Labor Day Thoughts

The late Sen. John McCain never forgot the soldier or average person in his career. Let us not forget our neighbors working in factories, warehouses, retail and services. 40% of working people do not make enough to live comfortably. They struggle to pay rent, groceries, healthcare or utilities. Any unexpected expenses or hardship derails being able to pay bills. Even though unemployment is down, food insecurity is on the rise.

Why? Middle-wage workers’ hourly wage is only up 6% since 1979. Low-wage workers’ wages are down 5%.  Outsourcing, the rise of a global workforce, and shrinking unionization has weakened the power to ask for raises. 

Education, housing and medical care have all gone way up. Fewer jobs offer stable hours or health insurance creating no safety net. Imagine you are on disability raising a teenager like my childhood friend.  My sister, trying to get disability for 3 years, lives on half of what he makes.  Hard to make your money last till the end of the month on so little.

All governments are in too much debt now to be able to do more. They need businesses growing their economy. Inflation needs to continue to rise, so governments get out of their overspending and over promising. However inflation hurts people on fixed income.  There are no easy ‘tax the rich’ solutions. Hard choices have to be made to cut spending and raise taxes.

Middle-wage workers may save some, but mostly rely on Social Security to retire.  Low-wage workers are completely dependent on Social Security. Yet healthcare costs are taking more every year, and your spouse being ill or dying can bankrupt you.

Was taught there are no unimportant jobs growing up. Everything has to be done by someone to contribute to success. Everyone is important. 

What can we do to care for family, friends and neighbors? $15 per hour minimum wages? Health care for all? Guaranteed work for all? Mental health treatment for all? We need ideas and we need action. Take some time this weekend to think how we can help.

Resilient Companies

Vibrant companies act differently. Even with a long history behind them, you sense they are current or even state of the art. How do companies stay resilient through all the changes in technologies, different styles, consumer fads, business practices, and new customers every day?

Simple, they are not the company they were yesterday. Vibrant companies avoid the ‘Status Quo Bias’ that affects us all. Keep looking for the new. Looking for the opportunities. Looking out for your customers. Finding better ways to take care of them. Seeing what competitors offer, then offering simpler or better value products/services to compete.

Second vibrant companies take care of their people. Provide benefits and onsite service that free peoples time to work. Simplify processes and procedures to allow creativity. Celebrate & learn from their successes and failures. Avoid overworking people, even if our culture is celebrating overwork.

Why take care of employees? Who takes care of the clients? Burnt out employees are not creative, and do not go the extra mile to make clients happy.

How do companies stay resilient? Create a culture obsessed with pleasing the customer. Truly care about customers and employees.

Spotting Dying Businesses

Do you want to know if your company is dying? Yes for two reasons:

One, you can intervene in the issue and improve your teams results. This puts you in a leader’s role with the resulting salary.

Two, you can be the first to find a new company to work with.  There are advantages knowing what you have to do and having enough time to start the process before you lose your salary, or experience the heartbreak of closing a company.

What are symptoms of a dying company?

1. Not Knowing Who the Customer Is

Big companies love processes. They are good because processes build quality controls and guarantee stable returns on effort. However your customer is not your co-worker who gets handed the work after you are done. He is a partner in satisfying the real customer who chooses and pays for your product & services.

Successful companies fall in love with their customers and dive deeply into their customer’s businesses. That way the company is focus outward, not inward.

2. Not Staying Up with the Times

Stable companies often have the belief their customers won’t change. They have always bought from us and will not leave. That is not true.

Customers retire, go out of business, or die. Businesses are run by people, and people always change.

Second technology changes. Eastman Kodak did not want to kill the film business, which brought in fortunes. The marketing failure was not realizing they could make more profits licensing their technology. Do you realize they could have had a Kodak Camera in every cell phone?

3. Not Creating New Products & Services

Unless 10% to 25% of your sales are new products and services less than 5 years old, your future is looking bleak. Mature products have to fund new investments to stay successful. What percentage of your sales are new products?

4. Illegal Business Practices
Bernie Madoff Ponzi schemes.  Double sets of accounting books. Inside trading. Bribes. Stealing secrets. Drug habits.

Any one of these practices can result in jail time, customers abandoning you, and being unemployable. Time to find new work now, even with a pay cut.

Check on a regular cycle how you and your company are doing. The only constant in life is change. Make sure you are doing everything you can to adapt and thrive.

In Honor of Veterans

Woke up this morning thinking of my late Uncle John and the calm character this Korean Veteran had with his little sister’s kids. He kept living with mom in his house, even after marrying the love of his life. He grew two good kids of his own, was a leader in the state insurance department, affected by trench foot & circulation issues in his feet. Uncle John was a beacon of calm in a family that often did not have it.

My late great uncle Bob who I barely remember was a Green Beret.

Uncle Bill married into the family was a Navy man in the Pacific for WW2. He lived to 88, outlived 2 wives, and refused to buy Japanese cars or products. Just enjoyed spending time with him when visiting my family in Florida.

My first job was with several veterans of the Seabee’s (We Build. We Fight) WW2 vets Charlie, Phil, Stan, and many others in the large office of 100. Their kindness with fresh out of college kids, working hard, telling jokes, and occasionally singing the Seabee’s anthem for no reason at all. They are part of the reason I never feared growing old.

At another company worked with Stan who was a German prisoner of WW2. Mistreated, tortured and starved. Stan came back and his military doctor told him not to hold it in. So instead Stan told everyone the truth and even shared it with school presentations. He always had a smile and truly enjoy life, family and work.

At my age have a lot of Vietnam veteran co-workers and friends over the years. Remember the stories Tom told being an aircraft mechanic. His friends being tunnel rats or taking small boats up the river to bring the fight. Tom was most proud of his kids.

Thinking about the men and women vets have worked with it is not their discipline that stands out. Not their contributions to work. It is the humanity, caring, charity, faith and their confidence if something went wrong, they had been through worse, and had faith all would thrive.

The greatness of this country came from ordinary people who were willing to do the extraordinary, and then come home to raise families, work hard, and enjoy life. They are also the reason I mentor others and believe things will always get better.

Businesses Need to Plan for the Recovery

It is about the opportunities, not the problems. We are in a good sized recession, and the uncertainty is making life difficult for business owners and managers. Orders are down as customers order smaller quantities, or no longer have demand for some products. Credit is in short supply, and cash is king.

Even worse is the drumbeat of bad news shouted from the TV, and on front pages of magazines and newspapers. They are trying to scare you to look or listen for better ratings. Hello, this is about the size of the 1982 or 1975 recession. Not the Great Depression 2 or even the end of the world.

Today is not about the fear. Business is about the relationships, especially with the customers. Business is about being better than the competition. Business is about finding our niches, and serving the customer. Business is about making a profit through service.

So what can you do differently to improve profits?

Can you offer 2 for 1? Make twice as much and lower your prices? Develop a low cost version? Add more products to sell to your customers? Redesign dated products? Bundle more services together?

What about when the recession ends? What products or services would you like to develop now to be ready for the next couple years? Who do you need or want on your team? What skills do you need to train your staff to have? Don’t you think this is the best time to prepare?

We have to be careful, but business will go on during and after the recession. Will you be ready?
Steve

Scroll down to Anticipating the Credit Crunch for more ideas to increase profits.

About the Market
Personally I am not ready to declare the bottom of the market, and it may be further off than we would like. However there are reasons to think we are closer to the end than at the beginning. Housing has already corrected about 40% from the peak of the bubble. The Dow has dropped from the $14,000’s to the low $7,000’s. For other hints see Irwin Keller’s article below.


Signs of life
Commentary: The economy's worst may be past
By Irwin Kellner, MarketWatch
Feb. 24, 2009

http://www.marketwatch.com/news/story/evidence-mounts-recessions-worst-past/story.aspx?guid=%7B71467556%2D3683%2D4018%2D906C%2D7FFC8A3F9E8C%7D&dist=TNMostRead

Note Marketwatch Links are soon broken. If the link does not work, go to
http://www.marketwatch.com/
Search for Irwin Kellner

New Products and Services

The most important thing in business is to create profitable products or services. The problem is after a while, everyone copies success. So how do you keep your growing profits when margins are under pressure?

Think about it, and we will discuss it in a future post. Email your questions to problem1solver@gmail.com and we will discuss it here.

Suggestion: How can you better serve your clients or customers?
Steve