In this economy, it’s the question every southeastern Wisconsin company must ask every day: How will we survive the recession?
Those that aren’t asking themselves that question probably won’t be around much longer to ponder it.
Some of the sharpest company leaders in the region are members of the Metropolitan Milwaukee Association of Commerce’s Council of Small Business Executives (COSBE) board of directors.
COSBE director Mary Steinbrecher was kind enough to invite me to sit in on the board’s most recent monthly meeting, where members engaged in a “world café,” in which they exchanged corporate survival ideas.
It was an honor to be a fly on the wall in that room full of such vibrant, intelligent, innovative and resourceful business leaders.
The COSBE directors then responded to an online survey from BizTimes Milwaukee. We asked them to answer the following: What is your company doing to survive the recession, and what advice for survival would you give to other business leaders in the region?
We are thrilled to report that all 29 independent directors took the time to respond to this exclusive survey, agreeing to share their best practices for our readers. We present them in a special edition of BizTimes Milwaukee today.
Some of their best practices are tactical. Some are strategic. Some are defensive. Some are reactive. Some are proactive.
In sum, the COSBE directors are doing what they have to do to survive.
It is our hope that their ideas will be helpful for other southeastern Wisconsin companies as we try to fight our way through this scary moment in time.
What is your company doing to survive the recession, and what advice for survival?
Take the ‘necessary action’
“Our CEO, Bill La Macchia, says our goal is to reduce our expenses to a level that could absorb a downturn in business and still be a profitable company. He says reductions in our staffing throughout the organization and overall expense elimination were carefully thought out and planned in order to keep costs in line with expected revenues. He also believes that the changes we have made have strengthened the company, our team and our foundation of leadership. He says companies need to manage their business and take the necessary action to remain profitable.”
Randi Becker, vice president, The Mark Travel Corp., Milwaukee
“We are working two or three times as hard to keep communication going with our clients in order to stay on top of spending intentions in 2009-10. We are taking on smaller projects in the meantime while clients work hard to regain confidence and free up larger project budgets. All employees at SysLogic are being really dedicated to tying expenses to tangible ROI (return on investment) activities, but we are still identifying opportunities for investment in strategic growth. Communication and transparency with employees have been key – we don’t want them having to guess about their future. So far, so good. Personally, I’ve been trying to avoid reading about bad news that I have no control over and which doesn’t affect me. I think it is important for decision-makers to stay focused on what’s really important to our business and to stay as positive as possible. It has been difficult to do that if your head is deep in today’s troubled news. I would advise business owners to stay on top of the news that affects their business and industry in the near-term, and to make key decisions based on that information vs. all of the other noise that is out there. Also, keep great communication going with your bank. If you sense your bank is being overly conservative (even though your numbers and projections still look decent), perhaps it is time to start building a relationship with another bank. More than ever, not all banks are created equal.”
Tina Chang, CEO, SysLogic Inc., Brookfield
“We are exploring new opportunities that can be offered to our clients to help them reduce costs. We are also implementing lean initiatives to reduce and eliminate wasted time and resources. Look for opportunities that can increase sales and reduce costs. Companies should look for add-on products or services that would benefit clients or help clients to reduce costs.”
Karen Bleach, CFO, Advanced Waste Services Inc., West Allis
Protect your top clients
“Protect and strengthen the relationship with top clients. Set a goal of having 12 positive contacts with your top clients. At least four of those contacts should be face-to-face over the next year.”
Richard Blomquist, President, Blomquist Benefits LLC, Brookfield
Increase your marketing
“We have increased our marketing plan, cut expenses and continue training for all sales staff and customer service. And we’re making sure we give our client a great experience so we get repeat and referral business. Make sure you are aware of every part of your company and stay on top of keeping your employees up so it carries over to all of your clients that your company is the best choice for them.”
Anthony Corona, President, Eddie Z’s Blinds Drapery & More, Brookfield
“At a time when so many of our clients are feeling the affects of the slowing economy, we are placing even greater emphasis on value. It is important that we work closely with our clients, challenging them to plan for the upcoming one to two years, identifying ways to increase profitability — either through diversification to grow the top line or efficiencies/cost reductions to maintain profits at lower volumes. Today, business owners are looking for advice and support. In addition to traditional accounting and tax services, we want to be sure that we are bringing them value by bringing them innovative ideas and challenging them on all aspects of running a profitable business. Know your numbers. Know where you make your money (profitability by product/service); know your breakeven; plan now for adjustments that may be needed if sales do not meet budgets. You must have timely, accurate financial statements to review on a monthly basis. You need to be ready to react to the changes (negative and positive) we will see in the next few years.”
Barbara Ecklond, Partner, Suby Von Haden & Associates s.c., Brookfield
“We are taking precautionary measures: reducing expenses; laying off persons whose work load cannot support their employment; and planning ahead by monitoring all potential income courses. We are also finding that in a world that is administered by fear, our colleagues (and we) are forced to cut fees to get work. We are going to the only sector of our industry that is busy – the government – for work. Preach optimism. Re-double your networking and marketing efforts. Be the light at the end of the tunnel to whoever you are working with.”
Charles Engberg, Partner, Engberg Anderson Inc., Milwaukee
“We are managing temporary labor on the defensive side and aggressively locating additional client opportunities on the proactive side. Each business and industry face unique challenges, since this recession is heavily weighted to particular industries. Unless you are in the housing, banking or auto-related sectors, don’t panic!”
Christopher Rebholz, President/CEO, Christopher Morgan LLC, New Berlin
“We’re trimming all.”
Russell Gnant, President, Spectrum Digital Services LLC, Hartland
Keep a close eye on cash flow
“We’re keeping a close eye on cash flow. We’re looking at new products that expand our customer base. It is important now more than ever to understand your market and understand the competitive advantage that you provide. Shed only non-critical parts to your business and listen to your market.”
Nancy Hernandez, President, Abrazo Multicultural Marketing, Milwaukee
Establish a strategic plan
“Without question, the use of an effective strategic plan is crucial during difficult times. An effective strategic plan will assess all areas of the operations of a business. Based on the assessment of the company’s strengths, weaknesses, markets and customer base, the appropriate plan can be established to accomplish the goals of the organization. The goals and objective must be measurable and communicated to everyone within the organization. The plan should be monitored on a regular basis, and appropriate action should be taken based on the results. Strategic planning should provide for the total alignment of the organization’s focus, effort and resources, which is most needed during difficult times.”
Mike Herro, CEO, Nickal LLC, Waukesha
‘Hunker down and hold on’
“We’re reevaluating costs, paying a lot of attention to our existing customers and looking for new customers. We’re looking for unhappy customers of other companies. Hunker down and hold on. It’ll get better. Keep on doing business.”
Henry Hurt, President, Hurt Electric Inc., Menomonee Falls
Invest in R&D
“We are proactively working to develop new capabilities to attract new customers. We are investing in research and development to prepare for service industries we have not worked in before. We are investing in additional training for all members of GenMet to advance skills and ensure a well-versed, cross-trained workforce. We are spending extra time learning what our customers’ needs are to ensure we are anticipating how best to serve them currently and in the future. Don’t give up! The economy will turn around, and there will be pent up demand when it does. Now is the time to work on all those great ideas and projects that there never seemed enough time to get to. Refine your processes and use this time wisely.”
Mary Isbister, President, GenMet, Mequon
Establish a rallying cry
“Offer more value, differentiated products/services, working with staff on cost reduction initiatives (hard/soft costs), continuous improvement and a variety of supplier based initiatives. Agility, flexibility, awareness, employee, customer/supplier involvement (i.e., stakeholder involvement), extra communication, acceleration of new product development, leadership/technical development (in-house train the trainer), productive work environment, alignment of targeted and key opportunities (don’t try to be everything to everybody), assurance of vision/mission, establishment of a rallying cry to lead around (cause/purpose), improvement and stabilization of cash/cash management and extra solid external partner relations with bankers.”
Jerry Jendusa, President/CEO, Emteq Inc., New Berlin
Empower your people
“(1) Micromanage cash flow. (2) Do the right things every day for each client. (3) Question all assumptions internally to achieve more efficiency, cost savings and empowerment of employees. (4) Stay optimistic! (5) See problems as opportunities. (6.) Help clients succeed! Partner with them. (7) Watch every expense and capital category. (8) Market to existing clients to expand services. (9) Keep negative media reports in perspective. (10) Market, market, market! You’ve got to stick to basics, be positive, listen to customers, involve employees in solutions and empower them to act, and micro-manage expenses and cash flow.”
Dave Kliber, President/CEO, SF Analytical Laboratories Inc., New Berlin
‘Stick to your ‘knitting’’
“We are working on liquidity, capital stability, asset quality and then earnings. Stick to your ‘knitting’ and make sure your product or service is of the highest quality possible.”
P. Michael Mahoney, Chairman/CEO, Park Bank, Milwaukee
“No. 1, we are trying to keep a focused and positive attitude in this environment. There will be work out there, it is just going to take more effort and patience to acquire. While staying positive, we need to be creative and offer customers alternative solutions so we don’t diminish their success. The need for a leak-free environment exists in any economy (especially after this nasty winter!). We just need to make sure we satisfy that need with budgetary considerations in mind. Be creative and get your entire team involved, so regardless of our business conditions and their effect on your company, you are continuing to operate as a cohesive and energetic team. All recessions do end, or we wouldn’t be around today to talk about it!”
Rob McNamara, President, F.J.A. Christiansen Roofing Co. Inc., Milwaukee
Upgrade your people
“As a team, we’re deciding to each take less salary to maintain all employees. We’re reviewing all processes to remove waste or look for ways to improve. We’re contacting our clients to let them know that we are part of their team and will pitch in with them where we can. We’re using the down time to retrench and incorporate new services. Small business is the cornerstone of the economy — we create more jobs and opportunities, and we should use this time to secure high-grade talent that may overlook us in good times for larger companies. Upgrade, upgrade, upgrade your people and your processes.”
Adonica Randall, President, Connection Strategies Enterprise Inc., Pewaukee
“We are redesigning and adjusting our services to accommodate our clients who have been heavily impacted by the economy by being flexible with fees, cutting back on contract hours if necessary, doing pro-bono work and letting them know we are in this with them for the long haul. Think positive and be creative. Failure is not an option.”
Connie Roethel, President, Core Health Group, Mequon
“We are trying to maintain high levels of customer service, stay in touch with our customers and take the opportunity to complete projects that will improve our productivity in the future. We are an ESOP (Employee Stock Ownership Plan). We will do cross-the-board pay cuts before laying people off. That’s what I promised them.”
David Rolston, President/CEO, Hatco Corp., Milwaukee
“We’ve taken a good look at how to provide immediate, pragmatic value to our clients. As a result, we’ve designed a couple of new programs to meet real needs in the marketplace. With 85 percent of companies upgrading their websites (according to a recent BizTimes survey), we believe that many will make decisions without a real understanding of how to integrate marketing and sales strategies on-line. We’re also taking steps to not only be in a good mood but to encourage other business leaders to produce positive environments in their organizations. We’ve actually started a LinkedIn Group called ‘Positive Breakthroughs’ to give business leaders a forum to share positive news, even smaller victories. I would tell people that it’s important to take action. To stop waiting. The economy is expected to be down for a long time. You need to understand where you can win, create new offers and begin to differentiate yourself in the market. Smart marketing doesn’t have to break the bank. Fear creates paralysis which is never healthy. I started using a saying after 9/11: ‘You can decide to wait. But you can’t wait to decide.’ Waiting is a strategy and should be treated like one. It’s a tough market. But we’re from Wisconsin. We’re pretty good at tough!”
Mary Scheibel, Partner. Scheibel Halaska Inc., Milwaukee
Stop your crying
“We’re strengthening our competitive advantages, including upgrading our human assets (this is a great environment to do so), applying Lean Manufacturing techniques and taking business from competitors (as new business is harder to some by). Get your core players together, do some real planning and stop your crying.”
Carl Sheeley, President, Fontarome Chemical Inc., St. Francis
Preserve customer loyalty
“I have cut back on non-business development expenses. In this type of economy, our business thrives as we assist firms in navigating the turbulent economic waters. You need to focus on your core businesses and increase the number of contacts with your customers to maintain their loyalty and respond timely to their needs during this time of challenge.”
Cary Silverstein, President/CEO, Strategic Management Associates LLC, Fox Point
‘Fire’ your marginal clients
“I’m looking harder to find more tenants/clients and ‘firing’ marginal clients. Put your vision on hold and cut more than you need to survive, regardless of how it may change your vision. Pull out all stops on your sales efforts. Do every and anything you can to get more business. Face the facts and do everything possible to survive. Remember that every crisis ends sooner or later. Then do what you can to turn the crisis into an opportunity.”
Wayne Staats, CEO, Granville Business Development Center, Milwaukee
Sell your way out of it
“We’re watching the pennies and reviewing all expenses, putting a lot of emphasis on retention of our existing accounts, offering many additional services as a part of our standard approach. We’ve increased communications (media, newsletters, presentations, new sources of prospects with appointment setting), and we’re staying positive. Increase marketing/sales activities and be careful not to try and ‘save your way to a profit.’ Top line increases by selling your way out of it are important.”
Arvid “Dick” Tilmar, Partner, Diversified Insurance Services Inc., Waukesha
Be proactive with your bank
“We’re staying focused on our current portfolio companies and continuing to look for opportunistic investments in quality companies with realistic valuation expectations. Develop very detailed financial projections for the year and be proactive with your bank and vendors if you see a cash flow shortage in the future. Don’t wait for the problem to arrive. Take corrective actions as soon as possible.”
Paul Sweeney, Principal, PS Capital Partners LLC, Milwaukee
Reevaluate your business model
“Pay on a ROI (return on investment) model. Reevaluate the business model to adapt to the situation. Share more calculative risks with customers. Involve employees while making tough decisions.”
Suresh Thankavel, President, Wisdom InfoTech, Brookfield
“We are continuing to stay in close communication even with clients who are not electing to utilize our services for financial reasons. We are bundling services to offer a different price point for leadership development: combining coaching with education. We are in conversation with other organizations to create a collaborative relationship to take new products to current and potential clients. We are keeping our own spirits high by practicing what we preach: example, our annual retreat. We hire a facilitator, even though that is our expertise. We created a concrete plan with team members making individual commitments related to client service and business development. I have assumed a new role as the facilitator of ‘Joy Breaks’ for our team! (enjoyable e-mails, treats, games, etc.) We are responding courageously and boldly. Do not lose sight of the importance of ongoing development for your leaders and managers. You want to be sure that they are invited into meaningful creative opportunities and leader development to ensure they have the best competencies to survive and the best competencies to navigate when the tide turns.”
Karen Vernal, President, Vernal Management Consultants LLC, Milwaukee
Your people are your biggest asset
“We have developed a strategic plan with contingences along the way triggered by defined financial indicators. The plan includes options for reducing overhead, marketing initiatives, as well as new products and services for clients. Communicate your plan, be open and honest with the goals and options. Your people are your biggest asset, and the platform to build a solution from. From everything they read in the news, they know what’s going on. Don’t keep them guessing, they will respect you for your openness.”
Gary Zimmerman, President, Creative Business Interiors Inc., Milwaukee