Renee’s Rule™ — It never hurts to ask.February 26, 2009
Approximately 20 years ago, I began compiling Renee’s Rules, which I will share from time to time on this blog. (My son Jason created a great “talking” set of the original Renee’s Rules™. If you would like a copy of the executable file, please contact me.)
Rule #1: It never hurts to ask.
This true story illustrates the point:
Shortly after I began working as Interim CEO of a manufacturing company, it became apparent that the company was going to lose its proverbial shirt on a large job. The selling price was approximately half the direct cost of the job. The company had not yet started the job.
We scheduled a meeting with the customer, explained the problem honestly, and told him that we could complete the job only if we doubled the price.
Instead of pulling the job, he agreed to the new price.
In these troubled times, cash-strapped companies simply cannot afford to sell below their direct costs. They need to be better off–not worse off-on cash. Period.
CEO’s of deeply distressed companies need to find a way either to reject cash-losing jobs or to increase the prices so that the company is better off on cash after the job than it was before.
It never hurts to ask. For many companies, doing so may spell the difference between survival and liquidation.