Cutting To the Bone

business plan weathering bad economy credit crunch economy layoffs staff reduction

By the time you read this, a new BCS Bowl champ will have been crowned in college football. But as I write this, I'm coming off of a great Florida vs. Florida State University intra-state rivalry football game that this Gator himself was thrilled to watch. Florida Gators, 45; FSU, 15. YES!

So what's that got to do with strategic management? During the game, one TV announcer asked the other, "Which player do you think the Gators could least afford to lose — star quarterback Tim Tebow or star receiver Percy Harvin?"

Frankly, this question could have come up in any game, in any sport — including your own sport of managing a powersports dealership. This is a strategic management question that we all must ask ourselves from time to time. And if there was ever that time, it's now.

We're in the middle of what will likely be a long, protracted economic recession — the second one in the last eight years. It's anyone's guess when we'll come out of it. If you've been facing sales and margin declines in all departments, you've probably already taken steps to weather these storms. If you read my column last month, you are already maximizing your survival opportunity.

But what if, after following the prescribed steps, you're still not comfortable with your current financial situation, yet you're not ready to take the final leap of putting your dealership on the market for sale? In other words, you believe your local market situation will improve faster than the national economy. Or that your dealership is poised to improve regardless of the surrounding market conditions. So your plan right now is to ratchet down your expenses even further without seriously affecting customer service or your ability to attract new customers and maintain current ones. In that process of shrinking expenses to survive until profits improve, you've made the decision to cut more heads. You've already cut some — the fat has been trimmed away — and now you're looking to carve out some muscle. Now what?

In the case of the Florida vs. Florida State game, soon after the announcers considered and discussed that hypothetical question, Percy Harvin, that star receiver, was taken out of the game with a high ankle sprain. So it was no longer a hypothetical question. It was reality. The end of that chapter was that Tim Tebow went on to score more touchdowns and lead his team to victory. Would the result have been the same if the injured-player situation was reversed? We'll never know.

In your dealership, maybe the questionable players have already been eliminated, and let's say one star player has chosen to leave on his own. What now? You still need to cut. But who, and how do you choose? Obviously, no one can answer that question without being in your shoes. But to help, here are the five most critical questions to ask, assuming that your dealership scenario is similar to what we've laid out so far: 1. Who is the single most productive and highest performer in each department? 2. Who has skills or experiences that are simply irreplaceable in a given department? 3. Who are your "utility outfielders" who can play positions in parts, service, prep, housecleaning, sales, or F&I and the parts counter? 4. Who has the youthful energy and initiative to work tirelessly through this process, even if it takes another year of six-days/week, late hours, and delivering bikes to a customer's home without grumbling? (And I'm not referring to chronological age here — some of the most energetic, responsive associates you may have could be senior players who remember the old days and remember what it took to survive and prosper.) 5. Who has the intestinal fortitude, mental toughness and positive attitude to weather the economic storms that may lie ahead? Remember, the fewer customers who do walk into your dealership during these challenging times still want to be treated to a show, in a place that's fun to shop, a place that takes them away from their own daily pressures, and an easy place to hang out when the rest of his/her world is falling apart. Your star players must deliver this promise, day in and day out.

Whichever players fit these gut-checks are the keepers, the final team members who will pull it out with you and be there strong when things turn around. These are the players you can least afford to lose and whom you must reward in tangible and nontangible ways as often as possible. They will give you your best shot at victory.

Clark Vitulli is a Harley-Davidson dealer in St. Augustine, Fla. Contact him via