Think and Manage Like a Winner – Defense is a Losing Strategy

As I meet with business owners, they tell me that they are battening down the hatches and waiting for the storm to pass. Economists date the beginning of this recession to December 2007, over 15 months ago. Does anyone see the end yet? Just a thought…what if the storm doesn’t pass, or it takes 18 months? 24 months? Will you survive? When your company was smaller and in its growth phase, how were you allocating resources over your expense categories? Are you maintaining your target ratios in your key performance areas?

Companies start the belt tightening process forgetting the priorities they set when they were on the upswing. That usually means they protect payroll and benefits at all costs by reducing their spending in “non-essential” areas, like marketing, research, and staff development. The balance that made the company successful becomes skewed. For you football fans, how many games were lost when the winning team put in the prevent defense? It seldom works. As much as it makes us feel better to take care of our people, the real challenge for business leaders is to make the tough management decisions that are in the best long-term interest of the organization.

I’m not advocating a cold disdain for your employees. Quite the opposite. Employees are the most valuable asset of any organization. But there are lots of ways to take care of your staff. I have clients who cut salaries 20% across the board rather than lay off employees. I have clients who laid off employees; it gave them no pleasure. But these leaders understand that maintaining a strong viable company poised for growth and capable of doing all of the things the company needs to do to remain strong and grow when revenues fall is the only way to protect and take care of employees in the long run, and today. They aren’t managing not to lose, they are playing offense and making decisions to win.

These are difficult times demanding that business owners make difficult decisions. They are especially difficult to make in a small company where the relationships are strong between all employees and the culture of the organization is largely a product of those relationships. This is when the guidance of a good business coach is vital. It is lonely at the top and opportunities to “think out loud” seldom exist for the owner. The coach can help you through the analysis process and help you deal with the emotional challenges that accompany these decisions. The very survival of your company depends on your ability to make these difficult decisions during difficult times and a good advisor is vital.

Or did you cut that expense category out of your budget?

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