Did I just witness the death of American values in business?

Did the most emotionally charged Shark Tank episode, presenting Donny McCall's Invis-A-Rack, lay bare the death of American values as we've known them?

Note: This is a somewhat off-topic and lengthy blog for me, but I hope it is a provoking read.

I recently watched ABC's Shark Tank episode that aired on January 27, 2012. This episode contained the most emotionally charged segment (the last one, at the 29 min mark), specifically that of Invis-A-Rack founder and CEO Donny McCall from Sparta, North Carolina. This segment struck a deep chord, as what we all feared has been happening all along was undeniably presented before us.  Whether you are a fan or not of this TV show, the Sharks' message for putting Americans back to work leaves no place to kid one-self as to where things stand today.

Summary of the Invis-A-Rack Segment on ABC's Shark Tank

The moment Donny McCall began his introductory pitch, you could tell something was different about him, and so could the Sharks. He was more humble than most entrepreneurs on the show, palpably nervous by the sound of his breath, yet clearly courageous. Unlike some entrepreneurs that are betting their future on the outcome of their meeting with the Sharks, Mr. McCall was carrying the future of much more to this meeting: a lifeline to his economically depressed community. He could capitalize on his worthy startup idea in a number of ways. But the way he wanted was to bring benefit to his "church, community, state, and country". Indeed, Mr. McCall was for all intents and purposes the embodied example of what my generation and those before have known was the moral compass, the core values, the principles that made America great, and if you had these, if you honored and followed these, you would earn true success in this land of opportunity.

Mr. McCall was for all intents and purposes the embodied example of what my generation and those before have known was the moral compass, the core values, the principles that made America great.

Ever-focused on the finances, the Sharks zeroed in on the production cost. Mr. McCall stated the retailers wanted a price point he was doubtful he could reach with States-side manufacturing. Yet, Mr. McCall was adamant that he keep manufacturing domestic. The Sharks pushed back saying he could still hire sales and marketing in his town, even referencing Apple as a model. Ultimately, three Sharks were turned off by his "closed-mindedness". Their impression was that he was stubborn, but where does one cross the line to "principled"?

Mr. McCall then focuses on Shark Robert Herjavec and simply utters "son of a factory worker...". What ensues is an extremely emotional and tearful response by Herjavec, with other Sharks also tearing up, about his father's pride of his simple work and recent passing. Striving to get back on track, Herjavec implores to Mr. McCall that as a business owner he "must take care of the business first, and the rest will fall into place". Ultimately, Herjavec also rejects the Invis-A-Rack, although I can't help but think he simply can't buy into something with which he is too emotional.

You must take care of the business first, and the rest will fall into place.
--Robert Herjavec

It's not about squeezing every dollar; there is always give and take. --Mark Cuban

Shark Mark Cuban, the last one in the tank, states his different view: "it's not about squeezing every dollar; there's always give and take". Cuban then makes the argument that Mr. McCall needs much more funding, and effectively there isn't a clear point for the pay back at this stage, and finally all Sharks have passed on the bait.

Instead of leaving like all rejected entrepreneurs before him, Mr. McCall distinguishes himself yet again, proceeding to walk up and shake the hands of each Shark, thanking them individually, before leaving.

Clear Takeaways

A few things were very clear to me from this segment:

First, the Sharks were emotionally affected with Mr. McCall's pitch for doing his part to help America, as they knew what business leaders across America have been rejecting for the past several years. Sadness, with a hint of guilt could be seen on their faces and in their interactions. This was even emphasized with every Shark preceding their rejection with "regretfully" or something similar--something else I've never seen on this show.

The message from the Sharks was clear: modern, competitive American businesses must operate as icebergs, with just a tip in the U.S. while providing the bulk of jobs in other countries.

Second, the message from the Sharks was clear: modern, competitive American businesses must operate as icebergs, with just a tip in the U.S. while providing the bulk of jobs in other countries. The comparison of Apple was a-propos. The "second-largest U.S. company" has 45,000 employees States-side, but easily upwards of 200,000 overseas jobs are supported by its manufacturing.

Finally, as Herjavec described how America is still the land of opportunity, that America will remain a world-class competitor, that American ingenuity is still alive and well, that it's only "Made in America" that is no longer applicable due to globalization, these things sounded reasonable but rang hollow. Probably because it is clear there is no short term path to putting Americans back to work.

This may seem odd, but I respect the Sharks for sticking to their own principles. I believe they represent a current mindset of business orientation. Had they succumbed and partnered with Mr. McCall, I think it would have been nothing more than a publicity stunt.

Right or wrong, upsetting or not, it is what it is in the current economic landscape. But the real challenge isn't to succeed purely with the brain Sharks or with the heart of Mr. McCall, but to succeed while honoring both—to find and walk a "middle path".

What Can We Do for Our Communities?

I feel immense respect for Mr. McCall's principles and a strong calling to a similar mission. I can't say that I know the best things to do, and I am open to suggestions (please do leave a comment or reach me otherwise at LinkedIn). We are a small company, and I believe we share a responsibility to walk that "middle path". For our small part, here are the things we do at Crossvale:

  1. Hire in the U.S.: We hire the staff States-side and keep them here. We are able to provide a superior value to our clients as a result, and it keeps the tax base local.
  2. Invest in technical education in the U.S.: We provide scholarships to local universities for U.S. citizens and permanent residents in financial need pursuing technical degrees.
  3. Support local communities with donations of funds, goods, time and expertise: This includes disaster relief, employee donation-matching, blood drives, church volunteering and more you can read here.

I sincerely hope Mr. McCall’s presentation and our own small contributions encourage you to make a difference and find a middle path while you direct or influence your company. I also wish Mr. McCall good luck and bon courage. I hope the right investor will find him soon.

In closing, it is undeniable the creative destruction implied by the Sharks is definitely alive and well. To everything there is a season, and some winters can be hard and long. The big question is how can this winter be shortened? Must every company go through an offshoring chapter before circling back? How can organizations stand on the shoulders of others and short-circuit this cycle?

 

 

 

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