That the world around us is shifting in terms of the economy
and our markets is not in question. What is questionable is how we address the challenges that
face us. It is too easy to bunker down, close the hatch, and take a month by month view of the
situation. However, this would not be the most opportune
Focusing on immediate or short-term survival is crucial. But
coupled with that is the need to have mid-range and long-term, at least five to ten years out,
views that will ensure a balanced strategic approach moving forward. Too often long-term growth,
or even sustainability, is sacrificed for short-term survival or gain. To take actions to keep
the doors open now, only to close down in 12 months time does not make good business sense. A
strategic approach would be to address immediate issues, together with long-term concerns, so
the two strategic action plans are implemented simultaneously. Let strategic thinking propel
your actions, not fear.
An economy under pressure does not automatically mean
financial difficulties for every organization. In some cases it can mean assured growth,
especially in market share for certain lines. McDonald’s is currently a good case in point.
Demand for their low priced menu items means the posting of good results. It does, of course,
mean that the menu items have had to be re-looked at. The introduction of their low price-point
coffee options also indicates a sound strategy.
If in survival mode, a company has to take all the necessary
measures quickly and decisively in order to ensure that the immediate pressing needs are met,
especially with regard to access to capital and the presence of positive cash flow. The
retention of existing customers becomes pivotal.
If a company is in maintenance mode, it does not mean it can
continue with business as usual. There needs to be constant striving for continuous improvement;
whether that means focusing on cost reduction, taking customer service to the next level,
enhancement to technologies or processes, optimization of resources, or finding the next new
Sometimes in a downturn, there is the opportunity for an
organization to be in a growth mode. This is the time to test new ideas, create strategies to
greatly differentiate your company and its products or services in the marketplace, go after
market share, or manage the risk while pursuing new approaches.
To fully navigate through the tough times, the focus needs to be both outward and
inward. Looking outside your company means focusing on your customer base, choosing new markets,
creating strategies, and following through with communication.
during this time. Work hard to ensure customers experience added value from your product or
service. Link your value proposition to customer expectations - wanting either the comfort of
the familiar or the surprise of something new. Do customers feel that you are supporting
their mission or need during these times? Sometimes this may even mean fostering a partnering
relationship with your customer. Make it pleasurable for your customer to do business with
you. Work all your networks as well. Make sure current customers remain satisfied; you cannot
afford to lose them.
breadth and depth with existing customers. Explore ways to extend what you can provide them. Use
your solid relationships to cross-sell products or services, as well as using current points of
contact to sell you further into a client organization. The closer your partnering relationship
with a customer is, the more a customer feels understood by you and the more your points of contact
are with the customer, the less likely it is that the customer will be able to break off a delivery
relationship with you. With existing products and services on offer, within an existing marketing
base you would focus on ideas for market penetration. Because you are staying with the familiar,
costs for this approach can be minimized and current knowledge maximized. Cutting prices is not
always the best strategic decision to make.
new customers for your products or services. This could entail positioning yourself in different
markets, or with different customer demographics. In order to do this, different features of, and
benefits from, what you offer would need to be highlighted as a good fit for different customer
needs that are identified. Different distribution and access routes may need to be established.
Sometimes looking beyond the obvious uses for your products or services may open up new
opportunities for market penetration. Look for ways in which your products or services can be
different from competitors in the market. Remaining with your current knowledge base, expertise, or
technology allows you the opportunity to concentrate on expanding your reach in new
and align it more adeptly to the current environment. Flexibility, adaptability and faster
response times are essential during tough times. Sometimes it is about having an interim
strategy that will still align with your long-term strategy that is a good five to ten years
out, but is primarily focused on navigating through the changing circumstances successfully.
Sometimes it is about taking an innovative approach, one that precludes increased money
spend. However, this does not mean that you neglect innovation efforts; you need to remain
ahead of the competition.
This is the time to be inclusive when planning your strategy. Aim for more
market intelligence and ideas that you can harness in your organization. Strategy is everyone’s
responsibility. It is then a question of recognizing the key patterns proactively and investing
your efforts in the right areas to propel you forward. The strategy needs to encompass the vision
for the organization, as well as translating the vision into goals to be achieved, and ultimately
the actions required in order to make it happen. Make sure timelines reflect the reality of the
Now is the time to keep communicating - with your customers, your managers,
your staff, and your suppliers. Fear is always elevated during these times and having real facts
presented, feelings acknowledged, and a pathway to follow can go a very long way to mobilizing your
people and helping them to deal with the stress of the times. Address the elephant in the room in a
judicious way. Ensure that rumors do not become the primary source of information. Create a
communication plan concomitant with your strategic plan. Determine key leverage points when a
message will have maximum impact and then design the appropriate format and content for the
different audiences in your organization. Don’t neglect your external communications either. Make
sure the communications strongly reinforce your brand and build marketplace confidence in your
product or service, and the organization. Communicate carefully and often - keep
Translate your strategies into action plans. Make sure everyone knows what they are
accountable for. Keep milestone deadlines spaced at short intervals. Visible successes will keep
the momentum going. Keep everyone focused and measure progress on the objectives set. Be sure to
reinforce the positive results.
Ultimately any change, whether big or small, that is made to optimize the external
interface must be adequately planned for. This will mean coordinating logistics, as well as the
cross-functional co-operation that will be required. Never assume that a change in one area of
the business can be implemented without consequences being felt in other areas of the
organization. An holistic approach is essential. A detailed plan should reflect
Align the organization to the environment in which it is operating, then
align the overall strategy of the organization to all its internal operations. Looking inward in the organization entails managing the internal
alignment and focusing on consolidation of efforts, reducing costs, chasing cash flow, aligning the
culture to the strategy, enhancing competencies, and championing the changes that need to
not the time for turf protection to take place or for the propelling forward of individual
careers at the expense of the whole organization. It is about harnessing the power of every
individual, system or process in the organization for the collective good. It is about
allocating resources to the key leverage areas. It is about consolidating plans to ensure the
realization of those goals that will ensure the organization can firmly position itself in the
market, deliver quality to its customers, be financially sound, have efficient processes to
underpin the delivery of its products or services, and have developed employees to ensure
continued success. Ensure every action is linked to the organization’s vision. Difficult
decisions will have to be made. Leadership will need to provide all the support that employees
require at this time. This means that leaders need to be visible, continually communicate, and
monitor that progress is being made against the strategic plans.
Handle the situation with respect and handle the people with respect. If a
layoff is unavoidable, prepare for it in a comprehensive way – both for the way in which to handle
those who are leaving and to manage those who have survived the downsizing
In tough times, positioning the organization in the marketplace is crucial and strategies
need to be devised accordingly. However, not to focus on increasing internal efficiencies would be
negligent. Challenge the existing processes. Question if the processes are even essential to
effectiveness – should they exist? Then, check the process flows to ensure that no obstacles exist
throughout the process flow – are there pain points, wasted effort, redundancies, unnecessary
complexities, or excessive resources required? If any, or all, result in negative outcomes, you
know where to focus your efforts to streamline your processes.
questions to ask are as follows. Are the existing systems adequately supportive of the
processes? Does the structure easily enable the processes and the interfacing required? Is the
operation appropriately equipped? Can the people and their competencies be more effectively
utilized? How can procurement be optimized? Can inventory and waste management be improved? Is
resource allocation being effectively handled?
Track the financial numbers and ensure the costs are minimized while still
ensuring that the money that is spent is done so in alignment with the strategy. Reduce
unproductive expenditure. But remember that successful growth does not come from reducing costs –
so keep your cost reduction efforts in perspective.
You need financial stability to sustain your operations through an economic
downturn. Without cash flow to roll over operating costs and with limited access to capital, the
ability to focus on what needs to be done is severely constrained. This, in turn, may present the
very real threat of having to close the doors of the organization. Plot the profitability of
projects, don’t spend more than its projected return (in actual revenue or in value), work within a
realistically set operating budget, resource correctly and improve efficiency so as to release
resources for revenue producing work, and aim for annuity business if possible. Ensure the
decisions you make allow for sound cash flow management.
Culture, as a learned system of meanings that inform the way we do things
around here, is a strong force within any organization. Tough times definitely call for a
re-examination of the current culture to determine those aspects of it that will help us move
forward and those that will hold us back. Having done the external environment analysis and
establishing the strategy that is best suited to penetrate the market, meet customer needs, and
ensure the organization’s profitable longevity, then it becomes essential to ensure that the
culture is aligned to the strategy to enable it to be realized. Define the required behaviors.
Strong moves need to be made by the leaders to embed desired behaviors into teams throughout the
organization. This can be achieved through role modeling, leadership practices, performance
management, communication, and reward and recognition. The aim is to continually reinforce desired
The core competence of the organization needs to be clearly defined. It must
be one that ensures the organization can fulfill its mission, be competitively positioned in the
marketplace, and achieve its vision. Available capacity needs to be established throughout the
organization and opportunities to improve on employees’ competency levels need to be made
available. This could involve ensuring cutting edge capabilities, building skill sets that allow
for multi-tasking, and providing generic competencies that are required across the organization at
different levels to embed a culture and to mobilize optimum performance for the future. Invest in
competencies now that are required to fulfill your strategies moving forward. You cannot afford not
to invest in your people – even during tough times. Assist your employees to cope with the stress
of dealing with uncertainties in their lives. Provide them with the skills to navigate their way
through all the changes they are facing. Often times, when focus is placed on employee development
during tough times, it can allay fears and emphasize the organization’s commitment to, and belief
in, its people.
Determine the changes that will be required from the formulated strategy. Think through
the entire change process in a systemic way so that all implications are thought through and all
possible consequences are noted. These would be the consequences for every stakeholder. All changes
need to be integrated. Create action plans to bring the changes about. Do so in a manner that
ensures all stakeholders are involved, responsibilities are set and people are held accountable for
them. What employees are going to lose by the change should be acknowledged. The realities of the
difficulties must be faced. Most importantly, the change efforts
required to move through the tough times must be championed strongly from the top of the
organization. A positive, committed voice needs to be heard, a visible presence must be seen, and
support must be felt for employees to navigate a change without feeling isolated, alone, and
fearful. People need to be propelled by a positive view of the future and feel confident in the
strategy that is formulated to get there.
Think through as many scenarios as possible so that you can proactively
formulate a plan of action that can be adapted as circumstances change. Facilitate the alignment
necessary within the organization. Engage your employees in the process. Seek out sustainable
growth opportunities. Make sure you are well positioned to forge ahead when the economic conditions
improve. Finally, have the courage to lead in this challenging environment.
↑ Back to Top