Embrace the Recession And Grow
For the first time in over 12 years our economy is shrinking. That means there is a new generation of leaders at the helm of Canadian businesses who, for the very first time, are being confronted with making choices and feeling professional pains that they have never before encountered.
These leaders are going through a series of stages while dealing with the realities of operating their businesses in a weak economy. And, only those who capitalize on the opportunities at each stage will emerge stronger, professionally and personally, at the end of this economic cycle than they were entering it.
Stage One: Prepare
Business leaders, for the most part, do everything they can to keep on top of current economic realities because their day-to-day operations are dramatically affected by sudden shifts in customer purchase behaviours, cash flow and long-term investments. That’s why the first stage that leaders take, although reluctantly – is to prepare for a weakened economy. Earlier this year, I described how leaders can prepare for a soft economy by recession-proofing their business. Specifically, I outlined four steps that leaders can take to build and strengthen an infrastructure that recognizes and rewards customer retention. Since successfully retaining customers is essential in a softened economy, taking these steps strengthens any business’ foundation.
Stage Two: Accept
In the last few months, local and international indices have clearly revealed that consumers and businesses alike are indeed spending less than projected. And, once a company’s revenues are affected, leaders truly accept the onset of a softening economy. During this stage, leaders can optimize several opportunities for success, for example: (i) target recession-proof industries – i.e. those that provide essential products/services rather than luxury products/services; (ii) only target segments that are the most profitable; (iii) focus marketing messages on cost-savings and reducing inefficiencies; (iv) renegotiate vendor contracts; and (v) outsource more marketing activities.
Stage Three: Embrace
During the most recent economic downturn – known as ‘the bursting of the dotcom bubble’ – ThinData consisted of a handful of dedicated professionals. With few assets to risk, we did something that was unheard of: we actually embraced the recession. That meant taking unconventional but well-grounded actions. For example, we took the opportunity to find and hire talented people who had been displaced. At the same time, we recognized that our former competitors were not marketing aggressively. That provided a rare opportunity to build name recognition, positive associations and new relationships in a ‘marketing vacuum’.
By successfully growing stronger through these hard times, the valuable lessons we learned about how to prepare for, accept and embrace weakened economies continue to shape our innovative approach to operating and building a sound business and vibrant culture.
