Bad times can’t last forever. Start acting like a winner.
By Christopher Lochhead, strategy advisor and former chief marketing officer, Mercury Interactive
A lot of CEOs got caught flat-footed by the recession: they just didn’t see the global downturn coming. They didn’t act quickly enough, and as a result, their companies’ revenues and earnings suffered more than they needed to. So did their people, customers, and shareholders.
It goes without saying that a lot of executives likewise will misjudge the upturn. Don’t be one of them.
Opportunity may be knocking. As a few rays of light cut through the economic storm clouds, it’s time for action. It is time to start planning, and taking selective thoughtful actions. Here are eight ideas for leading the upturn:
1. Get your smartest six people together to brainstorm for action If you’ve read my posts before, you know that I strongly believe legendary people produce legendary results. This week take six of your best people (not 60 – committees do dumb things), and put them in charge of figuring out how, where, and when to play the upturn. Ask them to look into:
- New technology
- New marketing campaigns
- New hires
- New product development
- New companies to buy or partner with
- New geographical expansion
- New cost cutting measures
2. Launch an aggressive marketing campaign–now. Being visible before your customers fully open their wallets is smart. Mindshare now translates into market share later. If your company sells to businesses you must be aware that your customers with fiscal years ending Dec. 31 may spend a little more in the fourth quarter.
You want to be first in line if that happens. If your outfit sells to consumers — ho ho ho. Christmas is coming. This holiday season probably won’t be a blockbuster, but after a year of little buying, consumers are itchy to buy stuff. Be the first to hand them a back scratcher. Oh, and in the spirit of transparency, as a marketing guy, I almost always advocate aggressive, smart marketing.
3. Lock suppliers into long-term, low-priced deals. Buy low, sell high. Right now things are still cheap. Suppliers will trade price for stability. Especially if discounts are connected to minimum purchases over a longer period. Now is the time to use what ever buying power you have to lock in a long-term price advantage with your key suppliers.
4. Invest in new technology. The recession didn’t repeal Moore’s law. Technology kept advancing – even if companies weren’t buying very much. Like all economic recoveries technology is a seminal fuel for the winning cars….gentlemen, start your engines. Now is the time to start investing in new Enterprise 2.0 applications, mobile technology, social marketing, and business technology infrastructure. One big shift in technology is that software increasingly will be delivered as a service (rather than installed on your companies’ servers and PCs). If you invest in these so-called cloud services today, ahead of your competition, you’ll benefit from the price advantages of this new model before the other guy catches on.
5. Fire losers. If you didn’t lay off the “C” players in your company during the recession, now is the time to whack ‘em. It sounds harsh, but business is business – while the recession is still on, you have a good excuse to cut under-performers.
6. Hire big brains before the next talent war. It isn’t easy to hire rock stars during boom times. So now is the time to start selectively adding “A” players to your bench while it is still easy to hire. Hire in the areas that will create the most competitive advantage, product development, marketing, and sales.
7. Buy some companies. Valuations and market caps remain low. Buy a few companies while they are cheap. Chances are your competitors are still on the sidelines. With a few well placed acquisitions now you can broaden your product line, expand geographically or enter new markets. This will position you for even more growth when the purse strings loosen.
8. Make your #1 competitor sue you. Okay, this strategy is a little controversial, but consider doing something (hire some of their top people, steal a few key customers, attack their core offering, launch a knock-off of their best selling product, etc.) that will make your key competitor launch a lawsuit against your firm. Their suit will make them look weak in the minds of customers and distract their management at the same time. As they focus on suing you, they won’t be focused on customers. (Oh, and your customers will be reading stories about how badly Brand X has been damaged – allegedly– by your firm.) It will also give your lawyers something fun to do for a change. Just don’t do anything illegal.
Of course, bad times may not be over yet. Some experts are projecting a “W” in the stock market – ie. their could be a drop or two coming before this recession is really over. Others are predicting that their are more bubbles about to burst. So a prudent, well thought-out approach will be best.
But executives, and CEOs in particular, get paid to create growth in revenue, earrings and market cap. We could be at the front end of a giant growth opportunity. Now is the time for thoughtful, aggressive, action.
Lochhead is a retired marketing executive turned strategy advisor and ski bum.