Well, it’s no secret that the economic falloff is bad – real bad. The challenge for management is to keep the company focused and moving forward. You have to be of two minds – watch the pennies at home, and spend the dollars to continue to build your business.
Sequoia Capital reportedly (see Gigaom, among others) called together their funded startups for what has been referred to as a "Holy Sh**t!" meetings – or, what in the South would be politely referred to as a "Come to Jesus" meeting. Om Malik of Gigaom wrote:
If your company is on the small side, try working up a staffing model with a blank slate – stick to tasks rather than people. If you need to let people go, do it sooner rather than later. You can decide whether to ask people to continue working until either a final date, or until they get a new job – either way, I’d try to give them something to soften the blow. Watch the pennies – cut back on the variety of free food and drink, a filtered water fountain may be more cost-effective than bottled water, reduce the inventory level of office supplies, review cell phone plans and phones out there, use freelancers as opposed to new staff – there are many seemingly small items that can quickly add up to significant dollars.
The recession is likely to last a while – it could be 9-12 months, it could be longer. The heart of the problem is in the credit markets – everything else springs from there. The chain of responsibility is complex, and is not your focus here. Your focus is to keep moving forward, watching, evaluating, and adapting as events unfold – watch, listen and act.