published Tuesday, April 6th, 2010

Riddell: We need maniacs in business today


by John Riddell Jr.

The March Madness basketball tournament has just ended, the Masters golf tournament is coming up and baseball, our national pastime, now is in swing.

There always is an optimism that comes with this time of the calendar year, and this year is no exception. While many might not feel exactly giddy over future prospects, a vast majority definitely feel less pessimistic.

Not surprisingly, conversations with "glass half-full" entrepreneurs ring with a positive buoyancy characteristic of folks who have dodged a bullet and know it. Yet these conversations also now include a dose of realism that might have been lacking in the past.

Perhaps the first and most important component of this realism is that future success and benefits are not guaranteed to any of us.

As the Great Recession caught many riding a perceived escalator of never ending success, this simple awareness breeds contempt for the status quo.

Staying ahead of the curve is the only strategy for sustainable success, and nowhere is this better manifested that in creating unique revenue opportunities.

From product applications to geography to industries, an almost maniacal focus on revenue growth is understood to be the single best antidote to the specter of a double dip.

Additionally, many small-business entrepreneurs are coming to grips with the reality of the market pricing mechanism, their inability to control it and their subsequent need to rely on cost control. As the economy has tightened and competition increased, many businesses sadly have confronted the reality that irrational pricing is a fact of life.

For many frustrated owners, they define irrational pricing as anything that cuts into their anticipated profit margin. What they neglect to consider is that if you are on the verge of going out of business, drastically cutting your price in the short run might be a very rational decision for keeping some cash flowing.

The only insurance anyone has against this type of competition based on the stroke of a pen is a parallel maniacal focus on cost control and reduction. The logic is while you can't control your competitors' pricing, you can control and reduce your costing. Performed successfully, this ultimately puts the pricing option firmly in your pocket.

Finally, many are recognizing that their future success will be directly tied to their ability consistently to create ideas and approaches.

As these new ideas can only come from people, those individuals who position themselves as idea creator/implementers need to be recruited and retained, and the best tool for doing this is an appropriate compensation package. Being prepared to give up a little control in terms of ownership in exchange for securing the idea lifeblood of the organization is an investment more and more entrepreneurial owners are willing to make.

I used the term "maniacal" twice to describe the required attitude and focus on both revenues and costs for continued survival. Now if you can just hire a few other maniacs to spread the craziness around, you might just have the ingredients for sustainable success.

John F. Riddell Jr., director of the Center for Entrepreneurial Growth-Hamilton County, writes every other Tuesday about entrepreneurs and their impact on companies and the marketplace. Submit comments to his attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at business@timesfree press.com.

about John Riddell Jr. ...

John F. Riddell Jr., director of the Center for Entrepreneurial Growth-Hamilton County, writes each Tuesday about entrepreneurs and their impact on companies and the marketplace. Submit comments to his attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at business@timesfreepress.com.

Comments do not represent the opinions of the Chattanooga Times Free Press, nor does it review every comment. Profanities, slurs and libelous remarks are prohibited. For more information you can view our Terms & Conditions and/or Ethics policy.
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