This is the first part of a multi-part series of lessons learned from Inc. Magazine’s GrowCo conference. These lessons have been translated and applied to the interior design industry for relevance.

Ram Charan

Dr. Ram Charan, author of Execution and Leadership in the Era of Economic Uncertainty and former Harvard Business School faculty member, gave a thorough and complete explanation of the current economic climate to kick off this year’s Inc. Magazine GrowCo conference. While one hour may not have been much time to explain a labyrinth-like fiasco, there were several important takeaways. To build a good foundation, we must answer the question “What got us here?”

Charan argues that several missteps resulted in the concoction of this downturn soup:

- The Banking Act of 1933 (also referred to as the Glass-Steagall Act), amongst other things, separated commercial and investment banks as a public interest measure. This provision in the act was repealed in November 1999. While the repeal of the Act was well-received at the time, many economists argue that the repeal contributed to the global financial crisis of 2008-2009.

- As an economy, we became overleveraged. For many years, interest rates were close to zero and there was too much liquidity.

- A major risk shift occurred when mortgage companies began bundling loans and selling them instead of keeping the loans in-house. This shifted risk from lenders to investors.

- Rating agencies did not do due diligence to uphold a high level of rating integrity.

Charan however argued that we will not see a depression. He theorized that government agencies are putting appropriate circuit breakers in place to prevent a massive plummet.

As small companies, Charan promoted the following importances:

1. CASH IS KING. Cash is the lifeblood of any business. You must have cash on hand to weather the storm. If you do not have enough cash now, seriously consider opening a line of credit or decreasing costs to increase cash.
2. Grow in the areas that you can generate cash. While long-term goals are important, think about the areas of your business that are actually currently generating revenue. Concentrate on growing these areas.
3. Focus. Don’t try to do too many things. You remember what they say about “Jack of all Trades, Master of None”. Don’t be Jack, be the Master. Focus on the core competencies of your business and grow those areas. Don’t try to do it all yourself.

After the economic refresher course, Charan turned his presentation to our psychology. He encouraged the attendees to keep the dominant psychology and to keep a positive attitude. “Inspire people”, he said.

One of the greatest takeaways from Charan’s presentation will be of utmost importance moving forward.

Don’t succumb to dropping pricing. ADD VALUE.

Think of areas that you can, for little cost, add a great amount of value for your clients. Remember that times will be better. If you have lowered your prices, it is much harder to raise them again.

The final important takeaway from Charan’s presentation was to not be myopic. Pay attention to what your clients want. Are you listening to them? Do they want more dedicated communication and a higher level of service? If so, how can you provide that for them? In your next team meeting, I encourage you to dedicate ten minutes to ask your team, “Did anybody see any change on the outside in the last week?” Look for the game changers.