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Forget recession proofing, it is time for recovery proofing! 8 strategies to help get you and your people ready

Lots of business owners and CEOs alike got caught on the hop by this recession.  Failure to anticipate the downturn led to businesses revenue and profits suffering.  This of course meant that staff, customers and shareholders suffered too.  Needless to say, there is every likelihood that those same business owners and CEOs will again be caught on the hop by the upturn when it comes.

We have all been in the same mode for what feels like forever…survival.  Everyone (almost) has been forced to tighten belts, cut costs, introduce pay cuts, reduce spend on ‘non-essentials’ like training and let staff go.  But if the first few weeks of 2010 are any indication there is an air of positivity about and some upward movement in sales and business generation.  If we aren’t ready for the upturn our problems may just be beginning.

8 strategies to help you prepare:

1. Business re-modelling – like most businesses you probably have quite a bit of spare capacity at the moment.  Instead of focusing on this as a negative why not use the time and the capacity to take a long hard look at your business.  And I don’t necessarily mean in terms of cutting costs because if you didn’t before the recession you should have a lean business by now.  But think in terms of the upturn that is sure to come (hopefully sooner rather than later).  How good are your systems and processes? Are there improvements and streamlining that can be implemented without over-stretching your budget.  I am not suggesting you make huge investments but that you look for low cost ways of improving effectiveness.  Take a look at your overall business model.  It may have worked well during the last boom but is it the right ‘fit’ going forward?  Make sure that the pain of the last 1 or 2 years doesn’t get wasted – take all the lessons you have learned and use them wisely.

2. Understand and manage your supply base – There are two issues here.  Firstly you need to understand your suppliers and their businesses and be fully aware of their ability to supply you into the future.  Will they still be in business?  Will they have the capacity? Secondly, this is the time for doing deals.  It is a perfect opportunity for locking in prices for a prolonged period – all it takes is a little negotiation nous.

3. Opportunity knocks – one of the biggest problems of a recession is that it is difficult to see opportunity and even if we do see it we rarely have the courage to go after it lest we de-stabilize our already shaky business.    The thing is though if you don’t start looking for those opportunities and gearing up to take advantage of them, someone else will.  And where will that leave your business? – bottom of the competition pile! Remember “fortune favours the brave”.

4. Use that brain power – The very practice of tightening belts and sticking to our core can stifle creativity and innovation.  After all there is no spare cash for trying out new ideas so why bother generating them?  This is a perfect time for brainstorming, building on combined brain power and stirring those creative juices.  Why?

  • You probably have the spare capacity already and this is a great way to extract value and if not, better people can be engaged at a lower cost
  • No-one knows your business better than your people – so listen to them
  • If you stop being innovative, you and your people will have forgotten how by the time the economy recovers
  • Downturns always lead to innovation and “the next big thing”
  • Recession always leads to a bigger and better upturn

5. Invest in your peoplethis is the best time to look at your teams, their skills and capabilities and mould them to what you need for tomorrow.  Are there opportunities for cross-training and job rotation?  Now is a great time to concentrate on succession plans and developing your future leaders.

6. Engage staff – there is no doubt that the upturn, when it comes, will create churn in your people resources.  As soon as the labour market starts to loosen up and good people begin to get offers your business will be in danger all over again.  Unless of course you have looked after them well.  A recent discussion paper by ACAS in the UK identifies four areas to promote and develop employee engagement:

  • Leadership – employees need to understand not only the purpose of the business but also how their individual role contributes to that vision
  • Engaging managers – engaging managers offer clarity for what is expected from the employees, treat their people as individuals with fairness and respect
  • Employee voice – employees’ views should be sought out, listened to and employees made to feel that their opinions count
  • Integrity – if an employee sees the values of the business ingrained in the management team, a sense of trust is more likely to be developed

There isn’t anything new in this but it is a timely reminder that it takes nothing other than a bit of effort to engage employees, build loyalty and protect against “fall-off” at the first sign of a sweet deal!

7. Build a sense of hope

While I am not suggesting that you mislead people about what the future might hold it is definitely time to build some sense of positivity.  This will be a challenging task, when there is so much bad news surrounding us and every day can seem grimmer than the last. But as a leader you can’t allow your people to dwell on the negatives – you need to find a way to instil confidence and hope.  Put a smile on their faces!!

8. Take a longer term view

To a large extent living through a downturn is about survival.  And as such, businesses tend to shorten their planning process, focus on shorter term goals and make themselves as adaptable to the ever changing landscape as they can be.  But in order to come out the other side of recession as a strong and successful business, there has to come a time when you once again start focusing on the longer term goals and objectives.  One of the things you may need to consider is “Is it time to hire again?” It is great people that make great things happen so having the right team with the right capabilities should be a priority.  Try to do determine where your business will be in another 12 to 18 months.  What capabilities will you need to be successful and can you get ahead of your competitors in securing that talent?  Look around you – what are your customers’ plans and what are your competitors doing?

Being ready for the upturn will make the difference between continuing to survive and being a successful, sustainable business.  So what’s it going to be?

Jackie Prendergast is a dynamic and focused HR and business professional with over 15 years experience in both public and private sector environments. She is a firm believer in the concept of delivering excellence through, and with people and strongly supports an ethos of continuous learning and development in the achievement of goals. Jackie established her own HR & Management Consulting practice - Consulting Excellence - in 2007. Working primarily with SMEs and private clients Jackie provides a range of HR advice, support and services. She has written a number of articles on C.V. preparation and Interview Skills as well as a short Interview Guide (E-book). She is also a business mentor with Dublin City Enterprise Board’s Mentor Panel. In addition Jackie runs an online network for SMEs (and consultants / service providers operating in that space) on LinkedIn - SME Links Ireland.

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  • Great post Jackie! I love point 4 “Use the brain power”. Once thing I’ve seen a lot in this recession are businesses doing absolutely NOTHING to innovate, be creative or different than the competition. The majority were obviously complaining about the situation and expecting that it reverts as soon as possible! That’s simply mad! I have wrecked my head with my team, came up with some good ideas but still think we’re far from full potential. In fact, last weekend I read by Gary Vaynerchuk and felt that there’s so much cool stuff that a company can do! I highly recommend ANY person to ready this short book. It will deliver “brain power” fuel for sure 🙂

  • I like the idea of cross-training, you got me thinking on that one Jackie

  • Fantastic post Jackie! I really really like this one. “If we aren’t ready for the upturn our problems may just be beginning” To create a new future, you have to look to that new future. Point 5 is key, particularly as the next boom (in-house or otherwise) will look a hell of a lot different to the last one. Companies will need new people, new roles and new skills. As regards point 1, I am happy to report that a client of mine (construction SME) spent 09 re-modelling and refocusing, there about to close their first 1million in a new market by the end of this month. It can be done and its wonderful to see.

  • Hi Fred, thanks for the comments. I absolutely agree that Using bairn power and remain innovative (or indeed becoming innovative) is key. Not only is it important in terms of coming up with new ideas to help a business to survive the recession but is hugely important for any business that actually wants to grow and move ahead of its competitors. The key point I suppose is that this is actually a really good time to do that while most business have some spare capacity! The book you mention sounds interesting – I will definitely be taking a look.

  • Glad to hear it Facundo – that’s what a blog should be all about…making people think!

  • Wow Niall – that is a really positive endorsement that this strategy is a wise one. I know some of the strategies I suggest require a leap of faith…but to a large extent that is what successful business is all about…as they say “nothing ventured, nothing gained”. Anticipating the future and being prepared for that has to drive business decisions at this stage.

  • Anonymous

    “Anticipating the future and being prepared for that has to drive business decisions at this stage.” I don’t think that will ever be different, but at least this recession made people realise they need to start doing it if they hadn’t been doing it in the past! It’s brought its pain, but I see a lot of healthy learning going on. Nice post, by the way. :0)

  • Apart from No 7 being the obvious survival kit, points 5 and 6 are people – focused, and the fast track to empowerment and retention of core staff, vital for the next phase – building up and out of the recession.
    Great strategies, great post Jackie, thanks for sharing

  • Super post Jackie. Nothing to add to the individual points which you make perfectly :). I would like to say it’s great to read a positive article focussing on the word recovery – makes a nice change from the naysayers in the general populace (bloggertoners excepted of course as we are all positive!)

  • Thanks Elaine. And yes no. 7 is the obvious but much ignored survival essential.

  • Thanks Barney – I really feel strongly that it is time to adopt a positive outlook and to move ahead. I think we have all had our fill of doom and gloom – now if only the media would start putting a positive spin out there….!!!

  • Excellent post Jackie. The tide is turning for those that are preparing at the moment and they’re the ones that will be able to ride the wave successfully in 2011…while the others are left behind stranded on the beach. Great pointers and advice.

  • Thanks Paul …and great to see you here on Bloggertone!

  • Anonymous

    Thanks for this Jackie. More than ever, we need to focus on our mindset. The best striker on the football pitch does not take his eye off the ball. He aims for the goal! He perfects his skills. Every business is about relationships and building them. We need to start using our communication skills and lets face it we are a nation who know how to talk. So lets start using our personalities and talk our way into business and out of negativity. A positive mental attitude will help you feel better. Great blog thanks for sharing this.

  • Grete post Jackie, especially point 7, build a sense of hope, if we dont believe things will improve then they wont (I’m not sure Barbara Ehrenreich would agree,

  • Thanks for the positive comments Margaret – here’s hoping that we all get “talking” then!

  • Actually I am pretty confident that we agree at least on some points. When I say build a sense of hope I am definitely not advocating building a sense of false hope since all that serves to do is undermine credibility and deepen the chasm of despair and de-motivation. But applying realism as Barbara suggests doesn’t mean that we can’t build hope either – we have to identify those positive things in our future or the future of our business and concentrate on making them our reality.

  • Catherine

    Hi, excellent post.
    I am actually writing a report around this topic.
    I wondered whether you’d all discuss the points I make below, it would make excellent primary research.

    Writing in a time of economic depression, it is important to consider the ways in which a financial downturn impacts on consumerism. Consumerism developed in the post-World War II era, where mass production led to a rapid increase in the number and variety of products consumed. More recently, consumerism has evolved with a reliance on the Internet to disseminate information. Furthermore, the growth of advertising led to what Tammemagi (1999:25) describes as ‘overconsumption’. Throughout this paper consumers and marketers have been segregated. However, Tammemagi (1999:3) claims that wastefulness is an ‘inherent and unavoidable feature of human society’. Hence, it is important to ascertain that the issue is all-embracing. The more enrapt consumers and marketers become in extravagance the further they deplete natural resources, thus negatively impacting on the environment (Chauhan, 2008). For instance, waste production leads to the emission of gases from landfill sites, which are harmful on both a local and global scale (Tammemagi, 1999). This leaves one to muse – if the recession cannot successfully regulate the nations spending habits, is there any hope for a sustainable future? In the same vein, the impact which overconsumption has had on the environment is evident, thus the question must be posed: are customers even concerned with engaging in sustainable forms of consumption? If the answer is ‘no’, then surely it is not effective for brands to base their marketing around green initiatives.

    Please discuss 🙂

  • Glad you found them useful 🙂

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