Alan Webber: When it comes to making a smart move toward adapting to a much tougher economic climate -- whether it's a cost cut or an investment -- what's a best practice?
Sunny Vanderbeck: Our company's approach has been to keep our customers in mind when the economy gets tough, because we know that those customers will determine whether or not we survive when the cycle ends. If you do things that keep your customers happy, and perhaps even make your customers happier, you'll be successful. They will stand by you through the mistakes.
Kevin Krone: Southwest has always managed in good times as if it were operating in bad times -- because eventually, those bad times come. And when they come, it's too late to start asking yourself, Now what do I do? When things started slowing down for us, we asked what we could live without to save money and jobs. We deferred anything that was not critical. That decision bred fierce loyalty from our employees, who, through a program called "A Pledge to Luv," are actually giving back money to the company to help out during this tough time.
Katrina Roche: I see this climate as an opportunity. We just had 200 of our customers here in Dallas a couple of weeks ago. The best performers in that group were those who had looked at their core competencies, figured out what would make them competitive as far out as two years, reinvested in those areas, and cut other unnecessary stuff.
Tom Rohrs: Applied Materials is part of a very cyclical industry, so we're fairly seasoned at this. We have a game plan that we execute. It starts with a very firm belief in the business that we're in. One of the best ways to get through a downturn is to have a firm understanding and belief that there's going to be an upturn. Another way is to have a very strong cultural fixation on remaining profitable. We try not to let our operating results slip into the negative numbers -- because negative numbers become an excuse for almost anything. A third thing we do is invest in R&D through thick and thin. We try to gain market share in the downturn through that R&D. Finally, we explain what we're doing to our constituents: Our shareholders, our customers, and our employees all know the game plan. It's built into their expectations when they buy the stock, when they buy the product, or when they join the company.
Steve Moffitt: I think that one best practice is to maintain a disciplined fiscal focus. At Dynegy, we employ smart fiscal responsibility when we make investments. We really study the financial side of things. It can be good for a company to go through a downtime. It takes discipline to figure out what the core business is and what to invest in.
Ian Downes: The best companies use down cycles as opportunities to change the game. They figure out where they want to be when they come out of a turbulent time, and then they lay the groundwork necessary to move toward that goal. If you know where you want to be when the economy comes back, you can make the smart moves to get there.
Fred Chang: The smart thing to do is embrace disruptive technologies. Technologists today are continuing to work hard on ideas that will improve productivity. It's more important than ever to use technology to change the game and to save money.
Roy M. Spence Jr.: Companies need to understand what business they're in. I'm not talking about their operational business. I'm talking about the culture of their company -- the spiritual business that they're in. What a company stands for is just as important as what it sells, because everybody is selling the same stuff. Best-practice companies understand their business beyond their profits and losses. They will endure; those are the beacon brands that consumers will gravitate toward.
Alan Webber: In today's environment, where business is changing rapidly and customer behavior is more than a little bit unpredictable, the first problem isn't what to do, it's how to make sense. So the question is this: How do we make sense of this current economic climate?
Ian Downes: This is my way of looking at the world: First, companies need to gain stability. After that, the best companies look at their income statements and their noncore processes and mine them for ways to generate positive cash flow. They can reinvest in what is going to be strategically important for them.
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