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Seven Ways To Stay Up In Down Times
by
Dave Anderson
The
only thing worse than wading through a downturn in your business is
doing so without a strategy. 'Business as usual' doesn't cut it when
markets, consumers or other conditions beyond your control turn against
you. The old saw, "what doesn't kill you makes you stronger"
is little consolation when down times ensue. Follow these seven steps
to stay up in down times:
1.
Focus on your core. Rein in investment in peripheral profit centers
and invest in the strengths of your business. Always assume your core
is under performing and you'll be right most of the time. Aggressively
market to your current customers. In down times one of the best ways
to gain market share is to retain the customers you already have and
gain their referrals.
2. Don't panic-spend on advertising. Resist the temptation to panic-spend
on advertising to conjure up more traffic. When the fish aren't biting,
throwing twice as many lines in the water brings a diminished return.
Do a better job with the customers already coming through the door
and you can close the same, and oftentimes more sales with lower traffic
counts. In fact, one reason people overspend on advertising is to
buy fresh prospects to replace those abused by incompetent salespeople
and managers. With lower traffic counts comes an opportunity to build
more rapport, give better presentations and follow up more thoroughly
throughout the sales process.
3. Don't kill your capacity to produce. Improve the bottom line by
maintaining a tighter inventory, scaling back ad dollars, putting
vendor products/services up for bid, improving receivables and other
cash flow factors. However, resist the foolish and shortsighted strategy
of cutting out costs that contribute to developing your most valuable
asset and only sustainable competitive edge: your people. Training
your people increases your production capacity and by reducing it
you collaborate in your own demise. Training your people is not a
luxury and it's not a cost. Training is an investment. When times
turn down, take training up a notch.
4. Reduce entitlements. Reward performance. Terminate the weakest
links. If you make personnel cuts, remember that tenure and credentials
don't substitute for results. Reward and support those who perform.
This means you'll have to resist the temptation to bond with yesterday's
heroes for old time's sake. Fall into this trap and you send a corrupt
message about standards and miss a prime opportunity to create urgency
and focus. The weak links in your organization determine the speed
of the rest of the team. They are a restrictive force. Just as a chain
can't pull more than the weakest link allows-regardless of the strength
of the other links-your overall production will be compromised by
your weak links as well. Weak links lower the collective self-esteem
of the whole team. They compromise your standards and impair your
credibility as a leader. They are a distraction; they sap morale and
break momentum. The team attitude towards weak links normally starts
out with 'let's help him or her' and when no improvement is discerned,
the attitude changes to one of resentment. Top performers feel cheapened
and diminished working in an environment where others don't contribute
and can't pull their weight. It's worth mentioning that the most devastating
weak link in your organization is a bad manager. Bad managers should
be given less rope because when a bad manager hangs himself he tends
to hang a lot of other good people with him. Use down times as an
opportunity to clean up your roster.
5. Cut once and for all. If you reduce expenses this month by cutting
out free cokes and bottled water, then two weeks later eliminate company
cars, then next month fire the cleaning service it's like Chinese
water torture that continues to distract, demoralize and disrupt.
Figure out what you want to cut and get it over with at once. This
includes personnel. Then bring everyone together, explain what you've
done and why. Then put it behind you and let them know everyone and
everything remaining has been strengthened by these cuts and that
because they're finished everyone can focus on getting back to work.
6. Don't develop a loser's limp. Don't blame so much on outside conditions
you fail to accept responsibility for your current ills. A downturn
always exposes the sins of the good times. These past record years
in our economy have created their share of fat, arrogant, complacent
know-it-alls who never thought they'd see another poor day. They stopped
training hard, making tough decisions and changes, became averse to
risk, maintained rather than stretched and turned a blind eye to poor
performers because business, overall, was good. Until you and the
other managers accept that the biggest threat to your organization
comes from the inside and not the outside you will continue to misdiagnose
and mistreat your most serious problems. Lack of: leadership, hiring
standards, performance expectations, accountability, a cohesive leadership
team at the top, vision, strategy, urgency, people-development and
a growth environment are the inside threats you must go to work to
eliminate day-in and day-out.
7. Remain a positive force. Management will multiply the damage and
compound morale problems if they begin terrorizing people with threats,
excessive criticism and lousy attitudes during slow times. Remember
what good coaching is: leading from the front with plenty of speedy,
positive reinforcement for worthy performance, encouragement and motivation,
listening and directing, honest communication as well as fast feedback
and consequences for deficient performances. Stay focused on the big
picture and, most important; remember that the best time to fix the
roof is when the sun is shining. Thus, when better times return for
you it is not a license to coast, become complacent and think you've
arrived. Instead it's the best time to train, coach, clean up your
roster, set standards that create urgency, make the tough decisions,
implement necessary changes, take risks and lead from the front. Do
these things when things are rolling to keep people sharp, focused
and let them know there's still room to improve. When business starts
to pick up again, develop a mindset to run up the score rather than
sit on the ball and the next downturn will find you bulletproof rather
then wearing a bulls-eye.
Credit:
Dave Anderson, author of the upcoming book Up Your Business: How to Fix,
Build or Stretch Your Organization (John Wiley & Sons) is a speaker
and trainer on sales, management and leadership. He earned his business
reputation by leading top national automotive dealerships to record breaking
sales. For more information go to:
www.LearnToLead.com
Related
Information:
NBA
Benefit Provider - NBA
Member Mall
NBA
Resource Article - Boosting
Performance in these Changing and Pressured Times
NBA
Resource Article - 5
Common Advertising Mistakes You Can Easily Avoid
Reprint
of this article does not constitute an endorsement by the National Business
Association; the article is for informational purposes for our members and
viewers of our Web site.
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