Back to Basics: Rising Above the Clutter and Staying There

A few weeks ago I had the honor and privilege of guest lecturing an M.B.A. marketing management class at the University of Rochester, Simon School of Business. Professor Nelson, a brilliant expert in the marketing field, kindly invited me to speak earlier this year, and presenting to his students energized me in many ways. Standing in the very room where I was once the note and exam taker fulfilled the deep need to give back. And, after thirty minutes of discussion, I raised the following topic: "What does it mean to be a corporation during a recession?"

The bright students and I discussed people's rituals and how savvy firms today will figure out ways to market products to consumers - products that will enable end-users to continue to behave in manners that are familiar to them, but in more cost-friendly options. Examples include home hair color kits, DVD movie nights and pot-luck dinners. In each option, people still get to participate in events and behaviors that matter to them most - beauty, entertainment and connection.

In recent months, manufacturers are not the only ones targeting the individuals that, ultimately, are responsible for making nervous shareholders happy. Savvy retailers, anticipating conservative shopping patterns, currently offer layaway. The rules of layaway are basic: find an item you love, take it to the service desk, pay what you can for it and once you have paid it in full, it is yours to keep - no credit cards needed. Think of it as a savings account specific for stuff. The question is, with many retailers moving to a Scan Based Trading (consignment) model, during layaway, who really owns the inventory? This must make auditors cringe more than the account receivables on expired gift cards or travel sites that enable transactions, but don't really provide independent services.

Back in the early 90's, while earning my B.A. at DePaul and working full time managing Claire's Stores in Chicago, times were tough. Not as tough and uncertain as today, but, still tough. Every morning, when opening the store and getting it ready for the customers, our district manager Andrea Pape would make the morning chain call. Andrea would call one store manager, provide a list of daily reminders on what will make a difference at the cash register, and that manager would then need to relay the information to the next store manager in the district.

Some of Andrea's reminders included:

• Is the store immaculate? Are the lights working?
  
• Is the store staged for sales? Are all the fixtures, shelves and pegs filled with product, with nothing in the stock room?
• Is the staff wearing its best smile, greeting and helping every customer that walks through the door?
• No one is allowed behind the register counter unless ringing up sales. All sales require a thank you.
  
• Are toys refreshed with new batteries and demonstrated to children and adults?
  
• Is the cash wrap filled with impulse items to drive a bigger transaction?
• Store gate does not go down until the very last customer has left the premises.

At the time, these reminders seemed silly, almost a common sense sanity check. However, looking back now, these Back to Basics worked. They drove sales and kept the shareholders happy.

Of course, the early 90's hadn't yet experienced the inundation of miles, points and other loyalty programs that seduce good citizens into irrational decisions.

Two years ago, due to the business needs of various job positions and other fantastic opportunities, I earned elite status with my airline. And for the next twenty-four months, I perpetuated the status by using a credit card to purchase even more tickets, justifying the trips with accrued credit card points and more miles, all in an effort to stand in a shorter security line at the airport. Earlier this year, it finally hit me: I was flying more just to fly more. And my airline, as many others, no longer has the expedited security line at all times and locations. Perhaps too cost prohibitive to have two agents checking tickets? Perhaps a trade-off to reverse the decision to stop granting a minimum 500 miles per trip (vs. actual miles traveled)? Regardless, the points and miles no longer seem all that seductive, and the recent investment in a house over-rode the need to book another overseas flight.

And speaking of transportation, currently, at this moment, as gas prices continue to fall and no one is reporting on why, six months ago, they rose to nearly triple the price they are at today, people have stopped flying, reduced driving and re-budget every fiscal decision, large and small. The typically cyclical economy patiently waits for the Next Big Thing. Perhaps the new president will encourage confidence - not a spending spike - but statistically significant economic investment - in manufacturing, in services and, most importantly, in entrepreneurial follow-through. In the holy trinity of decision rights, performance measures and rewards, millionaire CEO bailout sends a message of irreversible and irresponsible planning. When Cortez sank his ships, he made it clear that going back was not an option.

At times likes this, pure fiscal Darwinism has to tango with social responsibility. Profit-optimizing capitalists need to court the giving spirits and together generate a new rent-collecting business model, one that will reposition and reconfirm the country as the innovation champion. As my Strategy Professor Matteson once said, "You have to rise above the clutter."

So now the question is, which retailers and manufacturers have the common sense to keep the entire value chain happy? The answer lies in three additional questions:

• Which rituals remain holy?
  
• What behaviors no longer matter?
• What new needs are about to surface? (Think Wayne Gretzky's skating to where the puck is heading vs. where it already was.)
  

A savvy corporation during a recession has to stage itself for register rings. A profitable firm in today's economy may not even, yet, exist. Even Darwin would find that exciting.