Smart Business Magazine, Dec 2012

22 Smart Business St Louis December 2012 Click or scan to read more columns by Michael Feuer DONT CONFUSE DOING THE RIGHT THING WITH KNOWING THE RIGHT THING TO DO How to make the right decisions at the right time Companies typically want to do whats right for those they serve Key priorities should be customers investors employees and the communities in which the company is located but not necessarily always in this order The dilemma however is that many times short term decisions can prove to be long term problems that cause more pain than the initial gain Its difficult to make all constituents happy every time As a result management must prioritize decisions with a clear understanding that each action has ramifications which could manifest themselves in the short intermediate or long term Seldom does a single decision serve all of the same timelines There are no easy answers and anyone who has spent even a short amount of time running a business has already learned this fact of life So whats a leader to do Its a sure bet that investors want a better return employees want more money and benefits and customers want better quality products higher levels of service and oh yes lower prices This simply all goes with the territory and is a part of the game The problem can be that most times its hard to give without taking something away from someone else Here are a couple of examples Take the case of deciding to improve employee compensation packages Ask the auto companies what happened when they added a multitude of perks over the years as demanded by the unions The auto titans thought they didnt have much choice lest they run the risk of alienating their gigantic workforces History has shown us the ramifications of their actions as the majority of these manufacturers came close to going belly up which would have resulted in huge job losses and an economic tsunami Basic math caused the problems The prices charged for cars could not cover all of the legacy costs that accrued over the years much like barnacles building up on the bottom of a ship to the point where the ship could sink from the weight Hindsight is 20 20 and of course the auto companies should have been more circumspect about creating benefit packages that could not be sustained Yes the employees received an increase to their standard of living for a time anyway but at the end of the day a company cannot spend more than it takes in and stay in business for long Investors in public companies can present a different set of problems because they can have divergent objectives There are the buy and hold investors albeit a shrinking breed who understand that for a company to have long term success it must invest in the present to build for the future The term immediate gratification is not in their lexicon theyre in it for the long haul Another type of investor might know or care little about a companys future other than whether its earnings per share beat Wall Street estimates These investors buy low and sell high sometimes flipping the stock in hours or days And actually both types are doing whats right for them The issue becomes how to serve the needs and goals of both groups When a company effectively articulates its strategy it tends to attract the right type of investors who are buying in for the right reason This will avoid enticing the wrong investors who turn hostile because they want something that the company wont deliver When interviewing and before hiring employees it is imperative that candidates know where the company wants to go and how it plans to get there Many times this means telling the prospective newbie that the short term compensation and benefits may not be as good as the competitors down the street but in the longer term the company anticipates being able to significantly enhance employee packages with the objective of eventually outmatching the best payers because of the investments in equipment being made today The key to satisfying employees present and prospective investors et al is communicating the types of decisions a company will make over a specific period of time Communication from the get go is integral to the rules of engagement and can alleviate huge problems that can otherwise lead to dissatisfaction Knowing what is right for your company based on your stated plan that has been well communicated will help ensure that you do the right thing at the right time for the right reasons MICHAEL FEUER co founded OfficeMax in 1988 starting with one store and 20000 of his own money During a 16 year span Feuer as CEO grew the company to almost 1000 stores worldwide with annual sales of approximately 5 billion before selling this retail giant for almost 15 billion in December 2003 In 2010 Feuer launched another retail concept Max Wellness a first of its kind chain featuring more than 7000 products for head to toe care Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business marketing and building entrepreneurial enterprises The Benevolent Dictator a book by Feuer that chronicles his step by step strategy to build business and create wealth published by John Wiley Sons is now available Reach him with comments at mfeuer@ max wellness com Tips From the Top Michael Feuer