If you aren’t part of the solution in dealing with the recession, you are part of the problem.
This old 60’s phrase is relevant in many organizations’ reactions to the economic crisis, which is affecting most organizations today. While everyone acknowledges the recession and is worried about it, there is a lot more discussion than action. Most of the response is “it will pass soon; there is nothing we can do,” traditional responses such as cost or position reductions, etc. What is needed is a drastic rethinking of organizations’ business and financial models. Some suggestions are as follows:
- The first need is to recognize the problems and that they will be longer rather than shorter. The almost weekly changes in forecasts and plans in many organizations are evidence of the denial. A more important reality is that in the next year or less some of our competitors, suppliers and customers will probably not be in business and we need to take action to ensure it is not us.
- Our prior growth and marketing models have typically been built on differentiation and adding product extensions. This is being replaced in the short term with an almost reverse psychology of price, sale, unbranded products, Wal-Mart etc. being considered chic.
- In addition, suppliers and customers don’t need all the proliferation of products that don’t sell, take up inventory and cause excess product development expense. Rather we need to focus on winners and ensure survival rather than trying to find marginal opportunities in a difficult environment.
- We need to review entire processes and structures rather than just making marginal cuts. Unproductive product lines should be dropped, efforts to simplify and shorten operations and lead times need to be evaluated.
- We need to understand the uncertainty and fears of our organizations and be more open. In terms of communicating changes, the need-to-know approach is simply outdated by communication, gossip, interpretations etc.
- Decision making processes need to be reconsidered. The old authority or “we have always done it this way” don’t work anymore. Organizations need to use more expertise, collaboration, planning and fact gathering in their decision making.
In short it is a new world and organizations need to accept the current environment as a test for the future. Flexibility, speed, and innovation will replace yesterday’s methods.
