Lean times call for some tough calls

   Like navigating a great river, I have felt that I need to constantly keep my eye on the business environment around me, upcoming turbulence, cross currents, the wind. Adjusting the course, speed, and jobs is a continuous process in order to avoid being beached or worse. This process has been particularly important to us recently here at Blue Future.
   The Iraq project last year committed us to certain facilities and personnel changes. When the Corps of Engineers cancelled the contract, as they did with a number of Iraqi contracts, we had to scramble to make up for the changes and losses. I took the opportunity to build our infrastructure, buy test equipment, and get our vehicles and equipment into the best condition possible. Train, train, train.
   But we can’t control everything. The market did not come to us as strongly as we all hoped. It is coming, just at its pace, not ours. The cash was going out, and not as much coming in.
   On a ship, you have your radar as well as visual and sound cues to tell you where you are and what hazards are present or upcoming. In my business, I have anecdotal experience through talking with customers, hearing stories from employees, shippers etc. … but the radar is the accounting system.
   To really tell where I was, and more importantly where I was going, I needed to look at the books and make some projections, scenarios, what-ifs. Plugging all the data for the first year into a spreadsheet and graphing it gave me a clear idea of the upcoming shoals and what I needed to do to avoid them.
   I announced some painful resolutions. We needed to cut costs. The way I chose to proceed was to reduce redundant tasks. We have two branches, one in California, the other here in Bellingham.
   Both branches are doing much the same kind of assembly work, and neither is fully occupied. The logical thing is to consolidate the redundant tasks at one facility and phase out that part of the other branch’s function. This would cut costs (rent, personnel), while maximizing the function of the other. I chose the California branch to scale back. It is a gamble. The California branch is more established with more sales and market awareness. The Bellingham branch is new, less than a year old. The Bellingham branch in its first year had successfully managed a number of projects in different parts of the world.
   California’s sales were local, within 100 miles of the branch. I am gambling on Bellingham’s ability to expand globally with less cost. I decided to close the Santa Rosa office and rent a smaller place in Oakland that would serve as a staging and distribution hub for our sales efforts in California; all marketing and manufacturing would take place in Bellingham.
   Announcing to employees that personnel were going to be laid off and a branch office moved to a new location presents other difficulties. It was important for me to lay it all out so everyone understood what was happening and what steps were necessary to correct our course.
   People don’t like change as a rule. It makes everyone insecure, which can really affect their ability to work well and enthusiastically. On the water, it is important to keep the sails full of wind, strongly pulling. Insecurity and lack of purpose or mission takes the wind right out of everyone’s sails (sales!). Clarity and communications are vital to preventing this.
   I presented the options and the plan, and once everyone saw the plan, the team came together and went to work, even coming up with their own offers of personal initiative to get us where we needed to go.
   We are in the middle of tacking to avoid the shoals. And while we don’t know what the opposite shore will bring for new challenges and hazards, we do know that through vigilance, watching the glass, the radar, and communicating well, we can navigate this river, and get where we need to go.

Humphrey Blackburn is the President and CEO of Blue Future Filters in Bellingham.

Related Stories