Must Be The Economy?

August 2, 2010


This economic period of time is tough. Most of the key indicators are lousy. Revenues are down, margins are off, and unemployment is high. Seems like no matter where you look there is some impact tied to the poor economy.

Check Your Attitude

“So I see Sales are down 25% over the same quarter last year” – Must be the economy

“Clients are leaving at an accelerated rate” – Must be the economy

“The sales process is much longer than this time last year” – Must be the economy

“Companies are just too risk adverse now” – Must be the economy

It is somewhat trendy to blame the economy for business being off. I actually believe it’s the case for most companies and industries. My concern is not tied to the impact of the economy on business results but, rather, the trap we can fall into.  What I believe we have to be careful about is allowing the fact of the economy being slow to become the barrier for accountability and innovation around achieving results.

There are 3 phases to look for. The first is the early reactions to the downturn in business. Most people fall into 2 camps. One is the “sky is falling” and the other is “this will pass”.   Assume the answer is in between, accept it, and engage employees to work through it.

Phase 2 is typically 3 months or so of consistent poor results.  This is when “the economy” starts to become the excuse for just about everything. This can be anything from qualified leads slowing down to longer sales cycles to customers leaving. Businesses can start to rally around this phase as a crutch and it becomes common discussions –  “misery loves company” syndrome.  Water cooler talk, staff calls, corporate communications all start to have a theme of it’s not us but rather it’s the economy. This actually generates a lot of energy and momentum – problem is it’s the wrong energy going in the wrong direction.

Phase3 will have the greatest impact today and tomorrow for businesses if not corrected. This is where people start to get paralyzed around the impact of the economy. The glass is always half empty and not half full, business discussions are around “protecting” and not “growing”, Any new ideas better be tied to saving money and remain “in the box”. Innovation stops and businesses believe they are in business just to survive. Basically employees actually believe there is no other recourse.

Late last year I was on a flight to Minneapolis. It was a late flight and as the plane was pretty empty so I got lucky and was upgraded to first class. I started taking to the gentleman sitting next to me about business, the economy,and the stock market. What a nice way to make a long flight to Minneapolis in December even longer. All of a sudden this guy next to me tells me that he’s a realtor and had spent the last week in Scottsdale doing what he does once a year with his friends – playing golf. “Real Estate, what a lousy business to be in right now” I said to myself and went on to tell him “not to worry as things will turn around. This is a cycle and we’ll get through this”.

He went on to inform me that business was actually brisk and “as long as a market is moving, it didn’t matter whether it was up or down, there is money to be made. “Markets that are flat are the ones you need to watch” he said. He then spent the next hour taking me through his strategy of adjusting his business model in anticipation and direct response to market changes.  He realigned what he does and how he does it to the market. He was accountable and innovating and his glass was half full although he did empty a few glasses before we landed. He was upbeat, confident, and concerned at the same time. He was thoughtful about what he did yet acted quickly with resolve. He refined his and his people’s skills to deal with short-sales, foreclosures,dealing with lenders as customers, and buyers looking for deals. He knew the economy was at the heart of the issues he was dealing with but he just wouldn’t allow that fact to take him down. He said the realtors that did not react accordingly were suffering or had gone out of business. What a valuable lesson to learn.

In tough economic times businesses face difficult decisions and necessary actions.Laying off employees, reducing marketing spend, limiting travel, etc. are unfortunately necessary measures to avoid further pain. As business leaders we should not allow the economy to become the excuse or the easy answer to missing the plan. Accountability and innovation must take hold. Accountability to the commitment of the business plan and innovation assuring new ways to get there must be anchored into the business. No excuses.

About Frank Picarello

Frank is a well-respected leader in providing technology services to small and medium-sized businesses. He is currently COO for TeamLogic IT, Chairperson for CompTIA's Small Business Owner's Group, and a member of CompTIA's Unified Communication Committee.

View all posts by Frank Picarello

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