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Archive for May, 2008

Being a cost cutting crusader is a solid strategy for dealing with a soft economy, but it’s more defense that offense. Companies cannot cost cut their way to prosperity.

Sales and growth are the only thing that can make a company strong!

When times get tough, 99% of executives make a mind shift toward the sales department directly and customers indirectly; your career will benefit from doing the same. Likewise, insensitivity to the increased difficulty facing the sales force is sure way to tank a good career.

You may say: “I’m in accounting, how I can impact sales?” You’d be surprised, sales people depend on the home office more than you know. If they need a credit approval walked through in order to close a deal, you may have a chance to be a hero.

By the same token, beat up a sales guy over a minor expense report error and you could find yourself in deep trouble. There isn’t a lot that the vice president of finance can do to help sales, but he may be the first one the vice president of sales calls when he hears a horror story from one of his top sales guys about “some jerk” in accounting.

You could become infamous overnight – in the wrong way.

Of course if your job has any customer contact, the stakes are even higher. Everyone is hypersensitive about losing customers when orders are scarce. You may not realize it, but there are plenty of “back office” functions that can either solidify a customer relationship or send it up in flames:

Accounting – Invoice errors, finance charges, return credits
Manufacturing – Production delays and errors
Shipping – Getting goods out the door on time (or even early)
Customer Service – Caring for the customer as if your job depended on it

Again, customer contact cuts both ways. Go out of your way to help and maybe someone notices and tells your boss. Disrespect for the customer may result in a self inflicted wound that takes years to heal – if ever.

Remember, when business is down, the workplace is full of opportunities to help or destroy your career.

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Okay, back (home) in Massachusetts. The Sox are on a roll and the Celtics just need to remember how to win on the road again; life is good!

That is unless you’re working for a company that’s feeling the pinch of the tightening economy…

Actually, we’re not yet in a true recession (and hopefully we’ll dodge that bullet) but the R-Word is all over the news and that’s bound to cause top executives to switch gears and cut back on company spending. You need to keep your antenna up for this early warning sign of things to come.

Up until now, the people with big, bold ideas have been getting all of the spotlight. When times are good, executives look for ideas that help grow the company and risk takers get a lot of positive attention. But when the future gets uncertain, it’s like the giant RISK switch got turned to AVOIDANCE and those bold ideas that are being promoted by your aggressive coworkers suddenly look careless.

If you’re one of the first to see this switch turn and you change your behavior accordingly, you can create a nice career opportunity for yourself.  

Here are a few suggestions to consider:

Start With Yourself: Think of ways you can personally save the company money. If your job involves travel cutting out excessive travel is an obvious suggestion, but it’s a flawed idea because it assumes that there is a large amount of unnecessary travel occurring in the company. From my experience this is seldom  true.

Rather than stay home, look for ways to reduce the costs on the trips you have to take. Fly discount airlines, consider staying over on a Saturday night to get a leisure fare, use priceline.com or hotwire.com to get cheap car and hotel rates, stay with a friend, and avoid expensive meals. 

Help Your Department: Does your boss have weekly staff meetings? Bake muffins or cookies at home and bring them to the meetings. Look around for ways to make a personal contribution to cut departmental costs. Departments spend a lot of money at quarterly off-site meetings. Imagine you were spending your own money and then makes suggestions on how to save money. We once had a meeting where we had people bring the food. We broke people into teams and gave them $20/team to buy ingredients and had a contest to see who came up with the best recipe. It was a lot of fun and saved big bucks.

Look For BIG Company Efficiency: Every company has a half a dozen cost drains built into the way they do business. In most cases, these are things that cross the lines of multiple departments and have probably been done the same way for a long time. Physical processes that could become digital are usually big hitters.

Once you’ve nailed a couple of these, you need be very careful about how you promote your crusade. No one likes a coworker that toots his own horn. The trick is to offer to share your ideas and then earn your Cost Cutting Crusader reputation one person at a time.

Although these general themes work well, the best ideas are the ones that you create on your own based on what’s actually happening inside your company.

Finally, I need to pass along a word of caution about becoming a Cost Cutting Crusader. You can easily standout as a leader when the economy is down, but you need to keep an eye out for when things turnaround (as the ALWAYS do). One day your executive management will want to start taking risks again in the name of growth and you need to make sure you’re not the last one to switch gears, or your career may be left in the dust.

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Instead of jumping into my next tip for dealing with Distant Thunder, I want to take a moment and talk about innovation, the great USA, and your career.

Also, I’m sorry to be a little slow on my posts lately. Career Secret Sauce is going into print and I’m on one of my semiannual cross-country road trips. That’s what got me thinking about $4.00/Gallon Gas, Innovation, and Your Career!

You buy a lot of gas driving across the country, sometimes two tanks a day. The lowest price I’ve seen was in Oklahoma – about $3.50/gallon. The highest (so far) was in Indiana — $4.00/gallon. We head off the beaten track from time to time and talk to people in the middle of the country.

Besides the cost of gas, the other thing I notice is the transition of industries. I’ve seen incredible new buildings for new businesses and a number of ghost towns. The new businesses are very exciting, but the ghost towns are quite scary.

One of them was in McLean Texas. We had to mail a letter and drove down the “Route 40 Business Loop” looking for a Post Office.

We found it, but it turned out to be the only business in town that wasn’t boarded up and closed down. Everything else was gone; the shops, hotel, café; all out of business. It didn’t look like they’d been closed up for very long, but the only paycheck being written in that town was going to the postal workers. 

I did a little research and discovered that its prosperity was due to two things. First, it was a stop on old Route 66 and second, the train ran through town and it was a big oil transportation hub.

Times changed; Interstate 40 bypassed the town and nearby Amarillo became the oil transportation hub for West Texas. Today it’s pretty much a Post Office and the Devil’s Rope Museum — A Tribute to Barbed Wire.

What’s McLean Got To Do With $4.00/Gallon Gas and Your Career?

McLean was destroyed by the innovation of replacing Route 66 with I-40 and the supply chain efficiency of the Amarillo Hub. A lot of people fear $4.00/gallon gas because of all the money it’s sending overseas, but I’m excited about what it will mean for new career opportunities in the United States.

There are over a dozen incredible new energy technologies that have already been developed and were sitting on the shelf because they can’t beat $30/barrel oil.

They are now flying off the shelves being backed by the power of the US Venture Capital industry and $125/barrel oil.

Bright Source Funded

My old pals in Silicon Valley Venture Capital are among others who just put $115 million into this incredibly cool new company called Bright Source Energy (http://www.brightsourceenergy.com).

They have developed a smart high intensity mirror farm technology that follows the sun to superheat steam that is used to drive power turbines. The technology is so efficient that a 19 square mile farm could theoretically produce enough energy to power the entire United States.

They just closed an agreement with PG&E to supply 900 MKW all from five of these solar farms. That’s enough energy to power 540,000 homes. Building the five plants to support this contract in the Mojave Desert will mean 2,000 construction jobs, and about 1,000 fulltime skilled workers to operate the plants.

Imagine thousands of jobs being created in the Mojave Desert or Arizona, Nevada, and New Mexico. Think about all of the engineering, finance, and marketing jobs that follow. Now consider that this is just one of dozens of breakthrough new businesses that are getting big funding due to $4.00/gallon gas.

So when you think about your career or your new job, remember why the United States has the best economy on earth. We have the best national model for driving innovation and that’s where our great jobs and careers come from.

Follow Innovation!

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Distant Thunder

Okay, the cat’s out of the bag. Everyone is talking about a recession. Maybe we’re in one, maybe we’re not, but anyone who’s managing a budget these days is making plans for the worse.

Kind of like the sound of distant thunder. It may come your way and rain like crazy, or it may miss you completely. Regardless, you need to be careful.

How does this translate to your career?

Just about everything will be different and you need to make a mental mind shift to survive. Do it right and you may even thrive.

No Budget is Safe

You may have a project you’re working on that’s been budgeted for quite some time. Don’t be surprised if the budget gets cut.

I remember in 2002 we were facing a similar economic downturn. My group was planning a big product launch at a major trade show. The show began on a Saturday and on Friday afternoon I was told that all marketing event budgets had been cut and we would be pulling out of the show.

The problem was it would cost more money to pull out than to stay. Every expenditure had already been made; no credits or refunds were possible, and people were already at the show. In fact, we’d have to pay penalties to fly them home early.

I went berserk and started calling everyone I could to reverse this stupid idea. I was an Executive Vice President at the time so I had access to everyone and people generally listened to me.

Sending a Message

Guess what, even though it cost the company more money to pull out of the show at the last minute than to go through with the exhibition – we still pulled out!

The logic was to “send a message” to everyone in the company that it was time to cut back all discretionary spending.

So my first tip to everyone is to start thinking about ways to cut back. What was a bold idea last year is now a stupid idea that “we can’t afford.” Make a mind shift and try to come up with ideas for saving money.

You could become a star in the new business environment.

Next Post – Become a Cost Cutting Crusader

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