Not too long ago I was invited to a National Sales Conference. It was your typical, yearly sales conference designed to rally the troops and set agenda for the coming year. What I remember most was the CEO’s presentation and the companies goal to grow 5% to 7%. Grow 5 to 7%? I remember asking myself what evidence did he have that allowed him and the company to believe they could grow at this rate? The banking crisis had already begun. Credit was already tight. The market had already fallen 30%. And most notably, these numbers represented similar growth patterns for the company during “good times”. I just couldn’t see how this organization believed they could grow at that rate, based on the current economic environment.
The truth is they couldn’t and they’re not. Since the conference, I’ve been told sales are down substantially, like almost every other company in America. Could this company have seen the size of this economic decline? I don’t think so. But they could have seen A decline. The just chose not to. They chose not to confront reality.
Nobody wants to hear the truth, especially when its bad. Getting real with what is happening within an organizations environment is the achilles heel of business. The pressure to perform is too great. It’s not OK to say we can’t do something. But, it should be. It’s considered a weakness to say something can’t be done. Saying something is unachievable or not likely labels you weak, not on board, or worse – incompetent. This is only true when the data doesn’t support it. However, when the data suggests something is improbable or not realistic confronting it is exactly what should be done. Had this company confronted the reality of the economy and their real capabilities they could have responded entirely different, thereby preserving profit and mitigating the losses.
Since the downturn in the economy I am hearing numerous stories of sales and business leaders demanding numbers of their teams to meet their goals regardless of what is truly realistic. This authoritative approach only kills moral as it continues to push and drive the organization toward unrealistic goals, employees become more frustrated with lack of success, which in turn drives even more dictatorial demands. A cycle is started.
What should be done? Confront Reality! Ram Charan, and Larry Bossidy’s book, by the same name talks about this very topic. Engage your team, assess what your truly capable of, understand what the economic environment will allow, be real in accepting the information, and set goals best on what you can do, not what you want to do or “NEED” to do. Getting real with your environment allows organizations to be more nimble, it allows them to capitalize on growth and mitigate decline. HINT; Sometimes decline is inevitable, pretending it isn’t doesn’t help. Accepting it, mitigating it and taking your lumps early is far less impacting than pretending it isn’t going to happen.
In our society, getting real is hard, especially if it’s bad news. We don’t like naysayers. We cast out those with “negative” information. We don’t like to hear it. But we need to.
In January of 09 how many companies projected a “LOSS” for 2009? I suspect not many. But, most should have. They just didn’t have the guts to state what was real.
It is best for companies to look at their world as it is, not as it was, or how they would like it to be! As I like to say: “It is what it is.” Accept it and then figure out what your going to do about it.