Category Archives: Uncategorized

• The secret to growth in a recession: Motorboat vs. Sailboat

  Saturday, June 13th, 2009 by Wes Ball

  As I have watched a broad range of businesses react to this slow economy, something hit me about the differences between those who are thriving right now and those who are either dying or barely surviving.  The thrivers are all “sailors.”  The fatalities (even if they are only dying slowly) are motorboaters.

  Here’s what I mean:

  Motorboaters need to have all the fuel on board necessary to reach their destination before they start off.
  Sailors only have to have the tools and knowledge to take advantage of what they find along the way and stay out of serious trouble.

  • Motorboater businesses worry about moving forward without a clear view of how they are going to get there and confidence that they have enough “fuel” to make it without problem.
  • Sailor businesses move forward with the confidence that they can navigate to the resources they need, as long as they are creating sufficient demand which “floats” their vessel.

  Motorboaters expect to take a straight line path to their destination.
  Sailors expect to take a constantly changing course to reach their destination.

  • Motorboater businesses believe that they should somehow get to their destination smoothly and predictably.
  • Sailors know better and count on using the surprises along the way to help them.

  A motorboater expects to get to his destination as quickly as possible, with the fewest detours, and is upset if he misses the cocktail hour at the other end.
  A sailor enjoys the trip and doesn’t need the cocktail hour to have enjoyed the journey, because the joy was in the process of getting there.

  • Motorboater businesses hold on to an entitlement attitude.
  • Sailors enjoy the ups and downs and the detours along the way without the need for further gratification.  Look at the offices in sailor companies: they are trim, minimal, and functional.

  Motorboaters get extremely worried and begin to panic when their boat tips and water is rushing along one of the the gunwale.
  A sailor knows he has the opportunity to go faster and gain more ground when his boat tips and water is rushing along one of the gunwale.

  • Motorboater businesses panic easily and start “bailing” persons necessary to their future success as soon as they see difficulties ahead.
  • Sailor businesses make sure everyone knows their job and helps them work together to gain success.

  When a motorboater believes his fuel to reach his destination is below the minimum required, he starts to call for help, slows things down, and wallows in the sea.
  When a sailor starts to lose the wind he needs, he moves to where better wind is or simply waits patiently for the wind to come back, as it always does.

  • Motorboater businesses are victims of the economy.
  • Sailor businesses are opportunists.

  A motorboat must maintain power to sustain itself in a heavy storm, otherwise it wallows and is soon capsized.
  A sailboat can maintain itself in a storm without any sails and choose to either run before the storm under “bare poles” or turn bow into the wind and ride it out using a “sea anchor” to make it go slightly slower than the oncoming seas.

  • Motorboater businesses require too much investment to sustain themselves during economic downturns.
  • Sailor businesses can keep moving or just survive with far less investment.

  When the seas get a bit rough and the boat begins to rock, a motorboater will most often either run for port or just hold position, get seasick, and wait until things get better.
  When the seas get a bit rough and the boat begins to rock, sailors know they can make even better speed; they just shorten sail a bit.

  • Motorboater businesses require far more exaggerated responses to difficulties in order to survive.
  • Sailor businesses can reduce their response and still move faster.

  Most large businesses act like “motorboaters.”  That’s why they have to cut people and budgets as soon as they see potential trouble ahead.  They head for port and ride out the difficulties.  They are victims of the economy, not drivers of it.

  The most successful entrepreneurs are “sailors.”  They know how to spot new wind, how to take advantage of changing tides and currents, and they drie their businesses based upon what they come across.  They are the drivers of a new economy, because they are the ones out front discovering what’s ahead.

  Sadly, far too many small businesses try to emulate large “motorboater” organizations.  During tough economic times, they make the same mistakes, but they don’t have the resources to survive as long while doing the wrong things.

  The secret is to make your organization more of a “sailor” organization.  Watch for the wind.  Move to where it is.  Don’t panic when things look tough, but recognize the opportunity to accelerate while others founder or run for port.

  Wes Ball is the author of The Alpha Factor.  He has sailed for more than 30 years in both cruising and racing boats on both coasts and in the great lakes.  He is also a business owner, executive coach, and business turnaround consultant.  He has created growth for businesses in three recessions, even while their competitors are foundering.
  

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• Alphas don’t follow and they don’t stand still

  Friday, March 6th, 2009 by Wes Ball

  New post on “Dominate Your World” blog post from Wes Ball, author of The Alpha Factor.

  “There has always been an unjustifiable admiration of large companies by smaller ones.  Simply because it appears that large companies MUST be smarter (due to their success at getting large), smaller companies fall into the terrible trap of following their example…”

  See the entire post at… alphadomination.blogspot.com/

   

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• Grow your business right now; ignore everyone else – part 1

  Tuesday, March 3rd, 2009 by Wes Ball

  Growing in a recession is often the LAST thing corporate managers are thinking about, yet it is the best time to take growth steps.  The real secret is in recognizing how to apply Alpha thinking in order to attract the customer demand that still exists during a downturn.

  Many managers forget that demand is not “dead” in a recession.  In fact, some businesses are UP this year (a fact that the news media seems to keep missing).  Surprisingly, generating gains can actually be cheaper in this type of economy.  But there are some secrets that help make growth a lot easier when things get tough.  

  Here are some Alpha principles that create growth when everyone else is hiding:

   

  Leadership comes from the entire company, not just the top person

  Top managers tend to forget the real source of growth ideas, when times get tough.  In an effort to manage costs (a necessary activity), they often close off creative thinking among the ranks (a dangerous result).  By over-managing processes and by making it clear to employees that the company is in a “holding” pattern, the possibility of creating growth is significantly reduced.  It becomes a self-fulfilling prophesy of stagnation or decline.

  The typical reaction among employees to recessionary management tactics is to become fearful about job security or even about the economy in general.  This kind of stress reduces risk tolerance (even among persons who are not directly at risk), which directly affects the ability of a person to think creatively. 

  The greatest value of an employee is that he (or she) is not directly at risk of loss at the level the company might be, so he is more likely to be able to think creatively than top managers who are more closely linked to company losses.  It is critical for top managers to use these creative assets fully and wisely.

  Managers don’t have to accept all the creative thinking that comes up from the ranks, but it is unwise to close off that source of potential growth.

   

  Fear is the real enemy – it makes for really stupid decisions

  In much the same way, the more fear that exists in an organization, the dumber the decisions it makes.  Anyone who has gone through tough times at an organization that was fearful rather than confident has seen this at work.

  We have all seen the very employees who had the experience to carry the organization through the tough times fired, because they had the largest salaries.  Many of us have seen cost cutting that took away the very things the company needed to create strong profitability coming out of the recession.  Anyone in any larger organization has experienced many examples of really stupid decisions being made all due to the fear among middle or upper managers.

  It is healthy to recognize danger.  It is unhealthy to allow fear to overcome recognition of opportunity to the point that the future of the company is undermined.  Far too many publicly held companies are being run by managers who are fearful, because they believe their futures are at serious risk (and they usually are).

  It takes an Alpha manager to be able to manage well in a climate of fear, because it takes great self-confidence to be able to continually spot the opportunities available in the midst of what others see as chaos and collapse.  The Alpha manager maintains calm assertiveness (as Cesar Milan, “The Dog Whisperer,” would say) that allows others around him to function more effectively and more creatively.  The result is that movement is possible, where the fearful manager creates a fear of any movement.  And we all know that a moving truck without brakes (which is what the economy is) almost always hits an unmoving pedestrian.

   

  No matter how “down” things get, an Alpha does better

  While few companies are “doing well” right now, a few are doing much better than their competitors.  Just look at the current Alphas, and you can see how resilient they are. 

  Apple is one of the newest Alphas to emerge.  Their sales are finally down slightly, but not nearly as far down as their competitors.  They continue to defy market logic, as they sell more product at significantly higher prices than their competitors.

  Mercedes and BMW have both faired far better than even top dog Toyota (who is still not a true Alpha, but has the potential to become one soon).  And it’s not only because the very wealthy are buying from them.  Actually much of their strength has been at the low end of their lines, and from people who are trading up.

  Wal-Mart continues to outstrip its discount competitors (many of whom regularly are priced lower).  Although hated by unions, Wal-Mart delivers more of what customers want to buy in terms of Alpha ego-satisfaction than any of its competitors.

  Even John Deere, which is one of the few Alphas right now in a growth sector, continues to grow at levels that dwarf its competitors.

   

  Even the worst hit areas of the U.S. still have 90% of employable persons working.  Yes, we are in a short period where the government’s actions are frightening more than half of the population to significantly slow their spending.  That cannot last unless the government completely destroys our economy and puts everyone on the street, which did not even happen during the 1930s.  

  Following Alpha principles, any company can do better in a recession.  I have proven over three previous recessions that most grow dramatically at the expense of their more fearful competitors, and with less cost to generate that growth.  It just takes knowledge of the Alpha model and the confidence to stay focused upon that model to find the success most managers believe is impossible during tough economic times.

   

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