I was in the audience yesterday for the CTEC Economic Summit where Geoff Colvin , Senior Editor-at-Large of Fortune magazine, advised a full house about the five things smart companies and smart leaders are doing in the current economy:
- Reset priorities to reflect the new economic situation. Mr. Colvin referred to Jamie Dimon , Chairman and CEO of JPMorgan Chase, who abandoned his 2009 strategic plan - chucked the whole thing! - and charged his team to re-evaluate everything, from financial projections to travel to training budgets.
- Focus on - and invest in - the core of your business. Using a comparison to Lance Armstrong’s neck-and-neck uphill wins in his 6th Tour De France vicotry, Mr. Colvin advised that it is in times of turbulence that the new competitive order is established. During the Great Depression, DuPont invested more heavily in R&D, to emerge in an even stronger position. Nylon and Neoprene were two DuPont inventions that came out of this period.
- Protect human capital. “You don’t know who’s swimming naked until the tide goes out,” quipped Mr. Colvin. Now is a good time to evaluate your talent and identify which team members may not be pulling their weight. If you must lay people off, do it with grace. And if possible, acquire great talent from other firms. Mr. Colvin reminded leaders,“What you do with people right now will be remembered for a long, long time.”
- Communicate like crazy. It’s natural for leaders - when they don’t have the answers - to “hunker in the bunker.” But now is the time where more communication is needed, and when realism must be tempered with optimism.
- Customers have new problems that must be met with new solutions. Now is an excellent time for businesses to redefine value for our customers, and not just cut costs. Customers are looking for vendors and partners who can meet their needs more fully and/or in new ways. Colvin suggested that long-term commitments like mortgages, car loans and even 2-year cell phone service contracts are not popular with customers who may be afraid of losing their jobs. Verizon is offering month-to-month subscriptions, and Hyundai has offered to take your car back if you lose your job.
What are you doing to emerge from this economic turbulence in a stronger position?