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8:00pm EDT September 25, 2009

Andrew Logan hears people talk about the importance of transparency during these tough economic times and he can only chuckle. It’s something that’s been regular practice at Logan Clutch Corp. for as long as he can remember.

The Flash Report is posted weekly in the company cafeteria, giving employees a regular look at sales data, open quotes, the status of deliveries and productivity levels.

“This level of communication makes it easy for people within the organization to understand when and why the company has to scale back to get through rough economic situations,” Logan says. “The best way to keep your team inspired, during a strong or weak economy, is to keep them informed and involved. Who wants to be on a team that doesn’t set goals or record wins and losses?”

It’s this regular posting of information that heads off panic decisions because everyone knows what’s happening in the business at all times, says Logan, president and CEO at the 26-employee manufacturer of clutch and brake products.

“If you’ve been a straight shooter with them in good times, they will follow your lead through the challenging times, as well,” Logan says. “The buy-in comes when their thoughts and ideas are taken seriously and put into motion.”

Logan cites the example of a request made in January in which all employees were asked to make a list of tasks and projects they could take on to reduce waste and increase value for the company.

“Each week, we post small success stories in the cafeteria where the company has saved money on material, administrative or packaging costs or on a new manufacturing method,” Logan says. “It gives the people the opportunity to make a difference, which is a great motivator and contributes to our goal of weathering the economic downturn.”

The key is to provide opportunities that engage your entire employee base.

“It’s important to make sure everyone in your organization ... knows what the company’s strategy is to get through the current business/market conditions,” Logan says. “Second, each person has to know what their role is in the strategy and what they can do to improve the situation.”

Of course, watching the numbers, tracking the data and putting up charts isn’t enough to keep your business thriving through a recession. You need to have a plan of action for how to engage your people in what needs to be done to get through the bump in the road.

“It is imperative for small and large businesses to have an evasive action plan already in place when a market craters or significant market share is lost to the competition,” Logan says. “The biggest mistake a leader can make in a tough economy or downturn is to panic. Poor decisions made in seemingly drastic conditions can do more harm to a company and its people than any economic downturn.”

So what happens if trouble hits and you don’t have that emergency action plan in place?

“Don’t panic,” Logan says. “It’s very, very rare for a business to disappear overnight. Economic downturns are more of a death by a thousand cuts. Every business has a natural dashboard or a key measure of indicators that tells them what is and isn’t working.”

Meet with your key finance people and get a quick analysis of the most important numbers. Gather your management team and do a fast analysis of strengths, weaknesses, opportunities and threats to get a priority list together.

Once you’ve spoken with everyone and have some kind of plan put together, present it to your employees with action items and deadlines.

“The plan should be a solid foundation or framework and adaptable to change as the market changes,” Logan says. “If you’ve done a good job, you’re 70 percent on your way to success with the final 30 percent outcome determined by your day-to-day leadership and market conditions.”

Keep talking

Andrew Logan makes it a point to keep employees informed about what’s happening at Logan Clutch Corp. But he steps it up even a bit more when the times turn tough.

“The message has to be clear, consistent and based on the facts that you’ve gathered from your key customers, salespeople, suppliers, managers, supervisors and other people in the trenches,” says the company’s president and CEO. “In the best of situations, it would be ideal to gather the company together in the office or factory floor and explain the situation and convey the company’s short-term strategy and the role each area of the company will play in getting through the immediate issues of the crisis.”

The key is to stress the immediate issues and warn of the tough times that may lie ahead.

“Conclude the meeting by stating that there will undoubtedly be some longer range challenges and tough sledding ahead,” Logan says. “(You can add) that you are personally available to discuss any issues with them in smaller group settings after they have had some time to think through the situation.”

In addition to maintaining open lines with your employees, you need to stay in touch with your customers to be prepared for when things turn around.

“With your team, take a look at your top 50 to 100 customers and assess how you won their business,” Logan says. “Is the business profitable? Do they pay their bills on time? Were they easy to work with or did they consume your organization, sending more profitable prospects to the competition? Questions like these will lead you in directions that will help you decide what markets to attract.”

How to reach: Logan Clutch Corp., (440) 808-4258 or www.loganclutch.com