In October 2008, Blackman Kallick, a Chicago-based accounting firm, surveyed around 300 of their clients – most of which are small to midsized, longstanding, privately held firms – on their outlook on cutting costs and the state of the economy. The firm released the findings, which contain some surprises, in November 2008. In this interview their Director of Strategic Services, David Spitulnik, discusses some of these, as well as what they’re hearing from their clients since this survey was released.
How do the findings of your recent survey reflect the concerns of small firms vs. large firms?
After the survey was released, we received calls and emails asking why our survey didn’t seem to represent the gloom and doom in the newspapers. I think one of the reasons we didn’t see so much negativity is because most of our clients are middle market businesses that have been around for many years, if not generations. They’ve got core management teams in place that have risen to crises in both hard and soft markets, and when they get hit with the early effects of the recession, well, it was definitely a tough moment, but they’re not throwing in the towel by any means. They buckle down and see what they can do about it.
The closely held business is a different beast than the large public company. The people who are running the former are focused on thinking about where they want to be and how they get there, and they can directly influence the eventual outcome. Because of their size, their ownership structure and their culture, they’re a little more nimble than some of the larger players who are out there saying, “Our stock is down. We’ve got to lay off 25 percent of our workforce.”
What are your clients telling you about where they see the risks and the opportunities in this economy?
What we hear from a lot of the CEOs we talk to is that they’re looking at their lines of credit, which might be reduced, and saying, “How am I going to manage in this environment?” Sometimes they have to make some dramatic decisions, but they’re really not making the case for a large round of layoffs because that’s not a forward-looking strategy. They know that their 50-year-old business will be a 50-year-old business period if they do that. They’re looking ahead three to five years and using this down economy to focus on training for future growth, or fixing their processes so more top line money goes to the bottom line. They know that a year from now or 18 months from now, they’ll be glad they used this time to cross some of the tactical items off their “to do” list. They know this will help them come out on the other side stronger.
Forward-looking companies also see a lot of opportunity in this down market. They’re trying to take advantage of it by increasing their market share or deepening their relationships with present customers. And I don’t think there’s been a better time for opportunistic acquisitions of companies in the last 15 to 20 years than right now. You still need a cushion of safety, of course, but many companies do have the cash and credit available to take advantage of today’s exceptional opportunities.
Talk about what you’ve seen from survey respondents or your clients about what specifically they’re doing to instill healthier cultures to solidify their productivity.
We are seeing more V-level and directors asking for strategic advice than we used to. People are looking for game-changing ideas they can bring to their businesses, because they feel they owe that to their organizations so they can continue to exist and prosper.
And the CEOs are looking not only for strategies, but how best to communicate their strategies to their teams, as well as how to offset fears and keep morale as high as possible. Good news or bad news, the types of folks recognized by Winning Workplaces – the prize winners and those who apply for the awards – understand that communication is a much better answer than not communicating. They understand it’s not a sign of weakness to tell people, “Look, we have some problems, but we’re starting to address them. Here’s how.” Lack of communication fosters gossip. And gossip can quickly become reality.
I understand you plan to run a follow-up to your November survey later this month. Tell us about that.
So much has changed since we launched the first survey in October that we took it out of circulation. We don’t believe it’s a representative snapshot of the world anymore. This is everything from electing a new president and the Dow to the bailouts and the big stock scandals.
We plan to put out a follow-up survey right after the presidential inauguration. And then we’ll publish the results a week or so after that. If anyone wants to take part in this survey or be included when we release the results, they can go to our website and sign up.
We decided to change as little as possible for the follow-up survey, because we wanted the results to reflect the political and economic changes I mentioned, and not be skewed by our questions or how we phrased them.
Stay tuned as we follow up with Blackman Kallick on the results of their January survey.