Ashish Sanghrajka, president of Big Five, has written an open letter to the industry regarding the value of business owners doing periodic reviews, especially in such uncertain times.
I remember grade school when I had to take my report card home to my parents, often with a measure of trepidation because I knew that meant the dreaded parent/teacher conference came soon after. There, they discussed my progress or, sometimes, lack of it. Now as a father myself, I have quite a different perspective. Today, I see the value of periodic reviews. We can look at our businesses in that light. Here we are, parents reviewing our children’s report cards. We can gain an enormous advantage by knowing where we stand.
With that in mind, how are you doing?
With the economy arguably in a recovery mode after the most recent gross domestic product (GDP) showed some growth, it is a good time to check your report card. How much did you change? Did you further solidify your market foundation? Have you figured out your competitive advantages? Have you positioned yourself to gain market share in the coming years? Did you gain efficiency in your company?
If you answered yes to most of these, then you have earned an A grade. If, like most of us, you can’t say that about every aspect of your business, then it might be time for that conference aimed at getting your child back on track. The fundamental change here is that as a business owner, you must serve as both the parent and the principal.
Steve Jobs, CEO of the Apple, has just been named CEO of the decade by Fortune magazine. He is among the wealthiest men in the world, and his business seems to defy the laws of economics (or gravity for that matter). However, take a look at the road he has traveled. Here is a man who co-founded Apple in 1976, and was later removed from his own company. After a decade, known by some as the “dark ages” at Apple, Jobs returned to take over the reins again. He then completely reinvented the company while, at the same time, revolutionizing an industry. The result is a business model that looks nothing like the company he came back to in 1996. Today, Apple is miles ahead of its nearest competition. And, it has remained profitable despite the worst downturn since the Great Depression! Apple has been able to do this based largely on Jobs’ creativity in developing the iPod followed closely by the iPhone. Today, Apple is the only company giving market leaders such as Microsoft and Blackberry a challenge in all aspects of their business.
My former employer, Charles Schwab, offers another great case study. After selling his company in 1981, he bought back the firm in 1987 when it was on the brink of collapse. He set a clear definition for what he wanted the company to be, and began rebuilding it on a solid foundation. He envisioned a company that combined unbiased recommendations and information with a more do-it-yourself approach on the part of his clients. He took a serious risk, mortgaging almost everything he owned in the process.
The result was rapid growth in the 1990’s. During the “dot com” bust, Schwab, then newly retired as the CEO, saw his company slide back into that same position for a second time as it lost sight of his initial vision. The company he parented for so long was losing money faster than a deflating balloon. Once again, Schwab stepped up and took over as CEO. He once again steered the company back to his original vision that fused sound financial advice with an almost anti-stockbroker philosophy that gave clients more hands-on involvement with their own money. Now, Charles Schwab is one of the few financial firms able to refuse to participate in the financial bailout while claiming a healthier balance sheet than its rivals.
Both Schwab’s and Jobs’ roads to success were full of bumps, doubt, failure, sacrifice and most importantly, frustration. Consider these two businessmen as the experts on how to navigate uncertain waters successfully. Both have demonstrated clear competitive advantages, which includes a vital key to the equation – intellectual property. Most successful businesses, including travel companies are all about intellectual property. These are the vital, creative minds that develop innovative products and services.
Even during down turns, these people defy the fire sale mentality common to so many enterprises. The focus is on innovation not price reduction. Much like Apple or Schwab, success only comes when you take the more difficult road, challenging yourself to rethink almost everything you know to be true.
In parenting your company, have you been a catalyst for positive change during this downturn? Have you taken a risk recently, looked at new ideas, asked hard questions? Have you been frustrated because of the difficulty of change? Have you or your team sacrificed in the present for rewards in the future?
What grade would you give yourself? It’s still not too late, and the rewards are worth it.