduated, Northern Light’s School and Next Step Learning Center in Oakland, which focuses on adult education.  He and Mom gave generously to the Diocesan financial aid organization Family-Aid for Catholic Education and supported fundraisers like this one at high schools throughout the Bay Area.

But why did he do all of this?  Catholic guilt? A wish to ensure his place in Heaven?  No.  You have to go back to his beginnings, the formative events of his life.  Dad was born to impoverished Irish immigrant parents, his father a bricklayer with a fourth grade education.  He grew up in an Irish tenement in Brooklyn, where education provided the only road out, the most promising path to prosperity.  Catholic Schools, with their low tuition and dedicated nuns and priests, provided the means.  He went to the local Catholic grammar school, graduated on to St. Augustine’s High School where he ran track and earned a scholarship to St. John’s as a 400 meter specialist. The GI Bill, which he took advantage of after guarding parts of the United States during the Korean War, including his beloved Brooklyn, helped him earn a Master’s in Business from New York University.

Years before Dustin Hoffman received the career advice “One word: Plastics” Dad jumped into the high-tech industry of his day.  He climbed the corporate ladder at large multinational and then jumped out with Mom’s support to form and run his own company Emerald Packaging, today owned by the second generation. Dad grabbed on to success with all the determination, verve and intelligence he had.  But he always remembered he owned that success partly to Catholic schools.

Now I’ve left out a big component.  Not intentionally but because she should have her own paragraph.  Without Mom, Dad would not have succeeded, not as a businessman or fundraiser.  Importantly for Dad, Mom had the social graces that the street kid from Brooklyn almost entirely lacked.  She taught him to curb his temper, be more polite, and learn the arts of normal human interaction not practiced on the streets of Brooklyn.  As he told me two days before he died:  “Whatever grace I have I owe to your mother. She took a rough stone and smoothed off the hard edges.  And it wasn’t always easy.”  In fact, she deserves a Noble Prize for her work.

Mom’s social influence provided the foundation for Dad’s success as a fundraiser. After all, no one would have given money to someone yelling at them.  His willingness to “give back” both through treasure and his wisdom reflected his deep debt to Catholic education. When Emerald Packaging provided the wherewithal for him to begin donating he did so.  Financial aid programs particularly attracted his interest. Even today, he knew, Catholic schools provide one of the few ways for disadvantaged people to get a good education.  Make no mistake. The financial aid programs here, at Bishop O’Dowd, Moreau and other Catholic high schools are one of the few ways for kids in east and west Oakland to receive a decent education given the state of our public schools.  Let’s be clear: Do you think private schools like Head Royce provide the opportunities to these communities that Catholic schools do?  Not a chance.

Dad and Mom passed the obligation to “give back” – Dad’s phrase – on to the next generation, and we carry on their work.  But Dad insisted that everyone who had ever benefited from the leg up provided by a Catholic education should give back.  It drove him crazy that people who had received financial aid and attained some wealth did not donate to the degree they could.  Not this group of course, and certainly not tonight.

Dad’s death has been hard.  We miss him terribly. I know though that Dad would be honored by this remembrance tonight. He would think himself best remembered if everyone dug deeper into their pockets to support financial aid at SJND.  So tonight if you plan to give $50, I ask you to give $100.  If $100 then $150.  If $500, why not $750 or $1000?  And if you are flush enough to write a check for $5000, then go for $10,000, or be haunted by him the rest of your days.

Dad was proud of this school.  He loved the community and what it has accomplished, the opportunities it provided.  But he knew there was a price tag attached.  So he opened his wallet when asked.  In his memory, I ask you to open it a little wider tonight.

 

On Bids

bidEvery so often a bid lands on my desk. It’s either a current customer seeking lower prices or a prospect looking to see if we’ll compete for their business. Whatever the case, it usually means someone asking for bottom dollar, or close. No other qualifications matter. Such exercises drive me nuts.  Any company can find someone desperate or dumb enough to buy business.  Even we’ve been guilty of such stupidity, always discovering it doesn’t pay.  Some customers can’t help themselves.  Supplier madness is just too tempting.

Sometimes we run into a company that takes an entirely different approach. They work to find a way to create a win-win. I know that sounds cliched,  but it does happen. It requires hard work on both sides, a willingness to find creative ways to cut costs or limit price increases.  The process works because it cements partnerships that lead us to bring new ideas to them first and help them through hard times when needed.

Two or three times this year customers took this approach. They stated up front that they value what we bring to them, usually quality and new technology. Another appreciated our willingness to extend terms when they ran into a financial blip. Each wanted to trim cost, but they wanted to understand what we needed as well.  They didn’t want to disrupt a supplier relationship that worked, and valued that over the lowest price.

The approaches varied. One customer sat down with us and reviewed their packaging cost drivers. Plastic resin is one, but they understand we have little control over price movements pounded through by oligopolists like  Dow Chemical and Exxon Mobil.  However, this customer had an obvious way to reduce their prices. They used several different packaging sizes for the same item, an old practice that wasn’t required anymore.  Multiple bags meant we had to run smaller batches, which lead to higher prices. Together we worked to rationalize their bag sizes, taking four down to two, which allowed us to produce larger orders and reduce their prices.

Another customer took an entirely different approach. When they did their biannual bid we sat down and talked over their current prices. We contended they needed to go up, thanks to low prices exacted on prior bids and our need to cover cost increases in other parts of our business, like health care. We’ve done business with this company for many years and they appreciate the new ideas we bring to the table, and the consistency with which we meet their specifications. So they listened. In the end we compromised. We still provided highly competitive pricing, but we got enough bump to help. We kept most of our business.

On the opposite end of the spectrum there’s a company that bids their business every two years. They send a multi-page questionnaire asking about our technical ability, financial stability and willingness to help them develop new products. I spend hours answering the questions believing for some reason that even if we are not the lowest price, our service orientation and our engineering prowess will win the day. It never does.  The buyer awards the business to the lowest price, and my impassioned pitch goes to waste. Someday I won’t accept their invitation to bid.

Our company takes a holistic approach.  We do check resin prices rigorously, but award most of our business to the company that has delivered consistently good product. We work with our ink company to find ways to reduce cost, but we don’t toss them if someone shoots in a lower price trying to buy our business.  That doesn’t mean we never cut lose a supplier. Currently we have one on the way out. They didn’t deliver, rarely reduced cost and never brought new ideas.  So why be loyal?

Bid can cut prices. But they guarantee nothing when it comes to quality or service or willingness to work with a customer to reduce total cost.  Bids won’t reveal if a supplier will work with you when you run into trouble, as most companies do at some point. I know those companies that have gotten us where we are remain the ones which will drive us into the future. We hitch our wagon to them. We appreciate and value and help those customers that do the same.

Careless Email, Destructive Words

imagesMost of us have vented frustration in an email.  Some rant at the recipient like they’d never do in person.  A smaller subset stumble badly.  We hit “Reply All” when we don’t intend to, write a nastygram or some other uncomplimentary email about a person and hit “Send” only to  realize that the person who we are complaining about got the email.  Fevered attempts to recall it usually prove fruitless.  The unintended recipient either ends up embarrassed or offended.  Explanations may or may not salve wounds.  But damage lingers.

As a principle I don’t write nasty notes because they might get forwarded.  If I have criticism, I make sure I say it in person.  However I have hit the “Reply All” button and unintentionally sent an email asking another manager why one of his direct reports doesn’t understand his directions, only to realize too late that the message went to the direct report.

Recently something worse happened.  One of my colleagues had to deliver some bad news to an important supplier.   My colleague had done everything they could to ensure a good outcome.  But it just didn’t work out.  The email my colleague sent had several recipients on it.  One obviously unintentionally hit “Reply All” and sent an email questioning my colleague’s competence and even their motivations.  The result? Just like that our relationship, central to a new project, deflated.

The invective dripping from his email indicated feeling that went beyond this one issue.  But when he recognized what he had done — even before we had seen the email — he left a message on my colleague’s cellphone backpedaling.  “I shouldn’t have sent that email,” he said. “I’m sorry.  I was frustrated about something unrelated to you.”  That didn’t pass the smell test.  I immediately began asking myself why he had written it.  What frustration did he harbor that lead him to say what he did?  We must have done something wrong.

He compounded his error by making the lame excuse. The sender should have spelt out his frustrations.  Failing to do so chipped away his integrity.  He could have used his mistake to speak frankly about what we had done to upset him and in doing so strengthened the relationship.  Actually I think it best in these situations to go a step further and address the issues in person.  That tells someone you value the relationship.  Voicemail doesn’t.

One of his superiors called to fix the damage.  Doing so upset me further. Why couldn’t he call to talk in person?  Unfortunately the partner used the word “if”, as in “I am sorry if you were offended,” or something like that. The British writer George Orwell recognized the word’s power half a century ago in his wonderful essay “Politics of the English Language.”  Want to deflect responsibility?   Deploy “if”.  “I’m sorry if you were offended” shifts blame from the speaker and places it on the victim.  “If” distances the transgressor from their transgression.   The correct usage?  “I’m sorry he offended you.”

We did not hear from the writer for two weeks. That meant the wound festered for days.  “What had we done? What had we done?” droned on in my head.   Obviously not good for any relationship, personal or business.

When we finally talked he confessed that a series of frustrations unrelated to us caused him to crack when we delivered the bad news.  Plausible?  Maybe. But the length of time it took to call left too many questions unanswered.  His in effect uttering the hollow words of the protagonist in poet T.S. Eliot’s “Love Song of J. Alfred Prufrock: “That is not what I meant at all;/that is not it/at all.” didn’t really satisfy.  However it was time to move on.  The relationship mattered too much to allow an email to destroy it.  Ultimately I hope the lack of respect embedded in it doesn’t portend a sad end to it.

Whatever the case, the writer provided a reminder that “Reply All” has destructive power.  At least I can thank him for that.

 

Election Mania (or Maniacs)

sandersThis coming week New Hampshire goes to the polls in the first primary of our prolonged election season. Various contenders hope to stamp their ticket as front- runner thanks to their performance. For many months Donald Trump has been my main worry. His demagogic politics, given to demonizing Muslims and Mexicans, clearly puts him outside mainstream cultural traditions.

But Republicans finally have awakened. If polling holds, so-called establishment candidates will grab 40% of the vote to Trump’s 30%. Once the field winnows a clear alternative will emerge, not likely Todd Cruz, the other brash voice, but Marco Rubio, a moderate with sensible policies on immigration and even to some degree taxes.  If he learns how to debate.

Surprisingly the other side suddenly has decided to jump off a cliff. That’s not good news. Senator Bernie Sanders rush into contention against Secretary Hillary Clinton bodes ill for the Democrats and for the country. His brand of aspirational politics encourages belief that we live in a revolutionary moment when fairy tales can happen, like single-payer health care, a $15-an-hour minimum wage and a giant increase in taxes on upper incomes.  His politics encourages citizens to believe the impossible possible, which infantilizes our discourse, polarizing a divided country even further.

In the real world American politics won’t embrace any of Sanders dreams.  Republicans control the House of Representatives and thanks to their dominance of state houses, which draw district lines, won’t give that up for many years. While oversight of Senate business may bounce between parties, the need for 60 votes to move legislation means extreme bills die. Senator Sanders won’t be any luckier than President Obama.

Yet his support defies such logic. In fact, it turns it on its head. I heard former Ohio state Senator Nina Turner, who once supported Secretary Clinton, on National Public Radio radio assert the Presidential election would set the table for the 2018 mid-term vote. Her point: President Sanders would have two years to stump the country and return a Congress happy to support his policies.

Senator Turner certainly should know history. President Obama entered his term with unassailable majorities in Congress but could not get a “public option,” the goal of many Democrats as the precursor to a single payer system, into the Affordable Care Act. Republicans not only opposed it, so too did conservative Democrats. Efforts to raise taxes other than capital gains and boost the minimum wage significantly also fell flat.

But the Sanders groundswell persists.  Pundits talk about anger over wage inequality, health care costs, and the labor participation rate.  A recession slow to lift. Maybe. But something in the American character believes in magic bullets and the need for purification. Trump plays to that promising his brio will  restore America to former glory. Almost alone in the financial world some U.S. economists argue the world should endure a Depression to bludgeon excess capacity and easy money. No other western country sports major evangelical religions that call for modernity’s end.

Senator Sanders appeals to that purifying, magical mindset. If only we elected someone with strong enough beliefs our country would go through a “revolutionary transformation” and become more social democrat than much of Europe. Don’t get me wrong. As a business owner stuck with rising health care expense, single-payer makes sense. But it won’t happen.  Right now we need to talk about how to tackle difficult issues given our political dynamics, not daydream about what we should do given fairy dust.

Which leave us pondering how Secretary Clinton should respond. I don’t think she can transform herself into a “progressive”.  No use rebranding when you can’t. Tide is Tide. It’s not Seventh Generation Organic Detergent. Instead she must appeal to common sense, point to the obstacles even President Obama couldn’t overcome, emphasize the legislative calculus, and argue for the Politics of the Possible.

I suspect the Democrats will listen if she embraces her real sensibility. Otherwise either a so-called “democratic socialist” (he’s not by the way, socialists believe in government control of the “commanding heights” of the economy and he does not) or a muddled brand will face off against a clear-eyed Marco Rubio.  That’s what many may want.  But the Democrat’s bloodletting won’t help a country needing an adult debate about our future.

On Not Writing

imagesIt has been many months since I’ve posted anything here. This silence isn’t very smart for me. I really enjoy writing. Not doing it leaves a vacuum inside me. I like putting my thoughts out there, love the creativity of assembling letters on a page, and even find some hint of the Divine when my mind and my hands become one and the words spill out of me. It is an altered state of consciousness, access to part of my brain, my soul, that I have no other way. Not to mention how fun I find it.  Nothing I do feels quite like it.

Until last year I had written non-stop since age 13. Back then I penned Letter’s to the Editor of the local newspaper commenting on current events. I did it sometimes under a pseudonym because I did not want to upset my parents with my more liberal views. I evolved from there to actual writing for publication, first for my college newspaper, and then free-lance pieces for national publications. My passion for language evolved into a career, taking me into journalism with Business Week until 1996 and continuing even as I moved into Emerald Packaging as a columnist for various publications. And then the blog.

So why the silence of the last year? Well, it has not been an easy year. Our business, which has grown rapidly, needed to catch-up with itself. We moved into an additional building, added more equipment, looked at the profitability of our accounts, shedding some in the process. We expanded into digital printing and tried to build a business around the new technology. Work took up a lot of time, to which my family can attest. Something had to give, and writing did.

Ill-health did not help. I had surgery in early May to repair some abdominal muscles. I spent so much time in bed recovering I pinched nerves in my back. Until the insurance industry could get around to approving cortisone shots I slept three hours per night. Once that was behind me I managed to take a tumble off a retaining wall in our garden. That was the end of July. Not a good streak. Certainly not conducive to creativity.

But above all I really wondered if I had anything to say. Not writing anything compounded the problem because the worry became it’s own inflection point. Part of my brain became depressed I think, not my entire being mind you, but an important part. Stuffing creativity, even when it is something as mediocre as my writing (let’s face it, I’m no Hemingway), corrodes the soul, atrophies the mind, and, given my faith, distances you from God, since the act of creation brings us closer to the divine.

Finally I just could not shake the need to write. To express. To comment and engage with others. To find that little moment when I feel connected to something larger. To play. I could not forever neglect the passion. So I’m back and I will be posting here more frequently. I am not sure who will read this blog going forward. It would be good to find an audience. Even better though to be who and what I am.

My message here is pretty simple. I should not have neglected this side of myself. If there is something, dear reader, you have pushed away in favor of work or family or mending health which nourishes you, don’t do it. It won’t do you any good, probably undermines health in its own way.

I imagine if today were my last, having to answer to St. Peter why I gave up doing something that God blessed me with the power to do. That is not a conversation I want to have. Nor should any of us.

Turning Disaster into Freeze-Dried Blueberries

dried-blueberry-productRecently I had the wonderful opportunity to dine with the executive team of Homegrown Organic Farms, which operates one of the largest organic blueberry operations in the country.  I’ve rarely met a more open, honest and intelligent group — and I am not saying that just because they are customers — so passionate about their product.  It being our first meal together we spent time swapping stories family and corporate histories.  My team, lead by local Xpedx technical sales representative Chris Kampsen then had a chance to learn about the range of new products they hoped to introduce.  They asked our help to develop the necessary packaging.

If you had told me I would be sitting at this table over steaks and Italian food nine months ago I would laughed in disbelief.  Back then we had nearly destroyed the retail launch of their freeze-dried blueberries thanks to pouches that failed during packing.  Quite simply the seals at the bottom of the bag which enable it to stand-up did not exist. You couldn’t tell from the outside of the pouch.  The impression left by the seal bar was there, so the bags slipped past quality control.  If we had stuck our hands in we would have noticed the problem.  But that wasn’t part of our quality control protocol back then.

We had been so proud of the pouch.  The life-like printing made the blueberries on the front come to life.  Pitch perfect blue.  The bag looked majestic, tall with silver edges, likely to catch the consumer’s eye.  Our company knew that Homegrown had taken a big risk being first to market with freeze-dried blueberries.  So we thought we had taken extra care with the printing and pouchmaking.  The project was also our first with the Fresno branch of Xpedx and we wanted to shine.

Trouble arrived on a Saturday morning around 6:30 a.m.  I happened to look at emails while driving my daughter to a track meet in the Central Valley.  I know you shouldn’t read emails while driving but the story was so compelling that once I started I couldn’t stop. Our salesperson Barbara Gaitan and chief operating officer Pallavi Joyappa and Chris were trading notes about a potential pouch failure.  And as the day wore on the news got worse and worse.  The 4 oz. pouches did not work.  If something wasn’t done fast the company would not meet its roll out.  We had no choice but to get good pouches out pronto.

Pallavi guided the rescue effort.  We sorted bags in inventory at our facility and shipped them.  That bought us a few days. Then we went back into production to make new pouches.  That meant finding a way to break into the schedule — a task that fell to my sister Maura — print and make bags.  Later we dispatched a crew to their packing facility to sort through the bags on the floor. It took two days in near freezing conditions but they culled out the failed pouches.

Homegrown made its first shipment thanks to the crisis management.  But we had left them with a hefty bill for ruined product.  Xpedx told me the not insignificant number and my head hit the desk.  It did not occur to me for a moment not to pick up the bill.  We run a company imbued with family values.  One of those is integrity.  We don’t stick others for problems obviously of our own making.

I didn’t expect Homegrown  to keep us as a supplier.  We had failed to deliver what they needed most — quality pouches.  But this company proved different.  They admired the lengths we had gone to address the issue and profoundly appreciated the efforts made by our staffers who sorted the pouches in frostbite conditions. The fact that we paid the bill without hesitation told them we stood by our customers.  To my great shock came the phone call that they planned to keep doing business with us.

Owner Karen Avinelis spoke plainly.  They liked our character so much they wanted to partner with us, provided (of course) that the problem did not recur.  I think I had not been so humbled in my life, and rarely so touched by a businessperson.  She not only taught me that doing the right thing sometimes pays, but that telling a person how much you appreciate their company’s efforts can touch the heart.  Her willingness to give us a second chance made me look at how we treated our own suppliers.  Today I’m prouder than ever of that pouch.  Not because of what’s on the outside but what’s on the inside.  The soul of a family, the Homegrown Organics family, and the best freeze-dried fruit I’ve ever tasted.

 

On Growing a Family Business

wwaHistoryWhen my father started Emerald Packaging in 1963 he did so with three partners.  Over the years he bought them out, until in 1993 we became a family business.  Through the years the second generation slowly jumped on board. My brother came first, about 30 years ago, and took a sales role.  My sister followed and entered customer service.  I arrived almost 18 years ago after a career in journalism helping in operations.  My father ran a tight ship. The business prospered making iceberg lettuce bags back when such things were novelty.  He had a good plant management team, which allowed him to focus on sales, strategy and finance.

Then in the late 1990s he decided to begin handing over the reigns.  By then my brother handled some of our largest accounts and my sister oversaw scheduling, a tough assignment given the ever shifting demands of customers.  The  general management role came to me.  I apprenticed under my father and the plant management, sopping up as much as I could about how to run a company.  Certainly journalism had prepared me little except for providing me a grasp on strategy, the effect of world events on a business, and some understanding of finance.  It provided precious little experience managing people.

In 2002 my father officially retired.  My years as chief executive started.  I wish I could say all went smoothly but it did not.  Within my first month on the job we lost our largest account.  Then a month later our second biggest customer left.  Over $4 million of $18 million in sales disappeared overnight, more or less.  They left for different reasons. The first because of price, the second because they felt we didn’t have the technology they needed.  Almost instantly cash flow disappeared, we posted our first ever loss, and Union Bank froze our line of credit.  The family came together and weathered the storm.  We landed new customers, found a new bank that helped us upgrade our equipment and one of the two recalcitrant’s came back.  But the experience scarred me.  I never wanted to worry about financing or making payroll ever again.

Since then I have never had to face such times.  Instead we’ve built a vibrant, diversified company.  My brother developed accounts in Salinas and Bakersfield, my sister became a magician with the schedule, and I found the equipment, money and new markets to keep the business humming.  We bought our father out almost ten years ago.  This fiscal year we clocked in with over $80 million in sales and employed 275 people.  The factory runs around the clock, 7 days a week, 362 days a year.  We have the largest packaging operation on the west coast, making everything from stand-up pouches to complicated structures that preserve shelf-life to basic potato and lettuce bags.

But to get here we faced a different kind of challenge.  We had to hire the right people, give them responsibility and let them do their jobs.  We had to bring in capable middle and upper management and blend them into a family culture that tended to control every aspect of the business and gave trust sparingly.  Not an easy environment.  However over time we loosened enough that we’ve been able to attract several product development and industrial engineers, a strong technical sales manager to whom my brother reports, and a young woman who cracked the family tree and has become the second-in-command, our chief operating officer. Recently, to help us navigate our way to $100 million we signed on an experienced controller charged with financial analysis, replacing our deeply loved bookkeeper who plans on retiring in 2015.

I am not entirely sure how we made the transition from family business to a thriving corporation. Undoubtedly we recognized that to grow we needed help.  Our product development people helped us create new products which we could not have done on our own.  Our COO, who started out as a process control engineer, whipped our factory into shape, introducing quality systems, pushing productivity, and slashing inventory, saving cash.  Our sales manager pushed organic growth. He became the face of the company at many accounts, a first for us.  We also teamed with great outside salespeople, brokers, suppliers and distributors who helped us move into new markets, like fresh-cut fruits and vegetables and pouches for dehydrated potatoes.

Ultimately, I believe my siblings and I came to understand the difference between managing and owning.  Any family business set on survival has to recognize the limits of blood.  I cannot, for instance, develop new products.  We need a polymer scientist to do that.  Our sales team needs someone to oversee a large network of people selling our products and help organize customer service.  My brother did not want to do that.  My sister feels comfortable juggling the schedule but we needed someone to run operations.  If we tried to do all of these tasks we’d either be out of business or a much smaller, less successful company.

Parting with authority has not been easy.  Our COO earned our trust over 8 years.  The sales manager received responsibility only after 3 or 4 years.  But ownership means keeping an eye on the bigger picture, building a company of people whosZAZe skills help drive it into that future.  Ownership as a family company grows does not mean day-to-day responsibility.  Accepting this has allowed our family to look towards the horizon while letting people manage who will make us successful today and in the future.  My siblings and I accept we are stewards, who must protect the company and yet let go of it at the same time.

The California Bag Ban 2014

flying bagAfter over a decade of struggle, the plastic grocery carry-out sack looks doomed in California.  Earlier this month the legislature passed a state-wide ban on bags to take effect in July, 2015.  After that you’ll either have to bring your own or pay 10 cents for a paper bag.  If you’re like me and carry a reusable bag in your car, that means roughly a quarter of the time you’ll get dinged for paper. I forget the bag that often.  One of my main arguments against the ban has always been that it disproportionately effects older people, who are more prone to forgetting.  Well, actually I’ve never argued that, but doing so may have convinced the American Association of Retired People to throw their weight against the bill.

Plastics manufacturers in California saw the ban coming years ago.  Back in the late 1990s regulators had taken aim at bags, thanks to the amount crowding municipal landfills.  Nearly 15 years ago our statewide plastics group, then called the California Film Extruders and Conveters Assn., saw the bag in the wind and pulled together a national plastics group to hash out a program to sidetrack bag legislation.  We proposed organizing a self-regulating industry commission that would levy a fee on each pound of plastic sold in California — less than a penny a pound — that the state could use to encourage recycling and clean-up litter.

Our group proved ahead of its time.  Too many of the large national bag suppliers as well as their Washington, D.C. trade associations opposed taking any action in California, arguing that a ban would never happen.  This position did not change much over the years, though the big companies moved from outright dismissal of our group’s fears to actively fighting against bans by throwing dollars at the legislature.  During one particularly vicious fight in 2010 to block a bill opponents spent over $2 million.  Year after year such lobbying succeeded, which bred a belief that bans could always be defeated.  They got it right, until this year.

What changed?  My guess several things shifted.  To begin with the Latino Caucus, with its 24 mainly pro-business legislative members, has fallen into disarray.  Last year the FBI launched an investigation into the its leadership and the use of Caucus funds.  As a result caucus members did not want to appear beholden to donors, so money pumped into the fight had diminishing returns.  Grocers have also grown tired of the patchwork of bag laws across the state — over 100 cities and counties covering 35% of the state’s population have already passed bans — and wanted a unified law. Finally, California corporations took varying positions on the proposed bill, which had not happened before, reducing the industry’s clout.

Much of the news media overlooked that division.  Some company’s actually benefit from the bill because it exempts reusable plastic grocery sacks from the ban, defined as one that can withstand 125 uses.  A few manufacturers already make bags that meet this standard, so the law creates a large market for them.  By contrast, the mainly large national companies that opposed the bill can’t easily retool their machines to make reusable bags, which are thicker than their super-thin cousins.  The bill provided sweetener of $2 million to help California companies upgrade their machines to run compliant bags. The law exempts compostable bags completely, a provision that also peeled away some plastic opposition.

So the plot proved thick.  If only the industry had come together as hoped many years ago and tackled the problem on its own, this whole fight might have been prevented.  The industry did get behind a law a few years ago that mandated stores provide opportunities to recycle bags, but recycling rates never approached what regulators hoped.  Instead, the arguments made by environmentalists increasingly won over the public, even though many of the facts used by them were fiction, including that plastic causes oil pollution (it is made from natural gas), that plastic bags are a major cause of marine debris (studies have not shown this) and that endangered animals mistake bags for food (again, not much here).  But the environmentalists managed to make the single-use bag a symbol of our throwaway society.  Eventually they succeeded.

I’ve spent the last several years involved in the bag battles.  Our company does not make grocery sacks, but anything that harms the industry I figure in the end hurts us.  If plastic gets a bad name, who knows if our bags eventually get banned even if our produce packaging reduces food waste.  So I helped sue the city of Oakland to block its ban (we won) several years ago and lobbied in Sacramento when it made sense.  I was at the table when the industry began debating ideas about how to tackle litter and recycling.

Today I find myself somewhat relieved the bill wasn’t worse.  At least plastics still has some role.  Of course there will likely be suits seeking to block implementation. An initiative effort has already aimed at overturning the ban has kicked-off.  But if California corporations can make hay by producing reusable bags, then in the end that’s making the best of a bad situation.  A ban had become inevitable.  Ultimately the industry negotiated something short of unconditional surrender.  That’s the best we could hope for in 2014.

Emails, Texting and Business

iphone_addiction_798185Recently I banished iPhones and PDA’s from company meetings.  Over time it had become increasingly common to see staff checking their phones while a colleague tried to bring their attention to an issue. Or worse, they’d begin texting.  Not only is such behavior rude, study after study has shown that you cannot divide your attention between your phone and a conversation and do justice to either.  “Not unless you are negotiating Middle East peace,” went the one caveat I offered for getting on the phone during a meeting.  Our confabs aren’t very long, and if someone is expecting a call they can always bow out or reschedule it.

I became alert to the issue when I noticed people glancing at their phones during customer visits. Doing so just communicates exactly what you don’t want in the first place.  If I’m the customer I take away that we aren’t terribly important.  It doesn’t matter if you check by looking down at a phone slightly obscured by a table.  You can’t hide downcast eyes, nor fingers working quickly on a message.  Everyone present knows exactly what’s going on.  More importantly, the customer knows we’re not paying attention.

I don’t think anyone at our company means to be rude.  We’re just part of a culture that has become addicted to our phones.  Surveys show, for instance, that over 50% of Stanford University students believe they’ve developed an iPhone “habit”.  An unbelievable 8% report feeling that their iPad is jealous of their iPhone (these kids are smart?).  Businesspeople obviously aren’t immune.  We’ve become accustomed to putting our phones in our pockets and on our desks or on conference tables just waiting for that tweet, text, email or call to come through that requires  seemingly immediate attention.  Meanwhile those around us suffer from the attention deficit of others.

Worse yet, I think, people generally, especially younger employees, refuse to phone about an issue.  Instead they’d rather email or text.  When they email the cc line gets so crammed full of names it seems like a birthday invitation.  Then everyone kicks back their comments with those on the cc line getting whipped through circuits of information they often don’t need.  A wonderful rule I heard one company adopt states that after the third round emailing about an issue employees had to pick up the phone. Hearing a voice also helps develop a personal relationship in a way a message does not.

Some object to calling because they desire a paper trail.  They want proof a supplier or customer agreed to something.  The alternative? Summarize the phone call in an email, or better yet, trust that an understanding has been reached like we did in days of old.  Where agreement needs documentation, say like on pricing or scheduling, a quick note following a conversation should suffice.  If we are so suspicious of each other that we need documentation of every exchange, then other problems exist, trust being the most obvious.

Digital communications can present other tripwires.  Even in my wise old age I misunderstand tone in emails.  I don’t know how many times I’ve taken umbrage at something written only to find out I got it wrong.  On the equal and opposite side I’ve seen emails from normally balanced individuals that libel the recipient.  If the person had walked down the hall to work through the dispute, or picked up the phone, they wouldn’t have raised their blood pressure and that of others.  Instead, whatever caused the issue to devolve would have gotten solved.

I know I am no saint when it comes to iPhone abuse.  Too often I forget to turn it off when I get to the office. Then it rings during a meeting.  I’ve written angry emails when I should have picked up the phone.  I’ve disciplined myself over the last year to put those aside to decide once I’ve calmed down whether to hit “Send”.  Usually I end up spiking them.  My one exception: Complaint emails to airlines.  I figure venting can’t hurt because no one reads them anyway.

The final frontier remains internet use.  Games, shopping, stock trading, and so on also clog working hours, often leading to longer less productive days.  My first boss in journalism was an exceptionally disciplined man.  He came at 9, left at 5, and  wrote more stories in a year than just about anyone else.  Our chief operating officer Pallavi Joyappa is much the same.  I’m not there yet, but I’ve started to wean from Google.

I hope our iPhone policy helps us have more productive meetings.  Undoubtedly the messages will wait for us. Unless its President Obama texting for advice on Syria.  Then company policy says make excuses, quickly step outside and answer.

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