Win With What You’ve Got:
When Times Are Tight, It's How You Leverage Your Assests That Matter
By Mark W. Sheffert
December 2002
In Jim Collins’ best-selling book Good to Great, he details his findings after extensively
researching the question, “Can a good company become a great company, and if so, how?” It’s a good
book full of great ideas, and I recommend reading it. But with all due respect to Collins, in our current
economic climate with an unstable market, corporate scandals, layoffs, and volatile global issues,
many companies are struggling just to survive. Perhaps the real question should be, “Can a bad or
struggling company get to good?”
Vince Lombardi, the late Green Bay Packers coach, said, “Winning is a habit. Unfortunately, so
is losing.” During these troubled economic times, it’s easy for business leaders to throw their hands up
in the air and whine, “Why me?” “Why can’t more be done to fix the economy?” or “If only so-andso
had done his job, this wouldn’t be happening!” Many are becoming victims of stinking thinking, a
pity party that is a symptom of losing.
Business leaders have a choice: They can sit back and let circumstances dictate outcome for
their companies, allowing their organizations to fall prey to losing habits, or they can rise above their
circumstances and change them. It’s much more productive and personally gratifying to pull yourself
up by the bootstraps, stop licking your wounds, and take some affirmative action.
A few years ago – okay, many years ago – when I played football at the University of
Minnesota, in preparation for a game our coach would say things like, “I wish I could tell you we
have the most talented football team in our division, that we have the fastest backs, the strongest
guards, the best defense – or even the best coaches. But I don’t know that we do. So, we have to go
win with what we’ve got.” He would go on to talk about winning attitude, commitment, playing with
heart and intelligence, about putting mind over matter if you want to win.
This lesson certainly applies to business today. An organization may not have all the capital,
sales, profits, or whatever else it thinks it needs, but it has to do the best it can with what it has. Right
now, leading isn’t about acquiring a newer, brighter, shinier “thing” to boost productivity, sales and
profits – it’s about getting the most out of your current assets.
To win with what you’ve got, you need to understand what your most valuable extrinsic and
intrinsic assets are. Are they your company’s franchise, franchise value, or reputation? Your brand and
market-leading position? Your skilled employees, intellectual property, or production capabilities?
Determine how to leverage those assets to the maximum. Smart managers know they can always find
a way to do more. As food for thought, the following is a list of assets and ideas for leveraging them.
CUSTOMERS
I’m going to make a bold assumption that everybody knows it costs more to acquire a new customer
than to keep an existing one. In fact, companies spend gazillions researching what makes their
customers loyal by tracking customer satisfaction and defection. But today’s environment calls for taking
the next step. Savvy marketers profile and segment their customers into those who maintain or
increase spending, and those who decrease spending. By focusing on migration and understanding customer
motives, organizations can increase loyalty significantly and get more from the customers that
they already have.
IT SYSTEMS
Examine whether your company is getting its money’s worth out of IT systems. Many try to
calculate the total cost of ownership for their IT investment, which is important, but the real question
to answer is whether the system provides the information you need to make timely decisions and manage
the company. If your IT system’s cost of ownership is $10 million, for example, are you getting
maximum return on that invested capital? No company can afford to have an asset that size wasting
resources and not being productive.
PEOPLE
Similarly, measure the productivity of your company’s people by revenues per employee. How
does the organization stack up against benchmarks in its industry, especially against the best performers?
When an organization is struggling, managers can be too quick to pull the trigger on layoffs.
Perhaps they believe that the company’s biggest overhead is walking around on two feet. But there is a
balance between that point of view and one that maintains that employees are a company’s most
important asset. Instead of laying people off, are there opportunities to restr ucture compensation or
make it more variable? Can you rely more on bonuses and profit sharing instead of fixed salary costs?Be creative –like Southwest Airlines, which after September 11 asked employees to voluntarily give up
one to eight hours of pay per week. In about four months, the airline saved $1.3 million. Or look at
Macromedia, a software maker that outsourced its salespeople and restructured its compensation program
to reduce costs, keep the best salespeople, and strengthen customer relationships in the long
term.
ALLIANCES
Just a few years ago, at the height of the dot-com bubble, many companies formed collaborations
through alliances rather than acquisitions. Particularly with e-businesses, it became the norm to
have dozens of partners based on strategic alliances, joint ventures, cross-selling agreements, and
patent-licensing deals. It was thought that alliances were the best way to quickly gain access to new
markets and leverage content, customers and technology while minimizing risk.
Alliances still make sense after the dot-com bubble burst, and for additional reasons. With the
capital markets dried up, cash reserves shrinking, and debt load climbing, mergers and acquisitions
have fallen off. But smart groups of companies are collaborating across the value chain. They own
fewer assets and leverage those of others in their alliance, while delivering more value to customers
and spreading risk. Be creative in finding ways to partner with others.
I could ramble on, but by now I think you’ve got the picture. By the way, this management
style was advocated recently by the New York-based McKinsey consulting firm, which published the
results of a management study in The McKinsey Quarterly, 2002, Number 2. In “Learning to Love
Recessions”, the firm says it studied nearly 1,000 U.S. companies over an 18-year period that included
the recession of 1990-91. It identified companies that remained leaders in their industries or became
formidable challengers.
The successful challengers pressed their advantages. While everyone else was battening down the
hatches and avoiding risk, these companies were taking advantage of change by making acquisitions
that shaped industries. They spent their cash reserves effectively, refocusing instead of cutting spending. In essence, these successful companies saw opportunity in the change that recession brings. Their
attitudes were not those of victims avoiding risk, but of leaders who wanted to win even under difficult
circumstances. They demonstrated they could win with what they had.
As the saying goes, “Good things come to those who wait, but only the things left by those who hustle.”
In other words, if you don’t hustle and instead sit waiting for things to get better, rather than
being written up in Collins’ next book, you’ll be Gone With the Wind.
Back to Top |