On a recent walk through a canopy of 2,000-year-old trees in Northern California’s Sequoia National Park, I was struck by their strength and resiliency. These towering trees have endured storms, animals, drought, fire and strong winds. Yet, there they stand—even more majestic because of all they have been through. It took about 20 adults in my group to wrap our arms around the trunk of one of the trees.
The resiliency of the Sequoia tree reminds me of how we build durability into our business. It’s amazing to think that these trees started small from a simple seed and grew to stand tall for centuries persevering through the storms. With few exceptions, businesses are the same way. They typically start in a dorm room, garage or basement. Some flourish for centuries, and some don’t make the first decade. Why is that?
As I look back at Marco’s history and our transition from a small typewriter shop, we have had to navigate through many storms. The Great Recession is among our defining moments. The Recession tested our abilities as leaders to refine our business. Anyone can manage during good times. You find out how strong you are during the challenging times.
Here’s what I think are the key components to building a resilient company:
- Healthy balance sheet.
Financial strength and durability extend beyond sales revenue. It requires a healthy balance sheet. For a sales organization like Marco, this took some discipline. We did a good job building our cash reserves and maintaining little or no debt. We weren’t always that way. We had to work at it. With cash in hand, we made some of our best acquisitions during the depths of the Recession in 2008 and 2009. We were able to make moves when others couldn’t and accelerate our growth.
- Focused strategic direction for the future.
Most of our sales revenue used to come from project-based business and operated under the “hunt to eat” mentality. It naturally put a lot of uncertainty in our business. We developed and executed a plan to be among the first to launch and scale a recurring revenue model with Managed Print and Managed IT Services. Today, this is one of the highest growth, most profitable and predictable parts of our business. It gave us an element of resiliency and delivers significant value to our company and our clients.
- Diverse customer base.
I would certainly be disappointed if we lost any of our top clients; however, we would still grow. Having too much concentration on a small group of customers is not a good practice. We could grow in a vertical market quickly, but we know that would make us vulnerable during a storm. Creating a strong customer base includes a good distribution in vertical market, size, geographic location, and product and service type.
- A flexible workforce.
At one point the typewriter was our economic engine. I got my start at Marco selling office furniture. Neither exist today, but we stayed resilient as a company and I’m still here. Most of our employees have held a variety of jobs over the years. They have been retrained and cross-trained. They have been nimble and adapted their skills. We look for employees who are contemporary and open to what the future brings.
Like the Sequoia trees, our businesses need to be durable, flexible and resilient to be successful long-term. When things are at the worst is when leadership needs to be at its best. Be prepared for the unplanned and you’ll more effectively weather the storms.