I have often heard our Vistage economists, Brian & Alan Beaulieu say, “the time to invest is late recession, early recovery”. And it is one thing to say this in theory, and quite another to actually have the courage to do it. Not unlike the recommendation to buy more equities when the market is down. While we all understand the “buy low, sell high” adage, natural risk aversion causes many of us to do exactly the opposite.
And yet, the Beaulieu’s advice works. As an example, I had the pleasure of watching Baird & Warner, the 2nd largest real estate company in the Chicagoland area. With two of their top executives as members of the Vistage Advisory Boards I lead, I have a close connection to Baird. And while Baird, like everyone else, made tactical cost saving efforts such as closing offices and increasing efficiencies; at the same time, they were also investing in the future, making capital investments and key hires.
The result: as the real estate industry continues to recover, Baird has earned its unfair share of the market. Outperforming the competition on every key indicator, deals written, deals closed, etc.
When I spoke with Steve Baird, his response was “while everyone else is hunkering down – I took the opportunity to double down”.
Here is Steve’s summary of what it takes to build, and sustain (in his case for 5 generations), a world class company. Food for thought as the current economic cycle matures:
- continuous feedback loop
- commitment /stick to your principles
- time is an asset
- you have to do it for years – not just ride market share up and be really good
- not just a great product – need a great business
- building world class is not building to sell – be clear
- be careful of sacrificing profitability for the sake of more business