Every day I read about a company laying off employees because sales are lagging, profits are eroding and the company is losing money. The most commonly used option is to lay off employees. How many talented, well-trained people are laid off—particularly those who contribute to the leadership and sales excellence of the organization? Almost too many to count. If you own or run the company, you better know what it costs to train an employee and make them productive. It’s going to cost you just as much, if not more, when you begin to hire again and the folks you laid off are gone.
What’s a better strategy, you ask?
Restructure yourself to a business transformation. How? Ask everyone to take a pay cut. Sounds inconceivable right? Maybe not. No one wants to lose his or her job, and most savvy employees understand that thinking creatively during this economy—engaging in the principles of intrapraneurialism—is the key to long-term success. If you are paying them above the unemployment rate, they will probably stay. Perhaps a loyalty incentive can be part of the restructuring/ retention package. Look, professional sports teams do this every year.
The economy is not going to be ugly forever. As it begins to come back, your employees’ salaries will begin to increase. You keep talent, you avoid wasting money on future hiring and training efforts, and you build incredible loyalty…all while developing the leadership skills your company needs. And the icing on the cake? While you are fully ramped up, your competition is falling behind since they are stuck in hiring and training mode.
Take my advice: offer this form of restructure. You’ll be surprised at the outcome.
I was having dinner recently at one of my favorite steak restaurants in Carlsbad, CA. It was easy to recognize the effects of our current economic recession, as it was only half full on a normally bustling evening. Just last summer, you couldn’t get a table in this place. I really wasn’t that hungry; so as my guests ordered from the excellent house specials, I asked for the filet mignon sliders that I have had on several occasions at the bar, but which are not included on the dining room menu.
Since I am a frequent customer, I had good rapport with our server. She quietly informed me that the sliders were considered “bar food” and could not be served in the dining room.
“Are you kidding me?” I asked as I looked around. “Now is not the time to enforce rules because of some ambiance you are trying to preserve.” I asked to speak to the manager who communicated, through the server no less, that he stood by the rule. I let the server know my disappointment, and I bid them farewell for the last time.
Consider my new favorite restaurant Via Italia in Encinitas, California. It’s run by a vibrant Italiano named Paolo who completely understands who the customer is, and a master at business transformation. His margins are shrinking so what does he do? He gives more away to his customers. Upon entering his establishment, you are handed a glass of chilled Prosseco. When you are seated, he brings you some thinly sliced Prosciutto di Parma. The best part is that you still haven’t spent a nickel. His place is packed – even mid-week! People appreciate value not uppity attitudes, and sales excellence is often preceded by excellence of character.
If you run a business in this economy, be flexible, be generous when you can, take less and make more, and consider sales innovation techniques to bring your customers back time after time. You don’t have to own a restaurant to learn from Paolo.
Our new American culture has ingrained in most of us that smoking is bad; if you smoke you can be labeled unfavorably. This is not the case in many cultures; and if you are doing business in Asia, the label may well apply to you, the non-smoker.
When doing business in Asia, it is not uncommon to be offered a cigarette. I remember my first experiences, telling these well-intentioned potential business partners, “No, thank you. I don’t smoke.” Although I sensed they felt I was rejecting their gracious gesture, I don’t smoke; and I wasn’t about to start.
It was a short time later that I learned a valuable lesson not only in leadership, but in respecting business diversity. We were negotiating a fairly large and complex manufacturing deal in China. The company that we were meeting with had never done business with Americans. It was quite evident that posturing and delaying tactics were the primary strategies employed by our eventual business partner. It felt as though there was little trust in the room and we ran into impasse after impasse.
At the point that I was about to concede (16 hour jetlag can wear you down), my business partner, who also doesn’t smoke, got up from his seat at the table, walked to the Chinese side and instructed the interpreter to tell our host that he would like to smoke with him. The gesture had an immediate effect. As they enjoyed their cigarettes, the energy and demeanor in the room changed. They spoke of America, Obama and family. Within three hours we were at a banquet celebrating our partnership.
To simplify, when you’re out of your culture, get out of your culture!