The Dow drops another 300 points, unemployment rises, spending decreases. This hardly sounds like the environment for setting up your business for success, and yet this is exactly what your competitors are hoping for.
Let me explain.
Downturns in an industry or the economy have a necessary cleansing impact on our competitive capitalist environment. In times of rapid growth, bad practices, poor process, and wasted resources accumulate like straws on a camel’s back. The organizations usually do not notice the problems or choose to ignore them in light of the overall good growth in their products.
Then the music stops. And the question is now what?
The knee jerk reaction is to pull back on everything-reduce headcount, reduce expenditures, conserve capital and just slow everything down and wait out the storm. If this is all you do, you will, at best, not improve your market positioning, and very likely lag the recovery.
The downturn provides a unique, and yes, perishable opportunity.
Having managed through the dot.com bust, up-close and personal, I can definitely appreciate this position. Let me explain.
In a down turn you get to catch your operational breath. For example, you can kill those projects that were marginal and perhaps politically difficult to kill, and now you can kill them. Priorities can become crystal clear.
You can really examine company processes and quality. Fix those nagging product management and realization issues, get the quality tools in place that you never had time for, fix the old accounting system…
On the staff side, this should not just be a time for cutting headcount, and eliminating raises and bonuses.
This is the best time to upgrade your staff! Every organization has a range of talent. In a hot market you might be more inclined to hold on to mediocre team members, rather than invest the time and effort in finding someone new. In a down market, there are more highly qualified people on the market. Recruiting will never be easier than it is now.
If you upgrade your processes, products, quality and team in this environment, the cost to your bottom line is negligible!! If the market is not growing anyway you have the time to make this investment.
If you do this, you will thrive at the front end of the recovery and leave your competitors in the dust.
If you stay with the status quo you miss this perishable opportunity.