Or, how about “recession resistant”? With the Great Recession still visible in the rearview, the topic of how to survive a recession is still a common one on the show. This week’s guests are among the survivors, and what makes them so interesting is their line of business. Boosterthon Fun Run raises money for schools, and during a recession, that’s a tough business to be in.
This week on CEO Exclusive, I’m happy to welcome Boosterthon’s CEO, Chris Carneal, and COO, Stephen Murray. Boosterthon Fun Run is headquartered in Atlanta, and works with approximately 2000 elementary schools in 38 states, representing over 1.5 million students total.
Says Carneal “When you’re raising money for schools, and you’re income dependent upon fundraising, and people can’t pay their mortgage, it’s a very difficult business model.” His goal throughout the downturn was to survive rather than to thrive, but the experience taught him some great leadership lessons that he’s carried with him into the good financial times.
Be a Leader
Boosterthon came close to going out of business more than once, but Carneal led the team forward, with his focus being to “keep the troops on the field.”
Carneal put in extra hours and lots of sky miles visiting team members and offering encouragement and support. He maintained a focus on the future, and led his team to do the same. He says, “If you’re just dealing with trauma, and people are demoralized, then, of course, you’re never going to focus on the future. So, secure the team, keep them on the field, and set your sights on the future.”
He also focused his team on strategy. They defined several key strategic priorities: financials, customers, and team. In difficult times, Carneal pulled his executive team together to figure out what was the most critical, developed one or two key initiatives, and put an executive at the head of each one.
Being a leader has a lot to do with vision and strategy, and Carneal and Murray took the recession as an opportunity to develop in those areas. They chose to recreate their business model to be recession proof. “Then, if good times come again, great, but let’s do all we can to figure the true value of our clients, the true needs of our organization, and let’s streamline. If we can build a business that can grow in a recession, then it can grow anytime.”
Stay True to Your Mission
Part of staying afloat for the Boosterthon team meant keeping their vision at the forefront. They reminded themselves why they were doing what they were doing. Carneal is the son of a teacher, and he’s passionate about helping schools raise the money that they need to flourish. He realized that caring for the education system was still important to his target demographic, even in difficult financial times.
The Boosterthon team focused on increasing transparency, perfecting their message, and finding new ways to serve their clients. They streamlined, and worked on creating a more effective system for reaching their mission-based goals. Murray says that in improving their message, their focus became, “Let’s connect to their hearts. Let’s help you understand how giving money to your local school ultimately can help you in the long-run, even though you’re pinched in the short-term.”
Stay Focused and Flexible
Changing times means a changing business model. For Carneal and Murray, that meant finding a more flexible way to operate. They are, by nature, a seasonal business, so by making more costs variable they were able to operate smoothly through the downturn, as well as through the slower summer months.
As they began recreating their business model, they realized that to move forward in the way they wanted to, they needed to bring on someone with a strong financial skillset, so they hired a CFO. They got creative and examined their processes around staffing, purchasing, and scheduling schools, looking for ways to make those costs more variable. In all, they were able to move about 20% of their fixed costs to the variable category. This kind of restructuring is critical for any business when profits are down, but make sure you take it on early. If you wait too late in the cycle, it won’t make the difference it needs to make.
With a streamlined budget and a CFO in place, the Boosterthon team was able to restructure financially and bring in a strong banking partner, which allowed them to continue to build the business during the recession.
Keep Your Team Empowered
“Culture is not something you do, it’s who you are. It has to be at your DNA level.” – Chris Carneal
All the best planning in the world doesn’t mean a thing if your team isn’t on board. Carneal’s first move, as we’ve talked about, was to hit the street and encourage his team. Throughout the recession he maintained a strong focus on team building and culture. He says, “My job was to keep a glimmer of hope in our team…in-person meetings, late-night celebrations, dinner with the team. We were not cutting costs in terms of team culture, and if anything, we were spending more to make sure the team saw the vision.”
Carneal viewed team development as an important investment. “I feel that everyone could win a gold medal at some Olympic sport. It’s my job to discover what that is, what are they a superstar at, and what’s their superpower?” He sees his role as developing those super powers in such as way that they serve the clients, and then supporting, celebrating, and affirming his team and their victories.
A focus is placed on affirmation. The team does monthly huddles (some are video huddles with the team so widely dispersed) and team members are publicly recognized for small and large victories. Teams throughout the country hold daily huddles with similar affirmations. Carneal believes people are often too quick to point out what’s wrong. “If you can pick out what’s right, and people hear it, and reproduce it over and over, they’re that much more able to do it.”
Keep a Wide View
Carneal saw opportunity in the challenges of the recession. With financial times being difficult, he saw that schools needed their services even more. It was an opportunity to build strong client relationships and expand their base, even in the hard times.
Says Carneal, “I’m overly optimistic at times, but I was thinking, if it’s tough for us, it’s probably also tough for schools…We grew market share, even though it was a difficult time to run the business. There was a greater need for our services.”
For Boosterthon Fun Run, a privately held company, seeing the big picture meant taking the focus off of profits for the short term. They didn’t see profits for several years, but, says Carneal, “I didn’t care, because I had a future mindset. I thought, let’s gain market share, and let’s serve our clients.” Being able to provide for the clients in the hard times has created long term client loyalty that still benefits the company today.
As a CEO, it is crucial to hold that vision for your team to live into, balanced with creating a practical strategy to reach that vision. That can be more difficult to do in the down times, but it’s no less true. Seeing hard times as opportunities is key, and Carneal and his team were truly able to use the recession as a motivating factor to build a better business model that has served them in the good times as well.
Building a recession proof business comes from having a strategy that is strong enough to help you reach your goals, and flexible enough to adjust to the market. Be aware of the changes as they are happening, and continue to find ways to manage costs, provide value to your customers, and keep your team’s morale high. A company that does that can survive anything.