How Would I Know That?

April 1, 2009
In all likelihood more than half of the people running small businesses today have absolutely no experience with managing in a recession.

I thought I was really on a roll when I looked directly at the sharp young management team and said, “So that is why I strongly suggest you rewrite your 2009 financial plan immediately and reflect those lessons we learned from the early '80s.” This was my punch line, delivered to fully reinforce the urgency that I felt from my past experiences. Dramatically, I had put my hands flat on their conference table, leaned forward, looked them in the eyes and said, “Questions?” The 40-year-old president of this successful company looked at me and said, “Phil, as best I can figure, I was in the seventh grade when that happened. Tell me … how would I know that?

That's when it hit me that in all likelihood more than half of the people running small businesses today have absolutely no experience with managing in a recession. Sure, we have had some ups and downs during the past 25 years but looking at the numbers, you will see that even the downs have been short and contained in the overall up. What's happening now is different in that the factors driving it are unknown to us in terms of their effect. Our country is financially damaged, and people are frightened. If people become more negative, the situation will worsen, and if they become more positive, the situation will improve. While we can't control the public's attitude, we can control the businesses we are responsible for. Not knowing what will happen next is no excuse for not knowing how to run a business. Still, if you don't know what to do, you will do what you know. Our industry may be operating with an experience deficit.

The popular response to today's situation in our industry is to answer the problem with “sell more.” There has always been a certain amount of truth to that, and as sales trainers, we support that answer. However, if contractors are not selling anything, they won't be buying anything. It is possible to sell effectively and succeed at earning a larger “piece of the pie,” but if the pie itself is smaller, you will end up with less to run your business on in the end. A larger piece of the pie is not the sole solution when the pie is smaller.

The question was, “How would I know that?” My fine client couldn't have known what I was talking about because he never had the experience I was drawing on. The 40-year-old owner/president was at a significant disadvantage, as was the rest of his team. The captain at the helm may be the most experienced person on that ship, but if that ship is facing conditions that are unlike any he has faced before … his experience is of small value.

The experience they needed was that of what happens in an organization when faced with difficulties way beyond any before. Knowing what it feels like to run a business when bad news is flowing in like the tide. Having the knowledge of how to treat employees whose lifestyles are now at risk after years of feeling safe with you at the helm. How can someone who fully expects business to return to “normal” make the best decisions about running a business that will never “return to normal”? The only normal in their future is a “new normal.” It sounds scary and for those without past experience to draw on, it is scary; for some, even terrifying.

These smart, young managers utilize technology in ways I simply have to accept without understanding. They operate their businesses efficiently, serve their customers expertly and care about their people. Friends and family members populate many of their organizations. They have managed the growth of their business well, yet they have no clue about how to take their business in the other direction. They still believe that their friendly banker is really “their” banker and not the one person who probably won't be there if they really need a banking friend. They need help.

Recently, I was in a museum that had an exhibit about early American civilizations. One central theme that kept coming through was the role of the elders in those cultures that survived. The elders were the ones who carried the stories on to the next generation. Those “stories” exist today in our culture of business, and those “stories” are rich in experience. Experience is very personal and only real to the witness … that is who was there and lived it, felt it and experienced it. To anyone else, it is information. Information is a good thing to have but is of little value until it is appropriately applied.

Our seasoned veterans typically relate to their experiences at a holistic level and apply their experiences to a situation not as one single experience but rather as a combination of experiences. By applying this combination, we often see the situation in an entirely different perspective from someone without those same experiences. Typically, our view through these past experiences does not relate to the situation as “black and white” but rather as many shades of gray. Our vision of a situation is not some gift we were born with like a fortune teller, but rather as the outcome of a collection of things we remember that happened with consequences and rewards attached. Not to get too weird, it is more like being the village elder … or in today's language, a mentor.

Working with these new leaders is fun and highly rewarding. They learn rapidly, and they are very appreciative of the people they work with and the opportunities they have. They deserve all the help and support they can get and are well worth the investment of an experienced person's time. Small business drives our nation's economic production, and it has been the backbone of all of the economic recoveries I recall. These entrepreneurially driven businesses are the equivalent to the economy of what the media likes to refer to as the common man to our society. If it is true that more than half of the people who manage today's small businesses have never experienced a significant downturn, then it is true that they can use some help.

I remember during my first downturn experience, we received buttons to wear. The button said, “Business is good!” Our orders were to “wear these until I tell you to stop.” Naturally I had to ask why, and I was told “anyone can talk about how bad it is, but not everyone can do something about it. I want the people you call on to ask you what makes us think business is good, and I want you to be able to tell them. Some day they will remember you as the one with optimism and a positive message. Anyone can bitch!” That was more than 50 years ago, and it was my dad and his dumb buttons with a perfect message and perfect timing that turned our heads in the right direction. I saw buttons floating around the ASHRAE show that said, “I refuse to participate in a recession!” I laughed to myself and thought those buttons came from someone who had been through this before, and I bet that person has gray hair, a good sense of humor and a very seasoned base of experience. I bet that is someone's mentor.

So I'm writing to two audiences: those who are young enough to have not been through a downturn, and those who are old enough to know that it is survivable, potentially healthy and one heck of a painful learning experience. What I know today has come from those experienced people whose paths I have crossed, the mistakes I have made, the victories that came from decisions followed by implementation and the consultative/coaching work I'm fortunate enough to be doing today. The neatest thing with all of the work I do is how that work is so rewarding. I have never “taught” without learning, I have never “learned” without growing, and I have never “grown” without feeling younger.

So if you are in your “senior” phase, think about what this current generation of managers needs to know. The smart ones are scared, and if I asked you what they are frightened of, you would tell me “the unknown.” Bang! You are right on, and it is “unknown” because of the simple statement that I was hit with by one of them: “How would I know that?” So if you've been through it, look around and see who you can help by sharing your experience. Don't wait for someone to ask you what you think, and please don't wait for them to get into unnecessary trouble. Offer what you know with the simple question, “How are you coming along with _______ ? Any way I can help?” We need our village elders.

Phil Garrett is a former HARDI (NHRAW) president. He is also president of Systematic Selling. Contact him at 336/574-1484 or [email protected].