11 Keys to Ensure Your Company Survives, Even Thrives, in Uncertain Times
To say we are in uncertain times is a gross understatement. Investors are in a quandary trying to decide what to do. Employees are ringing their hands as they watch their 401k and retirement funds dwindle. And business owners are wondering what the future holds and what actions they should be taking. I certainly don’t have a crystal ball. I don’t know what tomorrow will bring. But I do know this is not the first time we have had uncertain times. This time, like every other time, there may be different causes and it may affect various companies and industries differently but, if the past is any indication, experience tells us there are proven ways not only to survive these times but, perhaps, even thrive in them.
These are not the conditions you had hoped for, but they are here and there is not a lot you can do to affect and change them. You can, however, affect how your company performs in these conditions. The last thing any business can afford to do now is play the turtle by pulling its head into its shell and wishing for the best. Instead, you need to face the reality of the situation and continue to move forward while you carefully navigate the minefield ahead of you.
Based on the success of various companies during prior bad economic times, I have listed 11 keys to getting through tough times in one piece, maybe even growing a little, and also being positioned to grow when the economy does turn around.
1. Act NOW! Don’t wait. But, DO NOT panic.
2. Don’t fly blind, have a plan.
3. Know where you are now, what is reality.
4. Monitor continuously, always know where you stand.
5. Understand the business model, how it makes money.
6. Focus, on the core business, not on the fringe.
7. Reorganize around reality, get lean, no anchors.
8. Strengthen the culture, communicate with the team.
9. Spend wisely, on the best.
10. Be easy to do business with.
11. Build market share.
Act NOW! Don’t wait. But, DO NOT panic.
It’s here. It’s not going away. So, what are you waiting for? I am not suggesting you run around setting off a panic in your company, but you need to take action now. Even if you are still doing okay,
even if you have good cash flow from prior work, assume it is coming and take action while you are still healthy. Taking action means doing the other 10 action steps.
Don’t fly blind, have a plan.
You don’t know where all this is going. You don’t know how long or how deep this will be. The only thing under your control is your company. As difficult as it is in this environment with all the unknowns, the only way to get any control over the company’s direction and success is by developing a plan. This does not require a 100-page masterpiece to bind and place on a shelf. All you need is a planned route, a roadmap for making it through. It should address the “what ifs,” and serve as your action plan should those “what ifs” materialize. It is a written document but it is not, and should never be, written in stone. It needs to be continuously reviewed and modified as times and conditions dictate. Flexibility is the key. But, again, it needs to provide enough direction to show you and your team where you are heading and the strategies you will take to navigate through these times. The last thing you can afford at this time is to show up Monday morning with a Sunday-night strategic plan and a bucket of hope.
Know where you are now, what is reality.
To develop a plan for the future, you need to know where you are at the beginning. This is true anytime, but it applies to an even greater degree when developing a plan in a difficult environment. Determining where you are now is truly a matter of identifying what is reality. It is taking inventory of the current state of the company, including its competencies, people, resources, suppliers, and customers. It is establishing a realist baseline for anything the company will do from here, an understanding of the tools and strengths with which it has to work, and what it is really good at doing, as well as the weaknesses and gaps it will have to overcome.
Monitor continuously, always know where you stand.
In a time of uncertainty, ongoing monitoring becomes critical so you are always aware of where the company stands and where it is headed. Annual, quarterly, and even monthly historical reports are questionable in good times. In challenging times, they are just that, history. Real time, daily, and weekly information will help you steer through and ensure you remain on course. Current information will enable you to make changes and course corrections quickly and help avoid going too far down a route that is no longer viable. It will allow you to make timely changes to your plan when necessary.
Understand the business model, how it makes money.
It often amazes me how many business owners don’t truly understand how their companies make money. They don’t understand the connections within the model creating profit. During good times, you can get away with this. Sales are building, cash flow is good, and profits are showing up on the bottom line. As things begin to tighten up, though, understanding your company’s business model becomes more important. It’s like a mechanic trying to fine-tune an engine without understanding how all of the parts and components of the engine work together and affect each other. Ignorance of those interactions could lead to removing an important part of the engine, believing it does not serve a major role, and protecting a part that is actually unnecessary. To make it through tough uncertain times, your company needs to be operating at peak efficiency. The only way you can ensure that is to thoroughly understand the business model, the interactions of the parts of the company within that model, how each affect the other, and how to tweak that model to squeeze out profits while maintaining what makes your company great.
Focus, on the core business, not on the fringe.
Businesses that maintain the strongest focus are typically the most successful. That’s because all of their resources are focused on their core business; what they do best. Since most smaller businesses have limited resources, focusing those resources enables them to become really good at what they do and sometimes better than anyone else. When the economy is in a downturn this practice of focusing resources on your core business could enable you to grow while others fail. Success in a bad economy can depend on you being the best at what you do. It can depend on you providing your key customers with more than they expect and with providing them more value than they can get anywhere else. By casting off fringe products and services you will be able to focus on those products and services at the core of your business; the ones you perform best and can do better than anyone else. Then, by casting off the fringe customers, you can concentrate your efforts on those best customers you absolutely cannot afford to lose. Although it may seem counter to common sense to cast off customers in a time of uncertainty, these fringe customers will drain resources needed to keep the core customers happy. Think of it as saving the passengers of the leaking boat by casting off enough excess baggage and weight to keep the ship afloat until the storm subsides.
Reorganize around reality, get lean, no anchors.
By acting early, you should be able to avoid wholesale layoffs of vital employees. However, that does not mean you can or should just leave the organization as it is. Getting real and getting lean should be your driving force. Getting real means you need to reorganize around the reality of the business. If growth is slowing, stopped or even in reverse, the organization needs to be adjusted to best fit the new reality of the market and the business. You must remove any excesses or positions that were nice to have but could become anchors preventing the company from being agile and lean as the slowdown continues. Getting lean now may prevent deeper cuts later, affecting your company’s ability to perform. The caution is, while getting lean, to be careful not to damage your ability to support customers and provide them with the service they have come to expect.
Strengthen the culture, communicate with the team.
Your team played a large part in the success of your growing company and they will have to play an even greater role in helping the company survive and thrive in this economy. Your team had help from your company culture. Your culture played a large role in helping employees perform, and it will need even more strength to help them work through these newest challenges. Throughout these next few months, or even years, as long as this economy remains a challenge, you can never allow your company to lose its culture. Your employees are happy in it, they perform well in it, and they are comfortable in it. Now is not the time to eliminate the ingrained elements of the culture. It may mean spending a few dollars on their favorite pizza lunch or free soft drinks, but it will be worth the investment. You can find other places to cut expenses. It is also definitely not the time to stop communicating. These rough times make employees uneasy. Communicating with them makes them feel like they are “insiders.” But you must communicate both good and bad news. By doing so, they will know you are not hiding anything. They will be able to do their jobs without worrying if the end is coming and you are not telling them.
Spend wisely, on the best.
This is definitely a time for budget scrutiny and elimination of foolish and unnecessary spending. However, it is not the time to stop spending wisely. Wise spending is spending on tools and improvements to make the company more productive and effective, better serve customers, strengthen the culture, and increase sales of core products. It may also be the time to spend wisely on a new hires. There may be good buys out there on some of the best possible talent. If that talent can improve the company through added resources or enable the elimination of weaker talent, the payback on the investment could be large and quick.
Be easy to do business with.
It’s a good strategy anytime. And it makes even more sense when the market is tight. Keep it easy for your customers to do business with you. In fact, look for ways to make it even easier. Easier to find you, easier to find what they want, easier to order from you, easier to get what they bought from you. This will require you to know what your customers want and what they consider easy. It’s a great excuse, while your competition is playing the turtle, to contact customers, reconnect with them, and show them you know it is also tough on them and you really want to help make their lives easier. Being easy to do business with can also become your focus and reason for reassessing your internal systems and processes. This ensures you can deliver what you promise and what your customers want in the most cost-effective and efficient manner.
Build market share
This seems both obvious and impossible, doesn’t it? It’s obvious that building market share would help a company thrive. But, is it possible in this economy? Unless you have 100% market share in your particular market, the potential to increase market share is there. Since the total demand for your products and services has or will likely decrease, the only way to maintain or increase sales will be to take them from your weaker competition. Focus your marketing and sales efforts on the principle of survival of the fittest. The prior 10 keys can make you the fittest. They can put you in a great position to take customers away from your competition as they weaken or even die in this economy.
These are not the conditions you had hoped for, but they are here and there is not a lot you can do to affect and change them. You can, however, affect how your company performs in these conditions. The last thing any business can afford to do now is play the turtle by pulling its head into its shell and wishing for the best. Instead, you need to face the reality of the situation and continue to move forward while you carefully navigate the minefield ahead of you.
Based on the success of various companies during prior bad economic times, I have listed 11 keys to getting through tough times in one piece, maybe even growing a little, and also being positioned to grow when the economy does turn around.
1. Act NOW! Don’t wait. But, DO NOT panic.
2. Don’t fly blind, have a plan.
3. Know where you are now, what is reality.
4. Monitor continuously, always know where you stand.
5. Understand the business model, how it makes money.
6. Focus, on the core business, not on the fringe.
7. Reorganize around reality, get lean, no anchors.
8. Strengthen the culture, communicate with the team.
9. Spend wisely, on the best.
10. Be easy to do business with.
11. Build market share.
Act NOW! Don’t wait. But, DO NOT panic.
It’s here. It’s not going away. So, what are you waiting for? I am not suggesting you run around setting off a panic in your company, but you need to take action now. Even if you are still doing okay,
even if you have good cash flow from prior work, assume it is coming and take action while you are still healthy. Taking action means doing the other 10 action steps.
Don’t fly blind, have a plan.
You don’t know where all this is going. You don’t know how long or how deep this will be. The only thing under your control is your company. As difficult as it is in this environment with all the unknowns, the only way to get any control over the company’s direction and success is by developing a plan. This does not require a 100-page masterpiece to bind and place on a shelf. All you need is a planned route, a roadmap for making it through. It should address the “what ifs,” and serve as your action plan should those “what ifs” materialize. It is a written document but it is not, and should never be, written in stone. It needs to be continuously reviewed and modified as times and conditions dictate. Flexibility is the key. But, again, it needs to provide enough direction to show you and your team where you are heading and the strategies you will take to navigate through these times. The last thing you can afford at this time is to show up Monday morning with a Sunday-night strategic plan and a bucket of hope.
Know where you are now, what is reality.
To develop a plan for the future, you need to know where you are at the beginning. This is true anytime, but it applies to an even greater degree when developing a plan in a difficult environment. Determining where you are now is truly a matter of identifying what is reality. It is taking inventory of the current state of the company, including its competencies, people, resources, suppliers, and customers. It is establishing a realist baseline for anything the company will do from here, an understanding of the tools and strengths with which it has to work, and what it is really good at doing, as well as the weaknesses and gaps it will have to overcome.
Monitor continuously, always know where you stand.
In a time of uncertainty, ongoing monitoring becomes critical so you are always aware of where the company stands and where it is headed. Annual, quarterly, and even monthly historical reports are questionable in good times. In challenging times, they are just that, history. Real time, daily, and weekly information will help you steer through and ensure you remain on course. Current information will enable you to make changes and course corrections quickly and help avoid going too far down a route that is no longer viable. It will allow you to make timely changes to your plan when necessary.
Understand the business model, how it makes money.
It often amazes me how many business owners don’t truly understand how their companies make money. They don’t understand the connections within the model creating profit. During good times, you can get away with this. Sales are building, cash flow is good, and profits are showing up on the bottom line. As things begin to tighten up, though, understanding your company’s business model becomes more important. It’s like a mechanic trying to fine-tune an engine without understanding how all of the parts and components of the engine work together and affect each other. Ignorance of those interactions could lead to removing an important part of the engine, believing it does not serve a major role, and protecting a part that is actually unnecessary. To make it through tough uncertain times, your company needs to be operating at peak efficiency. The only way you can ensure that is to thoroughly understand the business model, the interactions of the parts of the company within that model, how each affect the other, and how to tweak that model to squeeze out profits while maintaining what makes your company great.
Focus, on the core business, not on the fringe.
Businesses that maintain the strongest focus are typically the most successful. That’s because all of their resources are focused on their core business; what they do best. Since most smaller businesses have limited resources, focusing those resources enables them to become really good at what they do and sometimes better than anyone else. When the economy is in a downturn this practice of focusing resources on your core business could enable you to grow while others fail. Success in a bad economy can depend on you being the best at what you do. It can depend on you providing your key customers with more than they expect and with providing them more value than they can get anywhere else. By casting off fringe products and services you will be able to focus on those products and services at the core of your business; the ones you perform best and can do better than anyone else. Then, by casting off the fringe customers, you can concentrate your efforts on those best customers you absolutely cannot afford to lose. Although it may seem counter to common sense to cast off customers in a time of uncertainty, these fringe customers will drain resources needed to keep the core customers happy. Think of it as saving the passengers of the leaking boat by casting off enough excess baggage and weight to keep the ship afloat until the storm subsides.
Reorganize around reality, get lean, no anchors.
By acting early, you should be able to avoid wholesale layoffs of vital employees. However, that does not mean you can or should just leave the organization as it is. Getting real and getting lean should be your driving force. Getting real means you need to reorganize around the reality of the business. If growth is slowing, stopped or even in reverse, the organization needs to be adjusted to best fit the new reality of the market and the business. You must remove any excesses or positions that were nice to have but could become anchors preventing the company from being agile and lean as the slowdown continues. Getting lean now may prevent deeper cuts later, affecting your company’s ability to perform. The caution is, while getting lean, to be careful not to damage your ability to support customers and provide them with the service they have come to expect.
Strengthen the culture, communicate with the team.
Your team played a large part in the success of your growing company and they will have to play an even greater role in helping the company survive and thrive in this economy. Your team had help from your company culture. Your culture played a large role in helping employees perform, and it will need even more strength to help them work through these newest challenges. Throughout these next few months, or even years, as long as this economy remains a challenge, you can never allow your company to lose its culture. Your employees are happy in it, they perform well in it, and they are comfortable in it. Now is not the time to eliminate the ingrained elements of the culture. It may mean spending a few dollars on their favorite pizza lunch or free soft drinks, but it will be worth the investment. You can find other places to cut expenses. It is also definitely not the time to stop communicating. These rough times make employees uneasy. Communicating with them makes them feel like they are “insiders.” But you must communicate both good and bad news. By doing so, they will know you are not hiding anything. They will be able to do their jobs without worrying if the end is coming and you are not telling them.
Spend wisely, on the best.
This is definitely a time for budget scrutiny and elimination of foolish and unnecessary spending. However, it is not the time to stop spending wisely. Wise spending is spending on tools and improvements to make the company more productive and effective, better serve customers, strengthen the culture, and increase sales of core products. It may also be the time to spend wisely on a new hires. There may be good buys out there on some of the best possible talent. If that talent can improve the company through added resources or enable the elimination of weaker talent, the payback on the investment could be large and quick.
Be easy to do business with.
It’s a good strategy anytime. And it makes even more sense when the market is tight. Keep it easy for your customers to do business with you. In fact, look for ways to make it even easier. Easier to find you, easier to find what they want, easier to order from you, easier to get what they bought from you. This will require you to know what your customers want and what they consider easy. It’s a great excuse, while your competition is playing the turtle, to contact customers, reconnect with them, and show them you know it is also tough on them and you really want to help make their lives easier. Being easy to do business with can also become your focus and reason for reassessing your internal systems and processes. This ensures you can deliver what you promise and what your customers want in the most cost-effective and efficient manner.
Build market share
This seems both obvious and impossible, doesn’t it? It’s obvious that building market share would help a company thrive. But, is it possible in this economy? Unless you have 100% market share in your particular market, the potential to increase market share is there. Since the total demand for your products and services has or will likely decrease, the only way to maintain or increase sales will be to take them from your weaker competition. Focus your marketing and sales efforts on the principle of survival of the fittest. The prior 10 keys can make you the fittest. They can put you in a great position to take customers away from your competition as they weaken or even die in this economy.
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