What is a good strategy in a prolonged down economy?

Simple question … tough to answer. First, you develop a short-term goal of Survive to Thrive. From the Big Picture perspective, you intentionally decide to make “right decisions” based on today’s data on the economy for next 3 – 5 years based on five key sectors of the economy:

1. What’s happening with the Money Supply (the Federal Reserve … printing more money is not a good answer)
2. The consuming demographics of the economy (…is our economy able to consume enough to enable growth)
3. The real estate market (… are mortgages being properly valued or kept overvalued on the books)
4. Are the true unemployment numbers coming down to a reasonable level (5% – 6%)
5. Are you factoring in for inflation in your business planning

Make Profit Your Bedrock

If you have good cash reserves, you have a strong advantage over most of your competition. The proper plan of attack, in my opinion, is not to demand revenue growth … not to demand increased market share … your primary objective should be to make Profit your bedrock. The Top-line is not the goal … Profit is the only indicator to focus on in order to meet your Survive to Thrive goal.

My proposed strategy is clear. It is a strategy of Profitable growth. Focused to:

• Build a value driven brand
• Industry savvy to deliver trend-right products/services
• Outstanding service
• A lean company with a competitive cost structure
• High responsiveness
• A people company where the key people grow and contribute
• A company you can be proud of and respect

A New Chapter

We all expect a good leader will bring results. A great leader will write a new story for their company during difficult times … a different story within the new directions of the evolving economy and business climate. Obviously, the new story has to have results. But a story is a chapter in the life of a company that people want to be a part of and want to remember. You should take the responsibility to “lean down” whereby you position your company to Thrive … and pick the best people with whom you will build the founding future of your company.

A time for tough decisions by leaders.

What would you suggest as a strategy in a down economy?

© Phil Hoffman 2012. All rights reserved

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Tags: Decision Making, Economy, Leadership

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