Staying Hot When It’s Not

Jun 25, 2001

This week’s issue of The Zweig Letter is devoted to The Zweig Letter Hot Firm 2001 List. For me, this is what it’s all about— success. I love the Hot Firm focus and putting the spotlight on firms that are making it happen as evidenced by their sustained ability to grow. Plus, no matter what anyone says, committing to growth is really the only option. While profit is extremely important (and more now than ever!), you can’t keep everyone headed down the road with you if that’s all you’re interested in. Growth is a lot more exciting! That said, the business climate is definitely cooling. Pay increases are slowing down. We’re hearing of layoffs in firms that haven’t cut in a long time. The ZWEIG 100 optimism levels, both long-term and short-term, have declined from where they were last year. But this recession or slowdown won’t last. Energy prices will come down as suppliers rush to meet demand. Interest rates are already down. Pricing pressures for labor will decrease. And then everything will slowly start to heat to a boil once again! No matter whether the economy is good or bad, some firms will always do well. Why is that? Two reasons stand out above all others in my observations of these companies: Hot Firms know that gloom and doom talk is for losers. Half of the time, firms talk themselves into trouble. Just because you can’t sell snowballs to Eskimos right now doesn’t mean that there aren’t all kinds of people and organizations with all kinds of needs for what you do. They’re out there. You’ve gotta go out and find them. You can’t let yourself be negative, especially if you are the Big Cheese or one of the Big Cheeses in your firm. You have to project confidence, not negativity. There are plenty of folks out there who are negative. They don’t need any encouragement from you! You have to be the one that sees light at the end of the tunnel. That’s your responsibility as the boss. The firms on The Zweig Letter Hot Firm 2001 List have someone who is a super cheerleader. A cheerleader who points the way. Hot Firms don’t think selling is a dirty word. Most people have forgotten how to sell— they are all “above that.” If we do our marketing properly, the phone will ring, and no one needs to do anything beyond filling out the order form. Sound nice? It can work out this way if you really build a brand name for yourself. Unfortunately, it’s been working out like this for firms that don’t really have brand names. That has resulted in many companies getting confused about what they did on their own versus what a good economy did for them. The end result in those firms is that once the demand is less than the supply, they crumble. No one knows how to pick up the phone and call someone to get work. And if they do know how to do this, there aren’t enough of these people to support a machine that needs as much work as many of the mid-size and larger firms need today. Hot Firms build brand names for themselves in their chosen markets. But they also know their people have to sell in good times and bad, and they don’t get complacent. Optimism and the ability to sell go hand in hand. You end up with more work and a capacity that is 20% to 30% larger than it should be for a firm of your staff size because everyone works harder. That leads to better fees, higher profits, better staff morale, and longer-term ability to turn in good numbers year after year. Originally published 6/25/01

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