IMBC message: Don’t stand stillPosted on Written by Jim Flannery
Marina operators are told to stay nimble, seek out employees with an ‘ownership mentality’
The mood was upbeat, the information exchanges were sharply focused on succeeding in difficult times and if there was a mantra for the International Marina & Boatyard Conference it was, “Be nimble and change with the times.”
“You can be on the right track and still get run over if you’re sitting still,” says Jim Frye, president of the Association of Marina Industries, quoting humorist Will Rogers.
A lot of the emphasis at the Jan. 30-Feb. 1 AMI-run conference in Fort Lauderdale was about getting the lead out, moving forward and running businesses better. There are formulas for success, but they don’t have to be terribly complicated, says business consultant and thinker John Spence, author of “Awesomely Simple: Essential Business Strategies for Turning Ideas into Action.” Spence’s formula for success is (talent + company culture + extreme customer focus) x disciplined execution = success.
Spence says it’s vital to recruit good people to your organization. “It’s all about people, people, people,” he says. “It’s difficult to beat the competition if your competition is beating you in talent.”
Talent can be broken down into three elements: attitude, competence and aptitude. Job applicants may not have a specific competence, but they can be trained to a high level of skill if they have a good attitude and aptitude, he says.
Spence likes to see a company culture that is fun, engages employees and encourages them to enjoy their work. “Your employees should be enjoying work as much as they do taking off work,” he says. A positive company culture can nurture productivity, creativity and passionate commitment. “I want someone with an ownership mentality,” he says.
Extreme customer focus is essential. “The No. 1 factor in increasing the level of highly engaged customers in your business is the level of highly satisfied and engaged employees in your business,” he says. “If you take super-good care of your employees, they will take super-good care of your customers.”
How do you get satisfied customers? Tolerate nothing less than a superior product and customer service, and customer relations. Spence says studies show that one company pushed its level of customer relations up a notch and improved profits 104 percent.
Elements of developing highly satisfied and engaged employees include imparting a vision; having a culture of enthusiasm, commitment and respect; training and development; fair compensation; high standards; good coaching; and empowerment.
You have to listen to and understand your customer — for example, through surveys, focus groups, customer panels, employee feedback and social media. Spence says there’s a “moment of truth” in the relationship you have with every one of your customers when the company either gets everything just right or blows it and the relationship sours. For a restaurant, the we-blew-it moment might be a cockroach running across the table even though the food, service and atmosphere are exquisite. For a boatyard, it could be an overcharge, failing to finish a job on time or putting a ding into a boat.
For a we-did-it right moment to occur, “three, four, five things must be flawless,” he says. “And the reward is substantial. You will have won that customer’s loyalty, and he or she will get the word out: ‘That place is amazing!’ ”
Spence says only 10 to 15 percent of businesses successfully translate their ideas for success into action. “You must effectively execute your plan,” he says.
A 10-year survey of 160 top companies suggests that the four primary practices of a successful company are a sharply focused, clearly communicated and well-understood strategy; flawless operational execution that delivers the value promised; a culture that doesn’t tolerate mediocrity; and a fast, flexible organization that cuts bureaucracy and simplifies work.
Indirectly addressing declining boat registrations — they’ve fallen 700,000, to 12.17 million, since 2005 — Steve Murdoch, a professor of sociology at Rice University, told attendees that every company’s vision should factor in demographics, which “is changing everything” in our society, including our business plans.
By 2040, almost a quarter of Americans will be Hispanic, and for the first time non-Hispanic whites will be a minority of the population — about 47 percent. “[By 2050] there will be more Hispanics in most age groups than non-Hispanic whites,” Murdoch says.
But Hispanics today are a quarter less likely than non-Hispanic whites to be anglers or boaters. That has to change for the marine industry to ride this demographic wave. He says marine companies, like those in most industries, have been slow to develop effective strategies to market products and services to Hispanics — something more than posting a sign saying, “Se habla espanol.”
“The reality of it is, your future success is tied to the Hispanic population,” Murdoch says. In 2050, if Hispanics, Asians and blacks owned boats at the same rate that non-Hispanic whites do today, 20 million more people could own a boat than if ownership rates continue at current levels. “The key to the U.S.’s future is tied to these minority groups,” he says.
Another concern for the industry: declining mean household income between 2000 and 2010 in most age groups for all races and ethnicities. In the 20-24 age group, the mean household income of non-Hispanic whites declined 14.3 percent, Hispanics 21.6 percent and non-Hispanic blacks 21.6 percent. In the 50-55 age group, mean household income fell 8.9 percent among non-Hispanic whites, 4.6 percent among Hispanics and 11.3 percent among non-Hispanic blacks. “The average household is significantly poorer in 2010 than it was in 2000,” Murdoch says.
He notes, too, that there are differences in educational attainment among Americans today. In 2010, 35.3 percent of non-Hispanic whites, 21.2 percent of non-Hispanic blacks and 10.7 percent of Hispanics had earned a bachelor’s degree or better. In Murdoch’s view, if we want to bring more people into the middle class and the boating lifestyle and raise all boats in this economy, income and education levels must go up.
Yet Murdoch points out that there are plenty of Hispanics, blacks, Asians and women — groups that are under-represented in boating — who have the money to buy a boat today. “The main thing is to actively market to them,” he says.
Murdoch says Major League Baseball, the National Football League and the National Basketball Association focus on marketing to young people and to non-Hispanic whites, and the arts, film and music industries do, too. “Yet there is a whole set of industries that are not fully recognizing that their clientele are leaving them. They’re getting older. … It’s hard for us to digest that,” he says.
On the economic front, Maria Dolores Espino, an economist and professor at St. Thomas University in Miami, says one bright spot for 2013 is the recovery of net worth — a family’s assets less its liabilities — in the household sector. She says consumers have been paying down debt and spending cautiously, with the result that household net worth in the third quarter of 2012 ($64.8 trillion) was nearly back to prerecession levels ($66 trillion in 2007).
She says household and business debt is going down, but government debt continues to grow and now is larger than our gross domestic product ($15 trillion vs. about $16.5 trillion). However, she says that if Congress can reduce the national debt by $1.4 trillion through tax increases and/or budget cuts, that could have a stabilizing effect.
“That’s in the ballpark of what both Democrats and Republicans are talking about,” she says. “We have a way to solve the long-term debt problem.”
Although the Federal Reserve still is pursuing an “easy money” policy, she does not think that will generate a lot of inflation because banks aren’t borrowing much and consumer demand is still modest. The year should deliver “steady improvement but nothing to cheer about,” she says. She predicts continued low interest rates and inflation (2.5 percent), a modest growth rate of 3 percent, an unemployment rate of 7.5 percent and personal income growth of perhaps 5 percent.
Emerging markets should show a healthier growth rate (China 8.5 percent, Brazil 4 percent, Peru 6 percent, Mexico 3.5 percent); Europe is likely to remain in recession (Germany 1.4, Spain 0.8, Italy 0.5).
“The U.S. is leading the industrial nations in GDP growth,” she says. “It’s leading the recovery.”
This article originally appeared in the March 2013 issue.