The Fundamentals of Courage & Taking Advantage

The Kellogg/Post story (previous article) is enlightening. So often if we learn well from history, we have the opportunity to change the end of the story; we don't reside in the past & its failed actions. In addition to the studies & outcomes, I believe there are three fundamental areas of opportunity now existing that call us to action: low interest rates; low real estate/occupancy costs; and the availability of good people.

As the famous hockey player, Wayne Gretzky said, "I don't skate to the puck, I skate to where the puck will be." Similarly, with the economic recovery, we must look forward to where our market will be in 6 months/year +, and build the organization, people, and resources to serve and take advantage of it. If we do that better than our competitors, we will emerge the winners.

It's fairly easy to understand that if we do nothing, the best we can be is at the same relative level as when we started. Don't we want to be stronger, better prepared, and more responsive to our customers? That's the real reason that doing nothing should not even be close to an option.

First, let's examine cash flow and the cost of money. "Cash is king" has been the favored phrase during the economic crises, and rightfully so. However, as we hit bottom & begin recovery, the opportunity is at hand to invest in growth at an extremely low cost, building a more agile organization. This of course is due to the Economic Stimulus and the resulting low interest rates. Never again, for several years at least, will we see them this low. And as others get on the bandwagon, the rates will go up; if we delay too long, we'll miss the opportunity.

At the same time, real estate values are at 20 year lows, both in the private as well as business sectors. So there exists a window here as well, to buy land for expansion, or existing space, at an extremely attractive rate. If you have leased property, it's time to extend and renegotiate that lease, whether it is due or not. During the recovery, this opportunity will be lost as well as the glut is dissipated. Accordingly, the window for action is probably this Spring.

The most important resource is your people; take special care of them. Hire the very best, of the highly qualified and experienced talent available, resulting from short sighted competitors and companies who cut back too deeply. Give them a new home. Invest in training and development to maximize that talent and you'll have a deepening pool of loyal folks who'll serve your customers well. Geometric improvement can be achieved this year; next year will be too late.