Playboy And New Yorker Cartoons, And Other Trivia
For decades a staple of both editorial and general humor cartoons in America has been a scraggly, bearded, besandaled zealot in shabby robes, bearing a placard or sandwich board sign proclaiming “The End Is Near!” Usually placed in an urban setting among well-dressed passers-by, the prophet signifying the imminence of End Times was ignored, overlooked, or made sport of to the tune of a well-placed punch line.
As we have all recently seen, the bus must have backed up to the commune and emptied it of would-be Jeremiahs. The End has been announced often and with some effect as the wreckage of the global financial crisis has been examined. We even briefly considered opening a sandal repair shop to help make ends meet.
We’re here to make a proclamation of our own. The End Is, in fact, Near. But not the one the full-time alarmists would have you believe. It’s the end of the recession that’s coming, and we need to figure out how to prepare for it. Our friend, Rick Blasgen, CSCMP’s CEO, has coined the phrase “post-recession rally.” We believe that getting ready to capitalize on the growth and profitability opportunities that will characterize the rally are far more important than what we’ve done to try to survive the recession. Truth be told, how we have handled the recession sets the stage – or not – for how successful we will be in the post-recession period.
Leadership In Times Of Crisis
We are distressingly willing to indulge in knee-jerk reactions to challenging events, even to the detriment of future success. Maybe this is raw, fundamental, human nature. Research on reactions to acute stress, such as that applied by corporate shareholders, as filtered down through our bosses, is now nearly a century old. Its basics are that we have two paths of stress reaction. One is to run like mad away from the stress; the other is to fight like crazy.
In business, these translate to: 1) hunkering down, hoarding cash, furloughing people, delaying or canceling all new projects, forbidding travel by all except ultra-senior management, or cutting out training and other organizational development activities (among others); and 2) seizing the opportunities others are afraid to go after, re-inventing and repositioning organizations, adapting to a new world view, and other creative, aggressive actions. Curiously, the former approach seems to be often favored by leaders with some financial background. You know, the ones who struggle to understand the difference between headcount and human beings.
These corporate versions of “flight or fight” seem to get rooted in two distinct business communities. The big traditional outfits are big on flight, particularly when the burden will fall largely on a put-upon workforce. Entrepreneurs – al least those who haven’t been fooled by the realization that GM has no clothes – are the leaders in reinvention, risk-taking, and trying new ideas.
When To Start?
It depends a little on the shape of the recovery, of which there are three principal types. One is V-shaped, the quick, steep rebound. Another is the U-shaped, with a gradual bottoming, followed by a gradual rising, followed by a sharp upturn to previous high levels. The third is pie pan-shaped, with a long, long, flat bottom before the return to previous highs.
If the recovery is V-shaped, you’re too late to embark on a remedial course; you should have been doing the right things all along. If the recovery is U-shaped, you may be – or not be – too late, because the recovery will come fast when it hits. If it’s pie pan-shaped, you might have a little time, but there’s still no substitute for not having taken flight at the outset. Another factor is that your more inventive and nimble competitors may have had a load of time to perfect their tactics during the long flat spell. They may even have had time to make a mistake and recover from it.
Entrepreneurs are troublesome that way – they aren’t afraid to fail occasionally in the interest of innovating on the path to long-term success.
Will This Cost Money?
The magic word is investment. When others are pulling in their horns, retrenching, and thinking about how to get in on some of that bailout money, tomorrow’s winners are investing. Where should the investments go?
Infrastructure. This is the time to get equipment and technology that was too difficult to cost-justify when the financial buggy was careening out of control, and often get it for pennies on the dollar. Those who are good at this were always frugal, but that doesn’t mean penny-wise and pound-foolish. It does mean picking the time and place to spend wisely, and a recession can be the right time.
People. This is the time to train – and cross-train – and educate, so that your people are better than their people when the crisis is over. Better in competitive situations and better at building a winning internal team. It’s the time to recruit, to get some winners on the string while they’re uncertain about their futures and their current employer is treating them like dirt. When the pressure is off, you’ll have “A” players in your lineup and the competition will be scrambling to rope in some of the leftovers.
Customers. Spend time – not necessarily dollars – educating your customers and helping them solve their operating problems. This isn’t about making sales calls; it is about building stronger relationships for the long haul.
Is There More Than Flight Or Fight?
Our colleague in The Progress Group, Bruce Strahan, posits the hypothesis that there are really three classes of organization:
- Burrowers – the frozen ones who are trying to hibernate their way through these times. They can’t even contemplate new things, especially those that take capital. And, they’ve laid off the resources necessary to do new things, anyway. They’re not spending a penny that could be considered discretionary. Initiatives that could really pay off down the road are on indefinite hold.
- Holders on – tweaking, chipping away, adjusting the dials . . . anything that can lower break-even points, including layoffs, reduced operating hours, inventory sell-offs, reduced selling prices. Just getting enough in the door to keep those doors open. They look a lot like Burrowers, but are a little more optimistic and alert – and may be willing to listen to reason about investment possibilities once they’ve twiddled all the dials they can find..
- Rainy day optimists – the ones who get it, who see recession as an opportunity to prepare for the upturn. They understand that, while today is important, it can’t be sacrificed for tomorrow. They revel in the proactive practices that will create more separation between them and the competitors who sat on their hands during the tough times. They are infinitely more fierce competitors than the cost cutters.
When The Rally Strikes
It should be clear by now that those who haven’t prepared are really going to be struggling, because they won’t be ready. Not ready with infrastructure, not ready with people, and not ready with customer relationships. They will have found a way to do poorly in bad times, and to do equally poorly in good times.
None of this means that companies should not be prudent during bad times – or at any time. But, if all the management energy goes into destructive activities and none into positive building blocks for the inevitable future, the cause is in jeopardy. We strongly urge that two-thirds of management attention go into preparing for the future, with one-third devoted to day-to-day business realities. And that balance needs to be struck at the very outset of tough times, not plugged in as an afterthought when a bright new business day is about to be dawning.
Bottom Line(s)
These are trying times, and simply excellent times to be in business. We will learn more about ourselves, and about the resilience of our associates than we might have imagined in the good times. And we will prosper in the future because we have already stood up to the challenge, wrestled it to the ground, and replaced failed models with new products, new services, new structures, new customer relationships, and newly invigorated and committed associates. Our bold, decisive actions during the bad times will have defined the future in which we will succeed. Even if the mainstay of the new product/service line is the sale and repair of sandals.
Bruce Strahan is a Partners in The Progress Group, Inc., an international supply chain and logistics consulting firm headquartered in Atlanta. He lead the Supply Chain and Manufacturing practice groups for TPG. Bruce did his graduate work at Georgia Tech, and was previously a Manager in Coopers & Lybrand’s SysteCon division. He may be reached at
770-804-9920 or bstrahan@theprogressgroup.com
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