Economic Downturn An Opportunity in Disguise
Date: Monday , March 02, 2009
Cycles of booms and busts are phenomena that have affected economic activity throughout the ages, albeit the scale and impact in the last fifty years has been tremendous. During this period, the world’s economic activity has seen rapid growth due to a number of factors including rapid industrialization, technology advancement and convergence, increasing portfolio of service industries, and globalization among others. Periods of growth have seen increased business activity, high employment growth rates, and an overall improvement in the peoples’ standards of living. On the other side, economic downturn and recession have resulted in contracted economic activity, high unemployment, and a sense of despair among the affected people.
For leaders and managers of organizations, managing during an economic downturn is full of challenges and obstacles, which consume time and energy. Tough economic times are filled with uncertainty that make a recession a horrible period compared to times of high economic growth. For most people it would appear like a zero sum game. However, for those with a creative mindset and ability to catch the bull by the horns, these times are fertile with opportunities. Many consider this an opportunity to focus on your core strengths, fresh thinking, creativity, and innovation. It is an opportunity to strengthen your talent programs, identify weaknesses, and reinvent your company to survive and grow.
For those with the ability and the will to survive, the uncertainties offer not only a chance to look within but also scan for external factors that would turn threats into opportunities.
Getting Your House in Order
Looking across the entire portfolio of activities, including processes, best practices, project management, and business metrics among others, managers will be able to see the amount of waste and inefficiency that the boom period has introduced into the system. Identifying such ineffective means of work will help in streamlining the organization’s as well as that of a team’s processes to a more productive state. Simply ask questions that would be focused more inward and shed light on inefficient and unproductive means of working:
* What is the best way of doing this?
* Can we minimize time and effort by re-using processes or other practices?
* How would the client benefit if we adopt this improved process?
* How can we radically change the way we operate to deliver the solution cost effectively while retaining optimum quality?
This will help the project management team add significant improvement to the quality of their work, better team bonding leading to enhanced motivation levels of team members, and high customer satisfaction due to improved return on their investments. The client’s faith and trust in your abilities increase many folds, creating a platform for strong long-term relationship.
All these are possible, if the leaders and managers are able to focus the collective effort of their team members towards common goals and important activities that would make a difference to their clients. When managers are able to mentor and coach their team and enable a nurturing environment where mistakes are tolerated it creates a cascading effect on employee morale and motivation. In such a scenario, employees become passionate about their work and loyal to the organization and their customers. Effective teams are one competitive advantage that is difficult to copy!
External Threats into Opportunities
A new technology with the prospects of gaining customer acceptance sometimes appear to be a threat, as the skill and knowledge to handle it may not be currently available within an organization. Visionary leaders and managers are usually able to proactively work towards adapting to the realities and move towards training their employees in such technologies. For example, adoption and improving of an organization’s expertise from open source will reap its benefits if clients seek to reduce their IT budgets. Organizations that have been able to present cost effective ideas and suggestions to their clients have seen their share of clients’ IT pie increasing manifold.
The above is an example of the possible threat that a service provider organization may face. There will be many other threats across customer markets, market geographies, and the competitive landscape that can be suitably leveraged to one’s advantage. Leaders and managers are required to continuously scan the market, develop insights, and leverage the organizational strength to increase market share and customer’s mindshare to gain competitive advantage.
There might be plenty of other things you can, and should, be doing during a downturn to make your organization focused and stay efficient.
* Focus on business priorities and align them with client needs.
* Recognize and reward good talent. Provide opportunities for top talent to shine and rise.
* Do more with less. Reduce waste in effort and time. Improve productivity and efficiency.
* Continue with training and development programs; motivate employees to take on new responsibilities, thereby creating a supply of good talent across a spectrum of skill sets.
* Communicate, communicate... Recession and downturn are the ideal cauldron for rumors to float in and out, instilling uncertainties and fear in the minds of employees. Effective communication programs with team members on the internal happenings provide the right fodder for team bonding and employee trust and loyalty. When seen as an opportunity, an economic recession is a good testing ground for grooming future managers and leaders of the organizations. Good managers are like football coaches who have a wholesome perspective on the happenings in the game, constantly provide feedback on competitive position, and motivate players to work together and function as a single organism.
The current economic and business environment is an ideal opportunity for smart managers to make a difference!