Many business owners are anxious over the current economic situation, but according to some experts, you can actually use the economic downturn to create a better organization.
According to David Giannetto, coauthor with Anthony Zecca of The Performance Power Grid: The Proven Method to Create and Sustain Superior Organizational Performance, there are several ways to steer your business through the economic downturn:
No. 1 - In business, only the strong survive. During an economic downturn, many business owners overlook the fact that their competitors are suffering too - and what results from the slowdown is still an even playing field.
No. 2 - Use the hype to focus your employees. "The slowdown creates what I like to call a 'momentary unifying factor'- something that allows each employee to set aside their individual concerns and rally around a greater common cause," says Giannetto.
No. 3 - Expand, don't contract. It seems counterintuitive, but great companies expand during slowdowns; they don't pull back. Take advantage of the fact that the weakest organizations will be going out of business, losing critical funding and cutting operations, and/or letting go of critical but expensive assets and people.
No. 4 - Figure out what these tough times mean for your customers. They're suffering as a result of the slowdown too. The faster you realize that the quicker you will be able to better meet their needs.
No. 5 - Know the difference between profit and revenue. In many organizations, which customers, products, services or geographic locations provide the most profit for the organization are actually very difficult to determine. It's likely that at some point you will need to cut costs, and the first places to cut should be those areas where you are already losing money.
No. 6 - Stay current and creative. Too often during a slowdown companies cut back on the new products or services that represent the future of their business.
No. 7 - If you are a public company, be transparent and realistic. The market actually does respect firms that deliver realistic growth projects. "Even if these projections were lower than expected or desired, the market will not react as badly as it would have if you stated higher earnings than you actually came in at," says Giannetto.
"The point of all of this is that the words 'economic downturn' don't have to mean only bad news to your business," says Giannetto. "If you manage business during the downturn correctly - taking care to address the needs of your employees and customers - it is possible to make it through all of this with a stronger business than the one you had before."