The Prospecting Professor

The Law of the Jungle

On December 30, 1865, Rudyard Kipling was born in Bombay, India. His father was a British artist who received an appointment to run an art school in Bombay. He was raised by Hindu servants, and since he was below the age of caste he was allowed to roam and explore the city freely. During these adventures, he would meet all kinds of folks on the street who told him ghost stories and taught him songs that would have scandalized his Victorian parents.

He was sent to England to receive a proper education, yet returned to India at the age of 17. There he got a job as one of two staff members for the Civil and Military Gazette, a daily newspaper for British soldiers. In 1884, he wrote the book that he is best known for today, The Jungle Book...about a boy raised by wolves.

Let's bring Kipling's writing to a contemporary perspective. Phil Jackson, now coaching the LA Lakers again, is tied with Red Auerbach with nine NBA championships. One of his favorite poems, an allegory for team-work, is Kipling's 1895 poem, "The Law of the Jungle." Jackson often reads this poem to his players. The poem concludes with a flourish:

"Now this is the Law of the Jungle...as old and as true as the sky; and the Wolf that shall keep it may prosper, but the Wolf that shall break it must die.

As the creeper that girdles the tree trunk, the Law runneth forward and back...for the strength of the Pack is the Wolf, and the strength of the Wolf is the Pack."

Jack Abramoff: Networking Gone Very, Very Bad!

Jack Abramoff is the key figure in what is likely to become the biggest congressional corruption scandal in generations. Maybe ever. Justice Department prosecutors are now pressing him and his lawyers to settle fraud and bribery allegations by the end of the week. Unless he reaches a plea deal, he faces a trial January 9th...in a related fraud case that is not the main source of his chicanery.

Abramoff had monstrous ambitions. He sought to build the most influential lobbying portfolio in Washington D.C. He opened two restaurants close to the Capitol. He bought a fleet of casino boats. He produced two Hollywood movies (Red Scorpion, starring Dolph Lundgren). He leased four arena and stadium skyboxes and dreamed of owning a pro sports team. Abramoff offered jobs and other favors to well-placed congressional staffers and executive branch officials. Lawmakers and their aides packed his restaurants and skyboxes and jetted off with him on golf trips to Scotland and the Pacific island of Saipan.

Abramoff's career was given a big assist by forming a key alliance with Tom Delay. They first met at a Tom Delay fundraiser in 1995, and their histories have been intertwined since.

Abramoff also blatantly deceived his clients. For example, the Choctaws were one of his six Indian Tribe clients who gave him $80 million between 2000 and 2003. Behind their back and out of earshot, Abramoff referred to his clients as "morons" and "troglodytes".

The last big Congressional scandal was the Abscam FBI sting during the late 1970s and early 1980s...where six House members and one Senator were convicted. Many people close to the Abramoff vortex say that this one could be much bigger.

Keith Ferrazzi is the author of Never Eat Alone, and the uber-networker of the moment. One of his recommendations for people who want to build their own network is to establish relationships with individuals in professions likely to have very big Rolodexes. Four of these professions are: Politicians, Lobbyists, Fundraisers, and Restaurateurs.

Jack Abramoff had the networking process nailed...he was closely aligned with four of the top networking professions. Unfortunately, he skipped the chapters on Personal Integrity and Ethics.

Don't panic...the Fed will save you!

During the Depression, in a small town 200 miles from Minneapolis...a large crowd was gathering outside the bank. The restive throng was clamoring for their money. The frantic banker called the Federal Reserve Bank in Minneapolis, and warned that unless the "mad run" was stopped, he would soon be out of currency.

A small plane was chartered and two Fed officials, along with a half-million dollars in small denomination bills, was quickly flown to the town. Upon their approach, the pilot guided the plane low over the main street to dramatize its arrival...and then landed in a nearby field. From there the Fed officials were ceremoniously escorted into town by the police and the money was stacked along the bank's teller windows. The sight of all that money piled up inside the bank quelled the customers' fears...and saved the bank from failing.

This true-to-life account illustrates one of the key responsibilities given to the Federal Reserve System...which was created on December 23, 1913 when President Woodrow Wilson signed the Owen-Glass Act, creating the Federal Reserve System.

The Banking Panic of 1907, the most severe of four national banking panics that had occurred during the previous 34 years, was the primary inspiration for the major banking reform that led to the creation of the Fed. Previously, the banking system was dominated by two flaws: it was prone to panics, and the currency was not responsive to changes in demand.

Banking panics were an especially nettlesome feature of the US economy. Since banks and bankers were singularly unrelated and independent of each other, the majority of them were in a life and death contest with each other...forgetting the solidarity of their mutual interest and their responsibility to the community at large. During panics, two-thirds of the banks engaged in an internecine struggle to obtain cash, ceased to extend credit to their customers, suspended cash payments, and hoarded all of the money that they had. The sad and predictable result was that many thousands were thrown out of work, firms went into bankruptcy, the trade of the country came to a standstill...all because the credit system of the country had ceased to operate.

The Federal Reserve remains the central banking authority of the United States, establishing banking policies, interest rates, and the availability of credit. Expanded since its founding, the Federal Reserve consists of a Board of Governors, nominated by the president and confirmed by the Senate, twelve regional Federal Reserve banks, the Federal Open Market Committee, the Federal Advisory Council, a Consumer Advisory Council, and several thousand member banks.

Retirement Planning: Is $200 Million Enough?

Not if you are a spendthrift! This was exactly the case for a high-net-worth individual who had a $200 million net worth, and requested that his financial advisor analyze his situation. The advisor duly reported that Mr Big Bucks would have to restrict his passion for art collecting to an expenditure of $15 million per year or less.

This anecdote is from a fascinating new article, co-authored by the Wharton School and State Street Global Advisors, entitled "High Net Worth/High Net Risk: Balancing the Variables to Meet Retirement Goals" "link to article"

For many of us, it would seem ridiculous to consider that a multi-million dollar net worth would be insufficient for a long-lasting, comfortable retirement. Not so, according to Olivia Mitchell, the director of Wharton's Pension Research Council and the Center for Boettner Center for Pensions and Research. She says, "Retirement-saving shortfalls run up and down the income and wealth scale. In some cases, shortfalls were worst for people with high earnings. Of course, these people are in position to save a lot, but people with high earnings spend a lot. They don't necessarily set money aside."

Sadly, any amount of money can be frittered away in a remarkably short period of time. In this Age of Consumption, one's level of spending often rises to meet income levels...regardless of where these income levels lie.

As I said, this is terrific article. If you are a financial advisor who is marketing to high-net-worth individuals, the report is a must-read.

Finally, Happy Winter Solstice to you! Solstice celebrations go back at least 30,000 years. Ancient peoples believed that, because daylight was on the wane, it might go away forever. To counter this fearful solar trend, they lit huge bonfires to tempt the sun to return. The tradition of decorating houses and Christmas trees is passed down from these ancient bonfires.

In Ancient Rome, the winter solstice was celebrated with the festival of Saturnalia.

During this festival, Romans gave themselves up to wild joy. They feasted, they gave gifts, they decorated their homes with greenery. The usual order of the year was suspended: grudges and quarrels forgotten; wars interrupted or postponed. Businesses, courts, schools closed. Rich and poor were equal, slaves were served by masters, children headed the family. Cross-dressing and masquerades, merriment of all kinds prevailed. A mock king -- the Lord of Misrule -- was crowned. Candles and lamps chased away the spirits of darkness.

Well, as they say...Ciao!

Gus Gustafson: Networker Extraordinaire

Over the course of his 54 years of life, Gus Gustafson built his network...without really trying. When he died, in January of 2003, more than 1000 people attended a two-hour service that celebrated his life. A few weeks ago...almost 3 years after his death...more than 250 friends, family, and fellow artists, gathered together to remember his rich, generous spirit.

That's a network...and here is his story.

In the mid-1970s, the Warehouse District of Minneapolis was not an appealing place for the "beautiful people" and the property developers (unlike today). It was a slightly seedy section off the main downtown drag...and a hub for artists' studios, galleries and bohemian hangouts. Moreover...large, vacant buildings offered refuge for hundreds of artists to set up their homes and studios.

Gus Gustafson had recently graduated from the University of Minnesota where he studied painting and photography. Within the Twin Cities artists' communities, Gus was a ubiquitous attendee at every art opening and gallery show. Gus loved all mediums of art, dabbled in several, but quickly surfaced as a photographer with great sensitivity and mechanical command. His reputation as an artist of consummate skill soon reached the Twin Cities' thriving advertising community. By the mid-1980s, Gus was in high demand, with an ever-growing client base.

However, it was within the burgeoning Twin Cities arts community, that Gus displayed his singular talent at networking. His big-hearted, gregarious spirit embraced everyone he met...artists, architects, politicians, restaurateurs, business executives, and panhandlers. His standard greeting to many a woman was a heartfelt, "Hello darling, you're looking beautiful." He was known to carry a pocket full of quarters so he could stuff empty parking meters as he strolled down the street. At the end of the day, he held court and traded stories with the regulars at the New French Bar...Gus' favorite hangout and a popular watering hole for like-minded, thirsty, creative-types.

During these "after-hours sessions", Gus became known as the photographer-of-choice for the dozens of artists who needed slides and transparencies of their art...for grants, professional opportunities, etc. Gus made time for every artist who sought his services, and became an invaluable resource to many an artist in need of quality images for their creative efforts.

Gus was good at photographing artwork, liked working with artists, and was open to the barter system. As word spread, he found himself inundated with requests to shoot artists' work...in trade  for one of their pieces. Over the years, he amassed one of the largest and most comprehensive private collection of contemporary Minnesota art to be found anywhere.

For more than 25 years, Gus exemplified the single most important characteristic of effective "networkers"...a generous, giving spirit without the "hands held out" expectation of receiving anything in return. He brought people together...to share ideas, friendships, opinions, and art. His life-long friendships created a vibrant, community nexus that resonates beyond his time on this earth.

We should all be so lucky.

(For those of you interested in learning more about Gus, "Remembering Gus Gustafson: Artist, Collector, Friend" is an exhibition that will continue at the Minneapolis Institute of Arts through March 19, 2006.)

Most Salespeople are Troglodytes

"Most salespeople are cave dwellers. They get into their little cave with four wheels, get into a bigger cave with computers and telephones, then drive back to their home cave. And they can't figure out why no one is referring them. Networking is a contact sport; you have to connect with people, build a relationship.

There's a process to effective business networking. VCP, or Visibility, Credibility and Profitability. Only when you've gone through visibility and credibility can you get to the profitability phase, which  is where you are passing reciprocal referrals on a credible basis. If you get a referral, you are giving away a little bit of your reputation."

So says Ivan Misner, Ph.D., founder and CEO of BNI, (Business Network International)

If the concept of "networking" has acquired a bad name, that's because many salespersons approach networking like a scavenger hunt...scurrying around a room collecting business cards without ever actually connecting with a person. A better networking model is based upon sharing knowledge, personal experiences...and leads. Quid pro quo. Networkers who don't give...won't get.

Tomorrow...a story about the best networker that I ever knew. Stay tuned.

Do Not Call List: 110 Million...and Growing

Yesterday, officials at the Federal Trade Commission announced the largest civil penalty ever for violations of the Do Not Call rule...a $5.34 million settlement with DirecTV.

The National Do Not Call Registry came into effect in October of 2003. Since then more than 110 million phone numbers (wired and wireless phones) have been registered.

One of the questions that I have had, since the implementation of the DNC Registry...is what type of households are signing up for this thing? In a fairly recent study by researchers at UC Berkeley, one can draw certain conclusions. Households with income in excess of $100,000 have a higher propensity to sign up. So do households with post-graduate education. Senior citizens are more likely to sign up. The same can be said for households with mortgages.

In sum, it looks like the most likely registrants for the DNC Registry...are the most likely prospects for financial services.

During the '80s and '90s, many "stockbrokers" and financial advisors built their business through cold-calling on the telephone. With the DNC Registry, it has become obvious that this is no longer a viable means to connect with affluent households.

With the total population of US households now at 105 million, I wonder how long it will take before every residence and cell phone has signed up to say...Do Not Call Us?!

St. Lucy of Syracuse: Patron of Salesmen

I've always been somewhat conflicted regarding organized religion. I was raised Roman Catholic, yet now consider myself agnostic...at best. Nevertheless, one of the aspects of Catholicism that I enjoy is the iconic reverence towards the stories of the saints. Today, December 13th, is the feast day of Saint Lucy of Syracuse...who is appropriately the patron of salesmen (salespersons). "see link"

Here is her story.

Lucy means "light". In the old calendar, her Feast Day fell on the winter solstice, the shortest day of the year. Lucy was born in 283 in Syracuse, Sicily. She was born to a pious, rich family of Greek ancestry. Her Roman father died when she was young. Her mother, Eutychia, arranged a marriage for her, yet Lucy had vowed to die a virgin and leave all of her worldly goods to the poor.

Lucy's fortune-hunting, pagan, and rejected bridegroom, Paschasius, denounced her as a Christian to the governor of Sicily. She was condemned to be despoiled in a brothel, yet when the guards came to fetch her, they could not move her even when they hitched her to a team of oxen. The governor ordered her executed instead. After torture, that included having her eyes torn out, she was surrounded by bundles of wood which were set afire. When they went out, she prophesied against her persecutors, and was finally dispatched by a sword to the throat.

St. Lucy is patron to those afflicted with blindness, eye disease, sore throats...and salesmen.

Where has that hand been?

James Joyce is one of the literary lions of the 20th century. His great works: "Ulysses", "Finnegan's Wake", and others...have spawned legions of admirers. One day, while walking the streets of Zurich, a young fan rushed up to Joyce and said, "May I kiss the hand that wrote Ulysses?" Joyce replied, "No. It did lots of other things too."

In the sales world, the handshake is expected as the ritual greeting. It is hard to imagine how a salesperson, in a case of fastidious hygiene, would refuse to shake someone's extended hand. Such a refusal would be regarded as an outright insult.

Even still, some people in the business world consider the handshaking practice to be abhorrent. Donald Trump has said, "I think the handshake is barbaric...Shaking hands, you catch the flu, you catch this, you catch all sorts of things."

The Donald should be grateful that he is not developing more Trump Towers in Papua New Guinea. The men of some highland tribes say hello by (genially) clasping each other's genitals.

If one really wanted to make sure that they never suffered another cold, they would avoid all contact with all other people, as well as anything they had ever touched. Respiratory viruses are highly contagious and can survive for hours on skin, furniture, doorknobs, etc. Of course, good hand-washing is the best preventative procedure. Recent studies indicate that there is no difference in effectiveness of alcohol-based gels, antibacterial soaps, and plain soap and water.

Politicians are inveterate hand-shakers. The political handshake has its origins from long ago, when a king's touch was believed to possess magical powers. At the White House on New Year's Day, in 1907, Teddy Roosevelt set the world-record (at the time) for shaking hands. He shook the hand of every aide, usher and policeman in sight...8,150 in total. It is said that afterwards he went upstairs and privately, and vigorously, scrubbed himself clean.

Financial advisors tend to attract and gravitate towards clients who they resemble. It is conceivable that a financial advisor could get away with not shaking the hands of prospects and clients. Of course this would mean that they would garner a client list of hermits, recluses, and Howard Hughes-like germophobes. (Heck...Hughes died in 1976 with a $2 billion+ estate, so maybe this IS a viable business plan.)

"Birds of a feather..."

"Bird of a feather will gather together."...Robert Burton

Here's an interesting exercise that will help you think and consider the make-up of your own personal network.

Consider all of the persons in your personal network. These are people who you rely upon for:

• Exchange of (private) information
• Specialized expertise
• Advice
• Creative inspiration

These folks may be business colleagues, friends, family members, neighbors, individuals where you share an interest/hobby, etc.

How did you meet them? Were you introduced by someone else? Or did you meet this person on your own?

Most likely, you have introduced yourself to your key contacts in your network without the introduction of a third person, i.e. a mutual friend or acquaintance. This is true for most of us. The majority of the people that we know, who are within our personal network, have been self-selected by us.

Moreover, many of the persons that we gravitate towards resemble us in terms of :

• Worldview
• Experiences
• Training
• Background
• Etc.

If your network is built like this...if the nexus of people who you know/trust resemble you in some or many ways...then you are building your network using the Self-Similarity Principle.

The advantage of the self-similarity principle is that it is easier to know/trust people who think and act like ourselves. Working and interacting with "clones" of ourselves is more efficient due to the minimal friction in the interchange of ideas.

The disadvantage of the self-similarity principle is that it can create networks that are too inbred. Beyond that, if you have met all of the people  in your network by virtue of your own efforts...it's not really a network at all. It's simply a collection of people that know you...who have no connection to each other. In this way, there is no synergy.

A collection of people who all know you, without knowing each other, is not a network. It's a wagon wheel. A wagon wheel without a hub (you), will fall apart. In other words, when you go away, so will your network.

This is not the worst thing in the world, yet it is not the optimal use of the collective energies of the people who you have diligently assembled over the years.