Running a Business from Home | Home Business Magazine

Perhaps you’ve noticed that your market and company results don’t match some of the occasional "recession is over" headlines and that the profits for a lot of mid-market companies are not anything like some of the quarterly reports from the Fortune 100.

Reality suggests that the economy did indeed hit a floor a while back, but there’s been nowhere near a "rebound" to normal for many mid-size companies.

If you are seeing a full return to 2007 profits, you’re likely selling something to the government.

Someone far more capable in national or international economics can advise on why the foreclosure rate, price of gold or interest rates may be impacting mid-market company profits in the Midwest, but we see other factors contributing to the lack of rebound for many.

When demand and growth are present in a market or industry, a business can succeed by being proficient at the fundamentals of quality control, shipping on time, follow-up service, and responding accurately and timely to bids and RFPs. There is enough for everyone; simply do a good job and you’ll get your share. These are good times, and also times where company cultures and leadership are formed.

In such time, little attention may be paid to why a bid was not won, to the precision of sales and marketing tactics to find new business, the operational precision to ensure margins are made and held where they need to be, or to ensure that continuous proactive customer service is exceeding client expectations.

When growth slows, however, there may be only enough food for three—but five who still want to eat. This highlights elements of true competition, and the little things start to come to light. Little things like having a motivated and sales-

minded employee culture, having the brightest employees, or a cultural environment where it’s OK to try new and aggressive tactics.

Many managers, and even leaders, have never faced dire demand situations, or if so, the skills to respond were a bit rusty. This opens the door for the more aggressive national corporate competitors who now search every corner for new areas of revenue that used to be too insignificant for their interests. Here’s an example: One of our clients provides third-party service on medical equipment. That company is now faced with a sales force from the direct manufacturer for that service work.

There’s even the occasional upstart entrepreneurial company coming up from the bottom with better ideas and a welcome ear from clients looking for new ways to improve their own profits.

This situation forces management to make decisions: Are you a technology or innovation company, or one that simply has good products and must out-execute the competition? It’s hard to do both. If it’s innovation, then go all-out; if it’s to out-execute the market, then don’t just do your best—do it better than anyone else. There is share to be gained right now, but it has to be taken, as opposed to organic growth.

The lack of a rebound also is due to the recent recessions simply accelerating and highlighting something that was already in motion for many companies: They are now in a mature market category, at the top or the back of the bell curve, where demand and supply are equal. Or perhaps supply exceeding current demand has produced an entirely different type of game—one of fierce COMPETITION.

In a recent meeting with a large manufacturer that had experienced tremendous growth and prosperity for more than 20 years, I suggested to them that "those days may be over." The collective response at first was disbelief, but soon concurrence that, indeed, their products weren’t much different from everyone else’s now, and the go-go growth years for their products and industry might not return to those levels.

Again, this forces a decision: Are you a technology, product, marketing-driven company? Or are your products, though good, not so differentiated from the competition that people will stand in line outside your doors? If it’s the latter, then your rebound will require changing your culture from "wait and get our share" to "attack and take our share." These are dramatically different leadership mindsets, staffing and tactical and strategic approaches.