Interpersonal Business

Vol. LXX

Dear Manager,

I believe we have the tendency to view our competition in very definite terms, predominantly by specific product category. We keep an eye on it; we analyze and try to anticipate it, yet we always come back to the distinct reality that we hold little direct impact over these players’ efforts relating to our success or failure. I would suggest that this type of competitor, while certainly worth our attention, pales in comparison to the balance of the competition we must confront as a manager.

I have seen more companies fail over the past thirty years for lacking the understanding of this single factor than for any other perceptible reason. I would like to review the histories of two companies with whom I enjoyed significant and long-term relationships. Each company was held in very high regard in their industry; each of their annual sales approached thirty to fifty million dollars in their days of glory. For varied reasons, my relationships with these companies were cut short. In hindsight, this may have been good fortune, as each is no longer in business in their original form. Yet, even to this day I feel a sense of disappointment and frustration; a “How could they have messed this up?!” perspective.

Study #1

I began with Company #1 in its infancy. Through innovation, design, and strong sales management, they single handedly drove, expanded, and breathed exciting new life into an established product category. In the early and mid 80’s this company clearly, unequivocally, seemingly insurmountably, owned their strategic product category. This was a company that enjoyed sixty to seventy percent of the market share! Creative business judgments, market timing, and a bit of good fortune, smiled on this company simultaneously. I had never seen anything like it, and I probably never will.

The 90’s brought new and aggressive category competition but, more significantly, it brought a new management team to the company. The historical success of this company was so profound that new management took the potential of risk for granted. As the 90’s passed, the management team continued to rest on the laurels of the glory days of the 80’s. It was honestly heartbreaking to see a company that had formerly been so in tune with their market, show signs of losing its corporate sense of awareness.

When their market share began to slide, initiatives were implemented to revitalize their sagging sales. Unfortunately, these directives compromised the vested relationships with their customers, sales partners, and organizational image: their true “brand” in the marketplace. This company ultimately created an adversarial role with their sales teams that only served to alienate and perpetuate their downward spiral. I can best describe this attitude as one of “cultural arrogance.”

Once reality finally struck, they had lost all position of strength in the marketplace and the support of their valuable sales partnerships. It was simply a matter of time before all of their earlier tangible and intangible assets had been lost. Sadly, this former high flier filed for bankruptcy.

Study # 2

Similar to the first study, Company #2 was enjoying a near thirty-year history of consistent growth. In critical areas, this is a mirror image of our first study. As is most always true, innovation and design also put this company at the forefront of their category. The 90’s rewarded these efforts, establishing this company as one that could clearly execute and sustain a timely theme and trend. It was magic.

A licensing relationship opportunity also began to develop and evolve for this company. Before long, the license drove the category, a classic example of the tail wagging the dog. An explosion of growth followed that I have very rarely seen in this industry. Within two short years, this single theme accounted for over fifty percent of their sales volume. Just as the company saw early indications that the trend was beginning to decline, the company was sold.

New ownership, blinded by the theme’s record-high sales, continued to count on this trend to insure the company’s future value. Their product and marketing departments failed to meet prior standards of marketing genius and, within a year, the trend had passed and sales had fallen significantly.

Management panicked by hiring their own in-house sales force. Certainly greater control over their sales efforts would stem the tide and compensate for poor execution by management. Heavy investment of depleting resources into regional sales management and untested field sales personnel severely escalated training and sales operating costs. Within two years, this company was on the verge of taking its final breath.

What can be learned by the rise and fall of these two companies?

 Never take current levels of success for granted. “One hit wonders” are a dime a dozen in most industries.

 We are only as good as tomorrow’s best selling product and innovation in the marketplace. The only true value in today’s success is in its financial potential to recreate itself, and in the development of its own second generation.

 Establish sustaining and strong levels of communication between your marketing departments, customers, and field sales personnel. While their participation may have been limited at the front end, their guidance will be invaluable at the back end.

 Maintain a balance of control and resources to insure that if the market shifts, your risk is both defined and survivable.

 Accept full accountability that only sustainable product innovation holds the lifeline to future success. Professional sales partners can only enhance the sale of a strong product presentation. They cannot compensate for poor execution.

 In time of crisis, create an agenda that takes full advantage of your current wholesale and retail partnerships. Their clear interests are vested on your behalf, now is the time to call in the IOUs.

 Difficult times are the true test of management. Insure that you have your best “management foot” forward when it’s all on the line. As these studies suggest, ownership’s life and death is truly in their hands.

 If you are confident enough to risk your future on a single trend, then you had better be equally confident in your ability to identify and grab that next tiger by the tail.

We began with the topic of competition. While market conditions and management decisions played a significant role in the outcome of these two companies, neither of them was clearly taken out by significant category competition. They had but one competitor: themselves. Are we as managers so preoccupied with the evil outside competitor that we are ignoring the priorities within our control? In many cases, outside competition is a distraction acting as a placebo. The true poison pill is more often than not sitting right on our desk.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2010. 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. LXVIII

Dear Manager,

Perhaps only a small number don’t fully understand this basic fundamental. Yet the takers of the world, looking for “somethin’ for nothin,’” seem to have affected many of our perspectives. I now find myself reluctant to ever ask for favors for fear that I will be perceived as a mooch. Once again, too bad.

Whenever possible in new relationships, I make the effort to discuss the individual needs of others prior to my own. Sharing an appreciation and sensitivity for another’s time and interests goes along way in establishing a beneficial relationship for all parties. I believe this can’t simply be implied; it must be verbally addressed specifically at this time in American Business.

CAN’T GO IT ALONE!

If we think of ourselves as an island, this is exactly what we will become. While I understand the value of networking in many industries, I wouldn’t say that it’s been one of my priorities in the past. Those who network certainly scratch each other’s backs, but it seems to be a scratch here and scratch there. It would be difficult for me to keep score, much less invest the time to be effective at it. I’m not discouraging this practice, as it has been very effective for many. It’s just not my gig.

I’ve always relied much more on my ability to evaluate and participate with a much smaller group of individuals. This is a group I protect, appreciate, and will not compromise. In this highly professional environment there are no sellers, there are no buyers, and there is no need to keep score. It is simply a relationship whose value is apparent to all parties, and whose members will come to the rescue at a moments notice, and without a second thought.

We all share in these types of personal and professional relationships. As we prepare our organizations for a new world order in business, these types of relationships have heightened in their value. To insure a healthy organization, these relationships will become our cornerstone. Yes, this is the foundation that will sustain us in the years to come.

REINVENTING THE WHEEL

I have a fairly simplistic vision of American Business: steaming locomotives on parallel tracks, all heading in the same direction, each solving their own and often identical issues. Each is paying for identical and redundant services and overhead, each financing the coal to support their ability to be The Engineer.

Certainly there can be value in an independent business structure to innovate and lay a path for others to follow. But how many resources could be conserved if at least a “like coalition” hopped on a single locomotive and created an efficient “Super Train.” I warned you that this was a fairly simplistic analogy!

What would the cost savings be? What could your resources be devoted to if they weren’t redundantly directed at reinventing the wheel? Just how much more powerful and profitable could you be if you began to “train pool?” Be it stubbornness or pure ego, I am convinced there is not near enough collaboration from the very top echelons of business to the very bottom of the food chain. To survive the new economy, much more will be required in this area of collaboration.

CREATING STRATEGIC ALLIANCES

More will be required, because business is changing so rapidly. The sheer costs to modernize, computerize, economize, and mobilize will tap many of our resources. Look at the bath the dot.com industry has endured in the 90’s. Talk about parallel tracks and redundant resource investment. Is that a train whistle I hear, or the sound of a vacuum draining resources and venture capital?

If we are going to survive and retain our leadership, we must do so in the form of strategic alliances. Obviously, these must be acquired with great care, mutual understanding and forethought. We certainly wouldn’t want to endure a head on collision! To proceed, some questions come to mind that must be answered not only with great care, but also with great candor.

 What are your greatest concerns for your company in the near and long term?

 What do you need to accomplish to address these concerns?

 What similarities and redundancies do you share with related companies? Are there needs similar to your own?

 What do you seriously need to accomplish, but are unable to dedicate the resources to?

 What position of strength do you admire in other companies or industries?

 What strengths do you have to offer in a collaborative and strategic alliance?

 What are your weaknesses that could be enhanced through this effort?

The final question is by far the most important. What individuals known or unknown, what companies known or unknown, what industries known or unknown would gain benefit or might need to collaborate in this strategic alliance?

What areas of business might benefit from this collaboration? The list seems endless dependant on the common needs of its participants. Areas that initially come to mind include: web site development, computer hardware and software, data entry, payroll, accounting, group purchasing, shared infrastructure, cloud computing, product design and development, advertising, trade shows and product promotions, to name just a few. As compared to purchasing these services independently, economies of scale impact favorably in each of these areas of investment.

Now that you have your game plan and model, it’s time to set out to find the individuals with shared values to form these alliances. You have a lot to offer, the mutual benefit is established; you are there to assist them in exchange for their assistance. You have the concept, the product and the team to sell from a distinct position of strength!

The leaders of American Business take great pride in their ability to out think, out maneuver, and outperform one another. It is time to put egos aside and use the collective resources that only an alliance and collaborative effort can provide. We all have powerful strengths and weaknesses. The power of acting as one is formidable.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2010. 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. LXVI

Dear Manager,

With this issue, I would like to share some fundamentals that might assist in your own cash collection process. It’s such a festive topic; I’m surprised it has taken me nearly six year to address it!

Having worked with dozens of companies over the years, I have seen numerous styles and approaches to the collections process. Some were highly successful, some were heavy handed and adversarial, still others reflected total mismanagement and a skewed sense of priority to collections. Ones approach is critical to overall success and the continued growth and prosperity of the company.

In any business relationship, there is an assumed mutual commitment for performance. This assumption generally proceeds with little direct conversation or specific pledge. It is simply assumed that if I deliver, you will pay. All parties proceed on good faith, and with mutual benefit of the doubt.

Problems only arise when this assumption and commitment to fulfill ones obligation becomes compromised. In most cases this is a simple oversight or short-term aberration. We have all found ourselves in this situation. It is critical for credit managers to remind themselves of this daily. Having developed this foundation, I also believe that this benefit of the doubt has a brief window of opportunity! Accepting debt, commitment, and accountability, are all very personal issues.

We also have the individuals and companies that thrive in an arena of deceit, misinformation and failed commitments. This is where we will find a condescending approach by individuals looking to create a problem where none exists! These are the individuals to whom this issue is unfortunately dedicated.

In some instances, the parties might have the very best intentions, albeit very poorly conceived. In the absence of proper financial resources they have chosen to roll the dice. They are betting on the come; betting that they can find success prior to their creditors landing on their doorstep. Yes, they are using our valuable resources to finance their dreams! I believe this approach to business to be deceitful, self-serving and dishonest.

A COMMON THEIF

Had we, as managers, wanted to be in the financial industry we would have become bankers! What is the difference between purchasing with no ability to pay, and stealing? Very little. Individuals such as these operate under the guise of businesspeople, when in truth they are common thieves.

There are numerous effective and creative approaches to this type of individual. With practice, the process of dealing with them can become even entertaining in its ability to hold them accountable, for perhaps the first time.

THAT’S ENTERTAINMENT!

I always begin with a lot of questions in the hopes they will begin to dig themselves into the proverbial hole. Questions like: “Have we not fulfilled our original commitment?” or “Are you dissatisfied with the service we have provided?” or, “ I have had to assume that this is a situation of our making, as I know your intention was to fulfill your commitment to us!” It is critical that one approaches these probing questions with no preconceptions or edge in ones voice. You are asking for genuine answers to very fair questions!

This type of dialogue will, in the very least, open some doors and force their hand. If there are indeed financial problems, this is your opportunity to bring them to light. I would also ask, “Have you tried to contact us regarding your situation?

These individuals rely on “the con.” It is our job to gently but effectively use their words against them. Explain that you would like to be able to give them some additional time, but that your hands are tied. In fact, your own position is now being evaluated by their performance! Suggest that you truly need their help to get yourself “out of a jam.”

When asking for their payment plan, be ultra specific in your conversation and your notes. If payment is expected in ten days, does this mean it will be mailed in ten days or in your hands? Are they absolutely sure that this is “NOW” a commitment that they can fulfill? Do they understand that if they fail to do so, your mutual relationship will be in jeopardy?

One key to this conversation is to maintain an earnest and sincere approach to finding its resolution. If your approach is firm but fair, it cannot be judged critically. Do not give them any personal reason to justify not fulfilling this obligation. This individual will create any possible rationalization in order to defend their “dead-beat mentality.” Don’t do them any favors!

There are also individuals who in fact have the resources but have made the profound decision to bestow this financial burden on you. How gracious of them! There are two significant triggers that will motivate a response. The first relates to the fact that there are priority vendors. If a key vendor goes unpaid, they may suffer significant financial impact. This may impact their personal job security. Be sure to analyze your own position of strength prior to all conversation. Determine their prior order depth and purchasing cycles in addition to their prior payment history.

The second factor cannot be denied. Individuals oil the squeaky wheel. Become a squeaky wheel. These individuals live in the tomorrow, never the current moment, and are banking on your lack of follow through. Establish a very clear understanding that you are not simply going to go away. On more than one occasion an individual has suggested they would immediately write and mail me a check. Whenever logistically possible, respond with, “terrific, I (or one of my associates) will be over in an hour to pick it up!” Create a significant sense of urgency to fulfill this obligation, today!

Over the years I was confronted on occasion with a manufacturer we represented who made the choice not to pay the commissions due our organization and sales associates. I would proceed to explain that commissions are not just simply another accounts payable in their system. Commissions are payroll. It only seemed fair to ask, “How would you feel if you didn’t get your paycheck on time?”

These remunerations represented the livelihood of my team. Yes, it represents bread, butter, mortgages and braces. By the time a commission is due, we have completed our full investment in that sale. In many cases, the customer had already paid the manufacturer! Anything less than a full, complete and immediate payment was simply intolerable.

For me, the most effective approach and choice of words was: “Let’s not be confused. We have fulfilled our obligation, and you have my money in your pocket!”

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2010. 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. LXIV

Dear Manager,

Personal growth, experience, and maturity certainly impact all of us. The question becomes: Is personal growth strictly a personal issue, or something that management should want, expect, and even demand from those they manage?

If we are to expect growth in others, we must also expect growth within ourselves. Similar to a commitment to exercise, all too often we allow this critical area to simply slide. We had intended to do more insightful reading, attend a seminar and class, or ask for consultative guidance, but life seems to be unfolding at accelerating rates. Perhaps many of us believe we have learned enough in school and on the streets. I am not suggesting that this is substandard. The question is, is it good enough?

With the current transitions in the world of business, will resting on your laurels of current growth service your future needs? I took some computer classes this past summer at a local community college. What an eye opener! Here were individuals committed to join the twenty-first century. Many were my age and older, often better prepared than I, taking their own steps in a new world. I left these classes shaking my head, not only in the limited knowledge I had grasped, but also in the amount of knowledge yet to be learned. I found it very humbling to re-enter an exciting world, one I had long forgotten.

I would be the first to admit that I could have done much more in the past thirty years relating to this issue. Most professionals simply accept the need to stay informed and to continue their education. For doctors, lawyers, accountants, or engineers, further education is understood as an accepted routine. Would you trust a doctor whose medical knowledge hadn’t been updated for ten years? Why isn’t a similar culture routinely accepted in American Business?

Once again, as managers, do we have the right to address personal growth issues with our staff? Do we have a right, as their employer, to expect them to accept responsibility for self-improvement? When these individuals were hired, it would be common for them to embellish their education, and areas of further education. This suggests their acceptance and understanding of its vital role to any profession. Should we not continue to expect more?

If in fact we have no right to expect a higher standard and continued growth, then the die has already been cast when the hire is complete. Effectively, we had better be damn good in the hiring process. In this scenario, we must assume that the current package “is as good as it is going to get!” More often than not, I believe this is truer than we would like to admit. How do we change this standard of mediocrity, in ourselves and in the assets we choose to manage? The current economic culture suggests the time is now!

Having now established the foundation, and the current deficiency, I would suggest that there are few of us, including those we manage, who could deny its significance. As always, the question becomes how do we turn idle conversation into a strategy that will affect change? I believe this comes with mutual participation, recognition, and a system that rewards individual efforts.

YOU DESERVE MORE!

This is an ultimate truth, that all of us can relate to and accept on a personal “income growth” basis. Many of those you manage have achieved success beyond their wildest dreams. This would also suggest they may have become satisfied with their current standard of living. Complacency sets in, and a loss of rhythm relating to self-analysis and improvement follows. These individuals must now be convinced that they have only begun to meet their potential, and the worth you hold for them in the future. This must be accomplished in its most sincere form, as it is absolutely true.

There is an element of fear in all of us relating to what the future holds for business in America. We see the Generation X-ers with seemingly so many more tools to effectively maneuver and succeed in this changing climate. What seems so out of our element often seems rudimentary to this next generation. For many, the anxiety of being left behind is indisputable, and creates a very real sense of urgency to get caught up before it is too late. Certainly this creates a significant and authentic opportunity to not only make your point, but to take a stand.

OUR INVESTMENT

Having benefited greatly from my recent experience back in school, I would suggest this is a very cost effective investment for you and your team. On a very reasonable budget, classes can be incorporated as one aspect of your company’s strategy and compensation package. I would not encourage you to simply roll out the checkbook, assuming full responsibility for their growth. You cannot force feed; you cannot want self-improvement for your staff more than they do. Perhaps your participation would include 50% to 75% of the tuition and books relating to approved courses, or reimbursement related to an acceptable grade. In some instances this might be a class that you and your staff could participate in as a team. Regardless, your objective is not only their participation, but also the buzz among the staff created by their enthusiastic participation.

As their manager, I would acknowledge those who participate to their peers. Certainly everyone would understand if these individuals were to be given favorable consideration should advancement opportunities become available. This was certainly part of the criteria when they were originally hired for their current position!

I am not suggesting that this agenda become an all out competitive assault. I am suggesting that we are all fighting for our collective futures in a whole new era of doing business. Either grow as individuals or fall further behind the national and international standards of what can be reasonably expected from a professional.

THE QUESTION BECOMES

What do you hope to earn this year? What changes do you plan to make to accomplish this objective? On reflection, what areas would you change from last year’s efforts? What areas of personal growth do you plan to address in the next six months? What are your three and five year objectives? How might these objectives also assist in enhanced personal time? What can we, as an organization and team, do to assist in meeting these objectives?

ITS OWN REWARD

To bring conclusion to a prior question, yes, as managers we have every right to assume and expect sustained and committed personal growth from our staff members. It is our only prospect for the continued growth and vitality of one’s organization and our individual and collective futures.

As managers, we all know the value timing plays in the success of any program or strategy we might pursue. There can be no greater personal reward than that of accomplishment. There can be no greater benefit than what you can bring to your organization and to each of your staff members on an individual basis. The time is right, the urgency is crystal clear; your future will be defined in the process.

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2010. 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