Strengthen Your Business by Redefining During Recession
Through every recession, business has had to redefine itself in order to come out on the other side. We want the turbulence to be over—but we aren’t going back to business as usual. Here are some ideas that fall into four basic themes:
- Cutting costs
- Customer focus
- Communicating with employees
- Creatively capitalizing on opportunities.
Many companies are examining ways to trim costs, including:
Mandatory furloughs, lay offs, shorter work weeks, pay and bonus cuts, cuts in 401K matches, reduced travel, cuts in benefits for expats, stalling new product launches and renegotiating vendor contracts. Some arts groups have pooled services such as using the same web designer and printer.
But if your only strategy is to cut costs it is probably a mistake.
Jim Collins, author of the go-to read for business, “Good to Great” was interviewed recently in the April edition of Inc. Magazine He is doing some “turbulence research” and is discovering the importance of the “who” decision. He said, “If you can’t predict the “what” you have to do a good job with the “who.” Because the “what” is going to be constantly shifting.”
That leads me to the next three strategies.
Staying close to your market has never been more important. If you have a strong brand it can help during uncertain times because customers will spend their money on the brands they already know and trust. Creative companies are looking for ways to expand services within existing customers. For example, one company stepped up its calls to existing customers, even if they weren’t doing business with them at the moment. Others are offering to do smaller projects and making sure to tie them to the return on investment.
In addition, if you know what your competitive advantage is and exploit it, you can emerge stronger. For instance, if a competitor is laying off and you have a strong reputation for reliable service, you may be able to poach customers. Some companies are taking advantage of the situation by buying up competitors. Other companies are hiring sales and marketing staff, while their competitors shrink their marketing efforts.
Collaboration with your customers can pay off, too. If your company takes proactive steps to help your customers control costs, it will make loyalty grow. For instance, offering to have a conference call instead of a site visit, or cutting back on contract hours might be a big help to your customer, and prevent them from cutting the service altogether
Communication with Your Employees
Employees are scared and feel powerless. Companies who treat employees carelessly will pay the price later, for as the economy rebounds their best employees will be first to leave.
Now is the time to hold Town Hall meetings, to be open and honest and share what is going on and how the company plans to respond. This is also the time to ask your employees for specific help. They have a vested interest in how to save the company and their jobs. Involve them when making tough decisions. For example, one company was surprised when everyone agreed to take a pay cut and work shorter weeks, rather than have the company lay off 10 percent of the workforce.
Micromanage your cash flow but not your employees. Don’t look over their shoulders to see how many paper clips they’re wasting. Instead, get together often to find ideas to cut costs and enhance the customer experience. Letting them imagine the worst destroys morale and productivity. Doing something together is motivating—action dilutes fear.
Creatively Capitalizing on Opportunities
Some companies are stepping up efforts to streamline service or iron out product kinks they didn’t have time to focus on when it was busy. Others are looking for top talent who might overlook their company for a bigger organization in better economic times.
In my work with senior leaders, I’m seeing companies hold leaders more accountable for their own performance and the performance of their managers. These leaders are expected to have tighter plans for improvement and personal growth. I am also seeing a sharper focus on high potential employees—the seed corn of the organization’s future.
This recession will end. Your company can emerge leaner, closer to your customers, with employees who are more loyal and empowered. Or—you can just keep cutting expenses. Who do you think will emerge stronger on the other side?
Joan Lloyd has a solid track record of excellent results. Her firm, Joan Lloyd & Associates, specializes in leadership development, organizational change and teambuilding. This includes executive coaching, 360-degree feedback processes, customized leadership & presentation skills training, team assessment and teambuilding and retreat facilitation. Joan also provides consulting skills training for HR professionals. Clients report results such as: behavior change in leaders, improved team performance and a more committed workforce. Contact Joan Lloyd & Associates at (800) 348-1944, email@example.com, or www.JoanLloyd.com