 |
By Scott McKain
January 22, 2009
Just this morning, I received two promotional mailings from companies vowing they are “not participating in the recession.” I, in turn, swore I would not be doing business with such unrealistic organizations.
The hard, cruel, fact is that we are in a significant economic downturn - hardly news to anyone. What isn’t being discussed, however, is that there are strategies that visionary businesses could employ to enable them to stand out and move up while their competition fails.
Each day’s newspapers seem to be filled with job cuts and expense reductions by a myriad of companies. Naturally, we are all - organizationally and individually - tightening our collective belts. However, when we view that as the primary method to survival in a slowing economy, we are ensuring the doom we do not desire.
Harvard Business Review recently quoted A. G. Lafley, the CEO of Procter & Gamble, on how he decided upon a plan that would involve simultaneous cost cutting, and investments in innovation and employee education. He said, “We weren’t going to win if it were an ‘or.’ Everybody can do ‘or.'” The results clearly displayed the wisdom of his leadership.
Customers today are not disappearing! Instead, they are becoming infinitely more discriminating in how much - and where - they are spending. In my upcoming book, “Collapse of Distinction: How To Stand Out and Move Up While Your Competition Fails,” I outline the three reasons most businesses are adrift on a “sea of similarity” — meaning that customers cannot distinguish why one holds an advantage over another. And, I reveal the Four Cornerstones of Distinction - the specific action steps every organization must execute to grow its market share in a declining marketplace. They make up the “and’s” that will ensure your success - even as your competitors, and everyone else, does the “or’s.”
In his enormously successful work, “Good to Great,” author Jim Collins identifies the 11 companies his research determined had made the move to greatness. Unfortunately for Collins - and his readers - one of these “great” institutions is Circuit City. Examine what Circuit City did about a year ago. Facing enormous economic pressures, they decided on the “or.” They cut not only thousands of employees, they furloughed their most expensive, senior store retailers. The result was that during the Christmas season last year, customers at this supposedly “Great” company had difficulty finding anyone who knew what they were doing to wait on them. Is it any wonder they are now closing their doors?
There is no doubt that now is the time to reduce or remove any unnecessary overhead. However, it is also incumbent on you to provide compelling reasons for your customers to do business with you instead of your competition. If you can’t do that, customers will have no other alternative than to make a simple choice based upon mere price. That’s the worst alternative for any organization - and the solitary most despicable place for any business to locate itself for the future.
The single most important question you should be working on right now is not, “How do we cut costs?” That is the “or” that anyone and everyone can do. Your most important issue is, “How can our customers distinguish us from our competitors?” When you positively exploit your uniqueness - while trimming the fat from your company - you are focusing on the “and” that will enable you to stand out and move up, rather than the “or” that guarantees extended difficulty.
Scott McKain, of the McKain Performance Group in Indianapolis, is the author of “Collapse of Distinction: Stand Out and Move Up While Your Competition Fails,” due out March 2009. He can be reached at [email protected].
