Powerfully Executing for the Upturn

Posted on August 17, 2009

Any business cycle downturn produces unique opportunities for the CEO who is prepared to take advantage. What systems and people should you have in place, and when should you strike?

This article is for companies in a slump right now, due in large part to the downturn. It is not targeted toward companies that are in serious jeopardy of closing, nor is it for companies that are growing strongly despite the downturn.

Close your eyes and imagine your company’s future. You’ve been hanging on since the downturn hit, first staunching the cash bleed, but now you’re stable, perhaps even getting ahead slightly. You know your company will be around for a few more years at least, if the economy doesn’t slow much further. Congratulations. Many firms are not going to make it.

Keep those eyes closed. Picture yourself a few months from now. Customers and clients start talking to you again. They start asking for RFQ’s, and a few orders break loose. You realize that the ice is thawing, the time for hibernation may be over, and your hope for a bright, order-rich world is soon to be upon you. This is the time you’ve been longing for. Is your company ready to make the most of it? Will you be operating from your business’s power zone, where you have the maximum ability to create results? This chance won’t come again soon…..

Open your eyes, and keep them open. Here is the condition that your company needs to be in:

Your big unique marketplace advantage (your secret weapon) is at its height and primed for action.

For example:

• Your new software release is tested, finishing beta and ready for the big rollout.
• Or a whole new suite of next generation products have been designed, field tested and ready for the big release, with all the marketing collateral ready to go to press.
• Or the new retail store concept has been designed and two units have been built and tested for four months, with stellar results.
• The process to launch 40 new stores in 12 months is honed and ready. , and when you through some energy and resources behind it, it will produce dramatic results.

Having a big unique marketplace advantage ready to debut to the world and to shove in the face of your competition is at the core of making the most of any recovery. If you don’t have this, then the best you can hope for is increased activity as the economy picks up–no big leaps forward.

If you’re not ready with your big unique marketplace advantage, you may still have time. The recovery broadly, and the recovery in your industry, sector and region could be a year or more away. Hack back mercilessly in other areas of your business right now if it means you can build, create, or figure out your unique marketplace advantage, and prepare it for action.

Having your secret weapon at the ready is the pre-requisite, but it’s not usually enough. You have to wield it well. That’s going to take:

Money. Making payroll right now isn’t enough. You need to lay out your “attack” budget, then set aside a war-chest (or access to capital). On September 17th, 2009 in Santa Clara I’ll be moderating a breakfast panel with a banker, an expense reduction expert, and a CFO who will dive into the issues around finance as the recovery nears. CFOs and CEOs are welcome.

Leadership Depth. Too many companies roll along with leadership that isn’t great. By the time things are hopping, it will be even harder to change leadership. Best to do it now, rolling out managers, directors and VPs that are not pulling their teams forward, and replace them with executives that will deliver great performance when your company needs it most–when you unleash your secret weapon as the upturn sweeps across your sector.

Efficiency. When business volume steps up, you need systems and operations that function flawlessly, leaving your team free to focus on growth. So upgrading software or ÌT systems’ phone systems, documenting procedures, evaluating new vendors, moving your facilities and more are all things that should be top priority now, when you have the time. Now of course, some of t hem take money to accomplish well, and that may steal resources from other critical needs. It’s a balancing act, and certainly requires judgment. But if you can look forward and imagine your business scaling up and you already know which wheels will come off the bus, then get out the wrenches now and fix the problem.

Partnerships and Joint Ventures. Right now, more executives have the time to get to know you and your company. If ramping up means partnering with other firms, take the time now to get to know them and to build trust. Of course, the first thing partners will want you to do is to spend your cash hoard right away, on things they think will help them sell more. Resist. Don’t let them goad you into a premature action.

To summarize, being in your power zone means that:

1. Your key differentiator is ready for action, and has been tested and found to be very effective.
2. You have a great team, trained and ready to wield that “secret weapon” and to handle the increased flow of business.
3. You have enough money set aside (or guaranteed access to it) to launch a campaign when you determine the time is right. And your ongoing business, although not growing much perhaps, is cash flow neutral or a bit positive, so you’re not eating away at your cash.
4. You’ve cleaned up your internal operations, having set them up in as efficient fashion as is possible. You won’t be distracted when the rush of orders comes.
5. You’ve gotten to know companies that you might need to partner with as things ramp up.
6. You have defined a trigger point at which you’ll go into high alert about whether the time has come to launch the offensive.

Close your eyes again. Picture yourself, on a yacht in the Mediterranean, taking an occasional call from your incredible top team who are handling all things related to the incredible growth and massive free cash flow being generated by your business…… a fantasy perhaps, but let’s see just how close each of us can get!