The big tests in business rarely come in good times. But when the economic storms hit, we often start blaming everything and everyone else for our poor performance. And those who thought they were smarter than most a few months earlier head for cover.
Here are nine common issues that businesses face during a downturn.
• Lack of follow-through. When it comes to wrecking or hobbling a business, failing to follow through is near the top. Whenever you hear “I’ll do it right away” or “I’ll get back to you tomorrow,” it either won’t happen or what you get will be useless. Many people – including owners and managers – have a difficult time actually doing what they agreed to do.
• Lousy communication. It isn’t just poor communication; it’s an absence of communication. People don’t respond to e-mails and even if they do, they fail to deal with the issues in the e-mail they received. Just as bad is a failure to keep those involved in the communication loop.
“We haven’t had a staff meeting in two years,” a manager stated. No business can operate efficiently in an atmosphere of ignorance.
The end result is always the same. All the energy goes into making sure one’s rear end is covered, leaving little time or energy to devote to making the business a success.
• Incomplete, inadequate and incoherent instructions. It’s rampant. The words, “Please let me know if this isn’t clear to you,” should end every communication. Many employees are afraid to ask and others just go off in the wrong direction because they didn’t understand the assignment. It all has a cost in lost time and misspent energy.
• Unresponsiveness. It generally goes something like this: “We really need to get this done. When can you have it?” The message can come from any number of sources. Since the task seems important and time sensitive, everyone goes to work to get it done. It goes to the person requesting it – and then nothing. It isn’t even acknowledged.
It’s not just that ignoring people is desperately rude. When the next request arrives, it goes to the bottom of the “To Do” list where it may even disappear.
• Information paralysis. Today, databases are perhaps a company’s most valuable asset. Yet, frequently they are degraded to the point of being nearly worthless. Databases receive little or intermittent care at best. Often times, contact information is entered incorrectly – and no one figures it out! We may be good at business, but we could be even better if we could get beyond information paralysis.
• Relying on magic. The “Easy” button that Staples has made famous is brilliant. It is great differentiation. We all want to believe that pressing a button is all that it takes to make something happen. Hitting the send button for an e-mail does not guarantee that the message is received or acted upon. In the same way, there are myriad business services that offer the “Easy” button: you can communicate with customers and prospects, offer various types of information and have anyone respond and make a purchase. It’s like sitting back in your easy chair and letting someone (or something) take care of it all. It’s wake-up time: Even Staples is discovering that in a slow economy it takes more than a magic button.
• Failing to differentiate. Differentiation isn’t what a company thinks about itself. It is only the customer’s view that counts. If taken seriously, differentiation can provide a significant competitive advantage. The two fierce retail competitors, Wal-Mart and Target, are examples. As it turns out, there’s a minimal price differential between these two giants, according to the Wall St. Journal. Yet 87 percent of shoppers think Wal-Mart’s prices are better. Wal-Mart’s consistent and persistent message of lower prices pulls in customers. When they need to save money, they think Wal-Mart. If they have a little extra, they may turn to Target, with its slightly upscale image.
• Making everything too complex. In a Fortune article, Apple’s Steve Jobs lasers in on a critical issue, what he calls “democratizing technology.” The idea is that if what you make is “really great, then everybody will want to use it.” What Jobs seems to understand better than just about anyone else is that products must make sense to customers. In fact, such clarity characterizes the entire Apple product line. Customers will not spend the time trying to figure out what you are offering.
• Getting too hung up on the wrong issues. The current rage for ROI – Return on Investment – is an example. What is the ROI of a country club membership? What’s the ROI of taking a group of salespeople on a cruise? What’s the ROI of spreading Blackberries to everyone? The answer to these questions is the same: no one knows because it’s next to impossible to calculate. What makes it even worse is that so-called professional marketers have jumped on the ROI bandwagon and focus their budgets on activities that can be reduced to bean counting so they can save their jobs.
That’s exactly what has happened to Starbucks. When founder Howard Schultz returned as CEO, he pointed out that the company was floundering because the short-term “what are we getting for every marketing buck” mentality was sucking the soul out of the Starbucks experience.
How do you calculate the ROI on the Starbucks culture? The “pay-off” always occurs over time and manifests itself in many, many ways. •
John R. Graham is president of Graham Communications, a marketing and sales consulting firm. He can be reached at j_graham@graham.com.
