6 Critical resilience factors in challenging times
I have been blogging for a number of years, mostly for companies I have worked in. As I now set up my own blog, I thought it was worth sharing some of the early posts again, where the messages are timeless.
I wrote a version of this post just as the recession of 2007/8 was hitting and I could see younger managers badly affected: the world as they knew it was unraveling before them. Of course, for those who had been through one or more recessions, we knew it would be grim (and there was no doubt this was faster, darker, deeper than anyone had ever known). But we also knew those who kept their heads would survive, as has indeed proved the case.
At the very least, people would still need to buy food, package and market that food, distribute it and dispose of what was left. The question for every business was to find the core activities that would continue – even with constrained budgets – and how to add value to them. There would be winners and losers in the recession, and the winners were those who recognized just how quickly and differently they had to respond.
This was the distilled wisdom that my colleagues and I put together, to help businesses to focus on priorities. Every business hits its own downturn at times, so many of these are relevant even in better economic times.
The biggest focus has to be on cash – hang onto to what you have and become the “squeaky wheel” that your customers pay first. Make sure you incentivise your credit controller (there are some very practical discussions on how to do this in the UK Business Forum on credit control bonuses).
Treat this as an opportunity to really understand what your customers value about your business, and focus on that. Be clear about what is unique in your business and put that at the core of what you do
Stop doing anything that isn’t in this core and rationalise your operations. Management teams have to cost-reduce their networks, products and services. It is surprising how much cost you can save if you take an objective view. It usually helps to get outside help for this – there will be hard decisions and having someone to work with can make it easier to take out some of the pet projects that inevitably balloon in good times.
Be realistic about revenue expectations and get your costs behind these. If you have to cut, then make sure you cut hard, deep and once. Do not salami slice.
This one is often overlooked. Your best people need to know you value them. You need them now more than ever.
Do one new and innovative thing for the future. Put your best people on it and build hope for the future. Focusing energy on an achievable vision is inspiring and will help get through the tough times.