“ When the going gets tough, the tough get going” was a chart-busting song by Billy Ocean in the 80s. He would have never expected it to be relevant in tough economic conditions far removed from the romantic overtones of the song. But I do admit the difficulties of romancing do in fact display an indication of the hard times. However more relevant is a sports team. When everything is good, all blemishes are glossed over but when it hits a tough phase, that is when all problems are highlighted.
The old adage is only the fittest survive is fitting. During a downturn, the weak and feeble will fade away and the stronger ones will survive and live to fight another day.
Having said that there are some good points in the bad times. Everything is not gloomy and there are many bright spots. Organizations need to leverage that to pursue a successful path.
- Human relationships are a clear indicator. In the good times, a successful person/ organization will have many friends/ partners but in bad times, fair-weather friends/ partners will cease to partner or associate. This gives an indicator of who will stay by the organization.
- Lesser Competition: Most industries look good in favourable economic conditions. When there is no shortage of capital, competition will mushroom. As there is tightening of the belt, the weak and frivolous competition will throw in the towel. So the positive is you have lesser competition. On the other hand, however, be prepared for organisations that are strong enough to rough it out.
- Lesser access to funds: the sign of the tough times is when there are lesser funders/ financiers to bankroll investments. And the ones who are interested will be extra cautious. So chances of competition getting funded are lesser but so is the case with your organization
- Identify the weak links in your organization: since competition is less, now is the time to focus on the deficiencies/ gaps and bridge them. This is a chance to shore up your defences faster and better.
- Present players are susceptible/ vulnerable too: all players have chinks in their armour. So it will be to you to identify them and expose the weaknesses.
- Lesser cost: during the bad times when economic growth is stunted, businesses employ all means to get business and primarily by reducing costs or discounting their products. Simply put, things cost less. Your vendors charge less for their supplies, you can bargain for better credit terms etc. It is a great time to renegotiate a deal that will benefit you even after the downturn ends. Even employees are keener on saving their jobs and hence demand less and the newer ones a lower salary. It is hence a great time to optimize your costs.
- Higher employee retention and stability: During the boom, the employees have better bargaining power. Attrition rates are high and at the drop of a hat, they leave for other pastures. There is also a huge cost of also training new employees and also need time to settle down. Since there is less churn in downtimes, the time can be used to plan and pursue long-term goals.
- Good people are looking for work: In the boom times, let alone finding good people, getting just employees is tough. In a downturn, highly qualified, talented and effective individuals can be found much more easily. A great time to pick and choose. And more importantly to build a strong team
- Optimum team & organization – A mix of the good, older and new employees will form the basis of an organization that is fit and fine to fight it out. Take the organization to the future – a lean fighting machine (it does not have to mean!)
- An organization that negotiates the bad time is geared for the future: bad times don’t last and hence the processes, systems and people which the organization has should help the organization even better when the curve moves north. For example, in most cases, there is a fair amount of belt-tightening and this should stand the organization in good stead when things improve.
- More focus on long term goals: for some strange reason, during the boom, the focus is very short term in fact month to month. Given the fact that there is lesser competition, good team, and other reasons it gives the organization time to think long term and take steps to reach those goals.
Bad times don’t last and hence an efficient, smart and dynamic organization will be the stepping stone to success.