If there’s going to be a competitive war… be the arms supplier
By Carol Carman
The “Best of Business” headline in the May 21 issue of the Atlanta Journal-Constitution sent me searching through the articles on “The Georgia 100” to find a common denominator that would explain the formulas that qualified these companies as the best of the business performers. Your state probably endorses a similar list.
Some companies were large conglomerates; others were small entrepreneurships, and choices were weighted based on performance, not size. Outside of being more internet/e-commerce active, and growing through acquisitions, I found they had little in common; but I did find a lot of common sense incorporated into their business plans.
Here are some of the things culled from the strategies of top CEOs that have led them to higher than expected profits and growth:
- Talk to customers; listen hard.
- Use focus groups; do your market research.
- Provide service without long-term contracts, or offer prepaid service contracts.
- Reforecast every month, every quarter.
- Improve your technology. (Upgrade to the next generation as soon as it will improve your personal or product performance.)
- Build your image.
I really liked that latter one because it came from Georgia-Pacific. Its problem was that the masses know the Georgia-Pacific name, but they have no idea of the company’s broad range of products, from timber to table legs to computer paper. Image-building is a powerful route to customer confidence and information.
- Find ways around a fragmented market. (Buy out the competition, or find ways to form joint ventures.)
- Get a grasp of your internal controls. (One company turned itself around by the simple act of getting a better handle on its inventory tracking system.)
- Be a one-stop, one-shop source within your niche market. (Make it easy on the customer.)
- Re-engineer to your best core business.
-
Some businesses spread themselves too thinly. Diversification can be profitable, but not if you are overlapping products or adding paperwork, inventory, etc. Diversify only if you are reaching out to entirely new markets.
-
Build self-esteem into your products. (Make your customer feel good about making this buying decision.)
-
“Treat the illness before it becomes a disease.”
OK, that one was from a health company, but it works just as well in the woodworking industry. Don’t wait for the “patients” to get sick. Help them solve their factory problems when it’s only a minor cough, not when it becomes a terminal illness.
- Broaden your reach and get your people into the field — especially in Asia and South America. Other countries are competing for their business too. Many industry trade associations have already opened the doors. Contact them. If you don’t know who they are, call or e-mail me. I’ll give you contacts.
- Attract new customers, especially smaller ones. (Look at what has happened with custom woodworkers who were one- and two-man shops just a few years ago. They have become the major manufacturers and chief buyers of new technology as they have grown to become 20–man shops — not just component part producers making parts for the big guys anymore, but finished goods manufacturers themselves.
- Take the long-term approach to acquisitions. Don’t make the mistake of buying a company and selling it off in a couple of years. Work with it. Give it a chance to develop ideas. Let it make mistakes, support it and watch it prosper.
No rocket science here. No Harvard education required. Just simple, common sense measures to top performance. As one company CEO phrased it: “I think of ourselves as an arms dealer. If there is going to be a war, we’re going to be the supplier.”
