The ongoing economic slump has slapped most industries and weakened, even wiped out, companies that weren't prepared to withstand unprecedented changes. But even the worst conditions can't rattle an enterprise that's constantly innovating, operating with maximum efficiency, and willing to abandon ideas that no longer pass muster in a dynamic marketplace. Many of the best ideas emerge from the worst conditions. There are practices all business leaders need to implement in order to overcome setbacks and rebound stronger than ever.
There are three things that any company needs to be doing simultaneously, regardless of the current economic climate: eliminate activities that no longer work, improve performance in retained activities, and use resultant savings for new activities. But how that's implemented is unique to every enterprise, particular to its environment. You can't just rely on an existing plan—even if it's your own.
Building a business plan around this trinity allows a company to survive, even thrive, without making extreme changes like cost-cutting and slashing staff. Such drastic moves can devitalize a company, and make it difficult, even impossible, to weather economic storms and emerge stronger for it.
To attain this, you must adhere to three basic principles:
- Be Proactive. Sense changes in overall economic conditions as well as your competitive landscape, and proactively implement a response.
- Sustain Innovation. Develop new products, services, and methodologies that advance beyond the competition through repeatable processes.
- Be Consistent. Consistently deliver cost-effective services at defined performance levels to all customers.
Transformation can't be achieved without operating your company's business management simultaneously and in concert with its management of technology, on which business increasingly depends for execution. A divided company is not transformed and can't compete against those that have converged the management of strategy, business, process, and technology.
The iconic image of Dave Thomas' pigtailed daughter Wendy is part of pop culture, but the fast-food chain knew it needed to put a fresh face forward to stay competitive. In addition to pricier new menu items such the Spicy Guacamole Chicken Club, Wendy's is giving the starring role in TV ads to a young redhead called "Red" instead of the owner's daughter. The company has reported repeated increase in sales at restaurants open at least 15 months—a key metric for the industry because it doesn't include newly opened and closed locations. The company's long-term plan to win customers who pay more for better quality food is off to a promising start.
The customers and partners must be at the center of any transformation. Nothing should be done that does not contribute to pleasing the customer and leveraging outside partners. The customer has the money. Always consider the needs of existing customers, as well as the opportunity to expand into new markets with new partners.
Economic downturns are a great time to connect with customers and partners, as that's when market needs are often most evident. In boom times, markets are rife with ideas, many of which already have a niche. The best ideas are often born in the toughest conditions, which demand more thought to identify and address true needs and create innovative products or services.
A new generation of fix-it-yourselfers limited by shrinking budgets has been a boon for home improvement behemoths. Home Depot Inc. and Lowe's Cos. have profited from pumping up customer service to court the growing number of consumers tuning into DIY shows and how-to videos on YouTube. Training clerks to spend more time with shoppers and providing free Wi-Fi in their stores are among the new offerings to keep customers happy and loyal. The extra effort over the last year has paid off, with Home Depot's share price rocketing 77% and Lowe's shooting up 37%, both besting the Standard & Poor's 500 index, which is up 12% in the past year.
Don't wait to innovate, don't assume you've done enough to move forward. By the time a mission statement is written and distributed, the competitive environment has often shifted—sometimes seismically—and the best intentions become moot.
No company can succeed, or even sustain the smallest unanticipated obstacles, without maintaining the following characteristics:
- Ongoing assessment of activities, eliminating those that don't serve the core business strategy.
- Continual refinement of activities for greater efficiency and productivity.
- Redirecting resources to new products, processes and business models.
Those who say it's tough, even impossible, to innovate within a big company seem to be forgetting the gargantuan success of Apple. The company synonymous with innovation continues to lead the market with must-have digital inventions that have customers camping out to be among the first to own every new release. The key is maintaining that entrepreneurial spirit within your enterprise and leadership as you grow. Don't abandon that desire to be nimble and do it first and best and to anticipate all competition.
It's essential to eliminate emotion in order to keep decision making fact-based, as opposed to haphazard and inconsistent. An appropriate business standard enables decision makers to detect and adapt to changing market conditions, allowing them to be proactive.
The financial meltdown was enough to bring behemoths to their knees. But instead of crumbling in crisis, you can power through with a better plan. No business is immune to the pressures of shifting and globalizing markets, new technologies, new suppliers and supply chains, complex customer needs, and new (plus existing) competitors. It's not enough to ensure that your organization has a directed and well-defined mission. It's equally important to recognize that you can't cling to any one way of achieving that mission. Drop the Kleenex and revise the blueprint.
You can't lead without passion, but that doesn't mean wearing your heart on your sleeve. Acer CEO JT Wang stole the spotlight when he lashed out at rival Microsoft for producing its own Surface RT and Surface Pro tablets based on the new Windows OS. He urged Microsoft to "please think twice" about building the Surface tablets. It's not what he said, it's how he said it that sparked headlines like "Mafia-style warning." Comparisons to organized crime are never good for business.
Embarking on a transformation is more than just deciding to do something different or expanding into adjacent markets. It requires examination, planning, and execution.
Habits that make companies successful can sabotage them in the face of disruptive innovation. In a transformative age, competitors can spring up anywhere. Economic woes can catapult the newer, most nimble, and fiercest rivals that seize the opportunities amid turmoil. Don't get caught up in the problems you can't avoid. Success amid adversity requires a new business model, one that incorporates innovation, efficiency and abandonment. Don't let the unexpected drag down your enterprise. Take control of the ever-evolving environment around your enterprise, and harness even the worst conditions and sudden changes to transform your business. Don't let a setback keep you from a comeback.
[Image: Flickr user Snugg LePup]