Achieving Business Excellence with John Spence

The Last 50 Yards

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It is a phenomenon I have seen play out numerous times in my career and every time it happens I am completely befuddled. Great companies, with super products, and very talented people, making rookie mistakes that completely undermine the very things they were working so hard to achieve. Let me tell you a story and give you an example to show you what I mean.

The picture I see in my head is an Indy car race team that has spent an entire year building the absolutely finest car on the track.  Engineers and mechanics, drivers and technicians, pit crew and support staff have all labored for months on end. Every aspect of the car is top-notch. Every bolt, wire and component is the finest available. It is a multi-million dollar technical marvel.

On race day they tear up the track. From the starting flag until the last lap they hold a commanding lead. Then suddenly in the last turn, just as the driver enters the final straight away to the checked flag something goes terribly wrong.  The engine revs, rumbles, screams and blows.  No smoke, no flames… just dead. The car rolls to a stop just 50 yards from the finish line as competitors go whizzing by to take the flag and race away from them.

Later in the pit they discover what happened. Somewhere along the decision chain it was decided that they could save 5 bucks by putting in the cheapest type of motor oil. A year of work and planning and millions of  dollars wasted… to save a few dollars on what was considered to be a minor aspect of the race.

Now you might look at this analogy and feel that I have grossly exaggerated the situation. I am afraid not.  Here is a real example with real dollars.

A number of years ago I was involved in a project to build a cutting-edge “eco-friendly” resort  in the middle of a massive national forest in Florida.  The owner had procured a location that sat in the center of a 68,000 acre wildlife reserve. There was a 100-year-old lodge with a giant stone fireplace so big that you stand in it. The property was dotted with ancient granddaddy oaks draped in Spanish moss. In this idyllic setting we built 14 cracker-style cabins that literally set a new world-standard for sustainable construction. Every element was the best and “greenest” available. We even had local artisan hand craft much of the furniture and all of the furnishings and art. We had a horse stable, canoe rides, bid watching and, because there were no city lights for miles around, some of the best star gazing in the country.

When the project was complete it had taken 23 months and cost a little more than $3,000,000 dollars to get the eco-resort ready for guests. It was then that the owner turned to me and said, “We need to get the word out, let the world know what we have done here and start getting some people in those cabins.” Next he spoke the line I will never forget, “I have set aside $15,000 for the marketing, so let’s make some stuff happen.”

Yikes! A three million dollar plus project for a resort in the middle of nowhere and he wants to tell the world for $15,000?  I tried to explain that a good, professional photo shoot would alone cost $10,000. A well-designed brochure at least $20,000. A fist-rate website, that was commensurate with the quality of the property and would be appealing to the type of up-scale guests he wanted to attract, no less than $12,000. That was without placing a single ad. I tried to explain as delicately as I could that there was really no way to effectively market the property for less than $100,000 and even that would be a challenge.  His reply? “John, I spent all of the money building the place, all I have left for marketing is $15,000 – so that is all you have to work with.”

After several more discussions and no forward movement I regretfully resigned from the project because I felt that there was no possible way for me to successfully deliver an effective marketing program with the budget available. They found someone else to do the work, bought a few billboards, sent out a few fliers and the place languished for more than a year with only 10% occupancy. Within 14 months they were bankrupt and closed.

The point of my two stories? Take a look at what you do. Does any of this resonate with how you approach any part of your business?  Do you spend big in one area, only to cost cut in another area that could come back to haunt you later? Are you putting massive time and effort into a project, only to sabotage it in the last 50 yards by not paying attention to the details and allowing mediocrity to slip in? I know you don’t want to believe you could let this happen, but I challenge you to hold up a mirror and take a serious look. Hopefully you will be very happy with what you see, but if not, at least I have helped you find a few places to make some important improvements.

Take good care — here is to a fantastic 2008!    John

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Comments

  1. Julia Thompson says:

    Hi John,

    Nice article………and sad story as I would have liked to go to this great place! However, wouldn’t you have agreed in advance as to the business plan for the facility with such a large amount invested? This would mean that all of the critical partners and pieces would be reviewed and approved prior to sinking a ton of money into the venture?

    PS……..check your blog for typos, I found at least two :o) I can’t let Mrs. Partin, my English teacher down. Also, my writing isn’t perfect either. Looking forward to working with you again!!

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