Does it seem like you are spending most of your time these days defending your company against outside business threats instead of developing growth strategies or operating the business? Since the Great Recession, the country has developed a negative attitude toward business. With the threat of lawsuits, bad business contracts, and government over-regulation, it’s like everyone is looking for a way to blame someone else for their mistakes, lapse in judgment, or bad luck. There are so many people trying to get a free ride that playing defense has become a chief strategy for executives.
This cultural change in large part is because people are hurting financially and the loudest voices scream daily that corporations are evil. The current tone in our nation justifies unethical behavior toward businesses because “we all know they deserve it” and there appears little chance this negative tone will abate anytime soon. Executives must, therefore, adopt a proactive, defense strategy in all areas or be tied up in frivolous lawsuits and an inescapable web of government regulation.
I recently talked with a businessman who does not drug test or background check employees. He honestly admitted that if he were to implement those pre-employment policies, he would lose half of his workers. That is a stunning admission, fraught with danger. Pre-employment standards are used to reduce hiring mistakes, not keep good people from working. Bad employees are a group most likely to look for a free ride--and they seem to know the worker's compensation regulations better than you. A great defense against employment lawsuits and meritless EEOC charges is to adopt high standards in hiring.
The U.S. government is creating another safety regulation every day and adding another OSHA inspector to make sure it is being followed. It can be overwhelming, and many executives don’t prioritize their company’s safety program until an accident or failed OSHA inspection. The health and safety of employees is one of the most important jobs any executive must do, and a company that does not take safety seriously is destined to spend endless time and dollars defending against unscrupulous people who just want a payday. A great defense against frivolous lawsuits from baseless accidents is a strong, enforced safety program.
Government on all levels wants more of your money. Huge debt and an unwillingness to cut spending is pushing government to its next-best source of income—you! If there are any opportunities for fines, penalties, fees, or permits, government will impose them. Executives who take lightly the idea of following government regulations will spend huge amounts of money trying to get government off their backs. With the government, it is all black and white; that gray area that many executives used to visit is gone. If you want to keep the government off your back, a great defense is to know and follow regulations.
The days of doing business with a handshake are also gone. More and more vendors and builders require you to sign contracts to do business, and many executives in our industry fail to recognize that those contracts strongly favor the entities that wrote them. It is amazing how many LBM companies, both small and large, sign contracts that basically abdicate all their legal rights. Pay-when-paid clauses and indemnification stipulations on many contracts put companies in real peril, but the allure of sales are too much for many executives to resist. A great defense to ugly contract disputes is to read and not sign bad contracts.
Companies with great sales offensives can win to a point. However, without a great defense, based on sound operations and procedures, every dime can be lost. In today’s environment, a great defense strategy is essential.