Actions in Turbulent Times

Headlines continue to bring bad news and reports of continued declines, and many are calling this recession unlike any other in terms of its potential depth and length. Downturns rearrange the playing field more than boom times do, allowing for more dramatic losses as well as gains in the marketplace. How you fare in the shakeup will be highly dependent on the planning you are continuing to do and the actions you take as a result.

The global management consulting firm, Bain & Company in its presentation, "Winning in Turbulence," offered several recommendations to help management teams focus on those issues that would help them not only survive, but thrive through the turbulent times ahead. Using an analogy, Bain counsels that it is important to "brake decisively heading into the downturn" so that a company can "accelerate aggressively coming out of the curve." Their main theme was that it is more important than ever to know not only your industry better than your peers but also your relative positioning to properly plan the most effective actions. Through a simplified matrix of mapping your financial strength against your strategic position, one can derive a potentially highly effective near term action plan, whether it means a complete refocusing on the basics or a more aggressive posture to consolidating weaker competitors.

Heading into and coming out of the hairpin curves of today's economic environment, there tend to be some common traits / action steps among the companies that could be defined as winners. These include:

FOCUS ON CASH EARLY
Manage it carefully and do it strategically. Financial flexibility as a resultant of strong liquidity will be a key determinant of successfully managing through uncertainty and accelerating ahead of your competition.

BUILD ON YOUR STRENGTHS
Turbulent times are excellent opportunities to refocus on your competitive strengths and build on them. Resources - time and capital - allocated to non-core expansion or new areas can be better deployed building on those areas in which you have a strong position. Dispose of those assets that are none-core to your business, or look to outsource non-core processes or functions. Moreover, as you look to gain in an uncertain market, don't ignore the threat of smaller and nimbler competitors as they will be looking to build share.

PUT CUSTOMER FIRST
Create a greater level of loyalty and invest behind the best customers. Uncertain times are the best opportunities to continue to build on relationships by understanding your customer/client needs and being responsive to them. Over-delivering on your customers greatest needs and
helping them through their difficulties will not only maintain share but will pay off as times improve.

MOTIVATE YOUR "A" TEAM
While this is a good time to pare underperformers, don't neglect those individuals who are a key part of the team going forward. Everyone has some level of worry about future prospects. Keep those core team members informed, motivated and energized.

MAKE STRATEGIC ACQUISITIONS TO BUILD THE CORE
Look for assets, talent and systems that can complement your core business and expand your reach. Significant value can result from thoughtful strategic acquisitions which will position you even better once conditions improve.

The road ahead will undoubtedly have continued bumps, potholes and unexpected curves; your planning today will position you to weather
uncertain times and come out ahead.