I'm hearing a lot of interesting things about how to adapt your business to a recession, but the fact is, the most successful strategies we've seen in the past two recessions involved preparing the company for the END of the recession.
Partly, this is because the knee-jerk reaction to recession is to begin the cost cutting/value cutting syndrome that leads to a downward spiral...and partly, it's because there is NO better time to plan for a reinvigorated strategy than when you have a little bit of breathing room.
Let's look at this another way - during the peak season at a tourist destination, everything is crowded and expensive. Hotels, airlines, rental car companies all charge top dollar because they can, when there is more demand than supply. In the off-season, everything is cheaper and less crowded.
If you think of the US economy as being in the "off-season" right now, you'll realize there are some things that savvy companies ARE spending money on - right now. A classic example of this is something we teach in our strategic planning classes - that mature cash cow companies ALWAYS invest in marketing during recessions. This is because brand is still important to a cash cow - but waiting for recessions to invest in your brand helps to optimize overall cash flow.
Our experience bears this out - our top-performing clients not only managed costs carefully during previous recessions, but also invested in preparing for future growth - and beat their competitors to the punch by doing so.
What are YOU doing to prepare to return to growth?
Wednesday, January 21, 2009
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