Recession Strategy - Part 2: Introduction

Past recessions have shown that companies did a poor job of preparing for an economic downturn. Managers felt the situation was out of their control and, therefor, could not do any meaningful work. Since World War Two there have been eight recessions. Managers, supervisors, or business owners will experience several economic slow-downs in their career. If we factor in a downturn in specific industries, it is possible for a manager to experience several financially challenging periods each decade. The volatile chip manufacturing industry is a prime example. Makers of electronic chips fluctuate from downturns in the general economy and from a drop in plant capacity or unintended consequences related to technology.

While recession planning is unpleasant, it is vital that it not be put off. Financial reversals must be anticipated and prepared for. Though some of the actions may be painful, it is important that managers and owners not allow themselves to feel as if their hands are tied.

A consulting firm, the Forum Corp. (www.forum.com), and training company, Paradigm Learning, have teamed up to examine 10 steps that can help managers focus in a recession environment. The 10 steps cover three areas, financial, people, and organizational climate.

Recession Strategy - Part 1: Introduction

Recessions are particularly hard on owners and managers of businesses and non-profits. Those responsible for the day-to-day activities of businesses, government departments and organizations are wired for success! It would be counterproductive to have any other perspective. In 1979, during a past recession, James Stone framed it appropriately: "Managers expect and are rewarded for growth in output and earnings. Their concept of success is, therefore, tied to expansion; their energies and skills focus on corporate growth; they are committed to the optimistic belief that the future will be quantitatively better; and they position their companies to fulfill this concept and need."

Stone felt that this "quantitatively better" perspective got in the way of a fundamental shift in the manager's "patterns of thought, behavior, and expectation." Instead of using their management skills to mitigate the recession's harm, he said the "manager sees recession as a period where real work cannot be done. The result is crisis management, unduly impulsive reaction, and the hope that the problem will go away."

Since it will not go away, at least not in the near-term, let's look at how we can use our management and leadership skills to minimize the human and financial reversals caused by the downturn. Though recession planning can be unpleasant, putting off strategic action can be worse. Over the next several weeks, let's look at ways to help us weather these economic challenges.

I would like to hear your thoughts and ideas.

Stay tuned!

Sunday: Books for the small business owner

Must read books for the small business owner

Hopefully, you're like me and know there is a fairly cheap source of small business training available to you, and you're willing to exert the effort to do a little reading.

Without question, there are experts out there willing to share their knowledge. So, take a look a these offereings to help you plan, start, run and market your small business: