Saturday, January 31, 2009

IT’S THE TIME FOR SMART WORK


Slowdowns may hit the best of them, but not necessarily the rest of them! Any company, regardless of its size, can return to sustained profitability if it gets its basics right

Southwest Airlines is one company that never fails to inspire. Today, more than ever before, we can learn a lot from the way this company, which was once a startup with cash flow problems, became a hugely successful enterprise – that too in a business where it’s difficult to even break-even; forget about making profits. Think about bad times, turbulence, upheaval; Southwest has seen it all. From fuel shocks, to interest rate changes to the worst of all – the 9/11 attacks which psyched customers away from flights – Southwest has braved every storm and has come out stronger each time. Its probably got something to do with Herb Kelleher’s (founder Southwest) mantra. He says, “In good times, manage as though bad times are just around the corner, because they are sure to come.” It’s life and it’s normal. It may seem that the world is going out of control, but the truth is that you need to have a unique kind of leadership, a unique outlook to come out unscathed.

SMART ATTITUDE

I firmly believe, your attitude determines your altitude. After World War II, Boeing lost more than 90% of its revenues. The US government cancelled most orders for bomber aircraft, which had been the mainstay of the aircraft industry. It could not get worse than this, but Boeing’s Bill Allen saw this as an opportunity. He decided to use his knowledge of military planes and used some of its unique features to build commercial aircrafts. People thought he was crazy, but the $16 million of the company’s profits that he sank into this project paid-off. He got his orders and the company was in business again. By 2001, Boeing remained the only American provider of commercial aircrafts. According to Jim Collins, the author of the famous book Built to Last, 15 of the 18 companies in it had lived through the depression and all 18 are standalone companies today. And if you look closely, you will find a great leader who never looked back, never compromised, however great the pressure was.

Great leaders never let any adversity rule them, instead they turn it into an opportunity. Great leaders create great companies and great organisational cultures. According to Fortune magazine’s list of “100 Best companies to work for,” last year Google featured at the number 1 position. However this time it is beaten by “NetApp”. Network Appliance has survived the dot-com crash, has been growing consistently for years and hit $3.3 billion in sales last year. It’s the company’s “down-to-earth management ethos” that has catapulted it to the number one position. Its business heads don’t make business plans, rather they write “future histories,” where they imagine where their business will go in a year or two. Always frugal, but never foolish when it comes to handling expenses, the company has a great culture. Not surprisingly, it has gained market share during the slump, hasn’t had layoffs and has over $2 billion in cash on hand to help it survive the slowdown.

If you have created a great organisation, worry not. If you haven’t, well the
time to start creating one is now!

SMART COST EFFECTIVE STRATEGIES

Sun Tzu in his book The Art of War says, “On a ground of disintegration, do not fight. On shallow ground do not halt. On axial ground make alliances. On deep ground, plunder. On bad ground, keep going...” and so on. The point is, the best business model is the one that can be adapted to a situation. The one who is most adaptable is the fittest.

Things are changing very fast. Everybody wants to save cost. Everyone wants more bang from the buck. This slowdown is witnessing a lot of brands shifting from traditional advertising to below-the-line activities. ING Life for one has seen how its BTL campaigns have been such huge successes for it. It’s one of the most effective ways of consumer contact. Not just this, the communication can be customised.

Everybody wants to save costs and new techniques are sprouting up to help one do that. “Widgets” are the latest tools that many marketers are enjoying. Nike has one called “Miles”. He is a 3D desktop avataar that stays on your desktop to encourage you to run and keeps track of your progress. Not just that, he keeps track of the local weather, running events etc. and of course reminds you that nothing beats a Nike shoe. In style magazine has a Hollywood Hair Makeover widget which allows you to pick up hairstyles of famous Hollywood actors and superimpose them on your own photos! These “Widgets” engage the consumer, cost less than traditional banner (on the web) and engage the consumer better. Digital media was once dominated by financial services and travel. Today almost everybody wants to try a hand at them. The most attractive part about the medium is its ability to offer accountability. It’s measurable, for you to know who, when, and why visited your site. It works 24x7 and has a global reach too. With recession making people cautious, online does offer interesting techniques. E-mail marketing, blogging, search marketing, viral marketing and social networking are becoming interesting alternatives.

SMART & SMALL

There seems to be a link between success and size. We have seen how giants are falling. What we will witness is also the rise of a lot of “Davids”. Porsche is a small company. Yet it enjoys a profit margin of $14,000 per car; something no Detroit car manufacturer can even dream of. It’s this CEO’s vision that made this possible. He followed the Toyota way and spruced up his company’s operations. Not just this, in 2005, he started buying into the giant car manufacturer Volkswagen, whose stocks were below $50 then and bought VW! That’s an example of brilliant leadership, vision & focus. As its CEO Wiedeking says, “Of course it hurts when the little firm buys up the big one,” but this time, it’s not size but strategies that will matter. No wonder a lot of small advertising agencies are finding this a boom time. They help clients save costs and deliver results too. Nakshatra shifted its account from JWT to CreativeLand Asia Pvt. Ltd., a one-and-a-half year old agency. Reliance Communications shifted from Leo Burnett to a three-year-old agency – Cartwheel Creative Consultancy. Delhi-based Crayons Advertising won the Rs.150 crore election campaign account of Congress.

The success principle seems to be - as long as you are adaptable, creative and convincing you have nothing to fear. Recession will not really bother you much. It’s the time for smart work.

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