So, your business is looking down the barrel of a business slowdown. It’s been an issue Right turn arrow sign you’ve been thinking about for awhile. Maybe one of those back-of-your-mind things that is breaking out into the open. Something could be wrong here. You’ve asked yourself if it’s a temporary, short-term “bump in the road” or something bigger. And if it’s bigger, what do you do about it? Like any business decision, it’s not an easy call. As always, you have to decide based on less-than-perfect information. Well, I have some thoughts about how to approach this difficult situation and how to manage through it.
HOW SICK ARE YOU?
The first thing you have to do is decide just how big a problem you have. It’s critical that you understand the magnitude of your problem. As a good business leader I’m sure you are tracking the key measures that reflect the health of your business. Some are firm data points, some are a little more subjective. Among the objective data to watch over time:
- Sales revenue flat or dropping
- Profitability decreasing or becoming losses
- Customer defection rates going up.
- Average customer purchases declining
- Customer satisfaction results dropping
- Fewer customer referrals
- Sales pipeline weakening
Some more subjective things to watch:
- Is employee morale dipping? Find out why. This could be measurable. Sometimes it’s a more a feeling you get by walking around and observing.
- Sales length increasing
- A noticeable increase in customer requests for additional functionality (possibly indicating that your products may not be meeting their needs)
A key word you shouldn’t overlook is “over time”. Avoid rash, knee-jerk reactions. A month or two (or even one quarter) of disappointing results does not make for a pivotable moment. Just like in economic terms, one quarter of GDP shrinkage does not make a recession. But know which of these indicators are most important for your business to monitor closely. And as you sense problems you might consider adding some additional measures and/or digging deeper into the ones you have.
LET LEADERS LEAD
Now it’s time to get your team together and openly discuss the big picture. A few questions you and your leadership team need to consider:
- Are these issues longer-term in nature?
- What is causing the disappointing results? Is it a market shift? Is it your business model? Is it a misalignment of brand/market messaging? Is it operational problems that can be fixed? Is it a competitive environment change?
- Is there something fundamental taking place?
One thing you CANNOT do is leave the “elephant in the room”. Bring it up and face it head-on – earlier rather than later. Like a significant disease, the earlier it is detected and diagnosed, the more likely the patient can be cured. Ignoring a tumor does not make it go away. And so it is with most significant business challenges.
It’s healthy to work out for yourselves what would indicate a major problem. What would tell you that if significant changes aren’t made your company could be in trouble. Which measures tip you from smaller, less significant challenges (but challenges nonetheless) into “major problem” territory? Work with your team to agree on what these characteristics look like. Get everyone on the same page. Make the call. Is it a major pivot or a smaller set of changes?
If you decide that your current problems are not systemic, then plan how you will deal with it. Decide on the changes you will make.
If it is something major, start to envision at a high level what that new direction looks like.
TIME TO PIVOT
Now let’s talk about the big stuff. Suppose you decide a dramatic pivot (something that will make huge changes in how you do business) are needed – and that you have determined where you will pivot to. I won’t lie to you. Any significant business shift is not easy…and it’s certainly no fun. But it IS possible. Here are some steps to consider:
- Develop the case. You need to be clear about why big changes are needed.
- Plan, plan, plan. Building off the high-level vision you and your team developed, you essentially need to develop a new business plan. Be clear not just about what you are pivoting away from, but also what you are pivoting toward.
- Is your organization ready for the change?
- Is your organization structured the right way?
- Are the skills needed in the future different than today?
- How will your brand and market messaging need to change?
- Will you face new competitors?
- How long will the pivot take? (By the way, double the timeframe you have in mind.)
- Communicate openly. Let’s face it, employees know something’s wrong. They may not have all the hard data (or the broader business picture) you have, but they can feel it. They can sense it. Be open with them. Lay out the case for change. Honestly take on their questions and concerns. Address their fears. Share the plan. Allow them to try to poke holes in your plan. It may be uncomfortable, but it will make your plan stronger and will get everyone on the same page.
- Paint a positive picture of the future. Describe how the future will be brighter. Don’t dwell on the past troubles (although be honest about them). Get everyone looking forward to how things will be when they are again going right – even if it looks a whole lot different than it does today.
- Execute, measure, and revise (as necessary).
I know saying all this in a blog post makes it sound simple. And I know it’s not. But it is possible. And it’s critical. Ignore a huge problem and you just might have a company that goes out of business. Deal with it aggressively and openly and you can build a business with a new vision and a new future. Which would you rather have?
I would love to help you make your business thrive. If your business is facing some challenging times, let’s work together to design a way through it. I can help you with strategic planning, research, and business coaching services. Just reach out and get in touch. Call me at (713) 907-8429 or use our CONTACT US page. I’d be happy to chat with you and explore whether I can help. No pressure. Just an informal discussion to explore the idea a little.
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