One positive side effect of recessions is reduced arrogance. We all seem to have more “situational permission” to not know what to do and not have all of the answers. The sports-based phrase “levels the playing field” comes to mind. We all have the chance to share information about market trends, customer problems, and the sources of dissatisfaction with competing products.
Leaders of complementary companies are more willing to participate in strategic alliances and joint ventures during recessions. It can pay to go after a project or contract that is larger than you would normally take on and share the risk across a few businesses. Some of the grandest shows presented in Las Vegas are a result of strategic alliances and joint ventures between a handful of companies that could not produce multi-million dollar extravaganzas on their own.
Bankers, venture capitalists, and private investors may be more reluctant to take chances during the early stages of recessions. But as a recession lingers, they tend to look more assertively for new ideas, sources of innovation, and bigger opportunities. Think about it. “Laying low” too long is not conducive to the attraction of investors to a fund or members for their boards. Given the complexity of their due diligence process, it isn’t worth their valuable time to agonize over small deals,…, which is another reason for you to look for bigger ventures.
Where are the people who, a few years ago, could be choosey about where they work and demanded expensive compensation packages? These days, some of those same people feel trapped in jobs stuck behind timid department heads or indecisive business owners who have stopped investing and are just waiting for the recession to “blow over.”
With creative productive people, life is not just about money. They crave the opportunity to think, create, make something happen, and feel a sense of accomplishment. While their competitors whine about the recession, the fastest growing companies succeed by attracting very talented people because it is clear that their teams are on the move, welcome creativity, and generate opportunity.
Over the past few years, I’ve seen employers hanging onto mediocre employees and tolerating poor performance. You may have done that too because you were convinced that you couldn’t attract anyone better. Recessions provide ample opportunity for all of us to clean house. It’s a great time to let nay-sayers and dead wood go. Everyone will understand if you need to downsize your business. You won’t need to defend why you are letting someone go who has been draining your energy and is just too difficult to supervise.
As the recession deepens, more and more people will be leaving high paying managerial positions within major corporations and starting their own businesses. Whether the change from corporate management to business ownership was a lifelong dream or just forced early retirement, even the brightest corporate managers are in for a rude awakening when they step into the unprotected world of being an entrepreneur. As a manager within a large corporation, [you] have access to systems, resources, advice, and infrastructure. That bean counter in the accounting department may be annoying, but the reality is, errors on your budget get addressed.
You may be one of these people and assume that you should stay within the same industry and stick with what you know. But that decision ignores the scale of the career change from corporate manager to company President. That one decision cues you to continue corporate manager behavior instead of learning how the President of a company would analyze situations and reach decisions.
Marjorie Perry of Newark, NJ is an excellent example of person who made the career change from a successful corporate manager (3M, Johnson and Johnson, United Airlines) to President of a company by going into a completely different industry (MZM Construction). Perry has a reputation for keeping things moving and never quitting. She had very strong credentials, but for her business to grow, she recognized that she would need to go back for her MBA. As a result, MZM has new systems for estimating and managing projects, hiring, etc. “I have had to reinvent myself about every 2 years,” says Perry about her 18 year journey with MZM Construction. Even Perry had to try several people in the “#2″ role to now be positioned for further growth despite the recession.
Entrepreneurs can almost measure the status of the economy by the frequency of “offers” to explore “mutual referral opportunities”. Business people who wouldn’t return your phone calls or ever consider sharing commissions/profits are now more open to cooperation. This side effect of recessions can be great news, but it pays to take the time to stop and think before you accept a series of exploratory meetings that risk expensive distraction.
Reviewing your answers to a few basic questions helps keep you centered. Where were you headed before they called you? Which target markets fit you best? Which customer problems do your products/services solve? What is your brand promise that you will never compromise? Which large projects would you love to do if you just had more money? What are your selection criteria for a joint venture partner when you take the initiative to reach out? With which complementary businesses would you like to be associated?
When we are centered, we can hear ideas within a context, ask more relevant questions, and keep exploratory meetings at the peer-to-peer level. Recently, a regional accounting firm approached my strategic planning firm. We welcome those discussions because helping mid sized companies continue to grow is important to both firms. We refer some business to a few legal firms that serve only Fortune 100 corporations, but joint ventures or formal strategic alliances are very unlikely between us and those law firms.
I have also noticed that, when we are centered, a higher percentage of the exploratory meetings are with companies that are compatible with our strategic direction, regardless of who took the initiative to set up the meeting.
It pays to have consistent meaningful contact with customers rather than a complicated, clumsy, expensive, superficial process that just falls apart. Stick your toes in the water by asking someone to make phone calls to recent customers. Five engaging questions demonstrate that you appreciate their business, you believe in continuous improvement, and you would like to be of service to them in the future. Plus you gain invaluable guidance to improve your marketing.
Ask what their SITUATION was before they contacted you. You can improve your marketing if you learn what circumstances precede customers looking for your products/services.
Ask how they made their SELECTION. You can improve your marketing if you learn where your customers look and their decision criteria when they need what you do.
Ask the customer to describe what SERVICES (or products) were provided. It’s important to truly hear in their words what they think was requested and provided. Your marketing can dramatically improve if you can convey what you do “in their words.”
Ask how SATISFIED the customer was. What were the results? This reinforces that you care about results and reminds your customers about the value.
And then solicit SUGGESTIONS. This is not just about “ways to improve”. Focus on where the customer is headed in the future and what new services you should be developing to deserve their continued business.