Posts Tagged 'SURVIVING THE RECESSION!'

Day/Month/Quarter at a time!

Catching up on the ever-growing pile of reading to do,  I was struck by the number of articles across publications which point to the need for flexibility, the need to be nimble and the great deal of uncertainty which still exists in the US economy and across the globe.

Yesterday I received a periodic e-mail blast from Kraig Kramers, author of CEO Tools – a great book by which to manage – who said [I quote the article in its entirety]:

“Twelve Seasons at mid-year:  it’s a good time to re-evaluate economic trends and what they mean for our businesses.

“What many are seeing is the downturn slowing; some are citing hope as the harbinger.  My own view is that some economic indicators are degrading more slowly, yet there are still so many indicators that overwhelmingly say we’re still sliding into this recession headlong.  And, “hope” is not a good business strategy, so please don’t heed the “hopeful” rhetoric from Government and the parroting by media as hope tries to lull you into running your business as if things are on the mend.  They aren’t (yet), except in a few very rare sectors, geographies and industries.

“Unemployment has become the leading key indicator since it has consumers scared to death and continues to cause curtailment of their spending severely.  Many people who were not going to lose their homes now are, and the commercial real estate sector is now showing strong signs of decline, with deterioration not far behind.

“What this implies to me is that we can only see about three months out right now.  The stimulus packages (trillions of our tax dollars) are not being spent, certainly not coherently, and are going virtually nowhere…at least so far.  Less than $200 million of the original $800 billion has actually been spent.  It’s just not happening…yet…and probably not real soon.  Plus, it’s not aimed at most industries, just some.

“The economy continues downward, and some are saying bankruptcies will be even greater in 2010, while they’re already up in 2009 by 240% over 2006.  Again, we can only see with some certainty about 3 months into the future right now.

“So, my thought would be to set your goals and do your plans only 3 months out, and re-assess each month.  As we’re able to see somewhat clearly further out, then open up your range to 6 months and start implementing your growth and recovery plans.  There are some recovery things you can start to do now, but do continue to deal with the downturn while planning for growth.  The really savvy economists are saying we’ll bottom by the end of this year, but have a slow, very drawn-out sectoral recovery (meaning each industry will start recovery at different times and at different rates of speed).  So, watch carefully, frequently, and adjust accordingly.

“Really hope I’m wrong about the economic observations made above and that it’s much better than it looks.  As always, hope this makes sense for you and your business.” [END QUOTE]

That makes perfect sense to me, plan for the next 3 months at max.  Set monthly goals, weekly to do lists and work on a daily basis to make the plan a reality.

Good luck, to all of us!

Leading through uncertainty: HBR July/August 2009

Reading this article in the most recent Harvard Business Review brought to mind dog agility tests. The dog, usually an Australian Shepard, runs manically, through the uprights, over the tipping bridge, under a log and through a canvas tunnel to reach the end line for a tiny reward:  small kibbles.

We, owners of remodeling companies, employees of remodeling companies and the myriad consultants, groupies and hangers on, of whom I count myself one, might be feeling like that dog right now.  Running, jumping, leaping and navigating tight quarters, often in the dark, to receive a tiny reward, at least tiny compared to two years ago.

Some perspective on the matter, however, might cheer us all:  if you’re still in business, if you’ve got sufficient cash flow, if you count hard working and engaged employees in your group, and among your clients satisfied long-term relationships, if your health is good and your family safe — you’re a lucky person!  And, just like that dog, ready to run the current obstacle course.

So let’s take this one step at a time.  One of the GREAT articles in the current Harvard Business Review is Leadership in a (Permanent) Crisis (page 62). The first paragraph reads:

“It would be profoundly reassuring to view the current economic crisis as simply another rough spell that we need to get through.  Unfortunately, though, today’s mix of urgency, high stakes, and uncertainty will continue as the norm even after the recession ends.”

Further on, it states:

“Crisis leadership has two distinct phases.  First is that emergency phase, when your task is to stabilize the situation and buy time.  Second is the adaptive phase, when you tackle the underlying causes of the crisis and build the capacity to thrive ina new reality.”

I hope by now most of us have stabilized:  gone through the heart-wrenching difficult tasks of letting people go, of changing the rent structure – perhaps even moving the office back into the home – and built a “starvation” company budget for the remainder of 2009.

Now comes phase two, “the adaptive phase”.  In this phase we’ll have to determine our new reality by re-thinking what we sell, to whom and how we sell it and how to best produce great outcome both in terms of customer satisfaction and quality construction.  Efficiencies, both in the production process itself as well as in economics of scale, should be put under the microscope for improvement.

Tackle, as always, the issues with the biggest payback first, leaving less vital considerations to fall off the ‘todo’ list over time.

Start now, prepare for the future by engaging your brain as well as your employee’s brains, ask your customers what they need most immediately and what they hope for down the road.

“Jack be nimble” should be our new mantra.  Starting today!

[Download reprint RO907F from HBR.org]

YouTube for You?

Being a baby boomer, I’m not very adept at “social networking”.  In fact, I’m afraid of it — I don’t seem to have time to maintain the few important friendships I’ve got let alone search for new ones.  But perhaps I’m missing the point – I don’t seem to do a very good job of marketing either – and that might be where social networking comes in handy for people like you or me.

The May/June issue of California Builder has a good article on “Putting Social Media to Work”.  [www.cabuilder.com].

In summary Jim Adams said:

“Social media is still in its infancy.  The audience is already massive. … the fundamentals of social-media communication remain consistent:  keep the message transparent, interactive, and strong.”

How to best accomplish this very good goal?  He mentions Facebook, Twitter and YouTube.  Each of these seems to require a significant investment in time and maybe even money if you out-source it.

But one idea which seems appropriate to the remodeling community is YouTube.  He suggests that producing “real” videos which capture customer/market interest would meet the criteria of transparent and strong.    He says:

“Video is so cheap and easy to do that every sales executive can have their own YouTube account and a Flip HD camera in their pocket and post item after item.  You don’t have to worry that it’s shot in cinema quality; 95 percent of the videos on YouTube are amateur vides, and consumers like that.  It may not be pretty, but it’s transparent and real. Consumers respond to material that doesn’t look corporate.”

For a remodeler, that sounds pretty easy.  You could shoot a quick tour of the rough inspection, for example, explaining in detail the beautiful work you do to keep the structure sound, waterproof, secure and efficient.  This would be educational and to a certain type of client highly interesting.  Another video could explain aging-in-place decisions and remodeling.

Whatever you do, make it short and easy to get up on the web.  Keep your clients entertained and educated.  As Garrison Keillor says at the end of his weekly Writer’s Almanac:  “… and stay in touch.”

Be your own CFO!

“Every business owner needs to be his or her own CFO!”

So says Jay Goltz in the May 2009 issue of Fortune Small Business, page 17.  I couldn’t agree more!

“Delegating that task to a bookkeeper or an outside accounting firm means putting your life into their hands.  They generally don’t know the ins and outs of your business well enough to make critical decisions.”

Over 25 years in business, working only with remodelers, I’ve met many who have delegated not just the bookkeeping but more importantly the understanding of bookkeeping and financial reporting to others.  The line typically is something like “I just hate that stuff, I don’t do it, Jennifer (or some other name, typically female) handles everything.  She pays the bills, she balances the checkbook, she does payroll.”

But, I ask who LOOKS AT the reports, who understands the trends, who cares about what they mean?

Now more than ever, you – as owner – must be your own CFO.