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|Fighting Back: 43 Rules of the Road to Survive Today’s Tough Economy|
by Alan N. Schlaifer
Law Offices of Alan N. Schlaifer, P.C.
|Last month, experts suggested varied ways to survive the turbulence no doubt facing your company - and every other one – in the current economic turbulence. |
Whether you want to gain market share, reduce your sales costs, drive up your operating efficiency and customer engagement, or come out stronger and larger, we hope this series will help you survive and thrive.
The Light at the End of the Tunnel: Eight Ways to Gain from the Underdog Advantage, Regardless of Your Market Position
One of the positive signs in today’s economy is rising sales and profits at a few companies in varied industries. With few markets growing, the current “zero sum game” for many means acting more like an insurgent to keep your loyal customers and take business from less responsive – or nonchalant or unaware – competitors.
One of the best guides to learning how to use this process comes from corporate marketing and political guru David Morey, Vice Chairman of Zyman Group, Atlanta, Georgia. The author of the business best seller, The Underdog Advantage: Using the Power of Insurgent Strategy to Put Your Business on Top.
Morey says, “The only companies and people succeeding in this economy are the insurgent underdogs….they are fighting for market share, or job and career position, with a predatory eye on their markets and competitors.”
He notes, “This is now mostly a zero-sum game in our tough economy. Few companies are growing, especially from an increased market. So you better find your revenue gains, or at least limited your reduced sales, by taking from the other guy’s business.”
Morey says, “History shows the underdogs will survive, thrive and win in this environment.”
These are a few examples that may motivate you:
From films: That’s what Slumdog Millionaire did. It started out as a true underdog: no name cast, crew, unlikely location, and much more against it. The big stars and producers in Hollywood considered “Bollywood,” the Indian film industry, a regional and limited appeal phenomenon.
No more! Slumdog Millionaire beat the odds, as the “little film” with a big heart that could, and did, beat out the big studios’ huge budget productions. After it won Best Picture and seven other Oscars, it showed its true pedigree. Its competitors were simply “barking up the wrong tree.”
Politics: That’s what, whether you like him or not, Obama did. Four years ago, who, other than a “cockeyed optimist,” in the words of a song, would ever have predicted that a little known first term Illinois Senator would have beaten a shoo-in. After all, Hillary Clinton had the money, the machine, and more: her husband, the former President, one of the best liked of all time.
And yet, Barack Obama beat her in a tough fight for the nomination, continued his momentum against a much more experienced Senator, John McCain, and is now our President.
Business: One that was a leader, but quickly losing market share, McDonald’s, even tragically lost two top officers to deadly illnesses in a short time a few years ago. The company was simply not having it “its own way,” until it started thinking and acting like an underdog. The result: it was one of only two 30 Dow stocks (along with Walmart) that actually went up last year.
Sports: Did you ever even here of Appalachian State before they beat Michigan? Most people hadn’t before their 2007 football game that put Appalachian on the map, and in the sports headlines. No one can forget them now, as a result of one of the biggest upsets in NCAA history. Appalachian’s players and coach came out of nowhere, but had the right strategy, including a “can-win” spirit.
And what about the “Miracle on Ice,” nearly three decades ago, when our US hockey team, composed of unknowns, beat the vaunted Russians to capture the Gold Medal at Lake Placid.
But whether in film, business, athletics, or politics, underdogs can - and do - win, when they follow the right strategy with the proper actions.
Eight Ways to Win
These are a few of factors Morey cites as ways you can act as an insurgent to win in this economy, regardless of your actual market position:
- Use change to get control of the dialogue. Insurgents believe change will work for them. In the words of Alabama’s late, great coach, Bear Bryant, they are “mobile, agile, and hostile to their opponents.” They have a predator mindset. Incumbents believe they’re destined to succeed, then take needed actions to “beat the odds” set by the experts and complacent foes.
- Play offense. The “prevent defense” often does not work in football, and it won’t work in today’s economy.
- Be more responsive to consumers; listening better and greater speed can win. Constantly seek better ways to serve those who keep you in business.
- Focus your greatest efforts on keeping your “hard supporters” – your most loyal customers, who will “choose your brand even when the competition is price-promoted.”
- Do a better job with your “soft supporters,” who “may prefer your brand, but are not frequent users. They are about half as loyal as your Hard Support.”
- Spend less time and resources on others. These consumers, including Undecideds (brand switchers), Soft Opposition (prefer another brand), and Hard Opposition (hate your brand), are generally a partial or total waste of your limited resources.
- Never get overconfident, especially in this economy.
- Concentrate on what you can do. The “doable” tasks, from better niche marketing and products, are more fruitful than trying to do more than your resources may permit. Focus on the most promising and productive targets; don’t use a shotgun approach.
Blow and Blog Your Own Horn: Do a Better Job of Listening to, and Engaging, Your Customers
One of most outspoken blogs is from Bill Marriott, who comments on varied issues relevant to timeshare, hospitality and travel in general.
But in a turbulent economy, it may be helpful to look to other corporate leaders facing their own major challenges. Below are excerpts from a recent blog by Carol Bartz, Yahoo!’s new CEO. On the job for just 10 weeks as we went to press, she has confronted a company that had been a dotcom leader. More recentlym Yahoo! has been in disarray, especially after rejecting a 2008 buyout bid from Microsoft at more than two-and-one-half times its current stock price.
Whatever your facet of the vacation ownership industry, you may want to take her comments to heart, and to head:
I’ve noticed that a lot of us on the inside don’t spend enough time looking to the outside. That’s why I’m creating a new Customer Advocacy group. After getting a lot of angry calls at my office from frustrated customers, I realized we could do a better job of listening to and supporting you.
Our Customer Care team does an incredible job with the amazing number of people who come to them, but they need better resources. So we’re investing in that. After all, you deserve the very best.
We’re also leaning on this team to make sure we’re all hearing the voice of our customers (consumers and advertisers). I’m singularly focused on providing you with awesome products. Period. The kinds that get you so excited, you have to tell someone about them. Whether on your desktop, your mobile device, or even your TV.
And that takes a real understanding of what you want/need/love/hate, how you’re using our products, and what you find simple, intuitive, easy and fun. Who wants innovation for innovation’s sake if it doesn’t make your life easier, more efficient, more productive? So expect us to hear you better and take better care of you.
Here are four key ways you and every other business leader may consider adapting that message to your own company:
- Improve the ways you engage your customers; listen more carefully to hold on to them.
- Take better care of each type of customer, whether individual or business.
- Provide your staff with the tools to do a better job of this.
- Remember that innovation for its own sake is not the goal. Just as she focused on how Yahoo!’s offerings need to make customers’ lives “easier, more efficient, more productive,” so, too, must you find the benefits and emotional triggers that will turn on your consumers. When the trigger is pulled, work constantly to be sure it hits the target.
Five Ways to Help and Benefit from Current & Former Employees
Tony Audino, Co-Founder & CEO, Conenza, Seattle, Washington (www.Conenza.com), writes: “Companies around the globe are dealing with challenging economic times. Corporations are being forced to make difficult decisions about their business and people with imperfect and constantly-changing information.”
With more than a decade of corporate social networking experience, Conenza has built and managed engaging online corporate alumni and employee communities for Global 2000 enterprises. Several, such as Microsoft, have tens of thousands of current or former employees.
Conenza says its fully-managed alumni community solution feature the secure and scalable Conenza Community Core, delivers increased recruiting efficiency, decreased recruiting and on-boarding costs, and reduced outplacement costs, plus increased revenue- and brand-building opportunities.
Audino notes, “It’s natural during an economic downturn to scrutinize and prioritize investments. Strategic executives will make the choice to invest in initiatives that make their company more efficient, more productive, and more competitive—positioning them well for future growth. The business case for a private employee and alumni community in normal economic times is one that is extremely compelling; in an economic downturn it becomes a strategic imperative.”
These are five ways he says a company’s current and former employee can make a unique contribution to your business during a downturn:
- Capitalize on highly effective sales and marketing connections. Your former employees are influencers and decision-makers at companies around the globe. Whether they are working at clients or prospects, these are people with whom it’s smart to cultivate relationships. They are strong brand ambassadors, ready to refer your organization to co-workers and colleagues at their current companies
- Substantially reduce COBRA expenses from former employees. Across the corporate world, the red pen is out. COBRA expenses—which average $2,632 per COBRA continuant according to Ceridian—can be a substantial cash drain and add no value back to your organization. (Note: in addition, reducing hours of your employees, rather than just the number of them, may also cut your severance costs. The March 9 BusinessWeek cites a report that “37% of human resources managers say they’re now spending more time devising alternatives to layoff vs. six months ago.”)
- Build your employment brand. Starting an employee and alumni community during an economic downturn sends a powerful statement regarding the value your organization places on lasting relationships with your people—both current and former employees. It creates a corporate culture that is strongly rooted in relationships and trust.
- Maintain your competitive edge through an extended knowledge network. An employee and alumni community enables an organization to stay connected to key contributors and capture the valuable intellectual capital of departing employees.
- Find and place exceptional talent from both inside and outside your organization. Although hiring may be limited for most organizations during a downturn, it can actually be a great time to identify internal people with the hidden skills to step up to new challenges or cost-effectively acquire top talent with hard to find skill sets who know your business and can really make an impact.
Eight Pointers for Layoffs
Michael Lee Stallard, President, e Pluribus Partners, Greenwich, CT, and author, Fired Up or Burned Out? (203-422-6511; email@example.com), suggests what you can do keep remaining employees fired up, not burned out, after a big layoff.
He recommends these actions:
- Explain to remaining employees why you had to lay off their colleagues and what your plan is to improve performance.
- Meet with small groups of employees to ask them for their reaction to your plan -- what’s right, what’s wrong, and what’s missing from it.
- Consider their ideas, implement the good ones and thank those who provided the ideas you are implementing.
- Send employees an email that explains what you heard in meetings with them and what you plan to do about it.
- As much as possible, focus employees on productive activities that fit their strengths.
To minimize the negative impact of a layoff, he suggests:
- Respect is key. Treat others as you would like to be treated.
- Give laid-off employees time to say goodbye to their immediate coworkers and gather their personal items.
- Unless you have an employee who has behaved poorly in the past, there is usually no need for security guards to escort the employee to the door.
Five Survival Tactics from the Legendary Peter Drucker
Among all the management gurus of the past century, Peter Drucker is considered by many top executives and other leaders to have been among the best. He is certainly among the most quoted. Example: “Management by objective works - if you know the objectives. Ninety percent of the time you don’t.”
From 1971 until his death, he was based at the Peter F. Drucker and Masatoshi Ito School of Management at Claremont Graduate University, in Claremont, California. He was also a consultant to both businesses and nonprofits, and published 40 books over a span of nearly 70 years.
Drucker’s wisdom has guided great managers in their professional lives, and can help you and your colleagues through the turbulence that your business and career face now.
Even though he died at 95 in 2005, his lessons, legend and legacy live on. We are privileged to have input about Drucker from Bruce Rosenstein, from his book Living in More Than One World: How Peter Drucker’s Wisdom Can Inspire and Transform Your Life, www.brucerosenstein.com (Berrett-Koehler, being published August 10, 2009). Mr. Rosenstein writes:
We don’t know exactly what Peter Drucker would say about the current economic meltdown. However, he would probably urge us to take personal responsibility and deal with what is happening now in our personal and professional lives, without dwelling on the past.
Here are five areas of Drucker’s thought to help guide your thinking and actions as you make your way through the challenging times of 2009 and beyond. They are based on my research into his life and work:
- Diversify your life. If you have a setback, such as loss of your job, you’ll have other areas in your life (such as a parallel career or volunteering) to occupy your attention, and help you build a better future. Drucker wrote not just about business and management but also about what he called a “functioning society,” including the importance of nonprofit organizations and personal service.
- Tap into the power of lifelong learning. Drucker maintained his relevance long into advanced age partially by continuous learning. He had a longtime regimen of conducting a three-year self-study system, in which he would intensively read subjects as disparate as Chinese history or the plays of Shakespeare.
- Share your knowledge and expertise as a teacher. Drucker taught at various universities for many years, until only a few years before his death. He advocated that people should teach as well as be a practitioner. It helps you learn your subject better, and exposes you to new people and new ideas.
- Take time to reflect. Drucker spent time every summer considering how well his expectations of the previous year had gone. He redirected his priorities based on this process. The fact that someone of his personal and professional stature did this exercise until late in life was an example of his diligence, ongoing quest for relevance and lack of complacency.
- Reinvent yourself when necessary. In his 1995 book , he wrote: “People change over such a long time span. They become different persons with different needs, different abilities, different perspectives and therefore, with a need to ‘reinvent themselves’.” The widespread job losses many of us are experiencing provide the perfect opportunity for reinvention.
These five areas of personal development and diversification are not necessarily easy. But Drucker’s life and work was based on a diligent, hard-working approach, without shortcuts. It worked for him and his clients of all sizes and types. With time and effort, it can work for you as well.