Into the Storm: Managing Your Business in a Financial Crisis

By

 
By Hedley Lawson, Jr.
Editor, Vision Monday’s

Business Essentials

 
© iStockphoto.com/Yuri_Arcurs
NEW YORK—Everywhere you go and everything you read seems to focus on the same theme regarding these difficult economic times and the onset of a recession in the U.S. and globally: “There is nothing we can do but to save more, spend less, and work longer.”

It seems everywhere you look and everything you hear echoes a powerful dose of the doldrums and, for some, despair.

Instead of stating, and restating the obvious, here are some new thoughts and ideas to help you stay ahead of the curve as opposed to being weighed down with the continuous stream of negative news from every corner of the media about the economy.

We hope you will find some good tips and themes for your review and renewal as you walk the path not traveled in many years—or ever before—in your business.

Contingency Plans
Although most companies have taken action in advance of the current financial crisis, a sizable number of U.S. and European companies are unprepared to manage their workforces during an economic downturn. According to Watson Wyatt’s 2008 Global Strategic Reward Survey, about one-third of U.S. firms and 20 percent of companies in Europe failed to make contingency plans in advance of the current global financial crisis.

Of those companies that made contingency plans, organizational restructuring was the most popular option that was considered by nearly 70 percent of companies in the U.S. and Europe, followed closely by staff reductions and slowing the rate of salary increases. Other options considered include early retirement, reduced workweeks and sabbaticals. Watson Wyatt reports the research is based on input from about 1,400 companies in 37 countries.

So here are some additional ideas for managing in a down economy:

• Get out of denial and embrace reality. Attuned executives and business owners have a higher probability of surviving major economic downturns.
• It’s better to be frugal now than out of business later.
• Stay positive and stick with the basics: business development, customer care and satisfaction, closing sales, doing exceptional work.
• Communicate regularly with your employees. Let them know what’s going on and how good or bad the numbers look. Update them frequently and consistently.
• Invest only in must-haves. Make the company party a potluck as opposed to a dinner out.
• Transition your poor performers and keep only your absolute best employees.
• Have a family initiative to bring extraneous spending to a halt. Try to cut your personal spending to a minimum.
• Take responsibility for business development and involve yourself in closing important transactions. Spend at least one hour a day visiting current and past clients.
• Track your pipeline carefully. Figure out why you’re losing some business, and set a goal of closing everything in your pipeline.
• Consider taking on work you may have turned down six months ago. Work with a new business philosophy: all business and revenue is good business and
revenue.
• Do work yourself, and get your management team to do the same. Give everyone multiple jobs and tasks.
• Know that this, too, will pass.