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:
- Accept the hand you’ve been dealt!
- Singular Focus, Duality of Action
- Re-Invest in Specific Pockets of Growth
- 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.
Reverse logistics occurs after the sale. It includes an array of potential activities that recapture value and extend the lifecycle of the item. For example, consumers in many states participate in bottle return of glass soda pop bottles. Returning the bottles nets them a few cents and enables the manufacturer to cut costs by recycling the bottles. That small discount adds up to customer loyalty.
Modern businesses need to adapt to the speed at which technology changes. The past decade has seen a multitude of entrenched industries fall by the wayside in the wake of digital disruption. Businesses need to be proactive about following technological trends if they want to avoid potential disaster.
What is Big Bang Disruption?
In our current society, technology doesn’t evolve slowly. True innovation appears on the scene and then suddenly explodes, completely supplanting whatever came before it. Big Bang Disruption is driven by new technologies; with advancements on all spectrums of technology, it’s easier for new technology to gain purchase.
Technology is consequently able to suddenly and thoroughly impact the economic market. With more affordable experimentation and information, companies are able to better innovate and to race towards technologies that are more likely to be lasting and helpful.
Keeping Up With the Speed of Change
Organizations need to invest in change management to remain agile and active in this new, technologically explosive era. Change management has to be developed as a company-wide, multi-phase process. At all levels, employees have to be committed to change.
Traditionally, employees and upper management alike are reluctant to commit to change because they fear that this change will have a negative impact on operations. By promoting constant change and providing a positive reward system, employees can get past this negative perception.
To improve change management, it’s important that organizations be transparent about their change management processes and that they be clear about the value proposition for employees. It must be clear that a business will fail if the business does not continually change. The goals of each change must be thoroughly outlined.
How Likely is Your Industry to be Impacted?
Different industries have different rates of disruption. Much like other areas of risk management, it’s critical that you understand your industry’s likelihood of disruption before you begin making changes. If your business is in a low impact area, you may not need to invest as much into your change management processes. If you’re in a high-risk area, it’s absolutely critical that you do so.
When it comes to disruption, there are four important aspects: viability, volatility, durability, and vulnerability. Diversified chemicals, tires and rubber, and alcoholic beverages are all considered to be durable industries. On the other hand, the consumer technology, banking, and investment banking industries are experiencing volatility, as regulations and changing markets have shifted their operations.
Ultimately, disruption and change management may not be a process that can originate from within. Instead, businesses may need third-party help to develop the processes that their organization needs to continue to thrive. Contact us today at Starr & Associates to learn more about how we can help your business manage its change.
Nearly every company goes through some organizational growing pains. One common development, departmental silos, occurs at some point. Successful companies break down a silo, a department that protects its information, keeping it from other departments. Silos cause growth breakdowns, so continued growth requires their eradication.
If only every business ran smoothly with no issues, you’d never need to develop problem-solving skills. However, problems do arise, and knowing how to analyze and address them can make the difference in your bottom line. Apply problem-solving and innovations to improve processes to produce more while saving time and money.
The healthcare industry is both exploding and being held back by the onset of technology in all facets of the industry. What are these trends and how are they being implemented to reduce inconsistencies and, in some ways, bring in the potential for more?
On April 20th, I have the honor of representing my organization in an open panel discussion with esteemed colleagues from some of the largest global brands. The topic of conversation won’t be centered on the monetization of big data, managing asset efficiency or any of the other “sexy” topics of the month.