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2010 Executive Tidbits
IBM, P&G, General Mills, McKinsey, and McDonald's have the best manager training programs according to Fortune 2009. |
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Check out Keith's other site:
Virtual Writing Coach |
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The Executive Connection SM
a publication of The Virtual Executive Coach SM
"Vision + Accountability = Success!"
www.virtualexecutivecoach.com
March, 2008
In This Issue:
1. Preview
2. Executive Summary
3. Managing Your Business in a Downturn
4. Helpful Hints
1. Preview
The Executive Connection explores the creative and analytical process of business development,
team-building, and executive development.
We are an interactive community of executives and small business owners who desire to network
with like-minded high-performance executives
to enhance our knowledge, skills, and aptitudes in the competitive business world.
Published monthly, the Newsletter offers coaching suggestions around the topics of: business development, financing, marketing, networking,
incorporations, mergers, human resources, governmental regulations, and tax laws.
Topics are presented from the perspective of Keith Barton and represent only his ideas on creating and running your business.
Because we are an interactive community of executives and business owners, other viewpoints are welcomed and may be printed in future monthly
newsletters with permission from Keith Barton.
2. Executive Summary
March, 2008
Dear Executive Connection Subscriber,
This month's newsletter features: Managing Your Business in a Downturn
3. Managing Your Business in a Downturn
I think everyone will agree that 2008 will be a downturn in the U.S. economy; whether the downturn
will meet the economic definition of recession of a decline in Gross Domestic Product (GDP) for at
least two consecutive quarters. Worst-case scenario is that we will not pull out of a recession for
two more years. Most-likely case scenario is that 2008 will be a challenging year for small business.
As the number of jobs continue to go overseas, tax credits continue to be offered to the large
corporations, and capital gains taxes remain above thirty percent, small business owners will
struggle to maintain annual production goals, despite decreased daily cash flow for running their
companies. In this month's Fortune magazine, Ray Charan offers an interesting formula for making
your company better in our current downtown.*
Keep building. Do not panic, but instead refocus your energy on what made your company successful in
the first place. Was it customer service? A new gadget? Easier access? More variety? Charan quotes what
CEO Ray Gilmartin did when Merck was losing many of its brand name patents and the fall out from the
Vioxx scandal.
Gilmartin elected to increase R&D spending from 12% to 20% from 1999 to 2004. For Merck its
core value was finding new drugs to make people live longer and enjoy a better quality of life. (Go
to Fortune, pages 94-98 to see how Merck went from Scandal to Stardom). He also continued bonuses
for those stellar employees running the larger profit centers within the company.
One of the surest ways to lose talent is to cut pay and bonuses across the board in down times. This punishes everyone
for outside threats (like litigation) that affect the bottom line.
Communicate intensely. When the economy slows, intra-company communication should speed up. Many CEOs
insulate themselves from their workforce and customers. What EMC˛ did after its stock price plummeted
90% was reconfigure their business strategy after conducting focus groups, town hall meetings, and
intranet letters to query not only their customers, but their customer's customers.
When facts or
economic conditions change so must your business strategy, to paraphrase a leading historical
economist, Keynes. Too many companies continue the same ole' same ole', keeping their heads in the
sand, praying that macroeconomics and government subsidies will turn them around.
Evaluate your customers. During downturns, you should identify your higher-risk, cash-poor customers.
Don't continue to supply customers who haven't paid you in four months. Cut them off! Find new
markets for your products; help finance your customers with short-term loans or let them buy in
smaller quantities. Cut out the middle man and try selling direct to your customers over the
Internet. This is what made eBay so successful.
No across-the-board cuts. Prune, don't cut down the entire bush. Procter and Gamble did this in the
late 1990s by dropping stagnant brands like Comet and Crisco and focusing more on
environmental-friendly products for the household. Detroit automakers continue to produce giant
SUVs despite high gas prices with lower profit margins per vehicle when they should have invested
in smaller hybrids like Toyota has done. The American consumer hasn't caught on but they will when
gas prices move above $4 a gallon. People are now reconsidering jobs that require two hour
commutes.
So what kind of CEO do you want in 2008? Do you want the ostridge or owl? Good business sense relies
on more that internal knowledge of one's company and "doing business". A strong company remains
strong during the downturns--they learn when to "batten down the hatches" and prepare for bad times
by slicing and selling off their liabilities (money losers) and building and shoring up their bread
and butter. Getting back to basics is key to a successful ride through turbulent waters and you want
a CEO with a vision and knowledge of global macroeconomics to weather the storm.
Helpful Hints:
- Research other companies besides P&G and Merck who changed business strategy to survive tough
times.
- If you're a business owner, how often do you talk to your customers as to what they really need
and appreciate about your business?
- Despite the ups and downs in our economy as evidenced by the stock market during the past
forty years, the overall trend is 6% post-inflation and taxes.
* From Ram's Rules in Fortune's February, 2008 magazine, pages 54-56.
SUBSCRIPTION INFORMATION
The Executive Connection SM is a free publication. If you want to continue to receive this Newsletter, you can
SUBSCRIBE by clicking here or by sending a blank email message to
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Be assured your name and email address are confidential. We do not sell, rent or share our mailing list with anyone.
Contact Information:
Keith Barton, Ph.D.
Voice: 281-583-5005
Fax: 281-583-5008
Web: http://www.virtualexecutivecoach.com
E-Mail:
keith_barton@att.net
(c) Copyright 2008, Virtual Executive Coach SM
and A. Keith Barton, Ph.D.
All rights reserved.
Distribution Rights:
The Executive Connection SM is copyrighted, but you may retransmit or
distribute it to whomever you wish as long as not a single word is changed, added, or deleted, including the contact information. However, you may not copy
it to a web site.
Republication of The Executive Connection SM in paper media is encouraged and permitted by individuals, organizations and associations, as long
as the issue is reprinted in its entirety, without change, and includes the contact information.
With advance permission, we are happy to edit an issue to fit your space requirements. Republication also is encouraged under other circumstances.
However, the advance permission of
A. Keith Barton, Ph.D. must be obtained in the event that changes in the text are desired.
The Executive Connection SM Mission:
The Executive Connection SM is dedicated to helping first-time business owners and executives to recognize resistance to change, while they create
and manage their own businesses. My goal is to help you transform your vision into a successful business venture with the addition of accountability structures
and silent partner.
The Executive Connection SM is a publication of The Virtual Executive Coach SM and Keith Barton, Ph.D.
We would like The Executive Connection SM to be as interactive as possible. If you have feedback, comments, topics you would like addressed, or can
suggest additional resources to benefit us all, please email us at any time. Send your e-mail to
keith_barton@att.net
.
Please forward this issue to anyone you think would find The Executive Connection SM interesting and beneficial. Your recommendation helps us
keep growing, and ensures an excellent exchange of information and techniques.
Archives:
You can read previous issues of The Executive Connection SM in our archive section.
About Keith Barton, Ph.D
Dr. Barton received his Ph.D. in 1972 from the University of Texas at Austin and has been a practicing therapist for over thirty years. He is a graduate of
MentorCoach and is accepting new clients.
He has been an adjunct professor at the University of
South Carolina, consultant to Fortune 500 companies in
executive development, founded and managed Texas Community
Living Ventures, Inc., in 1986 for providing group home
services to persons with mental retardation. Keith founded
and has been running a clinical practice in Northwest Houston since 1990.
He writes part-time with the goal of completing one novel a year. His desire to coach others derives from his passionate interest in helping others become
attuned to their creative powers of storytelling.
Dr. Barton has training in coaching, cognitive and family therapy and health psychology. He has published articles, made presentations and conducted workshops about:
Small Business Development
Employee Wellness Programs
Anxiety and achievement
Stress management
Self-esteem
Communication skills
Leadership styles
Core values in the workplace
Executive Development
High-performance groups
Physician support groups
Writer support groups
© 2010
The Virtual Executive Coach SM
and Keith Barton.
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