Will Your Business Stay Ahead?

Things are pretty darn good right now for many Southwest Florida businesses. The last several years have demonstrated marked growth in many sectors with the obvious factor being new construction.

The question that many business people are wondering is "how long will things be this good?" There is probably no definitive answer to this question, unless "not forever" counts.

Another important question is "what does an economic leveling or downturn mean for my company?" And yet another important question asked by experienced, professional business leaders and managers is, "What must we do now to prepare ourselves for this eventuality?"

This article is dedicated to those business leaders attempting to answer this last question.

Present-day Practices

Let's first consider the current situation of many companies operating in Southwest Florida.

Market growth has fueled sales for many businesses that were at the right place at the right time. For these companies, revenues are increasing, and things are typically looking good. Each company's piece of the pie in its market is growing, and the same is true for its competitors. One company may not be growing any faster than the next in terms of sales -- often referred to as growth in market share -- but the pie is getting larger, so there is more to go around for everybody.

In fact, things are so good for many of these companies that sales growth has driven the need to expand its resources including technologies, workforce and facilities to accommodate the additional sales activity. In the process, we begin to see a lot more scrambling and fire-fighting as the operation plays catch-up with demand. Many companies begin to focus more and more on simply satisfying demand and generating additional sales.

Business, like life, is very much about balancing priorities, time and resources.

Unfortunately, as external pressures permeate organizations, some companies devote less time and focus to performance levels and improvement activities that aren't directly linked to sales. After all, when the going is good...

As volume increases and the business scurries to catch up, what areas are affected? In many cases those "little" things are no longer being done.

The company is stressed and flexed to the point that customer satisfaction, quality and efficiency/productivity are taking a hit. And in situations like we have described, these areas are almost always affected.

In a best case scenario, the damage is minimal with no long-term repercussions. In the worst case, the company as a whole begins to accept a poorer standard of quality and service in the name of "things are going crazy here, we have to do whatever we can to keep up."

Let's consider a few symptoms of what happens when a company loses sight of what is important in the name of additional sales:

Customer Service Issues

**Customer contact and the personal touches that were once part of the end service or product are no longer performed. Specific examples include follow-up calls after a recent transactions, thank you notes and time taken to introducing new customers to their new product/service.

**The customer must conform to your schedule instead of the opposite. Customers used to be able to pick the best time for the service for them and service was usually completed on time -- now customers must be flexible to your schedule, and things are often late.

**Customized or tailored products and services are no longer offered to customers. Bill Jones used to be able to get his product "with a twist," but is now told that it costs too much and takes too much time to provide special handling for one small order.

**Customer service line-ups and telephone wait time increase at a rate greater than or equal to sales growth. This speaks for itself.

Product and Service Quality Issues

**It takes two or more tries to get the product or service right for the customer. Getting it right the first time becomes a goal rather than a standard way of doing business.

**New products or services are introduced to customers with less testing and checking done ahead of time because there is not enough time.

**There is an increasing number of customer returns, claims and customer service issues after the sale.

Efficiency and Productivity

**Many additional people are "thrown" at the work to meet the increased volumes, yet there is only a marginal increase in output.

**New jobs are created out of a need for quick fixes to problems with service and quality. An expediter is a classic example. This person's role is to try to speed up the delivery of the product or service often because things are increasingly late.

**And the biggest problem: although revenues have continued to increase, profits are flat or, even worse, declining.

Most of our examples can be traced back to the company's focus on sales and marketing without a balanced focus on non-sales related performance issues and the development of an internal infrastructure to support the growth. While companies can get away with a "sell, sell, sell at all cost" mentality during the good times, they must also emphasize the internal performance in the leaner times.

Over time, as the market grows and sales increase, additional competitors enter the market to get a piece of the pie. It may not be dog-eat-dog competition because there is enough pie for everyone. However, as demand declines and the pie shrinks, there is only one way to maintain sales and profits - by biting into competitors' share of the pie.

It is in these times that we often see stronger, well-managed companies consume or drive out their poorly managed competitors. During these times, companies will excel if they keep a strong eye on internal performance while focusing on their markets. The companies that strive to continually improve quality, customer satisfaction and efficiency/productivity will be able to offer their product or service at a lower price while providing that extra mile of service.

The result?

**Stabilized sales due to customer loyalty and repeat business in lean times

**Increased market share and competitive advantage by offering products and services at lower prices

As competition heats up, a company's customer retention and loyalty, product and service quality and low costs are the determining factors for success. Competitors saddled with inefficiencies, waste, inferior quality and dissatisfied or indifferent customers will not be able keep up with those well-managed companies that are able to reduce their prices to earn additional market share and remain profitable.

Those companies that begin to prepare now can take a much bigger slice of the pie later and, who knows, maybe even get as much dessert as they can eat.

Rorie Wilson's firm, BPM International, is a Southwest Florida-based consulting firm that assists organizations in achieving pe