We suggest a six-step process that combines strategy and culture, the only two handles a CEO really has. Tape this list to your refrigerator.
By Scott S. Elliott, Principal and Founder, TechZecs LLC
The economy is slow and maybe your sales are flat. There is much uncertainty in your market and in the world economy. What strategic steps should you take to protect your market share and brand? Here is our advice:
1. Manage cash flow carefully.
2. Get flexible.
3. Plan some scenarios.
4. Retool for the next upcycle.
5. Look for opportunities.
1. Manage cash flow carefully. In this economy, cash is king and should be used wisely. We are not saying to stop spending, just minimize spending on unnecessary items. For example, you can minimize employee travel and instead use videoconferencing and internet communication tools such as GoToMeeting and Webex. When used properly, these tools can be nearly as effective as face-to-face communications and avoid the high cost, time consumption and stress of travel. There also may be opportunities to defer spending on construction of new facilities, postpone buying capital equipment that is not absolutely necessary, etc. Do whatever is necessary to keep a positive cash flow position.
2. Get flexible. If you have attrition or need new workers, think about hiring contract workers, outsourcing or partnering with other companies. A good rule of thumb during a recession or stagnant economy is 50-50; half employees and half temps or partners. Permanent employees are needed to keep your company culture and intellectual property fresh and growing, and to maintain your core competencies. But much of the work does not involve a core competency and can be done by non-employees. Contractors and consultants may seem to cost more per hour, but generally they net-out to about the same cost when you factor in overhead expenses such as employee support costs, benefits and paid vacations. Having a "stable" of good contract workers and partners and knowing how to manage them wisely puts you in a great position to thrive through a roller-coaster economic situation.