Ten Reasons Why You Should Keep Investing, When You Say "I Can't Afford It"

by Tom "Bald Dog" Varjan, Organisational Provocateur

Look at most service firms' web sites and what do you see? Seemingly amazing firms with mighty visions, breathtaking missions pontificating about achievements of epic proportions.
Then when you look at the real operation of many of those same firms, you often find that what you read on their web sites were empty platitudes.

Where do these firms actually fall short? There are several areas, but probably one of the biggest problems is around investing in their own futures. Sad but true. The world has been becoming more and more short-term oriented. Both individuals and businesses are seeking instant gratification.

According to a survey, some 95% of business owners know what to do, but they fail to take action because of the risk it takes to act on their visions. They often rather suffer from inhaling the decaying stench of the status quo than stepping up to a higher level of excellence and performance where they could breathe pure air, simply because they are scared of falling from that higher level.

So, instead of looking at how to win and how to achieve amazing goals, attract great clients, passionate talents and exciting projects, they try to play it safe just not to lose.

So, what holds firms back from investing in themselves during tough times? Some issues are...

Prostitute thinking - "Unless we make money right away, we do not invest in anything". "Either a marketing campaign or a new Mercedes. I take the Mercedes, thank you very very much. Everything else can wait." I have seen so many firms where all senior partners would take all the new money out of the firm to spend it on new homes, cars, boats, etc. All in all, the firm's growth was not important enough. The same partners told their people they had to freeze their salaries because the firm did poorly financially. Hm.

Managerial ego - "If a consultant points out the obvious, I lose face. It means there is a better system, process, etc. than the one I have created. No. I am the best around here." So, cantankerous curmudgeon managers rather lose money, their firms' prestige, reputation, respect than swallowing their false pride and get the problem solved once and for all. They don not care about what is right, but who is right. And they feel they must always be right regardless of the consequences.

Fear - "What if the new ideas do not work for us". Look at it this way. You have been doing your best and created whatever you have. And whichever way you shake or stir chicken shit, you cannot turn it into chicken salad. The only way to step up is by looking at your problems from a different perspective. It is scary, but you have no option. The status quo does not work any more. "We don't take any action until every T is crossed and every I is dotted. Every single step of the plan must be carefully scrutinised, analysed, timed and budgeted. Once we agree on those, we'll see what we can do." And this is exactly what losers do. They try to budget and analyse themselves into excellence. However, it does not work without action, and yes, every time you take action, there is some risk involved. That is, you must have the courage to act on your vision and strategy.

Lack of Focus – Many firms are so busy fiddling around with non-core activities that often lose sight of what their own businesses are all about. According to the Outsourcing Institute, companies are losing 38 cents on every dollar by engaging in "miscellaneous" non-core activities. This lack of focus reduces overall morale, and makes people question their managers' competency levels. They try to climb hard and fast, but if management leans the ladder of progress against the wrong wall, at the end of the climb all the people will fall into the bottomless abyss of organisational doom.

It is (consultant, marketing campaign, skill building workshop, etc.) too expensive - It depends. If you have a cheap shitty vision to build an also-ran mediocre firm, then even a used condom seems to be too expensive. I bet GM and BMW use different consultants, marketing strategies and ways of treating their people and customers. They also happen to be at opposite ends of the perceived value continuum. It takes money to make money, and your return is a logical reflection of your investment. But the investment must come first. And the investment is the reflection of how much you believe in what you do. Hint: Musicians bet on their talents every time they go to studio and pay studio time upfront. They have no guarantee that the CD will sell. But they have strong belief in what they do.

Believe it when I see it - "We invest once we have some money to spare". Well, if your parents had waited having you until they have all the money, there is a good chance that you would not be reading this article.

Lack of self worth and belief - Yes. If you do not believe you deserve more than you have right now, who else do you expect to believe in you? This reason never gets said, but this is the number one reason that cripples action in any direction. Sadly, most service firms are operated the wrong way. They are bottom line managed. The firm fails to fulfil a great vision, but simply makes money to pay the bills and make payroll. But when in a professional service firm the role of care (in my view the number one role of a service business) is replaced with the pursuit of the quick buck, the firm becomes just another bunch of greedy and couldn't-care-less mercenaries.

So, You Had Better to Keep Investing, Otherwise...

...your marketing will suffer, which will have a downward spiral effect on the perception you create in your marketplace. Your firm will drop like the proverbial rock in your industry's pecking order. And let's face it, most prospects have no intention to do business with losers.

...your existing clients will immediately notice that something is terribly wrong around your service, and get concerned that you cannot serve them well any longer. At this point they may just pack up and move to a competitor whose services they perceive to be more reliable and of higher quality. Clients also know that many, especially large, professional service businesses are notorious for their internal inefficiencies and try to compensate for their own defects with inflated hourly fees, sending an army of junior people on you at senior rates and conjuring up unnecessary tasks and deliverables. Also, perceptions do not come alone. Just consider this: Most criminals are also perceived as drug addicts, heavy smokers and heavy drinkers. Many thieves are also perceived as deceivers and killers.

...your investors will smell the rat and get worried too. They understand investing, and know that reducing investments in some vital areas of your business will exponentially reduce their return. With that in mind, they will know they have less and less chance to ever recover their money, so they may demand it back right away and run very fast and very far. Hm. Am I still remembering the dot com crash?

...you almost certainly lose your competitive edge. In tough times all competitors are likely to cut back, and that is why you should not. While they are running for cover and crying for their mothers, you should bring out the heavy artillery and dramatically reorganise the battlefield in your favour. And you had better do it fast because as soon as the market recovers, that is, "everyone can afford it", you can become very very dead indeed.

...you are basically castrating your firm and turn it into a proverbial impotent husband: The role is filled but there but there is no ability to perform. You are curtailing your firm in several dimensions, that is, even a small cut-back can have seriously severe effects on your future. Hint: Do you know firms that are small but try to create the perception of a large firm through truckload of subcontractors and temporary staff? Their margins are usually less than paper-thin. It is the same as standing up against a united army with a bunch of mercenaries. Remember, Alexander the Great's united army of 50,000 beat the crap out of Darius's army of 1 million mercenaries. In their futile attempt firms often outsource the wrong things. I have met several struggling accounting, law and IT firms with full-time webmasters and graphic artists on the payroll, but with no person in charge of marketing or client acquisition because they "can't afford it".

...your firm's natural attraction disappears. The quality of talents, new clients and alliances go right down. Is it surprising. Hey, even rats leave sinking ships. (It amazes me that those little critters always know where to go for safety)

...your proactivity vanishes and becomes a knee-jerk type reactivity to the smallest changes in the market place. Hint: When the Bundesbank sneezes in Germany, the whole Europe needs extensive hospital treatment.

...you lose the momentum you have gained over the years of operation. The same happens to your business what happens to an aeroplane whose flying speed drops under a critical minimum. Just as the plane falls off the sky, your business falls off the proverbial sky of the business world and hits the ground with an eardrum-shattering thud. As the saying goes, it is easier to patch up a leak on a damaged ship than raising it from the bottom of the ocean.

...your existing prospects, clients and your whole target market notice your penny-pinching operations, they will run screaming for help, knowing that in the middle of that penny-pinching policy corners will be cut and inferior service will be provided. There are lots of small indicators for your firm's struggle.

...you are in this business to make a hell of a difference. You must believe in yourself and your vision. You must believe that with some objective and unbiased support (from an objective outsider) and a new perspective (doing it differently) you can reach your goals more quickly and with more certainty with fewer bumps and bruises collected along the way. As the Chinese say, "You cannot cross the chasm with small steps, only with big leaps of faith". The question is whether you have the courage to actually live up to your vision or just get pontificate about it, while calculating how much you can save by hiring the cheapest webdesigner in town.

Summary

Well, there are no guarantees in this life besides taxes and death. As a tax payer, I can vouch for the former, and as a former butcher, grave digger and embalmer I can vouch for the latter. But, cheer up, folks. The situation may be crappy but definitely not hopeless.

Unless you do something different from what you have been doing so far, you are guaranteed to achieve nothing different. You end up spinning your wheels throwing more sand into your own eyes.

However, I cannot tell you what you can achieve when you get inspired by your vision.

I cannot tell you what you can achieve when you start believing in your strategy.

I cannot tell you what you can achieve when you have the courage to start seriously acting upon your belief.

But I can tell you exactly what happens if you fail to get inspired, to believe and to act in spite of all the fear and worry you may have. Nothing! Not a sausage. The question is whether or not you could be proud of that when some day you grandkids ask you about your life. Are you going to have to tell them that you were a chickenshit conformist with no guts to act on your belief.

Imagine a farmer after losing his crop to a hell of a storm. He can either invest his money and buy new seeds for the new crop next year, or he can just slowly live off the money he has right now. If he buys seeds now, next year he has a chance to harvest and feed his family well. If he does not invest in seeds, next year he will have neither money nor harvest, and he and his family are certain to starve to death. That can be a rather sticky end of life.

It also reminds me of George Harrison's comments on the idea of reuniting the a Beatles: "Why should I do that? Scraping around at the bottom of the barrel of the past is not my idea of having a good time".

I hope it is not yours either.

Copyright Tom "Bald Dog" Varjan. All rights reserved. You are free to use this article in whole or in part. One favour though: Can I ask you to you include complete attribution, including a live website link. Also, can you please let me know where you plan to publish the article.

The attribution: This article was written by Organisational Provocateur, Tom "Bald Dog" Varjan of Dynamic Innovations Squad, a firm specialising in helping consulting firms to sell their expertise at the highest margins. Get Tom's free Practice Management Black Paper when you sign up for his monthly newsletter, Commando Consulting: Lessons And Practices From The Ultimate Professional Service Firm, The Military. Visit Tom's website at http://www.di-squad.com.

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