Seven actions to survive, thrive during recession
By Theresa M. Szczurek
February 6, 2009 --
In his inaugural address, President Barack Obama didn't shy from assessing the current economic situation.
"Today I say to you that the challenges we face are real. They are serious, and they are many. They will not be met easily or in a short span of time."
He also didn't waver in his commitment to facing those challenges. "But know this America, they will be met."
Obama expressed what the world's most successful people already know: During difficult times don't despair. Believe and act.
Successful organizations do the same thing. Research reveals the following seven actions which have helped companies succeed during past economic downturns.
Believe. Henry McGovern repeated the mantra "Everything is Possible" when, in the face of much naysaying, he opened the first Pizza Hut in Poland in 1993. Today his company, the $3 billion, 16,000-employee American Restaurants, is the largest restaurant chain in Eastern Europe.
Choosing to believe is a conscious decision. Like McGovern, decide to carry a hopeful, upbeat disposition and believe that good prevails.
Belief, however, is not enough.
Develop a good plan, act on it. Companies with a written plan outperform those without one. A good plan depends on a core ideology to provide guidance and direction.
Andrew Benett's recent study in Brandweek, an advertising publication, revealed that 86 percent of consumers prefer companies with a core ideology that stands for more than profitability. More than 70 percent said businesses bear as much responsibility as governments for driving positive social change.
The first quarter is the best time to define your core and craft your strategic plan. Then execute it. Don't wait.
Serve your customers. Benett found that 80 percent of consumers want businesses to maintain a dialogue with them. James Campy's book, "Outsmart! How To Do What Your Competitors Can't," showed that of 1,000 companies with 15 percent to 5,000 percent growth, the most successful are open and transparent with customers and employees.
What are you doing to understand and retain your best customers? Remember, it is up to eight times more expensive to attract a new customer than to obtain more business from an existing one. Build customer delight and sales revenue through relationship programs that allow two-way communication.
Invest in marketing, advertising. When McGraw-Hill Research studied 600 companies between 1980 and 1985, it found that companies that continued or increased advertising dollars during the 1981-1982 recession had significantly higher sales growth during, and for three years after, the recession than companies that slowed or discontinued ad spending.
Conduct market research and develop a marketing plan to guide your efforts. Then implement free or low-budget guerrilla marketing. For example, use viral marketing through social networking.
Increase product, market coverage. Conduct a product audit to separate your cash cows from those that should be discontinued. Analyze the market and competition.
Reinvent your current product. Your firm already may have technology that can be deployed in new and different ways. Strategically expand your market coverage. Not all market segments are hurt as badly as others. Some actually grow while during a downturn.
Invest in your team. In the effort to improve business as the economy worsens, leaders can neglect their staff. Prevent rumors and good people leaving by improving relationships. Act with integrity and communicate. People are happier knowing the situation and can often help develop solutions. Even if you must let people go, act so your firm retains its reputation and people maintain their dignity.
Develop your sales strength. How effective is your sales force? Does your sales process consistently move leads to qualified prospects and onto closed accounts? Are your sales people up to snuff? Now is the time to assess, upgrade and train the trainable.
Proactive companies thrive in a recession. They believe and act. Many find they can't do it alone and turn to a consultant/coach to help navigate choppy water.
Theresa M. Szczurek is chief executive of Technology and Management Solutions LLC, a management consulting firm in Boulder, and author of "Pursuit of Passionate Purpose." Contact Szczurek at 800-505-8674.