Downturn Survival Strategies
Jan 24, 2019
In good times, running a company is exhilarating. Money flows, customers flock to your door, employees have a spring in their step. In not-so-perfect times—like now—running a business can feel like scaling Mt. Everest in a snowstorm while wearing a knapsack filled with bricks. Although there's no "magic pill" for business success, you can fortify your company by creating an organizational culture that develops great leaders today and instills the values that will continue to foster great leadership tomorrow.
Great leadership is everything. All other elements of success flow from it. Companies with mediocre leadership may skate by when the economy is booming, but in tough times leadership must be top-notch. If it isn't, your business may not be around when the economy bounces back.
Here are some strategies you can implement right now to help your organization weather any tough times:
- Develop a get-through-the-downturn plan. Sit down with senior-level management and go through your business plan with a fine-tooth comb. Determine which objectives you are meeting, which ones need more work, and which ones you should rethink. Make sure goals are aligned across every part of the organization, that everyone is "singing from the same choir book." At the same time, scrutinize your expenses and cut anything that's not absolutely necessary. Then (here's where many companies drop the ball) communicate your plan to all employees. Remember, if your frontline employees don't know you have a plan, then you don't have a plan. Everyone should understand the plan and buy in to it.
- Address tough issues with straight talk and transparency. Chronic secretive behavior from leaders and lots of behind-closed-door meetings harm morale in any economy, but this behavior is particularly dangerous during hard times. If employees can tell you are hiding something—and 9 times out of 10 they can—they'll assume the worst. Employees deserve and expect to be treated like adults. Pretend everything's rosy when it's clearly not and you might cause your best people to run for the hills.
- Empower and inform your managers. Let's say Worker Walt approaches Manager Mike to ask if the rumor he heard—that the Duluth division is on the verge of closing down—is true. Mike responds with a deer-in-the-headlights stare and a vague stammered comment that the company is doing its best to avoid any closings. (He knows the Duluth shut-down is off the table, but isn't sure how much he's empowered to say.) Walt draws his own (grim) conclusions and starts spreading "the bad news." The rumor mill kicks into gear and morale plummets. You can prevent these kinds of misunderstandings by telling managers exactly what to say when employees ask questions about the company's future. Write a “script” of sorts so that everyone speaks in the same voice.
- Lose the negative attitude. FEAR means Fantasized Experiences Appearing Real. Do you sit around chewing your nails and dreaming up terrible scenarios? What if our biggest customer pulls out? What if the market for our services dries up? What if our top salesperson goes to work for a competitor? If this sounds like you, stop it right now. Fear paralyzes and makes it impossible for us to move forward.
- Stay connected. Employees really need you right now. One way to make a real connection with employees—daily—is to practice "rounding for outcomes." In the same way that a doctor makes rounds to check on patients, a leader makes rounds to check on employees. This technique allows you and your managers to regularly touch base with employees, make personal connections, recognize success, find out what's going well, and what isn’t. If an employee expresses worry about the bad economy, don't just clap her on the shoulder and say, "Yeah, I know it's rough, hang in there!" A better solution would be to say, “Tell me what you're struggling with today. What can we do to help you?”
- Get rid of low performers. Poor performers suck up a disproportionate amount of managers' time, tick off customers, squash morale, and drive away high performers. When business was booming, you may well have let their bad behavior slide. Now, the day of reckoning has arrived.
- Look for creative ways to retain top performers. You can’t afford to lose your best employees, but at the same time, you may not be able to pony up big raises right now. That's okay. Instead, offer your people perks that don't cost the company a lot of money. Think about ways you can make their lives easier—flex time, partial work-from-home schedules (much appreciated in these times of exorbitant gas prices), access to a "chore runner" to pick up dry cleaning, or a financial planner to help them plan for college costs, elder care, retirement, and so forth.
- Manage up and insist that employees do the same. Managing up means accentuating the positive. It's a valuable confidence-building tool that keeps employees and customers happy. Say only great things about your company and staff, whether you're talking to outsiders, clients, or employees themselves. Never tell a client that business is slow, even if it is. Don't express doubt to employees about your company's ability to weather the downturn. Tell everyone how great your company is, how talented your people are, how excited you are about the future. All this positive talk becomes a self-fulfilling prophecy.
- Shine a 1,000-watt spotlight on customer service. This tip may seem obvious, but it can't be said too often. When pressure to stay competitive is at an all-time high, you must be absolutely certain your customers are getting what they want and need from your company. Never presume you know what's important to them. Ask each customer exactly what his expectations are, document them on an individual preference card, and make sure all employees who come in contact with him get a copy. Individualized customer service is more critical now than ever. In the age of globalization, it's the only way you can differentiate your company from your competitors. So don't look at it merely as a way to hang on to your customers until you get through the downturn; look at it as the new normal for your company.
A downturn can have a silver lining. It sharpens our survival instincts and shows us what we're really made of. Instead of just coasting along on the wave of an economic boom, we're forced to get focused and get serious. And for many companies, the pressing need to "kick it up a notch" starts a journey of opportunity, innovation, and great success.