MANAGER'S JOURNAL
Hawai'i experience brings lessons in surviving economic crisis
By Jeff Bloom and Rob Kay
For nearly 20 years, Hawai'i's economy has teetered between prosperity primed by tourism and real estate booms, and recession prompted by political and economic calamities. The current situation is nothing new. In the immortal words of Delta blues man John Brim, "Tough times is here once more."
The good news is that local managers are resilient. And with good reason. In the last two decades, Hawai'i executives have had more economic lessons to digest than our Mainland counterparts might face in a lifetime.
Recently we spoke to top local managers who have weathered economic storms and come out stronger than ever. Below is some of their collected wisdom:
• Don't bury your head in the sand and hope your problems will sort themselves out. Make a plan and work out your problems with customers and vendors.
• While most Hawai'i managers don't resemble ostriches, it is easy to go day to day without a long-term plan. It requires clear vision to differentiate your company from your competitors. All the people in the organization must understand their role in the vision.
You'll need to re-evaluate and focus on core strategies and come up with a plan that details how you will operate in both up and down cycles. Know what you'll do if sales fall 5, 10, 30 or even 50 percent, then stick to those plans. Look carefully at your overhead and eliminate the flab without cutting through the muscle.
Scott Bradley, managing director of Coldwell Banker Pacific Properties, advises turning overhead into a strategic advantage. You don't have to solve all your problems on your own. No one can. You'll want to explain to others who can offer help. Talk to your vendors, customers and bankers and get the best information you can. Look at all your costs and all the people you do business with. Work with them and make them partners in the success of your business.
• Above all, keep up morale and lead by example. Let your staff know what's in store and remain close to them.
As Dave Heenan, chairman of the board of trustees for the Estate of James Campbell and former dean of the University of Hawai'i business school, said, if you are going to reduce staff, tell people up front about your plans. You'll need to reassure remaining employees that you intend to keep them so they aren't waiting for the next shoe to drop.
The key, Heenan says, is to be honest about what to expect. If you do trim the work force, they will be working harder to make up for those who were let go, and you'll need everyone's cooperation. You also may have to ask people to take temporary pay cuts. Naturally, you should lead by example; not doing so would smack of hypocrisy.
If you're planning to solicit help from organized labor or government, and you're not sharing in the pain, chances are you're not going to get much support. Heenan suggests organizing more company get-togethers, coffee klatches and the like. You have to engender a spirit of "We're all in this together."
• Stay close to your customers — don't compromise on service. Try to avoid making knee-jerk decisions you might regret later.
Connie Lau, CEO of American Savings Bank, lives by this ethos and encourages managers to "take the pulse of your customers." She practices what she preaches by giving middle managers and loan officers autonomy, because "they're in touch with customers and are in the best position to know what's happening. If a client with a great track record is having problems repaying a loan, we may need to make adjustments that end up being a win-win for both the customer and our bank."
Lau also encourages local managers to think out of the box and avoid knee-jerk reactions. For example, cutting expenses needlessly may make sense for the short term, but hurt in the future. She cites her own company, in the middle of upgrading its technology infrastructure. Despite the huge capital outlay, she knows the move will make her organization more productive and competitive in the future.
Doing something radical without thinking out the consequences — such as letting go of a large number of employees — might backfire someday. The key is to attract and retain the best people.
Jeff Bloom, former SBA Small Business Person of the year, is the founder of CTA, a computer education/consulting firm based in Honolulu. Rob Kay is a Honolulu-based public relations practitioner who specializes in technology.
