The Recipe for Growth During Economic Downturn [Part 1]

3 Oct 2019 Strategy

Depending upon which pundits you may listen to, there has been significant discussion around an impending economic downturn. Regardless as to whether you believe this to be the case, we can all agree that the cyclic nature of the global economy guarantees that we will be faced with tough economic conditions at some point within our working years. A significant risk of economic downturn alone is enough to change consumer behaviors, which could then impact our broader business ecosystem. This then will impact how organizations communicate with and meet the needs of their respective customers.

It’s difficult enough for companies to stand out in performance and product during times of economic expansion. Those that have figured out how to navigate the competitive landscape well enough to be considered an “established brand” often struggle to maintain that relevance in favorable economic environments. The task becomes many-fold more difficult as the macroeconomic conditions of large markets (global, national, or regional) deteriorate toward stagnation or full-blown contraction. Corporate managers will be challenged to focus their decision making around the attributes that have created success for their respective organizations from inception and to ensure that their brands continue to resonate with their targeted customer base, while continuing to aggressively compete for additional market share.

The last two major US economic downturns: the late 1970s and more recently the Great Recession of 2008 – 2012 provided an opportunity to observe the successful strategies and tactics of well-managed brands that not only survived the downturn but in some instances thrived. Brands like ITT, Lehman Brothers, and General Motors can be counted among the casualties of consumer economic hardship from both periods. While on the other hand, companies like Microsoft, Southwest Airlines and Amazon saw unparalleled growth and expansion. What are the attributes that separated the latter group of brands from the former? What decisions, advantages, commonalities, and approaches were used to expand in such tough economic conditions?

While there are several well-thought-out strategies that I could point to, my primary focus is to highlight key principles that are easily relatable to your particular enterprise (no matter what it may be).  I, by no means, want to oversimplify what it takes to navigate the “choppy waters” of recessions, depressions and/or market contractions but in an attempt not to “boil the ocean” it is critical to hone in on what appears to be most important. Below are the four focal principles:

  1. Accept the hand you’ve been dealt!
  2. Singular Focus, Duality of Action
  3. Re-Invest in Specific Pockets of Growth
  4. Strengthen the Meritocracy

My subsequent four blogs will focus on each respective point above. The thought is to expound upon how each tenet can help your organization thrive in times of turbulence. Each will be explored in a non-prescriptive way, to shed light on its particular impact on your likelihood of continued success.

Let Starr & Associates help you navigate economic downturns before they happen.

Learn more about how we can help your business. Contact us

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Innovation, The Untapped Human

28 Jan 2019 Innovation

Innovation may be the latest and hottest buzz word, but its roots are by no means new. Innovation is synonymous with Human and all you must do is look around to see the far-reaching effects of human ingenuity and innovation. From things as simple as the wheel to the high-tech gadgets that both control and assist our lives. Knowing where the innovative spirit comes from and how to extract it, could very well be the most powerful and influential skill you could develop as a leader.

So why is innovation so “hard”? Why do companies struggle to break the “glass ceiling” or find their way “out of the box”? Turns out, there is A LOT to it. Our behavioral patterns are determined by a quagmire of personal experience, driven by societal and cultural norms, mixed with the fundamental nature of humans that both propel us and control us. The combinations are infinite, and the outcomes are incredibly broad on many spectrums. The forces of good and evil, the balance of control and freedom, the perception of time gained and time lost, our innate willingness to help others, and our incredibly vast interests, abilities, and passions that are as unique as our DNA will continue to drive destruction and creation as long as humans walk the earth.

So, I’ll ask you again, why do we struggle with Innovation if it’s a part of who we are? My most vague, yet most fundamentally accurate answer is “balance.”. Balance keeps us both where we are and where we want to be. I believe we have the power to decide which side of balance we want to be on, both as individuals and as businesses. To invoke change, we must upset the balance that exists, we must make waves in the status-quo, ignite a fire in the hearts and minds of humans and it must be constant, relentless, and void of direction.

This is by no means, easy, but a conscious understanding of what “levers” to pull is certainly helpful. Here are five of some of the most fundamental and obvious tendencies of humans that we need to understand, accept, and account for when driving towards an innovative culture.

1. The path of least resistance – We humans tend to take the easy way out. We take the shortest or quickest way home, we constantly seek better, easier, and more efficient ways to work, cook, lose weight, and just about anything else we get into. You could see how this would be an asset in the struggle to innovate.
2. Creatures of habit – Counter to our need to take the path of least resistance, we’re also wired to settle into the habits that have been created for us or that we have created for ourselves. This tends to hurt our drive for innovation.
3. Action and Reaction – The fundamental basis for how humans learn can be explained with action and reaction. Our behavior and actions are altered and modified from the moment we are born. Presented with a favorable reaction, we tend to perpetuate our actions. To the contrary, we tend to reduce or hide the actions that aren’t well received from our reactive forces.
4. Fear itself– Another side effect of action and reaction is fear. If the reactions are almost always negative or have a negative social component, fear keeps us from acting. Fear is all around us in one form or another. It manipulates us into buying products and services, it suppresses our opinions, it forces us to do things we hate for a lifetime, and it keeps us from creating the lives we are meant to live. Respecting fear is necessary, but suppressing it at the right time can have powerful ramifications.
5. Narcissism lives in all of us – We all have it, some more than others, but make no mistake. “Leaders” in any organization are often the biggest offenders of letting their narcissism run wild. A false sense of power tends to amplify narcissism without people even realizing the damage they are doing to their culture. As with any of these traits, anyone interested in harnessing the power of humans must first recognize this in themselves.

We could argue that law enforcement, is reactive in nature because of the ingenuity that lives within humans who don’t conform, who don’t live in fear of consequences, who seek a different path, who seek an easier path, and who have a keen sense of action and reaction within the system in which they live. The traits, talents, perceptions and personal experience of leading-edge criminals is arguably the very thing that’s missing from the people that live within your organization. No, I’m not advocating you hire criminals, but I am almost certain that those same attributes are alive and well inside all of us. Knowing what they are, how to disrupt or incite them, and who to apply it too, is arguably the most powerful tool of any leader. But in the face of innovation, does “leader” carry the same definition?

The traditional “leader” is best identified by their ability to get people to do what needs to be done. An Innovation leader, however, must be able to get people to do things that haven’t been done before. This is a subtle but important distinction since the combinations for success are far less obvious when it comes to innovation. Being able to distinguish one’s self as a leader in innovation is a tall order and one that brings about a great deal of self-reflection, faith, and understanding to both embrace and oppose the tendencies of nature.

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