It’s hockey time at the Winter Olympics, and for anybody older than 40 that brings back vivid memories of the 1980 Lake Placid games and Team USA’s incredible victory over the Soviet empire.

There are some obvious comparisons to 2010. In 1980 the country was mired in the worst economic crisis since, well, today. We were also coping with a belligerent Iran. Gas prices were on everybody’s mind, and there was a great deal of public dissatisfaction with the nation’s political leadership. “Malaise” was the word of the day.

But there’s another parallel I’d like to draw out; one that serves as a metaphor for today’s business environment.

If you saw “Miracle,” the thrilling movie chronicling Team USA’s formation, ascent and ultimate triumph, you’ll remember one particularly compelling scene. After the young team mailed in a lame performance during its first European tour, coach Herb Brooks made the players stay behind for an extra practice session. He forced them to skate a seemingly endless series of sprints, shouting “Again!” after each one even as the young men choked and puked from fatigue. They had no idea when it was going to end, which only added to their misery. It was difficult to watch, and one can only imagine what it was like to experience. But it was a defining moment and played a pivotal role in their crystallization as a championship-caliber team.

It’s easy to remember the miraculous victory Team USA pulled out when it counted. It’s also easy to forget that these young players had no idea what they could (or would) accomplish when it hurt the most. All they could do was pick themselves up and skate as best they could, fighting through the pain and trusting that somehow it was all for their good.

The economy is still fragile, and capitalism is under attack. Yet we can all take heart from America’s energetic, entrepreneurial and perhaps somewhat naive 1980 hockey team.  They were able to face down a seemingly invincible foe and find a way to prevail only because when things were most difficult for them, they stayed on their skates, stepped up to the line, and sprinted forward. Again and again and again.

This little illustration is from the January 29, 1954 issue of the Cass City (Michigan) Chronicle. Fifty-six years old it may be, but it’s a good reminder that the times in which we’re living are not so special after all. Businesses throughout history have had to cope with rainy days.

While the tools of advertising continually change, the need for it never does. That’s a lesson I learned the hard way through my own company’s stall (which began the journey that ultimately resulted in When Growth Stalls). Consistency is just one of the principles critical to recovering from (or preventing) a stall.

My business partners and I took our own medicine in 2009, and our firm is the better for it now. We’ll continue to keep it up this year, sluggish though the economy may be. I hope your company will too.

As 2009 draws to a close, I have bad news and I have good news.

First the bad news. According to the Wall Street Journal, stock performance in the decade now ending is the worst ever–worse even than the woeful 1930s. For the past ten years, the value of NYSE-traded stocks has declined by an average of 0.5 percent a year. Compare that to the 1990s, when the average annual increase was an incredible 17.6 percent.

Factor in inflation and it gets even more depressing, with the S&P; 500 declining an inflation-adjusted 3.3 percent annually. During the 1930s, stocks showed an inflation- (deflation, really) adjusted annual gain of 1.8 percent. And the decade now ending saw many notable companies fall out of the S&P; 500, for reasons of scandal (Countrywide, Enron), excess (Bear Stearns, Merrill Lynch, Lehman Brothers, Wachovia), misfortune (Circuit City, Lucent, Reebok) and just plain changing dynamics (AT&T, Compaq, Dow Jones & Co., Maytag, Wyeth).

Pretty discouraging, when you think about it. But here’s the good news. The vast majority of American corporations found a way to move ahead during the turbulent ten years past, and all of them–all of us–are the stronger for it. We face challenges ahead, but having muddled through the most difficult decade in two centuries we’ll face little that will surprise us. And those of us who have maintained our focus, kept our nerve and remained consistent throughout should profit all the more.

Here’s to 2010, the dawn of a new decade. May the old one rest in peace.

[Note: Today marks the one-year anniversary of this blog. Prior to launching it last December I wondered--and worried--if I would have enough to write about. If there's any silver lining to the year now past, it's that it provided plenty of content for a blog called "When Growth Stalls." Let's hope next year is a little tougher on me.]

“Most of the world seems to be focused on the Americans who are unemployed. We’re focused on the 90% that are still employed.”

Those are the words of Ron Shaich, CEO of Panera Bread, the 1,300-unit bakery-cafe that has found a way to thrive in spite of the recession. Its formula? A combination of smart financial management and keen understanding of its core customers, most of whom remain gainfully employed (and ever-more attuned to good value).

Rather than cutting corners, Panera has focused on offering more to its broad range of middle income customers, including free wi-fi access and frequent new menu offerings. “In many ways, we’re renting space to people and the food is the price of admission,” said Shaich. Panera COO Rick Vanzura agrees, saying, “A bunch of folks have been cutting quality to cut price to go after the marginal customer. We said a better strategy that addresses a bigger group of people is providing better value.”

The strategy is working. In 2008 (a very bad year for most fast-casual restaurants), Panera Bread grew by double digits. In 2009–the worst economic year in generations–the company managed to keep same store sales from declining, and in the third quarter actually increased them by 3 percent. Food industry analyst Darren Tristano pinpoints why: “Panera’s on-trend with what consumers are asking for: fresh, customizable, convenient, won’t break the bank.”

Panera Bread has been able maintain its focus because of careful cash management. Rather than using debt to expand, assuming the good times of years past would keep on rolling, the company grew slowly and deliberately over the past decade. That kept it healthy from a cash flow perspective and prevented it from having to cut corners or cut margins (or both) when times got tough. As Shaich says, “Every chain is cutting something — portion size, quality, hours of labor. The result is that ultimately the customer feels it.”

Most players in the restaurant industry—in most industries, for that matter—think the current game is all about price. Panera Bread is an all-too rare exception, demonstrating that companies that keep their focus, nerve, consensus and consistency can thrive even in bad times. I’m a fan.

It’s a classic When Growth Stalls scenario: start with a fast-growing and profitable company; add an aggressive new competitor that begins to successfully woo the same customers; watch as the previously flourishing company loses its nerve, its focus, and its consistency, leading to languishing sales and lackluster results.

When Gap, Inc. launched Old Navy in 1993, the spare retail chain sporting affordable merchandise and wacky ads was an immediate hit. Rather than risk losing focus at brand Gap (which was near its zenith atop the retail world), parent company Gap, Inc. used Old Navy as a counterforce to the big discount stores that were trying to ride on Gap’s fashion coattails by ripping off its designs.

Within four years Old Navy sailed past the billion-dollar revenue mark, accounting for nearly half of Gap, Inc.’s top line and some 40 percent of its profits. Offbeat commercials featuring has-been celebrities made the chain the talk of the retail industry, as well of teens and young families that comprised its core market.

Enter H&M;, the trendy Swedish retailer, which opened its first U.S. store in 2000 offering discount apparel with a more fashionable edge. Fearing that H&M;’s success marked a sea change in the industry, Old Navy shifted its focus from the basics to more trendy, upscale merchandise. It didn’t work. Sales fell by more than a billion dollars between 2006 and 2008, with last year’s same store sales sinking an incredible 17 percent.

It was then that Gap, Inc. decided to do something about it. As the Wall Street Journal put it, “Returning Old Navy to its roots was the central theme of Gap’s remaking of the brand.” The Journal quoted Old Navy’s interim president, Tom Wyatt, as he reflected on the brand’s original recipe: “We got tired of it. The customer never did.”

Eighteen months ago Old Navy recommitted to its original focus and began redesigning more than a thousand stores, hoping to leverage consumers’ renewed frugality in this toughest of tough economies. Year-to-date 2009 revenue is up 1 percent, due largely to a third quarter same store sales increase of a healthy 10 percent (the first rise in five long years). Pardon the pun, but Old Navy seems to have righted its ship.

There’s no guarantee that, having returned to its former course, Old Navy can count on smooth sailing. The retail industry is too dynamic to let any successful company alone. But Old Navy’s experience is one more point of evidence that when even the most successful concept runs into a rough economy, a tough competitor, or some other external threat, destructive internal dynamics can turn it into its own worst enemy.

Not a day goes by without more news about Detroit’s beleaguered automakers. While each new development is notable in and of itself, I find it more telling to take a few steps back and look at the big picture.

Below are a few clips from selected Wall Street Journal articles I’ve run across over just the last few days. Take a minute and scroll through them. They tell a fascinating tale.

First, GM continues its inability to focus, revealing a growing lack of consensus between management and the board:

“In a dramatic change of course, General Motors Co. backed out of a deal to sell the company’s European operations to car-parts supplier Magna International Inc., and now plans to spend billions to restructure the money-losing business itself.”

“The decision…was made at a board meeting Tuesday in which the company’s directors strayed from the plan of Chief Executive Frederick “Fritz” Henderson, who had spent months negotiating the Magna agreement.”

“The Opel deal is the second major transaction to fall apart for Mr. Henderson in little over a month.”

“Whereas Mr. Henderson’s predecessor, Rick Wagoner, had often won in the boardroom by relying on the support of long-serving directors, Mr. Henderson appears to be tiptoeing through land mines of strong opinions by adjusting his game plan.”

“Carl-Peter Forster, who worked for GM for more than nine years, is quitting as chief executive of GM Europe. The decision follows a vote by the company’s board of directors on Tuesday to scrap a plan to sell control of the German Opel unit…”

“Despite his dissent of late, Mr. Forster was long viewed as a strong asset on GM’s executive roster and his departure serves another blow to Mr. Henderson, who has seen his management bench shorten since the company’s exit from bankruptcy.”

Across town, Chrysler is making fairy-tale sales and market share predictions to try to convince investors (that means you, taxpayer) that it will repay the $9 billion it owes us by 2014:

“The company said it is counting on a slew of new models to spark a surge in sales over the next five years and drive its revival.”

“Chrysler—which has seen its sales plunge by half in the last few years—predicted revenue will rise about 20% a year, from $42.5 billion in 2010 to $67.5 billion in 2014, and said it would break even in 2011.”

“To hit its financial targets, Chrysler expects to double its world-wide sales, from 1.3 million cars and trucks in 2009 to 2.8 million in 2014, and predicted its U.S. market share will rise from about 6% in 2009 to 11% in 2014.”

Meanwhile, Detroit’s only private automotive company, Ford, has gone about regaining its focus, finding its nerve and sticking to its game plan.

“Last week Consumer Reports gave the company quality ratings comparable to those of Honda and Toyota.”

“On Monday, Ford reported its second consecutive quarterly profit—and more impressively, a swing from a $7.7 billion cash burn a year earlier to positive cash flow of $1.3 billion in the just-ended third quarter…”

“The company gained a percentage of market share in the first 10 months of this year, no easy feat in an ultra-competitive market.”

“The company’s turnaround actually began three years ago with decisions that amounted to zagging every time that General Motors zigged, which was remarkable for a company whose strategy for decades was to follow GM.”

“While GM kept its unwieldy assortment of eight brands, Ford sold Jaguar and Land Rover, cutting its brand lineup down to a manageable size.”

“What’s more, shedding brands and shunning the mortgage business has helped Ford focus on quality, where it had slipped badly early in this decade.”

“Consumer Reports said last week that 90% of Fords, Mercurys and Lincolns rate average or better in quality, right up there with Honda and Toyota.”

“When the economy recovers and car sales increase, Ford could be in great shape.”

The automotive business is complex, but it doesn’t have to be that hard. Focus, nerve, consistency, consensus—no matter the industry, all tend to diminish when growth stalls. And all are essential to getting it back.

At the moment, Ford is the only one of the Big 3 to be paying attention.

If you’ve read When Growth Stalls, you understand the internal dynamics that tend to keep struggling companies down: Lack of consensus among the management team, loss of focus in the marketplace, loss of nerve (usually evidenced by how a company invests–or refrains from investing–its resources), and inconsistency.

I long ago ceased to be amazed when I saw struggling companies dealing with two, three, or even all four of these issues, as they tend to feed off one another. What still amazes me, however, is when more than one of these destructive dynamics rears its head within a single, 750-word newspaper story.

The Wall Street Journal’s October 12 column about Carrefour, the world’s second largest retailer, is a case in point. The Journal’s Ellen Byron and Christina Passariello interviewed new Carrefour CEO Lars Olofsson about the current state of affairs at the company, and published selected excerpts. Here are a few of my own excerpts from his answers (emphasis added):

“If Carrefour had some difficulties in the last 10 years or so, it is because they lost focus on the consumer.”

“Carrefour wasn’t consistent in the execution of its strategy.”

“There has been this ambiguity between going for the bottom line or for the top line, and that means the whole organization hasn’t been aligned in one clear direction.”

Three-for-four in less than a thousand words is pretty amazing, and I suspect if they would have published the full interview evidence of a loss of nerve would have also been apparent. After all, Carrefour brought Olofsson into the stumbling company in January, presenting him with (as the Journal put it) “one of the most difficult assignments in the industry.”

Carrefour has some 15,000 stores around the world and a leadership team that is second to none. But no company is exempt from the forces that plague management when growth stalls–not Olofsson’s, not mine, and not yours. The key is to stare them down and fight them off. As you do, you can get back to business.

Years ago we coined the term “fragflation,” the combination of fragmentation and inflation in the world of advertising media. When the audience for any given media vehicle gets smaller,  while the costs of reaching that audience continue to rise, fragflation is the result. And like it’s cousin stagflation (the combination of high unemployment and high inflation), fragflation can do a lot of damage in a short period of time.

Here’s a current example. When Jay Leno signed off on his last Tonight Show in May, he achieved an 8.8 rating in Nielsen metered markets. That was the show’s best Friday night rating in the 17 years Leno spent behind that famous desk. By contrast, when Johnny Carson said his goodbyes in 1992, he achieved a 31.9 rating in metered markets.

From 31.9 to 8.8 in 17 years. That’s a significant decline, and unfortunately it’s the rule, not the exception. If it feels like you’re getting less for your advertising dollar than you used to, it’s because you are. Which puts all the more of a premium on strategy and creativity.

Make sure you’re maximizing both. You can’t afford anything less.

The Wall Street Journal recently ran a feature about C.F. Martin & Co., the storied guitar maker based in Nazareth, PA. It seems Martin is responding to the slack in demand for discretionary products like premium guitars by manufacturing a solid-wood model for under $900 (compared to the normal price of $2,000 – $3,000). Chris Martin, the company’s CEO, admits, “We needed something so we wouldn’t have to start laying people off.”

On that score the new guitar can already be called a success. Launched in April, over 8,000 copies of the instrument have been sold. One grateful music store owner said, “It was really smart of Martin to come out with these in the current economy. They seem to be filling the niche quite well.” No doubt they have.

While the new guitar is clearly a hit, I have to wonder what long term impact its launch is going to have on the Martin brand. It’s always easy for a premium brand to grab a quick handful of market share by going downmarket, but it’s often a mistake (Mercedes is a prime example, the case for which I make in When Growth Stalls). As the music store owner above went on to say about the new guitars, “Soundwise, for the money, they’re very good, but aren’t necessarily comparable with the more expensive models.”

There’s the rub. While longtime brand loyalists may be somewhat forgiving of Martin for its move to cope with the downturn, other (especially younger) guitar aficionados won’t have the same context and may think of the Martin brand in lesser terms than they normally would. Especially when competitors like Taylor are determined to maintain their quality and price points. It could change the perceptual playing field for some time.

Martin does already offer some cheaper, laminated guitars, which may soften the effects of this decision. And Chris Martin hearkens back to a similar strategy his great-grandfather pursued during the Depression (building guitars for tens of dollars rather than hundreds) as evidence that this was the right move. But the brand landscape in the early 1930s was nowhere near what it is today, nor was the level of consumer sophistication. It’s a different game now, and there’s no guarantee that the rules haven’t changed.

I hope Martin not only survives, but thrives, as it’s a legendary brand. I just wonder if the company considered the potential unintended consequences. And whether it will be able to cope with them as economy–and the guitar industry–shakes out.

In its May 25 issue, BusinessWeek reported on Burger King’s recent sales woes. It seems that after multiple years of stellar growth, the company has run into some rough water. While arch-rival McDonald’s saw April sales rise 7%, BK has had a difficult couple of months.

While I respect Burger King’s discipline in focusing on its core customer of young men in recent years, I can’t endorse everything they do. (Their Sponge Bob kids meal promotion was truly a head-scratcher.) Still, I think the company will be OK.

Why? Burger King appears to be stumbling on only one of the four internal dynamics that cause problems when growth stalls. CEO John Chidsey says he remains committed to consistency in continuing to pursue young male customers, he’s showing nerve by increasing the ad budget 25 percent next year, and I don’t see any reason to believe why “tweaking his strategy to draw in more budget-conscious consumers” would cause a loss of focus. For the most part he’s making the right calls.

The only concern I have is the one wrong move Chidsey has made. He ticked off his franchisees by appropriating funds from soft drink makers that normally go to store owners. It’s not like he was doing anything untoward with the money–it was going to support the national advertising fund, which would drive even more business into the stores. But Burger King’s independent-minded franchisees don’t like someone changing the rules, especially if it means money is coming out of their pockets.

This minor rift would be a problem in any company, but with Burger King it’s more of a whopper (sorry, couldn’t resist). The company has had a particularly troubling time with the lack of consensus issue over the years (I know–I used to work for one of its ad agencies). You don’t go through nearly a dozen CEOs and half as many agencies over a twenty-year period unless something is structurally wrong.

Consensus issues aside, if Chidsey and the team at corporate keep their market focus where it should be, sales will start to recover and all will be forgiven (for a time, at least). I remain cautiously optimistic that Burger King can steer its way through these rapids.