During the dotcom boom and bust, venture capitalists would commonly say that they wouldn’t consider investing in a new venture unless the leader had some failures on the board. Innovation had bred a new way of looking at the metrics of success and that includes embracing failure.
In times of looming economic crisis or the downturn of a specific industry sector, these big picture insights are easily forgotten and ‘fight or flight’ syndrome can overtake management strategy. But ensuring that your business has a healthy approach to tackling challenges and is primed for sudden pivots, can be the difference between surviving a crisis or getting swamped by it.
We look at key areas to keep your business match fit through the boom and bust cycles.
Be customer centric
Even if revenue generation is difficult, retaining the relationship with the customer is essential. This includes being innovative in customer incentive programs and service support; adapting services in a tailored way to meet client needs and/or diversifying the business to minimise potential damage from the loss of a significant customer.
Magnify your marketing
Highlight your competitive advantage, find your niche and be loud about it. Tough times may force you to be more innovative with your traditional marketing approach which may free you to explore social media, influencer marketing or other digital strategies that the business was not prepared to try before.
Use your resources wisely
Maintain communication with staff in order to minimise fear. Ensure you have a strong HR strategy in place. Involve staff in decision-making and solution seeking as this will empower them to be flexible if required and retain control when things may get uncertain in unstable fiscal times.
Extend your network
Seeking industry partnerships and alliances may open doors to support or new business opportunities, revenue streams, suppliers and business partners that may bolster or alter your business in a revived way.
Business advisors, coaches/mentors and government bodies can assist in getting you through a downturn. They may also lead to innovative solutions to move forward such as offshore expansion into new markets, mergers, acquisitions or sale opportunities.
Some of the best business ideas have emerged when the old ways of that business were dying. Look at the reinvention and world domination of Apple, or the rise of Uber or Netflix. If traditional revenue streams are being depleted, look at where they are leaking to and follow that flow. It may mean a minor shift in gear or a re-alignment of marketing strategy. Whatever the degree of change, it is often worth taking the risk to innovate rather than stick to outmoded thinking that may cause your business' ultimate demise. As Seth Godin says, “change almost never fails because it’s too early. It almost always fails because it’s too late.”
Every good leader should invest in knowledge to navigate through the high and the low cycles of business. Exploring further education such as a Master of Commerce can assist in bringing the best of breed in management thinking and strategies to your business.
Learn more about our leading online programs or speak to one of our expert Student Enrolment Advisors today on 1300 701 171.