By Scott Harris
Although it’s a controversial notion to some, most of those who manage our parklands have accepted the idea that forest fires can be good. This idea has even moved beyond letting natural fires continue to burn. We actually have a policy, Hazard Reduction Burning, of starting controlled fires. The theory — and it seems to play out — is that while fires are initially destructive, they are ultimately healthier for the area they burn. The fires destroy choking undergrowth, allowing for new and accelerated growth. In the long-term, the land, while temporarily scarred, is healthier and more vibrant.
I share this because almost a year ago, my firm was hit with a type of business “fire.” We lost our largest client. This client represented more than 20 percent of our total business and had been a constant source of revenue and comfort for about five years. Without warning, we were given one-day notice that we were being let go, so it was a bit of a shock to our psyche and our company. They had brought in a new CEO, which is usually a yellow — if not red — flag for any business relationship. And of course, in the back of your mind, you always know that you can lose a client and, in theory, you should always be prepared.
I immediately called our management team together to plan our reaction and our next move. There was no panic, but there was certainly concern. After determining that we had the resources to fight through this without having to make any drastic changes, we let the staff know. The reactions ranged from surprised to disappointed to relieved — the latter in particular when we assured the team that there was no need for layoffs.
However, the aftermath, the new growth, has been fantastic. The first half of this year has already been more profitable than any previous full year. In analyzing why, we came up with a number of reasons.
First, we discovered — and yes, we should have known all along — that this particular client was our least profitable client. Rates were so low and demands on our time were so high that we only ever managed to simply break even.
Frankly, the comfort of the revenue masked the lack of profitability, and we didn’t look at it closely enough.
Second, losing this client allowed us to bring in new clients who have been both refreshing and profitable. Adding new clients in new industries with new challenges has been energizing for our team.
This brings me to my third, and perhaps most important, point: the impact this “fire” has had on our team. This loss had the potential to lower staff morale if they focused on the fire and not the potential. Instead, it served as an electric shock to the entire team’s creativity, renewing our energy and enthusiasm. While I hate to think we grew complacent (we work hard not to), this loss sharpened everyone’s desire to work well and to work together.
I have opened the kimono here (and publicly acknowledged a few mea culpas) because I believe it can benefit others in our business community. I understand that many of the lessons here fall into the “duh” category.
At the same time, those are the lessons that are so often, and so easily, overlooked. We were fortunate that we not only survived, but prospered. The company is stronger, the staff is better and we are more profitable.
And while reacting to a natural fire — literally or in business — is required, perhaps it is time to see if you need a controlled burn. Take another look at your client roster; analyze them for profitability and overall impact on your company. It might be time to let one or two go and see what happens with the new growth.
• Scott Harris owns Westlake Village-based public relations and marketing firm Mustang Marketing. Contact him at [email protected]