Rebound in a Poor Economy: Find Hidden Opportunities

For many companies, the weak economy is presenting some of the toughest struggles in the company’s history. On top of decreasing sales, organizations are left to battle inflation, exchange rate issues and regulation shifts. CEOs and executive teams are working hard to create the most solid strategies by putting their heads down and working diligently. However, according to the Harvard Business Review, this strategy simply isn’t enough to survive in today’s marketplace.

Executives need to brainstorm fresh new strategies to tap into hidden opportunities. They need to expand thinking to include broader and more creative approaches to business. Even in the most challenging market conditions, there are still untapped opportunities. Finding these opportunities is a little like striking gold; it allows you to prosper during difficult times. The Harvard Business Review studied companies that struggled with difficult market conditions. The study found there are several attributes successful companies have in common.

Missing the Best Opportunities

Some companies are overlooking some of the most valuable opportunities. The most effective way to find these opportunities is reviewing real time data. Share data trends throughout the organization. Encourage the management team to generate creative ideas for finding new opportunities based on the trends.

Front line employees are also valuable for uncovering new opportunities. These employees are in contact with customers every day. The employees are listening to the customer’s product needs every day and can anticipate new trends in the market. When you combine employee feedback with real time data, executives have an opportunity to identify some valuable trends.

For example, a retail store can anticipate which items are selling and which aren’t. Employees may share what customers are asking for when visiting the store. The organization can boost production on the best selling items and cut back on items that aren’t successful, allocating resources and time better.

Reward High Performance

Some organizations are moving away from traditional bonus structures. However, results from study conducted by the Harvard Business Review indicate that these organizations should reconsider. The strategy behind discontinuing bonuses is that it fosters teamwork. This strategy appears to hamper productivity and long-term success. Companies need to reward employees for a job well-done. A bonus structure or pay increases are the easiest way to accomplish this.

Create measurable goals for employees. Employees who meet and exceed these goals should be rewarded. The company should also tie rewards to long-term performance. By recognizing long-term performance for employee’s contributions, it will train staff to think about the long-term implications of actions.

Update Core Values

A company’s core values need to be updated to strengthen the organization. Values need to focus on recognizing employee leadership, ownership for results, teamwork, creativity and integrity. Most companies hang core value posters throughout the company. This is fine, however, it’s even more important for executives and managers to live and breathe the values. Leadership must act as an example to create the right company culture.

Promote employees based on their ability to demonstrate the company’s core values. Performance reviews should weave core values into the evaluation. When human resource departments interview new job candidates, select individuals with a track record of acting in accordance with the company’s core values. This will create a culture that is true to the organization’s most basic goals. Employees who aren’t willing to accept and incorporate the company’s values into daily activities should be reconsidered.

Create High-Impact Conversations

Executives and managers spend approximately 75 percent of their time in business discussions. Leading effective discussions will assist in strengthening the company. Conversations need to have execution requirements, deciding which actions need to be taken to accomplish success.

Each manager has a specialty. For example, a manager who is excellent in leading conversations on strategy may struggle with effective execution conversations. Give managers the skills needed to develop in all types of conversations and experience the best results.

Avoid Getting too Comfortable

It’s easy to get stuck in a business rut. When the economy is struggling, however, you simply can’t afford to do this. Some employees and managers will cling to safe strategies. Among your management team, you need some people willing to explore new territory, brainstorm new ideas and pioneer new strategies. Having these key players will assist in keeping your company stable and growing during difficult times.

Stick to Core Values

When the economy is struggling, leaders often go into panic mode, rushing around to put out fires. Leaders must be involved in solving these problems, but it shouldn’t consume all of their time. Organization leaders need to be focused on building and guiding the company’s core values. A leader must be willing to walk away from an attractive opportunity when it isn’t a good fit for the company’s core values. A leader can accomplish this by hiring plenty of creative talent to look for new opportunities that are a good fit for the organization. This will keep your company relevant in the current economic condition and boost performance.

Resources

Donald Sull. “Are you Ready to Rebound?” The Harvard Business Review, 2010.


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Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy”, “Selling Your Business the Hard Easy Way”, “Enhancing Your Business Value…The Climb to the Top” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition” and “Selling Your Business The Practical Guide to Getting It Done Right”. For more information, contact him at 770.399.9512 or by email.