To read the papers, blogs and listen to TV news is to get lost in a sea of contradictions. “Now is the time to double down!” some will say as they name the great businesses that were born in past turbulent times. “Batten down the hatches!” others say as they insist you must cut costs anywhere and everywhere to survive the doom and despair that, almost, every business is fighting through.
Are either a true and pure strategy? Bet it all or hide in the corner?
For starters, the last thing you want to do at times like these is get stuck while wondering which path to choose. So, I put it to you, why must you choose one or the other? Why not double down on the area(s) of your business that you are truly best at and batten down the rest?
Why not take the time (now!) and figure out what the most profitable activities are for your business. Find out what products/services your clients love… by asking them!
Here is a plan to consider:
1) Call as many clients as you can in the next 3 weeks and ask them why they choose to work with you over anyone else. Push them to be specific. This is for them as much as it is for you. At the same time, ask your staff what they think you do best. Ask them why they think clients like working with them and the company.
Resist the urge to guess the answers in advance and let the clients real words come through. In my experience, some clear trends will emerge, quickly. Do not stress if what they say is different from what your competitors are doing or what you had hoped and wished they would say. In fact, rejoice if that is the case. You already know your “world view” of your business. You want and need theirs. Finding the intersection where what you do best connects with what your clients truly give a shit about is your best target.
2) Write down those key products/services as your “core” offering. That is where you want to double down and innovate, improve and focus. That is where the time, energy, innovation and money goes. It is the safest bet you can make. Communicate it clearly to everyone inside and outside the business. Tell them your plans, what new cool tools are coming next. Show them that you listened to them and the specific things you are going to make real.
3) With this focus in place, go through every single expense. It should now be easy to decide which ones support your core and which ones do not. If it does not, then batten it down (Reduce it to an absolute minimum or eliminate it completely). Do it all at once. Explain the reasoning behind it to everyone and get past it.
If you feel that there is not enough money to invest in your core, try the “$1.00 less” exercise. To be candid, it is as painful as it is effective. Get your budgets, revenue, expense and any other reports you need all together and figure out how you design your business so that it spends at least $1.00 less than it earns. You may want to do this with a conservative estimate of what you think you will realistically earn in 2010.
Forget growth projections for now. Work with what is real and what you know for sure. When you reset the business to match where you really are it will be much easier to deal with focused growth from there forward. If you cannot get to that $1.00 less than try it again! Many years ago I sat in a lonely conference room late into the night with my CFO and ran through this exercise 8 or 9 times until we got our expenses to $1.00 less. It’s no fun, but I wish I had done it a year or two before.
Fear persists when control does not exist. When you figure out those things you do best, what your clients care about and have comfort knowing your company will earn more than it spends… control returns.
Be honest with yourself (and everyone else that is in “the battle” with you) and attack the problem.
Batten down AND double down.