Why should executives focus on social networks? If they don't, they will be left in the dust. And why is this especially critical in the new normal business environment? Only the best will thrive! You'll learn why leveraging social networks is vital to success, and you'll take away best practices, results from an executive survey and gain insights into case study examples.
First and foremost, why prioritize? Why should an executive care about social networks? As an executive, your success is equal to your team. It can be as simple as that. As an entrepreneur, business consultant and former Operations executive, I've found that more than 80% of the time, if an executive is repeatedly successful; he/she has an exceptional team.
Building successful teams boils down to leadership and relationships. I've yet to find a successful executive who didn't value relationships. On the other hand, the executives who didn't value relationships eventually trailed off in performance. In essence, those executives with exceptional relationships not only achieve bottom line business results but they also stand out in the crowd with a superb team and a successful career. Developing long-term solid relationships requires a constant focus on building and nurturing your relationship network. Leveraging social networks is a key strategy in achieving this goal.
If social networks and relationships are keys to success, why is it more important in the new normal business environment? To answer that question, let's discuss the new normal business environment. The new normal emerged following the recession of 2008-2009 - an interesting mix of a lackluster recovery and steep customer demands combined with a lack of decision-making and a talent shortage. A tall order for any executive!
I've found that one of my keys to success has been my ability to synthesize trends quickly - and with relevant priorities. Thus, I often search for trends, and if I find a trend that is common across 80% of all of my clients (especially if it arises with different types of businesses, industries and across geographies/globally), I know it's worth taking a second look at those topics. During the new normal, I've found that my clients are facing many common issues. Prior to the recession, making a sale could be as easy as picking up the telephone. Not anymore! Executives are struggling to achieve each percentage of sales growth. For example, in the past, executives saw 3-5% sales growth as horrible performance. Yet since the recession, I've seen executives celebrate over 3-5% sales growth. It's funny how perceptions can change rapidly. We are in a new age, and it's unlikely to go back to the pre-recession days anytime soon. Sales growth is dependent on the consumer. For example, in the United States, around 70% of GDP is based on consumption. And the U.S. is not alone. For example, China has been spending on large infrastructure projects, which increases jobs and drives consumption. It varies from country to country; however, the trend exists. In the United States, the largest generation in history (the baby boomers) is beginning to retire. Undoubtedly, consumption will be impacted.
As the baby boomers retire, it is unlikely they'll spend as much money. For example, there is evidence that people in their 30's and 40's spend considerably more than those in retirement as they raise kids and build their lives. Most retirees do not spend money on diapers, funding college educations, trading up to a larger home to accommodate for additional children, etc. Hopefully, most boomers do not have too many kids at home. However, even if they do, it's unlikely they are supporting the same levels of spending as they did when they were younger. Of course, certain categories of spending will increase as the baby boomers retire - luxury goods, luxury vacations, and those types of expenditures.
However, when most people retire, they cut back on spending and prioritize differently. Thus, it will be a challenge to keep sales levels where they've been as the largest generation in history retires and trails off in spending levels. 3-5% sales growth will continue to be a stellar success in many cases. And since sales growth rates are likely to be weak at best in most industries, driving business and profitability growth will be a challenge. Instead, you have to stand out in the crowd to excel in today's new normal business environment.
In addition to lackluster sales growth, I'm also seeing a trend with my clients in terms of cash - cash remains king. Although most of my clients started off the recession with a true cash crisis, most have significant cash flow reserves post-recession. However, whether they have cash or not, they continue to perceive that they are in a cash crisis. In essence, they are still reluctant to spend money. They may have a stockpile of cash, but they are not sure of what tomorrow will bring and prefer to have a safe haven. They are reluctant to invest significant cash as they believe it could disappear rapidly and want to ensure they do not go back to the doldrums of the recession. To sum it up, cash remains king. In addition to a perceived cash crisis, there is also a crisis of confidence. We are stuck in a fire-fighting mode. When the recession hit, we cut back on costs and became expert problem solvers to survive through the crisis. Now we are stuck!
Since, nothing has come along in terms of significant sales growth or some other savior, we continue to struggle and fight the battle on a daily basis. Since the majority of companies have a leaner staff vs. pre-recession, we also have a less people to fight the daily fires. The bottom line is that we have more to do yet fewer resources are available to make it happen. Thus, getting stuck in survival mode is commonplace. I know from experience that it is easier said than done to dig your way out of it.
To add fuel to the fire, there is a significant trend within my client base and extended network of increasing customer expectations. In essence, customers want more for less - and now! Customers expect shorter lead times; consistently perfect delivery performance, lower prices, additional value and support programs, and higher quality products. In essence, every day, they want more and more, and they want it quicker and quicker. If any of these variables stands out, it is lead-time. For example, in one manufacturing client, if we could deliver 5% faster than the competition, we'd take the business - even if the price was slightly higher (so long as it was in the ballpark). In another mid-market distributor, those suppliers who partnered with the customer to drive down lead times won the business. Time is a luxury no one can afford in the new normal business environment. What can you do to edge out your competition by 1%? How about 5%? We must create a customer service edge and execute better than our competition. There is no room for error. Although it is essential, creating a customer service edge can be a tall order as we have fewer resources, less cash to spend, and critical resources are stuck in firefighting mode.
Last but not least, if this environment wasn't challenging enough, we have a talent shortage. It is actually quite the conundrum. We have high unemployment levels, lots of people looking for jobs, and yet they don't seem to be the people needed. Many of my clients have several openings, and it has been quite challenging to source the required talent. In the new normal business environment, executives are searching for well-rounded generalists - those who have a multitude of skills in many different areas with diverse yet deep experience. It is a critical priority, as executives need talent in order to determine how to successfully increase customer service levels while conserving cash and increasing sales. Execution is no longer enough. Innovation is essential to find ways to past by the competition. Thus, talent is cornerstone to success.