Recession’s Lessons: The Upside of Downturns

Companies that learn from economic crises will emerge stronger and better-positioned as industry leaders.

What measures has your company taken to cope with the international economic retraction? Layoffs? Secured Federal funding to mitigate toxic debt? Shuttered stores or manufacturing facilities? Aggressively turned the circumstance into an opportunity by purchasing competitors or assets for pennies-on-the-dollar?

Companies and families alike now dialogue about the differences between needs and wants. Pet projects vaporize in light of mission critical operations. Managers unhesitatingly reprove marginal performers, or ask them to leave altogether. Merit increases and 401K matches become myths.

While some companies approach this adversity defensively and others opportunistically, every organization must not squander the opportunity this crucible presents to learn priceless lessons. When income won’t grow and expense cuts begin to resemble outright amputations, a company can’t do much more than wait… wait and learn.

How and What to Learn from the Recession

Sharpen Your Business Focus
Individually and organizationally you must refine your purpose, further define your customer base, and clarify the unique features and benefits your products or services offer. As much as it’s important to define what those things are, you must also decide which avenues not to pursue. The economic crisis won’t permit curious forays into possible markets and product lines. Progress must move in the direction of committment, passion, and competitive advantage.

Leverage High-Performing Products and Services
To the extent that Pareto’s theory reflects reality, roughly 20% of your product lines or services account for the majority of your income. However, does the majority of your investment flow to those lower-yielding areas of the business which only promise diminishing returns? Your company must reappropriate capital and talent in favor of the most profitable business segments.

Ensure Your Company Emerges Leaner and Meaner
What divisions and which people bring true value to the business? If metric-driven performance management programs don’t drive who’s hired, fired, and promoted, there’s no time to lose implementing these critical systems. Do all decisions hinge on timely sales, revenue, or forecasting data? Business leaders who base decisions on gut feelings or knee-jerk reactions will have difficulty – especially in retrospect – justifying those choices to board members and shareholders.

A recent article by David Kesmodel in the Wall Street Journal Online verifies these actions organizations must take to survive and thrive in the current circumstances. (Click here to read that article in a new window.)

How The Center for Organizational Design Can Help

Learning as an organization during economic crises essentially depends on asking the right (often painful) questions. Equally important, informed answers must follow those questions. Corrective action must be taken in the form of initiatives and redesign to first, ensure your company survives the recession and then, that your company succeeds in spite of the downturn.

Our evaluation and consulting programs have proven to effectively make companies leaner and meaner. We can catalyze the redesign of your organization, help it establish a customer-centric focus, and effectively work with you to better define your business strategy.

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The Center for Organizational Design was created in 1992 to create high performance organizations that enrich human life and achieve extraordinary results. We’re experts in organizational design and creating high performing companies. We provide consulting and training to help leaders build organizations that can succeed in today’s complex, fast-changing environment. www.centerod.com

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