Cut back fixed expenses as sales slump

Tell me if this sounds familiar.  ABCO was growing each year. Leaders were excited about the top line growth, even though their bottom line was anemic – but hey, they were growing and reinvesting in equipment and inventory etc. etc. As sales went up they needed more people, so they hired them. More and more people and payroll grew anf grew – but hey, sales are and would continue to grow, and we need those people to grow.

One season sales did not grow.  Leaders fought to make them grow. A level month here, a couple down months there.  External conditions, low demand, or just high market share from earlier successes were against their continued growth. The leaders continued to fight for sales expansion optimistically.

Year end came and they see that sales were down 19% from the year before, and not only did they not make any money, they lost some.

They still had the same number of people and payroll, the number one expense at most firms. While sales slumped, they had the staff of a company that was 19% larger – and that’s all it took for the group as a whole to lose money for their 12 months of collective effort.

The leader’s mismanaged the company with optimism instead of realism.

Don’t do that.

Learn by losing

Business is a competition. There are winners and losers. When we get started we are not very good at it, and we lose. The important thing is we learn quickly from our losses before we are out of business, so we can win one day.

What have you learned from your latest losses?

Discernment

A leader needs to step back, and zoom out a little or a lot, and ask, “What is MOST important now?”

You can’t spend your time and take action on the most important things if you don’t identify what they are.

Each morning ask, “What is most important now for my organization to accomplish our big goals?”

When little things get in the way

Do you let little things get in the way of big opportunities?

You do.  You spend time on things that matter little and will have a negligible impact on tomorrow while letting much more important things go undone.

What is one example in your day from yesterday?

There is hardly anything more important for your business than for you to see this and change your focus to the most important things.

What about today?

The Price of Entry

These days, satisfying customers who have so many choices is the price of entry.  If you don’t satisfy them, you’re toast. Being able to satisfy them is not a competitive advantage.

You’ll need to Wow the customer to be memorable and earn their admiration.

What Wow are you delivering?

"Experience Breeds Stupidity"

I guess it’s Kathy Richardson week here at Think Daily for Businesspeople. This is the fourth one in a row inspired by a pithy Kathy comment – all blasted out in real conversation in 25 seconds.

What she meant is that some leaders have been doing stuff for so long that they get locked in a rut, thinking they know it all. Experience is a great way to learn. In fact, being book smart counts for little. You have to try things for yourself to really learn.  

But I’ll add this formula: Wisdom = Knowledge + Experience + Reflection.

Without the reflection part, (asking honestly “Is what I am doing working?”,  “How can I do better?” etc.) we can find ourselves on a treadmill going nowhere.

So go ahead – Reflect!

The "Sugar High" of new things

I was chatting with Kathy Richardson, our recruiter here in our office, and she busted out with four phrases in a row that represented key ideas we have talked about.  I told her to slow down as I grabbed a pen.

The “Sugar High” of new things means that some of us, yes leaders, are chasing the next shiny object, thinking it will be their answer, or at least be fun for a while.  New things may be interesting, but they can’t make up for lack of follow through on what it takes to make the old things (that were once new things), produce their fruit.  

Amateurs crave distraction, while pros are keeping their committments, “but in chair” following through. 

"Nibble your way lost"

Which cut dulled the saw? Well, no one that was noticable. But it got dull nonetheless.

If we don’t sharpen ourselves, we lose a little each day, until we have lost our edge too.

Top performers always improve themselves, even when they are doing well.

How about you?

You can't learn from yourself

You can only learn from yourself by making mistakes and trying again.  And while we do use this strategy, it is way too slow (and costly) to get ahead.  We must learn from other people.

Even and especially leaders – the ones at the top of their organizations, must learn from others.  

Seminars, trainings, books, magazine articles, internet searches – keep learning.

Learn how to do it better

If you are too busy doin’ it, and don’t have time for reflection and learning, you can’t get better at it.  

Don’t you need to get better?