How Robots Will Change the Future of Small Business

space robotBy Dana Borowka

Are robot employees in your future? Robots for small business have moved from science fiction to science fact.

Science fiction author, Isaac Asimov introduced The Three Laws of Robotics in his 1942 book, I, Robot (the basis for a 2004 film adaptation starring Will Smith.) Asimov’s Three Laws are:

1. A robot may not injure a human being or, through inaction, allow a human being to come to harm.
2. A robot must obey the orders given to it by human beings, except where such actions would interfere with the First Law.
3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.

For a small business, I would like to add three more laws:

4. A robot must not call in sick.
5. A robot must not request a vacation day.
6. A robot must not ask for a raise.

When most people think robots in business they naturally form a mental picture of manufacturing industries such as automotive, electronics and consumer goods. However, small non-manufacturing businesses with fewer than 100 employees and 10 robots or less represent a growing segment of today’s market for robots.

What Exactly Is a Small Business Robot?

In practical terms, a robot usually refers to a machine which can be electronically programmed to carry out a variety of physical tasks or actions. The word robot can refer to both physical robots and virtual software, but the latter are usually referred to as bots. There is no consensus on which machines qualify as robots but there is general agreement among experts, and the public, that robots tend to do some or all of the following: move around, operate a mechanical limb, sense and manipulate their environment, and exhibit intelligent behavior — especially behavior which mimics humans or other animals.

The International Organization of Standardization (ISO) sets a standard for what constitutes a robot. ISO defines an industrial robot as being an “automatically controlled, reprogrammable, multipurpose manipulator” that is “programmable in three or more axes.”

However, a robot is more than a mere programmable machine like a Mr. Coffee. According to Majid Abai, Chief Sherpa of the IT and robot consulting firm, The Abai Group, to qualify as a robot requires a mechanical component and some level of programmable intelligence.

Abai is the founder and CEO of The Abai Group, Inc. He is a senior executive with a 30-year track record of building, transforming, and leading domestic and international organizations. Majid is focused on innovation, strategy, and execution in tech companies and IT departments. He speaks to technical and non-technical executives on how an effective IT organization and robotics could help increase business efficiency, revenues, and customer loyalty while reducing the costs for the company.

Abai says a true robot includes “the capability to add analysis to its tasks, not just serving as an automatically operated machine that replaces human effort.” Therefore ATM machines are not robots that replace bank tellers, and not because they do not resemble human beings in appearance or perform functions in a humanlike manner. A device that automatically performs complicated and often repetitive tasks is not what Abai would call a robot.

food robotBy Abai’s definition, a Roomba robotic vacuum cleaner, would qualify. A Roomba features a set of basic sensors that help it perform tasks. For instance, the Roomba is able to change direction on encountering obstacles, detect dirty spots on the floor, and detect steep drops to keep it from falling down stairs. It uses two independently operating wheels that allow 360 degree turns. Additionally, it can adapt to perform other more “creative” tasks using an embedded computer.

Forget the cyborg imagery of sci-fi too. A Roomba, for instance, does not have to look like a domestic servant with a vacuum cleaner, like Rosie the robot from the 1960s animated TV show, The Jetsons. While a robot can be a machine that looks like a human being and performs various complex acts (such as walking or talking) of a human being, that is not the true difference.

Future Small Biz Jobs for Robots

Robots are best applied in any fixed, purely repetitive task where the motions involved are predictable and routine. These include the four Ps of picking, placing, packaging and painting, as well as some forms of assembly, ironing and welding. Compared to humans, robots are faster, have almost unlimited endurance, are more predictable or just provide outright superior precision. They are also very useful in jobs that are too dangerous for humans, such as handling containers of molten metal in foundries or radioactive substances at nuclear power plants.

Fast food workers, tax preparers and cashiers will be replaced by robots in the future. Here are just some of the other ways small business will use robots.

Nurses and Healthcare Worker. According to MSN Innovation writer Mark Hattersley, the Japanese are taking auto line production and delivering it straight to the hospital bedside. HStar Technologies is now taking orders for its Robotic Nursing Assistant (RoNA) and Serbot, and researchers from Carnegie Mellon University are putting the final touches on a nursebot called Pearl. According to the sales brochure, RoNA is a “stable, highly mobile, dexterous, autonomous, bi-manual humanoid robotic nursing assistant. Equipped with highly dexterous robotic arms of payload up to 10 lbs.” The Serbot is designed to monitor and transport elderly patients with limited mobility. Pearl even has built-in telepresence functionality, which essentially allows the patient to talk through the robot to a physician or nurse. The nurse or physician can control the robot remotely using a tablet device. When not being controlled remotely the robot performs routine caretaking tasks and checks on the status of patients.

Attorneys and Paralegals. The rise of the machines in the legal world is coming. According to Jordan Weissman of The Atlantic, attorneys have employed manual keyword searches to sort through the gigabytes of information involved in these cases. Now more firms are beginning to use a technology known as “predictive coding,” which essentiallywalking robot automates the process at one-tenth the cost. “Several studies have shown that predictive coding outperforms human reviewers, though by how much is unclear. A widely cited 2011 article in the Richmond Journal of Law and Technology analyzed research on document review and found that humans unearthed an average of about 60 percent of relevant documents, while predictive coding identified an average of 77 percent.”

Truck Drivers and Chauffeurs. An autonomous car, or robot car, is an autonomous vehicle capable of fulfilling the human transportation capabilities of a traditional car. As an autonomous vehicle, it is capable of sensing its environment and navigating without human input. Today robotic cars exist mainly as prototypes and demonstration systems. The Google driverless car is a project by Google that involves developing technology for autonomous cars. The software powering Google’s cars is called Google Chauffeur. The U.S. state of Nevada passed a law in 2011, permitting the operation of autonomous cars in Nevada. Florida became the second state to allow the testing of autonomous cars on public roads and California became the third state to legalize the use of self-driven cars for testing purposes as of September 2012 when Governor Jerry Brown signed the bill into law at Google HQ in Mountain View. Michigan Governor Rick Snyder followed suit by signing legislation allowing the testing of automated or self-driving vehicles on Michigan’s roads in December 2013, but this legislation requires a human in the driver seat at all times while the vehicle is in use. For now.

Journalists and Copywriters. According to The Guardian, already uses an artificial intelligence platform provided by the technology company Narrative Science to generate automated news from live data sets and content harvested from previous articles. What makes it possible is that business news content tends to be formulaic and data-heavy, listing places, stocks and company names. The Los Angeles Times, meanwhile, uses robots to report on earthquakes: the organization relies on an algorithm that pulls in data on magnitude, place and time from a US Geological Survey site. NPR has reported on the use of robot sportswriters producing coverage of games.

Customer Service and Marketing Reps. Why outsource to India when you can use a robot instead? Another area where businesses use robots is in their marketing to consumers. Technology companies produce robots to demonstrate new devices or inventions and to create a sense of innovation and progress. Robots are part of interactive displays at trade shows where they compete with more traditional marketing tools for attendees’ attention.

Call Center Staffers and Outbound Callers. Every business needs some form of telecommunications infrastructure to communicate with suppliers and customers. Robots can simplify a business’ call center and handle incoming phone or Internet traffic to keep the channels of communication open and running smoothly. Automated calling robots place prerecorded calls, including appointment reminders and customer satisfaction surveys. Likewise, an automated call center uses a programmable interface to greet callers and direct them to the appropriate information or department.

Inventory Takers. Robots also perform inventory tasks for businesses with large warehouses or sorting facilities. Inventory robots are essentially driver-less vehicles that can navigate a warehouse and select specific pieces of merchandise, bringing them to employees who enter product requests into an automated system. Inventory robots save time and also reduce the likelihood of human error that can cause inconsistencies in inventory tracking.

Entertainers and Performers. Another class of robots used in business are those that entertain audiences. Robots and robotic displays appear in storefronts, in theme park attractions and in television and film programs. Some of these robots are skillfully crafted to resemble real people while others represent fantastical creatures or mechanical robots from a fictional world. Robot characters populate science fiction narratives while special effects robots endure hazardous conditions that would be unsafe for human or animal actors.

But Who Takes Care of the Robots?

Typically, many small business leaders today are not interested in using robots for three reasons: expense, lack of expertise, and fear. All of these will be overcome. As the price of robots continue to fall and functionality continues to rise, the robot employees are coming. The jump in productivity will demand it.

windup man robotThe answer to the lack of expertise and fear objections is to hire the right employees to help with your robotics. Without a doubt, a tough challenge for small business managers with robots is consistently hiring quality people to take care of the robots. These devices need to be set-up, programmed, monitored and repaired. No benefit comes without a price.

Hiring the wrong people to handle the robots will create many problems: reduced time to market, a loss of market share, higher turnover rates among productive humans on the payroll, lost management time, lost customers to the competition and the tremendous opportunity cost of unmet sales goals.

To improve any hiring decision, many companies have found they need to crack the personality code by using robust personality testing. Personality tests are a standard recruiting practice for many branches of the government and military, as well as many Fortune 500 companies when assessing potential hires for key or critical positions. This is not guesswork or an untested science.

Therefore, when hiring robot handlers the secret is to cultivate top performers through a three-step process: assess candidates with an in-depth work style and personality assessments, screen candidates for behavioral tendencies, and manage more effectively based on behavioral styles. The goal is to base your hiring and managing decisions on the best data that can be collected about the best personalities to work with the robots. The same you do for any employee.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

Dana Borowka, MA, CEO of Lighthouse Consulting Services, LLC and his organization constantly remain focused on their mission statement – “To bring effective insight to your organization”. They do this through the use of in-depth work style assessments to raise the hiring bar so companies select the right people to reduce hiring and management errors. They also have a full service consulting division that provides domestic and international interpersonal coaching, executive onboarding, leadership training, global options for expanding your business, sales and customer service training, operational productivity improvement, 360s and employee surveys as well as a variety of workshops. Dana has over 25 years of business consulting experience and is a nationally renowned speaker, radio and TV personality on many topics. He provides workshops on hiring, managing for the future, and techniques to improve interpersonal communications that have a proven ROI. He is the co-author of the books, “Cracking the Personality Code” and “Cracking the Business Code”. To order the books, please visit

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, & our website:

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s,  workshops, and executive & employee coaching.  Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

Growth Takes Resources, How Fast Do You Want to Grow?

By Jim Canfield

[dropcaps type=”circle” color=”” background=””]T[/dropcaps]here is ultimately only one reason to grow your business; to increase its value. Business leaders like you everyday are entering into, swimming amongst or exiting out of some stage of their company’s growth. You don’t have to be a Wall Street resident or even an expert to recognize the daily stock man growing moneyprice fluctuations speculating what will be become the next stage for an enterprise. Do they predict booming growth based on the current track record or are they raising red flags indicating someone or something is potentially locking that growth potential down? Whether the stakeholders in your business are private or public, unlocking any door to a stage of growth is an overwhelming and gargantuan task. However, nothing can create value faster than actual or visualized organizational growth.

I have had the good fortune of watching hundreds of companies and their growth patterns as they attempted to unlock the potential growth envisioned by the CEO and supporting management team. While each organization possessed similar desires to achieve their projected results, the actual outcomes I witnessed varied widely. Some started out well enough, full of enthusiasm and confidence only to lose focus and momentum eventually forcing them to a plateau. Others, while starting slow, built steam but failed to push hard enough to create the required breakthrough. What caused these best intentions to disintegrate into disappointing outcomes?

One thing was apparent, each organization subscribed to the same two notions:

  1. The CEO and his/her supporting team “wanted to take the company to next level”, yet they were unaware of what their current level was and therefore couldn’t identify the next one they wanted to achieve.
  2. This same leadership team also declared that “our business is different” and for that reason the hurdles they must conquer to get to the “next” level cannot parallel any other organizations.

What are these levels to which they alluded and was each company truly all that different?

The various levels that the management teams alluded to can be summarized into what I term as The Four Stages of Growth: Start-Up, Initial Growth, Early Growth and Mature 4 stagesGrowth.

After spending thousands of hours with CEOs and their executive teams, you would think that these theoretical differences between one organization and the next each attempting to advance would be crystal clear. This was not the case. Instead five issues creating hurdles to the next growth stage emerged over and over again; People, Processes, Profitability, Personal Leadership and Planning.

This concept is the basis of the GrowthSpeed formula for company growth. At each level of growth, the five hurdles appear in a slightly different form. The company must successfully negotiate and leap over each of these five hurdles to move on to the next level of growth. The inability to make a transition over one of these hurdles forces the envisioned growth to stall at the current level. The company must then repeat the attempt at that hurdle until it is conquered.growthspeed formula

Imagine the thoroughbreds that compete in hunter-jumper competitions. They are confronted with a series of hurdles or gates as they negotiate the course. Each hurdle presents a different type of challenge; some are tall, others wide, several hurdles in sequence, while others require a landing in water. When a hurdle is not completed it may be due to a horse and rider which fail to attempt a hurdle and when part of it is hit, it is not counted as complete. The horse and rider are penalized and in some cases they must attempt the hurdle again.

As I mentioned, these hurdles show up in different forms at each growth stage. The Start-Up level is characterized by the desire to launch a new idea or concept into a viable commercial venture. This can be the emergence of a new company, the distinction of a new operating division and/or the development of a new product or service offering. The focus is on survival. The predominant activity is proving the concept by generating sales revenue. Finding a customer becomes paramount. This phase is often characterized by the founding team exclaiming, “we got the business, now what do we do?”

During the Start-Up stage, the People Hurdle is focused on creating assistance for the founder. The Process Hurdle is focused on identification and documentation of effective processes to provide clarity for new team members that join the organization in the future. The Profitability Hurdle in this stage is focused on staying afloat as the new venture attempts to sustain itself. This often requires outside funding, capital infusion or income sources from the owner. The Personal Leadership Hurdle places the founding leaders each in the role of the Champion. The leaders must be the Champion for the business, the concept and the value customers will receive. The Planning Hurdle represents the need for a business plan that can effectively articulate the value proposition and the opportunities associated with the new venture. This document will be the looking glass through which prospective investors, partners, customers and employees will determine whether they see themselves as part of this company’s future.

Each one of these hurdles represents a critical juncture for the organization. If they are not successfully negotiated and conquered, the company must repeat the attempt until the hurdle is crossed or risk their possible demise.

As a company navigates their way through the stages, each of the five hurdles is clearly present, but manifested in different ways. As you enter the next stage, not only do you need to recognize their new appearance, your arsenal to conquer them will also likely change. Think of the garden enthusiast who desires to make an empty patch of land into a vibrant and bizperson plantingbountiful vegetable garden. First they must plant the seeds and during their start-up growth, snails appear. By using the latest and greatest repellent, the gardener kills the snails. As the seeds continue their growth and the garden begins to flourish, crabgrass appears. It doesn’t look like a snail, it doesn’t act like a snail same but it is a hurdle nonetheless. The gardener can’t use the snail repellent this time; crabgrass is its own animal and requires a different solution. You get the point.

Regardless of the size of your business, or the type of business you are in – your desire to advance through the four stages is most likely present. And therefore, so is the inevitable emergence of the five hurdles. Take a look around, what growth level are you at right now? How are the hurdles expressed in your organization? Most importantly, what level do you want to be at and how can the GrowthSpeed formula get you over those hurdles?

A client company launching a new line of business faced these hurdles recently. While successfully negotiating several hurdles, two presented obstacles. The founder/CEO was still in the role of Champion and hadn’t transitioned to Leader. He found it difficult to recruit, retain and develop new salespeople because “no one knew the business like he did.” The organization also lacked clarity in the identification and reliable application of its processes. What symptoms did the organization possess to reach this diagnosis?

First, It was obvious the company was growing, yet employees felt they were working harder and accomplishing less. There was significant time wasted on re-doing tasks and explaining unsatisfactory work which was blamed on inadequate processes. Second, virtually all new business development was still being accomplished by the founder/CEO. This put the organization at risk of being totally dependent on one person for growth.

As a result of this diagnosis, new strategic plans were developed including key objectives for developing new revenue growth by recruiting and developing additional sales professionals. An operational plan was documented to improve effectiveness of existing processes while redesigning others. The key to these changes and the subsequent growth acceleration was person holding cloud over treethe application of the GrowthSpeed formula to identify the obstacles to growth and then implement the plans to address them.

Every organization I have worked with has been confronted by these hurdles as they navigated their own desired course of growth. Their ability to identify and subsequently conquer the hurdles is what truly differentiated them from each other after all. If you would like to identify your current stage of growth and what might be holding you back, contact Jim Canfield at 858-449-4207 or

Jim Canfield is the CEO of Renaissance Executive Forums, a world leading membership organization for company CEOs and business owners. He enjoys the opportunity to provide programs, mentorship and inspired connections that develop CEOs and management teams, to drive bottom line business results and enhance overall quality of life. His focus throughout all that he does centers on supporting and inspiring business leaders who are committed to growth and achievement. He has worked with inspiring clients that include small-to-medium size organizations and incredible thought-leaders such as Tony Hsieh from, Chip Conley, author of “Peak,” and founder of JDV Hotels and more. His years of coaching and working closely with CEOs and their teams has been extremely rewarding and has over 5,000 hours of coaching and worked with more than 300 CEOs. His approach brings a unique blend of extensive experience in leadership theory coupled with practical real-world experience building several companies. Providing clarity and insight into the unique leadership roles and responsibilities of CEOs, business owners, senior executives and managers, he is able to make moving to the next level a reality. Jim can be reached at 858-449-4207 or Contributing Author for this article: Kristy Cornell.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, & our website:

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to

5 Steps to Grow Your Business

By Marc Emmer

[dropcaps type=”circle” color=”” background=””]M[/dropcaps]any business owners and staff members have been conditioned to accept meager business results after two years of stagnation. It may be time to approach 2011 and the shifting business cycle with a new paradigm. For some of us, it is time to charge the hill.

Here are 5 steps that will enable growth next year and beyond:

1. Eliminate self limiting beliefs, and set higher expectations

In 1980, a raggedy group of US players did the unthinkable; they beat the big bad Soviets, and won Olympic gold. They didn’t win on talent, the Soviets were clearly a superior hockey team. The only reason they won was because they thought they could.MC900437519[1]

Business owners and staff have faced a crisis of confidence. The economy has soured moods and expectations. In the wake of an extreme economic downturn, our employees are paying attention to how we have shown up. If you budget for marginal revenue gains, you will get modest results. It is the responsibility of the entrepreneur to reframe the discussion, and reestablish the value proposition and motivate people to move the business forward.

There are always naysayers, the negative people who see the worst in things and drag your organization down. Be wary of salespeople who settle for excuses for why they can’t sell your product or service. For those people who are unable to drink the Kool Aid, and who do not share your vision, it is time to wish them the best of luck in their next position, wherever that might be.

The business owner or staff member must come to the office every day with a positive state of mind, and passion for growing the business. I am not advocating for reckless investment, I am suggesting that we set the bar higher and expect achievement. Make certain that your incentives plan is in alignment with your corporate growth objectives.

The entrepreneur also has the right to demand a profit. I work with many double digit EBITDA businesses (as a percentage of sales), and the sweat equity of the business owner should be worth something. If your business is break even or losing money, it is incumbent upon you to make changes.

2. Seek out new opportunities

It is well accepted that the best place to grow your business is in segments that are directly adjacent to the ones you already occupy. Growing in adjacent segments requires less man on jet trailR&D investment, and provides the least risk in achieving market leadership.

The marketer should always look for ways to exploit the organization’s core competency in a new market. Honda’s core competency is efficient engines, and when the company expanded, its brand was quickly recognized and accepted in the marine, jet engine, power equipment and motorcycle markets. These markets were natural extensions of what the company did best. When Pepsi bought Aquafina and entered the water market, they were able to leverage their existing distribution channel to build sales.

As a general rule, an organization should seek to achieve some scale (30% market share or more) before entering new markets. However, every company is different, and often business owners are weary of client concentration or industry concentration risk, which is a critical decision point for potential buyers of a business in the future.

However, such gambits can be very costly, and the entrepreneur needs to do his (or her) homework. It is important to understand a new market in depth. In Jim Collins’ latest book “How the Mighty Fall”, he describes how many of the “Good to Great” companies had an “undisciplined pursuit of more” and ultimately failed. Growth into new markets requires a business plan, capital and patience. As John Wooden used to say, “be quick, but don’t be in a hurry.”

3. Maintain price integrity through consultative selling

Your managerial courage is under attack. Do you have the will to defend your brand’s pricing integrity? If you do not value your own products and services, no one else will. Those who are unwavering in the improvement of their products will be in a position to charge prices that will earn a profit.

Examples abound of brands that have been able to defend their position. In the Apple stores, most prices aren’t even posted, because Apple has made such a powerful emotional connection with people, price is an afterthought. The average Apple computer sells for about double that of the average PC, even in a hyper-competitive marketplace.

In response to such thinking, I often hear, we are not Apple, we are a small company. Hogwash! Pricing is about attitude and value, not about size. In our firm, we have 3 employees, but regularly charge rates similar to those of attorneys and CPA’s because of the quality of the services we provide, but also because we are highly consultative in our approach.

The marketplace has a heightened awareness of pricing (that is a polite way of saying we have become “frugal”). Salesman have been conditioned to discount. It is their drug, and the business owner must show leadership in commanding a minimal margin threshold. Every business owner should be very active in the trade, at conferences, industry events and especially on sales calls.

Consultative selling is about listening and this is a time to listen carefully to customers whose budgets have been cut and headcounts have been slashed. They are looking to outsource work, services, or even just administration of details that they no longer have bandwidth to manage.

4. Provide exceptional experiences

McDonald’s founder Ray Kroc once said “we are not in the hamburger business; we are in the show business”. Like Netflix movement to digital downloads, the marketer must perpetually; prod, question and reinvent the value of the services provided and enrich the customer experience. Clearly experiential brands such as Cirque du Soleil command a price hands holding peoplepremium, and the marketer should continuously seek out methods for creating emotional value for the buyer.

More and more, emerging technologies seem to capture the imagination of customers or lead to greater efficiency that drives advantage. I recently bought a Lexus hybrid, offering 35 miles to the gallon. Toyota has been deeply troubled of late, but eventually its hybrid technology (offered in the Toyota brand, Prius) will be a dominating technology, which is currently unmatched by other automakers. Don’t only think about disruptive innovation, but also think about disruptive experiences.

5. Invest in retention

The number one rule of customer relationship management is to invest more heavily in retaining customers you already have than in acquiring new ones. Providing deep discounts to new customers is misguided. Customers who switch on price have little loyalty. Such investment is better directed towards customers who have proven their worth (usually measured in lifetime value), and who pay full price, pay on time and are easy to work with.

This is particularly important in times of rampant discounting as acquisition costs can be higher. In lieu of cutting pricing, marketers should seek out opportunities to treat preferred customers like VIPs. Consider expanding your service bundle for these clients and extending them perks such as faster cycle times or preferred customer service phone lines.

In my travels, I regularly stay at Hyatt and Marriot hotels in instances when clients control my itinerary. They are very good brands, and if asked, I would say I am satisfied. But I am loyal to Hilton. I will travel 15 miles or more to stay at a Hilton property because as a Gold VIP, I am treated like…

All businesses should regularly measure customer loyalty (a higher standard than satisfaction). Asking customers about their experiences is a self-fulfilling prophecy, it reinforces for the client that you care deeply about their business and you want to learn more about how you can improve.

Final thoughts

According to Dana Borowka, CEO of Lighthouse Consulting Services, LLC (, hiring the right people is key to future growth. If you would like additional information on hiring, please click here to see an article on this subject.

Marc Emmer is an author, speaker and consultant recognized as a thought leader throughout North America as an expert in strategic planning. The release of Marc’s book, Intended Consequences was covered by Forbes, CNBC and Fox Business. Before his consulting career, Marc spent over 20 years in the food business, in operations, marketing and business development. Marc founded Optimize Inc., a California based consulting firm in 2002. Optimize has an impressive client list including public companies such as CB Richard Ellis, Rio Tinto, and Superior International and mid market companies in a diverse range of industries including financial services, health care, technology and energy. Marc has personally facilitated over 100 strategy sessions. Learn more about Marc at He can be reached at

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014 This information contained in this article is not meant to be a substitute for professional counseling.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, & our website:

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to

Economic Slowdown?

By Robert Hougland

[dropcaps type=”circle” color=”” background=””]W[/dropcaps]hile some form of economic slowdown may seem possible at times, it is important to occasionally prepare for it. In 2007, the experts varied widely in their opinions of an economic slowdown. A few responsible opinions bear consideration. Interviewed on the KNX Business Hour, Jack Kyser, Chief Economist of the Los Angeles Economic piecharts graphsDevelopment Corporation retained his 40% possibility of recession prediction with the qualifier that Orange County would suffer more than other SoCal counties. On the same program, John Augustine, Chief Investment Officer at Fifth-Third Asset Management pointed out that two precursors to past recessions are not in place: there were no excess inventories in other than housing, and all segments of the export market were healthy. In testifying before a Congressional committee, Fed Chief Ben Bernanke expressed support for a prompt economic stimulus package, but maintained his position that 2008 would not see a recession.

Regardless of who was eventually proven right or wrong, we need to be ready for slow economic growth. Economic slowdown can mean that some marketplaces and the revenue they generate are going to grow more slowly than normal…and some may even decline for a while. Permit me to share some thoughts from what I’ve seen about small businesses during down economic times over the last 30 years. You may well have thought of all of these, but it might be worthwhile to refresh your thinking.

You’re an entity: What happens in your marketplace and/or what happens to any or all of your competitors does not necessarily have to happen to you in similar proportion. When revenues taper off or even drop dramatically, every company in that market is not impacted identically. You have opportunities to influence how a slowdown affects you. Focus on your opportunities, not your limitations.

Think wide, not narrow: Consider the value of chipping away at expenses and costs a little bit here and there rather than focusing on one or a few areas to slash. No one likes to lay off staff, but make sure you’ve explored the alternatives of reduced hours, cutting overtime, etc. And, consider the long-term implications of layoffs: you may be able to do some reorganization to permanently trim some fat. Just make sure your job descriptions are based on functions which need to be performed, not the particular array of skills of specific employees. Finally, don’t overlook profitability. If you can trim your profit expectations for a few months, you can relieve some of the cost-cutting pressure.

Don’t stop marketing: The biggest and most common mistake I’ve seen owners/CEOs make is to slash or even trash their marketing/sales/advertising/promotion budget(s) when revenue drops off. Of course, you gotta do what you gotta do. But, consider these things: 1) With very rare exceptions, your revenue stream isn’t going to totally dry up…there will be continued demand to some reduced degree for what you sell. 2) As your customers become more selective in their purchases of goods and services and as they seek to consolidate vendors, you have the chance to distinguish yourself even more from your competitors. 3) Its likely that some or possibly most of your competitors are going to chop their marketing budgets, and the ones who do are working from a position of weakness while those who don’t from a position of strength. 4) Numerous studies have shown that its more difficult for a customer to stop ordering or to cancel an order from a vendor with whom they have good rapport than one who’s just another supplier. 5) Perhaps most important, if you can gain some market share during a downturn, that will translate to better market share and profitability when the market rebounds. So, what can you do?

good times mkt sharebad times mkt shareback to good times mkt share

Maintain contact with your customers to the greatest degree possible. Talk to your large customers personally. Listen to their problems and see if you can offer any kind of help.

Be creative: Are there ways where you can “package” your products together to make them more attractive? Are there any premiums or freebies you could offer on the short-term? (Many industries, particularly the auto industry, have found that the most effective is something that improves the usefulness or enjoyment of the basic purchase). Can you give some kind of short-term financial break in return for a commitment to keep buying from you? Look at your vendors the same way. What can they do to help you to reduce inventories or costs?

Keep the blinders off: You never know what might be important to a customer or prospect and what will influence them to continue buying from you. Some examples from my experience:

A client was seeking to take a $400K/yr contract with an aircraft manufacturer away from a competitor. Knowing the prospect was looking to cut costs, we interviewed the buyer and learned they had problems with internal distribution of large, palletized shipments among their many buildings over several square miles. We met with the receiving supervisor and several shop foremen, then returned to the receiving dock with an idea: custom, rather than bulk, palletizing with additional color-coded labels to identify destinations, backed up with availability of one of our knowledgeable people to answer questions. The supervisor agreed to write a letter to the buyer on our behalf, and we got and kept the contract without having to underbid our competitor. Our cost was about one manday of blue collar time per month and we maintained a normal profit margin.

A company providing technical consulting services to a major insurance company was notified of the necessity to look at cutting back or even cancelling the contract because of new budget constraints. We put ourselves in the client’s shoes and took the initiative to present a new proposal. By separating the observation and information-gathering portions of the project from the analysis and documentation portions, we could have our high-hourly-rate professionals work at home instead of client-provided offices and reduce their on-premise time to alternate weeks and even every third week. Since we didn’t have adequate office space, all the consultants agreed to work at home and we would reimburse them for telephone expenses (this was pre-internet). Finally, we prioritized some of the steps in the project, identifying those which could be obeyed without interfering with goals, and we told the client we’d pick up the long-distance bills. The client said the reduced billable hours along with reduced transportation, lodging, per diem, etc. didn’t quite match his economy goal, but it was so close that he agreed to the changes and found the dollars he needed else where. Eventually, the hours that were postponed were made up.

My client who sold primarily to the hospitality industry was devastated by the impact of 9-11, and we rushed to see what we could do to salvage as much business as possible has hotel and restaurant business dropped dramatically. By learning some of the changes our customers were going to make, we were able to determine that earlier daily deliveries would be helpful. Since we used our own fleet, it was easy to schedule trucks to leave the plant at 2AM instead of 3AM to accommodate our customers’ new needs, and we implemented it within 24 hours. By taking a critical look at our internal operation, we were able to offer acceptance of orders until 4PM for next day delivery instead of 2PM. Several large accounts actually consolidated their business with us because we were there promptly with two workable solutions, even though the total volume lagged for a while.

Keep your presence out there: As much as possible, maintain your advertising and promotion activities so your name remains in the minds of your customers and prospects. I’ve lamented with a number of CEOs over the years who, after the fact, realized that pulling in their horns in caused them to lose market share during a tough period and that they faced an uphill battle to try to win those customers back. One client thought long and hard about not attending a trade show which they hadn’t missed in years. Deciding finally to go, he discovered that both of his major competitors backed out and he came back with plenty of business cards of people for follow-up.

Bottom line: Your customers will continue to buy something from someone. You need to be aggressive and show interest to keep them in your corner, although in reduced volumes for a while. When the economy bounces back, if you’re the supplier or provider who helped that customer through his rough time, you’re in the perfect position to reap the benefits in man carrying piea robust market. You could rebound with an increased market share.

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Bob Hougland holds a BA in Psychology and is a Vietnam vet with almost 5 years’ USAF active duty. He began his business career in the fast-track executive development program at AT&T, but sought out smaller employers. For most of a decade, he held sales management positions at L.A. radio stations KIIS, 93KHJ, and K-EARTH101, and created a successful marketing consulting division for RKO General Radio. With both sales management and marketing management awards under his belt, he founded RGH MARKETING. He now is the Owner/Consultant at SuperTemp where he continues his career of helping good organizations be better, new ones to get off the ground and bringing some back from the brink of failure. He is a strategist who sees opportunities where others see problems and bring lessons learned in a wide range of industries to bear on new situations. He can be reached at 803-774-7777 or or you can read his blog at

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