Peace Through Strength

“Speak softly and carry a big stick.”  An approach to international relations made famous by Teddy Roosevelt.  Few would disagree with the wisdom of the advice. But there is a great difference between an obviously keen insight or recommendation as to what should be done versus actually taking the actions to carry out the policy.

Not surprisingly, the same is true in business.  Think about the PE investor who is taking care to manage portfolio companies. Strength can take several forms, but so very often, companies sacrifice ‘strength’ for ‘expediency.’  For instance, financial strength.  It can be so easy (and appealing) to over-leverage the company with debt – in an effort to boost returns.  But, when the economy turns downwards, the weakness is revealed.  It’s a double whammy.  The company’s revenues and cash flow take a hit and the same time that interest rates spark up

Very much like financial strength, there is a strength that can be built up in the customer base.  It is a truism that we should all be ‘investing’ in our customers – i.e. strengthening our customer relationships. Yet, it’s so easy (and again so appealing) to inch prices upwards, to let investments in customer service, and other investments that impact our customers’ experience, slide and deteriorate.  Then, just when you need these relationships the most – when the company is under attack from a competitor, you find yourself vulnerable.  Yes, ‘peace through strength’ is easy to advise, but in practice, harder to carry out.

And, of course, your employees – the critical members of your team.  Both the executive leadership as well as the folks in the trenches who do the heavy lifting day after day.  The same elements apply.  Easy to overlook strengthening the loyalty and ‘esprit de corps’ of these relationships, yet here too, when competitors and others ‘knock on the door’ with an intent to poach these valuable team members, will you have made the necessary investments?  Or will you have taken your eye off the ball, possibly focusing excessively on output, working and stretching the team too hard, possibly undercompensating them?  All in the quest for immediate gain – while weakening the overall strength of the company. 

Especially at this moment, when there is so much uncertainty in the world – the political risk of geopolitics, the volatility in the economy and more, it seems like a particularly important time to take a pause, step back and ask yourself: What can I be doing to invest in strengthening my position?  As can readily be seen on the world stage, as well as our experience in business – if you fail to strengthen your position in advance, by the time you are under attack, it will be too late.