In the mid-1990s, Howard Mann owned a $150 million freight logistics company with six U.S. offices, 40 employees, and 35 agents around the world. And he was miserable—fighting bank pressure, staff problems, and slow-paying clients. The difficult turnaround and 2000 sale of that company spurred Mann to start a consulting business and write a book, Your Business Brickyard. His $750,000 consultancy, Brickyard Partners of Portland, Ore., tries to get small business owners back to basics so they can have fun running their companies again. Mann spoke recently to Smart Answers columnist Karen E. Klein; edited excerpts of their conversation follow.
Karen E. Klein: You went through a tough slog turning around your company after the recession of the early '90s. How did that motivate you?
Howard Mann: I learned so much about things I think every business owner should be thinking about. I wanted to help them break out of the bad cycles that make running a business a real grind. For the vast majority of business owners, it's a pretty good outcome if they have a business that makes plenty of profit, allows the business owners to live the life they want, and allows them to keep working with the people who strive alongside them to make the business great.
That's a tremendous outcome, but we've lost that because it's not as sexy as being the owner of the next $100 million mega-business. We've made business about an all-or-nothing sale or an IPO, even though that's a very small percentage of the outcomes and that's not what every business owner wants or really needs.
What's the biggest problem you see in your clients' companies?
Companies forget to figure out what they do better than everyone else and instead they try to match their offerings with what their competitors are offering. In my company, it always made us feel we were playing catch-up or we were somehow defending ourselves, instead of staking out compelling territory of our own that would reach a smaller niche.
It seems like many small companies are almost obsessed with their large competitors.
Almost every business that I encounter is consumed by what their competitors are doing. They're scouring the Internet to see news items from their competitors. Somehow we've all decided that our competitors have the answers and all we have to do is keep up with them.
That's a hard cycle to break. You just keep adding services because you think, "If my competitor is offering them, I have to offer them." You drive home at night feeling that there's so much to do and nothing's getting done and we're just treading water. That mentality—that there's a competitor out there that's looking to take food out of your mouth—doesn't lead to a healthy outcome. What you need to do is take all that energy and focus it on your ideal customers.
Do you recommend more focused targeting in general?
Yes. It became very clear to us that there was a group of clients who valued us, and that we enjoyed working with the most. They were more interested in service than in price. So we began to focus in on time-sensitive, high-value merchandise. That idea allowed us to have some real clarity about the market that we should be serving and move away from our culture being about doing more and more and grinding more out of our staff. Instead, it became more about doing fun things that honored the service culture we had.
Where do companies go wrong on that point?
They take on a bunch of clients because they think they have to, and they jump into large bids without realizing the impact it's going to have on their business and their culture. Those things make your business stray away from what's really true about it, and little by little it becomes a carbon copy of your competitors. After that, you're only competing on price.
Why did you decide to emphasize the basics in your book?
I wanted to get across to other CEOs that it's not about the latest fad, or trying to be so cutting-edge. Instead, it turns out, success is about getting the basics right. If you invest time and money in business basics, they will never fail you.
The other thing I want to emphasize is that business owners cannot lose their sense of purpose. People care about why you do what you do, before they care about what you do. Yet I rarely find a business owner who can tell me why they're doing what they do. They know what they do and they've spent time figuring out their elevator pitch, but very few figure out why they do it. So business owners need to have some sense of passion and purpose behind what they do and they have to get the basics right.