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Surviving the Upturn... Be "The Other"

In February 2008, Barry Cain and David Spitulnik provided a road map for surviving the impending recession in Getting Through 2008 and Beyond. Similarly, this article provides forward-looking strategies for seizing opportunity during the budding recovery.

According to many economic pundits, the recovery has started. While you might or might not be feeling it, the real question is: The recovery to what? More on that later, but first, a couple things to note:

• “Normal,” at least as it was defined at the end of 2007, is not likely to be seen again. We will have a “new normal,” which will not necessarily be bad—just different. 
• Do not assume that the recovery is your recovery. Just because recovery is happening, does not mean that everyone will get to participate.  

This article will help business owners and their management teams increase their chances of participating in the recovery and to help them prepare for business in the “new normal.” 

It was likely painful and costly getting to where you are, but consider those sunk costs for survival and let them go. View the current environment as an opportunity to reinvent your company, what it does and how it does it.

Understanding where you want to go, where you are and what you need to do to achieve your goals are all critical elements to ensuring your organization will be positioned to enjoy benefits of the “new normal.” 

• Don’t be bound by what you did in the past. Instead use this opportunity to determine where you want to be tomorrow.
• Odds are, you have less baggage than you did before this all started. Your business is still operating, but you probably made cuts—perhaps drastic ones. Simply put, your “new” business does not need to have the same look and feel as the old one.
• Understand your possibilities. While it is critical for you to consider where you came from, the past should not be the determining factor for creating your company’s future.

If this makes sense at 30,000 feet, it’s time to hit the ground running and rebuild your business given the “new normal.” Accordingly, following are strategies to help you capitalize on the current economic climate.

1.) Readjust your past goals. To start, articulate your three-to-five-year goals and ask yourself: do they make sense now? Are they still achievable? Are they focused and valuable? Make sure your plans make sense to both you and your leadership team. Listen to their input, but ensure that any recommendations to ‘stay the course’ are based on analysis of the new reality rather than comfort with the old environment.

Important: Change is not optional. Resist the impulse to rebuild what you had before. Be ready to review, revise and rebuild your business model with the understanding that what worked before will not necessarily work again. Make sure to answer the following questions before taking action.

• What is your value proposition? If the old concepts are no longer relevant, then they should be replaced. Think of what we went through as an earthquake. Evaluating a building in an earthquake zone involves looking not only at whether the building is still standing, but also at its underlying foundation. Similarly,  look not only at outward appearances, but also at the assumptions on which the business is built to see if they are solid enough to support the company today. 
• Who are your customers? More importantly, who do you want them to be? Are there strategic benefits certain customers could give you beyond revenue? One of the more difficult processes for businesses is defining their target customers and then sticking to the plan. There might be a set of customers with whom you want to establish a “partnership” for win-win positioning. There are others with whom you will likely have a strictly buy-sell relationship.Take the time now to define the attributes and benefits of different types of customers.
• What do I want out of this? You built your business with dreams and goals, but when the recession hit your mindset became “just survive.” As the skies clear don’t lose sight of the fact that you will be more motivated to meet your company’s goals if they match your personal ones.

2.) Build a road map and articulate 3 to 5 key actions to get to there. Without a specific plan of action, even the best goals cannot be achieved.

• Are the goals specific, measurable and time-bound? Are they “make or break,” “bet the farm” type goals? Have you articulated the action plans to accomplish them? Keep the list short, as too many goals equate to no goals at all. Each of the goals will have a number of
  underlying activities, but the overarching goals must be clearly understood across the organization and progress must measured and communicated. At the same time, the action plans to accomplish the goals must also be focused and clearly articulated. Once the main goals are established, communicate each department’s and employee’s roles in
  meeting them and help them develop their own plans and action steps.

3.) Rebuild only what you need. Having articulated your goals and the actions you’ll take to get there, what are the resources you will need? A clear and concise analysis of the people and capital needed to carry out the plan is necessary.

• Do you understand the attributes of the people you will need to accomplish your new reality? Are you trying to make do with the people you have or do you need to make further changes in the team to accomplish your goals? While you have likely been through a gut-wrenching period with your team, you still may not have all the right individuals onboard.
  Furthermore, there are many great people available right now, perhaps even working for a competitor, who could strengthen your team and  better position your organization in the marketplace.  Don’t lose your soul, but don’t lose this opportunity.
• Are you open to the notion that some of your needs might be met through outsourcing? Conversely, is the time right to consider bringing back in house some of what you outsourced in the past? The “earthquake” did not automatically destroy everything, but it is worth the time to consider rebuilding with a more comprehensive view of the current landscape around you.
• Can you try before you buy? Consider the benefits of a phased approach to resource acquisition. There are many resources available, both people and capital, that can now be rented rather than bought. In order to better control your cash flow, consider hiring temporary rather than full-time staff. This is not necessarily the answer for the long-term, but it allows you to spend on resources as you need them rather than having to purchase them outright and build them in to full utilization later.

4.) Make it personal. Understand that in the “new normal,” relationships and trust are key to success.

• What do you need to do to work together again with customers, suppliers and even employees—with trust and confidence? They have all experienced “earthquakes” of their own and will not trust quite so easily again. You will need to start building or rebuilding alliances with a fresh approach with those you know and with whom you’ve worked in the past. Make each relationship personal again, strive to understand how each entity or individual has changed. How have you changed? Help them understand your “new” business and what they should and should not expect. 
• Who should your customers be? You need to ask if your current and former customers can still benefit you as your business evolves. Focus on those with whom you can build your future. And if you’ve lost touch with contacts, reintroduce yourself with a renewed commitment to building a mutually beneficial relationship. Determine if there
  are some who, given the new reality, you are no longer able to or interested in serving. If you have decided that any specific customers do not fit your new normal, take the time to provide them with alternative strategies for meeting the same ends. They might even do the same for you and help you meet your new goals.
• Do you need to attack the market alone? Consider building alliances or partnerships with others who can help you achieve your goals and you, theirs; this might even include competitors. You don’t have to be “all things to all people.” In many instances, “together we stand” might be a better approach going forward.

5.) Build your think tank with the biggest brains you can. While at the point of redefinition, consider how third party, objective advice could be helpful.

• Who are the people who can help you think outside the box? Take the opportunity to build a “think tank.” You and the rest of your leadership team might have an excellent understanding of the markets in which you operate, however, now might be a great time to bring in outsiders to help you chart your course and, just as important, stay on that course.
• Identify and utilize outside advisors who can help you understand what you’re facing and the potential opportunities presented; ask for their insights, suggestions and even access to their contact lists. Your banker, attorney and accountant can be excellent resources; not only do they know your business, but they likely have an excellent perspective of the earthquake zone. They might be able to connect you with others who have experienced similar
  issues with whom you can network. Additionally, consider engaging a strategic business consultant to help guide your progress through this turbulent period or forming an advisory board to provide outside advice and counsel to take your company to the next level.

6.) Be “the other.” We see companies in several industries waiting for other companies–their competitors– to make the first move. Don’t just react. You might end up following lemmings off a cliff.  The time for action is now.

• There are many examples of new products and services being created by first movers. Likewise, there are a myriad of examples of companies expanding their product offerings or capabilities through a strategic acquisition or hire of talent. However a company seizes an opportunity, the common denominator is usually that they looked at the prevailing wisdom of the market leaders and other players and changed the paradigm in their marketplace.

While we fully understand that there are still trials and tribulations ahead, it’s important to manage, lead and act from the perspective of the long-term. Clearly, there might be “aftershocks” in the general economy, or your market specifically, that will impact your business. But if you set your plan and follow it with bold determination, you can be “the other” that your competitors are watching with envy. 
 
Keep in mind the quotes from the beginning of each episode of Hill Street Blues: “Be careful out there” and “Let’s do it to them before they do it to us.” 

Blackman Kallick has the strategies and resources to help your company sustain its competitive edge during the uncertainty that lies ahead. We look forward to our discussions with you on this matter. To discuss your situation, please contact Barry Cain, David Spitulnik or your Blackman Kallick representative at 312-207-1040.

Read Barry and David's blog, Strategy Insights. 

 
 

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.