Winning in bad times starts during the good times.
It doesn’t take a much of a pessimist to suspect that the U.S. economy might be in for a reset if not for a recession in upcoming months.
I know, I know: Rates are low, the stock market is bubbly, the yield curve is normal, unemployment is at 4.6 percent, and the newspaper of record is saying that the current U.S. president is “handing a strong economy to his successor.”
In fact, things are quiet.
We’ve survived for a long time on monetary stimulus pumping currency into the system, cheap debt underwriting everything from sports cars to sociology degrees, and a hefty entitlements-driven safety valve removing the discouraged unemployed from the workforce.
So, which is it? Are we in the best of times, or the worst of times?
What do you think?
Regardless of my views on the macroeconomy (which are neither as good or as bad as I imply above…more on that some other time), I’m what you might call a micro-optimist. That is to say that while Dickens may have described entire country economies in his tale of two cities, I actually subscribe to the notion that prosperity is exceptionally local…personal, even.
So, whether or not we as a populace face bad times, I’m a believer that you as an individual or as a business leader need not assume you are at the whim of the macroeconomy. The best business leaders I have known are not victims of circumstance. They have through-cycle mentalities to prepare for great during bad, and to prepare for bad during great. If bad times are looming, how do you win the bad times?
Then, if things are great, how do you have the mindset to ensure you will win during the bad times? Let me list 5 ways:
1. Ensure you win on the sales front. A rising tide lifts all boats, but it also masks a lot of foundering skiffs. If your sales efforts are doing less well in good times than they ought to be, then you have plenty to fix today. Is your sales force hitting its numbers on its talent, or on pure market beta and order taking? If it’s the latter, then you’d better watch out when the order window line dwindles. Go figure out how to generate and close leads in the good times. It won’t hurt.
2. Put on your “tough times” service hat. Yeah, I know…you are busy. Times are good. You may think it’s okay to ignore a few of those calls from customers or employees or potential partners because, well, you are making your numbers. Let me tell you something: People remember. If you want to claim that you are a high-touch servant leader, but you decide you have enough business now and don’t need to call people back after 5pm, then saddle up for a drought when the dry spell hits. It won’t hurt you to call people back and let them know you are too busy at the moment to help. Seriously.
3. Overinvest today in strategic marketing–to see the cracks. Without a doubt, the biggest recession excuse is “we didn’t see it coming.” I’m not a fan of planning for recessions (or even predicting them) but am a big fan of understanding customer and end market sentiment through a hefty investment in listening. If the good times are upon you, your customers are happy, and your order book is full; it can be challenging to go ask customers or downstream buyers what they think. It can be even more challenging to invest dollars to do so. It won’t hurt to know whether ripples are coming. Besides, your head in the sand–even when the sand feels good–is ignorance.
4. Take a minute out of your day to run a few scenarios. It’s an interesting facet of good times that they can cause us to stop thinking. Still, plenty of leaders know which customers are already high risk, which facilities are already at the margin of the cost curve, and which products really aren’t cutting it. What happens if you lose one or all? Do you know? What is plan b? It won’t hurt to have a plan b.
5. Look at the market for talent. Oooh, this one can feel scary. You as a leader should have a look at who is hiring (maybe even for you), and what kind of talent is bouncing around on the market. Have a few conversations with recruiters about where the activity is and where the softness is. Know what kind of talent is currently in demand, and where there’s a glut. This can be both personally relevant to you (you may thank me one day, mr. or ms. executive), and professionally relevant to the quality of the team you build. Just because you aren’t hiring doesn’t mean you ignore the market for talent. It won’t hurt.
There you have it. 5 ways to, perhaps, prepare for drought when the rain is falling. In order to be great in bad times, you have to be great in the good times. It won’t hurt.
Now, what do you think?