Mackay's
Moral: Rough
water is no place to check to see if you packed your life preserver.
Stash
something aside for a rainy day? Good advice for people and businesses
both. How about stocking up in case there's a warm and sunny
one? That can work too. It's exactly what the outerwear maker
Weatherproof Garment Company just did when they bought $10 million
of insurance coverage to insure against unseasonably warm weather
in December. On Dec. 12, the thermometer climbed to 66 in Pittsburgh.
It's the first time an apparel maker has hedged its financial
exposure to the weather with a policy. Contingency planning can
pay off. And companies are diving for rocky-time shelters undreamed
of a decade ago.
Hope for the best and prepare for the worst .
. . and prepare early. That's something the barons of finance
didn't do in the face of the recent credit crunch. Road kill
is littering Wall Street. In less than a month, Stan O'Neal was
ousted as CEO of Merrill Lynch, and Chuck Prince left Citigroup's
helm. To show there's a glass basement that goes along with the
glass ceiling, Morgan Stanley's Zoe Cruz, the top-ranking woman
on Wall Street, joined them out the door days later.
The sweet
can sour fast these days. In November, it was a kiss-off for
six Hershey's board members. At Motorola, Ed Zander's watch as
CEO of Motorola ended after months of pressure for the sharp
decline of the company's cell-phone business. CEOs have never
been paid better and are never more in peril of tumbling off
the perch. If CEOs are hitting the pavement, you don't have to
be an Einstein to figure out what's happening a level or two
down.
Thinking about how you might pare back if you have to? Forget
about the axe. Even a scalpel could be too clumsy. Better work
with a laser instead. Want your business to live to a riper old
age? Here are some New Age tips that could help:
| * A decade
ago, trimming R&D and technology expenses
was a 'gimme' in a downturn. Now it may be a fatal error. Information
is the plasma of modern business. You could be hawking Bluetooth
communications gear or corporate bonds. It doesn't matter.
The former director of a defunct investment banking outfit
noted in Inc. magazine: "We were a successful sales organization,
but our credibility with customers was based on the underlying
research we brought to problems Unfortunately, the president
didn't understand that, so when he needed to cut costs, he
cut back on research. Almost instantly, our sales melted away." |
| * Considering
cutting back your sales force? Dangerous step. Again, are
you taking
care of "I" . . . and "I" means
information? Are you giving your salespeople the right leadership
and the right leads? Expert James M. Rubenstein writing for
Crain's says: "A telemarketer can give 10,000 four-minute
quality sales presentations per year." I'll guarantee
you not a one will be worth the dial tone unless you are qualifying
your prospects properly in the first place. |
| * Stay
close to your best people. In tough times, you'll need them
the most.
When business is booming, who can spare
a day for a seminar? Some wisdom from FastCompany on training
in downturns: "Now people have more time. And it's the
time to develop them." If you never stop the clock to
groom your stars, someone else will. |
| * Some customers
have the jitters. Does your marketing make a strong value
statement? Anticipate customer pressure. If
a downturn happens, they'll want price concessions. Know which
ones you'll give beforehand, and it will help you identify
how to cut costs today. |
| * Track your competitors. Watch their websites. Monitor
press coverage on them daily on the Web. Maybe they're more
pessimistic than you are. Maybe they're already panicking on
pricing. No matter why they're doing it, one thing is sure:
The marketplace is changing and the customer is paying attention.
Times have been good for a long stretch, and here's hoping
they will be again soon. The best way to dodge a downturn is
to run a tight ship 24-7. Investing in your valued competitive
edges and your best people can do better magic than simply
making expenses and people disappear. |
|
