Recession

A recession is defined as significant decline in activity across the economy, lasting longer than a few months. Successful companies can use this “downtime” to their advantage to propel their profitability.

Are You Becoming Too Protective of Your Team?

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Are You Becoming Too Protective of Your Team?

George and his executive team succeeded in pulling their organization up out of a deep hole. They survived 2008 – 2010. They have been on a plateau for 4 years. That’s OK, right? They deserved a chance to breathe.  Maybe you don’t have to always be aggressive, go for growth, and create new things.

These people are incredibly dedicated and work long hard hours.  They have become accustomed to being short staffed and watching every dime.

But now George has become rather paternal.  In fact he’s a little like the PAPPA BEAR in children’s storybooks. He looks for perfection in his team and can seem somewhat critical.  But, WOW…you should see how his back tightens and his voice booms if anyone outside his team even hints that they need some training, should try something new, or might be stuck!  ¾ of their board meetings are dedicated to bragging about how much and how well everyone has been doing.

George is not alone. Maybe you can identify with how he feels.  Since the past 5 years have been pretty hard on most organizations, maybe you have also become a bit protective of your team.  You certainly wouldn’t want anyone to leave. Right? You’ve all been through so much together…you can finish one another’s sentences. Right?

Be careful though.  This pattern can feel like over protective parents. At some point, bright people who crave learning leave the nest to go try new things.

Instead of waiting for the bright people to leave George’s overprotective nest, they are making a group commitment to do some research, find new opportunities, learn new skills, and take some chances…together.  They aren’t going to do anything crazy.  There will be no diving into the deep end of the pool without swimming lessons.  But they are facing the fact that the recession and the lingering tail of uncertainty has affected how they think.  They are intentionally working on becoming less risk adverse, learning how to think bigger, and trying to expect more.

Disillusion

Disillusion.  What a fascinating word. How many Baby Boomer business owners do you know (perhaps yourself?) who have become disillusioned?

The recession and the long period of uncertainty that has followed. It looks like the underlying causes of the implosion of the financial industry in 2008 haven’t been addressed let alone resolved.  Government officials haven’t risen to the occasion and done the jobs citizens pay them to do. Disillusion.

International competition.  Most Baby Boomer business owners recognize globalization.  But how does a privately held US based company compete with a business based in China where the hourly workers are paid so much less and work so many more hours without overtime rates involved? Disillusion.

Advances in technology.  Oh it’s great to participate on a SKYPE call with your grandchildren who live on the other side of the country. And Wii bowling is fun. Getting movies through Netflix for your flat screen HD/3D television is a pleasant perk. But on the business side, technology keeps raising customer expectations and the EXPENSE, the constant training, the disruption, and the bottomless pit of change related to IT can be very discouraging to a Baby Boomer owner of a privately held midsized company.  Disillusion.

If it is a family owned business, the next generation doesn’t seem to want to learn leadership skills or work hard.  They don’t seem ready or as interested in taking over the family business.  An unfulfilled life plan. Disillusion.

There are solutions to this situation.  They all begin with the Baby Boomer owners doing some self examination to admit how disillusioned they have become.  Plus, in many cases, they would need to be willing to be a whole lot less stubborn. Less pride and less secrecy. The rules have changed and continuing to run a business in a state of denial won’t help.

My prediction?  There will be a SPIKE (huge rise) in the number of (formerly midsized) businesses being dissolved in a few years. Unaddressed disillusion leads to dissolution. 

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieve accelerated growth with sustained profitability® through opportunity & resource analysis, strategic planning, executive advisory services, growth financing, and targeted search.  2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.         

Wishful Thinking and Long Term Customer Loyalty Can Create a Risky Blind Spot

Imagine that you and your executive team have invested months and months on research. Despite the lingering tough economy, you have even hired some people to launch a complementary product/service.  The new offering has the potential to expand your customer base, increase your profitability, and solidify your company’s position as an industry leader.  Sounds exciting, doesn’t it?

We’ve noticed that these days, when business owners are in this position, they conclude very early on in the process that the new product will be a huge success.  That makes sense, really.  When you have a great deal riding on a new product during uncertain times…it had better work!

But hopes for the success of a new product and a need for everything to work out can lead to blind spots.  Ironically, we are seeing wishful-thinking blind spots hurting well-established companies with great reputations and loyal customers.

ABC Inc. recently introduced a complementary product that looked like it would provide tremendous benefits for their customers. The product launch was a little rough, but there were understandable reasons for the problems and the customers didn’t complain.  The folks at this business are highly skilled, hard working, and personable.  The overwhelming majority of their customers love them.

The owners of ABC Inc. asked our strategic planning firm to do a strategic assessment and lead a strategic planning retreat.  They wanted to build on the complementary product/service lines and make sure that ABC Inc. is ready for exponential growth.  During the research stage of our assessment process, we conduct interviews with employees, key vendors, and a representative sample of each type of customer. To our surprise, 20 straight interviews revealed that the customers of ABC Inc. didn’t like the new product/service and didn’t view it as complementary.  In fact, their customers felt a sense of loss. They had liked what they had and thought that the new product/service had reduced their benefits, interfered with their interaction with the nice people of ABC Inc., and reduced their choices as customers.  Some customers expressed anger that they were switched to the new product/service without being asked.  Some customers had concluded that ABC Inc. must have created the new product/service for its own convenience and/or increased profits because they (the customers) couldn’t see any benefit for them.

WORSE, the customers were reluctant to tell any of this to the nice folks at ABC Inc. The customers didn’t want to hurt their feelings or upset them.  Some customers were already shopping the competition, but planned on remaining “friends” with the nice folks at ABC, Inc.

It was interesting to see how angry the “nice folks at ABC Inc.” became when they heard and read this information.  Even though a quantitative customer survey corroborated our findings, they couldn’t believe that their loyal customers were unhappy.  It was beyond comprehension that some customers would actually consider changing vendors instead of just telling ABC Inc. that something was wrong. A few folks at ABC Inc. became angry with us.  It must be those negative consultants; it can’t possibly be the new product line!  Ironically, the long term loyalty and strong connection between ABC Inc. and its customers added to the blind spot. 

Think about a family.  Imagine that your elderly aunt decided to get her hair colored and pay for plastic surgery to look and feel younger.  You think it’s a waste of time and money.  Plus it just doesn’t look right.  Would you come right out and tell her?  Be honest with yourself now.  Are you sure?  You don’t want to upset her.  It’s her decision after all. You are just one person.  Maybe you decide that it isn’t worth the risk to speak up.  Long term loyal customers can feel like a reluctant niece or nephew.

Are you sure you would be receptive to customer concerns and complaints after you had invested a great deal of time and money to create a new service/product and need it to succeed? How long would YOU argue with the research?

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. Ambler is in the process of launching her 8th enterprise. All of her current service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, and search) help privately held midsized companies achieve accelerated growth with sustained profitability®. 2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

2011 Was a Tougher Year for the Owners of Midsized Companies and Recent Retirees than the News Media Portrayed

Deep down, we all know that broadcast and print media have some biases.  (No kidding.)  During election years, some media outlets are compelled to emphasize progress being made, jobs being created, and consumers spending more around the Holidays. Following recessions with particularly long periods of uncertainty (NOW), some reporters play the role of consumer advocate to help unwitting buyers beware of high profile crooks. While the US Congress and President Obama took different stands on raising the debt ceiling in 2011, the media focus seemed quite partisan.

So why am I reminding you about media bias?

In the midst of all of the political infighting and fussy stories about progress, the personal portfolios of owners of midsized companies and recent retirees took a disproportionate hit during the summer of 2011.  For many, 2011 was as bad as 2008. That fact got lost in the media coverage.  So if you lost a lot of money in 2011, you could be wondering if you were cheated somehow instead of feeling “normal.”

Imagine if your investment portfolio of $10 Mil dropped 30% in 2008 to $7 Mil and then it dropped another 30% in 2011 to under $5 Mil.  People in that position thought they could stop working and turn their family businesses over to the next generation but now feel compelled to continue to work to replace lost money. Folks who retired from corporate management positions after 30+ years now wonder if they can afford to keep the house at the lake. Instead of investing in real estate, businesses, new products, and nice vacations, these people are worried and frozen.  This has a direct impact on job creation.

I also mention media bias because many of the people who lost large sums of money in 2011 (maybe you) wonder if you did something wrong, have lost some trust in your advisors, and feel stranded.  That combination of emotions stifles economic recovery.

If my words resonate with you, give your financial planner a call. Get explanations.  Revisit your personal financial plan. Base your decisions on real information rather than just worry.

Isn’t it interesting that a strategist who helps companies grow is suggesting that you request an appointment with your personal fee only financial planner. Mental attitude in one arena impacts the other.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her current service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.  Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business.VoiceAmerica.com and www.growthstrategistshow.com  which  features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.       

Should You Assume That ALL of Your Customers are Uneasy?

A pattern has been surfacing recently from the interviews we conduct prior to on-site strategic working sessions for/with the clients of my growth planning/strategic advisory firm. We are hearing from our clients’ customers that they:

  • want to be contacted BEFORE a question would even come up
  • don’t like the expectation that they will do the traveling for appointments
  • don’t want vendors to get defensive or take their questions too personally
  • want more one-on-one interaction and more individualized services/products
  • expect more understanding, compassion and empathy
  • are not very interested in the vendor’s feelings, needs, personal life or goals
  • need bright vendors but won’t tolerate arrogance

It’s no longer enough to say that your firm is responsive and brag that you return customer calls quickly. They don’t want to have to call you. They want and expect you (and me) to PREVENT their ignorance, concerns, and uneasy feelings.

This extended period of uncertainty following the recent recession has had an adverse impact on just about every market.  The obvious sectors include construction, real estate, banking, and wealth management firms.  But uncertainty has been unsettling to customers in other industries.  We feel it. Even our most ambitious clients now want to review the details of our research findings, request multiple presentations of our recommendations, and need repeated fact based reassurance.  Some would like to demand guaranteed revenue growth and net profit levels.

If your business is related in ANY manner to the shifts in the economy, stock market, political winds, etc…take a fresh look at the tone and frequency of your communication with clients/customers.           


 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her current service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™. Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business.VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

Persevere, Answer Questions, Do Demonstrations, Create Payment Plans…and Reassure

The extended period of uncertainty following the recent recession continues to raise the cost of doing business.  These days, an experienced sales person expects to explain the value to more people, provide free demonstrations, answer lots of questions, create payment plans, and reassure decision makers.  You might find that reassuring people is becoming the most important step.  Cash is tight. Jobs are at risk.  Few people are willing to take a chance or be an early adopter because they can’t afford to look like a fool.

As a few of my recent blog entries have shared, I have been working on a new economic development initiative that will help midsized companies rebound. When folks see the statistics, hear the approach, and review the business model, anyone who interacts with midsized businesses quickly sees the value and gets excited that it could help the economy. It’s one of those win/win/win models where:

  • the clients pay a little to gain a lot
  • the service providers make a difference, earn some money, and benefit from great marketing
  • the sponsors invest a little and are applauded as visionary leaders

But even something like this has difficulty attracting sponsors.  WHY?

In some corporations, their own bureaucracies are so difficult that a regional President has very little chance to shift priorities for even $15,000. In other corporations, the decision has been made about which nonprofit organizations will receive their support.  Even if/when too little return on investment is resulting from those decisions; it is too difficult to consider a change.  Other corporations say they like innovation, but sponsor only traditional approaches.

The concept I/we have been working on isn’t a traditional 501C3 or 501C6 entity. I have recruited over 50 service providers, and we are determined to launch this initiative in 2012. Like other sales people these days, I have to persevere, answer questions, do demonstrations, create payment plans, and reassure. Interestingly, involving the legal and accounting firms in the sponsorship calls is needed to help reassure corporate executives.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™. Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business.VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

Survival Versus Thrival

George’s business has three stores.  The oldest one makes money but is still a bit too dependent on one key salesperson.  The second one hasn’t hit its sales or profit goals in a long while. And the third, a relatively new location, seems like it has great potential but hasn’t yet reached the inflection point.

If George has a survival mentality, he will close the second store, try to relocate one or two sales people back to the first store and give the salespeople in the newest store a deadline for hitting their goals.   George and a very small business might survive, but will he have something of value to sell when he wants to retire?  Will he be able to attract experienced sales people? Will his business deserve exciting marketing campaigns? Could he attract the best vendors and utilize premium pricing? Would the key salesperson in the oldest store continue to produce?

A thrival mentality asks different questions. Does the key salesperson represent the old way of doing business and should the company actually focus more on the newer sales people? Should something like incentives or a marketing campaign be added to the third store to lift it more quickly over breakeven? Is there an exciting theme or approach that could differentiate George’s business from competitors? If so, should George be looking for additional locations or considering franchising his business?

Thriving during uncertain economies involves thinking much bigger than your company is today. It actually requires bolder marketing messages because so many people are so preoccupied and distracted they will not see or hear your message right away. Growth during recessions is often easier when people like franchisees or investors share the risk.

If things don’t work out for “Survival George,” he will be on his own. If things start to go badly for “Thrival George,” bankers, franchisees, employees, vendors, and even local economic development agencies will be invested in the company and care about its future.

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over two dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across four recessions.  Her midsized BtoB service, technology, and distribution clients get on–and then stay on–the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, radio show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™. Ambler is in her 7th year hosting a weekly peer-to-peer-to-peer on line program at www.Business.VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

Reclaim Your Innovation Process

The economy slows and the typical midsized business slashes a few line items in their budgets including marketing, training, recruitment, and product development (R&D).  That can temporarily ease strained cash flow, but it isn’t a formula for surviving and thriving during a recession.

The most resilient companies seem to find ways to weave the innovation process into their cultures. One way to attract and retain productive employees during tough times is for them to know that their employer is still interested in market trends, customer needs, new technology, and better ways to do things.  Plus, it pays to remember that the most innovative product improvements aren’t necessarily the most expensive.

The innovation process includes five stages:

  • Investigation
  • Preparation
  • Incubation
  • Verification
  • Application

Some jobs can become tedious if the employee isn’t also invited to participate in a little research.  The second generation of a family owned business often doesn’t want to take over the business if they haven’t been invited to do research and lead innovation. What are competitors doing? What do customers really think? Which new technologies could speed up the process? Is investigation an ongoing part of your employees’ jobs?

Periodic meetings to review what has been discovered can surface patterns.  When you see which ideas have the most potential, preparation starts.  What is the idea worth? Who should be involved? How do you protect profitability as this project gets underway? What other resources might you need to analyze and design a viable idea?

You get the idea.  Verification is one of the most important steps, especially during a recession. Most of us can’t afford to make too many expensive mistakes.  In a classic article “5 Myths of Innovation” in MIT SLOAN MANGEMENT REVIEW, Julian Birkinshaw reminds not to believe “IF WE BUILD IT THEY WILL COME.” We have all heard stories about computer programmers who have generated millions of lines of code to software products that too few people wanted to buy. Customers feel important when they are asked to try your new products and services.  It pays to do a BETA test to verify if your proposed approach makes sense and will work.

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, radio show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™. Ambler is in her 7th year hosting a weekly peer-to-peer-to-peer on line program at www.Business.VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

If You Decide to Take a Chance and Develop a Truly Innovative Product

A lingering recession is actually a very good time to introduce exciting new products.  Continuing to provide the same old thing just doesn’t do it. But a product that truly represents “value add”, advanced technology, or ease of use garners the attention of even the most cash tight customers.

But this may be the first real innovation your well established midsized company has done in a long long time. If so, it pays to focus your attention on a small group of your most desirable customers (the sweet spot). Beta tests can be done for people you truly care about and the product can be tweaked until it is really ready to launch.  A broader launch is much easier and more successful if you can confidently brag about the premiere customers who chose to embrace your new product.  Frankly, most customers are followers and won’t take a chance on a new product until leaders endorse it. And the percentage of followers increases during tight economic times.

Breakeven and ROI can be difficult to project if product development isn’t an ongoing part of your daily lives, so it pays to learn from companies with a track record of successful product launches. They immediately measure the time, effort, and cost involved in developing a new product and winning first wave early adopter premiere customers.  And then they measure the time, effort, and costs associated with attracting their followers.

If it’s been a long time since you launched a truly innovative product, you may not like the numbers that are generated when you measure these things but you do need to know. It’s important to have some faith in your capacity to improve.  With information, each subsequent product launch can be more cost efficient.   The ROI on product launches becomes easier to calculate with each innovation.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions. Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, radio show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.  Ambler is in her 7th year hosting a weekly peer-to-peer-to-peer on line program at www.Business.VoiceAmerica. com and www.growthstrategistradioshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

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