The state of the economy is a fact and how you feel about that fact and what it means to you personally is a belief. Your beliefs have a major impact on your employee's attitude.

Beliefs that drive your sales behaviors are the keys to becoming successful in a down economy. If you believe that this economic crisis can provide you with opportunities than your attitude will drive the behavior of your employees.

Sales Belief

One sales person might believe that a "bad" economy means it's going to be harder to make a sale.

"It's just not possible to hit my numbers when the economy sucks."

Another sales person might believe that a "bad" economy means you can now win lots more business.

"I am a good sales person and I am prepared for this downturn. We have quality  value propositions coupled with our ability to reach out – network and build customer relationships is far superior to the competition that generally only has price going for them. I know I can take business from the competition"

So, ask yourself these questions.

What Do Your Sales People Believe? What Do You Believe?

Is Your Glass ½ Full or ½ Empty?

If you believe the glass is ½ Full, then you believe there is a window of opportunity built on the following foundation

• Distribution market share growth normally occurs in the down cycle
• High unemployment creates opportunities for the upgrade and recruitment of quality people from competition-
• Cost containment means  trimming the fat  from the "Top Down" – NOT the bottom up
• You take the "Smell the Blood approach"
• Taking advantage of vendor discounts and special promotions because inventory management has always been one of your core competencies and you are now in a position to capitalize on it.
• Refocus on customer service
• Refocus on best practice

If you believe the glass is ½ Empty, then you have adopted an attitude that may demonstrate fear, panic and confusion. Your leadership model becomes one of panic response management built on the following foundation.

• We must fight to keep from losing customers – cut prices
• We need to cut cost and the quickest way is a reduction in force (RIF)
• Cut expenses to the bone "Bottom Up"
• We must "Stop the Bleeding" which includes
• RIF
• Cut commissions
• Sell off inventory
• Reduce services
• During economic turbulence judgment can become cloudy and you can confuse personal needs with business needs. This means you put your personal wealth and objectives ahead of the business needs and objectives. This is a major mistake.

Attitude

This is Not the Time to Panic. Yes, there are economic problems, but there are also opportunities!  Leadership during these tough economic times is about not panicking, and that's exactly the message I want to get across... don't panic! Panic causes knee jerk reactions, and they're rarely correct. This Economic Panic that could be caused by "Media Sensationalism" can create a knee jerk reaction that negates effective leadership.

Panic Creates Fear ----- & Fear

• Paralyzes Potential
• Ruins Relationships
• Sabotages Success
• Inhibits Initiative
• Circumvents Creativity
• Promotes Poor Productivity

We must understand the difference between panic and caution.
 Panic - (noun) a sudden overwhelming fear, with or without cause that produces hysterical or irrational behavior that often spreads.

Caution – (noun) a prudent forethought to minimize risk: a warning, a precaution.

Deliberate Leadership, clear thinking and solid strategies leads to success in any economy. Panic leads to failure. As leaders we need to be deliberate, thoughtful, and take the actions necessary to stabilize the future of our individual businesses.

The Pygmalion Effect

The wrong attitude can create a Self fulfilling Prophecy. It's called the Pygmalion Effect.

You Must Believe in Yourself. You must believe in your own ability, the ability of your team. You must have the will to succeed even though times are tough. You must openly demonstrate the desire to succeed. Look inwardly at your own thoughts. Thoughts are powerful as they shape your attitude and your attitude shapes your beliefs which control your actions. Hard work is a direct expression of your beliefs. Effective leaders fall back on the five basic principles of success.

1. Commitment with a passion --- Leaders must demonstrate a commitment for success that leaves no doubt in the minds of their employees.

2. Realization that "You don't have to have all the answers. Seeking input from employees and openly discussing ideas and strategies is the best way to demonstrate a confidence in the team you have and the employees that will execute your vision.

3. Empowerment & Delegation

• Delegation is the handing of a task over to another person, usually a subordinate. It is the assignment of authority and responsibility to another person to carry out specific activities. It allows a subordinate to make decisions, i.e. it is a shift of decision-making authority from one organizational level to a lower one. Delegation, if properly done, is not abdication. The opposite of effective delegation is micromanagement, where a manager provides too much input, direction and review of 'delegated' work.
• Empowerment refers to increasing the spiritual, political, social or economic strength of individuals and communities. It often involves the empowered developing confidence in their own capabilities. In the sphere of management and organizational theory, "empowerment" often refers loosely to processes for giving subordinates (or workers generally) greater discretion and resources: distributing control in order to better serve both customers and the interests of the company.

4. Employees are the most precious asset --- This means you must walk the walk and invest in employee development and employee training even more during tough economic times. Employees are the profit and success creators of every organization.

5. Communicate intentionally & effectively following these ten tips.

"Manage by Walking Around".  Get out and meet your people, talk to them, show an interest in them and in the job they are doing for you.  This includes everyone from the forklift driver to your Vice President of sales.  Everyone likes to know they are appreciated.

Eliminate unproductive – unnecessary lengthy meetings.  I know a CEO that refuses to allow chairs in the conference room.  All meetings are held standing up.  I don't believe there is a company that exists that can't do a better job making their meetings more productive.  
.   
Written communication should be precise and clear.  Don't write like you are a journalist for USA today.  Avoid excessive and lengthy diatribes that become confusing.

Create flexibility in your organization structure.  Rigid organization charts that are too restrictive can get in the way of getting the job done.  job functions and descriptions must have clarity but don't make them so restrictive and detailed that cross functional inter action, support and cooperation is limited.

Open your ears and your heart.  Learn to listen more effectively.  That means becoming disciplined at not interrupting.  You might be amazed at what employees will tell you if you just listen.  You might be amazed at what employees can do for you and the company if you just let them.

Constructive feedback can be helpful.  Don't criticize the messenger.  Frank opinions can be helpful if we allow our ego to get out of the way.

Put a filter between your brain and your lips.  A passing comment that seems frivolous to you could devastate your entire staff and you may never hear about it.  Think before you react spontaneously.  Don't say what you think they want to hear and remember; even the simplest or dumbest complaint to you is serious to the one expressing it.  Be sensitive to the environment, the values and the culture of the person or persons you are communicating with.

Don't build a kingdom on the backs of your employees.  If economic times dictate cutbacks, layoffs and expense control… Start at the top.  Share the pain.  Look at corporate overhead, perks and fringe benefits of management and the executive staff.  Consider a pay cut at the executive level.

Keep your hand on the pulse of your business environment.  Make sure you are well informed on the external and the internal environment of your business.  Network with industry colleagues. Benchmark friendly competitors or businesses outside your region.  Stay close to the communication channel of your vendors.

Make sure you have a definitive focus on employee training and development.  This must always carry a priority.  Make sure your orientation program for new employees is continuously updated.  The first sixty days is critical to retention. 

Communicate the company's value effectively.

Today's Reality

Unemployment expected to reach 10%, Consumer spending is falling like a rock and it represents seventy percent of our economy.  Recovery could take two years -- so…….Don't count on the government bailout to fix things.                                                                                                                                                

Seek New Ways to Improve

If you are like most people, you are content with the status quo until something disturbs it. You should be constantly re-evaluating not just your sales plans, but all of your business strategies including policies, pricing, and employee performance. The idea is to eventually be as efficient and effective as possible so your company runs smoothly and profitably. Look closely at your competitors. Talk to business leaders you respect. Read business management books.

Experiment; solicit feedback from your workers and customers. By doing several of these things you will accumulate a wealth of knowledge and experience crucial to the survival of your business.

Take Advantage of the "Window of Opportunity"

In a practical sense, what this means is that you view this time as providing you a unique window of opportunity to cut the non-profitable elements of your sales and marketing system away, to pare down to a dedicated and competent core, to sharpen the focus of every element of your system, and then to expand your market share so that you can weather the hard times and be stronger when the economy inevitably turns.

Evaluate your markets. Over the past few years have you stretched into markets which are not profitable? Are they unprofitably siphoning time and talent that could be more effectively focused on your core markets?

Evaluate your customers. The same approach applies here. You are probably losing money on half of your customers. Get tough, prioritize and target your accounts based on the stability and likely growth of their business

Carefully and methodically exam each piece of your structure. Look at this temporary economic downturn as a window of opportunity to jettison some of the policies and procedures that are vestiges of the past, and reconfigure your system for the next wave of future growth. Look at your inside sales department, customer service staff, marketing and sales administration, etc., with the point of view of reducing the unprofitable and focusing on the profitable.

Focus on gaining market share. Approach your good customers with sole source proposals. Capture the business and lock it up by forming long-term contractual relationships with those customers who are solid and supportive.

Finally to the opportunities to add key salespeople, managers and executives. Many of your competitors will struggle to stay in business. Some good people will become available. The pool of available talent will swell. Look for opportunities to upgrade your personnel by picking off proven talent when it becomes available.

Turn Your Vision into a Cause

"Leaders are visionaries with a poorly developed sense of fear and no concept of the odds against them". If you aren't a visionary ---- hire one ---- more importantly --- turn your Vision into a Cause.

I wonder how many of you remember the movie "Rebel without a Cause". Rebel Without a Cause is a 1955 film directed by Nicholas Ray that tells the story of a rebellious teenager played by James Dean. In this movie James Dean played the part of a rebel but he had no cause that could provide direction, guidance or an ethic to get him on the straight and narrow path;  the path to success.
 
Paradoxically to Dean in this movie, every effective leader I have ever known has had a vision. But, having a vision alone does not make you an effective leader. In fact there are hundreds of "Unsuccessful "companies and "Ineffective" leaders that have Vision Statements posted on their web sites, in their brochures and even posted in their lobbies.  A Vision without a Cause?

You see, almost anyone can have a vision but if you have a "vision without a cause" you are just a dreamer.  Let me repeat that --- "A vision without a cause" simply makes you a dreamer. I have known plenty of dreamers in my lifetime whose ship never has and never will come in. One thing I know for sure --- If your ship misses the harbor --- it's generally NOT the harbors fault.

Rick Johnson, expert speaker, wholesale distribution's "Leadership Strategist", founder of CEO Strategist, LLC a firm that helps clients create and maintain competitive advantage. We specialize in leadership development, strategic planning & sales effectiveness. Need a speaker for your next event, E-mail rick@ceostrategist.com. 

And check out Rick's new CD and workbook Real World Leadership Kit --- "Learning to Lead So Others Will Follow" www.ceostrategist.com/resources-store/real-world-leadership.html