As we finish celebrating Holy Week, the most important week of Christianity, we reflect on our Lordís passion, crucifixion and resurrection and are strengthened by these events. As a society each year we learn from this special week, we are revitalized, reenergized, filled with hope and faith. In business we see a type of economic resurrection or resurgence appear, again we are reenergized with hope and faith.
After surviving one of the longest recessions since the Second World War we are beginning to see a very different landscape when compared to other post recession periods. While each economic expansion is different, this one seems to be quite peculiar. In this upturn we are experiencing low levels of employment recuperation, high levels of economic uncertainty, a strong globalized competitive environment and many energy challenges, just to name a few. For organizations to thrive and prosper early in this upturn, they will need to develop unconventional strategies that are up to par to todayís reality. Organizations should face this economic landscape with bifocal strategies. Focus on managing assertively their economic reality, while at the same time investing and building optimistically in future growth.
In studying post recession strategies that organizations have applied in the last three economic downturns we found the following interesting data. Organizations that maintained a balance between achieving operational efficiencies and investing in the future, emerged from the recession achieving growth quicker than their competitors. More that forty percent of the companies that followed these dual strategies were successful early in the upturn compared to twenty percent that only looked for reducing cost or twenty five percent that only invested in the future.
Companies that have been successful early in the growth portion of the economic cycle identify differentiating tendencies that contribute to their competitive position and establish strategies to gain advantage in the upturn. Some of these strategies include:
Investing heavily on the future of their clients. They have found creative ways to be part of their clientís solution. They identify opportunities to co-develop new offering and revitalize their value proposition. They focus on nurturing an intimate relationship that increases growth. Successful companies take advantage of opportunities to acquire new technologies at bargain prices due to recessionary pressures. They invest in gaining capacity for the growth opportunities of the recovery.
Successful companies identify and exploit hidden assets. These are abilities and capabilities that the organization has developed thru the years that can be used for multiple purposes. Some of the most obvious of these are internal services that can become profit centers, logistical strengths, technologies that could become sources of income etc. In many occasions the assets are not obvious, they were not the result of conscious strategies or pursued goals.
Organizations also capitalize on their competitorís weakness. At the end of the recession some competitors are left in a debilitative state due to the reality of the market, this is the moment for successful organizations to take strategic decision that will fuel their growth early in their upturn.
Businesses that have been successful early in the upturn have been able to assertively face todayís reality without loosing site of all the opportunities that the early future will bring. They embrace their values and at the same time challenge rigorously the status quo, excel in operational efficiencies and effeteness while focusing on the engagement and optimization of their human capital. These organizations have met head on strategic challenges with innovative strategies based on knowledge and information and at the same time are managing change in times of uncertainty.
Businesses that have been successful in this upturn have continuously used market sensing tools. Market sensing is increasingly important given changing buyer values, growing demand from emerging markets, and heightened competition from both existing companies and new entrants. Effective market sensing requires sophisticated analytics to determine what customerís value and what competitors are doing. It also requires a flexible, innovative approach to adapt offers to meet customer requirements and increasing customer discernment.
These organizations ensure they have clear processes in place to identify, select and prioritize growth opportunities, as well as to conduct rapid testing of new ideas. They have quickly tapped into new markets or customer segments, and considered divesting on-core or underperforming assets to free up cash.
As you can see these are hopeful times especially for those companies that are positioning themselves to ride the wave. They are seeing new bigger waves on the horizon and they are yelling to their people, Surfs up.
Copyright 2012 QBS, Inc.