The Seeds Of A Company’s Destruction Are Sown In Good Times
We’re having good times right now. In just about every industry throughout the U.S. and Canada, things are pretty good right now. There are pockets where the economy hasn’t fully recovered, and certainly there are industries and individual companies that haven’t fully recovered from the great recession. But for the most part, things are pretty darn good.
That said, the things that happen to us today in this time of prosperity cause little chinks to appear in our armor. And eventually, we get into some bad habits. And then when the bad times return, we’re vulnerable. And who wants to be vulnerable?
So here are eight specific steps that you can and should be taking right now in boom times so that you don’t make yourself vulnerable and weaker than necessary when the recession comes back:
The first tip for surviving into the next soft period is to be vigilant. You need to be very apprehensive when times are too good. Be apprehensive. Don’t be paranoid, but be vigilant. Keep an eye on things. Keep your ear to the ground. Talk to your people. One good way you can help to do that is to manage by walking around. Go out and talk to your people and visit with them, and see what’s on their minds and where they’re experiencing problems. Spend some time talking to your people and finding out where their concerns are, and once you accumulate some of those, you’ll start to see places in your business where you need to make some changes or improvements.
Number two, benchmark your costs regularly. Do rigorous, detailed benchmarking at least once a year. This is something that being part of a peer group is particularly helpful for. Within a peer group like our Bottom Line Impact Groups, you can benchmark with your peers and then compare them with each other. That way you can really tell if costs are creeping up.
The third thing is to look at new opportunities deliberately. It’s easy right now when things are going well, and you’re at about 85% or 90% of capacity to take on that next new opportunity that puts you at 110% capacity. And then you get into turnaround times changing, quality changing, and you overstress your people because you can’t hire quality people fast enough. You really need to be deliberate when you’re looking at that next new opportunity. Of course, this doesn’t mean just reflexively saying no to all new opportunities. Maybe you can take a new opportunity on if you get rid of an old line of business that you’re doing that’s not as fun, or profitable, or challenging as it used to be. But go into these things with your eyes open. Don’t just take new business because for no reason.
The fourth thing is the 80/20 rule. 80% of your revenue comes from 20% of your clients, or 80% of the value in what you do comes from how you invest 20% of your time. Focus on that 20. Focus on your top 20 customers. Focus on your top employees. Focus on the things, the activities, the 20% of the activities that you do that really add value in your company and in your life. And if you really, really, really want to take it to an extreme, you’ve got the 80/20 rule. So 20% of your activities produce 80% of your results. What if you multiplied it again times 20, 20% that is? So 20% times 20% is 4%. What if you could figure out a way to focus on that 4% of your time that really, really adds value, the most value? Think about how much time that would free up for family, for fitness, for travel, for whatever it is. As you’re trying to figure out how you’re going to have that beautiful, wonderful life, focusing on how you spend your time is the number one payoff there.
The fifth thing is to take more time to coach and teach and drive decision making downward in your organization. If you’re still the person that has to make every little decision about every little decision, you’re trapped. You’ll never be able to leave your company. You’ll never be able to turn it over to a son, or a daughter, or any other successor for that matter. You’ve got to begin to coach. Stop doing so much and start teaching other people. Yeah, they’re going to make mistakes. But if you don’t educate your people on how to do the things that you currently do, then where does that put you five years down the road?
Similarly, point number six is to train your people. Get your people the training they need to be really good in their jobs. How are you going to get the most out of your employees if you’re not willing to invest in their training? Get your people the training they need and the training they want, especially for your next generation leaders. Get them leadership and financial training, so they will know how to look forward in the business and how to do forecasting and budgeting and all those kinds of things that will actually help you take the business to another level.
Number seven, show appreciation to your customers. If you as the business owner are not loving on your customers enough, carve out some time and make that happen. You’d be surprised in today’s world how far you get from just writing a handwritten thank you note to somebody. It is an impactful thing in today’s world. The other thing that I’ve been really shocked about is how people appreciate other little things, like giving away nice shirts. Almost all of us have corporate logo wear that we use. Why not share it with our customers and vendors and suppliers? You’d really be shocked about how much people appreciate a good quality item like that. So love on your customers.
And finally, maybe the most important thing, make sure to spread love to your employees too. You’ve got some people that really make it happen. And without them, you’d be in a pickle. So make sure you’re giving them all the TLC they want and deserve. Some of it is money, but a lot more of it is just recognition, or the ability to participate in the high level decisions of the business, and those kinds of things. Make sure that you’re giving them all that they need and want. It’s the platinum rule. Everybody’s heard of the golden rule. The platinum rule is do unto others as they wish to be done unto. If you can find a way to make the platinum rule an important piece of your business life, then you’ll be able to love on your customers and employees, and things will be great.
One last thing to think about: “There’s no such thing as corporate culture. There is only how we treat each other.” That’s what it’s all about. If you build the right character in your business now while times are good, and you remain vigilant, when those bad times return, you will not have sown the seeds of your own destruction. You will be a survivable and a sustainable company.