The dean of automotive reporting, Paul Ingrassia, published a terrific interview with Alan Mulally, CEO of Ford Motor Company, in Saturday’s Wall Street Journal. Citing Ford’s $2.7 billion 2009 profit, and the fact that it was the only U.S. automaker not to duck into bankruptcy, Ingrassia noted how Ford might even surpass GM in market share for the first time in more than eighty years.

In When Growth Stalls, I document how struggling companies tend to keep themselves down through a combination of a loss of focus, a loss of nerve, a lack of management consensus and marketing inconsistency. I found it interesting that in Ingrassia’s analysis he inadvertently referenced how Mulally has dealt with three of these issues:

Loss of Focus: “[Mulally's] method has been to simplify, relentlessly and systematically, a business that had grown way too complicated and costly to be managed effectively. ’Improve Focus, Simplify Operations,’ reads one of Mr. Mulally’s many charts, which he repeats like a sacred mantra. Soon after his arrival Ford began shedding brands—Jaguar, Land Rover and Aston Martin among them—that the company couldn’t afford to support. Volvo will be next to go.”

Loss of Nerve: “The core Ford brand got an investment infusion to replace aging cars and revive a model lineup that had been heavily tilted toward gas-guzzling trucks.”

Lack of Consensus: “Mr. Mulally has overhauled the often-contentious culture in Ford’s executive suite. Most of his appointees are company veterans, but they’re the sort of people who typically got overlooked when style seemed to count more than substance, as it often did at Ford…Internal surveys show 87% of Ford employees believe the company is on the right track.”

Mulally summed up his recent success with a simple statement: ”It’s all about producing products people want.” That may be true of every company, but too few get it done–especially in the American automotive industry. I, for one, hope Ford’s comeback is a lasting one.

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.

The National Federation of Independent Business (NFIB) says that small business optimism grew slightly in January. Slightly. The NFIB Optimism Index currently sits at 89.3, ten points below where it was prior to the recession.

Commenting on the index, Lawrence Mishel, president of the Economic Policy Institute, said, “To absorb the over 15 million officially unemployed workers in this country…job openings and hirings must rebound dramatically. This report offers no indication that this is happening.”

The NFIB’s report is consistent with Decision Analyst’s January Economic Index, a survey of several thousand households based on nine different economic measurements. The index remained unchanged for the third month in a row, stuck at 94, well below the 110 which signals an economic expansion. This index tends to lead the U.S. economy by up to a year, suggesting the economy will remain sluggish throughout 2010.

That’s what the CEO of Unilever, one of the world’s largest consumer product companies, is preparing for. Speaking of the economy, Paul Polman says, “It’ s not going to just drastically change in the next 12 to 24 months. We will be in for a long and slow recovery, and that’s what we’re planning our business on.”

Policy makers continue to point the finger at the difficulty of securing business credit. But the indexes above suggest the bigger problem is simply a lack of revenue growth, meaning employers simply don’t need to hire. That sentiment is borne out by the fact that fewer than one in ten owners surveyed by the NFIB added employees in January, while more than twice as many cut jobs.

Businesses don’t want to borrow money as long as economic uncertainty remains high. What we most need now is normalcy, not big ideas. Let’s hope the politicians are paying attention.

Cristobal Conde is CEO of SunGard, a leading global software and IT company. In an interview with the Wall Street Journal, Conde was asked what has been the best move he’s made during the downturn. He answered, “We could have generated more earnings by having more layoffs. We wanted to protect R&D.; We wanted products ready to go at the end of the cycle. I saw a huge competitive opportunity to protect programmers when others weren’t.”

Conde’s perspective is smart, but rare. Our research shows that most companies overreact to a downturn and cut not just fat, but muscle. If they go beyond what’s absolutely necessary, that can easily compromise their future. Conde turns the fear on its ear by asking his employees “What is it you need to do now so you will remember the crisis as a gift?”

Chilean by birth, Conde has developed a taste for a uniquely American institution: NASCAR. Perhaps it’s because he sees in racing similar patterns to those of business. “Going into the crisis is not that different from going into a turn,” he says. “You slam on the brakes. In the turn, the most important thing is your position relative to other cars. I’ve been telling people, ‘Focus on our relative market shares rather than overall volumes you can’t control. What are we doing to improve our position?’ After the turn, you take that better position.”

Conde can’t guarantee that SunGard will come out of the recession a winner, just as even the best NASCAR drivers don’t know when they’ll cross the finish line first and when they’ll come up short. But races are decided by the strategy of the driver as much as the speed of the car.

Drive smart.

You can hardly turn around these days without running into some sort of reference to innovation. Dozens of books about the topic line the shelves at Borders and Barnes & Noble, from The Art of Innovation to The Myths of Innovation. Innovation is rapidly becoming the latest business buzzword.

But before you dump “innovation” into the jargon dustbin along with “reengineering”, “rightsizing” and “paradigm shift”, consider this: the need for innovation has never been greater than it is today.

Doug Hall is founder and CEO of Eureka! Ranch, an organization that helps companies define, refine and improve their new ideas. In an interview with SmallBiz magazine, Hall defined innovation as that which “moves companies and their offerings along a continuum from providing commodity products or services to having a monopoly that is extremely difficult to combat.”

Hall’s definition is spot-on, and made even more significant by the fact that no company’s position along that continuum is static. If you’re not actively moving your company away from commoditization, it’s destined for it. The extent to which any business proposition or value equation is achieving success in the marketplace is the extent to which it will attract competitors who want what it’s got. There’s simply no free pass to sustainable success.

If you’re making money you’re making noise, and competitors are bound to notice. They’ll deconstruct your products, mimic your pricing structure, duplicate your distribution system, infiltrate your customer relationships, and do anything else they can to take your margin and market share. In so doing, they’ll be creating acceptable substitutes for your products and services, which without intervention will inevitably lead to a price war in which no one wins. Unless you can stay ahead of the game through continuous renewal and change (i.e. innovation), your competitors will commoditize you right out of business.

As frightening as this prospect might be, many companies are intimidated by the concept of innovation. They somehow think it’s the purview only of organizations with massive R&D departments funded by equally massive budgets, not the typical small- or medium-sized business. But this reflects an incomplete and unrealistic understanding of what innovation is really all about.

One of the reasons executives think this way is because we tend to associate innovation with breakthrough leaps forward–advances that change the playing field, shift competitive dynamics, make the covers of Forbes and Business Week and end up as business school case studies. Certainly, big innovations can be big news, and for good reason (Doug Hall’s research shows that major breakthroughs are worth four times as much as minor innovations). Naturally, they’re the ones that get the most press.

But the systematic introduction of even small improvements along the commodity-monopoly continuum can compound to deliver just as much (if not more) impact as a single big breakthrough. Popular Science says of innovations, “The objects don’t necessarily need to be beautiful. They don’t have to be eco-friendly. They don’t even have to be difficult to build. They just have to push past what we thought was possible just twelve months ago.” To that I would add that they don’t have to be big. They just have to be consistent.

If you spend just a few hours critically analyzing your industry from a customer’s perspective (perhaps even involving customers themselves), you’ll identify dozens of pain points about which somebody ought to do something. Airline seats should be comfortable. Take-out orders shouldn’t be wrong. Physician’s handwriting should be legible. The better you can anticipate what customers will be wanting/needing/expecting down the road, the more likely you can be the leader that first addresses the issue. No one, as they say, ever asked for a microwave oven. Or even a curved shower rod.

Want to keep commoditization at bay? Focus on innovation. No matter what size, shape or form your company is.

The big news this week in Medialand is NBC’s decision to cancel The Jay Leno Show and move the eponymous comedian back to a late-night time slot. About the short-lived experiment, Jeff Gaspin, NBC Universal’s Chairman of Television Entertainment, said, “I don’t think it’s wrong to take chances…Sometimes they work. Sometimes they don’t.”

Fair enough. But with a little more imagination, NBC might have been able to predict the outcome. The much-hyped decision to launch The Jay Leno Show was made in part based on economics—it’s a whole lot cheaper to produce an hour of live TV than an episode of Law & Order. While the show was profitable for NBC, it’s not terribly surprising that it would lag its competition in the ratings—especially in its first season, when loyal viewers of competitive offerings were caught up in current storylines.

The Jay Leno Show’s low ratings created a “lead-in” problem for NBC affiliates, who rely on audience carryover to provide viewers for their late local news. Michael Fiorile, chairman of NBC’s affiliate board, said NBC’s Leno strategy “has been devastating for a number of late newscasts around the country.”

While that’s unfortunate, it also underscores an unhealthy dependency that too often blinds local news providers to their task. And it provides a valuable business lesson for us all.

Most people tend to think of the television industry as something “other” than the product and service sectors that comprise the rest of the economy. But in reality it’s no different. Television news is a “product” that consumers “buy” (we pay for free TV with our time), and competitors are called to offer their prospective customers an experience that is unique, relevant, and valuable, just like any other business.

When a local affiliate complains about the network not offering a good enough lead-in for its local news, it’s like McDonald’s complaining that the Burger King across the street has better access to traffic. While that may be true, it can also serve as an all-too convenient cop-out. McDonald’s job is not to complain about the way the street is designed, but to get people to cross it–by offering something intriguing and unique (a task the company has performed quite well in recent years).

That’s where TV news falls down. Local news directors too often live in a “be better” bubble. That causes them to overstate the impact of their slogans, overvalue being first on the scene of an accident, and overpromote their handsome/pretty/ smart/honest/capable/talented/sincere news anchors. If they instead applied their intelligence and intensity (the news directors I’ve met have both in abundance) to seeking new ways to truly differentiate their offerings from the competition, we could see some real innovation in how local news is delivered. I suspect most viewers—and most people in the industry—would agree that there’s plenty of room for improvement.

Jay Leno is proven product whose success is in part dependent on how well he’s packaged and distributed. Local news is no different, and as Gaspin said, it’s not wrong to take chances. If only more news directors would.

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.]

I don’t know if two instances signify a trend, but I’m pretty sure in this case they mark at least a fad.

Catching up on my newspaper reading over the weekend, I noticed two advertisers using social media soundbites to boast of their products. The first was Motorola, which incorporated into its ad quotes pulled from Facebook, Twitter, and a site called Phandroid.com (“The first independent website dedicated to delivering Android news”), among others. The second was for Trident’s new Layers chewing gum, sticking strictly with Twitter (headline: “The people have Tweeted”).

I don’t know whether or not these advertisers sought permission from the quoted to feature their testimonials, but imagine how excited @mattchew03 and @amybites must be to see Trident put their “names” in print. And suspicious Twitter handles (-chew? -bites?) aside, I have to believe that they are legitimate endorsements (as opposed to planted reviews, which no advertiser would be dumb enough to employ in the age of social media).

“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.