People often say they wish their foresight was as keen as their hindsight. But most of the time, trial and error are the price we exact for such vision.
Some of Utah’s CEOs in industries notoriously affected by national economic crisis lend Utah Business readers the wisdom they’ve garnered from toughing out economic slumps at a time when we all could use a little experience to our advantage.
Jane Driggs, President and CEO, Utah Better Business Bureau
Jane Driggs remembers the late 1980s and early 1990s when for every 20 new members that joined the non-profit organization, 60 left. Things were so tight, she says, the man-in-charge was frugal right down to the supplies.
“Times were tough and office supplies were one of the big things—you could not get anything that was not necessary,” says Driggs. “We got a box of green pens and I remember the CEO went to the supply person and said, ‘you will mail these back. We cannot afford green pens—we will get blue, we will get black, but we cannot afford green.’ I thought, ‘you’ve got to be kidding,’ but now I think how smart was that? It’s those little things that add up.”
What’s different now, versus then, says Driggs, is that businesses are more concerned with keeping employees. So, she’s glad she can provide green pens now, “even colored post-it notes if it makes employees happy and they will stay here!” she laughs, adding that keeping her employees is paramount to the BBB’s success, since when the economy goes down, demand for its services, which includes assisting in cases of misrepresentation or business fraud, increases.
Driggs attributes the fact that the BBB’s services are more heavily relied on in stressful economic times to people being more diligent in checking into companies’ practices. This last year, complaints are up 11 percent to 15,762 and services provided are up 16 percent. Whether the economy is good or bad, though, Driggs says business is never easy for the BBB because when the economy is good, members believe they don’t need their membership. On the other side, when the economy is bad, BBB membership is a cost they’re willing to cut, which she says is actually costly for other businesses, since it’s the membership funds that allow the BBB to provide services. Even when times are good, though, Driggs says that the BBB doesn’t spend a lot of money on frivolous things. “We’d rather save up money for a rainy day, and now it’s raining, so it’s not quite so bad.”
This year, Driggs had hoped to move the BBB to a larger office with a conference room big enough to hold her board, but they’ve put the plans on hold. “I don’t like going out on a limb if I don’t know if I can crawl back. I think that’s what a lot of businesses do when times are tough, you just make do with what you have and live on the savings you had during the good years,” she says.
Driggs’ conservative approach is helping the BBB maintain services to 2,900 members, reviewing their business practices and providing consumers with vital information on businesses’ activities.
Mike Cameron, President and CEO, Christopherson Business Travel
In tough economic times, businesses can be tempted to diversify and cut staff, two measures Mike Cameron, president and CEO of Christopherson Business Travel, says he has been wise to avoid.
“We made a decision early on to change our focus from being all things to all people to being the business travel experts in this market,” says Cameron. “We actually changed our name to Christopherson Business Travel and we decided we would pick one thing and do it better.”
Cameron says finding a niche and trying to be the very best at it, along with making some strategic adjustments, have been his best moves, making the company more efficient and enabling resources to be more productive, which helps the company during economic down swings.
For instance, when Cameron’s clients still demanded paper ticket delivery when the industry went to electronic ticketing in the 1990s, the Christopherson staff educated their clients about the benefits of electronic ticketing and itineraries. When clients on board to accept the change, Christopherson Business Travel developed proprietary software that delivers travel information that demystifies old travel agent codes. Establishing client support for the new software allowed Cameron to reassign staff to other jobs, eliminating the costs associated with the paper delivery system. “It was a proactive response to dealing with the tough times and then it worked into a value-added service for our clients,” says Cameron.
Cameron says he almost made a mistake, though, when after he moved into his building near 5600 S. and I-15 in Murray seven years ago, he thought he could attract more clients if he offered additional services. “I kept thinking of all the retail consumers that would drive by and thought ‘this is the perfect location to diversify into leisure travel.’”
But Cameron says he headed off a costly mistake by listening to his gut. “I realized I was making an error when I would speak in presentations and I didn’t present the new model with the same clarity and passion,” he says. “It affected my integrity when I met with perspective clients.”
Cameron went back to his niche and hasn’t regretted it since, rapidly growing for the past 18 years. In addition to maintaining his focus, he credits his success towards finding ways to conserve money that do not impact his clients and employees.
“I’m absolutely dedicated to not having layoffs,” says Cameron, who advises other business leaders to keep their employees abreast about company welfare during tough times. “Protect your number one asset—which is your people—by not creating an environment of fear and uncertainty. Talk to your employees.”
Gordon Dames, President and CEO, Mountain America Credit Union
When the economy flops, you can’t let your service standards go with it, or you could loose what’s keeping you in business, says Gordon Dames, president and CEO of Mountain America Credit Union (MACU).
“Our services are commodities; you can get them anywhere,” he says.“To survive, we have to focus on providing the best service possible with the best trained employees and make sure that everything we do is in the best interest of our members.”
When loan delinquency increases and income decreases, Dames says MACU controls spending, just as his member/owners do in tough times. But Dames says he doesn’t scrimp on the training that helps employees deliver their services. “If you don’t focus on service, you will fail,” says Dames. “You must continue marketing and training even though it seems that you could cut costs by eliminating these functions.”
Dames says other CEOs can learn from the mistakes high profile executives made on Wall Street by making sure they always know what’s going on within their business and never meeting up with surprises. “A CEO must ensure that the staff always does the right things for the right reasons,” says Dames. “Our business is risk based, but we should never take unnecessary risks.”
Going from point A to point B is rarely a straight line without unexpected problems, Dames says, adding that MACU hasn’t been immune to them. But, he says the key in making it to point B is knowing when you need to let go of a bright idea, not wasting additional time and resources on something that is not achieving your objectives or can’t because the timing is wrong for it.
“Everyone has problems and there are some things beyond our control,” says Dames, referring to the events on Wall Street this past fall. “We had a marketing plan we designed at the beginning of the year according to a certain budget, but then when the financial crisis hit, we had to be pretty nimble to adjust our track to survive in that environment.”
So who is the best one to learn from Dames’ experience? Sterling W. Nielson, who takes the reins from Dames when he retires Dec. 31. During Dames’ 16-year tenure, MACU grew from $280 million to $3 billion and from 13 branches to some 60 locations in Utah, Arizona, New Mexico and Nevada.
JoAnn Wagner, Chairman, President and CEO, SOS Staffing
As a leader in one of the top 50 largest staffing firms in the United States since 1995, JoAnn Wagner, president and CEO of SOS Staffing, has seen difficult economic times before and learned that business survival depends on the ability to switch gears.
“I have been fortunate to have been involved in the staffing industry through several upturns and downturns which involved divestitures and buyouts,” says Wagner. “The outcome has always been positive.”
Currently, SOS Staffing includes private and public staffing companies and covers 21 states with 140 plus offices. So by the very nature of her business, Wagner knows how a firm can control fixed costs by adding or reducing staff, which is the highest percentage of SOS’s operating costs. However, Wagner says, tough times like these give companies the opportunity to get creative.
“Experience has taught me some valuable lessons in how to plan for and maintain flexibility,” says Wagner. “It’s helped me develop optimism and confidence in our industry and a strong will to find creative solutions.”
Wagner’s creative solutions include being flexible even with core staff members by reducing hours, travel and advertising budgets. “We always try to protect core staff and continue investing in training and developing new ways to serve our customers,” she says, adding that Utah companies are generally cautiously aware of how staffing can help employers cope with business cycles.
If layoffs happen, Wagner says, companies can protect themselves from increased unemployment insurance exposure by helping employees get placed elsewhere. Then, when new business needs arise, using temporary staff can help companies decide if the up tick is long term and sustainable, then choose new full-time employees.
“In terms of my part personally, and including our management team as well, our focus is to never give in to the easiest solution or problem, but to seek the best outcome possible for our company, including employees and customers,” says Wagner. “Our survival plan is to pay close attention to keeping our business financially viable and healthy, take calculated risks, but also have solid back-up plans.”
Hal Wing, Founder, President and CEO, Little Giant Solutions
Consider a 21st century business version of the historical James Fenimore Cooper novel “The Last of the Mohicans” and you could place Hal Wing, president and CEO of Little Gaint Solutions, as a character in it, since he stands with a diminishing tribe of leaders still operating from an era when a professional was as good as his or her word.
“Relationships are the keys to success, regardless if you’re talking about internal or external partners,” says Wing. “As you develop the right relationships, the most important agreements are made with a handshake, not a written contract.”
Whatever you’re talking about with Wing regarding his business ups and downs during the past 36 years, the conversation circles back to people and his strong conviction that he has survived because of his relationships with his employees, suppliers, customers and partners.
His philosophy substantiates itself from past and present experiences, since during the past three years, aluminum, a significant raw component in Wing’s high-end aluminum ladders, doubled in cost. This increase required Wing’s company, which is a part of Wing Enterprises, Inc., to search for new procurement and distribution solutions, and they began sourcing from across the globe. “In addition, we determined what we were best at and what our partners were best at and let each other focus on our core competencies,” says Wing. “We were careful to create strong relationships with companies that have the same values that Wing Enterprises has.”
This hasn’t been the first time Wing has had to look for an answer to a problem. When exchange rate fluctuations in 1972 made it difficult for Wing to maintain steady pricing on the ladders he was importing from Germany, he started fabricating them in his carport; hence, a solution to his problem and a name for his company.
“Challenges bring out the best in people because they have to search for new solutions to old problems,” says Wing. “Prepare for the worst and work as if things will all work out for the best.”