“In a tough economy, self-understanding is key.”
— Laura Rowley
As the global financial crisis continues to unfold, leaders need to have a clear strategy to survive and thrive. When it comes to economic downturns, some forget that there can be winners in this environment as well. In this time of economic crisis of confidence, it is important to protect the vital core of your business.
The here and now
In the short term, your teams must adhere to the following four principles to emerge from the storm stronger.
1. Remain or get very close to your customers by paying attention to their needs and serving them extraordinarily well. If you can provide them with service that surpasses the service you provide them in good times you will make long lasting positive impressions. By serving your customers well during times of stress, they will more deeply appreciate the business value that you bring to them and be inclined to award you more business.
2. Be proactive with your customers. For example, if you know that your customers need to cut their costs, promote leaner solutions. Before this crisis, many customers regarded retaining their operations as a sacred cow. Now, as they are faced with fierce cost pressures, these same customers will be more willing to consider out of the box ideas.
3. Act with a sense of urgency. Do not postpone until tomorrow what you can do today. With the market as volatile as it is today, your customers need to make decisions in much shorter timeframes than in more calm times. If you wait, you might be unpleasantly surprised by a customer’s decision to downsize a current piece of business with you or worse yet, go with an attractive offer from a competitor. If you are proactive and act with a sense of urgency, you can influence your customers’ thought processes.
4. Spend your money as if it were your last dollar. In other words, be prudent with new spending and root out inefficiency wherever you see it. In a time where it is more challenging to earn revenues, you must spend only what you must so you can maintain the highest levels of profitability. In these capital constrained times, short term cash flow may well be an important differentiator between you and your weaker competitors.
If in the coming months and quarters you embrace the above four approaches, you will weather the storm. You may, in fact, grow even stronger.
Looking ahead towards long-term growth
Leverage your strong competitive position to exploit the growth opportunities afforded by your chosen markets. Many global entities are actively looking to invest in the emerging markets right now to diversify away from North America and Europe.
To this end, build three-year actionable strategies that will dramatically increase the probability of reaching your aspirational growth targets. By implementing these strategies, you will be able to come out of this crisis better positioned than when you entered it.
Leverage your strengths. For example, the importance of a strong balance sheet cannot be overestimated at this time. Today, many young, smaller companies are on the receiving end of the pain of this crisis. Venture capitalists are culling their portfolios of non-cash generating companies. This presents a huge opportunity for more established organisations to acquire younger or smaller companies that can help accelerate the delivery of innovation to customers. You may also see opportunities in these companies or even larger companies to consolidate your market position and acquire new customers.
In 2009 consider adding to your capabilities through acquisitions, by exploiting your balance sheet and throwing lifelines to companies that otherwise would not have had a future.
What does the future hold?
Steer your organisation’s path in such a way that ensures you can confidently feel optimistic about your long term future. Identify programs that have huge upside opportunity. Today, your innovative and proactive attitude should remain undiminished. This financial storm may dampen your results in the short-term but it should not impact your long-term potential.
Most important of all, do not forget to honor and respect the quality and dedication of your employees. If you have good people who are willing and ready to work hard, you can achieve great things.
The writer is a Consulting Manager for Amdocs, North America.