How Would I Know That?

I thought I was really on a roll when I looked directly at the sharp young management team and said, “So that is why I strongly suggest you rewrite your 2009 financial plan immediately and reflect those lessons we learned from the early '80s.” This was my punch line, delivered to fully reinforce the urgency that I felt from my past experiences. Dramatically, I had put my hands flat on their conference table, leaned forward, looked them in the eyes and said, “Questions?” The 40-year-old president of this successful company looked at me and said, “Phil, as best I can figure, I was in the seventh grade when that happened. Tell me … how would I know that?”

That's when it hit me that in all likelihood more than half of the people running small businesses today have absolutely no experience with managing in a recession. Sure, we have had some ups and downs during the past 25 years but looking at the numbers, you will see that even the downs have been short and contained in the overall up. What's happening now is different in that the factors driving it are unknown to us in terms of their effect. Our country is financially damaged, and people are frightened. If people become more negative, the situation will worsen, and if they become more positive, the situation will improve. While we can't control the public's attitude, we can control the businesses we are responsible for. Not knowing what will happen next is no excuse for not knowing how to run a business. Still, if you don't know what to do, you will do what you know. Our industry may be operating with an experience deficit.

The popular response to today's situation in our industry is to answer the problem with “sell more.” There has always been a certain amount of truth to that, and as sales trainers, we support that answer. However, if contractors are not selling anything, they won't be buying anything. It is possible to sell effectively and succeed at earning a larger “piece of the pie,” but if the pie itself is smaller, you will end up with less to run your business on in the end. A larger piece of the pie is not the sole solution when the pie is smaller.

The question was, “How would I know that?” My fine client couldn't have known what I was talking about because he never had the experience I was drawing on. The 40-year-old owner/president was at a significant disadvantage, as was the rest of his team. The captain at the helm may be the most experienced person on that ship, but if that ship is facing conditions that are unlike any he has faced before … his experience is of small value.

The experience they needed was that of what happens in an organization when faced with difficulties way beyond any before. Knowing what it feels like to run a business when bad news is flowing in like the tide. Having the knowledge of how to treat employees whose lifestyles are now at risk after years of feeling safe with you at the helm. How can someone who fully expects business to return to “normal” make the best decisions about running a business that will never “return to normal”? The only normal in their future is a “new normal.” It sounds scary and for those without past experience to draw on, it is scary; for some, even terrifying.

These smart, young managers utilize technology in ways I simply have to accept without understanding. They operate their businesses efficiently, serve their customers expertly and care about their people. Friends and family members populate many of their organizations. They have managed the growth of their business well, yet they have no clue about how to take their business in the other direction. They still believe that their friendly banker is really “their” banker and not the one person who probably won't be there if they really need a banking friend. They need help.

Recently, I was in a museum that had an exhibit about early American civilizations. One central theme that kept coming through was the role of the elders in those cultures that survived. The elders were the ones who carried the stories on to the next generation. Those “stories” exist today in our culture of business, and those “stories” are rich in experience. Experience is very personal and only real to the witness … that is who was there and lived it, felt it and experienced it. To anyone else, it is information. Information is a good thing to have but is of little value until it is appropriately applied.