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PUBIISHER EMERITUS David Cutler

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What makes a best-tuh business?

In my own past lives, as regular readers of this column have learned, I was often embarrassed at how some of the businesses I worked for were run, including, sad to say, a couple of businesses where I was the c.e.o.

It is not easy to be a top manager in any size corporation, particularly in our industry right now. We often are led to do things that our board, shareholders, or other top management push on us; pressure to perform is high. But I find more and more that common sense gets thrown out of the window in today's corporations. Very few companies know how to be a bestrun business.

I enjoyed an ad currently being run by Southwest Airlines that shows a cut-out coupon reading, "Don't #$*l7o me over. Accepted only by Southwest Airlines." No checked bag fee, no change fee, no fuel surcharges, no aisle or window seat fees, no phone reservation fee, etc. You get the point. When conditions become dire, some companies make the wrong decisions. (Some never make the right decisions when times are great, either.)

You have to ask yourself who raised their hands at the meeting at one of our largest airlines and agreed to charge a fee for all bags checked in. I can imagine them all clapping like sealsanother $ 1 5-per-passenger yum-yum. Or the airline that decided that they would charge extra for an aisle seat. Or the airline that stopped passing out those ghastly snacks. And, just as I predicted, the airline that has just begun charging $2 a pop for soda.

I understand their current predicament, but these type of decisions are short sighted and just plain dumb. You fool a customer only once; they go elsewhere when they discover that you cheated them by hiding the real cost ofthe ticket.

Best-run businesses understand that customers are at the heart of the process, top of the mind, to be valued and not be at the end of the pipeline. Nickel and diming them is not the way to their heart. I understand only too well the times we are in right now, but I see too many short-sighted decisions that can only over time come back to bite your rear end off and erode hardeamed loyalty with good customers.

In tough times, best-run businesses know how to hunker down but at the same time expand. Yes, you may have to make cuts, but what then? You have still got to find ways to maneuver the company in a positive way to provide a future. That starts with being open to new ideas both from within and outside the company. Indeed best-run companies have the ability to take their leadership position in one market segment or industry and make those same ideas work in a completely different business.

I remember being pulled aside by the owner of one of my employers 20 years ago after I asked a leading trade buyer what ideas he had for our company. "Alan, that was a mistake. We should know our direction and we should be telling them what we will be doing." The one thing I have learned is that at times we become blinded by our own greatness or our own problems. I often learn as much or more from outsiders. The results of my question to the buyer were two new product lines, one of which proved quite successful.

So we need to be open to new ideas from all sources-inside and outside our company, and even outside our industry. I am constantly scanning what others are doing-each month I read some 30 to 40 magazines, of all types. I listen a lot, and I learn as much about what not to do as what to do. I am always trying to find new ways of doing things and hitting industry shifts at the right time. Being insular is one of the greatest barriers to success. However, I would also agree that change for change's sake is also expensive and debilitating to a company's health.

The big winners are those who can see a market before it becomes a market. The ability to see four to five steps ahead is one of the best management skills you can have. Be able to move your company fast and hit the ground running. Be prepared to change course when you hit a crossroad, by monitoring and measuring each step along the way. Simple, but many do not know how to do that.

Today's brutal environment is perhaps the perfect time to take a deep breath and look to see how we might be a best-run business.

Lastly, best-run businesses keep things in perspective. I just returned from Europe, where at $8.50 a gallon, gas prices are double ours. Consider that we pay what equates to about $8 a gallon for that small bottle of water and $1.50 for that 10-oz. coffee. We better get used to it and start doing something about it. The impact of emerging economies such as China and India are only just being felt, and it is perhaps the tip of the iceberg.