Amid all the depressing talk of recession, we thought we'd take a more encouraging view! Find out how to view the downturn as a challenge rather than a threat - an opportunity to fine-tune your organisation.
How are you feeling about the downturn? Governments may not yet officially have declared a recession, but the media and millions of ordinary people have. A knee jerk response for many businesses is to 'batten down the hatches', cut budgets and let people go.
But no matter what the economic climate, people will still buy what they want and need. The real battleground will be the value people see they are getting for what they spend. And the winners will be companies who take the opportunity to build a really strong organisation. The biggest risk you can take is to try to survive doing business as usual!
What is the Opportunity?
While there's still a demand for goods and services, there's still a market. Badly-run companies will tend to go under which will mean less competition and more real demand. Take advantage of this and your business could well end up even more profitable!
You will certainly need to manage credit control and cash more tightly than ever. But don't take action that may damage your business in the longer term. Don't immediately cut all external costs - a typical 'knee-jerk' response to recession. Cutting all your marketing spend, or staff development costs for a period is at best a 'quick fix'. But you'll pay for it in the longer term when your customers have forgotten you and your best staff have left! Keep some healthy cash in the business and use it wisely.
How Can You Profit from the 'Downturn'?
1. Market yourself: Get out there and really market your product or service - make sure people know you are there. Find out what your competition is doing and better their offering. But don't panic and immediately drop your prices - people will sense your lack of confidence.
2. Communicate: engage your staff fully in the game of thriving in this more competitive period. Give them clear targets and goals. Work with them to build tight budgets and make them accountable for delivering them. And talk to them - find out what they need to be motivated and fired up, and provide it!
3. Negotiate to maintain healthy finances. If times get tougher for you, you can do deals with your suppliers, the VAT man and your bank - as long as you talk to them in good time, and keep them well-informed.
4. Focus your resources on sales - new business and account development. If necessary adjust your marketing mix to respond to the new market conditions.
5. Enhance key people's skills: provide just-in-time training and coaching so staff are comfortable and credible discussing the current economic situation with customers. Train them to focus on the customers' specific recession-related challenges, not their own! Make sure they know how your products and services can contribute to your customers' bottom line and how to create specific value propositions that will compel customers to listen and then to buy.
6. Build a strong, cohesive management team to provide direction; the most common reason successful people leave their organisations is poor leadership. You must show great leadership: take a look at the Shine Blog, where we are currently exploring the seven levels of leadership.
7. Measure and improve your effectiveness: plan rigorously around your key metrics, and monitor and refocus regularly. Inspire and focus your staff with common goals, and reward the behaviour you seek. Staff who weren't productive in a good economy are very unlikely to be productive during a recession. You know who they are; give them clear targets and focused training and coaching, but if they still don't buy in to or work towards your goals, let them go. If you keep them aboard, especially now, the drag on your organisation will be multiplied.
8. Take extra care of your customers: lastly, and by no means least, provide exemplary customer service. It will never be so important to keep the customers you already have!
Bomb-Proof Your Business!
There's nothing new here; this is what companies should be doing all the time. The opportunity here is that many companies don't.
It is not easy; it requires visionary leadership, a courageous attitude and a healthy organisational culture to provide an environment where employees can deliver what the organisation needs not just to survive, but to thrive.
Some businesses thrive in every recession and come through stronger than ever. Make sure yours is one of them!
What are You Like in a Crisis?
This article gives an insight into what happens in a crisis to our reactions and ability to think clearly. It suggests some simple strategies to restore equilibrium and 'manage your mind'.
How to Make Change Stick
There are two clear groups of factors to take into account if you want to make changes stick and produce outstanding results quickly, efficiently and permanently: the 'internal', and the 'external'. And there's a sensitive balance to strike when you consider which to pay attention to at any given time.
Beware: Groupthink!
Groupthink is a mode of thinking that people engage in when they are deeply involved in a cohesive, task-centred group, when their need for unanimity supersedes the need to make a decision based on rational information. Groupthink can lead to bad judgments and decisions being made, and can also cause a group of decision makers to rationalise a poor decision after the fact. It's a simple and totally inadequate way to deal with difficult issues.
