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These are the worst of times but it can be the best of times

March 24, 2009

To paraphrase Charles Dickens, ‘this is the best of times; this is the worst of times’. OK, we all understand the ‘worst of times’, but ‘best’? Sometimes ‘best’ comes at us in strange and non-linear ways. Given the economic mess our country is in, and how long it will take for this mess to unfold and resolve itself, the ‘best’ is that we have no choice but to fix all those broken or uneven business processes; the time to procrastinate is long over.

Increasingly, over the last several months I have witnessed on a first hand basis how highly experienced and deservedly self-assured senior managers are beginning to look over their shoulder. They are facing unprecedented obstacles that befall them in their business. Overflowing sales pipelines and a seemingly endless supply of credit options for operations and trade finance seem like fond, distant memories. All the buttons which operated so well when pushed in the past are no longer connected to a functioning circuit. When sales and credit flowed, inefficient or even broken processes and logistics, as well as higher than necessary costs, could be covered and not dealt with. Partly, this was due to the focus on sales and the order to cash cycle and addressing hard subjects was postponed because most senior executives today have never had to manage under this level of adversity and are inexperienced in living through a prolonged crisis.

Pick up the paper any day over the past six months and you can read about one company or another who has just jettisoned a significant number of employees. I had one executive relate a story of how a large technology company got the orders from the corner office to begin layoff, post haste. The question was; “fine, how many folks do I layoff?” The response from the CEO was ”keep cutting until your processes break.” Unfortunately, many of today’s executives are simply ill-equipped to deal with an orderly scale back of a company. The wholesale removal of personnel does more damage to the overall business than good, in terms of morale and productivity, as we discussed here in a recent Blog entry.

Operating under severe economic or even political uncertainty is a real skill, which, like any form of combat, can be taught but  must be experienced. How to cut costs, how to reduce headcount, how to trim back product lines and renegotiate vendor contracts  takes a skilled and highly experienced hand to accomplish in such a way that the business survives or even thrives short term and then grows as the economy and business cycle returns to sanity. I have also personally seen, with increasing frequency, how these same senior managers mandate across the board cuts which are then translated by the next levels down into personal survival and internal political agendas. The results can be a company cut to the bone in key areas and still having waste in many others. An apolitical and objective outsider, experienced in operating under economic uncertainty and deep recession would have made significantly different choices.

From my own history of being a VP-Sales during recessions, my biggest issue is with sales reps who blame the economy for revenue drop offs. You really don’t need to keep paying someone to tell you the “market stinks”. Force these people to go on more calls than ever; be creative on packaging services and products into value bundles; make more cold calls than ever – take control. Yet, many Sales executives prefer to explain why they cannot make their revenue plan, to ‘tough it out’ rather than rethink and fix falling forecasts. Partly, this is for fear of their own jobs, partly it is because they like their staffs, but mostly it is because they are inexperienced in selling during deep recession. Here too, you must retain or obtain objective, real-world viewpoints.

These are the worst of times but it can be the best of times if you use it properly as a call to action.

Tom Bergeron is a Managing Principal of Return on Efficiency, LLC, who’s website is www.growroe.com and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years experience reshaping companies, Operations and sales organizations. He can be reached at tom.bergeron@growroe.com

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2 Comments
  1. RaiulBaztepo permalink

    Hello!
    Very Interesting post! Thank you for such interesting resource!
    PS: Sorry for my bad english, I’v just started to learn this language 😉
    See you!
    Your, Raiul Baztepo

  2. Hello ! 😉
    My name is Piter Kokoniz. Just want to tell, that I’v found your blog very interesting
    And want to ask you: what was the reasson for you to start this blog?
    Sorry for my bad english:)
    Tnx!
    Piter Kokoniz, from Latvia

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