We are on the edge of opportunity. Recovery isn’t the right word but there is opportunity in the air. Will your business thrive or dive?
There is pent-up demand in the world market for heavy industrial goods. Caterpillar and Cummins are seeing demand increase. Ford is doing very well. GM is coming out of their own self-dug ditch. Things look poised to recover.
Except, most of the new demand is coming from India and China. Those countries have economies on the rise. Meaning, some American companies will see sales soar and that revenue will make its way into the U.S. economy. Get clear. This recovery is coming not because we’re recovering, but because of foreign recovery leading the way. This has not happened before.
The implications are serious. For the first time since WW2, the American pie has shrunk. This will be a time of tremendous competition resulting in heavy price pressure.
We’ll read a lot this year about reaching the end of the tunnel and the recovery gaining traction. And the very next article will be about a business closing, bank failure or home foreclosure spike.
Only the strongest, smartest companies will thrive in this recovery. I see it like a tsunami. A big wave is coming that will lift the strong and swamp the weak boats.
What to do now?
Service. You must do more than talk about service. Your service must be impeccable. Service doesn’t mean fixing problems. This is absolutely critical. Everyone will be suffering from very tight margins. I can’t afford to receive a defective laptop from you no matter how fast you take care of the problem. I can’t waste time trying to make something work or trying to get help. Fix issues before they reach your customer.You must prevent problems. This must be priority one. Loyalty is fragile.
Clean up the balance sheet. Clear old inventory, collect old debt, pay down payables. There will be opportunities that will require cash. Credit will continue to be tight and lenders will want to see pretty balance sheets.
Streamline. Allocate thinking time. Let your talent know that they have 2 hours every Friday (or whenever) to think about how they can do their job more efficiently. Build spreadsheets that facilitate tasks. Look at time spent collecting meaningless data and eliminate that tracking for now. Focus on getting things done more smoothly. Focus on error reduction. You must allocate the time to think. Everyone I talk to is “busy”. Too busy to do really important things. Change that.
Management. Management must must must must be available to make urgent decisions and spot-check all operations. Management should not be tied up with reports and meetings. Management must must must must must be ahead of the curve by preventing potential customer problems. If you are in management and less than 70% of your time is spent directly involved in what your sphere of authority does, you’re not spending your time wisely. 70% of management time must be WAM—Walking Around Managing. You can go back to email and data analysis later. For the next 90 days get your hands dirty. You must understand and see what everyone is doing. If you are the CEO, work on the line for a day. Spend a half day in purchasing. Ride a delivery truck. Go on a sales call. No, I’m not kidding. DO IT.
Marketing. Marketing. Marketing. When everyone is busy, too busy to do the important stuff like marketing, work on YOUR marketing. No, not advertising, marketing. If you don’t understand, call me. This is urgent.
Hurry. If you don’t strike right now, you’ll sink.