Growth in hard times: surviving
Growth in hard times： surviving——and thriving——amidst chaos isn't impossible. The secret lies in corporate culture， a contrarian attitude， the art of anticipation， and change strategies. （Perspectives： Strategy）。
by Hal F. Rosenbluth， Diane McFerrin Peters
My company， Rosenbluth International， is growing by over $1 million a day， and yet we weren't supposed to even be here. We're supposed to be out of business —— because of war， the aftermath of September 11， commission cuts in our industry the threat of online commerce， and repeated hits to the economy. We're in the travel business. We're supposed to be on our way out of business， not leading the charge into the future.
I am constantly asked the secret to our success in consistently growing， even through the most troubled times and conditions. In just the past 10 years， we've grown from $1.5 billion to $6 billion， and yet this has been one of the most trying decades in our company's 110year history.
For me， personally， the secret is to hone my ability to recognize my own shortcomings and weaknesses， and surround myself with great people to shore those up. This encourages them to do the same， which constantly brings the right talent into the company， overcoming any weaknesses we may have and adding strength upon strength.
For our company， the secret to growth in impossible times is four-fold： our culture， our contrarian attitude， the art of anticipation， and change strategies. Let's talk a bit about each.
OUR CULTURE
We keep our culture sacred —— its among our highest corporate priorities —— because we know the power it holds. When people look forward to coming to work in the morning， it shows in what they do. We have built a culture of trust， which has carried us through the toughest of times. That's when our people dig deep to make the kind of sacrifices that will keep us strong when others around us are falling. In good times， our people aren't tempted by a lucrative job market， they stay with us and give us their all， because this isn't a stop on their career climb， it's a way of life. We have the lowest turnover and the highest customer retention rate in our industry.
We're in a tough business， corporate travel. The first decision companies make during lean times is to cut back on travel. Just before September 11， many clients had cut their travel by nearly 60 percent in order to stem corporate losses. Post-September 11 conditions should have been insurmountable to us， as they were to so many of our competitors.
What did we do？ Our people pulled together and did whatever it took to keep us afloat. They secured a record amount of new business for the future. Leaders took a pay freeze； senior leaders took a 20 percent pay cut； there were no bonuses. Next came an across-the-board salary reduction and a hiring freeze. Finally， we had no choice but to furlough people （with the understanding that we would bring every associate back as soon as possible）。
What happened next was amazing. Leaders asked to be furloughed rather than their people. Scores of people volunteered to work for free to save others jobs. People offered to cut back on their hours to help keep associates. Many asked to give their jobs to others in greater need.
Because of the heroic efforts of our people， we bounced back. Pay cuts were rescinded， and eventually we were able to bring back our furloughed friends. This was only possible because of our culture.
OUR CONTRARIAN ATTITUDE
We are contrarians by nature. Our corporate mascot is the salmon， because it likes to swim upstream. One example was a journey we began in 1988 that caused many to think we'd lost our minds. That odyssey has been one of the best moves our company has ever made.
Responding to a severe drought in the upper Midwest， our company sought to find the area hardest hit， and was led to a little farm town in North Dakota （Linton， population 1，000）。 To help provide income so families could keep their farms， we set up shop in an older tractor implement building， brought computers and trainers， and hired 40 part-time people to help with some data entry work.
In just the first few weeks， we began to see a pattern of quality work， with no absenteeism and no turnover， high morale， and lower operating costs. Soon， we began to send all types of work there. After six weeks， we made the office permanent.
Today， we have 200 full-time people in that office， and have since opened offices in four additional North Dakota communities， one in rural Kentucky and one in Ireland. What began as a mission to help people in need became an invaluable resource —— a competitive weapon we would have missed had we not been contrarian by nature.
THE ART OF ANTICIPATION
By anticipating what could harm our company， we have tried to create those same businesses （or participate in them） before they become a reality. We have constantly evolved as a company to morph into the leading player in the fields we think will be critical.
For example， we are now the leading customer service entity for the online travel industry We provide the backbone of customer service for Orbitz， Travelocity， and a host of others. In 2000， we formed a new line business we call Up/ Stream， which provides end-to-end customer service and customer relationship management for other companies.
We looked at things we're good at and existing assets. We looked at the threats and the needs， and launched our business. It was crucial in our ability to sustain the hits 2001 and 2002 brought. But time is a luxury not often afforded when preparing for the future.
In the midst of the chaos caused by September 11， we disciplined ourselves to practice the art of anticipation and jumped on the development of a global security suite. Our clients called upon us to provide critical information on their corporate travelers' location and safety. We did， but the information was in a variety of places and took hours to obtain. We worked quickly to take it to a two-second process， which we unveiled in February 2002.
Our Web-based tools include e-mail alerts on breaking news around the world， a real-time look at travelers itineraries， updates on weather and political conditions， and automated U.S. Embassy registration. An events database provides information on historical events with anniversaries that may cause higher risk for travel. This information is all tied to the traveler's itinerary， so they only get what's relevant to them.
CHANGE STRATEGIES
Everything we implement has a built-in change strategy. We don't announce them， but we always have them ready. We know exactly what the next step will be at any given moment， and we begin to act well in advance. Many predicted intermediaries would vanish as a result of technology， but we find that being an intermediary gives us a 360-degree view. Long ago， we made a shift from intermediary to infomediary， enabling us to take advantage of our place in the middle. One recent example is a new market we developed.
More than 13 million small-to-midsize companies in the U.S. comprise 60 percent of the nation's corporate travel spending， and have historically been expected to pay full fare for travel， while larger companies enjoyed negotiated discounts of up to 75 percent. Travel suppliers were simply not equipped to reach that segment of the market.
We used our position in the middle to create a Web-based B2B marketplace called Rosenbluth Exchange， where companies can submit electronic RFPs. Suppliers bid for their business， and negotiate with them on line. The result？ Double digit percentage savings for the companies， access to a new market for the suppliers， and we have secured a pivotal role for ourselves in this important arena.
WHAT'S NEXT？
As we look into the future， the next battlefield is further consolidation of our industry， and Rosenbluth International is ready. We'll be leading it.
Hal F. Rosenbluth and Diane McFerrin Peters are co-authors of The Customer Comes Second： Put Your People First and Watch 'Em Kick Butt （HarperCollins， August， 2002.） Hal Rosenbluth is chairman and CEO of Rosenbluth International， the world's third largest travel management company.
From <The Chief Executive>