You’ve Got to Spend Money to Make Money
Looking around at all the headlines and listening the discussions at management meetings, it is obvious why we are in a recession. No one wants to spend any money.
Well, I remember a wise and wealthy Cajun from Louisiana who liked me and shared a lot of his personal philosophies with me. One that I will always remember was…
“You got to Spend Money to Make Money!”
Now this statement is not rocket science, yet, it is sound economic theory if you want to make money in the future. Let me rephrase it to…
“You Have to Invest Today for a Return Tomorrow.”
This came home to me in a big way while I was participating in a business simulation process. It became very obvious that if you wanted to win in the business game, you had to invest in the sales and marketing side of the process. No investment meant no sales, no production, no opportunities of any type – therefore you were looking at bankruptcy.
After that “ah-ha” moment, I took the time to look at my business first and then looked at my client base to see who was succeeding using this strategy.
First, my business review reveled that I was under-investing in the future of the company. Being cheap was not a strategy that worked – yet, my marketing budget was – well – non existent. I made a decision to change that and invested both time and effort into the marketing side of our business – the old man’s discussion ringing in my ears – Voss, you got to spend money to make money! He was a wise old man and his philosophy is more true today than ever before.
Second, I reviewed the habits and several line item budget numbers with key managers. The interesting thing that showed up were the ones that continued to “spend some money to make some money” were doing better that the ones that were not investing in the future.
Sales were improving since they were investing in marketing opportunities to get leads and identify opportunities for growth and they investing in developing their people – even in the down time. Now the interesting fact is several of their competitors were eliminating training and development during the economic downtime which while saving some money – it was not the right thing to do at the moment. With more downtime, it is time to improve the skills and motivation of the staff, especially the sales teams. We know the economy will turn around, yet will all the sales teams be ready to excel or will they be down and outclassed by the sales teams that are prepared to win again?
Now there are several additional insights that my little Cajun friend shared with me over the years, yet, this one really hits home in its impact on both people and organizations. Even in the world of investments – you do have to spend money to make more money. I have never seen an return on investment without an investment being made – first..
My question to you: What investment have you made this year? Managers and Leaders, what investment have you made in your people? (Especially the ones left after layoffs!) These are tough times for sure, yet, it is the very time for leaders and managers to make tough decisions for the future of their organizations and teams. Think about today and then make a decision and move forward rather than continuing to slide backwards with the thundering herd.