What’s Your Post- Recession Strategy?
Originally published: 07.01.10 by Ron Smith
Stick with good practices to take advantage of rebounding markets.
The economy is improving. We still have a ways to go, but clearly there is positive movement. Consumer confidence is up, and folks are beginning to buy items they put off buying during the past two or three years.
The Gross National Product index has improved significantly. The stock market, although still showing its volatility, continues to improve as companies report profits, and investors become more confident. The housing market — both existing and new homes —is gaining momentum (assisted by the federal government’s first-time buyer program).
Now — finally — companies are hiring, and people are returning to work. It is particularly interesting and certainly enlightening to see that some of the companies that moved operations offshore years ago are returning work to the U.S.
Two of the many reasons are because suppliers are more reliable and stable here, and U.S. workers produce a high-quality product. In this more positive climate, it’s time to ask a challenging question: What initiatives did you take to combat the recession, and — just as important — how will those initiatives affect your ongoing management decisions as the economy improves?
First, we need to recognize that the recession had and still is having a significantly negative impact on contractors that perform both residential and commercial new construction. They have really had it tough.
Contractors in the residential retail market have certainly fared better. And, they were affected to varying degrees in different parts of the country. Some of these contractors took a hit; others were affected but not as seriously; and other contractors have reported good results the past couple of years, particularly in 2009 and into 2010. How did you address the recession in your company? Here are some of the things that I did as a contractor and that I have seen others do during difficult economic times:
- Did you discharge the mediocre and less-than-mediocre coworkers and retain those coworkers who contributed to your past success?
- Did you carefully review all of your overhead expenses and reduce or eliminate the less-than-necessary ones?
- While reducing or eliminating your overhead expenses, did you continue marketing? As a contractor I learned that if I continued to market, we always came out of a recession with an improved share of the market.
- Did you examine your portfolio of products and services and consider adding more, recognizing that the additions will increase revenue whether added to equipment replacement jobs or sold as individual accessory items?
- Did you review all of your pricing to identify where it was possible to implement increases, even if the increases were minimal?
- Did you develop and implement any new processes that made your company more efficient? Or improve customer service? Or add to your coworkers’ job satisfaction?
- Did you take steps to improve the productivity of your installers, and service and maintenance technicians, contributing to increased profits and possibly a reduction of the work force?
- Did you challenge your coworkers to work as a team and make the best out of the economic situation?
- Did you make certain that your presence was seen throughout the entire company and take the time to engage in conversations with coworkers?
- Did you frequently report to your coworkers, keeping them informed of how the company was doing as well as providing inspiration?
- Did you concentrate on special care for your valuable service agreement customer base, and — very importantly — did you really focus on growing your service agreement customer base?
- Did you set measurable goals and carefully track the results? If you implemented all or most of those initiatives, congratulations!
Now here is the big question: Why not manage your company in that manner as the economy improves? Why let those initiatives slowly disappear? Imagine how successful you could be as sales opportunities increase if you practice the same management style.
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