Economist and management consultant Dr. David Goldsmith addressed the opening session of IAMC’s Spring 2009 Professional Forum in Asheville, N.C., with a message that was at the same time upbeat and cautionary. He said, “We (the U.S.) will get an up-tick in 2010.” On the other hand, he warned that the country’s unemployment rate likely will be elevated even after that year.

“Don’t Accept All of My Ideas”
Goldsmith’s insights came at a rapid-fire pace. Looking at the United States’ position in the global economy, he observed that we have been exceptionally competitive, overall. “Over the past decade, in business we’ve been playing offense; today, however we’re on defense,” he said. He saw this as an unusual role for American business, and not one we want to retain. He warned, “Business today is playing too much defense. You can’t win playing defense. The offense wins games.”

His presentation was much like that of college professor. And he had an academic’s attitude toward what he was teaching. He told the audience, “Don’t accept all of my ideas, but keep an open mind.”

David Goldsmith addresses the Asheville Forum’s opening general session

Best Victories Sometimes Very Close
Winning by a nose is a very good outcome, while losing by a nose is bad, noted Goldsmith. But the numeric difference between the two outcomes can be quite small. Winning by a nose is as good as winning by a mile.

What’s the secret to winning close contests? The presenter suggested that it’s first taking everything you can get, and then winning more of the difficult-to-get business than your competition.

He gave two examples. First, he told the story of a Baxter Pharmaceuticals manager who used this technique to reach 108 percent of his sales budget. Then, he gave an anecdote about a hotel manager who won his annual bonus by beating his budget by a mere $169.

A Clever Strategy Can Transform the Business
Many business people don’t appreciate the differences between strategy, tactics and execution, proposed Goldsmith. Strategy, he said, is “where you’re going.” Tactics have to do with “how you plan to get there.” And execution involves the “blocking and tackling” needed to get something done.

He gave two instances of strategies in action. First, he told how distribution center developer ProLogis sold many of its properties in order to get on strong, recession-proof footing. Second, he related the story of how one university transformed the role of its student book store. Most of these, Goldsmith said, make about a 10 percent margin on book sales, not much for a small retail operation. The stores typically sell clothing and novelties to boost the margin. However, he said one store that he’s aware of changed its business model by deciding to “radically support the professors’ teaching, instead of selling t-shirts.”

“You Are Paid to Think.”
Goldsmith spent some time talking about the corporate real estate (CRE) executive’s role in the company. He strongly encouraged them to “learn about the rest of their organizations, cross-tool and contribute broadly in their firms.”

Forum attendees listening to management consultant David Goldsmith

As an example, the management consultant asked the audience, “Do you help your tenants improve their businesses?” He responded rhetorically, “You should, because your success depends on theirs.”

Downturns Often Boost Corporate Productivity
Employment tends to be a lagging business cycle indicator. On the way up, companies resist hiring until they have no choice but to do so. On the way down, they resist furloughing employees even as sales begin to soften.

Goldsmith explained another employment characteristic that many of the attendees may not have considered. He asked, “As a CEO, if you have to lay off 1,000 of your employees, will you call back 1,000 when demand recovers?” In response to his own question, he said, “No, you’ll bring back fewer because in the meantime your productivity will have risen.”

He noted that this effect holds true economy-wide. Even though output goes up, the labor needed to produce it becomes less with each economic expansion.

“Change Is Not Happening Faster than in the past.”
Toward the end of his talk, Goldsmith scoffed at the idea that business change is happening faster with each passing year. He said this is a myth: it’s not true. He illustrated the point with a simple chart.

Although most of the management concepts he presented are high level, David Goldsmith worked hard to help his audience think about how they can be applied on the job; he gave concrete examples. He recommended his listeners take the initiative, question new ideas, struggle for performance gains when the going gets hard, and think and act strategically.

That’s how you edge out the competition; winning by a nose is as good as winning by a mile.