Post Recession Planning – Strategic Perspective
As Americans we live in a rich nation since the activities we decide not to perform ourselves are tasked for an army of others to complete
. When one needs to make more money, we call on this army to do it for us. If a corporation is unable manage operations efficiently, they simply give it to India; if toys can not be manufactured for our internal needs, we simply go buy from China. This colossal work-force to task-master separation, improves our abilities several folds. It enables us to profit from other skills' as our own. This is trueuntil around 2001-2003 timeframe.Along with this important gain, however, comes a certain danger. A breakdown of any one of these very small group to carry out its activities would cripple us. For example, a fiber cable disconnect with India could bring Wall Street to a screeching halt. From a strategic standpoint, companies from time to time face a bad issue, causing the entire business cycle to falter because a strategic activity ceases to perform its accustomed tasks. Specifically, far too many companies have ignored the importance of having a realistic strategic plan and periodically analyzing every aspect of their customer base. This activity is not exclusive to the big companies that have resources. It is the primary function of every business owner irrespective of the size. As strategic advisor to businesses, author has implemented specific strategic activities every month, every quarter to detect client sector habit shifts, individual client's behavior.
The new economic imperative require business models be altered to best suit client economics. There are three ways to recession proof your business.
1. Align to customer needs A traditional method, to re-align product and service portfolio necessary towards solidifying customer base and cash-flow. Farmers periodically grow different crops based on longer range weather forecast, market demand, oil prices and distribution channel available in the local market. But farmers also recycle crops to enrich the soil to ensure their assets are safeguarded for long-term success. Traditional recession proofing method is fundamentally a portfolio adjustment to serve specific core customers' needs. In bad times a company carries products/services mandatory to core customer's existence. In good times, a company extends the same service to adjacencies and multi-level service offerings (bronze, silver or platinum).
This approach solves the cash-flow problem, but it does so at the cost of growth progress typically. This is one reason why most businesses tend to stay mediocre. The crux of the challenge is to solve creation and distribution issues by enforcing continuity of tasks and rewards through process.
2. Align to immediate customer economic Arbitrage as many processes as possible and provide more value to customer at lower cost. Selling on the internet is probably the most common approach. Year-over-year sales growth is a testimonial to this recession proofing adjustment. Simply moving to complete online sales will not provide sustainable results. Businesses must balance off-line and online strategies. The biggest focus is to significantly enhance offline customer influences. For example, the devices sales representatives use show-n-tell approach more often during recession times. You may need one. Refer to other approach in a different article (www.thebusinesslabs.com) to further enhance customer experience. Using internet as a foundation, businesses will need to further innovate almost every aspect of the traditional activities.
This approach imposes disproportionate allotment of efforts to short-term activities and rewards by results. The model persuades businesses to achieve rapid and far-reaching financial shift. It takes on almost autocratic or mild demographic forms to achieve ends.
3. Align to customer's future success - Organize your future prospects along the lines of economic success. A combination of Pay-for-Performance' and Done-for-you' model significantly assures continued revenue. For every type of business far more revenue opportunities exists on the services side than by selling products. For this reason, author's clients are advised to a Pay-for-Performance' maturity model with the clients. Achieving 100, 200, 400% is possible, provided owners commit to fulfilling customer goals.
This method is far more complex than it resembles and competence emerge "spontaneously" from a seemingly wild outcome. Stick to gradual results and grow methodically.
Over years of working with businesses, author has used these base techniques and created multiple variations to best fit customers' goals.He suggests a business transformation road map as the best starting point for those considering to adopt these techniques.
Post Recession Planning Strategic Perspective
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