Whether or not the current economic slowdown has affected your business, there will be times when change -- whether economic or in your industry, technology or market -- will have an impact on your business.
These are changes that are essentially out of your control. If your biggest customer goes out of business or decides to replace your steel components with plastic ones, it doesn't matter whether the economy is in a growth mode; your company will face a critical time.
Last month, I indicated that not only could companies survive external changes such as an economic shift, but they could actually get stronger. I listed strategies for making this happen and this month will discuss these in detail.
Awareness and action
In 1996, Andrew Grove, president of Intel, published a book entitled "Only the Paranoid Survive." That may be a little strong, but the truth is that for companies to survive and prosper through changing times, management must stay awake and stay aware.
It needs to identify and pay attention to indicators that things outside the company which could affect the business may be changing. To do that, you need to know what those indicators are and what they signify for your business.
Once an indicator has given you a sign that something is changing, you cannot ignore it. You need to react quickly and decisively.
You'll likely never be completely sure what the cause of the indicator is or that your actions are the right ones. As Colin Powell was quoted as saying, "Go for it when you are 40 to 60 percent sure." If you are less than 40 percent sure, you probably don't have enough information. If you are more than 60 percent sure, you've probably waited too long to take action.
Flexibility, momentum and creativity
Many of our clients are reviewing their strategies in light of recent economic changes. They developed strong strategic directions and practices over the past few years when growth opportunities abounded, and now, many of those strategies need to be adjusted.
But because their overall strategic approach was one of flexibility, they are able to easily adjust. They are experienced in developing strategies and in managing them, so reassessing those strategies and modifying them are simply part of their process. In doing so, they are able to keep up their momentum and keep moving forward.
In rough or changing times, although aggressiveness may need to be tempered, a business owner cannot afford to go into a defensive mode. He or she needs to continue to move forward and identify new opportunities for sales, improved operations and growth.
Major changes in a company's market may require out-of-the-box thinking to create those opportunities. The strongest managers will watch for and take advantage of opportunities that may be created by weaker competition. If it is an industrywide situation, opportunities may be abundant.
Stay in control
Finally, management needs to stay calm, think clearly and not panic. It is impossible to make logical decisions when you have gone into irrational panic mode. Your calmness -- or lack of it -- will also affect your organization.
If employees see a calm, methodical process being utilized to deal with the situation, they'll have a much higher level of comfort and confidence. Employees can sense the mood of the company, and a crisis-driven panic mood may cause some employees to panic as well and find other opportunities.
Operating in a boom situation, when everything is positive and opportunities for growth abound, is certainly more fun than dealing with an economic downturn or major industry or market changes. However, being prepared, following basic strategies and keeping everything in perspective can not only make it easier to survive, but can actually make your company stronger and poised for even greater growth. Joel Strom (email@example.com) is president of Joel Strom Associates Inc., Growth Management. His firm works exclusively with closely held businesses and their ownership, helping them set and achieve their growth objectives while maximizing their profitability and value. Reach him at (216) 831-2663.