Junkyard Dog Management

A few years ago I was talking with a client about a severe downturn in his market: “You have to protect your profit with the same fierceness that a junkyard dog protects his turf,” he said. The term “Junkyard Dog Management” was born. Over the years together we fleshed out our new management theory:

Junkyard Dog Management is an approach for managers operating without the benefit of a significant equity cushion. Managers must identify changing conditions, identify required responses, decide, and implement. Junkyard Dog Managers (JDMs) know that survival is about speed. Identify, decide, implement and do it NOW! JDMs move quickly in response to both a downturn and to a recovery. They are accustomed to managing with limited resources.

You need to be a JDM if:

  • You have either limited or negative equity
  • Your business is cyclical and your sales and profits vary greatly with the cycle
  • You manage a small business and your major customer is a multi-national OEM that wants annual price reductions due to your “productivity gains”
  • Your major customer has told you that you may not be financially viable enough to be its supplier

Companies in these situations need to aggressively slash costs in a downturn and retool just as quickly when faced with a recovery. All costs, no matter how minor, are constantly scrutinized. New customers and new strategic advantages must be discovered when the old ones fail you.

You know that you are a JDM if:

  • You have negotiated the cost of shop rags down in the last month
  • You have no professional janitorial service. Your cleaning service is a part time 1099
  • Employee bonuses and 401 K matches vary directly with operating results
  • You would rather have a root canal than let your attorney spin his meter
  • Your hiring process can be measured in hours rather than weeks
  • Every new employee has a mentor
  • You have eliminated routine “update meetings”; the only reason your team ever meets is to either solve a problem or capture an opportunity
  • Your team meets to solve problems and to capture opportunities every day
  • You can be profitable despite a 50% sales swing
  • During a recent downturn your SG&A expenses decreased by the same percentage as your sales decline
  • No one on your team attended college at a school in the NCAA tournament
  • Everyone on your team outperforms their resume
  • You understand that building a great company starts with surviving this year
  • You have negotiated down your monthly cost of paper shredding
  • You constantly fight to contain health care costs but are committed to delivering competitive health care benefits to your employees
  • Your market has been down and has not recovered, but your sales have recovered and are now greater than at the beginning of the downturn

A trip to the Junkyard may be in order if you are violating loan covenants, your profitability is marginal, employee turnover is increasing, your key people spend too much time in meetings and your organization is stuck in “slow”. You can change the trend but you are going to have to bare your teeth.​