Interpersonal Business

Vol. LXXXVIV

Dear Manager,

I believe that business culture in America has lost an element of respect for time. With individuals seemingly being “expected” to give more and more to meet today’s multi tasking standards, there’s an element of despondency in fulfilling all of the personal and professional requirements in their lives. If the scenario becomes hopeless, it can easily evolve to a state of “what difference does it make anyway” and, yes, a lack of respect for this commodity we call time.

While I’ve met a number of individuals who’ve tackled this concern, they seem to be the exception. This month’s issue proposes that individuals must address this problem if they are to reach the Promised Land of fulfillment. Once again, I’m speaking from experience!

I’ve seen friends and associates with anguished, almost sullen expressions, as it relates to their day-to-day realities and sense of responsibility. Their “to do” lists are overwhelmed with messages to return, emails to respond to, and under-whelmed with very little personal opportunity to effectively and creatively manage their organizations. In this scenario, all fundamental respect for time has been lost. My own observations would suggest this issue has only intensified in recent years. If, indeed, individuals can lose respect for their own time, how can they possibly hold:

RESPECT FOR OTHERS’ TIME?

It’s true. I think we all find ourselves frustrated by those who fail to hold any regard and respect for our time. Be it a doctor appointment, meetings with clients, or the very simplest courtesy of a returned phone call. What was once an inconvenience has now become much more common place. I’m here to suggest we shouldn’t accept this in ourselves or in others. This single factor, this lack of respect for time, is professionally and economically costly to American business.

How often have opportunities been lost for the simple reason that individuals have shown a lack of professional follow up and execution? How many doors, ever so briefly opened, were closed? Whether we admit it or not, there’s a surprising number of important decisions made with limited or incomplete information, because someone didn’t take the time to return a phone call.

PRODUCTIVITY VS. EFFICIENCY

There’s no question that we, as professionals, are much more productive than in the past. Commonplace technology and tools have had an extraordinary and positive effect over the past decade. These tools now provide us with the reality of being connected 24/7 if so desired. Are we thirty percent more productive than ten years ago; at some level has our culture “taken us for a ride?”

The daily use of these tools, and their relationship to productivity, is too often misconstrued to mean that we are, in equal parts, much more efficient. In fact, just the opposite is true. Simply because we may be more productive in no way implies we are any more efficient. Tools can only provide increased productivity, while efficiency is a direct and quantifiable reflection of one’s own personal discipline. It’s the evidence of who/what controls and defines ones schedule: ones technology or ones intellect.

In the new age of technology, this distinction has become blurred. The problem with an evaluation based on productivity is that there can be no true quantification of having fulfilled ones potential. We can all give an additional ten minutes today, add ten more minutes tomorrow, and on, and on, and on. There’s no beginning, no end, and ultimately no fulfillment.

Efficiency, on the other hand, is synonymous with discipline and personal control, regardless of any potential for increased productivity. I’ve often heard the lament, “I ‘have to’ do this; there’s no way to consider a vacation this year, there just isn’t ever enough time.”

THE FIRST AND ONLY RULE OF ONES SCHEDULE

A schedule can only have one “owner,” and that’s YOU! There are no excuses, rationalizations, justifications, defenses, or apologies acceptable. We are not only responsible for our personal and professional schedules, but also the implications of how this ownership demonstrates itself. How many times have we heard excuses, only to come to our own conclusion: “Your choices, and their reflection on your actions, have become very clear to me, and have been noted for future reference and consideration.”

TRUTH AND CONSEQUENCE

I learned that our need and appetite for time is insatiable. An eight-day week would no more meet our needs than seven. I realized, in fact, that the world would not collapse with ones periodic absence and, with very few exceptions, with ones eventual and “ultimate” appointment. It’s liberating to know that “no” is an acceptable answer. I also realized that important aspects of one’s professional schedule could, in fact, adjust to varied personal and professional priorities.

We have been given the opportunity to enjoy a new level of productivity. What better time to evaluate each of our own schedules and priorities on a daily and annual basis? I see the anguish in the unknown faces at the airport; I see it in the known faces of some of my clients. We now have all the tools. The only piece missing is in the personal resolve to translate new priorities with higher efficiency and improved discipline. The greatest advantage held by the best and most contented managers I know is that they have figured this out.

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. 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. LXII

Dear Manager,

Have you ever known of anyone who could even come close to always being right? Are you kidding? No way on God’s green earth! I believe we all realize these axioms are based on a generalized philosophy of one’s approach to doing business. Problems only arise when we accept these values in literal form rather than general form. You guessed it! There’s a group of individuals who currently expect us to accept this adage in “very literal terms.” Yes, it is a majority of our current and future customers.

I have no problem accepting these ideals in their intended context and frame of reference. Nordstrom, as well as many others, have outperformed their peers for years by bringing a much greater sense of focus and priority to meeting the needs of their customers.

In the legal system, there is a standard litmus test that all contracts must pass to be considered valid. The standard that has withstood centuries of litigation is: for a contract to be valid, benefit to both parties must be established. A contract that only benefits one party will never hold up in a court of law. If you look at it from a purely legal perspective, just how right are all of these customers?

The customer is, in fact, always right, with the following exceptions: in the case of being misinformed or being misguided. Misinformed or misguided? Impossible your might say!?!

THE MISINFORMED

These are the customers with whom we hold the greatest opportunity to evoke positive changes. It is certainly not their fault that they are, or choose to be, so poorly informed. Look upon it as your civic duty and a public service to show them the light. Let’s look at the buyer’s perspective.

In most cases, from their perspective, the defining element in any sale or contract seems most often to be focused on price. Price is a very tangible and precise medium in the negotiation process. Your customers will hound you about price at the beginning, middle, and end of many of your presentations. Within reason, we must certainly be competitive in this arena. I also believe that for the highly skilled professional, pricing issues are very rarely the defining element. This is where we must become the teacher, to assist the misinformed.

If price were the only issue, half of America’s economy will not, could not, would not, exist. In the absence of price considerations, quality, service, performance, confidence and personal relationships guide the vast majority of all business relationships. All too often, we allow our customers to emphasize and overstate pricing issues, as compared to true value issues associated with the balance of “the contract.”

If a product costs $1, what is its actual cost if, in fact, it is never received? In this scenario, would free provide additional value? Creating “added value” seems to be the buzzword of the new century. I’m not sure that anything has been added, such as octane to gasoline, but I do suggest that we need to be able to define and establish true value to our customers. Yes, our customers need to be better informed. We are in a position to do so, and the only ones willing to do it.

If price is a much more precise and tangible factor, how do we better define these secondary features and benefits, bringing similar clarity and definition? Ahhhh, this is where selling becomes pure. This is also what will define and protect salespeople in the new economy.

By nature of the buying and selling relationship, we must do a better job of bringing significant definition to the role we play, its value, and its priority.

If I had to define a single factor, one that translates to more sales in American business, it would be – without question – relationships. Fortunately, loyalty based solely on performance and established mutual benefit will rule in the buying and selling of commerce in the United States. Relationships suggest an understanding of the mutual value relating to service, confidence, performance, and in many cases, quality as well.

The problem comes in our ability to quantify this value. I believe many of us side step this most important of opportunities. Few of us wish to self promote, particularly to individuals with whom we enjoy a strong working relationship. It may become easier to allow them to focus on price, and hope that these “other considerations” will assist in a fortuitous outcome and conclusion. Come on. Are you truly willing to bank your fortunes on the potentially misinformed? If so, it may be time to get out of sales.

It is now time to bring definition and specifics to your value as a resource, and the ultimate sale and contract. What are your consistent service, confident hand, and past performance worth? A heck of a lot more than price! Incorporate these equations into each and every one of your sales presentations. With practice, this can be done effectively, not in a self-serving way, but in an informational way for those who may be misinformed.

THE MISGUIDED

In literal form, one would also have to conclude that all business is good business. What happens when the Nordstrom customer purchases a gown the day of a prom, only to return it the next day (only slightly used) due to “its obvious and clearly apparent poor fit?” Even for the standards of excellence that Nordstrom has established, this has got to be a challenge. Yes, there is such a thing as bad business.

Once again, our customers often rely too heavily on their regal throne of righteousness, never to acknowledge that a one-sided contract has been established. Conversely, we as sales people are often so hungry for the sale that we are willing to attach a dollar bill from our own wallet with every delivery. Unfortunately, I believe there are not enough of us who will stand up and define a relationship, and its understood contract, invalid. We have all created valid relationships that have lost their foundation of mutual benefit over time. These relationships are often derailed by the misguided. It is our responsibility to illuminate their path, or terminate the relationship, turning off the lights as we shut the door.

We must first define who the misguided parties are. More often than not they are hiding behind significant volume streams, years of commitment, and prior profitability. Others never fulfilled their commitments to us, or overstated their ability to provide value. Still others were simply a poor business decision on our part from the outset.

In the above instances, a conversation and conclusion relating to mutual profitability can only create benefit. Either they become valuable, or the losses have been eliminated. First, define your objective. If the objective is to proceed, then create a success formula that you feel you can both live with. At all costs, protect future potential with this client. If necessary, suggest alternative resources for your products. In your presentation, be sure to explain that you would certainly never expect them to continue an unprofitable relationship. They certainly must share this perspective!?!

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