The sands of the 2008 hourglass have almost completed their journey. 2008 will stand out because of the financial upheaval that affected everyone. The “average Joe” on the street pays very little attention to the ramblings on Wall Street. In 2008 the rumblings sent tremors coursing through Main Street. The value of real estate, homes in particular, which has served as the basis for most peoples net worth and their sense of self worth was devastated. Even if you did not have a mortgage the decrease in the value of your holdings made people feel poorer. When this occurs consumers reign in their discretionary spending immediately. The continual barrage of negative media, highlighting all the things that have gone awry added to the general malaise griping the nation and the consumer.
If your only source of information is the media, you would conclude that all is lost, life is over, and this time the doomsayers got it right. Well I am here to tell you that the world is not over. There is gold in the danger around us. This is an opportunity like few others before. I urge you to Seize the Day!
Scott Anthony’s post illustrates the opportunities that are available;
For many companies, the Great Disruption requires nothing short of transformation. It requires fending off attacks from below and making the creation of new growth systematic. It demands embracing new forms of innovation, such as business model innovation, and dramatically improving the productivity of innovation efforts. Investing in transformational efforts in a brutal market appears difficult, but the alternative isn't stagnation, it is extinction.
More Bankruptcies: Corporate-turnaround experts and bankruptcy lawyers are predicting a wave of retailer bankruptcies early next year, after being contacted by big and small retailers either preparing to file for Chapter 11 bankruptcy protection or scrambling to avoid that fate.
What that means is that some very prime real estate will be available very soon. Take advantage of it.
Kevin Maney’s post discusses how difficult the tradeoffs are and the dangers for businesses that stray.
“consumers will trade the quality of an experience for the convenience of getting it…
…it's dangerous for a business to try to be both high fidelity and super convenient. It confuses the brand and drags the product or service into a crisis. A prominent example is Starbucks, which began as a high-fidelity experience, and attempted to become high-convenience by flooding the world with outlets. The fidelity and convenience aspects worked at cross-currents and damaged the brand.”
Simona Cavel’s article, “Slump Batters Small Business” outlines the struggles many businesses are experiencing.
“For many small businesses across the country, these are scary times. The dramatic pullback in consumer spending is only the latest blow threatening to push some strapped small businesses out of existence. Customers are paying their bills late, cutting off cash flow, the lifeblood of a small business. Even healthy companies are being choked by the lack of credit lines and bank loans. Others are still reeling from several years of high raw-materials prices.”
January is going to be an interesting month because many individuals and businesses have held on through the holiday season hoping to reach the other end. The other side one way or another is going to be January. Consumers will evaluate and revamp their behaviors given the economic circumstances. A meal at a restaurant is ultimately a discretionary spending decision. Businesses will review their financials this week and say “it’s over I have nothing left to continue”, others will map out strategies to survive into the spring, all will be fearful of the unknown. Still others will launch into those raging seas of uncertainty.
Seth Goldman of Honest Tea offers this bit of wisdom in an interview for Knowledge@ Wharton:
“The key is to be different. You know, we never came out with just another "me too" product. From the start, our product was less sweet than what everyone else was offering. And that was why we felt it was relevant, because everything out there was much more like soda than it was like tea. And it's grown. Our differentiation has grown. So now everything we offer is organic. And a great deal of what we offer is also Fair Trade certified. And we'll continue to raise the bar and find new ways to set ourselves apart. But we're too small to compete directly with the big companies on their terms. We have to do it on our terms.”
“It is what it is,” is the phrase I have heard entirely too much this December. January will be here shortly and sadly quite a few of our customers will not because of their personal financial struggles. The customers that do come however are a very precious resource. From those brave intrepid souls who are challenging the economic tsunami swirling about them you will rebuild your business. Nurture them, water them, expose them to plenty of sunlight and business life will flourish yet again.
An entrepreneur chugs along doing everything right in their business. One day they receive a communication from their bank and discover that their line of credit facility is being reduced or eliminated. These are viable business with no history of negative credit incidents. The banks because of their own malfeasance are suddenly thrusting viable ongoing concerns into the abyss. The banks are reducing their credit exposure because of the huge loans losses they have endured. The credit crunch is real.
I personally abhor debt, however an ongoing concern needs to insure stability in their operations. If you have an existing credit facility, I strongly urge you to fully draw upon it before the facility is reduced or eliminated.
You do not want to ask the question, ”What do you mean I have no credit line?”
And treat those two imposters just the same” Kipling
The City of Chicago has in the span of four weeks experienced civic pride and civic disgust. The city went from receiving the accolades from President – elect Obama’s election night speech and subsequent transition team headquarters, along with being a candidate city for the 2016 Olympics, to receiving jeers and condemnation for allowing a corrupt political system to flourish. The mood of the city offers life lessons for any business. Kipling words address the highs and lows of life and that the only response is to meet triumph and disaster the same because they are both imposters.
Idris has an insightful post about the continual battle that occurs between order and chaos:
Success and Failure: In order for people to succeed, you must first allow them to fail so they fail small and quickly and succeed big.
Efficiency and Effectiveness: The customer is best served when the organization is efficient; the organization is effective when it puts the customer first.
Control and Freedom: People need controls to be free. Freedom can only be bought with restraints. Empowering people without losing control and ensure efforts are aligned.
Change and Stability: To change safely, we need a stable base. To find stability, we need to change ourselves often. Or as Alfred Whitehead put it: "The art of progress is to preserve order amid change and to preserve change amid order.
The paradox is that if change is to be successful it requires revolutionary not evolution thinking. Too often entrepreneurs lull themselves into believing that small incremental tweaks are sufficient to keep ahead of the curve. The process enables a false sense of security as they sail their fragile vessels headlong into uncertainty.
Everything is a gift, all else flows from those four words. Christmas is the "Pay It Forward” holiday. If you understand that everything you have been, are, or aspire to be, is to be shared as a gift, than you have grasped the essence of living an enlightened socially responsible life.
Merry Christmas and may the sound of the Christmas Bells always ring.
Technomic published their trend forecasts for 2009
“ Experimentation and innovation will flower.
An upside of operators’ struggles will be innovations resulting from experimentation with new menu items, delivery services, price/bundling schemes and unit designs (including smaller, more efficient footprints).”
"The only way to influence someone is to find out what they want, and show them how to get it."
Dale Carnegie
The way for any business to flourish is to discover what the customer wants and find a way to give it to them in a manner that makes a profit. Really it is that simple.
New research reinforces the notion that happiness is contagious;
“happiness isn’t just an individual phenomenon; we can catch happiness from friends and family members like an emotional virus. When just one person in a group becomes happy, researchers were able to measure a three-degree spread of that person’s cheer. In other words, our moods can brighten thanks to someone we haven’t even met.”
When a guest walks into your restaurant they are immediately uplifted by the existing energy in the space. Clearly you need to keep them happy.
Harry’s post crystallizes the focus every successful entrepreneur must have:
"Helping the dreams of others come true is a pretty big responsibility. Your clients trust you with their project, but they also trust you with something far more precious. They trust you to handle their vision with care and attention.
Their vision may be a little ragged around the edges... They may splatter out ideas, subconsciously asking for guidance. They may want something so badly they can’t put it in words."
Creating customer advocacy begins with viewing everything from the perspective of the customer. A business is in its purest form is a tool for your customer to achieve an objective. Help your customer fulfill their dreams is a sustainable business model.
Seth’s has a post about the responsibility of spreading the word:
“When you find a service or establishment or product that gives you joy, it's tempting to keep it to yourself. Perhaps it's uncomfortable to recommend it to a friend (after all, you might seem silly) and even more uncomfortable to recommend it to a stranger (after all, you might seem like a shill).
“If you will miss a product, a service, a book, a site or a professional when they close up shop, stand up, speak up and bring them masses of new business.
We get what we promote.”
Seth is aiming his comments to all however the key for restaurateur's is to convey urgency to your customers. There is an urgency for your advocates to spread the word because tomorrow their favorite restaurant may not be there. Have you heard there is a recession going on, Who Knew!
One can easily imagine this restaurant scene, the guest places the order “mushroom omelet, fruit no potato” the server neglects or does not hear the “fruit no potato” request, the server delivers the “mushroom omelet with potato”. The guest explains to the server that she ordered “fruit no potato”, the server proves beyond a shadow that the order relayed to them was “mushroom omelet”, because that is what is clearly written on the order check, no mention of “fruit no potato”. Clearly the guest did not order “fruit no potato.”
Fantastic, the server has proven that 1) the restaurant does not train 2) the server is blissfully unaware that a tip is voluntary 3) treating a guest as if they are having short term memory issues is a losing proposition .
The guest will of course in the end get the “fruit”, however having to dance with the server leaves them quite unhappy. I am amazed that experienced servers and knowledgeable restaurateur’s believe that proving the guest wrong serves some higher purpose. Please let the rest of us mere mortals in on that higher purpose.
Hospitality requires that when you invite someone into your restaurant you treat them as an honored guest, as a partner, as a relationship to be cultivated not as an adversary to be vanquished.
