What scares you?
The fear of being different is scaring the heck out most managers. If I try something bold and it fails, I’ll get too much negative attention. Better play it safe. Better stick to the rules. Better do it the way it has always been done.
The worst? Sales take a dive. Instead of asking the hard questions about why sales are diving, instead of changing your products or services to build sales, instead diving head first into new and unknown markets, cut back. That’s the safest thing a business can do when sales show a prolonged period of decline. Cut.
When a business cuts by reducing it’s workforce, closing facilities and slashing expenses, it reduces the mass of the business. Few businesses ever return to their former glory. VERY few. Still, cutting is seen as the safest course. It is the safest course for the CEO. He may be able to cut the company back to the black. At the very least, he’ll stop the bleeding. It’s a very crude surgery to go after the limbs of the company with a saw. Cut and cauterize. Bleeding stops, patient lives.
What’s so sad is this perceived safe course of action is not safe at all. It’s the common approach but not the safe road. But we feel safer on a known road.
I would reduce waste. Yes, if sales drop and stay down, there is waste within the business. You don’t need as much paper to print invoices. Duh. So there must be some waste.
I would look at WHY sales dropped. If your business is in a sinking industry, and you choose to go down with the ship, you can bail until it sinks. Order the experienced people overboard. Then toss over your means of production.
But if you don’t want to sink. Why not look for leaks? Why not start building a new boat? Your business will have all the resources it needs to reinvent self. Unless you throw them overboard. This takes guts. It takes focus. It takes an iron will.
Fix your service problems. (You have them, guaranteed)
Get your sales force into new markets. (They exist)
Reassure your people. After all, how hard would you work for a company knowing the goal was to eliminate YOU?
Make certain your marketing department understands marketing TODAY. If they don’t, CUT them and get marketing people that “get it”. Most traditional advertisting does not work in 2007. Does your marketing department understand that?
Innovate in ALL areas of your business. Reinvent every job. Ask every employee and every customer with whom you have contact for input. (That’s way too scarry for most managers.)
Think about this. In 1900, everyone needed tack (saddles). Horses supplied the transportation. How many people need a saddle today? So a saddle today should be really cheap and made in China, right? No. Today, saddles are still made in the USA and are very expensive. And quite profitable.
Look, when you read about Ford laying off 10,000 workers they aren’t cutting their workforce by half. They might reduce by 2%-5%. When they close a plant they aren’t losing 30% of their production capacity. That’s why it seems like cutting works. They are trimming fat not cutting to the bone. When Sears lost it’s number one retail sales spot to WalMart, Sears closed stores. Today, Sears isn’t even close to catching up with Wally World in spite of adding K-Mart to the Sears family.
You can’t expand and cut at the same time. So why is it done so often? Cutting is the answer because most businesses don’t react until it’s too late. Bad management. There’s a lot of very bad management out there.
Chris Reich, Author of TeachU’s Business Talk Blog