Coincidently, Fortune magazine features an article this week on How to Manage your Business in a Recession, ( by Geoff Colvin. Fortune. New York: Jan 19, 2009. Vol. 159, Iss. 1; pg. 88 ) where they conclude:
“It’s hard to be upbeat about a recession, but it truly is an opportunity. Marathoners and Tour de France racers will tell you that a race's hardest parts, the uphill stages, are where the lead changes hands. That's where we are. When this recession ends, when the road levels off and the world seems full of promise once more, your position in the competitive pack will depend on how skillfully you manage right now.”
In this article, Fortune identifies 10 strategic issues or tactics to manage your business in a recession. I’ve added 18 more strategic questions of my own from the Opportunity Clinic, to get a total of 28 tactics or strategic issues that each business or entrepreneur should be seriously considering and re-evaluating now, if they have yet to do so.
Why 28? Well it comes from the core components of your Business Model, which is made up of 6 key generic areas or components such as:
In turn, these general components can be further subdivided into 28 strategic issues or questions, that every entrepreneur should be asking himself or herself when first designing a business model for their business idea or concept.
In recessionary times however, tactics that made sense in fast growth times can be absolutely disastrous, even survival-threatening for many businesses. If you haven’t done so, business needs to step back and explore each one of the assumptions behind their original business model idea. Criteria for assessing the overall business model in recessionary times could include profit potential, robustness (ability to withstand changes in assumptions about underlying internal or external conditions), adaptability, resilience, and sustainability.
Part 1 View Unemployment as an Opportunity Window (competitive strategy factors and internal capability factors)
The December 2008 figures for unemployment in Canada, USA, Europe and Asia were generally grim sounding and greeted with doom and gloom by the media and most politicians-the worst or steepest drop since the 1930's in some cases. Stating the obvious, Fortune says: "
"Managing in any recession is difficult; managing through this one is especially hard because it's different from previous ones in multiple ways. Most immediately significant, employment is plunging more steeply than in a long time--by more than two million jobs [in the US} last year, more than during the previous two recessions, and this one is far from over."
However, entrepreneurs should look at the plus side and see this as an opportunity to capture new talent that is normally difficult to recruit in good times and fill key positions with experienced staff that may now be out on the street looking for jobs. A good friend of mine, who was formerly a Country Sales Manager with a top 5 consulting firm, is now looking for a job. Anyone need to fill a Sales position with an excellent candidate?
Fortune reminds us to:
"Reevaluate people--and steal some good ones.
Just as most investment managers look like geniuses in a bull market, most employees can look like excellent performers in a booming economy. Now is when you identify the impostors. Working hard at that task is important, because if you need to lay people off, as you well may, it's critical that you choose wisely. A subtler danger: If salaries or bonuses need to get whacked, you may be tempted to reduce them equally across the board in an effort to show that we're all in this together. But think of the message that practice sends to your best performers, who will feel they're being punished rather than rewarded for their great work. Mel Stark of the Hay Group consulting firm points out that in his survey of the World's Most Admired Companies as ranked by Fortune, the best ones take extra pains to reassure their "most driven and focused employees," the ones it is most important to keep. Instead of spreading the pain, reward your best workers well, even in a recession. Then scout for competitors that are sharing the misery equally and steal their best performers."
In summary, protect your own best performers from competitive poaching, and do some aggressive hiring and poaching yourself, while times are bad.
Cognitive Skill?What's negative, positive, different and interesting about unemployment in this recession?
Walter Derzko< Smart Economy, Toronto
Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression featuring 45 opportunity scenarios.
Related posts in this series:
Related Posts over that past year:
Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn Recession - Proofing your Business - Spotting & Designing Opportunities in a Downturn – June 25, 2008, Ontario College of Art Design, Toronto, ON Recession-Proofing your Business-Strategies and Tactics for smoother sailing in turbulent seas Master Class in Opportunity Recognition for entrepreneurs and intrapreneurs> May 30th 2008> University of Toronto How will baby boomers handle the recession? Zoomers, Doomers, Gloomers, Opportuneurs Using New Yorker Cartoons for Opportunity Recognition /Sense-making & Pattern Recognition Text Mining for S&T Scouting, Foresight and Opportunity Recognition The Opportunity Clinic-swapping opportunity scenarios 08-002
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Walter Derzko -"Changing the world, one idea at a time"©
Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "
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".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
- ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
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".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought." --A. Einstein
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".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko
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".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has." -- Margaret Mead
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".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon
P. S. if this is your first visit to my blog, please go to our Welcome page
Walter,
I came here as a result of your posting on the google group, Transforming Transformation.
On my own blog Architecture of Life - I posted a 3-part series called "Transformative Economics", mostly a treatise about distinctions in language and personal responsibility - but it proposes a more positive conversation about the current economic situation.
I thought you might be interested in it. The posting is here -
http://architecture-of-life.blogspot.com/2008/12/revelatory-christmas-new-vision-for.html
I wrote the first post on Christmas day. Note this link only goes to the first post. The other two - that finish the piece - are linked from that one.
Christopher K. Travis
Posted by: Chrsitopher K. Travis | January 14, 2009 at 11:30 AM