Introduction

For the most part, the US has enjoyed unprecedented economic growth over the past 15+ years. Many companies, however, are merely surviving in these great times. Only the healthy companies are able to maximize their profits during periods of economic prosperity.

Having said that, economists are now focusing on some ominous signs indicating that harder economic times are ahead. For example, the US is in debt over $700 billion to China and over $800 billion to Japan. There are signs that these two nations are becoming reluctant to continue lending. With the onslaught of Katrina and Rita (costing the US about $200 billion), and the war in Iraq equaling almost that much, something will break... and probably soon (over the next 12-18 months). In hard times like good times, it is the healthy companies that are able to take advantage of the circumstances.

Ideas

Let's consider what is meant by a "healthy" company. Specifically, there are five characteristics of a healthy company:

-People: Skilled, motivated

-Leadership: Profit focused, future oriented

-Production: controlled, predictability; flexible lead time

-Sales: Culture of Charging for Value

-Quality: Consistent and Reliable

People: For years, good people management was considered a "soft" skill, but anyone who understands business realizes that there is nothing harder than finding high caliber people. These are the character people that are able to understand and commit to the business' strategy and are partners in helping the business succeed. "NPTH" is the core philosophy of winning companies: No Place To Hide. Every role is important, every task is essential, every minute counts. Creating a compelling vision of the future of the business, communicating it consistently and aligning key decisions to the vision all combine to create a winning work team and environment.

Leadership: Bill Belichick, head coach of the New England Patriots, has demonstrated the power of building a team around solid players with exceptional commitment. The same is true in business. But, this is a very UNcommon skill. If people are important, then leadership is critical: the willingness to think ahead, to challenge current ways of doing things, to commit to customers AND employees, and to drive change. These are the characteristics that set the foundation for a healthy company that will stay successful for years to come.

Production: How easy or difficult is it for you to manage your production process? The more difficult, the less your quality and delivery will be reliable. If employees need you (or someone) to direct most of their decisions and/or actions, then managing your process is too complicated. Regardless of what business you are in, knowing what the priority tasks are is a key ingredient for long-term success. It is a frequently overlooked aspect of managing: priorities MUST be so simple to determine, that any employee, with basic information, should be able to know what YOU want them to do WITHOUT you telling them. Sounds like a dream? It's not... it's a requirement of creating a healthy company.

Sales: If you are competing on price in the good times, where will you be when market demand drops off? If you do not know how you bring value to your customers, you have stripped your company's ability to maximize both sales and profits. And, if your customers can't tell how you are different or valuable, they will force you to compete on the only value-element they have left: price.

Are you the most expensive provider of your product or service? Almost every owner asked this question will answer 'no'. The truth is, someone is. Have you ever wondered how 'those expensive guys' stay in business? Chances are, they are far more profitable than most (if not all) of their competitors. How could this be true if competing on price is the only way to survive? Maybe there is another way to compete...

Quality: Your product or service MUST solve the problem it is designed to solve, and it must do it EVERY time. No excuses. The better you can do this, the more valuable you become to your customers. While it is true that a brilliant recovery (after a quality faux pa) can help to develop customer loyalty, it is not an approach that can work as a standard practice. Customers will pay more for reliable quality. If your value to the market does not include reliable quality, you will be forced to compete on price and suffer consistently lower profits.

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Being in business is hard work.

Why not maximize your results?

Questions to Consider

As you read this short discussion, consider how your company stacks up:

• Have your profits grown significantly and are you confident that you can continue to do so?
• Are you content with your current profit level? Are you really?
• If you were not there, would your employees' priorities be the same as yours?
• Do your customers rely on you as their BEST source of the goods or services you provide?
• Will your business be able to survive a significant economic downturn?

Next month: The QRS of Value.

Until then, have a great month!

-John P. Gaulin
Success Force, Inc. President

For information on any SFI programs, contact Success Force :

(716) 681-4434 or sfi@success-force.com

About Success Force, Inc. - Success Force is a Buffalo-based company with extensive experience working with companies across the Unites States and internationally. Success Force enables business owners to find new opportunities to drive profits and accelerate the process of ongoing improvement. The company's vision in designing this and other SFI programs is to help rebuild the competitive strength of Western New York businesses. http://www.success-force.com/