In December 2007 when the great recession started, I was working with several companies across a myriad of industries, and I spent a lot of time strategizing with CEOs about how to successfully survive that global financial crisis. Although each company was unique in the specific strategy we developed, as I look back, I can see a pattern of five key things that I counseled all of the organizations to focus on.
1. Be so good they can’t ignore you
A) Deliver the best product/service you have in the history of your company. You still need to do some level of advertising, but the most potent opportunity to retain and grow your customer base will be through referrals, so you must be so incredibly good at every level that people enthusiastically recommend you to new potential customers.
B) Get closer to your best customers than you ever have before. Identify your top customers and invest heavily in strengthening your relationships, understanding them at a deeper level, and turning them into wildly loyal evangelists for your business.
C) Retain and grow your best employees. It is impossible to do the two things above without an amazing team. Identify your top performers, invest in them heavily, get closer to them than you’ve ever been before and turn them into wildly loyal evangelists for your customers!
2. Have a very focused strategy
Ensure that you have a clear, compelling, and well-communicated strategy for how to successfully navigate a challenging marketplace. Your current strategic plan might need to be adjusted, even significantly altered, if there would likely be a significant negative impact on your industry. You will also have to shorten your planning timeframe to be nimble and adjust quickly as a wave of changes impacts your organization. Once you have that plan, overcommunicate it consistently so that everyone is fully aligned and understands their role in keeping the business moving forward.
3. Execution is everything
During a rough patch, you must have high levels of accountability and disciplined execution. I just mentioned that you need to have a focused strategy, but that strategy is useless if you don’t execute it effectively. You have to make your numbers, meet your deadlines, increase quality, decrease waste, increase efficiency, increase customer satisfaction, increase employee engagement, and become more innovative all at the same time. The only way to achieve this monumental challenge is to create a culture of accountability that has a fanatical focus on execution.
4. Be honest and transparent
When employees see an organization struggling, they fear the worst, and nobody does excellent work when they’re feeling scared. Share as much information as you can with your team, be open and honest, share the good, the bad and the ugly. The only people that will allow your company to survive, even grow, during a severe recession are your employees, so give them enough information to understand what’s going on and help you keep the business on solid footing.
5. Create a contingency plan
Before it gets too stressful, create a thoughtful plan of action for what to do if things start to get bad. A strategy is simply the allocation of scarce resources, and during a recession, you’re going to have to allocate your dwindling resources even more strategically. Before your judgment is clouded by fear and worry, decide what you will cut and in what stages. Then create a series of red flags that determine when you begin to implement the different elements in your contingency plan.
As I am writing this note, there is a hurricane headed for Florida, where I live. A few weeks ago, it was a tropical depression off the East Coast of Venezuela, and I did not know it even existed. About a week ago it became a tropical storm headed towards Puerto Rico, and we were worried about them, but not about us. Today it is on track to hit Florida as a category four hurricane with winds in excess of 130 mph, and I spent the afternoon filling up my truck with gas, buying supplies and making sure the generator at my house works. I don’t know if it will hit us, but I know that if it does I am fully prepared.
Right now I think it’s the same with the economy. There is a storm brewing, possibly a severe hurricane and it is only a matter of when and where it hits. I am currently working with CEOs around the world, and every one of them is nervous, they feel the winds growing. I have counseled all of them, like I am counseling you, to start getting prepared for the storm now before it is too late.
Be safe, it’s going to get nasty out there – John
** Please let me know if there is any way that I can help you and your team.