To me, all of this talk of a double-dip recession is nonsense. It had become clear that companies who thrived through the recession are going on a shopping spree. Just a few examples over the last couple of days:
– Walmart to buy Massmart Holdings for $4.6b
– Southwest Airlines to buy AirTran for $1.4b
– Unilever to buy Alberto-Culver for $3.7b
Those are three significant deals. So what does that tells us? That companies are ready to spend, ready to expand and ready to grow. Each of these acquisitions will help the buyer with expansion into new global markets. We still need to be careful, but investors, both personal and corporate, are coming back. I think we are in for a good run in the near future and we will see more consolidation and acquisition as companies that were successful during the downturn use their cash to snatch up strong assets that are undervalued. It should be a fun ride.
We have not heard much from Black Photo Corp. lately. Back when printing pictures was the only way to see them, Black's was one of the dominant players. Now, people view electronic photo albums on their smart phones or on the internet. Black's still makes half of its revenues from selling cameras, but is now banking on selling T-shirts and mugs to improve performance. That's right, the other half of Black's revenue comes from putting pictures on promotional items such as mugs and T-shirts. Quite a change from where Black's used to be. Black's is now investing time and money in growing this portion of their revenue. Is this a good move? It depends on how easy Black's makes the process. Right now, it is very easy to upload photos online and have albums and other items made and delivered. This can be done at various different sites and it is difficult to distinguish between the different offerings. Black's needs to make it easy and they need to provide some additional value to attract new customers. Their brand recognition is not what it used to be, so they need to sell the value to potential customers as well as ensure delivery and quality are of a high caliber. It is an interesting scenario to need to re-establish yourself in a market where you used to be a dominant player, but that is what happens when you play behind the curve instead of ahead of it.
Black's has also recently announced a new website in partnership with Telus to make uploading and sharing photos online simpler. This new site also links from an app on a Telus phone to make photo-sharing much easier. We will see how much of an impact this will have on Black's success…it is certainly a step in the right direction.
There are a few golden rules that you can follow in order to strengthen your relationships with customers and business partners:
Make phone calls instead of using email – it is more personal to speak to someone over the phone and it shows that you value the relationship.
Make every decision as if you did not need the money – this ensures that you will make the right decision for the customer/client and not because you need the money.
Put customer needs before your own – this ensures that you will always have the customers best interests in mind.
Give before you take – to create loyalty and a reciprocal relationship, it is usually better to give something before you get something. This shows that you want to make the customer's life better.
Have you ever had a situation where the bank where you have long been a customer freezes your account over one bad cheque or your credit card company locks your account over one missed payment? I am sure we have all had this happen to us at one point or another. Are you doing the same thing to your customers? We all believe that when we are a long-standing customer, we should receive the benefit of the doubt before having our services frozen. Someone should give us the courtesy of a phone call letting us know the situation and give us a chance to remedy it, right? Especially if this is something that is out of the ordinary and we have never before missed a payment or bounced a cheque. The only way to do this is to ensure that an entire organization is aligned towards the same goals and objectives. When customer service representatives and accounts receivable clerks have the power to block our services, but not the power to turn them back on or resolve the situation, problems arise. We don’t know who to call or how to get our services back on, so we are forced to spend time and effort deciphering this code. For your own organization, make sure your processes make sense and that your customers, and not you, are the main focus.
Yesterday, I was privilieged enough to attend a lunch event where Frank McKenna was the keynote speaker. The event was hosted by Leadership Sinai, a group of young professionals committed to volunteer leadership and philanthropy and advancing the mission of Mount Sinai Hospital, and sponsored by TD Commercial Banking. The event was amazing. We had a great turnout and Mr McKenna was an amazing speaker. He told many great stories about some of the great leaders who he has had the pleasure of knowing and also talked about some of the characteristics of a great leader. What were they, you might ask? Hard work, collaborating with a great team, having passion for what you do and giving praise as often as you can. These are great leadership lessons from a great leader and we should all remember them to improve our lives and our businesses.
As an entrepreneur, it is important to know when you may be a detriment to your company's further success. It is always difficult to hand over the reigns of your company to someone else. Here are three things you can do to make the transition easier:
1. Find a successor that you trust implicitly
It becomes much easier to hand over the reigns to your company when you have selected someone whom you trust. This does not mean that they make all of the same decisions that you would make, but it means that you are confident that this person is qualified and has the best interests of the company, and its employees and business partners in mind.
2. Find a new passion
Find something new that you are passionate about and throw your energy into it. This will help ease the transition because you will be focusing on something you love doing. This could include starting a new business venture or dedicating more time to philanthropy or spending more time with kids and grandkids.
3. Become an expert in delivering vision and strategy
You are still the founder of the company and have a unique perspective that you can provide. Be available for the new leaders and the company’s employees. Provide vision and strategy. Ensure that you remain out of the daily operations of the company and provide value in other ways.
Here are a few best practices in the way that you negotiate and manage contracts and relationships:
Contract length should be no longer than 3-5 years in most cases. Technology is changing so quickly that most ideas are obsolete in five years. Give yourself the opportunity to see what else is out there.
You should have no more than two contract renewals for the same agreement and they should be no more than one year in length. Contract renewals become an excuse to avoid doing work to find a better return on investment. You get a good deal on a renewal, but how do you know it is better than what you would have gotten somewhere else.
Ensure that you get all contract renewals, amendments and extensions in writing. You never know who may leave your company or who may need to review the information.
Manage the service levels that have been agreed to in the contract. Why bother having service levels if you are not going to measure them?
Meet regularly with your suppliers. Regular meetings help to strengthen the relationship, which means you collaborate more.
These are just a few pointers to help improve contract performance in your organization.
I wrote a few weeks ago about how Mark Hurd resigned from HP…well he has now re-surfaced as co-President of Oracle. This is a huge coup for Larry Ellison. Not only does Oracle get the guy who ran the show for one of their biggest competitors, they also hire one of Ellison's good friends and a seasoned executive. When Hurd was asked to resign from HP, Ellison said that the HP board had made one of the worst personnel decisions he had ever seen. So now Ellison not only gets someone who ran one of his competitors, he also gets to stick it in the eye of the HP board of directors.
What may be lost in all of this could be the fact that Hurd will be co-President. Not only will he have to give over the spotlight to Ellison, he will need to share decision-making with Safra Katz. I am not sure that this will work because on the surface, accountability is muddy. Who has the final say? What if Hurd and Katz don't agree, did Ellison just sign up to be a glorified referee? Either way, if I was HP, I would be worried. One of their main competitors just got a whole lot stronger.
Watching how this plays out might be a great example of what (not) to do when setting up accountabilities within your organization.