If managed effectively, businesses can emerge from a downturn stronger for the experience.
A common refrain that comes up in my many conversations with business owners nowadays is that it’s hard to think about growth when they’re doing their best just to keep their heads above water.
I ask them to think about the alternatives; surely, they are twofold only – grow or contract. Staying still is not an option; it’s sink or swim.
That is a good analogy. When you are in water, out of your depth and stop swimming, you sink. Yes, you can tread water, but that is a finite option and does not get you anywhere.
There have been instances where companies have had to take stock and to re-evaluate where they stand in the market. I have spoken to business owners who have said that, in doing so, they used time to look at other appropriate market segments or to become more effective by developing their internal systems and processes to deliver an improved service.
This is not standing still. Out of whatever ‘downturn’ these businesses are experiencing, they come out of it stronger, more resilient and better placed to take advantage of the upswing – when that eventuates. This effective business leadership as it should be.
It could be argued that busy market conditions are the very worst times to be considering growth, expansion and internal development. This is when customers are demanding services and demanding them at increasing rates (and in shorter time frames). With all of this frenetic business activity, how can there be an effective focus on internal growth?
On the other hand, there is often a temptation for business owners to batten down the hatches and retreat into their shells when business activity slows. This becomes a self-fulfilling prophesy, and demand slows even further as a result of business being lost to more proactive and progressive competitors.
The sad fact remains that, in times of economic downturn, the two areas most likely to be cut in the budgets of small businesses are marketing and business development. The business owners who commit to this fateful strategy are confining themselves to a worse situation than they would experience if they showed more confidence. This is not to say that such times do not call for caution and prudence; of course, careful judgement is required.
However, it is far too easy to deem ‘advertising’ and ‘business advisory’ as unaffordable in these circumstances.
On the contrary, times of uncertainty and even downturn are opportunities. A true leader will look at the opportunities for business development and have a laser-like focus on implementing them for the longer-term benefit. This is the difference between seeing the bigger picture and being overwhelmed by today’s apparently negative conditions.
The attributes for business growth do not change, irrespective of conditions. The long-term vision for the business should be relatively stable, while management needs to be brutally honest about the reality of the day.
The strategy could change but its goals should not. In such times there is even more reason to tap into the intelligence of the workforce, more reason to fully understand the needs of customers and to communicate effectively with them.
If times are tough, true leadership is required to make the right decisions and to retain belief in the long term. If business conditions are good, it should be realised that they will, in all probability, take a turn for the worse at some point. Whatever the case, the same consistent approach to good management and leadership should be maintained.
John Matthew is principal of Switch Directions for Business, which offers a range of coaching and mentoring services to business owners looking to grow their enterprise.