Rules for Surviving Anything in Business

Sure, they are facing the challenges presented by frightened bankers who have tightened credit and taken the opportunity to do a little interest gouging at the same time, but most have adopted the strategy that since things are a bit harder, they need to focus on doing more of what works for them, and less of everything else.  The result is generally an increase in business despite the downturn; they are working a lot harder and doing a bit better, and that puts them streets ahead of those businesses who are “waiting for the Government to fix things”.

I thought it was worth a look at what the good guys – both big and small – are doing that works for them pretty well regardless of the economic climate, and I came up with the following observations:

1. They Stay Positive: They accept the pain that any disruption to their forward progress brings, they immediately assess what needs to be done to match the change in circumstances, and then they set about looking to see what new opportunities the changes will present – and they know that there will be opportunities.

2. They Communicate Early: As soon as they are aware of a shift in their world and they’ve formulated a take on what it means and their first response, they communicate that to their team, ask for their input, and seek their renewed commitment to do whatever it takes.   They keep their people up to date on developments in an open and honest way.

3. They Keep An Eye On The Dashboard:  They work out the key numbers that tell them what’s happening in their business right now; they create systems that enable them to see those numbers easily all the time; and then they focus themselves on those numbers – obsessively.  When a number moves the wrong way they take immediate action and stay on it until it normalises.  (For more on this point, see Dashboards from a past edition)

4. They Pull Their Banker in Close: They set up regular contact with their bankers before they ever need them; they proactively provide monthly or quarterly analysis of performance and projections; they forecast credit requirements, and they build comfort and trust for the future.

5. They Use Debt Like Gelignite:  They accept that debts is dangerous, they handle it with care, they only use as much of it as they need to remove the object in their way, and they keep it in a safe place when they’re not using it.

6. They Cut the Fat: They know that as their business moved into middle age it gathered a little weight in non-revenue staff, marginal products, and questionable customers.  A return to fitness means cutting non-revenue staff then replacing half of them with revenue earners; then running a ruthless competitive analysis over every product and service and cutting the bottom 20%; then repeating the exercise with your customers, dropping the bottom 20% then immediately seeking the same number of new customers who fit the profile of your best customers.

7. They Informalize: They can remember a time when they were smaller – and more profitable!  There were less people and so less coordination, ritual, formality and bureaucracy – less non-revenue activity. They strip down, simplify and streamline every section of their business. They see lean and mean as good when times are tough.

8. They Evolve: They recognise that nothing stands still in business; they study the market to anticipate change so that they can convert it to opportunity.  They know that if the economic pie is shrinking the present opportunity must focus on gaining a larger slice of a smaller pie; and that the future opportunity lies in preparing themselves to ride the wave as their bigger slice grows rapidly when the pie expands again.  They focus near and far managing now with the future in mind.

9. They Partner With Suppliers: They know that not all suppliers are equal (and probably know that not all will survive) so they pick winners and get close to them, seeking to partner in strategic marketing and looking for ways in which to support each other so that both parties gain an advantage.  In a very real sense, a good supplier can also be a very good low-cost banker.

10. They Look for Opportunities: They know that if they are feeling the heat, then their less able competitors are probably feeling fried  – and may be open to selling, merging, joint venturing or just plain “getting out”.  They use innovative solutions to acquisitions and mergers to conserve cash and, if they are going to lay out cash, they involved their banker from the beginning.