Date Line: 28 February 09
Change Now and Reap Rewards – Part 1 of 3
PRINCIPLE’S NOTE: In today’s business climate, the emphasis is on survival. Change is sourced from internal innovation, processes and procedures or from external influencers such as interest rates, competition or limited resources. As a leader, you have lemons in your enterprise and you need to make lemonade from them. In other words, you have an opportunity to take the next step in optimizing your organization and produce tangible rewards. JBS provides transformation solutions for business, IT and government arenas, from concept to reality, through people, ideas and technology.
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In today’s climate, very few news stories provide the consumer good information as to how one can act to minimize expenses and adapt their lifestyle. I believe we have choices, we are not helpless and we need to share information in order to evaluate our own personal needs and be proactive and adapt to our changing economic environment.
Part 1: The Approach During a Recession
Especially in today’s business environment, adaptability is a key characteristic of any successful business. That adaptability is also a reflection of the leadership of the company to be flexible during difficult times.
“In my view, adaptability is about managing your portfolio of businesses effectively, scanning the horizon for opportunities that may arise, and making decisions on a continuous basis about which of your businesses is best suited for carrying out a given activity.”
Source: Ralph Norris, CEO, Commonwealth Bank of Australia
External recession strategies for business: Simply think strategically, but execute tactically and adjust to the government, market and industry signals. Now is the perfect time to consider when that adaptability injects change it then can create opportunities for improvement, efficiency and productivity by refining your strategic thinking. Consider these external strategies:
1. Work with your investors [bankers, VCs, family, etc.] and share your recession strategies. Look for their endorsement and elicit their suggestions. Recognize that their buy-in may provide a bridge for future funds.
2. Investment and acquisition opportunities are more prevalent in a recession. Competitors may want to shed portfolios or product lines that would enhance and boost your core business.
3. Find out what are key satisfiers for your customers. Go out meet with your key customers, send out surveys, build relationships that provide insight.
4. What are existing competitive substitutions for your products and services? What are the startups that provide new approach that is faster, better, cheaper?
5. Look for business values that refine your product and service value. Look across industries where more value for less is apparent. Copy their success, but don’t sacrifice yours.
6. Look for alternatives to enhance your product or service lines by providing cheaper, less complex solutions.
7. Create new opportunities through networking your partners, suppliers, competitors and investors.
8. Go beyond the contract and handshake. Go beyond what you promise, build relationships and beat out the competition.
Internal recession strategies for business: Don’t be myopic and overlook opportunities internally. This is a time to pursue internal transformations, as well. Also, some of these seem they should be external points, but the defining characteristic is that those points originate within the company culture and internal mindset. Here are internal strategies to consider and promote sustainability:
1. Every customer is a diamond in the rough, potentially precious. Take GOOD care of each of them, especially the repeat customer.
2. Reevaluate your entire pricing structure. Maintain your margins by market testing increase or decrease pricing strategies.
3. Don’t rely solely on the web. Be proactive and meet the people loyal to your products and services.
4. Evaluate your core business needs. Assess and increase its value. Don’t loose your focus.
5. Managing resources are important and employees are usually the key resource often overlooked. Keep your employees in the communication loop regarding change and how the change process will be implemented.
6. Know your strategic value to the market. Do you provide products and services on cost, quality, flexibility, service timeliness, partner relationship or other areas?
7. A recession is an opportunity to increase the quality of your human resources. Hire quality people for open requirements. Be methodical. Take you time in assessing the candidates. Make the best decision for your company. Remember, change can be a catalyst to improve your organization and morale.
8. Refinement and prototyping extend your knowledge on how your business can be improved. During a recession, your efforts can quickly pay-off when the market opens up, when cost reductions are replaced with productivity, or when new product or service introductions have been postponed to take advantage of the uptick.
9. Cash flow is the heart beat of your company. Monitor it. Keep you accounts receivable, timely, current and limit bad debts.
10. Cost reduction is important in a recession, but understand the consequences. Know where to reduce. Look for efficiencies in processes. Increase your productivity through reduced costs, but recognize the downsides.
11. Look for strategic investments for they may get a price break during a recession. Focus on new processes, equipment or technology that produces efficiencies, productivity, quality and cost reduction. More importantly, recognize the project implementation’s lead-time and plan accordingly. Don’t rush into a quick fix or cause stress your organization cannot handle.
Next Blog: Let’s focus on your customer’s perspective. They are key to your survival and success. Survivability, in part, is due to your market presence and the value your products and services provide to your customer.
Source: Jarvis Business Solutions, LLC, © 2009, For services: http://www.jarvisbusinesssolutions.com
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