May 9, 2008
CSD: Recession Rx For Business
By Convenience Store Decisions Staff
Through a special arrangement, presented here for discussion is an excerpt of a current article from Convenience Store Decisions magazine.
“Companies with mediocre leadership can skate by when the economy is booming, but in tough times they really suffer,” says Quint Studer, president of the Studer Group, a Florida-based think tank. “Your leadership must be top-notch. If it isn’t, you may not be around five years from now.”
So what can you do to get through the recession? Well, creating a culture of sustainable leadership doesn’t happen overnight, but the following eleven steps can yield quick wins and get your organization on the right path
1) Develop a get-through-the-recession plan. Figure out which objectives you are meeting, which ones need more emphasis, and which ones you should rethink.
2) Address the tough issues with straight talk and transparency. Chronic secretive behavior from leaders and lots of behind-closed-door meetings harm morale in any economy, says Mr. Studer.
3) Equip supervisors to answer employee questions. The rumor mill kicks up a notch and morale plummets. Train managers on exactly what to say regarding timely issues – and how to say it.
4) Nix the negative self-talk. When you exist in a constant state of worry, your state of mind infects everyone. Forward motion halts. And besides, 99 percent of the disasters you agonize over probably won’t come to fruition.
5) Don’t permit fear to get a foothold in your company. If an employee expresses worry about the bad economy, don’t just clap her on the shoulder and say, “Yeah, I know it’s rough; hang in there!” That lends credibility to her anxiety and indicates that you share it.
6) Stay connected. In the same way that a doctor makes rounds to check on patients, a leader makes rounds to check on employees. The technique allows you and your managers to regularly touch base with employees, make personal connections, recognize success, find out what’s going well, and determine where improvements are needed.
7) Get rid of low performers. You should be spending 92 percent of your time with high and middle performers and only 8 percent with the people who don’t really want to be there.
8) Look for creative ways to hang onto top performers. It may be unrealistic to pony up a big raise right now. But you can offer your people perks that don’t cost a lot of money. Think about ways you can make their lives easier – flex time, partial work-from-home schedules (much appreciated in these times of exorbitant gas prices), access to a “chore runner” to pick up dry cleaning and stop by the supermarket – and implement them.
9) Put your best face forward with a Standards of Behavior contract. How should employees answer the phone? Should they knock before entering a coworker’s office? Steer clear of controversial topics like politics and religion? Mr. Studer suggests creating a Standards of Behavior contract that employees help craft, then sign.
10) Always manage up your organization. Say only great things about your company and its staff, whether you’re talking to outsiders, clients or employees themselves.
11) Shine a 1,000-watt spotlight on customer service. This one may seem obvious, but it can’t be said too often.
There is a very big positive that comes out of downturns, said Mr. Studer. “It sharpens our survival instincts and shows us what we’re really made of. Instead of just coasting along on the wave of an economic boom, we’re forced to get focused and get serious.”
Discussion Questions: What are some common management mistakes during down cycles? What’s the best advice for managing down cycles? What’s often the worse advice heard for managing down cycles?
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The single biggest reason for failure during down times is the inability to take timely (as in asap), decisive action. The discussions around whether or not we were going to be in a recession in November were a perfect example of this syndrome.
Smart retailers and service companies were not spectators and were subsequently decisive first (Wal-Mart) and hopeful second. Although the closings and cutbacks during the first quarter were what is commonly known as “slicing off the bottom of the pyramid,” those swift actions caused hope for 2009.
These are all very good suggestions. Another one that would stabilize leadership for the long term is conducting a 360 evaluation on how everyone is performing their jobs. A quality audit of each position will bear some interesting facts. Many times the under performers know how to stay under the radar and they stay on, zapping the company of life blood.
Common management mistakes during down cycles include tight sphincters. Please don’t misinterpret. There are several sphincter muscles in the human body. For instance, the iris of the eye is one (or two), and tight times result in their dilating the pupils of stressed-out people to mere pinpricks. Thousand-yard stare. Our mouths are sphincters, and uptight managers tend to purse their lips under pressure. The duodenum, a sphincter muscle separating the stomach from the upper intestines, can influence stomach ulcers during emotional stress.
Management mistakes during retail down cycles include tightened sphincters. Relax. Loosen up.
When times get tough, far too many retailers hang on to guaranteed losing situations. You own 5 stores and 2 have never paid for themselves? Get rid of the 2 losers ASAP, because they’ll only get worse.
You have just 1 store, and you’re holding on by your fingernails? Be realistic: try every alternative for success, and then give it a decision date. If none of the alternatives work by D-Day, sell it or close it ASAP.
Far too many retail store owners make less money being in business for themselves, compared to what they’d make working for someone else.
Three items on the list jump out at me as parts of a core internal strategy around ramping up the customer experience: Shine a 1,000-watt spotlight on customer service, which retailers need to support with the points about doing whatever it takes to keep top performers and putting in place performance standards so everyone knows what great performance looks like.
(I think behavior standards might be part of that, but focusing only on that one facet of the package strikes me as just a bit juvenile. If some folks need a brush-up on business etiquette, maybe that’s a training issue….)
What’s missing from the list, of course, is #12: Market as aggressively as you would in good times. Of course, look for efficiencies, and focus first on replicating your most profitable customers before conquering new market segments. But the businesses who stay top of mind in the tough times will sell more now–and won’t have to reintroduce themselves to the market when consumers are flush again in a year or so.
This is also a good time to test a wide variety of social tools essentially for free. So while there’s always a cost for creative and strategy time, we can learn a lot from a relatively small investment overall. And while it looks like playing with fun new tools now, it’s worth considering that the Facebook generation is shortly going to be growing up: buying houses, starting families, investing assets.
My best guess is that they’ll buy those things from the marketers who come to them in an authentic way–and not so much from the ones who only show up on a banner ad, or worse, avoid the social milieu altogether.
During a down cycle, management should stay true to the company’s core story (why the company was founded, what it does and for whom, its values, etc.). Staying true to the core story allows management to focus the company on the key priorities necessary to accomplish its goals. Remaining focused and on course will help the company ride out the downturn.
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The single biggest reason for failure during down times is the inability to take timely (as in asap), decisive action. The discussions around whether or not we were going to be in a recession in November were a perfect example of this syndrome.
Smart retailers and service companies were not spectators and were subsequently decisive first (Wal-Mart) and hopeful second. Although the closings and cutbacks during the first quarter were what is commonly known as “slicing off the bottom of the pyramid,” those swift actions caused hope for 2009.
These are all very good suggestions. Another one that would stabilize leadership for the long term is conducting a 360 evaluation on how everyone is performing their jobs. A quality audit of each position will bear some interesting facts. Many times the under performers know how to stay under the radar and they stay on, zapping the company of life blood.
Common management mistakes during down cycles include tight sphincters. Please don’t misinterpret. There are several sphincter muscles in the human body. For instance, the iris of the eye is one (or two), and tight times result in their dilating the pupils of stressed-out people to mere pinpricks. Thousand-yard stare. Our mouths are sphincters, and uptight managers tend to purse their lips under pressure. The duodenum, a sphincter muscle separating the stomach from the upper intestines, can influence stomach ulcers during emotional stress.
Management mistakes during retail down cycles include tightened sphincters. Relax. Loosen up.
When times get tough, far too many retailers hang on to guaranteed losing situations. You own 5 stores and 2 have never paid for themselves? Get rid of the 2 losers ASAP, because they’ll only get worse.
You have just 1 store, and you’re holding on by your fingernails? Be realistic: try every alternative for success, and then give it a decision date. If none of the alternatives work by D-Day, sell it or close it ASAP.
Far too many retail store owners make less money being in business for themselves, compared to what they’d make working for someone else.
Three items on the list jump out at me as parts of a core internal strategy around ramping up the customer experience: Shine a 1,000-watt spotlight on customer service, which retailers need to support with the points about doing whatever it takes to keep top performers and putting in place performance standards so everyone knows what great performance looks like.
(I think behavior standards might be part of that, but focusing only on that one facet of the package strikes me as just a bit juvenile. If some folks need a brush-up on business etiquette, maybe that’s a training issue….)
What’s missing from the list, of course, is #12: Market as aggressively as you would in good times. Of course, look for efficiencies, and focus first on replicating your most profitable customers before conquering new market segments. But the businesses who stay top of mind in the tough times will sell more now–and won’t have to reintroduce themselves to the market when consumers are flush again in a year or so.
This is also a good time to test a wide variety of social tools essentially for free. So while there’s always a cost for creative and strategy time, we can learn a lot from a relatively small investment overall. And while it looks like playing with fun new tools now, it’s worth considering that the Facebook generation is shortly going to be growing up: buying houses, starting families, investing assets.
My best guess is that they’ll buy those things from the marketers who come to them in an authentic way–and not so much from the ones who only show up on a banner ad, or worse, avoid the social milieu altogether.
During a down cycle, management should stay true to the company’s core story (why the company was founded, what it does and for whom, its values, etc.). Staying true to the core story allows management to focus the company on the key priorities necessary to accomplish its goals. Remaining focused and on course will help the company ride out the downturn.