Every adversity, every failure, every heartache carries with it the seed of an equal or greater benefit.Napoleon Hill
In the real world not every business survives. Once-thriving businesses can shrink and fade away for a variety of reasons including.
- Being out of touch with customers.
- Lack of product or service uniqueness in the marketplace.
- Poor communication of value propositions.
- Heightened external competition.
- Sudden change in the business landscape.
In a downturn, numerous difficulties present themselves – all important, all urgent. A natural response may be to prepare for trouble and focus solely on today’s problems.
Nobody likes to shrink a business, but sometimes it’s necessary. Organizations may be able to cut their operating costs enough to keep going by closing locations or instituting business restructuring. If labor costs are a major portion of the operating expenses, they may be able to use contract, temporary, or outsourced employees to replace higher-cost, full-time, permanent employees.
Thriving in a downturn requires greater diligence and skill than during more favourable economic times. However, the rewards can be greater as businesses that adapt quickly with the right strategies can not only grow, but position themselves strongly for the inevitable upturn that will emerge.
Prudent management is of course necessary, but it is important also to recognize the opportunities presented – to challenge old ways of doing things and to plan for the changed marketplace that will emerge.
The first step before making any concrete decisions about the next course of action is to decompress, analyze the challenges and determine the biggest contributors to why things went wrong. Here are a few suggestions from a people driven approach:
- When adversity strikes your business, be open and honest with your staff. Confront the brutal facts by explaining the prevailing situations and communicate your resolve by outlining the problem in a way that everyone can understand and discuss possible solutions together.
- Solicit for input and ideas from others and ask for help from the staff. When decisions are finally made, the employees will at least have the knowledge that their contributions were heard.
- Clarify roles and responsibilities in the recovery effort and emphasize the importance of communication and team work.
- When everyone understands the problem and what they can do to help, they will be able to pitch in and work together to fix the mess. If you are open and honest about the problem, you will be amazed at what can be achieved through teamwork.
Effective people management will help ensure your business is best placed to come through the bad times re-energized and fit for the future.