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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.


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