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Stuck in 2008 or Moving Purposefully Into 2009?

The Recession Isn’t Waiting for You … What Are You Waiting For?

Our March 4, 2008 posting entitled "Getting Through 2008...and Beyond" was written to help business owners and CEOs to better see the coming economic storm and plan their way through it. Well folks, don your slickers: it’s here!

Every day seems to bring unrelenting bad economic news: more bank loan write-offs and failures; an ever-deepening housing crisis; inflation growing at the fastest rate in 27 years putting intense pressure on interest rates; a continuing slide in the stock market indexes; the once mighty GM denying bankruptcy rumors; consumer spending tailing off rapidly ...

These are the headlines. You likely have more intimate tales affecting your business and its environment.

So what do you, as a business owner or CEO, do? Run for “higher ground?” Hunker down? Stay the course? Or … get going now? (Remember the adage: “When the going gets tough, the tough get going!”)

Running or hunkering down often carry with them an attitude of resignation. Sure, you can try to sell your company or find a strategic partner, but this might not be the best time in light of falling values and tight credit. Likewise, you can just hold fast, hoping that the storm will pass without too much damage. But what will be the long-term costs of rebuilding if there is damage? What will be the lost opportunities that quicker and insightful action might have helped produce?

If you answer, “stay the course,” because you’ve already developed a strategic plan to assure short-term stability and long-term prosperity and your management team is focused on executing against that plan and taking advantage of opportunities as they present themselves, sail on.

But, if you know that you should have acted sooner in the face of the approaching storm and are truly prepared and committed to beginning and following through on a strategically focused process beginning today (not tomorrow), all might still turn out well … or better.

Begin by asking yourself, and your management team...

• Are we prepared to adopt a disciplined and focused course to improve our business?
• Are we prepared to take advantage of opportunities coming our way?
• Are we prepared to protect our turf?

When you ask these questions, make sure that they are not just in the context of today. They must be asked while considering what you’ll need to do to transform your business to assure your ongoing success and prosperity.

As we wrote in February, your organization looks to you for leadership. Are you prepared to lead? Sure, it might have been better if you had begun work on your plan and execution strategies much earlier, but you can’t go back. So again, are you prepared to lead—to go forward now?

A word of caution: If you are not prepared to take the lead, don’t start the discussion. The worst thing you can do for the organization is to create false hope and then not follow through. Status Quo Cannot Be an Option! Where to Begin?

Begin by developing a Strategy Statement for your business looking out over the next three to five years. With your management team, develop an action-oriented statement of what you want your company to be and to achieve over this period.

A well-crafted strategy statement should contain three key elements:

• A definition of the ends that the company seeks to achieve, essentially what it seeks to be
• The “playing field” or scope of the activities in which it will engage
• What your company will do differently from or better than its competitors—in other words, it’s competitive advantage

It should not be a mission or vision statement for your company, but an explicit statement of how you will go to market and what you will achieve over the period. Progress and results must be measurable. The goals can be stretch goals, but don’t make them so outlandish that the team will quit before it starts. Be specific. Be goal-focused. Be time-bound.

An example might be, “Over each of the next three years, annually deliver a minimum of 30% revenue growth with 10% profit margins by being the most important and trusted total value provider of user-safe and effective cleaning solutions to the industrial maintenance industry.”

Why begin with a strategy statement? Because if you know where you want to take your business over the next few years, decisions today and later on can be tested against the strategy. Your actions will begin to have a purpose, and not be one-off events. You and your team will be better able to resist reflexive actions for purposefully directed ones.

Look again at the questions posed in our February alert. Ask them again in light of your experiences in the ensuing months. Consider how these questions, or ones particular to your business, can be better answered if you’ve developed a forward-looking strategy statement. Very quickly in some cases, and with greater thought and analysis in others, your actions should become more focused and purposeful, helping you better chart your course.

Think about the question relating to your competitors. Are you looking at them? If they are as good as you think they are, you can be sure that they are looking at you and your customers. What do you need to do to hold them off? How can your strategy statement drive your actions?

Admittedly, developing a strategy statement can take significant time and effort. It’s a process that can’t be rushed if its value is to be realized, if it’s to be distilled down to what’s essential. Once the words are defined and understood and the explicit goals are determined to be realistic, yet a reach, the strategy statement in its simplicity can be a powerful guide for setting your direction and taking actions now and in the future. Next Steps?

Keep in mind that, once developed, the strategy statement should constantly be tested for relevance.

• This is not a one-time event
• This is an opportunity to engage in a process oriented way to better understand the uniqueness of your business and its competitive advantages
• This is a way to plan the future course of your business in a measured and focused way
• This is a way, when necessary or appropriate, to guide a course correction for the business going forward

Start down this path knowing that developing the strategy statement is but the first step in a dynamic process. With the strategy statement in hand, ask...

• What are the critical goals that you’ll need to achieve?
• Which individuals will be responsible for achieving them?
• What’s the timeline in which to achieve results?
• How do you measure what’s truly important, and how does that influence or change the behavior of your implementation teams?
• How do you hold people accountable for achieving their assigned tasks?
• And finally, and perhaps most importantly, do you celebrate successes along the way?

These are all questions that need to become ingrained in the way that you are driving your business—not just to survive today, but to also flourish into the future.

 

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.