Discover your free Construction Marketing Ideas Email Newsletter

Tuesday, February 24, 2009

The bumpy road

The previous blog posting reports on one of the biggest business challenges -- things never are as simple as you would like them to be; and sometimes you hit bumps in the road. These problems are enhanced by the very real need to do whatever you can to minimize the bumps for the people around you; your employees, your clients, and your market's perceptions of your stability and business health. The fact is, you don't want (usually) to go around broadcasting your difficulties, so you keep things under wraps, perhaps hoping by keeping things stable you won't scare off potential clients, and you can work your way through the problems.

These strategies indeed are common-sense business practices, but we've seen in the past few years what happens when things are just a little too smooth. Bernie Madoff seemed, for example, to be defying gravity, with steady, reliable, slightly above average returns, regardless of the economy. Trouble is, he had set up a ponzi.

Other businesses traded publicly have cooked their books to show stability and growth in their earnings -- resulting in horrendous losses for investors, and sometimes jail time for executives -- when the real books, well, burned in the fire of disastrous losses.

Nevertheless, blatant honesty can be costly as well. The U.S. auto industry is in deep trouble, and this trouble just adds to the problem -- who wants to buy a car from a business about to go bankrupt? For that matter, who will sign any kind of long-term prepaid contract or purchase any sort of service with forward expectations if you have reasonable doubt of it being around for you in the future.

So how do you deal with these matters?

The approach I've chosen to take may not be right for your business, but it feels right for me. I don't go about broadcasting every little detail and truly work to smooth the bumps for our employees, while ensuring reliable and consistent service for clients. But I've chosen to do this with an open book attitude. Employees -- even the most junior employee who signs a financial non-disclosure agreement -- see the numbers every week. In normal conditions, this information is background and doesn't affect their work; but when we hit snags or difficult situations, they know they have access to the same information as senior managers and no wool is being placed over their eyes.

This blog represents another avenue of openness. Yes, competitors and potential clients as well as employees and current clients can read this and see the story, good and bad. Does this help build trust, open communication, and mutual support? I think so, but equally, I know that there are points where too much truth can scare people away. You need to be responsible and thoughtful about your communications.

No comments: