Hraba Hospitality Consulting

I actually got into a conversation on linked in today!  Go figure… I haven’t used it much as the “professional facebook”, but every once in awhile meaningful discussion about the industry pops up…. even then I typically don’t dive in.  But it is interesting…. so much conversation about the recession being over, and hoteliers, ownership, and properties are popping up their heads to see if they see their shadow.  As real winter looms, our proverbial “winter of discontent” wanes.  But instead of being rife with joy… let’s cast our doom & gloom nets out a bit.  If you look anywhere in media – fear and panic are often confused and countered by people’s desire to find the light at the end of the tunnel.  There are two types in this debate…. the sky is falling, or it’s looking up.

Well… I am cautiously optimistic.  The Dow hit 10,000 today, briefly, and a “painful recovery” is nothing in light of 80% of economists saying “The Recession is Over”. What’s more – It isn’t just the normal public mags, but trade mags are being VERY cautious in saying… “recession lifting, let’s get back to it!”.  In fact, not many are even highlighting articles about it… it is just a general “how to weather the rest of it”, “ideas for getting out of the recession” and the like.  There are articles like this (and here about a community’s B&Bs, and I have seen many like this about international markets)  all over the internet… little niches surviving or doing great!

It is a good feeling to see people conversing about an end to our economic woes.  Of course, I don’t forget that it is the talk and panic that drives the initial problem, as well as talk and optimism that can drive us out of the “mud” on our bottom line…… that is……decidedly….. black.  In fact, that negativity and existential concern about hotels and their future still pervades the news feeds.  But let’s not give the time of day to those who pander to the lowest common denominator… let’s look at a tried and true brand who’s consistent and professional tone to the industry is a good earmark for our collective concerns:  Marriott’s blog post.

I think it sums up the problem we hoteliers currently have… we would like to celebrate the dow at 10K, or the economists reporting, en masse, “it’s getting much better!”.  The problem is the reality, and that many hotels in standard, normal markets can feel the pinch for some time longer.

Another reason to hesitate…. we are growing, but current growth is *slow*.  I don’t have the articles on me, but I do know that lenders are still holding all the keys because the value of properties since 2007 have basically halved (Hotel Business Vol. 18 No. 19 Oct 7-20, 2009)… which is ground shakingly tragic.  The foreclosured and distressed will hit the market soon, and more problems will be discovered than are currently known.  But on the other side of this coin, it is time for equity and ownership to start finding PHENOMENAL deals.  Everyone should be able to buy a hotel in the coming year (joke)….

Economic recovery and slow growth is one thing… but we are hotels, and we might need to take a closer look at the national unemployment rate.  The economy might be recovering, but our industry is so COMPLETELY controlled by labour and unemployment, I am worried it will give a false sense of security when certain segments might still get hit hard.   I saw Tom Callahan the other day from PKF in San Francisco, and he said the basic consensus is that we will not hit q4 2007 or q1 2008 ADR and RevPar until 2014… which is…. depressing.  But it is only a climb up from here.  As long as you retained some rate parity, the property should be able to bounce back.  If you are like Vegas, you may have dug a hole so deep, you will have issues “digging up”. =)

(To be fair, even some people think that Vegas is finally on an upswing, or at least battling the recession.  True their tourism is down, their rooms are empty…. but finishing City Center in a climate like this is amazing, and frankly… although they are reducing flats @ $2000 / sq ft possibly to below $1000 / sq ft…. I am shocked 55% of it has been sold.)

All this being told… I think the slide and panic is over.  Our awful day at the beach is done, and what happens next is shaking out the blanket to clear the sand…. and we will see what is jarred loose from the hotel economic fabric.  The problems that are still to come are not pro-longed troubles for hotels, it is simply the back end of the recession working itself out.  Until then…. buckle up…. I doubt it will be too bumpy a drive home, but it’s gonna be a long ride.

Yes I am fully aware of how many metaphors I used in this.  =)  Good luck EVERY SINGLE ONE OF YOU… be well, hang tough… and see you on the other side!

Once again, I got carried away with a response to a blog post, and decided to expound on it.  I am sure this counts as real business right?

Newsweek’s Budget Travel has a great article about TripAdvisor trying to deal with the long coming revelation that many of their users and reviews are not legitimate.  This is, frankly, a huge blow to the site, and should pose a happy problem in it’s early adolescence as they deal with all the changes that come along with growing into adulthood.  Frankly, I am thrilled that this may provoke User Generated Content sites to seek the same verification model other sites have.

At any rate, this is vital to all of us, and it recalls some of my previous post (which I seem to mention once or twice):

You know I am skeptical of social media, whether speaking of Facebook’s lack of meaningful interaction, or Flickr’s nebulous TOS.  In general, I have had major concerns since my yelp research project, and resulting thoughts on ethics in social media. I had even mentioned in January that Yelp should consider verification processes.

One scotch fueled evening my jocular side protruded a wee bit and I became a prankster. To be honest it wasn’t to learn the lesson I did, rather just good fun.  I speak of the Ryan Air Twitter spoof of mine, which got considerable attention in traditional media (namely because Ryan Air claimed @ryanaironline was their account).  It  helped me realize that there is a grave concern for brands and trademarks, and both the businesses & social media sites should have a vested interest in a verification process of brands.  There is a serious risk of hijacking and damaging people and businesses, with inauthentic people (or dim ones not realizing pranks and social media can go viral) damaging a brands reputation.

Social Media is young. FB beat out myspace because it is better at replicating and verifying the real world (although it can’t actually do anything more meaningful than provide a wonderful marketing data gathering opportunity for FB, coupled with a nice phonebook)… but it was verifying that the person was the *reality* based person, which quickly attracted people to it. If you aren’t relevant to any networks, or aren’t genuine… you quickly become invisible.

As user generated review sites follow a similar path, these things will stabilize. It is very young, and still in the myspace period of fake profiles and people… but as twitter adds verification services & FB starts considering verification due to trademark infringement issues with it’s new URL program: , it will be obvious for User Generated Content Sites to authenticate, across the board. I am not sure if open ID and attaching accounts to mobile phones is the simplest way, but if something doesn’t happen quick the sites will implode through sacrificing the only thing that makes their business model feasible.  I am sure Tripadvisor has seen the start of accounts closing due to the breach in ethics.

We will wait until services like Yelp and TripAdvisor grow into the awareness of what they have created.  People sardonically jest “the internet is serious business” when it comes to this sort of stuff.  But it is.  It isn’t just 2.0.  It’s a massively powerful tool that completely reorients the consumer model, putting control into the hands of the people, and out of marketing and PR companies, possibly for the first time in capitalism’s history. The message can no longer be managed, and PR doesn’t work the same way anymore. You are only as strong as the advocates and endorsers that believe in your brand. Ethics is paramount.

The only way for these sites to continue their validity is by echoing the sentiment of their own taglines: Tripadvisor’s “get the truth… and go”, or Yelp’s “real reviews, real people”.  If they commit to intelligently policing their own site by being completely transparent, authentic, accountable, and earnest, they should be able to emerge better than before.. They might need to take a huge dip in registered users, as well as delete a lot of existing content. This open and honest method of dealing with this situation will undoubtedly sacrifice trust in the short term, but it is the only way for a social media site to maintain the trust that they leverage for business.

It will hurt… but this is an opportunity for them to re-organize into a leaner and more valid site than ever before. Most people saw this coming. Let’s hope it isn’t something they try to spin away or ignore… instead of doing what is right and being honest, while doing everything they can to curb the problem.

I admit concern about the idea of having to hire non-revenue generating staff to handle the massive clean up project, and the fact the money simply might not be there to handle it.  However, it is obvious they are quickly responding, like April Robb from Tripadvisor commenting to Christopher Elliott. I do like the warnings they put on some hotels, but it could be markedly arbitrary?

We’ll have to see.

Not sure what age social media is at right now, but it is certainly hitting a painful growth spurt.

A colleague and I were bemoaning the difficulty with modern customer service, and the fact that so many tech support numbers are no longer offered as toll free unless it is someone like HP or Dell. Per usual, I fanatically inject my own experiences into the situation, and muse about the long and wild road of in-room phones at hotels… specifically the way technological innovation and advancement has, constantly, caught our industry unaware to the point that we shoot ourselves in the foot.

It isn’t right not to have access to free phone tech for a product, but it is the way modern business is happening. Telephony has altered greatly (understatement) in the last two decades…and property level we are still calling them “PBX”. What’s more is that the IT guys at hotels are well versed enough to know just to ignore it.  I have seen one or two try to explain.. “Well the PBX doesn’t really exist anymore”, the GM will point to the operator, and then the IT guy capitulates with a shrug.

We hotels used to gouge consumers for phone calls because they had no choice, and it was a BRILLIANT revenue stream. Then came calling cards, and hotels started losing lots of revenue… and per our typical furrowed brow, it took us a couple years to figure out why. Even dial-up modems for AOL and prodigy services were a complexity to us… which is why we started charging people to call out to 800 numbers. Of course this garnered more distrust from guests about our call accounting, but it also got the enraged guest at the desk who had left AOL connected for 3 days and owed the hotel $5545 for a 2910 minute phone call to an 800 number.  I had at least 3 of those that I can remember… and those people were all completely, and totally, hysterical.  Not the funny kind, either.

By the time we admitted to ourselves that the revenue stream was lost and started charging enough simply to cover costs… hotel guests had already decided to never trust in-room phones ever again. Calling cards were used almost exclusively, and guests now have cell phones that simply makes in room telephones, for all extensive purposes… obsolete. This has been patently obvious in the last 5 years…. in-room phones are nothing more than an intercom now, which is why telephony solution providers are trying to make them into a marketing gimmick with big LCD colour touch screens, etc. What’s more is that anyone silly enough to install payphones on property has them regularly taken back out within 3-5 months because it simply isn’t profitable for the companies to maintain them.

By the way – that might be my only professional advice in this post, along side the historical ramble…. stay away from that “slick” nonsense.  LCD screen phones are nothing more than an annoyingly bright & pricey business card for in house outlets where guests are already likely to contribute incremental revenue. These phones are a gimmick, and they are part of the technological in-between period of telephony companies trying to generate need and create a new niche for them while everything swirls up in the air.  These “hubs” will become something incredibly powerful, and useful… but the new tech coupled with cost and lack of dynamic functionality (beyond being flashy) makes them a poor investment for the time being.  For now, think of in-room guest phones as IP “intercoms” for your next project, and you will save a lot of money. Heck… you may start having guests order room service online before calling on the room phone…or they may plan travel without even considering a voice call – like GPS enabled hotel booking apps, or basically just making an app to make every department available by PDA as seen at the Malibu Beach Inn. Even Choice Hotels has an incredible mobile app that not only sells their brand, but it enables an entire community of brand endorsers.

So in this panic of the phone industry changing, everyone has been hit… robots handle call volumes of humans, 800 numbers are incredibly expensive, and customer service has tanked in general because of it. In 20 years we went from fully staffed calling centers with live operators to a computer voice that handles the volume of 20 employees’ worth of labour. With cell phones all but destroying traditional landlines, they have also made the 800 number obsolete. When it is used, it is strictly for high end marketing, because no one else can afford it. It usually only goes to the departments that generate revenue (SALES) and the guys doing all the real work have the fun of not having one, then fielding complaints from already unhappy consumers that have just been further inconvenienced.

As we continue forward, I think the traditional phone will die, but rise a bit like a Pheonix – the same thing existing in a different form.  It will not only take on the traditional rolls, but also a hotel intercom, then soon to be an internet hub… and slowly integrating with other guest room controls and being not unlike the new Verizon Hub, which demonstrates that you can have a phone that is highly adaptable and functional.  Think of it as the Looney Tune cartoon “House of the Future” where panels & buttons on the wall call outside, surf the web, program the house settings, washes, cools, power management, etc.  The only thing is that we are a long way off from that kind of functionality…. and for now spend as little as possible on both ends.  As for 800 numbers, if the department’s revenue can’t cover it without impacting business, it simply isn’t a wise choice.

In the future, however, someone in your hotel will also have grown up playing around with making apps, and you will have your first person on staff managing the 2.0 of your hotel.  I like to think this would be a salaried position from a truly innovative management company, but I am aware this starts with property level people engaged with the brand that have extra time and know how.  As for the salaried position, we shall see.  I know we are all looking down the road at Concierge 2.o, and few of us might have thought that could be possible. Now with IP, Google Voice, and even browser enabled chat sessions… there is an exciting future of unending real time communication with brand advocates (returning guests) and potential clients.

These conversations about archaic forms of communication will fall to the wayside during the tremendous fervour for hotels’ future comm abilities, where we will have to adopt a more pro-active and less wary view of technology, so the hospitality industry can be carried forward by technology and the advent of 2.0 – at the intersection of commerce and the community that is selling your brand.

Someone had asked what systems of PMS are out there… and where you start.

Frankly, researching, engaging, and dealing with the endless sales negotiations is daunting, and tiring. I still don’t get why PMS’ aren’t transparent and straight to the point. I don’t want to negotiate for 3 weeks just to find out there is a “competitive discount” at the end worth $60-100K. That’s asinine, and it wastes people’s time. Until then…. here we go with some loose numbers about IT!

A Note About These Numbers.

I have done my due diligence for many hotels, and these are the trends.  Vague, non binding, budget purposes only numbers;  IE – don’t quote me, but these are my experiences. I don’t think it is unethical to share these numbers… they are loose based off of many projects, and I am also not divulging the sensitive licensing fees, software costs, integration and implementation fees, etc. Ask me more or email me if you want specifics.  What’s more, this doesn’t totally include all hardware, but the big numbers at the end should compensate for much of it.  This isn’t stubbing out fiber optic, nor is it all the imlpementation time for your tech people to set up the server racks, etc.  Of course, that’s a different budget.  This is basically IT software plus some of the peripherals that make it run (like touch screen POS, etc).

Also… in interest of environmental concerns… there is little wrong with having redundant RAID array servers, and having your system work off of a thin client environment.

I am available, of course, to talk about this at length.

What PMS should you buy? How much should you budget?

The PMS you should buy is obviously the one that works for you.  There are many options, like the AMAZING and TALENTED and Customer Service oriented guys at Mirage Hotel Systems.  Sure it’s not pretty, but it’s going to run about $45K, and they are guys you can call to change something and it will be changed IMMEDIATELY.  They are amazing, I have always found it a pleasure to work with Armond and the gang… and if you talk to them, mention that I sent you.  They rock.  But it isn’t necessarily appropriate for some luxury hotels, or complex layouts, etc.

The big players (in my opinion) are as follows:

PAR/SMS – Springer Miller Systems will be the most expensive, and I am not a big fan. It’s huge, clunky, they oversell it, and the implementation and integration is not so great.  It used to be the leader, and might still consider themselves the “cadillac” of PMS.  I say it’s big… REALLY big.  It’s also prohibitively expensive, and the back end interfacing and tech isn’t always the best.  Of course, that is a problem with almost all these systems.  Once they sell it, they never seem as eager to fix things after they get the check.  Budget $166K w/o modules. It’s a *beast*… modules included I would say a total would be around $300K+, easy.

Micros/Fidelio Opera – Probably the industry leader now, and for good reason.  A windows based program that is slick, intuitive, and often prohibitively expensive.  They have the industry leader for F&B POS, but the sales and catering is light to say the least, and I am not even sure they have an integrated accounting system.  It’s a solid PMS, and you will be happy. Period.  However, the S&C module is nothing compared to Delphi, and I have seen properties buy it, and switch to delphi years later.  The spa system is limiting too, but not in price.  Micros/Fidelio Opera – $130-150K w/o modules.  Modules -
F&B $15 – $25K depending on the restaurant
S&C – $30K approx
Spa – $35 – $40K approx

This will end up around $250K for the total with modules.

Agilysys Visual One – Visual One is fantastic, but the peripheral modules (desk, F&B) aren’t so easy on the line and front of house as I would like.  The back end accounting, G/L, month-end is ***AWESOME*** (read, “like a dream”) and very simple. What it comes down to is sacrificing front end functionality with back end convenience.  The problem here is that you are paying that back end controller more money than the simpler line staff who have to deal with some complex, and frustrating issues.  It depends if you want unhappy staff and happy owners, or vice versa… however simplistic that sounds.  Honestly… we always want our reporting and accounting as streamlined as possible, but not at the sacrifice of losing a functional front of house system that is intuitive and simple to learn for the ever rotating line staff and management that actually have to deal with day to day operations.  $95K w/o modules
Modules – total them all up and it will run $260K or therabouts.

Northwind Maestro – I like this system, because we have made them do a couple builds where they are interfacing with industry standards for the modules… So instead of relying on an entire system that has multiple weak spots… IE Agilysys’ Visual One F&B & S&C weak spots, or Micros’ S&C, Spa, and Accounting weak spots, etc… you get to build out a vetted system with Delphi, Micros F&B POS, MAS 500 Accounting, and Harms Millenium for the spa. It does create a lot of extra work and communication, but you can rest assured that from front of house to the G/L and beyond you will have a solid system that can do a lot.  $80K w/o modules.  Modules -  The total cost ends up being around $180K – $210K with the benchmarked modules. So it is cheaper as well.

A word about interfacing

When you are interfacing, you have to realize that when Opera or Par/SMS talk about an integrated system, they aren’t really talking about an “integrated system” like Agilysys Visual One.  That one is wholly and completely tied into all parts, while the other systems are simply *interfacing* with other modules.  That means when you are choosing, it is just as easy to go with Delphi and an XML interface for inventory management as it is to go with the preferred S&C module that the company offers.  This is because those modules weren’t built with the PMS in mind, as much as they were bought as 3rd party programs and co-opted by the PMS to work with the system.  All this means is that you should pick systems you are comfortable with, and not feel the need to be a partisan picker, and go with an entire bundled system.  This is why we have gone with Northwind Maestro… it’s a great windows based PMS that integrates well with all the industry standards.  I also didn’t feel the hard sell from them as I did from other vendors…. Northwind wanted us to be successful so they looked successful, instead of just selling what they offered.

I am really happy with Northwind Maestro.  It will be the most affordable of the lot, and I am pleased with them across the board. The modules aren’t my favourite, so usually we use Maestro and go with Delphi for S&C, Micros for F&B, Mas 90 (should work, but mas 500 is better, a 2 way XML interface, and simply better reporting/much easier).. and HARMS MILLENIUM for the spa… because Harms is awesome, and I don’t think there is a better spa software anywhere.  At least not yet.

And that’s my two tech cents!

You know, I really admire Tom Sargent.  I have known a lot of developers, but very few have had such a long-view approach, coupled with steadfast determination.  Even those I know that approach that level of professionalism don’t have the empathy, humanitarianism, self awareness, or committment to the integrity and vision.

I know I sound like a fanboy, and a bit cliche, but if any of you realized what he went through on his last green-build/historic rennovation/national park land reuse… you would understand.  Very rarely do we see a holistic approach to development, with as much concern for the land use as well as the people that are impacted by it.

It is no wonder why he is featured in this month’s Contract magazine, and I post those articles here because… well… it’s important.  For any developers, architects, designers and more… he really has a wonderful philosophy to this madness that we “do”.  I think his words will make you think, and the ideas he is promoting are relevant, if not before their time.  Maybe not all that too soon… apparently commercial builds are still heavily enthused and leaning towards green builds, regardless of the economy.  This editorial from Contract says a lot about that… and about people like Tom that make it a priority to “lengthen the timeline” of development mentality, and focus on the Native American “7th Generation approach” in a business sense.

Tom is trying to spread some very big ideas around… magnanimous in their complexity, to be sure.  But huge in their forward-thinking, dedication to building community, and creating sustainable structures that are functional and practical, aesthetically pleasing and innovative.  Actually… all the people at Equity Community Builders in San Francisco have put together some amazing work.  So three cheers to Tom, and a moment in the spotlight for one of the most humble people I have ever worked with.

PERSPECTIVES, with Tom Sargent; Principal with Equity Community Builders

LEED compliancy is often an expensive, and frustrating, process.   Many hoteliers feel it just means a sterile, ugly building; others think it is imperative – not for the good of the earth – but the marketability of their brand. Whatever reason people use, one thing is for certain – it is relevant, it is part of the standardization of the green movement, and it is something that is here to stay.  In what form, I am not too sure, but the need to abide environmentally aware construction and renovation is paramount in our eco-hungry clients’ eyes.  The Green Movement isn’t a movement anymore, it’s just the way business should be done.  This isn’t just about guests, nor industry trends.   This is just about smart business.

After two decades of slowly getting there, the practice of being ecological in the hotel industry has gripped us at every angle.  One of the reasons green has finally been benchmarked into the hotel industry is that people caught on that “green” can often mean “saving money”.  Many aspects of being green are really just about being conscious about how you use your resources, and conserving.  That is what a good GM is doing all the time! Many of these things significantly increase savings, and general managers seem to be getting it.   Less wasted paper, reusing and readapting office furniture, I have even seen products from craigslist for back of house operations.  The hotel industry has finally settled into being green aware and acquiescing to guests’ desire to reduce, reuse, and recycle.  Just a few of these powerful tools that are environmentally friendly as well as create savings: In room Energy Management Systems (needs room key to have lights work), refrigerator’s with absorption technology, CFL lightbulbs, thin client networks, laundry water recycling systems, cogen heat capture systems, bathroom amenities’ current trend moving away from small bottles to refillable dispensers, installing solar at properties (Cavallo Point in Sausalito has panels on their contemporary buildings, while Wilbur Hot Springs is 100% solar). All these things are, primarily, about savings for the hotel. If that is the way you need to sell it to the owners, then so be it. You can simply relax and enjoy the added benefit of helping the environment, as well as catering to your guests, echoing their ideals, creating a brand they can identify with, endorse, and come back to.

Now let’s look at some ways this becomes incredibly complex. There are some design issues that come into play when you are designing with something like LEED in mind. This isn’t necessarily about saving money or resources. This is about building responsibly. However, there are many people that aren’t sure LEED is all that responsible themselves. It comes under intense scrutiny from equity and construction people, as well as environmentalists. Construction types think it is an out of date, inefficient system. Equity people think it is too expensive. Green people think it is too wasteful, and full of endless missed opportunities. Most agree it needs overhauling.

It isn’t an option with building at this point… you must go green. You *want* to go green, but going LEED creates a conundrum for project managers. You need the designation so that people know you are legitimate. If you didn’t have it, and kept saying “we are really eco conscious with design” it doesn’t mean anything for consumers. They can’t identify with it or understand it, and prefer something tangible that verifies any “green” claims made. Hence the popularity and near necessity for people to passionately campaign for LEED accreditation, a process that can take years of planning, and years of operating before status is granted. What is problematic is that the cost associated with creating this marketable aspect to your green building limits how green you can be. When you spend $200K on a LEED architectural consultant just to vet the complex process, it becomes pretty obvious you *could* spend that on actually being more green. The arcane regulations are difficult to get through, and it is an inefficient process. The costs associated with abiding a frustrating, and at times arbitrary and muddy, process such as becoming LEED compliant. I have seen some projects that got into the millions in pursuit of the title LEED. I think it is important to build and operate green, and for now the only thing we have is LEED. I just find it an obvious “throw the hands in the air and shrug” moment in regards to whether LEED needs an overhaul. By spending money to be green, you limit your ability to be green. This is a problem, and LEED needs to address it if they want to stay the industry leader in green certification. If it isn’t addressed, someone else will and we will have a brilliant new process to vet the altruism of equity, architect, design, and management.

I am excited about the future of all this, and thought I would just address some of the majour points. Green has been done to death, but not by me. I think it is just the way business is happening at this point, and if you aren’t aware of that…. get hip and go green!

The below is overkill, but here are some thoughts on LEED from treehugger and grist, as well as a couple others. I just raise the point because I apparently like adding complexity to an already dizzying issue. =)

http://www.treehugger.com/files/2008/01/slate_on_decide.php

“The point system creates perverse incentives to design around the checklist rather than to build the greenest building possible.”

http://www.grist.org/comments/soapbox/2005/10/26/leed/index1.html

Grist says “Let’s fix it”

http://www.icsc.org/srch/government/briefs/200810_leedtalking.pdf

council on shopping centers doesn’t like it, but does have a few good, key points

http://findarticles.com/p/articles/mi_qn4184/is_20041028/ai_n10047515

3 key problems

Social Media is one of the more important tools for business in a long time.  But there are those that sort of treat it like a cult or religion.  I am doing my best not to get sucked into that wormhole.  I note that when I do, all the other operating world seems distant and out of touch, when it is in fact that I am residing inside my little bubble and missing 90% of what the business world is doing.  This is an exagerration to say the least, but I note that some people compartmentalize their lives into this spectrum of “those using social media” and “those not using social media”.  Then a lovely dichotomy breaks:  the hip 2.0 social media crowd scoffing at the archaic and obsolete approach of baby boomers and more classically trained business crowd; while the old timers think of social media as zero productivity game playing used by capricious facebook generation kids. 

It is the nature of our polarizing culture, and the either “this or that” mentality we automatically separate things into.  To make it easier to digest: 

1) You young judgmental whippersnappers!  Remember that there has been business successfully run for thousands of years, and it will happen in other ways 1000’s of years after now.  This isn’t the be all end all, it is simply something that is useful to *DO* business.  In itself, it is *NOT* business…. and the problem with monetizing these networking sites and creating profitability is of paramount concern to keep these tools alive.  Why put all your eggs in one basket when the business model is completely unsound?

2) You old crotchety types that don’t get it! Just because you have done business without it for decades doesn’t mean you don’t need to start now.  You are losing leads, sales, networking, potential opportunities… all this and more by ignoring it.  It isn’t a church, it isn’t a video game… it is just another tool to sit aside your traditional rolodex.  But just because it is foreign doesn’t mean you can ignore it.  Ignoring it will cost you business in some capacity, be it an actual sale to long term branding and presence.

It comes down to needing to be aware of it and how it can be used, coupled with knowing it has some serious critical faults that are going to come around and haunt these people that have adopted it like a cult.

It’s like when I help build and open a property….

You look for critical flaws while building.  If you miss it, or smart people ignore it, then you keep building and doing what you need to do.  You keep “doing” business.  You open the property, you launch the website. 

The problem is when it is supposed to be at its peak and functioning its best… when everyone is excited and bought into it (opening day)…. that is when the critical flaw comes crashing down and you have to rip out an HVAC system or jackhammer leaking radiant heating in a concrete floor.  Or… build a network so effectively strong that it is too big to scale to and support.

Whether there is a problem or not, you still need to maintain and finish business.  Ignoring a problem, or opportunity, will just come back in the end and bite ya back.

There is a critical flaw in social media that will come crashing down, possibly.  It is best to be aware of it and know how to do business the right way, as well as the modern way.  Some people even think social media *is* business (I would say it helps business).  But that may beg a larger commentary on our modern working world:

I think a lot of people aren’t sure how to do business the right way.  That is a critical flaw that doesn’t even involve social media.  =)