22
Feb
10

Do you have “deer-in-the-headlights” syndrome?

Without question, these are challenging times for everyone in business. It doesn’t matter if you’re an owner, manager or employee; it takes more energy and hard work to live in the warm glow of success. Succeeding today means you have to take some risks. Playing it safe means you’re hunkered down waiting for the storm to pass. And while you’re hunkered down, your competition is pushing forward. Your employees are asking, “When are we going to get back in the game?”

I recently had the pleasure of hosting an Internet radio show. My guests were friends Jack Stack, CEO of SRC Holdings and author of The Great Game of Business, and John DiJulius, author of Secret Service. The show’s theme was “Survival in the new business paradigm.” Jack talked about how the last quarter of 2008 and first quarter of 2009 were pretty ugly at SRC. “If there was a land mine, we managed to step on it,” explained Jack. “We needed something to help us focus on surviving the recession and all the heartache that comes with a downturn. We came up with something we called the Four Ps: people, positive cash flow, profits and positioning.”

Here’s how Jack describes the Four Ps:

  • People: Our goal was not only to maintain our open-book culture and keep the communication channels open, but also to redouble our efforts to keep everyone informed of the constant changes that were occurring.
  • Positive cash flow: Our banks were shifting their lending requirements. We couldn’t borrow based on the value of our assets anymore, like buildings, machinery and inventory. If we wanted to survive and grow, we concluded that we needed to focus on maintaining positive cash flow. That was the only way we would be able to keep our current debt level, let alone have a chance to obtain future loans.
  • Profits: We knew it would be a tough year and that profits would be in jeopardy. We decided, though, that if we needed to sacrifice profits, we should do it in a strategic way that would help position the company for after the recession. We were prepared to lose money as long we were investing in new opportunities.
  • Positioning: We knew from our forecasts that our organic growth was going to stall. Things we were doing that had helped propel us for 25 years were coming to a screeching halt. We needed to figure out ways to bring in new business. We decided we would look at the recession as a way to encourage diversity and to position ourselves for future growth. Even in tough times, there are always significant opportunities.

How well did Jack’s Four Ps work? SRC not only gained back the revenues it lost at the beginning of the recession – they finished 2009 with record sales. “We’re looking at an explosive first quarter,” said Jack. This sure beats the alternative of downsizing.

John DiJulius drove the message home with this line, “A recession is a terrible thing to waste.” Creating extraordinary customer experiences is a choice: You do it or you don’t. To survive and thrive in these economic times, the choice is simple.

Are you leading and charging your company forward, or do you have “deer-in-the-headlights” syndrome?

Click this link to listen to the recorded radio show.

Please share your thoughts with me about today’s Monday Morning Wake-Up. Click “Leave a Comments” above.

Neil Ducoff, Strategies founder & CEO and author of No-Compromise Leadership

Pass this e-mail on to your business colleagues, managers and friends. They’ll appreciate it.

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