The class valedictorian is…you! Yes, you! You were at the head of your business coming out of the most brutal schooling in our lifetimes known as The “Great Recession”. The past 4-5 years was like going to college at the University of Hard Knocks and getting the greatest business lessons in a lifetime. The important question is what did you learned from these lessons. What is your valedictorian address to your class?
Often the Valedictorian is not the smartest member in the class. Instead the Valedictorian is the one who was most committed, the most perseverant, and the most disciplined. They had the raw intelligence to take advantage of the information provided and applied it in the best manner. Since you are still in business after the Great Recession this likely describes you.
Even more important than surviving the lesson is to implement what was learned. Take a minute to make your list of your top classes and the lessons taught. If you are typical, this suggested list may sound too familiar.
1. People 101. In this class you learned that you held on to mediocre performers too long. This was a really tough class emotionally for most business leaders. We hire people we like. They fit. They become “like family”. Frequently they were family. We knew in our head before hard times that these players were not contributors. We were aware they could be disruptive and were a detriment to the business. Then when cash got short, we continued to carry them even before you paid yourself. When times got critical, we anguished over what was an obviously decision and finally let them go.
2. Cash Flow 101. The difficult class was avoided by many as long as possible. During boom times the checkbook appeared bottomless. But like the ever flowing fountains of mythology, the cash ran dry. Trusted customers began to drag out payments. In the interest of the “relationship” we allowed this to continue even though theses long term relationships were using you as a bank, not a vendor. Payable became a high stress point as you had to decide who to pay what you could with the cash you had. And the bankers, ever-present during the good times, were nowhere to be found.
3. Marketing 101. This was the course most often dropped. As cash fell short, and the list of discretionary expenses got shorter, the amount invested in marketing dropped. We used “hopium” as a strategy and it did not pay off. As customers tightened their belt, spending on attracting customers and securing repeat business fell even when it was most needed.
Here is your valedictorian address (Pomp and Circumstance plays in the background):
Good morning, ladies and gentlemen:
It’s a great honor to stand here and deliver the valedictory speech at this special survival commencement ceremony. Let’s begin by thanking the faculty consisting of the employees, the vendors, the bankers and most importantly the customers. Each of you, in your special way has taught us how to survive, and thrive moving forward.
Class, we have all overcome many challenges to get to where we are today, and every one of us has achieved success in our own ways. We have learned our business lessons in an economy unlike anything experienced before. I assure you, the future economy will likewise be unique and unpredictable.
But certain principles are immutable and have been instilled in us through the daily lectures we have experienced. Venturing forth as business leaders we will:
Hire slowly and carefully. We will prepare successful paths for those employees we bring on. We will define expectations and hold them accountable. We will act decisively and properly if things do not work out.
Manage cash effectively. We will establish reserve working capital. We will purchase frugally, but not cheaply. We will accrue and prefund predicable expense and be aware of the seasonality and cyclicality of our business.
Market continually. We will plan all marketing efforts in a comprehensive, holistic manner. We will listen to marketing vendors with an open mind and a measured commitment. We will evaluate the results of marketing activity and adjust appropriately.
Fellow graduates we did not go into business merely to subsist and endure but rather to make our dreams a reality. Made stronger by the lessons of the Late Great Recession it is time to move boldly, and confidently to grow our businesses. It is time to look back and thank those instructors and build wisely on the lessons taught. We will achieve our BHAG and make a difference. Thank you.
Russell Lookadoo is the HR Guy for small businesses. His firm, HRchitecture, specializes in helping business leaders accomplish their goals by effectively using their teams. Russell brings over three decades of experience designing Human Resources solutions that achieve business strategies in varied organizations ranging from a small manufacturer to the nation’s second largest bank. Russell holds the Senior Professional in Human Resources designation from the Society of Human Resources Management and earned the Certified Compensation Professional designation from World at Work. Russell attended the University of North Carolina on the prestigious Morehead-Cain Scholarship and graduated with a Bachelor’s in Industrial Relations. Visit his website at www.theHRGuy.biz