You have slashed expenses everywhere you can, reduced head count, have everyone in the organization focused on incremental revenue opportunities, and maybe you have even squeaked out a small profit. Congratulations, you have survived one of the toughest economic quarters in history. Now what are you going to do to help the business get through the next two quarters?
Most businesses have slashed their organization expenses to its bare bones, through reduction in head count, pay cuts, deferred bonuses, etc. and have held a ruthless line on expenses. And the business has survived as a result. What next deals with whether the business can actually continue operating in this “minimalist” mode for another quarter or two. Your customers will want to see your business make progress in order for you to remain a reliable vendor. And because there is so much strain on your operations right now that fatigue, burn out, and collapse could have a significant adverse effect on the business if it is asked to operate this way for a sustained period of time.
Lets take the customer perception issue first. Your customers are as nervous as you are about all aspects of their business. Their natural tendency (as probably was yours) is going to be to pair back on suppliers. Under current economic conditions, often these decisions are made based on most recent performance OR what your customer’s management thinks will have the largest impact, positive or negative, on their business. These are code phrases for non-rational decisions. So you may have the best product or services, but you may also lose a valued customer, because they lack confidence that your business can remain reliable through a sustained downturn. Staying still then may be exactly the wrong thing to do, although it seems to be the thing to do because that is what got you though the first quarter.
Now let’s take the operations issue. Moral is probably pretty low, because there have been lots of changes and uncertainty about the present and the future. People are working lots of hours and many at reduced pay. The operations engine that has been scrambling for a quarter or two to service the revenue opportunities maybe starting to overheat. How long can your business run this way before the engine seizes?
The common denominator for both of these issues is that if you keep on doing what you did to survive the last few quarters you may experience significantly diminishing returns in the quarters to come. In other words, lower revenue and an organization whose energy is completed depleted.
So what can you do? The first step is to recognize if you have a problem, and then, counter to your instincts, invest some time and money in preventive maintenance to mitigate the downside risks that the organization could fail.
It is not only just about having more customer meetings (because they most likely are not going to indicate anything to you as they go through their supply chain consolidation) you also have to have a very keen understanding of what your competitors are saying to your customers and how the market dynamics change because of it, or you may get blind-sided. Make sure you gather superior intelligence and that it is being efficiently communicated throughout the organization.
And it’s also not only just about having some kind of success party for surviving, it is about addressing how to restore what often feels like operations chaos. This is a great time to look at your development and marketing processes to determine how they impact the people in your organization. How many touches (time, people, and meetings) does it take for your business to move from an identified sales opportunity to a deliverable to the customer that has enough value such that they will pay for it? Don’t guess, measure this and you will likely be very surprised. Invest some time and money to adjust the processes now so that they can allow the people to function more efficiently in the roles.
Because the business has operated for some significant length of time now just figuring out how to survive, history will begin to work against you moving forward. This is why doing the same will not work, and taking preventive measures now will go along way to avoiding potential catastrophe. Yes this means spending some money now and that may seem risky. But if you have been just surviving for some time, you are operating in a high risk mode anyway and at some point will have to spend as the risks turn into crisis.
Advance Tech Marketing (ATM). helps comapanies save money and increase revenue by streamlining their development and marketing processes for more effcient operations. For more information, see http://www.advancetechmarketing.com