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The Big Picture of Business – Achieving the Best by Preparing for the Worst: Lessons Learned from High-Profile Crises, part 2 of 4

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Wrong Actions, Mis-Actions

Ford Motor Company and the Firestone Tire Company had partnered and collaborated for almost 100 years, stemming from ties of their founders. In the 1980s, Bridgestone Tire Company purchased Firestone.

In the 1990s, another international conglomerate purchased Bridgestone-Firestone. Business shift from the retail dealer customer service mentality of Firestone shifted to a high-production tire operation. Not only was this a shift in company focus and customer orientation, but it put high-volume tire production and sales as the only priorities. Along the way, many defective tires hit the market, subsequently causing SUV rollovers, damage and, in some cases, deaths.

Rather than stick together in crisis situations and collectively investigate the problems, both Ford and Firestone distanced themselves from each. Ford blamed Firestone for tires that would not hold up. Firestone blamed Ford for unsafe vehicles. Each blamed the other for losses in quality control. The media circus jumped on all facets of the conflicts, as well as lawsuits filed. Both Ford and Firestone turned the tragedies into shouting matches. This sad chapter is a tarnish on the legacies of two longstanding corporate families. Current management of both companies were ill-advised on handling the crises.

K-Mart closed 617 of its under-performing department stores and filed for Chapter 11 bankruptcy reorganization in 2002. K-Mart, long the dominant discount chain had gotten comfortable with its leads over competitors. During the years while K-Mart did not plan for change, Target and Wal-Mart did plan, change and established defined marketplace niches.

K-Mart had become the odd retailer out but still kept 1,500 stores for its reorganization. Inevitably, when retailers contract, they blame poor performance upon bad locations.

Sadly, the criteria for retail stores opening is the availability of property, not marketplace studies and strategies. That’s why so many chains rapidly expand and subsequently contract so frequently. Real estate consultants are not business strategists, but the retail system gives them the say-so in establishing community presence. This is yet another example of niche consultants skewing the client in the wrong directions. Similarly, it is poor business to suddenly wake up one day and wonder why the marketplace passed you by. Retail stores are about more than just storefront locations.

In 1999, the U.S. economy spent one trillion dollars fixing and treating the so-called Y2K Bug, which we now know was a manufactured “crisis” by technology consulting companies. Certainly, aspects of the bug were treated successfully, and troubles were averted because of professional actions. Overwhelming public hype contributed to a “sky is falling” mentality that made computer consultants rich.

As was discussed in Chapter 8, technology constitutes one tenth of 1% of any organization’s overall Big Picture. Computer activity constitutes less than 1% of the technology picture. Thus, efforts to treat a fraction of one percent took resources away from addressing the other 99.999% of companies’ full-scope planning, training and marketplace development. Money was diverted from most other aspects of organizational wellness toward treating one symptom of one disease.

Among the lessons which we learned from the Y2K Bug exercise were:

  • When they want to do so, company leadership will provide sufficient resources to plan for the future, including crisis management and preparedness (of which computer glitches are one set of “what ifs.”)
  • When they are compelled to do so, company leadership will provide leadership for change management and re-engineering…two of the many worthwhile concepts that should be advocated every business day.
  • People are the company’s most valuable resource, representing 28% of the Big Picture. Today’s work force will need three times the amount of training that it presently gets in order for the organization to be competitive in the millennium.
  • Change is good. If you like change, then don’t fear it. Change is 90% positive. Without always noticing it, individuals and organizations change 71% per year. The secret is to benefit from change, rather than become a victim of it.
  • Pro-active change involves the entire organization. When all departments are consulted and participate in the decisions, then the company is empowered.
  • Fear and failure are beneficial too. One learns three times more from failure than from success. Failures propel us toward our greatest future successes.
  • When we work with other companies and the public sector, we collaborate better. All benefit, learn from each other and prepare collectively for the future.
  • In the future and in order to successfully take advantage of the future, make planning a priority…not a knee-jerk reaction.

What Causes Crises

Crises can have many liabilities upon companies, including loss of profits and market share. Inevitable spin-offs include government investigations, public scrutiny, and a tarnished image. This causes loss of employee morale and, as a result, company productivity.

Based upon research and experience with hundreds of client situations, I have found that seven types of crises exist:

  1. Those Resulting from Doing Nothing. The biggest problem with business, in a one-sentence capsule: People exhibit misplaced priorities and impatience…seeking profit and power, possessing unrealistic views of life, and not fully willing to do the things necessary to sustain orderly growth and long-term success.
  2. Doing Things as We Always Have. Resulting from inflexible conditions, obsolete policies-procedures, procrastination, attitude, resistance to innovation, failure to change.
  3. Those We Bring Upon Ourselves. Don’t have sufficient management skills or resources to do something well. Ignore small problems when they occur. Won’t listen to advice.
  4. Circumstances Beyond Our Control. Miscalculations, manmade disasters, natural disasters, shifting resources, changing marketplaces, regulations, bureaucracies.
  5. Bad Work, Poor Planning. Damage control for what someone else did wrong, sub-standard, behind schedule, in poor taste, without regard for quality or ill-prepared.
  6. Averted. 85% of the time, planning and forethought will avert the crisis. So, why don’t organizations and individuals remediate trouble by planning on the front end?
  7. Intervention. Getting past the current crisis does no good unless you take steps to assure that it does not recur. Planning is necessary to remediate current and future problems.

Crisis management and preparedness can minimize negative impacts of any emergency. Going through the planning and implementation is a quality assurance process that strengthens any company. Crisis communications means banking goodwill for those times when the plan is called to the test.

Continue to part 3 of 4.

Return to part 1 of 4.

About the Author

Power Stars to Light the Business Flame, by Hank Moore, encompasses a full-scope business perspective, invaluable for the corporate and small business markets. It is a compendium book, containing quotes and extrapolations into business culture, arranged in 76 business categories.

Hank’s latest book functions as a ‘PDR of business,’ a view of Big Picture strategies, methodologies and recommendations. This is a creative way of re-treading old knowledge to enable executives to master change rather than feel as they’re victims of it.

Power Stars to Light the Business Flameis now out in all three e-book formats: iTunes, Kindle, and Nook.

How to manage staff when planning an office relocation

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The key to a successful office move is organisation, not only planning the move itself but also managing staff. Office relocation can be a stressful, complex process, so making use of the people around you is paramount as it will both speed up the process and reduce your stress levels. The easiest way to manage staff is to put together a management team and ensure staff are fully informed throughout the move. Here a couple of top tips to help make sure you are always making the most of your team.

Select your team well in advance

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About the Author

From her 25 years in business, Elizabeth Hill aims to pass on knowledge and skills gained in that time through her writing. She loves walks in the countryside, spending time with family and friends, and is ever so ‘slightly’ addicted to coffee.

Who is Martin Rooney? And why you need to know.

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In early August I got a call from a guy named Martin Rooney who had just moved to Charlotte from New Jersey. Turns out we had a mutual friend who insisted Martin and I meet.

I agreed to meet. He’s a new guy in town and he’s a friend of a good friend. We’d have a short meeting and be done. So I scheduled a 30-minute breakfast.

At breakfast, Martin and I began to talk. Three hours later, we were still talking.

We talked sales, martial arts, fitness, health, speaking, writing, and 100 other things. We exchanged books and agreed to carry the conversation deeper. Martin agreed to help me get ‘in better physical shape’ at his training facility.

Martin Rooney bills himself as a Fitness Philosopher. But he is at the top of his profession as both a trainer and a speaker on fitness. He has been a trainer-consultant to athletes from the NFL, MLB, NBA, and has trained numerous Olympic medalists. He produced the fastest athlete at the NFL Scouting Combine four times. One hundred of the athletes Martin has trained have been drafted to the NFL, and the contracts signed were in excess of a billion dollars. Not bad.

My training is taking place at one of the facilities he licenses in his, ‘Training for Warriors’ program. He now has over 70 locations worldwide and over 1,000 trainers have become certified in his training system. Not bad.

So, what’s the attraction? Adonis wants to train an overweight old man. Doesn’t seem like a fit – until you discover our mutual passions: thinking, writing, and speaking. We also both have four daughters, and we’re both from New Jersey. We are helpers at heart, and we exchanged amazing ideas in the first three hours. So many ideas that I believe I have found a new life-long friend. Not bad.

He gave me a copy of his book Rooney’s Rules. He creates a new health, fitness, sales, philosophical rule every day.

Here are a few examples of his philosophy, his thinking, and his writing:

  • Want to be REMEMBERED tomorrow? Then don’t FORGET to do something great today.
  • You don’t become the thing you THINK about all the time. You become the thing you DO all the time.
  • The real garbage holding you back is all the time you throw away.
  • Try new things. Biting into the unknown may be the best way to cut your wisdom teeth.
  • Success may have less to do with the depth of your background than it does with the strength of your backbone.
  • When fighting this battle called life, taking yourself lightly may be your heaviest artillery.
  • Hindsight is worthless until you are able to use it to gain insight that can be used to positively affect your Foresight.
  • Algebra and Trigonometry are less important than learning to correctly add your strengths, subtract your faults, divide your time and multiply your talents.
  • Just like a well-prepared meal, a well-prepared day often ends with a clean plate.
  • If you aspire to retire after building an empire, the best way is to inspire as many people before you expire.
  • Most people often develop a weak set of knees when it comes time to take a stand for themselves.
  • Perhaps the most important thing you can be when you grow up is Yourself.
  • The key to confidence has less to do with inborn talent than it does with ingrained practice.
  • Just like the tide, you will rise or fall as a result of the most influential bodies around you.
  • The Road to Success does not intersect with the Path of Least Resistance.
  • Joy follows success. Success follows experience. Experience follows failure. Don’t fear failure. Without it there is no joy.
  • Your life will not be measured by how many days you get to ‘take off,’ but instead by how many of the days you ‘take on.’
  • The easiest way to lead an unsuccessful life is to work hard all day to get out of a hard day’s work.
  • Most people think the difference between easy and hard can be found in the problem. Successful people know it’s found in your head.
  • Your Reputation and Credibility are just like your muscles. They take years to develop but can be lost in a short time of misuse.
  • Action is your most important export. Better to use it up in the storefront than to keep it stored away in the warehouse.
  • You’re a product of your priorities. You have 168 hours a week. If you can’t find five to workout, you’re not busy; you’re insane.
  • Don’t go ‘halfway’ with anything you do. Either go ‘all out’ or not at all. Your ‘whole heart’ always beats your ‘half ass.’
  • Make your enthusiasm for success stronger than your fear of failure and you will become unstoppable.
  • One way to stand out is to be kind, fair and hard working in a world that often isn’t.
  • Unlike a great steak, great effort can be rare and well done at the same time.
  • Waves of problems will always break on the shores of your life. It is not the wave, but how each is ridden that will reveal you.

Pretty cool, huh? Martin Rooney is a deep thinker and doer who is able to express himself in a very intelligent and thought-provoking way.

He’s putting me through my paces. And I’m loving it.

SO FAR: I have been to Martin’s workout facility six times. I’m getting personal training from a world master. And it’s a fun exchange of ideas along with the grunting. I love it. I am building strength and friendship at the same time.

Reprinted with permission from Jeffrey H. Gitomer and Buy Gitomer.

About the Author

Jeffrey Gitomer is the author of The Sales Bible, Customer Satisfaction is Worthless Customer Loyalty is Priceless, The Little Red Book of Selling, The Little Red Book of Sales Answers, The Little Black Book of Connections, The Little Gold Book of YES! Attitude, The Little Green Book of Getting Your Way, The Little Platinum Book of Cha-Ching, The Little Teal Book of Trust, The Little Book of Leadership, and Social BOOM! His website, www.gitomer.com, will lead you to more information about training and seminars, or email him personally at [email protected].

The Big Picture of Business – Achieving the Best by Preparing for the Worst: Lessons Learned from High-Profile Crises, part 1 of 4

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Just as we gain wisdom from the business failures and corporate scandals, we can learn equally valuable lessons from crisis situations that were successfully handled. The insightful companies examine their own backyards… applying the discussions, uncoverings and applicabilities to how they will better manage in the future.

For many years, we will be measuring how loss of corporate credibility has tainted all facets of business, in terms of remediation, replacement, litigation, make-good, rework, damage control, recovery process, settlements to victims, decreased stock market value and sagging retail sales. The Enron scandal alone has cost each taxpayer twelve dollars.

Some of those events that had profound impacts upon us recently (and which were covered in Chapters 2 and 3) included corporate fraud, accounting irregularities, earnings misstatements, hiding expenses, Enron, Arthur Andersen, the dot.com bubble burst, Worldcom, Tyco, Qwest, Imclone, Martha Stewart and Global Crossings.

It’s not enough just to handle a crisis effectively. The follow-through and crisis preparedness planning process helps to divert other crises from transpiring. Recommendations for crisis management and preparedness as part of macro planning are offered.

Every organization and community in America is presently at a crossroads. There exist two current options. Business can be seen and known as a dynamic community that addresses its problems and moves forward in a heroic fashion…as a role model to the rest of the world. Or, the organization can bury its head in the sand and hope media attention dies down… thus becoming a generic tagline for troubled communities.

Purposes and expected benefits of reviewing business crises include:

  • Understanding the difference between good and bad handling of crises.
  • Comparing crisis follow-ups that help heal and rebuild, versus those that fester and bring destruction to cities.
  • Preparing the community to utilize the concepts of bridge building and problem remediation.
  • Implementing methodologies to address problems sooner, rather than later.
  • Creating cause-related marketing opportunities, so that local businesses can sponsor the community healing process.
  • Benchmarking the progress made and communicate it outside the community.
  • Rebuilding the community image.
  • Involving the widest base of support in pro-active change and growth.
  • Establishing safeguards against future trouble.
  • Putting more emphasis upon the positive ingredients and happenings in the community.
  • Taking hold of the future.

Some of those events that had profound impacts upon us recently, examined in this chapter, include examples of crises that were handled well, thus increasing public trust and respect.

Actions During the Crises

In times of crisis, business does what it should have done earlier: study, reflect, plan and manage change. Sadly, business adopts a “head in the sand” mentality when the crisis seemingly passes. Many rationalize that they dodged the bullet.

In the aftermath of Three Mile Island and the Exxon Valdez crisis, companies increasingly became scrutinized under the public microscope… thus affecting its Wall Street book value, reputation in the marketplace and employee morale. It became incumbent to communicate openly to media about the crisis and what was being done. Companies had to overcome the poorly handled crises, as well as mount their own proactive strategies.

In times of crisis, advisors are called upon more frequently. Crisis Management and Preparedness has been one of my areas of expertise for many years. Among the types of crises that I advised clients through were government reorganizations, plant explosions, contaminated food and drugs, school shootings, executive kidnappings, plant bombings, hostile company takeovers, natural disasters and problematic employee behaviors. I have learned that strategic planning for crises can avert them 85% of the time.

The NASA community and the entire world were saddened by the disaster of the Space Shuttle Columbia on February 1, 2003. During and after the crises, NASA adopted its policy of forthright communication. They continually reinforced the determination to find out what went wrong and take whatever steps necessary to get it right. That’s laudable, and NASA is to be respected for this posture. Not every company would have approached each crisis this correctly and honorably.

There have been far-reaching business after-effects from the attacks on September 11, 2001. 1.5 million jobs were affected by the. Unemployment is at an eight-year high. September 11 is attributed as costing New York City 83,000 jobs and negatively impacting its economy by $1 billion.

In the fourth quarter of 2001, there were 408 extended mass layoff events, involving 114,711 workers, directly or indirectly attributed to the attacks. Thirty-three states reported extended mass layoff activity related in some way to the September 11 incidents. Fifty-four percent of these events and 56 percent of these separations occurred in just five states—California, Nevada, Illinois, New York and Texas. Among the workers laid off because of the terrorist attacks, 42 percent, or 44,756 workers, had been employed in the scheduled air transportation industry. An additional 28 percent, or 32,044 workers, had been employed in hotels and motels.

The U.S. airline industry reported an operating loss of more than $10 billion in 2001 and a net loss of almost $8 billion, according to Air Carrier Financial Statistics Quarterly, a compilation of airline financial reports issued by the U.S. Department of Transportation’s Bureau of Transportation Statistics.

Losses reported by the airline industry for 2001 compare to an operating profit of $7 billion and a net profit of almost $3 billion in 2000. In 1999, the industry reported an operating profit of almost $9 billion and net income of more than $5 billion.

The U.S. Department of Transportation paid air carriers a total of $3.8 billion in direct payments made available under the Air Transportation Safety and System Stabilization Act, which was enacted to compensate airlines for losses suffered as a result of the September 11, 2001, terrorist attacks. Without these payments, which are reflected in the carriers’ results, industry losses would have been substantially greater.

The major air carriers (with annual operating revenues of more than $1 billion) reported an operating loss of more than $9 billion and a net loss of more than $7 billion. Operating profit or loss is the profit or loss from performance of air transportation and does not include non-operating income and expenses, nonrecurring items or income taxes. Net income or loss includes those items.

As new security procedures at the nation’s airports has significantly increased ground time for airline travel, interest in business aviation also increased as companies were drawn to the productivity, efficiency, safety and security of business aircraft.

Continue to part 2 of 4.

About the Author

Power Stars to Light the Business Flame, by Hank Moore, encompasses a full-scope business perspective, invaluable for the corporate and small business markets. It is a compendium book, containing quotes and extrapolations into business culture, arranged in 76 business categories.

Hank’s latest book functions as a ‘PDR of business,’ a view of Big Picture strategies, methodologies and recommendations. This is a creative way of re-treading old knowledge to enable executives to master change rather than feel as they’re victims of it.

Power Stars to Light the Business Flameis now out in all three e-book formats: iTunes, Kindle, and Nook.

Why Your Employees Count as Much as Your Clients

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Success in business begins with your people. The model is actually quite simplistic although not always easy to execute. What effective managers and leaders must recognize is that it begins with caring about the people who drive your business. But what distinguishes success is the recognition that businesses are driven not just by customers but by employees as well. Developing a culture of caring within your organization to engage your employees is vital to the strategy to drive success to your business.

Building a Customer Focused Environment

As customer expectations are constantly changing, it is ever more critical that businesses are in tune with those trends. It seems that every day expectations are rising rapidly with every transaction and interaction. In order to leverage the power of customer care in your business, it must be integrated into all aspects of your business by recognising your internal and external customers. Superior customer care can become a powerful business driver that is not centered on major investments but simply an awareness of how you do business. Ultimately, the more that you increase engagement with your customers and focus on taking a routine interaction and making it something memorable, the better chance you will have of creating an improved customer experience. But the process must begin with your employees, also known as your internal customers.

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About the Author

Julie Bowen is a freelance writer and full-time mom. After graduating college, she put a lot of effort into her career as a businesswoman with several successful enterprises, but when motherhood came along, she decided it was time to pull back and take up her other passion, writing. Now she writes about business and finance and finds her work-life balance far more enjoyable. When not working and caring for her children, she likes to go for long walks with her dogs, though she is considering using Rollerblades so they can pull her.