It seems like everywhere you turn, there is a slowdown in the economy.
You read in the paper or hear on the news about cutbacks in corporate America. Many companies continue to miss their earnings estimates, which makes Wall Street investors quite nervous. I often ask myself, why is it that the larger companies have no problem making changes relatively quickly but smaller companies sometimes wait until it's too late? One thing I realized is that larger companies have to perform for Wall Street each quarter or the stock market will not be very friendly to them.
This forces the leaders of these companies to be accountable to their employees, shareholders, investors and themselves.
The powers-that-be seem to have a strategy to keep the once red hot economy from falling beyond recovery. The Federal Reserve continues to lower interest rates. President Bush continues to talk about his tax-cut proposals.
Wall Street still tries to give us some promise of a rebound. Most of us continue to be hopeful that things will pick up in the near future, but what if they don't?
Each person in a management position owes it to themselves and to their company to prepare for the worst. We are all optimistic the slowdown in the economy is only a short-term setback, but in the meantime, there are several steps you should take to protect your company's success.
1. Manageable break-even. It's important that your budgeted break-even in expenses is less than your average revenue from the previous quarter. If it's not, make changes that will allow you to run the company without falling behind and accumulating losses.
2. Focus. Share information and communicate to your entire staff the condition of your company. People need to understand the goals. They cannot operate in the dark and still be helpful in achieving the company's goals. Everyone must be focused on the goal.
3. Flexibility. In a declining economy, everyone must be flexible. People may be asked to do things they do not normally do. The walls must come down, and people must understand things do not always stay the same. They must be open to change.
4. Value added. During times like this, it's important to differentiate yourself from the pack. When people are making decisions during slow times, offering a small bonus or perk could be just the thing to differentiate yourself. Do something that makes your product more attractive to your customers. Add something they value without having to cut your prices.
5. Be prepared. We've had boom times for so long that many businesses aren't sure how to survive in a slow economy. Pay careful attention to your financial numbers and prepare for worst case scenarios. Could you survive a 20 percent decline in revenue? It might not come to that, but if you're prepared, you're more likely to survive it.
If you built your business on strong principles and sound practices, you have a solid foundation to make it through any tremors in the economy. But what works in boom times may need some serious adjusting in a recession, so be prepared to make the tough decisions and be accountable to your chief stockholder: You.
In the long run, you'll be happy you did. Fred Koury (email@example.com) is president and CEO of SBN Magazine.
We seem to live in a world in which me, myself, and I have become our three best friends.
We have become so self-centered that an offer of help is often viewed with suspicion. Opening a door for someone has become more of an insult than a positive gesture. Visiting a neighbor has become something of the past.
We have gone from sitting on our front porches and visiting with the people in our neighborhood to hiding in the backyard behind a giant fence. We retreat behind walls to live our lives, not even knowing our neighbors' names. In our modern world, we get more pleasure out of watching cable television than spending time with a family member.
What have we become?
We have become a world centered on self. In the dictionary, self-centered is defined as occupied or concerned only with one's own affairs; egocentric; selfish.
Maybe it's time we try to reverse this trend. Maybe it's time to reach out to others and become more focused on our community, regardless of whether it's the community at home or the community at work.
Whenever we are in a position of leadership, such as owning a business, we carry responsibility for others whether we like it or not. It is our responsibility to make the best decisions possible. Here are several steps to ensure that we are doing so:
1. Reach out to your employees. Get to know them for who they are, not just what task they perform for your company. Everyone has problems, and you can find ways to help. Even small gestures can go a long way to make someone's life a little bit better. Work with your employees as much as you can and their loyalty will pay off.
2. Reach out to your customers. The economy has slowed and cash flow has tightened up. Work with your customers as much as you can. Bending the rules once in awhile to help a loyal customer will only strengthen your relationship. If you are reaching your cash projections, and are in no immediate danger, why not try to help another business? The owner will appreciate it and become a customer for life.
3. Reach out to your vendors. Establishing a win-win relationship is the goal of everyone in business. Today you may have an upper hand in the relationship; tomorrow, that can change. It is important not to overnegotiate. Everyone needs to make a profit. Pushing your vendors up against a wall through unfair contracts and unprofitable deals will weaken your relationship in the long run. Things can quickly turn the other way, putting your company in trouble. Will a poorly treated vendor give you a break when you need it most? Probably not. It pays to be fair.
Many of us try to live by these rules but sometimes fall short. Failing once is no excuse to not try again. We must keep trying until we get it right. Doing this will ensure the success of our businesses and of those around us.
So what do you say, neighbor, shall we tear down the fences around us and reach out to others? A small gesture can go a long way. Fred Koury (firstname.lastname@example.org) is president and CEO of SBN Magazine.
SBN Online is more than simply a Web-based version of our monthly publication. It will be the leading provider of daily local business news and information for senior level decision-makers.
It contains daily local and industry news, executive insights, a wide variety of resources and business information you won't find anywhere else. SBN Online will evolve quickly. Nearly every day, new features and information will be added to provide just what you're looking for.
We've spent the last five years developing an extensive database in order to understand our readers better than anyone else. We knew if we did that, we could better service their needs and provide them with smart ideas and information to help them grow their businesses.
Because of this, we can offer pre-personalized information and advanced predictive modeling. This makes SBN Online the only local business site designed for executives.
I invite you to log on to www.sbnonline.com and discover what we have to offer. We will be sending out a series of postcards and direct mail pieces that explain how to use the site. You may have already received yours. It has your user name and password listed on it.
When you visit SBN Online, enter that information. The site will then use predictive modeling to deliver content specifically designed to fill your needs. Each user will get a different look and feel to the site, with industry and interest-specific news and information already loaded onto his or her browser.
We recognize the use of technology as another means to serve our audience. Now, after more than a year of work, numerous focus groups and dozens of surveys which validated our concept, we're proud to roll out the results of what local top-level decision-makers said they were looking for from the Internet. Here's what they want.
Ease of use
CEOs told us they are not Internet savvy. We solved this problem by developing an intuitive and personalized interface that does the hard work for them. We will use our monthly print publication to guide users to and around the site. And, we'll be sending out manuals to help explain how easy-to-use and friendly SBN Online is.
There's little doubt that while information is available on the Internet, the Web is simply too complicated to use efficiently. We've streamlined content and developed one-stop-shop simplicity. Our goal is to make SBN Online your home page. You won't need to go anywhere else to find the business information you seek.
CEOs buy, sell and network within their home communities. We recognize the importance of being local. That's why SBN Online offers locally generated news and information, as well as locally sourced goods and services.
Lower costs equal higher profits. We've partnered with many of the region's premier service providers and suppliers to create more efficient acquisition of goods and services. We'll also be offering discounted offerings from our preferred providers.
SBN Online's preferred providers cover nearly every industry that businesses need to work with in order to succeed -- health care, advertising and marketing, human resource management, software solutions and payroll. They are Anthem, Dollar Bank, Xerox Connect, Cleveland Clinic Health System's Center for Corporate Health, Microsoft, FirstEnergy, Hitchcock Fleming and Associates Inc., The Reserves Network, Ahola Payroll Services, Roetzel & Andress, Meritech Blue and Great Lakes Computer Corp.
Together, we plan to change how Cleveland business leaders think about using the Internet. Fred Koury (email@example.com) is president and CEO of SBN Magazine.
We may not necessarily be aware of what we're waiting for, but still, we wait. We come into the office on Monday, feel a total lack of motivation and start the trudge through another week. Before you know it, a year has gone by -- and then your life has passed you by, too.
What have we accomplished? What kind of impact have we made on society? Have we truly made a difference? What would your epitaph read? How about your eulogy?
My goal is not to write a doom and gloom column. It is to get you thinking about your future.
Each one of us has a certain lot in life. Are you living life to the fullest? If your answer is no and you are interested in making the necessary changes to do so, continue reading.
We all have basic practical needs that must be met, but sometimes, we can be too practical, stifling our growth within the rigid frame of our life's schedule. Life can be very similar to nature if we allow it to follow its natural course. Just like seeds become plants that eventually flower, our dreams can blossom, too, if we let them.
There are two things that need to take place in order to realize our heart-felt dreams. First, it's important to realize that we do need to meet basic practical needs, so don't make rash decisions which could prove more harmful than helpful. Second, be ready to take a chance and make a leap of faith. Timing is everything. Here are several signs to help you recognize it might be time for a change.
1. You don't like what you are doing at work. This is a sign that you have a job, not a career. A job is a series of tasks you perform. A career is something you believe in and which gives you a sense of accomplishment at the end of the day.
2. Does something else interest you? Make inquiries, do some research and explore while you are in your current position. I'm not suggesting you take advantage of your current situation, but this will give you time to think before you make hasty decision. Learn more about the details of what you're considering, and talk to others who do it.
3. Find the new opportunity that's right for you. Pursue your new interest by locating the best opportunity that fits the criteria you created while exploring and researching what you wanted to change.
4. Take the plunge. Wait until you have peace about your decision. If it doesn't feel right, it's probably not the right choice. Bide your time until a better opportunity finds you.
Change is never easy, but you have to be willing to take a risk. The greater the risk, the greater the reward.
The seed of your dreams will never flower if you don't allow it to grow. Fred Koury (firstname.lastname@example.org) is president and CEO of SBN Magazine.
As the CEO, everything you say is magnified. You might as well walk around with a bullhorn turned up to the highest volume and broadcast even your most insignificant thoughts across the office. Everything is exaggerated. If you don’t smile wide enough when someone says good morning, people start to speculate that it must be because something is wrong with the business. If you don’t stop to chat as you walk by someone’s office, it must be because you hated the proposal he or she turned in last week.
It’s unfortunate, but that’s the way people look at the CEO. They view you through a microscope while you view them through a telescope. Every word gets dissected crossways. What did he really mean? What’s the significance of the red tie he’s wearing? He requested a meeting for next week are we in trouble? Whether you like it or not, what you say carries a lot of weight with your employees.
Be very careful what you say, because anything you promise will come back to haunt you if you don’t follow through. And I’m not just talking about promises about big-picture initiatives. If you told someone that you would look into why there are no pens in the supply room, you better follow through. If someone thought it was important enough to bring to your attention, then it’s a major priority for that person. It might be at the bottom of your priority list, but if you told the employee you would look into and you forget, he or she will see that as a broken promise and call the rest of your leadership and integrity into question.
You may have just forgotten about this minor detail as much more important issues swirl about in this difficult economy, but we live in a world of broken promises. People almost expect that when a promise is made, it won’t be honored.
Lehman Brothers promised to take care of investors’ money and manage it wisely. Its broken promises wiped out what had once been a pillar of the financial community and helped put the economy into a tailspin as people lost faith in the system.
People in your company look to you for guidance. If you say you are going to do something, then do it. If there’s a chance you won’t get to it, then you are better off not saying anything.
The other thing to remember is that as the CEO, you set the tone. If you don’t follow up on things you say you are going to do, your senior managers will see that as acceptable behavior and do the same thing. The people under them will do likewise, and the next thing you know, you have a culture of people who don’t value the promises they make. Eventually, customers will become the victims of this behavior. Managers and salespeople will make promises and then not deliver.
Be careful with what you say and how you say it. Talk to your managers and make sure that there aren’t any items that you told people you would take care of that have been neglected.
Promises are a big deal, even when they may be about things that seem trivial at times. Breaking promises is the fastest way to destroy your credibility.
There will be times when you simply just can’t keep a promise. It could be something that’s completely out of your control or just bad luck. Perhaps you promised bonuses, but one of your biggest customers canceled its contract, so you can no longer afford to issue bonuses. Or maybe a storm damaged one of your facilities and the money had to be spent to put everything back in working order. Regardless of the reason, if you have to break a promise, make sure you take action.
Talk to the people involved, explain what happened and then do whatever it takes to make it right. Most people will understand why something wasn’t delivered if you give them all of the information.
In a world where people don’t honor promises, it’s important that you set the standard in your company. Be careful with what you say, do what you say you are going to do, and if something goes wrong, explain why. If you do all of those things, your credibility will remain high and people will know they can trust you.
In today’s world, leverage is everything. You have to take advantage of every opportunity you can, because you never know when a small investment will turn into a big payout. Margins are really thin, and the competition is tougher than ever. The days of “business as usual” are gone forever.
If you aren’t finding ways of leveraging your people, your brand, your locations and your products, you probably won’t be around much longer. If you think of every contact as a dot, you need to be connecting those dots, not collecting them. What I mean by this is look at ways you can serve as an intermediary between those points. In some cases, there will be a direct business benefit for you. In other cases, you are simply making a connection that will benefit someone else. When you meet someone new, think about ways you can connect that person with others so that both parties benefit. When you come across a new product or service, don’t just think about how it can benefit your company but think about how it might benefit other CEOs. When you operate this way, you start making positive connections and people remember that. In the long run, hopefully they will remember you when they come across something that might help you out.
You are at the top of the organization and are probably used to thinking like this. But to maximize your leverage, you need to do everything you can to make sure those below you are doing it, too. Some people may not be as comfortable making the personal connections, so you should focus them on products. What are ways you can leverage your existing products in new ways? What are potential new products? How can you leverage your brand to create new revenue streams?
One example of a company that does this well is Sunkist. Not only does Sunkist provide fresh citrus fruit, the company also has the brand on more than 600 products in more than 45 countries. You’ll find the Sunkist moniker on everything from fruit juice to vitamins to orange soda. The company has found new ways to take its existing brand and apply it to products that still relate to its core, fresh fruit.
An effort like this isn’t coming from just the CEO. It’s something the entire organization embraces. The only way for you to achieve similar results is to make it a companywide effort, as well. It starts with a passion for knowing it’s the right thing for your company. When you exhibit that passion, it’s contagious, and others will follow. But you can’t stop there. You need to convey that passion as part of your vision for where the organization is going. When you combine your passion and vision and demonstrate that behavior, the attitude will start to be ingrained into your culture. When that happens, you are more likely to find the success that Sunkist has found in leveraging its brand.
But it all starts with your mindset. A lot of people talk about it, but few actually do it. The time to start is now. The next person you meet, think about not only how his or her talent or business can benefit your company, but think about how it might benefit other people you know. Find ways to cross-market not only your business but your peers, as well.
Start connecting those dots today, and you’ll see a stronger bottom line tomorrow.
A visionary is defined as a person with unusual foresight and the ability to anticipate things before they happen. Whenever we are in a position of leadership, we carry the responsibility of being a visionary, whether we like it or not.
Smart Business is all about visionaries. In 1999, we hosted our first Innovation in Business Conference, which recognized leaders for their innovation and vision in business.
This year, the featured speaker at the conference is Jim McCann, the founder and CEO of 1-800-Flowers.com. Jim started with one flower shop in New York in 1976, and by 1986, had acquired the 1-800-Flowers number and changed his company name to match the phone number. By 1999, the company went public and added the dot-com to the name. Today, Jim sells more than $700 million in flowers and gifts annually. He anticipated the demand for quality products that could be delivered anywhere in the country and made moves to put his business at the forefront of that trend. When buying shifted to online, he was once again ahead of the curve.
Jim and others like him have the uncanny knack of knowing which direction their industry is headed before everyone else. The Innovation in Business Conference has been a smashing success because people want to learn what it takes to acquire these skills and apply them at their own business.
Failing to be a visionary will put you out of business. If you don’t have a vision, it will be hard to retain your top people. With no clear goals, they’ll see the company as stagnant and move on to more promising positions.
In the end, it’s all about accountability. It doesn’t matter whether you are running a $50 million company or a $1 billion company. It’s about the morale of the people, whether your top performers are being rewarded and whether everyone understands your long-term vision.
As the visionary for your organization, you have to keep everyone working toward that end goal that you set. You have to put back into the business as much as you take out. There are too many companies where the CEO is living good but no one else is.
Being a visionary isn’t easy, but if you carefully define where you want to go and how you are going to get there, you’ll already be ahead of most of your competitors.
For more information about the 11th annual Innovation in Business Conference held in Cleveland, Ohio, please call (866) 582-7011 or e-mail Caroline Calfee Zerbey at email@example.com.
When it comes to wellness, it’s hard to beat Motorola. The company started a pilot project a decade ago and turned it into a global initiative that is now run by more than 50 employees and is funded with an annual grant.
Individual programs are continuously assessed on effectiveness for the 30,000 workers, family members and retirees.
The company either provides free membership to its wellness centers or pays for memberships at qualifying fitness centers. It has provided flu shots and offers a variety of health education plans each year.
The results are impressive. For workers that regularly used a fitness center, the company saved $3.93 for every $1 it spent, and participating workers cost $6.5 million less in lifestyle-related medical costs than nonparticipants. Those in the program saw health care costs rise 2.5 percent annually, compared to 18 percent for nonparticipants.
While you may not have the resources that Motorola has, there are some things you should consider. Healthy employees, whether it’s through a formal wellness program or an informal encouragement for healthier living, help your bottom line. And more importantly, a commitment to health is the right thing to do.
Each person has a sphere of influence. As CEOs, it is our responsibility to get involved to do what we can to help those around us live healthier lives. Any health initiative has to start at the top. If you aren’t serious about it, then it’s going to be much harder to achieve any results. This isn’t just about absenteeism, it’s about doing what’s right for ourselves and our companies.
Motorola’s commitment shows what can be done when you have a lot of resources at your disposal. Most middle-market companies, particularly in the current economic environment, can’t match that level of funding. But there are some things you can do to make a difference.
Once you decide to make a personal commitment to health, you need a champion for your program. It can be you, but if time constraints prevent that, then find someone who strongly believes in the effort. The key to health initiatives is getting buy-in from every level so that each employee’s success helps generate other successes. Healthy living is contagious, and by getting a lot of people involved, you will be able to start to see significant results sooner rather than later.
As time goes on, the commitment to good health will become part of the fabric of your culture, making it easier to launch new initiatives and build on prior success.
Motorola has its own fitness centers in some of its locations, a luxury you probably can’t afford. But these programs do not have to cost a fortune. Check with your insurance provider and/or your local hospitals. Many have either free or low-cost programs that can help you get started. Some have consultants or health coaches that can do initial assessments and advise you on how to set up a program that is right for your company.
Experts will tell you that you won’t see returns for probably two or three years, but if you are doing it because it’s the right thing to do rather than from a strictly economic motivation, this won’t matter. Healthier employees are happier and more productive.
Not everyone will be interested in participating in whatever program you set up, but don’t worry too much about participation rates. If you lead the way, you are giving people who are interested in good health a means to reach their fitness goals, and participation will increase as people see the successes of those around them.
In the end, it’s all about your health. Because if you don’t have that, what do you really have left?
There’s no doubt that the current economic conditions have put a strain on a lot of business relationships. Money is tight and that requires tough decisions both internally and externally. Take banks for instance.
Tough economic conditions forced many banks to rethink how they were doing business. Companies that ran into trouble weren’t getting off easy. Banks needed cash flow to deal with their own problems remember, banks are businesses, too. What happened was a perception that credit availability tightened. What really happened is that banks that were in trouble did indeed change their methods they could no longer afford to take any risks. With a lot of bad loans on the books and no end in sight to the downturn, they took a much harder look at each loan. Meanwhile, at banks that weren’t in trouble, they continued to loan money using the same guidelines as before, which were a bit stricter than other banks which is partly why they were in much better shape than their competitors.
The end result is a banking market where most people feel it’s difficult to get a loan. Compared to several years ago, that is certainly the case. If a financial institution turned you down, there were several competitors who probably had less strict rules and were willing to loan you the money. But now, those same banks have either been seized by the federal government, bought up by a more solid competitor, or are in survival mode and aren’t taking on any additional risks.
So where does that leave you? Probably caught in the middle. You may have a solid plan and some decent returns but maybe not enough for the banks to feel comfortable loaning you the money you need.
Your only option is to persevere and make the tough decisions. Tighten your belt as much as possible and keep going. Get out in the field and listen to your customers. Do everything in your power to get by until economic conditions improve. Here are three general rules to guide you:
- Be forthright with everyone. Don’t try to hide any troubles you have, that will only undermine the trust people have in you. Spend time talking directly with your clients and customers so they know where you stand and what to expect. Being honest with them will hopefully encourage them to be honest with you about their future plans. You also need to be honest with your banker. Talk about long-term plans and the hurdles you see preventing you from getting there. The better they understand your business, the better off you will be.
- Lower your pride. In the past, you may have been choosy about what jobs to take or which customers you would serve. In this environment, you need to take every job you can get. Don’t let pride stand in the way of a job. And who knows, that small customer that doesn’t seem like much today might be the one who comes out of the recession on top of the heap. Build as many relationships as you can to take advantage of those situations.
- Don’t wait to make tough decisions. Keep people that can help your business, but if you have someone you can’t afford, you need to move on sooner rather than later. You still need to do it in a humane way and help the person find another position if possible, but you can’t keep positions that your revenue will no longer support.
If you do everything you can, what you’ll find is that banks are willing to work with you, even if things aren’t perfect. A number of people in the construction industry told me that banks were working with them and were willing to cut debts in some cases by 50 percent. The banks recognized the economic difficulty and would rather have half of the promised amount rather than own a property they would be unable to sell.
The banks that haven’t closed their doors are pushing people hard because they have to remain healthy, but if you do everything you can to run a tight ship, then your bank should work with you to help get you through the economic crisis. But don’t expect your bank to make sacrifices if you aren’t willing to do the same.
In an economy where every penny counts, return on investment is king. People want to know how much they will get back on anything they spend money on.
One area you probably can’t go wrong in is business events. Investing in events, and the face-to-face opportunities they present, provides you with returns that you can measure.
Regardless of whether you attend, sponsor or buy a booth, you can determine whether it was worth the time and money you invested. If you attend, how many people did you meet who were prospective customers? In an age dominated by e-mails, text messages and the occasional phone call, nothing beats face-to-face communication. People do business with people whom they know and like. The best way to earn their trust and get to know them is through a face-to-face meeting at a casual business event.
If you are sponsoring an event, you’ll know how many people were there and will probably get introduced to some VIPs and get other opportunities to provide information about your business to others. Like the attendees, you’ll get plenty of opportunities for face-to-face contact with business prospects.
If you buy a booth, you’ll have a list of qualified leads to work off of after the event is over, and they will be people you met in person. So no matter what route you take with events, you will have a measurable return on your investment.
The key to a successful event, whether you are putting the event on or just attending, is qualified people. You want to go where your potential customers would go. Customers are lured by high-quality information that’s relevant to them.
The more specialized the event, the more significance it will have. It’s easier to find general information than it is niche information, so if you have an event that is narrowly focused, you will find a lot of customers in attendance who are attracted to that niche.
If you are the one putting on the event, take great care that everything is professionally done from start to finish. If you are uncomfortable handling the details internally, I recommend using an event management firm to look after all of the details for you. It only takes one small slip up to ruin the entire event. You will be judged not just on attendance but also on things like the food quality and how well the sound system worked.
Your event should provide an opportunity to bring buyers and sellers together, even if you are the primary seller. Use your event to get face-to-face time with not only prospective customers but existing ones, as well.
A big part of building a company is repeat business. You can’t afford to lose a client these days. An event can build on the trust and rapport you already have with your customers. It offers the opportunity for face time and perhaps even a chance to introduce them to other customers who can assist them with other problems they may be having. The more value they get out of your relationship, the harder it becomes for them to walk away.
A good event will keep people coming back year after year. Regardless of whether you are a sponsor or attendee, with a little preparation and the right attitude, you can get a great return on investment. In this economy, is there anything better than that?
Read Fred's previous column.