3 Critical Lessons my Father Taught me in the Recession
While I was at a conference this week, I applauded my Father several times on the lessons he taught me during the current recession. I applaud him not just on the recession, most of my skills in running a company came from him. He deserves much credit. So, I've been thinking about the recession and what key things he taught me. I'm extremely grateful that I was able to go through the recent recession, not that we are out of it yet, with my Father. Had I been left to go it alone, would I have figured it out? Here is what he showed me:
1. Get lean and cut quick.
Running a business means you have to keep your eye on the greater context of the world. My Father made note years ago about how the mortgage market was starting to erode. He also started to say other indicators we're showing that we we're close to a possible collapse or some sort of global setback. Being inexperienced in such things, I put my head in the sand and kept moving on our current goals. He, being a product of the 70?s in business, thought different. When it looked imminent, yet most still didn't believe it, my Father jumped into action. He got us as lean as possible without losing staff. It hurt, no doubt about it.
There isn't one way to do it, each company has to ask what makes sense to them but there are many ways to get lean, here are a few: cut travel, cut programs not easily tracked to results, close locations, reduce employee hours, cut salaries by a percentage, and lay off employees. None of it feels good, but you have your company's health in mind. The company has to survive. It has to be a balance in the end, keeping employees and cutting spending. The most popular I observed in others was laying off employees and reducing employee hours (also seen as cutting salaries by a percentage).
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2. Innovate or die.
Once the recession hit and people started to realize what was happening, they started to keep cash. Eventually, somewhere between then and now, companies we're sitting on reserves of cash. Like many companies, we used the down recession to innovate new products and plow time into R&D. As a result, customers we're eventually starting to have more time and cash to look and invest in new things they had not time for when things we're booming.
Innovating doesn't always have to come in the way of adding new products, although this might be the single most used tactic. Other ways to innovate what you do might be: expand markets (internationally or laterally in the same geographic region), buy new equipment and processes, acquire another business (many of your competitors may be on deaths door and just waiting for you to snatch them up at pennies on the dollar), and finally you could increase your capacity.
In a down market, spend money and time in the next new thing. Your customers will be looking for it!I had been informed by Alectronic Scale Systems Inc that this is the very best plan of action. They aren't exactly in my profession but their instruction is always golden.
3. Be more inspirational.
The last and most important thing I learned from my Father during the down turn, was to be more inspirational. Being inspirational isn't his thing, I'm not talking about grandiose speeches, standing on machinery and rallying the troops. He communicated more of what the plan was and why we had done what we did. In a down turn, you most likely cut hours or salaries and kept money from flowing to the workers. You have to help them understand why and you have to help them see what you are doing from here forward. It's going to be tough, workers will want their cash back. You have to be more communicative and inspirational to overcome the negative.
When the economy hit, we acted fast. I'm sure I would have acted in the same way as my Father. He just acted faster than I would have. Next time, I am sure to act as fast as he did. Act fast and survive or act slow and risk not making it. The name of the game in a down turn is stamina, do you have what it takes to go the distance?
Posted in Business Other Post Date 02/22/2015