Taking Advantage of the Recession

I just did a Google search on "changing business model," and got 62,700 results.

Over the past few months, I've noticed that our bravest and smartest clients are taking advantage of the recession by taking a hard look at how they do business and being bold and creative about making needed changes.  I've talked about this before here, and provided some examples. Now I'm seeing a real pattern in terms of what seems to be working and what's not working.

Here's some stuff that people are doing that seems smart and useful:

• using their best minds to explore alternative revenue streams and approaches to distribution and marketing,
• focusing on serving customers better than ever (and in ways their competition isn't),
• communicating consistently and honestly with their employees about what's happening and what the company is doing about it,
• setting clearer performance standards and figuring out how to hold people accountable to them,
• letting go of marginal performers,
• hiring newly available 'rock stars' to fill key open positions,
• agreeing on those efforts most essential to growth and directing resources toward them,
• using any available resources to take advantage of market opportunities created by others' failures (as long as those market opportunities lie squarely in their core competencies).

And here's some stuff that people are doing that seems...well...not smart and not useful:

• focusing on survival at the expense of the customer experience,
• keeping quiet about the current situation, or scaring employees, or falsely reassuring them,
• letting go of key performers,
• doing across-the-board budget cuts,
• conducting business as usual, but more cheaply.

What are you seeing?

Comments

[Lynn M]

These are good points and they seem like common sense, though no doubt many businesses take the 2nd route. One comment -- you point out letting go of "marginal performers" and hiring "rock star performers." The recession is a perfect time for companies to acquire top performers they may not have had access to in the past (since many people have the unfortunate fate of working for short-sighted companies that operate on the second bullet point list during difficult times). But it is important for hiring managers to take the time to learn how to properly interview candidates so that they are skilled at identifying those rock stars....otherwise they might end up hiring someone else's marginal performer.

[Erika Andersen]

Absolutely - many managers interview very badly...they spend lots more time talking than listening!

Really good point...

[Lynn M]

Listening is certainly of key importance! Here are some other good pointers on how to hire top performers. This is a blog post I wrote for salesjobs.net, but there is information which can help with interviewing and hiring in any industry. http://www.salesjobs.net/articles/how-to-hire-top-salespeople-4125-article.html
Thanks!

[Erika Andersen]

Excellent article, Lynn. Clearly, great minds think alike - we make many of the same points when we teaching interviewing...

[Victor Cheng]

For a book I recently published, I've done a ton of research on this topic and would add the following to the list of smart things to do in a downturn:

1) Create new product, services, and bundles to sell to existing customers (no customer acquisition cost = higher margins)

2) Upgrading talent while cutting costs (e.g., replacing marginal performers with better ones that cost less)

3) Cherry picking your competitors key accounts. You know the accounts that are now getting ignored by a competitor who is pulling back.

4) Strategically marketing more aggressively when you have something unique to offer. With the recession clearing a way a lot of the clutter, it's much easier to get noticed.

5) Use joint ventures, cross promotions, or collaborative marketing with other companies in your industry. When you don't have the resources to market aggressively yourself, pool your resources with others in the same boat and market aggressively as a team.

[Erika Andersen]

These are great suggestions, Victor - thank you!

[Ritesh Anand]

A S.w.e.e.t and in-your-face article

[Erika Andersen]

Re: [The Simplest Thing That Works] Ritesh Anand submitted a comment toTaking Advantage of the Recession

Ritesh -

Glad you liked it. (I think g.)

Erika

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You're right, simple thing really works.