Management Apathy Kills Corporate Potential
MoneyMoz.com presents you “Management Apathy Kills Corporate Potential”, an article written by Bill Lee. We hope you’ll find a lot useful information in here.
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I recently received a most interesting phone call. When I answered the phone, I immediately recognized the name of the company as one of the most visible distributors in the construction supply industry, headquartered in a city about two hours from my office. The owner described how this seemingly invincible 75-year-old firm had very little to show for all those years except their good name. In fact, over the past five years, their sales had deteriorated by over one third.
The owner cited two major factors that he believed to be the cause: 1. A strong national distributor had opened in his market. 2. A near depression was looming over the community due to the closure of a large military base.
| MoneyMoz recommended article: Tapping The Potential Of Your Customers Business owners of long standing know the cardinal rule “take care of your existing customers first”. Today especially we see business owners looking constantly for the new customer. Hey, did you forget the customers you have. All of us want our businesses to grow. However, after a number of years, depending on your business, you might reach a point where your business starts to taper off. You find you are not getting any new clients. Before you throw in the towel, realize that you still have your current customers. Why not try to increase volume and steady revenue with your current customer base. One of the things we have discussed in a number of our articles is to get feedback from your customers. Yes, you might hear about problems. However, this is a good thing, it allows you to fix them or stop selling that product. Ever wonder why some of your customers never buy again, that product with the problem might be the reason. Don't ask, don't tell DOESN'T work in the business world. How to Increase Your Sales BEFORE You Launch Your Product or Service Want to increase your sales BEFORE you launch your product or service? The following are some of the most effective ways to do just that: 1. Use Social Proof What is "social proof"? Simply put, we are all conditioned to watch what others are doing and follow along (think teenagers). Using social proof in your marketing helps you to influence your customers to purchase your products/services, get new prospects to sign-up for your list, and get people talking about you and your offering - and that's just the start. |
I asked the owner to allow me to interview and test each of his key employees and also interview several customers. The owner also agreed to send me the company’s financial statements from the past five years.
The results should be a warning to every business: management apathy will kill a business.
From the psychological tests we administered, we learned that the organization was not balanced. Inertia had set in. There was no spark, no innovation. No one was initiating change.
The employees were good people with excellent product knowledge and years of experience. The problem was that they were merely going through the same motions year after year, expecting different results.
The financial statements revealed that over the past five years operating expenses had steadily increased while sales and gross margin had slowly declined, producing a lot of red ink.
Employee interviews revealed that not one of them had a clue that the company was in trouble. Management kept profitability a secret unto itself. Everyone was working hard, but no one was doing any long term thinking or planning or keeping score.
The core problem was that for years management had given raises averaging 4% to 5% regardless of performance. Gross profit didn’t keep pace, so the bottom line slowly eroded.
| MoneyMoz recommended article: Losing Recruits - One of the Biggest Challenges in the Direct Selling There's a saying in direct selling: "Recruit quantity, promote quality." I have a slightly different philosophy and it goes like this: "Recruit ideal, promote ideal." Now you are probably saying "what does she mean by this?" Here's what I mean. An "ideal" recruit would be someone that has the perfect, (by your definition), characteristics and qualities for your business.Picture the top individuals on your team, the most successful top tier. What characteristics do they have in common? What natural gifts or talents do they possess? What makes them ideally suited to the business? Now keeping these individuals in mind, create a list of the qualities you might look for in an ideal recruit. Maybe your list includes such characteristics as: Willingness to try new things; adventurous Desire to learn and grow Trustworthy Positive outlook; see possibilities Likes to share and help others be successful Active in the community Sense of humor Honors commitments Persistent Self-motivated Loves your products! What others qualities can you come up with? The reason to go through this exercise is to get a really clear image in your mind. Review your list daily. Spend time picturing this person on your team. Create an affirmation that you repeat each day like: "I am attracting ideal partners for my business with ease and at the perfect time".It takes less effort to "attract" an ideal recruit than it does to go after a "not so ideal" recruit. Use this image to set an intention and focus your energy on attracting individuals that are a natural fit. Then practice gratitude in advance for all these wonderful individuals coming into your life! When I first started coaching, my mentor coach had me go through this exercise to create an image of my ideal client. Her reason for having me do this was to help me attract individuals with which I felt a rapport, and as a result really enjoy my clients. Sound advice!Building a strong base is about surrounding yourself with the best people you can find. That's where the "ideal list" comes it, creating an clear image in your mind. When you attract individuals that fit this image, share with them that they possess these qualities. Guess what? They will love to hear it! |
The salespeople had noticed that they had lost a few accounts here and there, but had spent no time on a game plan to replace them.
The operations manager realized that overtime had become a problem, but limits were never set.
The buyer was achieving around five inventory turns and thought that this was a pretty good job for a business doing almost $60 million in sales.
The customer interviews revealed that our client did have a great reputation for quality and service, but most of the customers who weren’t regular customers hadn’t seen one of this company’s sales reps in years. To make a long story short, the sales force was in a rut, calling on the same customers year after year. The sales force could be described as “content.”
Could a similar scenario occur in your company? By putting basic management principles in place now, any company can avoid this kind of catastrophe. Just don’t wait until you are in serious trouble to begin.
The most profitable companies I work with have a leader at the helm. All companies have managers in place, but only the most progressive have placed an emphasis on leadership. While leaders are also managers, they do more than what I call directing traffic. By merely telling their people what to do, the leaders don’t develope the critical thinking skills necessary to determine why their organization is not performing to high standards.
For example, if your sales force has not produced sufficient sales for your company to keep up with the growth in your market; that is, your company is losing market share to the competition, critical thinking skills are necessary to determine why this is the case.
It is often the case that owners and managers are so close to the business that they can no longer observe it objectively. They are so much a part of the “day to day” that they can’t step back and see the business analytically. If this is the case with you as an owner or manager, it would be wise to either retain an industry consultant or invite a fellow owner or manager whom you respect to take a critical look at your business and make proactive recommendations.
Executive success is measured by a leader’s ability to achieve an optimal level of profitability in good times and in times of slower business activity. Don’t allow management apathy to rob you and your business of the success it deserves.
Bill Lee is a consultant who works with owners who want to put more money on the bottom line and author of Gross Margin: 26 Factors Affecting Your Bottom Line. $29.95 + $6 S&H. Bill’s newest book is 30 Ways Managers Shoot Themselves in the Foot. See Shopping Cart at http://www.BillLeeOnLine.com Or call 800-808-0534 to order via voice mail.
Keywords assigned to this article by MoneyMoz: manager, management, sales, profitability,
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