Success Breeds Mediocrity
by Scott Harris
At first, the following may sound counter-intuitive. However, it is my belief that one of the lessons of our recent economic challenges is that success breeds mediocrity.
It is far too easy for companies that are doing well (sales hides many ills) to overlook weak employees, bloated budgets, poor planning, and structural weaknesses. Strategic planning, capital reserves, crisis planning, and tough decisions are delayed, ignored, or even deemed unnecessary in the face of solid sales and profits. Unfortunately, this lack of planning leaves companies ill-prepared for any reversal of fortunes, so many have gone under or are about to.
We are coming out of our recent economic tailspin, but there has been a paradigm shift in the way many companies do business and make decisions. Rather than go back to the “old ways” of doing business – restaffing, automatically reinstating budgets, and retreading old ideas and ways – many firms are taking a whole new approach to the way they do business, the way they spend and invest dollars, and who they do business with.
As a result, there has been a stratified recovery. While some firms are doing very well and others are failing, there appear to be very few in the middle. The difficult challenges that all businesses are facing have tempered and strengthened the good firms, allowing them to grow and prosper. At the same time, those same challenges are killing off the weak firms. Sadly, many companies were completely unprepared for the economic downturn and many still are equally unprepared for the turnaround. Companies (large and small) and individuals are watching every dollar they spend or invest and expect a return on that investment. Very few of us have the luxury of accepting, “Well, it’s good enough,” or, “That’s the way we’ve always done it.” Show me directly and exactly how my company benefits by hiring a new employee, increasing a budget, or engaging the services of a provider of goods or services. “Nice to have” ain’t going to cut it in the new economy.
I recently met with an executive of a worldwide consumer company who said that, while it may seem counter-intuitive, brands (relative to private label) are more important than ever because consumers want quality for their dollars. As a result, they are investing in brand identity and expect to reap both a short- and long-term benefit. A financial services provider is making a 7-figure investment in advertising, their first true advertising campaign, because from the president on down, they feel they have an opportunity to capitalize on the paralysis exhibited by so many of their competitors.
Within your own company, take a look at two areas. Are you maximizing every dollar you are spending and investing? Are you doing the same thing you’ve done for years, with the same people, or are you exploring new options and new opportunities? It may very well be that the current option is also the best. But don’t assume that it is.
At the same time, are you offering maximum return to your customer and clients? Expectations are on the rise. More is expected from us than ever before, as owners, employers, and businesses. Are you prepared to deliver at a heightened level? Are you looking at new and different ways to manufacture, market, and manage your business? How much help were your key managers, outside counsel, accountants, and auditors? Did they offer valuable advice and counsel over the past two years, or simply complain about the banks and government? Do you have a strong plan in place to increase profits, margins, and market share over the next two years, or are you too busy complaining about how bad things are?
We are most definitely recovering and the economic tide is rising, but this one is not floating all boats. Those with holes are sinking. Now is the time to ensure that you have no holes. Look at every department and department head, review all vendor relationships, and consider your board, your executives, and yourself. Most importantly, look at your company from the point of view of your customers, clients, and prospects. Are you likely to be viewed as a problem solver, a good investment likely to give a healthy ROI, or a tired firm, mired in the past? Quite simply, be the company you would like to do business with. Recognize that there has been – and will continue to be – a significant shift in the way business is done, and to be successful you will need to anticipate and adjust. If not, you should invest some time in preparing a résumé and a good story for why you’re out of business or a job, because odds are you soon will be.