Five Hatches to Batten Down for Business Success

It’s time to trim the sails and batten down five management hatches in preparation for the coming storm of challenging business environments. Just as ships trim their sales and batten down hatches sail more safely in choppy waters, organizations who are well-prepared will better cope with the turbulence and changes in the marketplace.

No one can foresee what this year will look like exactly. So how can one prepare? Here is a five-step recommendation that will be both prudent and profitable regardless of the economy in this year or next year:

1. Collaborate, Cooperate and Communicate.
Speed up and improve the flow of communication. The companies that work to provide real-time data about how well the business is doing are the ones that can turn on a dime to make quick changes. Get electronic feedback or survey customers in a traditional manner to learn just how well which services or products are meeting customer’s needs and which are not. It may sound laborious, but you have to know which products and services are making money and which are not -- customer by customer. Customers love it when they see an attempted bridge being constructed of collaboration, cooperation and communication in partnership with you. Finally, share that information with your employees and gain their ideas and insights as well.

2. Slow down with your employees.
RETENTION of employees – your key talent – has never been more difficult. You can’t always pay top dollar to your employees in uncertain times. One of the keys to retaining your talent is enabling them to use their intellectual capital by offering a diverse set of challenges and tasks. Another one is LISTENING to them and spending more time giving them feedback, direction, status reports (so they feel “in” on things), and more dedicated one-on-one time with them. This means that executives and managers need to sometimes slow down so that people feel that they are genuinely listening. Nothing harms retention more than poor supervisor and management performance, behavior and skills.

3. Minimize fixed costs and control variable ones.
If your facing uncertainties, it is no time for empire building. Instead, take a page from large manufacturers and outsource whatever you can rather than building your inhouse capability. Lease office furniture or computers if you’re not sure you will need it a year from now. Use contract employees or temporary staffing services versus adding permanent hires to payroll. Variable costs can sometimes be managed more effectively if everyone knows that it is a goal to reduce them, and means are implemented to more effectively measure and quantify them. If you can’t measure it, you sure can’t manage it.

4. Build business literacy and upgrade the skills of your employees.
When people see the big picture – how their department contributes to the overall profit picture or realizing the current competitive environment – they are more willing to pitch in and do more of what it will take to grow the business. Here’s one way to do this after you have brought in some bagels and donuts: try facilitating a SWOT analysis – strengths, weaknesses, opportunities and threats – one morning and help your employees better understand the context or conditions contributing to the sense of urgency. How else can I get more work from the same group of people?

Recall that poor supervisor and management skills and behaviors is what capsizes the retention boat. Any worthwhile and significant training and development journey MUST start with executives and managers first – but, sadly, rarely does. When you want to provide training to the entire company, have a few of the best supervisors teach others in a cascading effect, and you can save money with a Train-the-Trainer type of delivery system.

If you are at a loss for how to budget for training, here’s a simple and effective formula: 3% of payroll. Your budget’s biggest line item is payroll/benefits, and it is an asset, yes? Then, be willing to reinvest back into your biggest asset, your people. Three percent is benchmark – those companies that invest 3% or more are, in many cases, market leaders according to the American Society for Training & Development. Training is an investment, but it costs – you pay for it now, or you pay for it later in turnover and missed productivity gains being realized.

5. Plan, contingency plan, and Plan some more.
A year of uncertainty, by definition, is a year in which something unexpected is likely to happen. What will you do if your three most experienced people leave? What if your biggest customer leaves you? What will you do if your assistant leaves you .. or your CEO? Succession planning documents need dusting off; then hire a professional firm to audit it and make recommendations for strengthening it.
Plan next year’s hires now. Rather than decide you need someone next month, and then starting to recruit, try instead determining your staffing for two or three quarters out at minimum and execute your recruiting plan next month. If you use recruiting firms, sit down with them and communicate your plans well in advance so that you have the people you need when you need them.

Speed up. Slow down. It’s tough to be assured what to do. The tendency in tough financial times, for example, is to cut training. Companies who have long prospered in good- and in tough-times have often practiced a contrarian strategy, one that works against the normal, human tendencies. The business philosophy of grow it when the economy stinks, and be austere when the economy is good is the exact opposite of human nature, and how most companies tend to operate. When the economy is growing, these companies often get tough on budgets, consolidate market gains, and generally batten down the hatches in preparation for any approaching, quick-hitting storms. In contrast, in bad- or lean-times, which we in the U.S. haven’t seen in nine years (and many say we’re overdue for a correction), contrarian companies work to grow and expand their business before and during the gale of the storm.