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10 Basic Business Rules in a Broken Economy

August 12th, 2011 11 COMMENTS
10 Business Rules for a Broken Economy

10 Business Rules in a Broken Economy

I Made a Wise Decision This Week

Two weeks ago, I wrote about the federal budget impasse and the inability of Congress and the President to negotiate a reasonable, intelligent, and non-partisan solution to the deficit. No doubt, you have your opinion about the final “deal,” one that is well-reasoned and not influenced by the talking heads and their simple solutions for complex problems sound bites. The market found it unsatisfactory, just as did Standard and Poor’s. For those who haven’t viewed Jon Stewart’s humorous response to the downgrade, I invite you to see it here.

I made a decision this week, akin to the ostrich sticking its head in the sand. I plan to ignore the gyrations of the stock market, the government economic reports, and anyone connected with minute-by-minute analysis on CNBC, Bloomberg, Forbes, Fortune, and WSJ. In addition, the 2012 elections, and any news related to it, are off limits until next summer.

What I’ve learned is that these distractions are not helpful to running a business in our broken economy. They are neither insightful nor enlightening. They are, in fact, counter-productive to working with customers, employees, suppliers, and colleagues and prospering in this uncertain time. It’s time to re-work, re-invent the rules. So, with all humility, here are my “10 Basic Business Rules in a Broken Economy.”

  1. Sales Trends are So Last Year. There’s no such thing as an overall sales trend anymore. Whatever happen in March and April has no bearing on sales trends in August and September. Zero. If anyone tells you the following, “Based on our sales this spring, we expect fall sales to increase by 15 percent,” they are living along the banks of D’Nile.
  2. Average Joe Has to Go. You can’t reform a hardened criminal or an average employee. You hire people for what they know. You fire them for who they are. If they are not moving the bar forward, then cut your losses NOW.
  3. Hunters and Gathers. If you define yourself as one or the other, then you should consider the convenience store business. Slim Jims would be a better career choice. For most of us, we no longer have the luxury of sales specialization. We need account executives that find new customers and cultivate existing ones. Don’t have one skill set or the other? It’s not like learning to play the violin. You can fake it.
  4. The Consultative Approach? Customers don’t want consultants. They want experts. Experts provide proven answers and solid results. Consultants offer advice, which may or may not work. Unless you are an expert in your field and have solid, proven solutions, then you are wasting your customer’s time.
  5. Good Suppliers Matter. Industry supplier relationships matter, if there’s a marketing, sales, and R&D symbiotic relationship. You would be surprised at how often they promote your business whenever they meet with their customers. Be good to them, and they will be good to you.
  6. Common Courtesy and Politeness. Go ahead — blame Twitter, email, voicemail, bad parenting, or high-fructose corn syrup on rudeness in society. Pointing fingers is just another way of not taking responsibility. Being nice doesn’t make you a “Nancy.” It means you respect others. I don’t know about you, but I enjoy working with people who treat me with respect. Do yourself a favor and learn these three powerful phrases:  “Please,” “Thank You,” and “You’re Welcome.” Rinse and repeat.
  7. Management by Walking Around (MBWA). In my humble opinion, the single best management concept to emerge in the past 40 years. It’s too easy to get disconnected from people and your business when you spend the day staring at a computer screen. Even worse, the core values that drive your business get blurred, muddied, or lost when you are not talking to others in casual, unstructured situations.
  8. Margins Matter. Yes sales matter. Yes, costs matter. But, if you obsess about one or the other, you tend to ignore margins. When is the last time you analyzed your margins? Chances are your costs have changed in the past year, but you haven’t factored how those costs affected your margins. Margin creep occurs in every business, particularly in difficult economic times. Then when sales improve, you’re scratching your head why your bottom line hasn’t improved.
  9. Vacation. Have you ever wondered why you are at your best after a vacation? Your brain needs a break. It needs to clear the rust away, just like a hot water tank, which will last longer and heat faster if you drained it several times a year. You need to flush the mental sediment to be at your best. One more thing . . . if your office can’t survive a week or two without you, then here’s something you need to understand. You suck at managing people. Good managers have good employees who can manage their workload.
  10. The 2012 Elections. The 2012 elections will have no bearing on whether your business is successful this year. Quit blaming Congress, the President, some government agency, or the teacher’s union. Turn off the TV, turn the radio to a music station, and pick up a good mystery novel. I guarantee that you’ll make smarter decisions over the next twelve months.

What did I miss? What rules do you live by in this broken economy? Please share. And be polite. 😉

–Mel White
http://www.linkedin.com/in/melmwhite
mel@classicexhibits.com

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Based in Portland, Oregon, Classic Exhibits Inc. designs and manufacturers portable, modular, and custom-hybrid exhibit solutions. Classic Exhibits products are represented by an extensive distributor network in North America and in select International markets. For more information, contact us at 866-652-2100.

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11 Responses to “10 Basic Business Rules in a Broken Economy”

  1. Mel White,

    Two big honkin’ thumbs up. Not sure how you got inside my head, but this post is ample evidence that you have been traipsing through this year. (“Please”…close the door on your way out…it does tend to get drafty in there).

    This should be mandatory reading for every sales manager.

    THANK YOU, for putting it in writing so brilliantly.

  2. gary camarato says:

    Excellent Post Mel!
    g

  3. Derek says:

    Niiiiiccce. Liked all the points but “Customers want Experts” is so very true. “Management by Walking Around” correct! You can’t always get things done sitting at your desk. And lastly “Vacation” is a very important statement.
    Thank you for the fresh take on avoiding the politics. All the economy projection talk is like listening to the weather guy. His forecasts are 100% correct…the next day.

  4. mel says:

    Allow me to add a #11.

    Associate with smart and insightful colleagues in our industry. 😉

    Thanks guys. I really appreciate your comments. It’s makes Monday seem like Friday.

  5. Another fabulous article Mel. You’re the bomb and a pretty smart guy.

  6. I would also add 2a, if you have a customer who is spending less, demanding more, and is in an industry that is contracting; fire them. Even if it’s not your client’s fault and they are being beat up by their boss, the controller or someone in procurement, that isn’t your problem. Personally, I think these are the clients that cause the most margin creep you were talking about.

    Back when a pop up mural was $2800 and a good quality 10′ pop up was around $3K we all had enough margin to throw in something every now and then to a good customer. Nowadays if a client wants free proofs and tells you they won’t pay overnight freight becasue the controller has a rule that nothing ships overnight (even though they approved the art 2 days before set up) these giveaways might be close to cutting your margin in half.

  7. mel says:

    You are 2 2 kind Susan. Thanks.

  8. Nicole Klein says:

    terrific post Mel! Your practical approach to focusing on the present is spot on!

  9. mel says:

    Hi Nicole. Thanks. Hope you are doing well.

  10. Excellent article and timely reading for all in business. One other factor that seems to have gone by the way side in most industries is customer service. You mentioned “find new customers and cultivate existing ones”. Sometimes finding new, inexpensive ways to provide more value to a customer is a way to not only protect them from your competition, but make them realize they should do even more business with you.

  11. Well said, Mel. John Galt needs to either shrug or do as you suggest, and just ignore all of the silliness and focus on what matters. All of your points are excellent, and you prove #5 & #11 with your post:).

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