Changes in the way CEOs work these days, including sales trips, customer retention, and the end of the merit raise.
"Do you think those people on the line are dumb? They can raise a family of four on $347 a week. I don't have one vice-president who can do that."
-- Rene McPherson, former chairman of the Dana Corp., quoted by Tom Melohn in his forthcoming book, The New Partnership (Oliver Wight, 1994, $22)
Forget all the talk about what's worrying the small-business community these days. The important question is, What are small businesses doing? Judging by our latest unabashedly unscientific survey, there have been some significant changes in the way folks are running America's small growing companies.
CEOs are back on the road. In recent months the focus has shifted from cutting costs at home to getting out and selling. The most sales-shy owner we spoke with says she's spending 50% of her time selling, "and every minute is painful -- but necessary."
Product development is a top priority again. Now the emphasis is on developing new products and services at lower prices for existing customers -- and quickly. "Those who can exploit the advantages of being small are going to be the winners," says one owner.
"Key players" are in demand. Though still conservative about hiring in general, small companies are aggressively looking for top managers, including former large-company executives. "I know how difficult the transition from big company to small can be, but I also know the potential impact of one key person on a business as young as mine," says one start-up veteran.
Belts are staying tight. "I never ever again want to go through the pain we've experienced in the past three years getting our overhead down," is how one founder expressed the universal sentiment for keeping costs under control.
The watchword in marketing is customer retention. Companies are focusing on keeping current customers loyal with pricing policy (holding the line), product development (coming up with more stuff for the same folks), and technology investment (improving customer service).
The merit raise is a thing of the past. More than ever before, growing companies are using performance-based incentive programs. Other than cost-of-living adjustments and promotions, financial rewards go to those who produce tangible results.
The big concern is stress, "at every level of the organization," says one CEO. "We're working overtime because we don't want to add to payroll. Our salespeople are pushed to the limit. We are a very, very successful company, and yet I wonder how long we can go on like this. How long can I go on?"