For every organization there are two crucial 'break points' in every economic cycle: first, surviving the initial decline, and second, maximizing the eventual upswing. Get the first one wrong, and the results are obvious - your business is gone. Stumble on the second, and the results aren't so clear-cut, but can be equally devastating - you lose crucial market share to your competitors.
Think of it this way: maximizing the upswing in an economic cycle is like coming round the final bend in a car race - either you or one of your competitors is going to obtain a winning position on the inside of the curve that's virtually impossible to catch in the home straight. So, in the next economic upswing, who's going to be ahead coming out of the curve, you or one of your competitors? Here are five steps that will position you in the lead for the next economic upswing:
1. Find your sources of trusted data.
There's a lot of chatter about economic recovery and whether green shoots are beginning to show now, later this year, or next year - and of course those opinions vary from industry to industry and across geographic locations. It's important for you to be able to 'read the runes' correctly for your industry and in your geographic location: jump the gun too soon, and you'll spend a lot of time and energy chasing a rising market that doesn't exist; wait too long, and you'll be sucking fumes coming out of that bend.
Find the sources of information that you trust - both quantitative and anecdotal - and start tracking them seriously, not just as an aside in your usual reading. Government statistics for most industries are quite helpful, but they are usually lagging indicators - they provide the information too late for you to act on effectively. What is your industry body saying? What about your local chamber of commerce, your customers, clients, suppliers and competitors (yes, your competitors)? Haw far 'downstream (close to the source of your industry's activities) can you go? One CEO I know in the construction industry talks weekly to a local plant hire company, because their volume of business gives him a good gut feel for local construction activity levels.
2. Stay close to your customers.
Using an economic recovery to 'slipstream' additional market share begins and ends with just one thing - increased demand from your customers. Identifying that rise in demand comes easiest when you are in the flow of customer activity, actually watching the change as it happens. And yet, in times of economic decline, so many business owners and managers actually withdraw from the marketplace, mixing less with their customers, rather than more.
You don't need to be selling to them to listen to your customers. Trade shows (their trade shows, not yours), conventions, Chamber mixers, Twitter, Facebook and other social media all provide great opportunities to stay in the conversation and watch what's happening in 'real time'. If you're running short of ways to listen and watch your customers (and potential customers), then why not host your own event? Have a bi-weekly barbecue, invite your customer list and some potential customers, promise you won't be selling to them - make it just a social event - then listen to what you hear.
3. Start hiring now.
To make the most of any recovery, you'll need the best people possible. There are a lot of good people on the market right now. Hire them today. Don't wait, or they'll be ahead of you - driving your competitor's car out of the curve.
4. Learn to be 'predicatively agile'.
Business plans in the past tended to be fixed, clunky, medium- or long-term strategies and tactics. Plans like these won't deliver success in troubled economic times - even in an upswing. Instead, businesses that maximize the next upturn will do so by being 'predicatively agile': this means trying something, seeing if it works and if not, altering it on the go and testing again. Don't write a business plan for the next 12 months. Instead, list what you're prepared to try out (new pricing structures, new delivery channels, new sales techniques) and decide how best to test each new idea.
5. Do what you want to do - and what your competitors can't.
Don't stop just at testing out those things you would like to do - take time to survey the new competitive environment caused by the recent downturn. Assess the impact it has had on your competitors, and specifically how it has weakened them. How can you take advantage? Have they abandoned a product line or closed offices or facilities in a specific geographical area? To save money, have they reduced their product guarantee or changed service terms, or otherwise weakened their customer offering? If so, how can you best take advantage of any or all of these changes?
Les McKeown is a writer, speaker, consultant and President & CEO of Predictable Success(R), an organizational development consulting firm based in Marblehead, MA. He is the author of Retaining Top Employees, The Complete Guide to Mentoring and Coaching, The Complete Guide to Orientation & Re-Orientation. For more on employee retention, visit Les' Retention Secrets website.