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 people – this 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?