new energy – Fast:Forward Farther

Over the weekend a Focus Group I facilitate met in Naples, FL to once again take an in-depth look at the financial, marketing and operational sides of their businesses. Many of these seven franchisees rank among the sales leaders in their system, yet they value the importance of getting together each quarter to share, challenge and learn from one another.

Among the key metrics tracked and reviewed are Percentage of Salaries compared to Sales and Sales per Employee. One member has lagged in these categories for a while, so the group recommended it’s time to address the situation by either changing the makeup of the workforce, reducing headcount or increasing sales to make the ratios fall into line.

Not surprisingly, there was pushback to this suggestion, with the franchisee saying things like: “In our market we wouldn’t get a single resume if we advertised for anything less than what we currently pay,” “We couldn’t get out the door this much sales without the skills these folks bring” and “If we were to reduce salaries even slightly, there would be an uprising.”

Of course, the other owners and me countered with: “How will you know until you try?” “Might it be possible bringing in new energy in a few positions might give you more capacity?” and “So you’re happy with your employees maintaining their income while yours continues to fall as health insurance and other expenses rise?”

Owning your own business means you take all the risks. You cover mistakes out of your profit. You pay yourself last. Every franchisee or small business owner I know previously worked for someone else at some point during their career, so they’ve seen both sides. It may seem cold-hearted to make tough decisions about your employees, yet it’s part of the responsibility that comes with being the boss. As one of my first clients told me nine years ago, “The only place a business will run itself is into the ground.”

When the numbers don’t add up and cash flow is tight, you have to make the difficult call to protect the organization. Otherwise, one day you may wake up and be out of business.

With the nation days away from what President Obama called ‘Economic Armageddon,’ the sides negotiating a solution seem destined to raise the debt ceiling and ‘kick the can down the road’ until after the 2012 election. It appears his request that we ‘eat our peas’ might not happen. (Of course, as the NFL proved yesterday, hard deadlines tend to inspire quick resolutions to challenging disagreements… so stay tuned.)

During a coaching session this morning, a client asked for my thoughts on the deadlock among House Republicans, Senate Democrats and the White House. “It’s sad we’ve come to this point,” I said. “You would think there would be a sense of statesmanship for finding common ground, giving on some positions and resolving differences.” His reply made me think.

“It’s the fable of the scorpion and the frog playing out,” he said. “Our elected leaders are willing to stand on ideological ground – even if it means catastrophe – then shrug their shoulders and say, ‘What did you expect? You knew we were politicians when you elected us.'”

I believe there is a solution to change that attitude: term limits. Six years for the president, eight years for a senator, four years for a representative. No reelection campaigns. No additional fundraising. Work everyday you’re in office to make things better… and go get a job afterward. That’s how it works for Boards in the charitable world; do your time and move on for fresh ideas and new energy. (Key: Stagger the first few years so everyone doesn’t leave at once, then keep it in place for, say, a few centuries.)

While I’m not a Constitutional Law expert, I’m guessing Congress would have to pass this bill and the president would need to sign it. There’s probably a better chance of them agreeing to tax hikes and deficit reduction in the next seven days than that happening. Of course, every sweeping change throughout history started with someone asking, “Why does it have to be this way?”

Tag: new energy

Modest Proposal