Getting off the dime

"'Even' is the new (in the) black", a friend in financial services told me the other day. He was referring to his clients' portfolios, bailed out banks, automobile manufacturers. A world where losing a billion fewer dollars than you had been expected to is seen as positive news for the market.

In a time of powerful financial gravity, 'even' is safe. 'Even' is acceptable. Except when it is not (for ancient historical reference, see Matthew 25:14-30).

The origin of the term to 'get off the dime' comes from old dance halls, when floor managers would see dancers and their customers barely move from a small (dime-sized) spot as they held tightly to one another. In the morality of the day, this was unacceptable.

Today it isn't dancers but companies and their executives that can't seem to unwind from their tight hold on whatever brings them security: cash, "the old way", the bird in the hand, or whatever was done a year ago when things weren't so dire. When Larry Young, CEO of Dr. Pepper-Snapple reported earnings last month, he stated, "Even though the majority of Americans are still working, the fear factor that has gripped the nation is having a significant impact on consumer psychology." That psychology is real, and it doesn't just impact sugared drinks. It carries itself into offices and boardrooms where it impacts a whole host of decisions based on the paralyzing fear of the unknown.

Such destructive emotions are common among all companies, large and small, and the longer they go unchecked, the worse the impact, as they create a flywheel of negative emotions throughout the organization, building, building, the cycle destroys any chance of a recovery.

In his book Confronting Reality, written with Ram Charan, former Honeywell CEO Larry Bossidy outlines a process for executives to begin to see the forest from the trees, and the symptoms from the cause. Companies that recognize the symptoms, recognize the cases, and, critically, take action to overcome them can recover. It just takes a little insight, a little courage, and a bit of forward strategic thinking.

And that's my two cents. I only wish I had as much as a dime.

Warning signs

The other night I had an "I Love Lucy" moment – I found myself desperately, and ultimately unsuccessfully, attempting to stem the tide of about 75 PSI of water shooting from what had been the stem control of an upstairs bath.

I had been ignoring a persistent drip for weeks.

Together with a client, I was speaking yesterday with a lovely woman who runs the Diabetes Education Center at a local hospital. The topic soon turned to preventative medicine, and the number of people who discover they have diabetes only after entering the ER with blood sugar levels in the 700s (that’s really high).

They were ignoring the frequent urination, constant thirst, weight loss, fatigue and other warning signs of diabetes.

Last month a neighbor had to be rescued from the side of a busy highway during rush hour when her transmission gave out and she slowly glided to a permanent stop on the gravel shoulder. The car had been recently detailed, however, so it looked sharp as it was hoisted onto the back of the battered tow truck.

She had been ignoring the thump and jolt from the backend of her foreign sedan for months.

And of course, we can all point fingers at the politicians and bankers and brokers and others who ignored the warning signs that have led to the current world financial credit crisis.

What are you ignoring? What are the warning signs in your own business that need attending to?

Are consumer complaints increasing? Is innovation fading? Are too many of your receivables over 120 days out? Do your employees fear the next 'all-employee meeting'? Has cash flow become the dominant topic over the water cooler, instead of tactics and strategy?

None of these scenarios are uncommon in a weakened economy. But what are you doing about it?

There are no easy answers to these problems. But analyzing the problem for weeks isn't helping. The quicker you act and the more decisive the action – any forward action – the greater the likelihood of preventing the situation from truly getting out of, that is, beyond your, control. Once a problem is beyond your control, it is too late and the options for a remedy, such as they are, are never good ones.

Okay, so this post doesn't say much that hasn't been said before. But if you've ignored the same reminders before, here's your chance to act.

Regardless of the specific corrective action required for your company's circumstance, the immediate requirement is communication. Internal and external communication to explain the company's circumstances to employees, partners and customers; reinforcement of company values and vision, and each individual's role in fulfilling the company's mission; the long term and near term future for the organization. And communication is a two –way street as well, that is, remaining open for customers to become real-time sources for feedback and product ideas, perhaps seeking out suppliers willing to extend finance terms, and listening to employees for suggestions regarding improving operational efficiencies.

The important thing is not to ignore the constant drip, drip, drip of market erosion and declining revenues, blindly hoping that a sudden macroeconomic recovery is around the corner, a rising tide that raises all boats. Don't ignore the warning signs. Take action now, because like my plumbing, the 'pressure' to take corrective action now is only building.