There’s a new normal for today’s businesses
Part 1 of a 3-Part Series
All great leaders are constant learners and unlearners. They study, analyze and question everything regardless of the economic situation. They shift when the need arises, not depending on those things they have always done the same way. Effective leaders don’t take anything for granted, especially outside forces that can drastically change the long-term impact on business.
So, what do we think we know based on the past year?
- Growing government regulations will impact how you sell, operate or deliver products and services more than ever.
- A recent study by Vistage International finds many business leaders are bracing for higher taxes to pay for the new regulations and loans used to re-ignite the economy.
- Economist Brian Beaulieu and others predict unemployment will continue to rise until early 2010 while loyalty will diminish as the remaining employees are asked to tackle extra tasks.
- Online social networks and other technological changes will continue to empower customers and employees. Company reputations will rise and fall virtually overnight through these communities.
- Finally, globalization will march forward on all levels… from smaller American companies selling security technology to foreign governments to Chrysler being owned by Italian automaker Fiat.
Planning Versus Reacting
Companies are adjusting to these trends, but often with knee-jerk reactions:
- Many businesses remain in survival mode with a focus on scrutinizing every expense, stretching out accounts payable schedules and, of course, layoffs. Preparing for sustainable growth is not on the radar screen.
- Customer service is improving as businesses hold on to preserve every precious relationship, but many companies will do almost anything to keep customers happy even if it makes no financial sense.
- Companies are chasing anything that might turn a fast buck. But with fewer employees, the chase diverts limited human resources from the core business and less progress is made on the right things.
- Decisions have been delayed in almost every sector regarding almost every choice. Some are looking for an instant, magic wand type event to indicate it is time to shift back to growth mode so not much is getting done even with the resources these organizations have.
What can you learn from these trends? And what can companies do to get positioned for an era of sustainable growth?
As Albert Einstein summed up about change… “Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.”
But with so much in flux, where do you begin with your list of questions? Break up your process into three main steps to avoid confusion among employees and customers, and to validate your assumptions for success as the economy recovers:
- Identify key lessons about your business from the past year or two. What major considerations should be central to your strategic planning? Consider actions, activities, products and services that are not the focus of your competitors. Are they not hiring? Are they not seizing an emerging market? What gaps can you fill? And what can you stop doing? What did you try, but it did not work? What old habits and processes should you abandon even if you have invested in them for a long time?
- Distill your learning into focused action plans. Some actions might be short-term opportunities to meet cash flow needs. Other actions may build long-term sustainability. You may seize an opportunity that your competition is missing. Regardless, the actions should always support your core business mission and you should be very clear on when you will take the action and what resources are required to do it well.
- Anticipate the unanticipated as you start to implement. Make scenario planning part of the daily routine rather than an afterthought when plans don’t pan out. Prepare to pause, think and plan. It will feel like it is slowing you down, but will actually help you get to where you want to go much faster. Make asking “what if?” part of ‘the way we do things here.’ Force yourself to slow down and consider multiple perspectives, challenge your own assumptions and engage others who have diverse views.
I’ll break these three steps into more detail over the next two blogs. Stay tuned for a step-by-step approach on how to leverage the lessons learned to position your organization for greater success in the future.
