Fall 2002
Staying Successful
When market conditions are abundant, firms are busy. Utilization rates are up. Profits are up. Firms grow. And even training budgets and other amenities flourish.
The problem?
No pain … other than getting work done and finding more good people. Leaders often get caught up in the euphoria. And everyone reacts to the joys of the moment …
“We’re having our best year, ever!”
Often, no one is wondering …
“What will the markets be like in three or four years?”
Yet, it’s the perfect time for someone – or some small leadership cadre – to do precisely that. One firm, during a strategic planning session, experienced incredible dissonance from a group of its leaders whose primary market was, according to re-search done for that meeting, about to fade.
“We see what the numbers say.
And the data does seem accurate.
But we are so busy with that work, and
have such great relationships with those clients,
that we just can’t really believe the work will drop off.”
Many of the others, not in that market, chided the group …
“Denial!”
Yet, the projects that were keeping those people so busy were actually budgeted two or three years previously. It seems difficult for people to really feel the future … to believe the market shift will happen, before it happens … or to believe lay-offs (or hirings) will happen, before they happen.
Yet, some of the leaders comfortably led development of if/then scenarios …
“If this market slows – or shifts – what will we do?”
“If this geography gets soft, how will re react?”
Two observations:
1. It seems infinitely more difficult for people to let go of a market they have served for several years – even though it’s become commoditized and fees have dropped – than for firms to penetrate a new market. Comfort is so high with the known and familiar, the people who serve that market hang onto the belief that it’ll rebound, almost regardless of what the research data actually says. Many firms run profits of only 3-6 percent – but find reasons to stay in those markets, anyway.
“The Buggy Whip Syndrome”
2. Creating “if/then” plans seems more comfortable. It could involve in-vesting money in a new growth market now, to provide an alternative opportunity, if needed, later. It could involve focused tightening of bonds with clients now, so they stay loyal even if their market softens and they‘re pressured to price shop. In softer, commodity markets, unique services (that you can identify through client focus groups or research), and solid relationships can help differentiate you from the hordes of other firms trying to survive.
Paraphrasing the words of one client, whose strategic planning session was filled with massive expressions of denial …
“I have to tell you that the markets are behaving exactly as the research said they would. If we hadn’t created and instituted our contingency plans,
we’d be hurting like all the firms around us.”
Market behavior will be turbulent for some time. First, spend energy – the time and dollars are not extensive – to monitor market shifts. Trends reading, client focus groups, and selective market research efforts are best. Second, invest time (and dol-lars for skill-building training, as needed) in tightening relationships with clients … feedback throughout every project, and a Client Service Management “Tactical Action Plan” for every “strategic” client organization you wish to serve.
It’ll pay big dividends!
Here’s a major freebie for all of you: Go to:
http://www.arlintoninstitute.org/futuredition/index.html#SUBSCRIBE
The Arlington Institute emails a free newsletter every two weeks. 22-24 pages, with paragraphs about all sorts of global trend topics. Each paragraph also has a web link, so you can get full in-depth information on topics of special interest. Why it’s free, I don’t know; it’s a gold mine for which I’d gladly pay.
PDR is moving.We’re relocating to the model of the Garden Atrium sustainable development we’re doing. As the other houses are built, we need to be there. Our new address will be: 4 Garden Atrium Way, Poquoson, VA 23662. Our phone number remains the same, for a while. The web site, pdrinfo.com, and our email addresses – stu@pdrinfo.com or trina@pdrinfo.com – remain unchanged.