2009: It Wasn’t Pretty

Let's face it, be real and call it what it was: 2009 was a bad year. No need to list the negative news the business world kept getting pounded with all year. Most every industry took a punch in the gut at some point. Some industries got hit a little harder and were dropped to one knee. Would you say this was one of the worst years in decades? Yes, I think that would be accurate. Now that that is out of the way...

What happens next?

Global competition didn't stop. Your national competitors are putting their brain trust to work on finding the solution to emerging stronger. 2010 is not the year to cut budgets, sit by and lick your wounds so you can consider it a year of getting back on your feet. That is what January is for. The rest of the year you need to have your track shoes laced up and double knotted for the race that will determine your next five years of growth.

Define your path to point B

Sure 2009 was a curve ball and your plan for getting from Point A to Point B no longer works because you no longer can see Point B. I hear many executives so confused with their organization's direction because of the turmoil of this year, they seem ready to just idle until the fog lifts and the picture gets a little clearer. The fact is, we are going to be traveling in foggy times for quite a while and no one can afford to just idle. Point B is still out there, granted the road to getting there has changed.

Map a different path to reach your destination.

Might it take longer? Yes, it probably will. Will it be a tougher road? I think over the last 15 years the path to business success has shifted dramatically and become much tougher. So have most avenues to success, but people still achieve tremendous accomplishments.

Use the beginning of the new year to prepare for the success you owe it to your organization to achieve. As long as you know the path, believe in the path and are willing to put in the leadership effort to walk the path, 2010 can become a much different story than 2009.

Failure? Not a damn chance

2009 is on pace to record close to 150,000 commercial bankruptcies to go along with almost 1.5 million total bankruptcies. That is a lot of lost wealth and lot of crushed dreams. Businesses have failed because leadership was poorly matched with the situation they encountered. Whether it came on suddenly or gradually, the leadership missed important steps to preventing the failure from happening.
How do you prevent getting into such a dire situation when the best choice you have left is to ruin your credit rating and get into a disastrous financial situation for your organization? You have forethought and rely on these three steps.

Obstacles are a guide post

Along the way to every bankruptcy were poor decisions and misunderstood obstacles. Obstacles are not always best dealt with by waiting from them to get out of the way. You can't throw money at obstacles and hope that will make them to go away. Just going around them and not considering the new direction you just took is also a poor decision.

So what do you do with obstacles? Sometimes obstacles are an indicator a new direction is needed. But make sure you know where the new path is heading other than simply around the obstacle. When you encounter an obstacle to the normal flow of your business, stop a minute and think what it means.

Obstacles will show you what you are doing incorrectly if you stop and pay attention. Most people are of the mind set to plow forward and charge through on the same path they have always taken. In these times of rapid upheaval change, it's the right time to stop and think what your obstacles are telling you. They could be warning signs of greater problems down your normal path.

Refuse to lose

What does it mean to refuse to lose? Continue to bang your head against a wall until you are unconscious? Of course not, "refuse to lose" is more about commitment and dedication with a healthy mix of business savvy.

Bankruptcy had become too easy in this country and poor decision makers were using it to wipe the slate clean of mistakes to get a fresh start and letting others pay for their mistakes without making the effort to save the mess they created. The bankruptcy reforms of 2005 tightened the rules on these folks making it tougher to file for bankruptcies, but the mentality of business owners haven’t adjusted as fast as the law.

I see business leaders throwing in the towel because the work seems overwhelming. I've seen small businesses disappear because owners simply quit. Most business failures don't happen overnight unless there was a disaster such as a fire or a devastating law suit. This is not a popular opinion I know, but most businesses fail because leaders either were not paying attention or didn't have the energy to do what it takes to refuse to lose. If there was ever a time to have mental toughness, now is the time.

When you dig deep surprises happen

Innovation never happens unless someone is trying to solve as problem. When times are challenging and you feel backed against a wall, dig deep for new ideas, fresh thinking and new solutions.

We never know what we are fully capable of until we are fully tested. Don't shy away from challenges, embrace them. Don't throw in the towel, stoke that fire from within and drive harder. Failure? It doesn't stand a chance when you are fully engaged and committed to coming out on top.

3 Ways to Zig When They Zag

The business world today seems to be playing follow the leader. The "Got Milk?" ad campaign became successful and dozens of companies copied it. One company decides the best way to deal with a recession is to lay off employees and have a salary freeze and dozens once again follow suit, not stopping to even think if there is a better alternative.

Playing follow the leader requires no original thought, means you will always be playing catch up, and what works for one organization doesn't mean it will work for your organization. Effective leaders look for opportunities to zig what everyone is zagging. Consider these three ways to take a different road that puts your organization in front and well positioned for the near future.

1. They are laying off people so you need to be hiring -- top talent

The employment numbers in this country continue to demonstrate companies are trying to gain through subtraction. Two years ago the biggest concern I heard from HR directors and CEOs was the dearth of talent to pick from. The talent pool is full once again with tremendous talent looking for new opportunities. While everyone else is still trimming good talent trying to meet short term end of year goals, you need to be shopping to upgrade your workforce. Who are you keeping that sucks? Think you can find someone else out there that is a better fit? Now is the time.

2. They are cutting budgets so you hold steady and reapportion budgets

Companies are so short term focused they are cutting out dimes that could be making them dollars just to make a report look good. It's a bad way to manage. While everyone else is cutting back on budgets, take the contrary approach and keep your budget at the same and just redirect money to where it can do the greatest good for the organization as you move forward. I find that most companies do sweeping cuts like 10% across the board which is laziness and bad business. Dig into the details. What areas can handle a 10% cut? What areas should actually have an increased budget right now? Marketing rates are very low for example, is now the time to add budget dollars to maximize the opportunity for greater exposure? Be different and make smarter choices.

3. They are taking a protective posture so you need to go rogue

Last year budgets were being formed during election and economic questions, yet most budgets went forward as usual. This year everyone is over reacting and afraid of what next year could bring; therefore, budgets are getting slashed and fear reigns. What happened to courage? When did leaders become timid and fearful? Be the rogue and take a stand you believe in your organization's ability to thrive in slow economic times and give your people the tools and talent they need to succeed. In war times the best time to make critical advances is when the opponent is in retreat. Your competition right now is in retreat and playing a "wait and see" game. Take advantage of the situation, be bold and courageous as a leader should be and grab the opportunity with gusto and charge ahead. More organization make a name for themselves in tougher times than when the economy is good to everyone. Be the rouge and grab market share.

Russell’s Rules #3 Change is Always Going to be a Challenge

What elements have you put in your plan to deal with resistance to change?

I've heard it said the only person who likes change is the person who came up with the new idea to begin with. Whether it's good change or bad change, people tend to resist change that is being put upon them.

In any growth strategy, build into your time frame an adjustment period. Create a strategy to facilitate that adjustment so it can be received and accepted properly.

Often, dictates come from on high, causing dramatic shifts that affect those who had no input; such a situation will always cause people to resist. Not only are they resisting the change, but they are also resisting the way it was implemented.

Just Do This …

1. Announce the change before you start the implementation.

2. Train employees to deal with the changes successfully.

3. Get input on how to make changes from the employees who will be affected.

4. Expect the change to take longer than expected -- it always does.

Top 5 Ideas for Process Improvement

Self-examination is important to improving your organization. In challenging economic times companies usually resort to panic-selling just trying to bring orders in or just looking at what is to happen next in their industry. Self reflection will strengthen the organization to better prepare for bigger opportunities in the near future.

1. Eat This, Not That

The book by that title tells readers what healthier food choices to make when dining out. Apply the same idea to your business. What are the unhealthy things going on in your business you need to eliminate? Also, what the good ideas going on in your business you want to eat up and apply to other areas? The book uses great pictures. Do the same in creating your book of We Want This, Not That for your business.

2. The Purple Cow

Seth Godin’s book by this title is one I read over and over to remind me we always need to look for better ways of doing things. Actually, not just better but the unique that works. What in your business is old hat that people ignore or take for granted? What are ways you can spice up the employee and the customer experience that really sells your corporate culture? How are you exciting people with your work product?

3. Blue Ocean Strategy

The book by this title challenges organizational leaders to make the competition irrelevant. Hundreds of thousands of copies have been sold, but how many readers are actually applying what they learned on the pages? Step one is to put into action the new knowledge you gain. I ask every attendee to my programs to leave with only 2 or 3 ideas they can use, will use, and make happen and they will take great leaps beyond their competition. What knowledge are you not using?

4. The War of Art

The book by this title is one I’ve read a dozen times. Every business owner knows the basic mechanics of running a business. The science of business can be found in every book store in every city in this country. It’s the elusive art of doing business that makes the difference between running a business and growing a business.

5. Read more books

The four book titles I’ve listed here are great books for leaders to not just read, but digest, take notes from, and put into action. You don’t learn to run a better business watching television where people think for you. Spend your off time sharpening your craft and taking a leadership role in your business by improving your knowledge and putting to use that new information. You are guaranteed to make improvements.

Locate Your Vulnerabilities

One person’s game is another person’s nightmare. My website was hacked recently by a hacker claiming to be from Pakistan, which is just slightly out of my reach to wrap my hands around his throat. In any event, it has been a teachable moment to understanding where my business vulnerabilities are. As a small business significant interruptions to my process can be debilitating. Consider checking your organization for vulnerabilities in the following areas.

Technology

I am not a code writer nor do I understand the least bit about web coding. Technology is becoming so specialized that fewer and fewer people can truly handle all of the multiple technologies companies rely on. Small organizations need to have back up plans and know where to turn when the disaster strikes.

One of my clients purchased a very expensive system at the core of their organization that continues to fail to deliver on the promises made upon purchase. Their tech people are doing all they can, but they often find themselves stuck between designers and hosts pointing fingers at each other. Not a way to run a business, yet I encounter many who are working around these type of situations.

Where are your technology gaps? Do you have the technology you want? The technology you need? Do you have a clue how it operates? You need to have answers because the next vulnerability can leave you hanging.

People

Because I am not a code writer I have to be reliant on my web host and web designer to come through for me in an emergency. My designer was notified the day the site was hacked as was the host. The host tells me there is no way to track a hacker or find exactly how he got in. Five days later my designer is still AWOL. Essentially, my front door to my operation is closed until further notice because the people I count on didn’t deliver.

Who are you relying on to know what they are doing and be available 24/7 in case an emergency happens? Do you have a single person who possesses all of a specific piece of knowledge? A client had one person who could run payroll and the day that disgruntled employee quit his job, a virus was found in the payroll system making it a disaster. Did he do it? The mess was expensive and disruptive. Be sure you have people redundancy for critical information and knowledge.