On January 24th, sixteen ISA member firms met in Washington DC for a CLevel Forum. It was a high energy group. Before the Forum commenced, a discussion took place. It was all about recession proofing your business. Some weren't convinced the recession was real but that didn't stop the discussion. What follows is a summary of the discussion graciously provided by one of the participants. We decided it was worth inviting all interested parties to chime in. So take a read and chime in. It's worth the time.
Timing – There was a consensus showing that our type of business feels the impact of a recession 9-12-18 months out. Just when we thought we had come out of the last recession relatively unscathed, we experienced the bigger impact on the back end.
Signs – When sales people start hearing the “B” (budget) word, when existing clients start to decrease their spending with us or push business into the next quarter (and then the next quarter…), and increased cancellation are all signs of recession.
Glass Half Full – While no one wants to have rose colored glasses on, as leaders we have to be careful about talking pessimistic because this paralyzes and spreads like wildfire. Remember that we always come out of a recession.
Tactics / Strategies we employ – Rally the troops. Provide State of the Union to your staff, use this as a wake up call to get all hands on deck, calm their fears by letting them know you have a plan, and be very specific about what they have to do to help company get through this challenging time.
Financials – Hoard cash, earmark 10% of expenses you can eliminate from your budgets if you have two bad months in a row, take immediate action, stay on top of A/R. Freeze on salaries / bonuses / new hires.
Get Creative – One firm will contract with outside SME’s to develop new product at a discount (because they’re hungry for the business) and with deferred payments.
Activity Breeds Activity – This may be an opportunity to take on more “pilot” workshops that get your foot in the door for future engagements. You might also combine two or more clients in the same city to provide them economies when their budgets are impacted. These kinds of activity will breed activity and energize your people.
Reach Out and Touch Someone – Increase the number of touch points you have with your clients – get more of your people in front of clients (tendency is to get defensive and pull back).
Opportunities Abound – Take advantage of a slowdown to go after new markets or industries, increase market share, identify new delivery approaches, and increase efficiencies in your business.
Be Like the Boy Scouts – Be Prepared! – Develop and execute a sound plan that gets you ahead of the curve – it’s a lot more painful and more drastic action needs to be taken if you fall behind the curve.
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