Perseverance and optimism.
Those are the two qualities that need to permeate companies and businesses if those enterprises are to survive the current economic crisis, according to Jim Donald, the former Starbucks CEO recently named executive in residence at the University of Washington, Bothell.
In Donald’s opinion, optimism especially seems in short supply at the present time.
“That’s not something I’m hearing from companies today,” Donald said.
Incidentally, if you have had any doubt, Donald said there is no mistaking that the economic crunch publicized in every newspaper, on every newscast and talked about by every government and business leader is very real. He said there can be no misconceptions about the country’s condition in light of massive layoffs and dire earnings reports coming from firms big and small. He talked about a key consumer trend having completely reversed itself in that the general public now is saving money instead of spending it.
“That’s not necessarily a bad thing,” Donald added, but he said that trend is not going to help jumpstart the economy out of its current funk.
Having spent the last year as a consultant and speaker, Donald said he had researched nine major companies that survived and ultimately thrived after struggling through the Great Depression and two World Wars. It was from his study of those firms that he distilled his perseverance and optimism formula.
According to Donald, perseverance goes to taking the long view when making business plans.
“Most companies are in the hunker-down phase right now,” he added. But he said companies need be ready to take advantage of any economic upturn.
In this context, optimism involves avoiding a Chicken Little approach to running a business, according to Donald. He said those successful companies redefined themselves as needed in order to survive, for example moving from manufacturing elevators to manufacturing steel doors. Donald also talked about “top down” financial cuts and keeping an up-to-date employee base.
On the level of personal finances, Donald first noted he is in the same position as everyone else. In other words, his retirement plan and stock portfolio have taken the same hits others’ almost certainly did.
“The first thing to remember is, we’ll get out of this, we’ll get through this,” Donald said. He added a key to personal survival may be to keep debt to a minimum. But Donald also talked about “picking it up a bit” in terms of putting more effort into one’s business or job. He said ultimately the extra effort will pay dividends.
Like some others, Donald believes the Puget Sound region is faring better than most areas of the country and will continue to do so despite problems at big-name companies such as Boeing, Microsoft and Donald’s own former employer, Starbucks. He said local economists are actually seeing growth in such areas as education and health services.
Further, while he admitted the local real-estate market has seen better days, Donald said that market is suffering through one of the least precipitous declines in the country.
During a phone interview for this story, Donald didn’t talk much about his days at Starbucks, where he served as CEO from 2004 to January 2008. After taking the company to record financial growth, sales slumped in 2007 and Donald was asked to step down.
Donald first joined Starbucks in 2002. He admits he took a somewhat different path to success in business, a path he said makes his position at UW-Bothell a good fit. Donald is the product of a community college, as are, he said, 80 percent of UW-Bothell’s current students. He did go on to the University of Southern Florida but never finished, working full-time and moving around a lot. Donald said he didn’t earn his four-year degree (in business, from a long-distance learning company) until 15 years after he graduated from high school.
In Donald’s case, the lack of a degree hardly mattered. He worked his way up to top positions at well-known companies ranging from Safeway to Wal-Mart.
While at UW-Bothell, Donald said he will spend time mentoring students and lecturing on such topics as “It’s OK to Steal (Market Share),” and, according to information supplied by the school, “What They Didn’t Teach You in Business School.”
Donald said he plans on bringing in guest speakers from current CEOs to an Olympic athlete, the latter to touch on the “discipline of success.”