Published on: September 20, 2011
by Michael SansoloLast Thursday marked an anniversary that seemed to get a shockingly low amount of attention. And while it pales in importance to the much-deserved attention to September 11th, all of us in business should never move past September 15th lightly.
Incredibly, it was only three years ago that Lehman Brothers failed. It was hardly the first or last company of its type to suffer that fate, but for a host of enormous reasons Lehman’s collapse was different. Somehow it was the spark that landed on the tinderbox of economic weakness and it set the world’s economy ablaze.
If you haven’t noticed, that fire is still raging. You see it constantly in the endless reports on unemployment, underemployment, rising poverty rates, falling manufacturing rates, foreclosures, and more. September 15, 2008, was the day that launched the world into the new economic realities that we continue to battle daily.
Yet, looked at another way, it was the start of a period of incredible opportunity, but only if you examine it correctly. Bloomberg recently quoted Stephen Sadove, the CEO of Saks department stores, as saying that he is not letting “a good recession go to waste.” It’s a quote you should write down and think about daily.
What Sadove was talking about was how Saks, a luxury department store, managed to grow sales solidly in tough economic times. (Re-read that last sentence. No one has ever confused Saks with a discount store and it is growing sales solidly in the current economy!) All of this goes beyond the very significant discussion we’ve had here on MNB in the last week of the increasingly hourglass shape of the American economy, with growth at the richer and poorer ends of the spectrum.
For Sadove, not wasting this recession focuses on how to make the tough decisions to make his company leaner and more competitive than ever. He’s done it by tightening inventory, increasing store brands and exclusive items, improving sales training while reducing overhead and even cutting back poor performing stores. In the process he made Saks a significantly better company that it was before.
In a perfect world, companies and business leaders would make the hard decisions daily and well before the storms hit. However, we don’t live in a perfect world and frequently key decisions wait until there is a burning platform of new tough competition, changing shopper needs or a global economic crisis. As we all know, it’s hard to find time for all the topics that must be addressed and in good times there are always so many other things to think about or work on first.
But we aren’t in good times and haven’t been for a while. What’s worse, the predictions from whatever economist you trust seem to indicate that the good times aren’t around the corner - no matter what any or all politicians say.
So ask yourself the Stephen Sadove question: how are you making certain this recession doesn’t go to waste? Inside your company, your team or wherever, ask the question today of what you have changed in the last three years? How have you altered your cost structure, your value equation and your offering to shoppers? You know the world has changed around you, so the question is: what have you done about it?
And then ask: what should I do next? Because the odds are that your customers’ needs continue to change and your competitors are going to a higher level to meet them. Like it or not, you need to change, too.
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