Stay ready
Bad economic times will come. It’s inevitable, so you should make plans and prepare before your profit-and-loss statements are setting off alarms.
Many businesses fall into a comfortable groove when times are good. They don’t want to upset a good thing, so the company focus stays on maintaining the status quo. The trouble is, once you can no longer maintain that status quo, problems can quickly snowball into something much bigger.
Brandon says that risk needs to be managed closely in difficult times. If you’re throwing Hail Mary passes to try and dig your company out of financial trouble, you’ve got it backward.
“The best time to be taking risks and making big changes in your organization is when conditions are good,” he says. “What I’ve always advocated is that when business conditions are good, that is the best time to be tough, make changes and take risks to ensure that your business is as effective and efficient as possible.”
Brandon has spurred rounds of consolidation and head count reduction at Domino’s, even when the company’s financial data said it wasn’t necessary. Those steps have helped Domino’s stay financially strong through the economy’s slump.
“I’ve had people internally who have looked at me and said, ‘Dave, things are going so well, why do we need to do this?’” Brandon says. “My response is that, one day, we’ll be glad we did this. One of the big reasons that Domino’s has weathered the storm as well as we have is we were more prepared than some other companies. We haven’t had to do huge layoffs and huge changes in benefit plans or shut down facilities.”
The key to staying lean in good times boils down to one word: discipline. Take the same mentality to your business finances as you do to your personal finances.
“The mistake that businesses are making is really no different from the mistake that a lot of families make,” Brandon says. “Times are good, so it’s easy to spend more and run up your credit cards. You become less disciplined when times are good.
“That’s why I believe, whether it’s managing your personal affairs or leading an organization, you should never get lulled into a feeling that because times are good, they’re always going to be that way. You have to discipline yourself for the down cycle and gear your spending and decision-making around the idea that it’s going to come. When it does, you’ll be fine because you’ve prepared for it.”
How to reach: Domino’s Pizza Inc., (734) 930-3030 or www.dominos.com
