How To Stay Off The Endangered Species List
By Dave Anderson
Back in the 80s when Tom Peters wrote "In Search Of Excellence", he profiled 33 of the best companies in America. Within three years after the book was published, 14 (42%) of the 'best' no longer met the book's criteria. From1970-1980, 33% of the companies on the Fortune 500 disappeared. From 1980-1990, 46% fell off the same list; they merged, folded or were outgrown. And all this happened before the decade of seismic change and speed began. Even some of the best organizations will never learn that they don't "arrive" - that they're constantly in the process of getting better or worse. Many will become extinct. Others are getting close. They're on the endangered species list. The problem is that most don't even know it and won't until it's too late. Here are four strategies to help your company stay off the endangered species list. Continue with "business as usual" at your peril, because those who fail to learn the lessons of history are doomed to repeat them.
1. Move Fast: Speed offers you an insanely unfair advantage in coming years: how fast dealerships seize opportunities, cut losses, change direction and empower others to act will more than ever separate the quick and the dead. But most companies move too slowly and their leaders are at fault. They are reluctant to act, risk, change and decide. Every business leader could learn speed from studying General George Patton. During World War II, in a period of nine months and eight days, his Third Army captured more territory (115,000 square miles) and towns (12,000) than any army in the history of the world. In the process they also inflicted a casualty rate of 10-1 on their enemy over what they sustained. How? Patton moved fast. How was he able to move so fast? He made snap decisions. How was he able to make big decisions quickly? He knew what was going on in every aspect of the arena because he led from the front, spent more time in the trenches than in his tent, sought feedback and counsel from superiors and subordinates alike and had the good sense not to break his own momentum by resting and reflecting when things were going well. Leaders today who spend more time behind closed doors than sweating with their troops are endangered. They can't or won't decide, because they don't know what's going on. They tout the "slow and steady" approach to disguise the fact that they're out of touch and are more interested in maintaining their dealership than growing it and thus stand on the brink of the endangered.
2. Stop Counting Just The Easy Cost. Quit thinking with just the left side of your brain, tallying the cost of training your people with the same attitude Scrooge has figuring Bob Cratchet's vacation pay. If you continue to increase your advertising budget more than your training budget when you want to increase sales, your short-term thinking will put you on the endangered species list this decade. In past years, it was easier to get away with this "sugar-kick" approach to boosting sales, but with today's premium on brain power, you'll have to quit figuring just the easy cost: what it costs to train and pay your people properly. Start factoring in the hard cost of not doing so. Quite frankly, it's never been more expensive to have ignorant people working for you: salespeople ignorant to how to sell today's smarter customer and managers ignorant of how to coach and draw the best out of today's smarter worker. The excuse that training is "hard to quantify" is baloney. Leaders who don't have the faith or foresight to believe that investing in human capital returns exponentially to the bottom line are hopeless. Arthur Andersen Consulting found in a ten-year study that companies considered poorly-led saw their stock price rise just 74% in that time while firms considered well-led realized a 900% gain: twelve times the return. The University of Pennsylvania studied 2300 companies and found that a 10% increase of capital expenditures brought forth a 3.8% increase in overall productivity, while the same spending increase in training secured an 8.5% jump in productivity: over twice the return on investment. Companies wanting to stay off the endangered species list must quit treating training expense as some sort of necessary evil and shift their thinking and dollars to take the human capital they're entrusted with and make it more valuable for tomorrow.
3. Make The Decisions That Make Your Gut Ache. In order to stay off the endangered species list, leaders will have to sacrifice some "sacred cows": employees that have outlived their usefulness. Some of these decisions will make your gut ache because these solid old standbys have meant a lot to your company over the years. But yesterday's heroes that have stopped growing and producing diminish your organization on a daily basis. Contrary to what conventional wisdom says, it is not the totally incompetent people who destroy a company. Totally incompetent people usually don't get into a position to destroy a company or if they do, aren't there long enough to get it done. (Unless they're related to someone.) The people that bring down companies are those who at one time were achievers: people who took risks, made changes, grew personally, became successful. Then they stopped: they started to play it safe and run with what worked in the past. They started to work harder to maintain what they had than to grow it. They went from risk-taker to caretaker to undertaker. They are the most dangerous people in an organization and you keep them in your employ at great risk.
4. Work Like Hell On Yourself. I saved the most important factor for staying off the endangered species list for last: you. You're going to have to work harder on yourself than you have in years: harder on your attitude toward challenging the status quo, abandoning many of the policies and philosophies that made you successful in the past and work harder on your skills because you cannot effectively lead an organization where people have outgrown you.
A recent quote by Andy Grove, CEO of Intel seems appropriate to wrap up this article:
"There comes at least one point in the history of any company where you must change dramatically to reach the next performance level. Miss that moment and you start to decline."
Some of you are in danger of missing that moment.
Dave Anderson is president of The Dave Anderson Corporation, a sales, management and leadership training concern. Dave conducts "Leading At The Next Level" workshops and publishes "Leading At The Next Level" newsletter. He is the author of "Selling Above The Crowd: 365 Strategies For Sales Excellence" and his Web site, www.learntolead.com has free training articles and materials updated weekly. Dave is a member of The National Speaker's Association and conducts workshops and keynotes worldwide. danderson@dealeronline.com
