smart talk
Back |  Print  |  Bookmark

 
   Managing Through Tough Times

   Let strategic thinking propel your actions, not fear.

 

That the world around us is shifting in terms of the economy and our markets is not in question. What is questionable is how we address the challenges that face us. It is too easy to bunker down, close the hatch, and take a month by month view of the situation. However, this would not be the most opportune approach. 

 

Focusing on immediate or short-term survival is crucial. But coupled with that is the need to have mid-range and long-term, at least five to ten years out, views that will ensure a balanced strategic approach moving forward. Too often long-term growth, or even sustainability, is sacrificed for short-term survival or gain. To take actions to keep the doors open now, only to close down in 12 months time does not make good business sense. A strategic approach would be to address immediate issues, together with long-term concerns, so the two strategic action plans are implemented simultaneously. Let strategic thinking propel your actions, not fear. 

 

An economy under pressure does not automatically mean financial difficulties for every organization. In some cases it can mean assured growth, especially in market share for certain lines. McDonald’s is currently a good case in point. Demand for their low priced menu items means the posting of good results. It does, of course, mean that the menu items have had to be re-looked at. The introduction of their low price-point coffee options also indicates a sound strategy. 

 

If in survival mode, a company has to take all the necessary measures quickly and decisively in order to ensure that the immediate pressing needs are met, especially with regard to access to capital and the presence of positive cash flow. The retention of existing customers becomes pivotal. 

 

If a company is in maintenance mode, it does not mean it can continue with business as usual. There needs to be constant striving for continuous improvement; whether that means focusing on cost reduction, taking customer service to the next level, enhancement to technologies or processes, optimization of resources, or finding the next new idea. 

 

Sometimes in a downturn, there is the opportunity for an organization to be in a growth mode. This is the time to test new ideas, create strategies to greatly differentiate your company and its products or services in the marketplace, go after market share, or manage the risk while pursuing new approaches. 

 

To fully navigate through the tough times, the focus needs to be both outward and inward. Looking outside your company means focusing on your customer base, choosing new markets, creating strategies, and following through with communication. 

 

Managing through tough times.  

 

Managing through tough times - Customer Focus

Retain your customers during this time. Work hard to ensure customers experience added value from your product or service. Link your value proposition to customer expectations - wanting either the comfort of the familiar or the surprise of something new. Do customers feel that you are supporting their mission or need during these times? Sometimes this may even mean fostering a partnering relationship with your customer. Make it pleasurable for your customer to do business with you. Work all your networks as well. Make sure current customers remain satisfied; you cannot afford to lose them. 

 

Build breadth and depth with existing customers. Explore ways to extend what you can provide them. Use your solid relationships to cross-sell products or services, as well as using current points of contact to sell you further into a client organization. The closer your partnering relationship with a customer is, the more a customer feels understood by you and the more your points of contact are with the customer, the less likely it is that the customer will be able to break off a delivery relationship with you. With existing products and services on offer, within an existing marketing base you would focus on ideas for market penetration. Because you are staying with the familiar, costs for this approach can be minimized and current knowledge maximized. Cutting prices is not always the best strategic decision to make.

 

 

Managing through tough times - Choose New Markets

 

Create new customers for your products or services. This could entail positioning yourself in different markets, or with different customer demographics. In order to do this, different features of, and benefits from, what you offer would need to be highlighted as a good fit for different customer needs that are identified. Different distribution and access routes may need to be established. Sometimes looking beyond the obvious uses for your products or services may open up new opportunities for market penetration. Look for ways in which your products or services can be different from competitors in the market. Remaining with your current knowledge base, expertise, or technology allows you the opportunity to concentrate on expanding your reach in new markets.

 

 

Managing through tough times - Create a Strategy

 

Revisit your strategy and align it more adeptly to the current environment. Flexibility, adaptability and faster response times are essential during tough times. Sometimes it is about having an interim strategy that will still align with your long-term strategy that is a good five to ten years out, but is primarily focused on navigating through the changing circumstances successfully. Sometimes it is about taking an innovative approach, one that precludes increased money spend. However, this does not mean that you neglect innovation efforts; you need to remain ahead of the competition. 

 

This is the time to be inclusive when planning your strategy. Aim for more market intelligence and ideas that you can harness in your organization. Strategy is everyone’s responsibility. It is then a question of recognizing the key patterns proactively and investing your efforts in the right areas to propel you forward. The strategy needs to encompass the vision for the organization, as well as translating the vision into goals to be achieved, and ultimately the actions required in order to make it happen. Make sure timelines reflect the reality of the changing environment.

 

 

Managing through tough times - Communicate

 

Now is the time to keep communicating - with your customers, your managers, your staff, and your suppliers. Fear is always elevated during these times and having real facts presented, feelings acknowledged, and a pathway to follow can go a very long way to mobilizing your people and helping them to deal with the stress of the times. Address the elephant in the room in a judicious way. Ensure that rumors do not become the primary source of information. Create a communication plan concomitant with your strategic plan. Determine key leverage points when a message will have maximum impact and then design the appropriate format and content for the different audiences in your organization. Don’t neglect your external communications either. Make sure the communications strongly reinforce your brand and build marketplace confidence in your product or service, and the organization. Communicate carefully and often - keep connected!

 

 

Managing through tough times - Align with Internal Initiatives

 

Translate your strategies into action plans. Make sure everyone knows what they are accountable for. Keep milestone deadlines spaced at short intervals. Visible successes will keep the momentum going. Keep everyone focused and measure progress on the objectives set. Be sure to reinforce the positive results. 

 

Ultimately any change, whether big or small, that is made to optimize the external interface must be adequately planned for. This will mean coordinating logistics, as well as the cross-functional co-operation that will be required. Never assume that a change in one area of the business can be implemented without consequences being felt in other areas of the organization. An holistic approach is essential. A detailed plan should reflect this. 

 

Align the organization to the environment in which it is operating, then align the overall strategy of the organization to all its internal operations.  Looking inward in the organization entails managing the internal alignment and focusing on consolidation of efforts, reducing costs, chasing cash flow, aligning the culture to the strategy, enhancing competencies, and championing the changes that need to occur.

 

 

Managing through times

 

 

Managing through tough times - consolidation

 

Now is not the time for turf protection to take place or for the propelling forward of individual careers at the expense of the whole organization. It is about harnessing the power of every individual, system or process in the organization for the collective good. It is about allocating resources to the key leverage areas. It is about consolidating plans to ensure the realization of those goals that will ensure the organization can firmly position itself in the market, deliver quality to its customers, be financially sound, have efficient processes to underpin the delivery of its products or services, and have developed employees to ensure continued success. Ensure every action is linked to the organization’s vision. Difficult decisions will have to be made. Leadership will need to provide all the support that employees require at this time. This means that leaders need to be visible, continually communicate, and monitor that progress is being made against the strategic plans.  

 

Handle the situation with respect and handle the people with respect. If a layoff is unavoidable, prepare for it in a comprehensive way – both for the way in which to handle those who are leaving and to manage those who have survived the downsizing decision.

 

 

Managing through tough times - Cost Reduction

 

In tough times, positioning the organization in the marketplace is crucial and strategies need to be devised accordingly. However, not to focus on increasing internal efficiencies would be negligent. Challenge the existing processes. Question if the processes are even essential to effectiveness – should they exist? Then, check the process flows to ensure that no obstacles exist throughout the process flow – are there pain points, wasted effort, redundancies, unnecessary complexities, or excessive resources required? If any, or all, result in negative outcomes, you know where to focus your efforts to streamline your processes. 

 

Other questions to ask are as follows. Are the existing systems adequately supportive of the processes? Does the structure easily enable the processes and the interfacing required? Is the operation appropriately equipped? Can the people and their competencies be more effectively utilized? How can procurement be optimized? Can inventory and waste management be improved? Is resource allocation being effectively handled? 

 

Track the financial numbers and ensure the costs are minimized while still ensuring that the money that is spent is done so in alignment with the strategy. Reduce unproductive expenditure. But remember that successful growth does not come from reducing costs – so keep your cost reduction efforts in perspective.

 

 

Managing through tough times - Chase Cash Flow

 

You need financial stability to sustain your operations through an economic downturn. Without cash flow to roll over operating costs and with limited access to capital, the ability to focus on what needs to be done is severely constrained. This, in turn, may present the very real threat of having to close the doors of the organization. Plot the profitability of projects, don’t spend more than its projected return (in actual revenue or in value), work within a realistically set operating budget, resource correctly and improve efficiency so as to release resources for revenue producing work, and aim for annuity business if possible. Ensure the decisions you make allow for sound cash flow management.

 

 

Managing through tough times - Culture Alignment

 

Culture, as a learned system of meanings that inform the way we do things around here, is a strong force within any organization. Tough times definitely call for a re-examination of the current culture to determine those aspects of it that will help us move forward and those that will hold us back. Having done the external environment analysis and establishing the strategy that is best suited to penetrate the market, meet customer needs, and ensure the organization’s profitable longevity, then it becomes essential to ensure that the culture is aligned to the strategy to enable it to be realized. Define the required behaviors. Strong moves need to be made by the leaders to embed desired behaviors into teams throughout the organization. This can be achieved through role modeling, leadership practices, performance management, communication, and reward and recognition. The aim is to continually reinforce desired behaviors.

 

 

Managing through tough times - Competency Enhancement

 

The core competence of the organization needs to be clearly defined. It must be one that ensures the organization can fulfill its mission, be competitively positioned in the marketplace, and achieve its vision. Available capacity needs to be established throughout the organization and opportunities to improve on employees’ competency levels need to be made available. This could involve ensuring cutting edge capabilities, building skill sets that allow for multi-tasking, and providing generic competencies that are required across the organization at different levels to embed a culture and to mobilize optimum performance for the future. Invest in competencies now that are required to fulfill your strategies moving forward. You cannot afford not to invest in your people – even during tough times. Assist your employees to cope with the stress of dealing with uncertainties in their lives. Provide them with the skills to navigate their way through all the changes they are facing. Often times, when focus is placed on employee development during tough times, it can allay fears and emphasize the organization’s commitment to, and belief in, its people.

 

 

Managing through tough times - Champion the Change

 

Determine the changes that will be required from the formulated strategy. Think through the entire change process in a systemic way so that all implications are thought through and all possible consequences are noted. These would be the consequences for every stakeholder. All changes need to be integrated. Create action plans to bring the changes about. Do so in a manner that ensures all stakeholders are involved, responsibilities are set and people are held accountable for them. What employees are going to lose by the change should be acknowledged. The realities of the difficulties must be faced. Most importantly, the change efforts required to move through the tough times must be championed strongly from the top of the organization. A positive, committed voice needs to be heard, a visible presence must be seen, and support must be felt for employees to navigate a change without feeling isolated, alone, and fearful. People need to be propelled by a positive view of the future and feel confident in the strategy that is formulated to get there. 

 

Think through as many scenarios as possible so that you can proactively formulate a plan of action that can be adapted as circumstances change. Facilitate the alignment necessary within the organization. Engage your employees in the process. Seek out sustainable growth opportunities. Make sure you are well positioned to forge ahead when the economic conditions improve. Finally, have the courage to lead in this challenging environment.

 

Back to Top