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Really – It’s not my fault. It’s his. Or her’s. Or… March 21, 2006

Posted by John M McKee in Uncategorized.
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The US- based auto industry continues to receive bad news with the recent reports that the entire Top 10 list of 'best bet' cars in 2006 is either Asian or European. It's increasingly likely that both Ford and General Motors will have to change significantly to survive.

We hear about 'the North American worker' being a problem, but see companies like Honda, Toyota and Hyundai hiring like crazy in the southern states and Canada and making awesome vehicles. Lots of finger pointing going on with different managers citing many reasons for the demise of this once-dominant business sector.

What can we learn from this horror story? Can we apply the lessons from this situation to other industries in time to prevent further erosion of our leadership and also our standards of living? I'm reminded me of something GM's previous chairman, John Smale, had told me back in 1994.

Smale was a brilliant guy and the former chairman of P&G before GM. He understood brand marketing and managing huge operations. I was privileged to be able to spend time one-on-one with him and remember it well. He'd remarked that large corporations, in addition to making money, have an obligation to other stakeholders as well. I took that to mean that he felt it was inevitable that an org like GM would occasionally have periods with losses, and that during such times it had to keep as many other commitments to employees, or suppliers, or other stakeholders, as was
feasible.

I believe his comment was enlightened. It bears consideration again for any manager or executive who can influence the future outcomes of her or his domains.

'Noodling': Business leaders usually fail to achieve maximum returns and benefits from their investments. I hear from business operators that they are uanble to optimize resources due their lack time to get everything done each day.

Here are 3 quick ideas which, if dealt with effectively, will give many managers an immediate lift in their results:

1. Don't Buy a Dog and Then Bark Yourself
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
This problem impacts all managers; but it can be less problematic in large corporations where the large headcounts make one's poor delegation skills less likely to cause a business to fail.

Over and over again I see managers hiring 'in their own image'. Don't! It's a waste of money and even if you like having 'yes men' around you -it's a waste of everyone else's time.

When hiring, always try to find someone smarter than yourself. Look for someone who brings new skills to your team, someone with fresh perspective. And then let her or him loose on the tasks at hand.

Don't micro manage your new hire and tell her/him how to do their job. It will only cause 'reverse delegation' with all decisions and needs being sent to you before any action is taken. And if you're the one making every decision; you've just lost a big part of the benefit of bringing in new talent. Your time management ability for other issues is worsened as well.

2. Do an ROI Analysis on Every Spend
> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

By now we've all heard that most new businesses fail because of under-capitalization issues.

For all enterprises, effective use of working capital is critical to success. However, if you are running a small operation with limited funding, poor usage may be the principal reason why you're trending toward failure.

Many business managers just don't make the effort to review the results of investment spending adequately. The importance of an objective analysis of what – if any – return came as a result of their spending is critical for
any future business planning – and yet it's continually ignored or postponed to a time when it's no longer valuable.

I recognize it's difficult to determine (for example) what marketing activity actually caused increased traffic; or what discount offer caused your phone to ring, or if adding 3 bodies actually improved company output. But failure to determine whether your investment was appropriate will only result in further blind spending.
Management-by-gut-feel isn't usually as successful as it feels.

3. Usually, Your Results Aren't Due to the Economy
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

When I first became involved in the franchising business back in 1985, the biggest problem I saw was that small business operators didn't understand the effects that the global economy could have on any business dedicated to consumers. Today, it seems it's just the opposite. I frequently hear business managers justifying their lack of success on everything but internal issues.

I don't believe that most businesses fail to make their numbers because of some prognostication from the Federal Reserve Chairman.

Sometimes we can get so wrapped up in global issues that we forget why our customers came to us in the first place; and that they will continue to spend and grow regardless of what happens in Japan or Poland. Deal with the issues that are really creating your current results.

That's it for tonite.

Looking forward,

john

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