Managing for Challenging Times

Every economic cycle poses unique challenges, meaning some businesses are hit harder than others, but nobody escapes forever.  Whether it’s election year uncertainties, mortgage meltdowns, credit crises or some other scare, forces simply conspire from time to time to generate a unique blend of self-induced societal hysteria easily rivaling the effects of any Starbucks five-shot venti mocha latte in the blood stream of the average business owner.  In short, it’s easy to be left feeling frazzled, frenzied, and more than a little paranoid about how to make a business not only survive but thrive in challenging times.

The cop-out answer is to declare that you must plan, and you must start in good times.  That’s true… but isn’t a good answer if times are already lackluster.  And as the sign on my office wall points out, “Thinking is Good.  Doing is Better.  Accomplishing is Best.”  Planning by itself is nothing more than mental exercise.  The key to thriving in challenging times is establishing a meaningful course, monitoring progress, and constantly taking corrective action to get there.

Focus on an Established Outcome
Every business owner ought to have a clear sense of business direction – vision, mission, values – guiding strategy and daily operations.  (If not, seek help and get this foundation in place.)  In challenging times, your operative word should be “anticipate.”  If the goal is to modify course based on changing conditions, a crucial first step in anticipating, identifying, and coping with change is to first fix more firmly on the desired outcome.

Then attention can turn to identifying how to adapt. The classic way to do this is to take an honest look at the plusses and minuses of the business, as well as the opportunities and challenges presented by the competitive environment.  Known as a SWOT analysis (i.e., Strengths, Weaknesses, Opportunities, and Threats), this exercise is a standard and powerful way to rapidly identify challenges and brainstorm solutions.  Most importantly, it gets us thinking throughout the business as well as outside the business in an attempt to predict the future.

Use the discoveries of SWOT and other analyses to determine new or changed initiatives for the future based on anticipated conditions.

Set Your Goals
The really scary thing about setting goals is as soon as they’re set, you’re underperforming.  Until you hit them!  Budgets.  Quotas.  Metrics.  Words that strike fear in the hearts of many.

The simple truth is most of the issues that can be identified with a business can be grouped, turned into trackable data, and have a goal attached.  Obviously, profit can receive a goal like “up 10%.”  Less obviously, the issue “Customers are unhappy,” can be turned around into the goal, “Customer complaints down 10%.”  Even less obvious, an initiative to “Improve work quality” can be tracked as “Dollar value of re-work.”

Look carefully.  I find that a lot of people fall into the trap of only looking at financial data, but the metrics above go much further to include Customer and Quality measures.  I could go on to include other categories of measures and several within each – and you should, too.  Instead of focusing only on the bottom line, consider the things that are critical to making your bottom line happen: Productivity; Use of Resources; Client Satisfaction; Business Development.  Perfect those factors and the bottom line will happen.  Put another way, keeping watch over fiscal measures alone is nearly never enough.  Refocus on the broader perspective, or get help doing so.

Measure Performance and Correct Course
Remember the sign that said “Accomplishing is Best?”  Correcting course is the way to get there.  As you take action on the initiatives that you think will get you to your goals, do so with two commitments in mind.

First, that you will absolutely commit to a regular, objective review of the progress you and your team are making.  At least monthly.  Get together, look at the numbers, talk about what goals have been achieved and – most importantly – what to do about those that are not being accomplished.  The purpose of this meeting is to hold each other accountable for result.

Second, commit to results, not initiatives.  Give every idea its fair chance of success.  But be absolutely ruthless in your willingness to cross an initiative off and come up with something new to try if results aren’t happening.

These commitments take steadiness and incredible objectivity, but they’re absolutely critical to making progress. 

A Brighter Tomorrow
Sometimes it’s possible to get away with simply taking a casual approach to business and seeing what each day will bring.  And trust me… I see plenty of people with that attitude.  Challenging times are the worst of times for that approach.

Hone your direction.  Set goals.  Check and vigilantly tune your performance.  And ask for help when you need it.