During a Recession Entrepreneurs Should Invest for Recovery
The recession has hit every business hard, with more layoffs, closures and bankruptcies reported every day. Yet, just as many companies are slamming on the brakes, a few gutsy visionaries have put the pedal to the metal.
While some are lamenting the situation, savvy entrepreneurs are busy developing Big Hairy Audacious Goals (or, as my colleague Jim Collins, the author of Good to Great, calls them: BHAG’s) designed to make their businesses stronger and more successful when this recession finally ends.
Lessons from Tech Giant Intel
Take, for example, the incredibly bold bet being made by Intel right now. While the rest of the computer industry is retrenching, Intel has just committed $7 billion to build a brand-new state-of-the-art chip manufacturing facility in Utah. According to Intel President and CEO Paul Otellini, “We're investing in America to keep Intel and our nation at the forefront of innovation.”
If that's not a BHAG, I don't know what is, but this comes from a company that has a long history of zigging when others are zagging. During the massive downturn that hit the computer industry after the burst of the dot.com bubble around the turn of the millennium, Intel invested in new innovations and new products, thus allowing the company to emerge as the most dominant computer chipmaker in the world. I think the logic of Intel's downturn investment strategy was best captured by co-founder Gordon Moore: “You don't save your way out of a recession.”
BHAGs for Small Business Owners
Intel, of course, is a $38 billion company. What can a small-business or franchise business owner do to stay strong and competitive in the face of such challenging times? A great example is my good friend Rod Cesario, who owns Dragonfly Anglers, a fantastic little fly fishing shop in Crested Butte, Colorado. The entire economy of this small mountain town is pretty much dependent on tourism, which, as you can imagine, has been way off. While many businesses in Crested Butte are cutting back hours or simply closing, Rod is taking this slow time to, as he puts it, “dial everything in just right.”
He's re-organizing the merchandise in the shop, adding really cool new inventory, and installing a big flat-screen TV and surround-sound system (the prices have never been better) so when customers do walk into his shop they will be completely blown away, hopefully rewarding him with larger purchases and increased word-of-mouth marketing. He is also making a major investment in his website to increase his online sales, to make up for the reduction in walk-in traffic. While others in town are lamenting their bad fortune and waiting for things to pick up, Rod is working hard to ensure his business is poised to grow with the recovery.
Another super example would be one of my clients, EdgeWater Boats, located down in Edgewater, Florida. In the past year and a half the recreational boating market has dropped as much as 80% and the landscape is littered with dozens of once-great boat companies that are now out of business. Although EdgeWater has had to scale back somewhat, they have also made a commitment to use this downtime to take the quality and innovation of their boats to a new level. From the CEO to the front-line workers, everyone in the company is striving to build the absolute best boats that have ever left their factory and to dramatically strengthen their relationships with their customers. In the midst of industry turmoil, EdgeWater remains strong and on track for great success as soon as things begin to turn.
If Not Now, When?
Waiting for things to get better, hoping business improves, or trying to just hang around are not sound strategies for long-term success. The lesson is clear: Now is exactly the right time to set Big Hairy Audacious Goals for improving the quality, innovation and customer service your company delivers to the marketplace. Invest today in your business and, as the recovery takes hold, you'll reap the rewards.
Remember: Nothing great has ever been accomplished through waiting and hoping. Fortune favors the bold.
FranchiseHelp.com contributor John Spence is the author of “Awesomely Simple – Essential Business Strategies for Turning Ideas into Action.” He is an award-wining professional speaker and corporate trainer, and has been recognized as one of the Top 100 Business Thought Leaders in America.