We are living in uneasy times and, right now, many companies are stuck in analysis paralysis. Their first impulse is to hunker down and muddle through. But inaction itself is a business risk—often a larger risk than conventional wisdom gives it credit for.
It’s time to get off the sidelines and take action. While every business needs a good defense, now is the time to strengthen your offense. Here are four plays your business can make right now that will serve you well whether we’re headed for a recession or a brighter period of slow but steady growth.
1. Get your priorities straight, and pare them down to focus on one or two. What are the one or two most important things your business can do now to be successful in the long term? Launch a new product? Enter a new market? Open a new sales channel? Take a look at these opportunities and prioritize for the future—not just for what will make you operationally sound in the near-term.
It’s not always easy. Be prepared for skepticism from investors, bankers and employees. But don’t let fear keep you from taking measured risks to achieve your top one or two business goals. For our company, this means weighing current strategies to invest in internal IT systems versus the long-term value of entering new markets. The IT investment would certainly bring an incremental gain in productivity in the short-term. Entering new markets will mean more risk, but with it comes the possibility of a significant long-term leap forward for the organization.
As scary as it might be, now is the time for leaders to look to take measured risks.
2. Leverage your people; make layoffs a last resort. The tendency to lay people off at the first sign of recession is a counterproductive move. As with any good offense, your players make the game. At times, they need to pivot for the good of the game and help you out of a slump. When the cycle reverses and things are looking up again, you’ll avoid the cost and time it would take to rehire.
If times are looking tough, give your people the opportunity to retool and make a shift. In the last great recession, we turned our client service team into salespeople. We made the pivot right away, in late 2008. The first quarter of 2009 was still tough; we saw nearly one-third of our revenue drop off. But with that new focus on business development, our people were fully staffed again by the fall of 2009. When you have great people, do everything you can to keep and engage them in the challenge. Which leads to the next point.
3. Communicate. Then communicate again. Transparency is important at all times, but especially during uncertain times. People feel more empowered and in control when they know exactly what the plan is. When people feel they can contribute directly to staving off hard times or accelerating on your one or two key business priorities, you have greater opportunities for success.
If business begins to take a downturn, keep up your communications. During the last recession, we gave every employee our nine-step plan, and we illustrated the triggers for each phase. Layoffs were last on the list. Everyone was aware of the plan, our measures for failure or success, and what we expected of our teams. During times of transition or critical concern, monthly—and even weekly—communications are vital for the health of your teams and your organization.
4. Understand that disruption and uncertainty are breeding grounds for innovation. Great opportunities and market adaptations can and do emerge during times of uncertainty. Ask yourself: How can you take advantage of the situation in front of you? What market opportunities do your people on the front lines see at the intersection of customer pain points, competitive alternatives, and unique solutions? Are there opportunities to enter a new market or develop a new product? Market forces matter now. Any time of disruption is a time to look at the world around you and use the dynamics to your company’s advantage.
Most companies have senior leaders or a strategy team looking at the market and searching for innovative opportunities. But what about your people who interact with your customers and suppliers, and see competitors every day? We empower all our people to look for, identify and pursue innovation every day. We also have a program that provides coaching and support for “intrepreneurs” to help them form and pursue their ideas for innovation. This practice unlocks the potential of your entire workforce, many of whom are yearning for a chance to make a big impact.
Now’s the time to break the huddle and get back in the game—maybe even change it. Take action, and take heart: Even though headlines are bleak, a strong offense is a smart move—regardless of whatever uncertainty lies in the months ahead.