By: Laurence Weinzimmer
What do you do when times are tough? It's a question many companies are wrestling with right now. The common, knee-jerk reaction is to reduce spending, slash costs, and maybe even to lay off employees. After all, a corporation has to make a profit if it wants to stay afloat. And in an economy like this one ”when you're struggling to hold onto your market share” cutting costs is the only way you're going to survive. Right?
Wrong! Cutting costs is, indeed, one way to show a profit in the short term. But you should be working toward long-term Profitability ” and that means you should be thinking growth. Fast growth.
It's really quite simple. You can only cut costs so far; eventually you run into a wall. On the other hand, there is no limit to growth. So why not grow? And I'm not talking about trying to hang onto your market share or even increase it. Your competitors are trying to do that! No, a growth company is not market driven; it's a market driver. Instead of trying to get a bigger piece of the pie, growth companies work to expand the pie itself.
Focus on effectiveness, not efficiency
First, be sure you're effective (doing the right thing), then focus on efficiency (doing things right). That's the way it should be. But in hard economic times, many companies revert to survival mode and slash budgets across the board. The problem is, it doesn't matter how efficient you are when you're efficient at something the customer doesn't care about. Wouldn't it be far better to take a hard look at resource allocations and direct more money toward goals that will lead to long-term success?
Get schooled in the art of external framing
External framing has to do with the way you view the markets in which you operator more to the point, the markets in which you could be operating. Don't look at your company the way your competitors do, or even the way your customers do. Average
companies think like their customers ... growth companies think for their customers. There's a big difference!
Focus on value innovation
Most companies talk about value creation, which is usually an incremental improvement over existing products or services. In contrast, value innovation means thinking proactively in terms of providing total solutions for customers needs often
before customers realize a need exists. Ask yourself some basic, common sense questions: What does our industry take for granted? What are we failing to do that the customer needs? What are we doing that the customer doesn't need?
Practice diamond mining
Underling this concept is the old adage about grass not being greener on the other side of the fence. The big growth opportunity you’ve always been looking for may have been right in front of you all along! To mine for diamonds, ask yourself: What is it that we do differently from everyone else? How can we take what we’re doing and exploit it in new and different ways?
Damn the economy, full speed ahead!
It seems to be human nature or perhaps corporate nature to hunker down and wait for the storm to pass before taking chances. But the kind of aggressive growth I advocate doesn’t require a robust economy.
When things are humming along nicely, you may not feel motivated to change. Why change when you're comfortable? Sometimes it takes watching your profit ratios fall to spur you into action! Just be sure it's the right kind of action. And look at it this way: chances are good your competitors have their heads buried in the sand. Take a fast growth stance now and they'll never catch up.
Of course, these suggestions are just the tip of the iceberg. But underlying the mall is a theme you can't argue with: common sense. It's amazing to me how many corporations panic when the economy takes a downturn and make bad decisions that seem to involve absolutely no logical thought. Taking a growth stance based on proven commonsense techniques is never a mistake, and in a recession, it could just be what saves your life.
Laurence G. Weinzimmer: author of Fast Growth: How To Attain It, How To Sustain It ($25.00, ISBN: 1-57410-135-8) is available at neighborhood and online booksellers or by calling (800) 245-2665