Stalled, Stuck or Stale The Blog For Brands That Don't Have It All Together

Creative Destruction In Action

This week my hometown is abuzz with the news of a pending layoff of some seven hundred public school employees—administrators, aides, and yes, teachers. The dismal economic situation finally caught up to our school district, leaving it with a $43 million shortfall and precious few options.

It’s a tragic situation, but it’s where we all find ourselves during this most difficult economic period in recent history. Countless private companies have had to lay off valued employees, and there’s no reason we should expect government employees to be unaffected.

As painful as it is in the short term,  it also spells opportunity. Those seven hundred people will now energize their interests, talents and creativity in all new ways as they explore their options.  Some will even strike out on their own, leveraging the upside of “creative destruction” to bring to the world something entirely new.

As former U.S. ambassador and author Michael Novak states, “the distinctive, defining difference of the capitalist economy is enterprise: the habit of employing human wit to invent new goods and services, and to discover new and better ways to bring them to the broadest possible public.”

Sometimes there’s no way around a tragic situation such as this. But there is a way through, and I’m confident that through creativity and enterprise those affected will find it.

The Other Margin Problem

As our business has picked up in early 2010, I’ve noticed something frustrating: Response time from our vendors isn’t what it should be. Nor is our own responsiveness, I must confess. Finding a way to quickly and effectively meet customers’ needs, in fact, may be the challenge of the year facing most companies.

There are two resources in business, money and time. Over the past two years, most companies have seen their financial margins evaporate, requiring them to trim every ounce of fat they can out of their operations. That means their margins of time are gone as well. Like a shoulderless highway  suddenly getting jammed with moving vehicles, there’s nowhere for oncoming traffic to go. It’s a problem that can only be solved by adding capacity, which isn’t always an easy option—assuming management even has the nerve to do so in a still-uncertain environment.

Last year I confessed that my second greatest fear (after “how are we going to cope with this mess?”) was “what if it all comes back at once?” While the economy isn’t exactly booming, it does appear to be showing signs of life. That’s a welcome sight, but it presents a whole new challenge to companies recovering from stalled growth.

Life is never dull.

Postscript: Road Warrior

As a follow up to my previous post, I just did the math. In the fifteen months prior to and following the launch of When Growth Stalls, I was on the road 45 times, an average of three times per month.

Not too bad, although considering the number of cross-country trips (eight visits to New York, three to Washington, D.C., three to Philadelphia, plus Baltimore, Atlanta and Orlando) it’s no wonder I’m tired. And—get this—I calculate that I was in the DFW Airport (the one with the bathroom plan designed by a camel) sixty times over that span. There are only so many times you can eat Taco Bell or Au Bon Pain, you know?

I also worked my way across the Midwest (Minneapolis, St. Louis, Kansas City, etc.) Southwest (Dallas, Houston, Phoenix and more) the Rockies (Denver, Colorado Springs, Vegas) and the West (San Francisco, Sacramento, LA, Orange County, San Diego). All in all a pretty good tour of the U.S.

I knew when the book came out what I was signing up for, and the growing footprint of McKee Wallwork & Company also played a part (we now have clients from coast to coast). It’s been hard, but it’s been fun. And since there are still a number of places I haven’t visited in the past year, I’d be happy to bring the message of When Growth Stalls to your city. Just click here and holler.

Happy Birthday, When Growth Stalls

When Growth Stalls is officially one year old.

In dog years one equals seven, but I’m not exactly sure what it means in book years. Some books grow in influence over time, while others quietly fade away. My sense, at least for the time being, is that the influence of When Growth Stalls is anything but on the wane.

The recession has dragged on much longer than anybody anticipated, and companies are struggling now with sheer fatigue. As I’ve crisscrossed the country over the past twelve months sharing my message, I’ve noticed a growing sensitivity to the need for intervention, and a ready recognition of the havoc that can be wreaked by a lack of consensus, a loss of focus, a loss of nerve and inconsistency.

Of course, my research shows that in any given year some twelve to fifteen percent of companies stall, making the message of When Growth Stalls perennially relevant. But since that percentage continues to remain in the high double digits as we sit here in March, 2010, a great many companies still have to deal with the issues associated with stalled growth.

If you haven’t read When Growth Stalls yet, I encourage you to pick up a copy. As anyone who has heard me speak over the past year (five years, really) knows, I genuinely believe what we discovered can make a difference for struggling companies. I’ve been told it has by many of my readers, and I’ve seen it make a difference for my own firm’s clients.

If you have read the book, thank you. I hope it has made an impact on your company’s health during these difficult times. Please consider sharing the book or sending a copy to someone you know who could use it, and/or offering your thoughts in the form of a review at Amazon.com.

Here’s to a better 2010.

The Power of Social Media. Mine.

I had a powerful realization tonight in the Apple Store.

I took in a torn leather iPhone case that I had purchased there a couple of months ago. I didn’t have a receipt, but I figured since I paid forty bucks for it I should at least see if they’d do something about it. To make a long story short, the great people there did the right thing and took care of me. It was a positive, but not wholly surprising, experience. I had a sense they’d do that.

As I was checking out, I told the clerk that I was going to tweet about my positive experience. She thought that was cool. Actually, I had decided I was going to tweet about the experience no matter how it turned out. And that’s when the realization hit me. Not that I could tweet my pleasure or dissatisfaction (I’ve done both before), but how empowered I felt. It wasn’t little old me taking on a powerful (in this case) retailer, it was me and seven thousand of my friends. The odds seemed much more even than they used to be. And that felt good.

I realize that only a small fraction of my followers would even see the tweet, and most of them would pay it no mind. Still, it was nice to know that there was something I could do about my predicament, regardless of the outcome. And since I had also checked in at Foursquare when I entered the store, I knew that I had even more power at my disposal. Not to mention my Facebook friends, on whom I could call anytime.

Well done, Apple Store. You did good. This time. ;-)

In The Driver’s Seat at Ford

The dean of automotive reporting, Paul Ingrassia, published a terrific interview with Alan Mulally, CEO of Ford Motor Company, in Saturday’s Wall Street Journal. Citing Ford’s $2.7 billion 2009 profit, and the fact that it was the only U.S. automaker not to duck into bankruptcy, Ingrassia noted how Ford might even surpass GM in market share for the first time in more than eighty years.

In When Growth Stalls, I document how struggling companies tend to keep themselves down through a combination of a loss of focus, a loss of nerve, a lack of management consensus and marketing inconsistency. I found it interesting that in Ingrassia’s analysis he inadvertently referenced how Mulally has dealt with three of these issues:

Loss of Focus: “[Mulally's] method has been to simplify, relentlessly and systematically, a business that had grown way too complicated and costly to be managed effectively. ’Improve Focus, Simplify Operations,’ reads one of Mr. Mulally’s many charts, which he repeats like a sacred mantra. Soon after his arrival Ford began shedding brands—Jaguar, Land Rover and Aston Martin among them—that the company couldn’t afford to support. Volvo will be next to go.”

Loss of Nerve: “The core Ford brand got an investment infusion to replace aging cars and revive a model lineup that had been heavily tilted toward gas-guzzling trucks.”

Lack of Consensus: “Mr. Mulally has overhauled the often-contentious culture in Ford’s executive suite. Most of his appointees are company veterans, but they’re the sort of people who typically got overlooked when style seemed to count more than substance, as it often did at Ford…Internal surveys show 87% of Ford employees believe the company is on the right track.”

Mulally summed up his recent success with a simple statement: ”It’s all about producing products people want.” That may be true of every company, but too few get it done–especially in the American automotive industry. I, for one, hope Ford’s comeback is a lasting one.