Interpersonal Business

Vol. LXXXVII

Dear Manager,

This oasis has become a sanctuary for me, my writing, and a window on the world that can be difficult to find at home. While the resort is very beautiful, it’s all about the people, the friendships, memories and the quality of life that’s always captured my imagination. It’s been a rewarding study of a culture in great contrast to my own. I’ve learned a great deal from this culture, and am convinced its essence and purity have impacted both my professional and writing philosophies. A few years ago as Sally and I arrived one October, we had no idea that within just a few days, our oasis would be in great jeopardy.

The Mexican people living in their native land are one of the most intriguing peoples I’ve ever known. They are a people who have, in many ways, accepted and flourished with the very little provided them by the Mexican government. Entitlement, as a word, can’t be translated into their native tongue. Clearly, this is one of the greatest contrasts to the expectations held by our American society.

Of equal (perhaps greater) contrast is the average wage of $5.00 or less per day. This is why tourism, its economics – and yes tips – are so essential to the Mexican food chain. Certainly there is corruption, but this is consistent with nations whose limited resources are overshadowed by poverty. I find this to be a footnote in the grand scope of a people I admire greatly, and a culture whose characteristics and priorities may be much more grounded than our own.

I’ve asked myself over these many years, how can a culture and people with seemingly so little opportunity by American standards find such rich fulfillment, and inspiring contentment? How does one bottle it and take through Customs to the United States? How would they react if what “little they had” were, indeed, placed in jeopardy?

On our fourth day there that October, we were warned that Hurricane Kenna (I know . . . what are the chances?) was heading our way the next day. Hurricanes are almost nonexistent in Puerto Vallarta, because Bandaras Bay and its ring of mountains this has historically sheltered this area from harm’s way. Effectively, the eye of the storm would require a pilot boat to successfully navigate a small inlet in the bay to reach the city.

Since few storms have impacted the city in the past, certainly placing sand bags at the sea wall gate “would deter any high water.” I spotted four at our gate prior to retiring to bed that night. By morning, the winds and waves had picked up; we were all preparing to watch the effects of an exciting storm. Kenna had been upgraded to a category five hurricane, but still there was little concern as breakfast was being served in the palapa just a few feet from the beach.

Within minutes of sitting down, there was a distinct transition in the barometric pressure, the wind and rains picked up, waves could now be seen swelling up to thirty feet. The sea wall, not to mention the bags, was overwhelmed by the tidal surge. The Mexican staff immediately announced an evacuation of the resort’s first two floors. Five minutes later, a second evacuation had been announced for the entire building. We literally ran through the street to a shelter in a nearby convention center to wait out the storm.

Many of the resort staff stayed behind to secure the facility, and to insure that all guests had, in fact, been evacuated. Their own families were now at great risk; many homes are not constructed to weather a storm of this magnitude. We waited five dark hours in our evacuation facility. We had no idea of what to expect or when we would be able to return to our resort.

Staff brought bread, juice and water to take the edge off our lack of breakfast. Runners were sent back and forth to update us of the plans in motion. Their single priority was our safety and comfort in a very difficult and unanticipated set of circumstances. There had been no practice runs; this was the real deal, and it had to be executed as if it was a common occurrence. It was.

By mid afternoon we were allowed back in the resort, and each guest was accounted for and escorted back to their rooms. We immediately went to the balcony of our seventh floor room to assess the damages. Waves of sand had completely flooded the pool, restaurant, and common areas, which were 100 yards from the ocean. Refrigerators from the restaurant had been picked up and swept fifty feet. Palm trees on the beach were down, their root structures completely exposed. Once the tides receded, the entire ocean side of the resort was left with from six to twenty-four inches of sand. The lush green was now gray. It was a devastating scene.

It was now time for the very best of what humanity can provide. Mother Nature and the sea had taken ownership of our resort; it was time for the guests and staff to take back this ownership. While all sixty condominiums had a broom and dustpan, the resort only owned three shovels and one wheelbarrow. Over eighty guests and staff pitched in with buckets, hoses, pots & pans – any primitive tool that could be scavenged and used to make a personal impact. With sunset only five hours away, the sense of urgency was well at hand.

It felt like an old-fashioned barn-raising; it also felt like moving a mountain of sand with soup spoons. By sunset, one of the prettiest in days, nearly 70% of the restaurant and pool deck areas had been liberated from the sea’s unwelcome gift. With dinner and drinks on the house, and the sense of satisfaction and relief felt by all, it was a memorable day for all of us. We had all learned something new about ourselves, the Mexican culture, and our fellow Americans.

With daybreak came a realization that “the perfect storm” had indeed hit Vallarta. The city’s two-mile boardwalk and its retaining wall had been overwhelmed and demolished, along with all of its shops and restaurants. Boats and cars were now resting in furniture stores and banks, and villages to the north were completely destroyed. Many ocean front hotels were flooded, to be closed for a month or more; some have never re-opened. A fragile economy, a financially deprived culture and its people had faced a significant setback. It was very sobering.

Within days, huge progress had been made. I wouldn’t hesitate to recommend – no, I would encourage – visiting Puerto Vallarta, for it will always be a slice of heaven. There’s something to be learned, and brought home, on each of my many visits to this wonderful place. It’s a culture of harmony and genuine happiness; a more measured pace that the world as a civilization can learn from. Mexico continues to grow and modernize thanks to its neighbors to the north. We also have much to learn, and we have no further to look than to the south.

This is a society that suggests family values and friendships are the singular priority and true meaning of life. These are children and parents who, as a family, have all learned how to genuinely smile from their heart and through their eyes. We can learn from a culture that rewards simple values, hard work, and living within ones needs and means. I feel honored and privileged to have been given the opportunity to have once again been its student.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2012. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Vol. LXXXVI

Dear Manager,

Yet, many of the most difficult and soul-searching decisions that management must make are made in times of diminishing cash in the cookie jar. Why is “panic” the catalyst in motivating us to take actions we already knew were needed, even inevitable? Could it be that while we had the instincts, we lacked “the justification?” If this is true, to whom do we owe this justification?

We’ve all been faced with this scenario; hopefully we’ve successfully tackled its problematic alternatives. I’ve worked with many companies who can see the undertakers shadow at the door. It’s a time of tough decisions; for them the pretending is truly over. Staying ahead of the undertaker is always a worthwhile objective! At the very least, it should be our goal to lengthen that lead as we mature as managers.

Downsizing Is Not A Dirty Word

Why is it that downsizing occurs most often when there seems to be no alternative? Business 101 taught us that bigger is better; it’s so much “sexier” than being a company that can only provide significant revenue and profitability. Sales might be sexy, but profitability makes your company truly attractive! Why not consider downsizing, not only to strengthen the company as a whole, but also to better fulfill its objectives and responsibilities to the whole?

If profit is our new best friend, is there a model that would create equal or enhanced profit on a more limited and streamlined scale? Is there a model that would enhance the quality of life for both you and the most capable members of your staff? If so, it would seem to be worth (at the very least) your evaluation.

Downsizing Has Significant Advantages

A mature company can fully quantify and evaluate its position of strength in the marketplace. Strategic alliances with vendors, customers, products, and staff have been developed. For every two of these quality relationships/assets, I’d suggest there’s one that simply can’t carry its own weight. The opportunity and objective is to retain the cream that rises at all costs. Approached dispassionately, the value of each of these alliances will become very clear.

What is left – the pitcher of cream you hold in your hand – contains the greatest assets of your company. Once again, you must protect these fortified assets in addition to providing newly available enhanced capacity. Attack with your best and brightest instead of being a fire fighter. You now have the quality and expanded resources to bring focus and true professionalism to the equation. How much better could you be, how much stronger and more profitable could these strategic alliances be, with this enhanced focus? Finally, how much more professional satisfaction might you find in this new model?

Shifting of Strategy

Ironically, you may find that this downsizing isn’t downsizing after all; it’s more likely an orchestrated “right sizing.” I’ve witnessed an expansion of profits and sales in this scenario. You’ve simply evaluated and eliminated areas that haven’t provided you the return on investment that’s essential to all relationships, products, and services.

How does it feel to be free of those aspects of your business that were the least profitable, the most time consuming, and the least pleasurable alliances you’d previously retained? Lean back in that office chair and tell me why this reinvented business plan isn’t anything but appealing. Maybe it sounds like a fairytale, but there are aspects of this strategy that can, in fact, be quantified and implemented for your company, guaranteed.

Could It Be Time To Expand?

Now that the profitability benchmark of performance has truly been established, you’re in a much better and knowledgeable position to truly evaluate future opportunities as they present themselves. Certainly, you wouldn’t consider reverting back to accepting alliances that can’t produce levels of profitability equal to the standards you’ve now established.

This scenario very certainly puts you in a buyer’s market. I’m a big believer that to accept additional responsibility in my already challenged day, it must be a clearly outrageous sweetheart of a deal! I’d encourage you to adopt this mindset, as it’s only then that you can truly and effectively define this type of opportunity. Not only that, why would you want to consider anything less? You’ve streamlined your costs, vendors, products, customers and staff; it can also be time to get back to enjoying your role as a business owner.

There will always be opportunities to expand; you simply have to approach each one with a strategic eye, commitment to enhanced profitability, and a firm hand on your wallet. Yes, in the vast majority of cases these “opportunities,” in tandem with your new standards, will breathlessly whisper in your ear, “You don’t need me, pass me on to your competition!”

I encourage you to review your current operation as compared to your original objectives, business plan, and mission statement. In addition, review what you may have anticipated five and ten years ago. Has your model lived up to, or exceeded, your expectations?

If today were your final day with your company, would the current model – your offspring – live up to that which you initially envisioned? Was it your primary objective to build a large company, or one that brought you fulfillment, inspiration, personal and professional balance, and a significant quality of life for both you and your team?

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2012. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.COM as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Vol. LXXXV

Dear Manager,

I believe more and more businesses fail as a result of their desire to be “something they are not.” What they are not is profitable; otherwise they’d be “succeeding at something they are!” Take a moment to ponder this thought. Bigger is better, crush the competition, dominate your field, reap the eventual rewards; perhaps Enron would like to comment…

American business is getting another history lesson as it witnesses these mighty falls. Question is, will we learn anything? Big egos always have and always will compromise solid business practices. Businesses will continue to fail or underperform, not from market conditions, a poor economy or steamy competition. They will continue to underachieve by pretending to be something they are not in these very difficult times.

Sales growth is the venerated measure of performance in American business. In working with dozens (if not hundreds) of companies over the years, I’ve observed the phenomenon of management’s obsession with, and commitment to, sales growth. Expansion most certainly will increase market share! New funding will allow us to attain our “rightful position” in the marketplace! Many of us, this author included, have bought into this rationale in the past.

The truth is that sales growth hasn’t an ounce of influence relating to success if, in fact, we can’t sustain profitability. How many companies are you aware of that failed because they sustained profitability and a reasonable return on investment? Should profits not be the primary, perhaps the only, benchmark in evaluating the success of our own business? When profits are addressed, it’s commonly assumed that they’ll simply “take care of themselves.” There’s less excitement in profits, we can’t quantify profits in open discussion, so let’s talk about sales growth; it’s much more glamorous! The pretending continues.

The following scenario has reared its head more than once in my consulting efforts, the conversation often beginning with: “Keenan, you’re a sales guy. What can you do to increase my sales?” A major red flag, telling me to step back and review the profitability of the entity, has just been waved. Invariably, the client has convinced him or herself that by increasing sales, profitability issues will be “worked out” along the way. They are banking on the economies of scale to either soothe or entice the investors, banks, and vendors scrutinizing them.

Having been a “sales guy” for over thirty years, I can tell you that increasing sales is the easiest aspect of the equation! Who gives a damn how many more widgets we can sell if the current profit model is leaking like a sieve? I often ask clients if they’d be willing to work elsewhere, essentially for free or a nominal wage. And, if they think their own employees would be willing to re-invest their emotional commitment in a “less-than-profitable entity.” If manufactured and fixed costs can’t sustain current (let alone increased) capacity, let’s do ourselves a favor, stop the pretending, and invest in certificates of deposit.

Profits: Friend or Foe?

My role with clients has evolved from evaluator of sales performance to analyzer of profit performance. I want Google’s scale of profitability! You bet I’m in search of excessive profits that sustain competitively priced goods and services in the marketplace. Not possible in today’s business climate, you say? I say you just might be wrong. If we give up the search, the outcome is inevitable. I further suggest that this is American business’ only assurance for sustained livelihood in the years to come. At the very least, we must raise the bar.

Profits Aren’t Obscene … But the Alternative Certainly Is

Years ago, I knew of a prominent overseas manufacturing company with the reputation of being the largest supplier of their product category in the industry. In order to maintain that status, and attract increasing numbers of contracts, deeper and deeper discounts were given. In the end, profitability hit bottom, and the company that “sold the most” went bankrupt.

Let’s return to the widgets. Similar to several of the companies I’ve worked with (and the unfortunate folks in the example above), the owner of the widget factory is proud of the fact that they sell more widgets than anyone in the industry. Sales may be booming, but in analyzing their profitability my recommendation (as it has been with similar clients), would be to discontinue up to 50% of their current product presentation, areas subject to poor profitability, and/or poor performance. You might think that I’d just asked them to sacrifice their first-born!

Once the discontinued widgets were evaluated, their actual contribution to the bottom line represented between 10% and 20% of current sales. The support of these products, however, represented 30% to 50% of existing fixed costs. Additionally, in order to sustain the larger product presentation, capacity and financial resources had diminished the ability to cost-effectively sustain the balance of the most productive aspects of the line presentation. Essentially, a company can hold their best products hostage in order to shore up their more-widgets-than-anyone-dream-world.

In each case where this “less is more” strategy has been implemented, sales and profitability in the following year increased, often substantially. Focus is now established on best selling
products, economies of scale are activated, and management finds much greater fulfillment in the company’s performance. It may not be as glamorous as selling the most widgets, but wouldn’t you rather be the most profitable widget company?

This is a model that can work in many business environments. The dynamics of profitability was always open for review in my own sales agency; our product performance and its relationship to capacity and profitability was evaluated on an ongoing basis. It was common for our sales agency to “tactfully resign” a significant number of manufacturers on an annual basis. While providing one of the smallest (in number of manufacturers represented) presentations, our agency became one of the largest agencies in The Northwest.

I recently heard the lyrics of a song that made a strong impression on me. The song, written by David Wilcox, tells a story of a relationship that failed because tough issues were avoided in order to maintain outward appearances. It wasn’t until the relationship ended that the first meaningful conversations were shared. Mr. Wilcox’s lyrics ring true: When the pretending is over, the truth is safe to say.

Personal Regards,

Keenan

Next month’s issue will continue this theme as we look in further detail at avenues of increasing profitability.

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2012. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.COM as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM

Vol. LXXXIV

Dear Manager,

With this month’s issue I’d like to try to tackle something that’s bedeviled me for many years. While I’ve made progress, I’ve never been fully satisfied with its current state, and perhaps never will. The battle continues.

I believe most of us hold a high standard of “professional performance” for ourselves and for those with whom we come in contact. Certainly this has paved the way for our current success. What some call high standards, others see as being a “perfectionist.” Duty is in the eye of the beholder.

I learned years ago that within the context of our greatest strength are elements holding equal potential to exhibit our greatest weakness. This weakness is found in the potential for excess. Similar to the “candy bar” phenomenon, if one bar tastes good, just imagine how much better two must taste! Over a period of time, as we continue to escalate our standards of productivity both personally and organizationally, there may not be enough candy bars in the pantry to satisfy that sweet tooth.

Personal Perfection

In a practical world, the reality of perfection exists only in our dreams. I made this most difficult realization a number of years ago. Each of my days was begun with a very high degree of anticipation for fulfilling or exceeding my expectations, not only for the day, but also for the month and year. When I got close to my goals, I’d raise the bar, for surely my expectations were too low. I must have underestimated my own potential. It finally dawned on me that, “This is never going to be achieved on an ongoing basis!”

Along with my perfectionist’s dream world came the reality of heightened frustration. I’d consistently head home feeling as if each day had failed to meet my high standards. If this sounds familiar, proceed. If not, I greatly admire you and you can now skip to the next section.

My resolution to adjust came with the understanding and acceptance that I simply couldn’t move forward with this rigid perspective because it was based on a fallacy. What I also realized was that these high standards, effectively monitored, can also be a great advantage. By sustaining high goals, even with their predestined failure, I’d provided the foundation for what success I’d already achieved. Certainly we can all lower the bar – not the candy bar – of expectations, achieving our objectives by noon, just in time for a round of golf.

By holding a high standard, my 80% fulfillment effectively made me that much more productive. Rather than lowering my expectations, I created a new approach, almost like a game or competition with myself, to see just how much I could accomplish. As with any competition, some days I’d win, some days I wouldn’t. The personal challenge became the motivation, win or lose.

I’ve always felt most productive when my plate is full. It’s amazing how easy it is to putter through a slow day, accomplishing very little. Optimum performance can only be achieved with a full and challenging schedule. This is when I developed the rhythms of my day, finding the most fulfillment. While the “unexpected encounter” always loomed, on balance I’d finally found the vehicle that met my expectations.

Now, rather than pressure, I enjoyed the contest because it was a competition I couldn’t lose. Fulfillment came much more often, while still maintaining similar expectations; they’d just become more productive. If our own professional perfection can’t exist, at least on this scale, we can easily surmise that it can’t exist in our expectation of others. With perfection out the window, then, what can we ask our team members to strive for?

Peak Performance

Defining the “best performance” of others would certainly be considered very subjective. I’ll never forget hiring an additional person to provide support for my “finely tuned machine” of a data entry department. Within days, this new individual had literally revolutionized my perception of peak performance in her area of expertise. By month’s end, I’d reduced staffing in this department making this individual my shining star. Ten years later, even after my company’s significant growth, this individual continued to control a huge percentage of this vital function, just as she continues to do for my former agency. Thanks Traci.

As managers, we can never completely understand or assimilate peak performance until it’s become fully exhibited, comprehended, and established. Time and again I’d find myself astonished by a salesperson’s performance when I was convinced they couldn’t effectively compete with their predecessor (to include my own former sales territory!) This single reality suggested to me as a manager: never underestimate, never accept a standard of anything less than the potential available only in peak performance.

Are we ever going to achieve peak performance across the lines of our organizational team? Probably not, but this shouldn’t diminish our vision with each hire, with each staff evaluation, of realistically establishing this standard as our legitimate goal.

Progress versus Perfection

There are secondary professional relationships where we have much less control over peak (let alone perfection) performance, because we don’t have a primary role in the ultimate outcome and the collective potential for growth. Examples would include a consultative relationship, a client, or a relationship with a vendor. In essence, a professional relationship that holds opportunity in some form.

Clearly we can’t hold these individuals to a standard consistent with those maintained for our staff. We simply aren’t “their boss.” I’ve maintained a number of these relationships over the years. While often very fulfilling – and sometimes less so – they too must maintain a minimum standard of performance that provides tangible value to all parties. This minimal standard can and should be quantified as progress.

You might be amazed at the number of business relationships that can’t sustain this basic standard of coexistence. This is the minimum standard! Management should walk away from any relationship that can’t support this reasonable objective. Progress is quantifiable; progress sustains interest, anticipation, and the potential for future growth. Anything less and realistically there’s no professional relationship to protect.

We can’t always sustain a standard of peak performance from all of those with whom we come in professional contact. We can expect a commitment to progress in each and every professional relationship we maintain, including the professional relationship we have with ourselves.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2012. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.COM as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM