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The best focus in this economy is the word ‘NO’

April 9, 2009

In the turnaround and growth business, we all harp on the word focus. We scream it just like Keenan Thompson screams “FIX IT!” on those hilarious SNL skits where he shows how good a senior manager he could be by screaming “Identify a problem and FIT IT! Identify another problem and FIX IT! Repeat as necessary!” Wish I had said that to someone on billable time.

Focusing on the wrong target is what troubled companies do. Once the main source of business has either dried up or fallen apart, they start to focus on multiple focuses, any one of might be OK, but together are unmanageable and further facilitate the slide. At a flailing NASDAQ listed software company with rapidly declining revenues, a new president decided to re-focus the entire company towards healthcare. OK, that’s a focus and since the previous focus wasn’t living up to expectations, why not? He then proceeded to focus on multiple focuses, all self-funded. After about a year, when this President du Jour was let go, it turned out he had 9 focuses running all at the same time. Really!?

In yesterday’s and today’s NY Times and on the local NPR morning show, GM rolled out its latest focus – a Segway based 2-wheeled 2-seater that, per the GM VP flacking this brilliant focus, would require a separate traffic lane on already congested city streets. Not to mention the cost which he told the WNYC host was “lower than a regular small car”, ie they had no idea. Also, to put it rather indelicately, didn’t someone wonder how many people have the innate body movement control necessary to run and steer this uber-Segaway doing 35 mph? How many of these devices could they sell in the short term? Given idle factories and the real possibility of a Bankruptcy Judge supervised breakup, why are they even focusing on this? I love technology, and the Segway and cars for that matter, but why now? Perhaps, it’s to show the parent, GM (as opposed to the operating companies Chevrolet and Cadillac) still matters. In any event, focusing on producing great cars and restoring their image should be first priority and any other focus should be off the table during this economy.

Given the very human trait of trying anything when panicked, the chief focus of every company these days should be the word “NO”. Focusing on new out of the box products without identifiable markets to show how innovative the company is – NO. Focusing on de-contenting your products to cut build costs, even if it means the parts do seem to fit right to the naked eye of the customer – NO. Focusing on finding new verticals where we don’t have an offering but we can build one and then ramp up a sales process – NO.Focusing on cutting store expenses by firing your best sales staff and replacing them with cheaper but untrained and under qualified sales reps – NO.

‘No’ can also be a constructive focus because it can also mean ‘not now’. Should we give up and bury our heads in the sand and focus on accepting the inevitable – NO. Should we focus on accepting that our competitors will eat our lunch and steal our customers – NO. Should we stop all R&D or new thoughts about how to grow the company – NO. Should we have more than one focus – NOT NOW.

Rich Eichen is a Managing Principal of Return on Efficiency, LLC, who’s website is www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years experience reshaping companies and key initiatives as well as operating units of Global organizations. He can be reached at richard.eichen@growroe.com

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