The length and depth of the recession has been surprising. It wasn't that long ago that forecasts for a prolonged economic boom left businesses unprepared for success. Now, many business owners are stuck in some state of limbo: still open, making some sales, barely profitable, but not enough money to invest back into the business.
Most companies have right-sized their business by reducing people, inventory and space, and have eliminated discretionary spending. These were dramatic changes, unimagined a few years back. And yet, business owners are not confident the cuts are deep enough, that business will return and they have a future.
Many segments and industries are under attack: Las Vegas , housing and related services, local banks closed by the FDIC, newspapers and television stations, home and commercial construction, and the list can go on. If you are in, or related to, an industry that is suffering more than the average, then your business is in survival mode. Some businesses are struggling because they carried too much debt and were thinly capitalized. With fewer customers and lower profit margins, these businesses can't keep up with their debt and cash needs.
Survival is not a business strategy; it is a short-term tactic. Survival is an instinct that keeps your business alive for another day. Businesses may find the need to implement a survival tactic as they make necessary adjustments. This change allows right-sizing to an operating model that will be successful. When you recognize that you are in survival, remember it's a short-term tactic, to be done quickly, placing your business in a position to move forward.
Accepting that your business will not be simply cured by waiting, nor will government actions and legislation repair the damage, or a new wave of business demand will suddenly occur, you must create a strategy of success – daring to win! Winning is different than simply accepting your deserved portion of the business pie. Winning is taking definite, purposeful steps to position your business to be an industry leader, not follower.
In order to make this change, your business needs dynamic, visionary leadership. In the movie The Poseidon Adventure, a rogue wave capsizes a luxury ship turning it upside down, but not immediately sinking the ship. Many of the survivors are dazed and follow their instincts to go to the top of the ship. But they do not realize their actions will result in certain death. A few, following a leader, go in the opposite direction and valiantly survive. Leading your company out of this recession is going to take dynamic, visionary leadership. This new leadership style and discovery will be the foundation of your business strategy to win.
With leadership, you can start to develop a business strategy. We all have strategies, written documents, business plans, and goals, and all of them were developed in a different era when there was an abundance of customers and opportunity. Many of these business plans were upwards of 100 pages and were needed for growing businesses.
Today your business plan needs to be one of action, fast steps and discovering what works for your business. A plan I like best assigns each executive three to five specific initiatives. Each initiative is outlined into these parts: objective, goal and desired outcome, necessary steps, reporting dates, resources and dollars. It takes more time to lay out multiple initiatives, but it assures the executive will be focused on company goals. Further, it gives the management group a way of assessing the progress and likely outcome.
This type of planning is unique to fit today's changed business environment. Owners need to be working on simultaneous initiatives of success that will make a difference in their company. The initiatives that aren't market ready or require too much investment will simply have to be shelved for another day. Ideally, several members of your team are simultaneously working, getting strategic feedback, overcoming obstacles and bringing initiatives to the company that will contribute to a winning strategy. Small businesses do not have the luxury or staying power to take years to develop a new, profitable plan.
The initiatives I outlined above should be published for that group, specifically assigned to one driver and have frequent reporting of the success and challenges. Your business cannot afford to waste resources. This requires fast movement with lots of adjustments to fine tune an initiative. Weekly reporting to a boss and team accountability will keep the project moving. If a project doesn't move forward, you need to move to another initiative that can be successful.
As your new leadership style develops, and new offerings are made to your customers, work on the cultural alignment in your business to help your people support the company in its new strategy to win. Your employees have observed management that has been ornery and cantankerous. They need understanding of the changes occurring in your business enterprise. This may include more oversight, planning to do jobs once, reporting for a reason, improved communication – up and down, faster changes of operational plans and eliminating waste in all areas of the business. Changes like this make sense and should reduce cost, but will likely affect your historical culture. Communication and meetings will help your people help the business.
Changes like this are traditionally slow to occur, meet resistance and make us nervous of what could be certain doom. Your people need continual encouragement that your leadership and business strategy, with their support, will make your business successful. Daring to win, is a success strategy that encompasses visionary, dynamic leadership, new, fast paced ideas and culture change alignment.
Two Winston Churchill quotes are appropriate: "Never give in, never give in, never, never, never, never – in nothing, great or small, large or petty – never give in except to convictions of honor and good sense," and "Courage is going from failure to failure without losing enthusiasm." This is the type of conviction you will need to craft your winning strategy and be an industry leader.
