As many of you know, I am a member of the The Chief Executive Network, an organization that brings together owners of businesses from around the country. We meet in small industry specific groups for a day and a half, twice a year. My software company group serves as an ad-hoc advisory board and my association with this organization has had a major impact on how I run Tribute over the years (I joined in 1994). There is a similar section of CEN that serves the distribution industry.

Bob Grabill is the owner of CEN, and from time to time he communicates with the members on topics of the day, particularly regarding best practices. I find his notes thought provoking at a minimum and they often provide ideas that I can act quickly on. I thought you would be particularly interested in this last email I received from Bob. I used it to frame a discussion with Tribute’s senior managers. That meeting produced some wonderful ideas and action plans. You will see some results very soon!

Take Action!

Tim Reynolds
President, Tribute, Inc. 

Preparing for the Recovery:
Are You Ready?
By Bob Grabhill

No, we are not referring to a certain date when it will end, but when it does, is your company ready to take advantage of the improved marketplace?

Why is this important? Several reasons, not the least of which is that there are a number of encouraging signs that we may be nearing or already have hit the bottom…for example, consumer spending (think 70% of GDP) and consumer confidence are up. Additionally, inventory levels have come down significantly and the stock market and housing prices are showing signs of stabilization. While we still believe that we may have a quarter or even two to go (CEN is holding to its earlier forecast of a bottom by mid-summer with the 3rd quarter of 2009 showing a meaningful uptick), history shows that the companies who did not wait until there is conclusive evidence that the recession had ended were the ones who took increased share post-recession.

But the key question remains…When the economy does rebound, will your company take full or partial advantage? Here is our concern: For the last 6-9 months most companies have hunkered down in a cost-cutting mode. Necessary –absolutely– but while all of our skills have gotten better in this area (a side benefit of a deep recession), our growth practices have been put on the back burner. And when the economy does turn, market share will not be automatically distributed in the same way as it was prior to recession.

As a consequence, CEN has 4 specific recommendations to begin working on now:

Examine the Post-Recession Marketplace Now

Now is the time to place your product/service bets! Kraft’s Mac & Cheese was created in 1937. DuPont created nylon in 1938. Fortune Magazine went to market during the Depression. All took advantage of emerging market trends created by the downturn and prospered significantly when the economy turned. What are these trends for your company?

Now is the time to get new offerings ready for market to take advantage of the new and increased buying patterns.

Are We Positioned Well with Our Client Base?

The best customer is the one we already have. While we already know this, the question is are we using the market slowdown to stay in touch and even re-position our company with our most important customers or are we waiting until they can “buy” from us? The natural tendency is the latter, but CEN feels this is a big mistake. If you have taken us up on our suggestion of a customer contact campaign conducted by your top management team, you have already experienced many of the benefits which CEN member Bill Lundberg and others have reported.

If you haven’t, it is not too late. Get on the phone and or in front of your customers. And do it now!

Do We Have an Improved Value Proposition?

In most recessions two things happen. Productivity is enhanced due to significant cost cutting particularly as a result of head count/plant/office reductions - usually where our productivity was the lowest (think “C” players). Second, the marketplace has heightened sensitivity to “more for less” than they did before the recession.

Have we taken full advantage of the burning platform we have been presented with? Remember after the recession, burning platforms tend to fade and taking costs out is usually met with more resistance.

Is Your Organization Ready to Go?

Training budgets have been slashed. While necessary, this is not a long term prescription for success. The statistical correlation between training and bottom-line performance is undeniable and has been proven over and over again during the last 50 plus years.

The best companies will be the ones which re-invest in the remaining “A” & “B” players first. While low revenues may not support training initiatives now…having the plan ready to go when they do will jump start your organizational strength when it comes time to go after market share again.

Bob Grabill is the President & CEO of Chief Executive Network - Mr. Grabill has over 35 years of management and senior management experience including an accelerated management program at a Fortune 10 company, senior management positions with several mid-cap growth firms, and turnaround experience as the president of a smaller $20M company.

Chief Executive Network
(O) 785-832-0303 Ext.102
(F) 785-832-0404
www.chiefexecutivenetwork.com