By Paul Plotczyk, President, WSA
- Wall Street is a roller coaster.
- Credit is drying up and cash will soon follow.
- Recession is on the tip of every major economist's tongue.
- Housing is in a “meltdown,” according to Business Week, and the worst is yet to come.
- Consumer confidence is at an all-time low.
- Many companies are “right-sizing.”
- Employees are grappling with a strong case of FUD (fear, uncertainty and doubt).
How do you keep your organization focused and ride out these turbulent economic times? Is a turnaround strategy necessary? Or do you simply have to manage the perceptions and fear generated by external circumstances that have little to do with your company's or your industry's reality?
While each company faces unique challenges in good or bad times, we offer 10 things to focus on when times are tough.
10 Keys to Managing in Tough Times
1) Your business is no longer simple: One upon a time, market stability existed, command-and-control management was the default model, and “change” was a buzz word. Today, virtually all organizations are part of a complex, often global, interconnected set of business affiliations and alliances.
Fluctuations and unpredictability reign. Command-and-control or impulsive, “ready-aim-fire” is no longer an acceptable mode of decision making. Complexity requires more communication and decisions have a ripple effect.
2) Knowledge is Power: Knowing your “stuff” is more critical than ever before, especially when it comes to getting your enterprise back on track. It is critical to get accurate information about the reality of your organization's position.
It is often very useful to hire outside consultants to help you view an objective “snapshot” of your organization. (This may sound slightly self-serving, but in fact it could be money well spent especially if quick and objective action is needed.) Once there is a clear understanding of the current state, what needs to be done next is often obvious.
3) Establish a “Kitchen Cabinet”: Assemble a small working group of trusted advisors – people who will not only contribute to your ideas but will challenge your point of view. Conduct an initial face-to-face meeting to lay out the issues, set the tone of openness and straight talk, and build a sense of urgency.
This is not a substitute for your executive team or Board. In many situations this is a way to acknowledge and leverage the expertise of the few, trusted individuals you find yourself always turning to in a crisis! Formalizing this is not new: it has been done by a variety of people in complex situations, including Andrew Jackson, John F. Kennedy and Tony Blair. You are in good company
4) Declare Your Intentions & Act Swiftly: You don't have time to pour over old data. However, as outlined above, snap decisions will not necessarily produce the positive impact you need. Quickly formulate and communicate your plan internally first. Take small steps, test your instincts, put mechanisms in place to get accurate feedback on results and refine your direction accordingly.
5) Wants vs. Must Haves: Cut back on everything that is not directly related to generating revenue. No exceptions!
6) Make One Cut: If personnel reductions are necessary, cut deep. The alternative is setting your organization up for a slow, painful decline rather than positioning it for a remarkable turnaround.
Ask anyone who has tried to sell their house in this declining market how this mistake feels! Wanting to get the most for their houses, those owners who have cut too little too late find themselves chasing the market downward. Plus, if you have communicated your intentions clearly, people will put in the extra effort to save the company – and their jobs!
7) Communicate Your Strategy to the Outside World: Counteract the doom and gloom of the media with a clear message that positions your company for success because it will satisfy the customers' “need to know” in today's market.
8) Focus on Customers and Prospects: This is the time for your team at the top to be visiting and talking to your customers and prospects. They are the ones who buy your product and generate the revenue, not the pundits and economic gurus.
9) Revise Your Product/Service Strategy: Once you have listened to your clients and prospects, take their feedback and revise your strategy to match their needs with your organization's strengths.
10) Tell the Truth and Keep Your Promises: This is no time to put on rose-color glasses and ignore whatever difficulties and challenges your company is facing.
Be honest. Keep your promises. And do not disrespect the intelligence of your people. They know that “We'll be all right" and "nothing will change” are empty phrases at best. When people find your message credible, you not only increase their commitment, but you will maintain your integrity.
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