Storm Prep: Five Critical Tactics to Prepare your Organization for a Recession

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If you’ve ever survived a nasty weather, or even the aftermath of an extended power outage, you may also know the pain of having been unprepared.  A lack of preparation can mean everything from the mild discomfort of being unable to make coffee to enduring the loss of almost everything.  Some thoughtful planning can make an enormous difference in what your experience might have otherwise become.  Fortunately, same is true when your business when facing the potential storms of a recession.

Unfortunately, executives are often so busy with their day-to-day responsibilities they have little time for charting a path through these storms before the metaphorical dark clouds of the recession are upon them.  So here are five critical tactics to contemplate as we enter 2023.

Perform a Break-Even-Analysis

In a recession, top line revenue growth can slow dramatically or even fall.  That means it’s wise to contemplate how far revenues can fall at current margins and still produce positive cash flow.  If you haven’t done so, now is the time.  Be sure to pay attention to your fixed costs and search for tactics to lower them if possible.  We work with our clients to anticipate the impact of thinning margins as well, producing best-case, worst-case, and most-likely-case scenarios to understand how these changes might affect compliance with banking covenants and their access to working capital. Once we’ve done so, we encourage our clients to discuss the results with their banking and other financial partners.

Evaluate Your Working Capital

Because recessions may impact your customer’s access to credit or their financial health, it’s a good idea to make sure your organization can endure an unexpected liquidity crunch.  So, once you’ve completed your break-even analysis it’s wise to begin forecasting cash flow in 13-week increments. In such an analysis you will want to determine the impact of even a few days of slowdown in your accounts receivable collection period, as well as the possible impact of carrying raw materials & other inventory.  If you haven’t done so, now may be the time to reduce your carrying costs, just as you’ve done with fixed costs.

 

Know Your Key Customers

Ensuring you know your key customers is, of course, essential to your organization’s success.  If you haven’t already done so, make sure you and your sales team are keenly abreast of their possible needs during a recession.  Too many leaders lose touch with customers—especially after periods of rapid growth—so now is the time to reconnect.  Make sure you have an effective CRM system in place to know which key customers you’ve been staying in touch with than during stable economic periods, so you may want to examine your sales incentives to ensure you are rewarding your sales executives for

becoming trusted-advisors and retaining those key customers.

 

Retain Your Key Employees

Hiring has been a notable challenge for most organizations in these post-pandemic times.  Wages have been driven up as the participation rate in those seeking work has fallen.  Just as losing a key customer is more painful during a recession, so too is losing a key employee.   Before the storm hits, we encourage you to engage in a through and deliberate talent assessment and planning process like our NorthStar© approach takes.  The information you’ll harvest through such a process will allow you to make better decisions about personnel and how to reward and retain them rather than resort to a strictly cost based process of layoffs and reorganization.    

Examine Your Supply Chain

Disruptions to your supply chain can have the same sort of devastating impact as an unexpected liquidity crisis.  As such, you will want to keep abreast of trends affecting your industry at the macro level, as well as at the micro level.  Now is the time to make sure you and your purchasing officials are talking to your key vendors about what they have done to prepare for the recession and how they believe it will affect their ability to provide you with the goods and services you need to run your business.  You will also want to talk to your transportation services providers if you’re a wholesaler, manufacturer, or retailer.  And you and your financial team will want to re-assess the credit worthiness of anyone in your supply chain today.  You will be glad you’ve tightened up your credit before you begin seeing weaknesses manifested by a slow-down in your collections or, at worst, an increase in bad debt.

Like many things in life, these five things are simple.  They just aren’t easy.  Finding the time to work through them or knowing how to execute them efficiently can be a challenge.  But we’ve found they are critical components of our client’s strategic and tactical planning.  And if you’d like some perspective about these topics, or perhaps some help executing them, email [email protected].   You can also learn more about us at www.psghsv.com.

 

Performance Matters - The Beatings Will Continue Until Morale Improves

Performance Matters: The Beatings Will Continue Until Morale Improves

 

 

If you’ve found this information useful, encouraging or might see a way we can improve it, please let us know.  And if you thought it was encouraging, forward it to a friend so they can subscribe. If you want to find out more about how Performance Strategies Group helps organizations sharpen their sales skills and processes, builds more self-aware and resilient leaders, or equip more productive teams, find us online at www.psghsv.com, or call Principal Consultant, Jim Owens @ 256-426-0305.

 

Performance Matters - Moving the Needle of Productivity

Performance Matters: Moving the Needle of Productivity

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As we’ve discussed here before, we really only have four options for creating change in our world. We domoreof the things we are doing.  We can do lessof them.  We can do them better or we can do them differently. Sometimes, doing things differently can have a dramatic and immediate impact on our productivity.  But doing things differently, may only require a modest change in our approach to becoming more productive.

Many of us start out days with a simple list of things to do.  And as the day grows, we find ourselves adding to that list until it seems impossible to do them all.  Yet we just continue trying to trudge through those tasks.

Ugh.

But there’s a better way to move the dial of our own productivityand it is one that will feed our sales effectiveness, the productivity of our teams, and make us more effective leaders.  After you’ve made your list of things to do for the day, look over it and decide which two or three items move the needle in terms of gauging your success.  Then make sure do those things first.

Let’s say you’re an account exec with sales goals.  You probably have to write reports, enter data in to a CIF system, and maybe even fill out an expense report. You also have to follow up with clients, reach out to new prospects, and stay abreast of market and product matters. But what moves the needle in terms of reaching is your relationship with people, right? So every day, before you do anything else, identify and block time on your calendar for making those calls, sending those emails and seeing those people.

Once you’ve done so, list who—the most important prospects and clients—you need to talk to and what you want to accomplish before you connect.  Invest a few minutes in this kind of preparation and you will find yourself more effective in those interactions and reaching your goals more consistently.  And don’t let yourself connect with anyone other than those most important prospects and clients.

To make sure you protect this time for interactions–building relationships–with your prospects and clients, ask your team—including your boss—not to interrupt you while you’re on the phone, sending emails and working through this process.  You will be surprised how much they will appreciate your focus and how willingly they will respond if they know you will be undistracted when you do interact with your team once you’ve completed the tasks that move the dial in terms of your sales effectiveness.

Next week, we’ll talk some more about we can capitalize more on how doing things a little differently can lead to big gains in productivity!

If you’ve found this information useful, encouraging or might see a way we can improve it, please let us know.  And if you thought it was encouraging, forward it to a friend so they can subscribe. If you want to find out more about how Performance Strategies Group helps organizations sharpen their sales skills and processes, builds more self-aware and resilient leaders, or equip more productive teams, find us online at www.performancestrategiesgrouponline.com, or call Principal Consultant, Jim Owens @ 256-426-0305.

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Performance Matters: The Elixir of Productivity

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Just about anyone focused on productivity—their own or a team member’s—is looking for hacks, some shortcuts that will improve performance.  We build efficiency processes, hold meetings, establish sales goals, and set and reset staffing levels all in the hopes of achieving more.  Much of which just grinds the joy out of our work and lives.  But what if there were an almost magical means of doing so?

Many of you have already decided that’s impossible.   But the science is in. And it’s both simple and compelling.  If you want you and your team to be more productive, be happy.

In his 2010 bestseller, The Happiness Advantage, Harvard-trained psychologist Shawn Achor details countless pieces of research indicating productivity and achievement are by-products of happiness, not the consequence of it. In his book and in his wildly popular Ted-talk, Achor demonstrates how our perspective impacts accomplishment. Among the most compelling items in the book is the Losada Line.

In short, the Losada Line indicates that it takes roughly “three positive comments, experiences or expressions to fend off the effects of one negative one…(raised) to a ratio of six to one and teams do their very best work.”   There’s a boatload of academic research behind this phenomena, and Achor’s work is rife with practical, effective ways to raise your own level of happiness, as well as that of your team.  And while being happy is simple, it isn’t easy.   You have to work at it.

But why not give it a try.  Achor doesn’t suggest we shouldn’t chant empty affirmations. Rather he gives us the means to invest in ourselves and others.  He gives us the research supporting meditation, kindness, anticipation, and many other tools that can actually make us happier and thereby more productive.  Investments take time to generate a return, so why not grab a copy of Achor’s book or watch his Ted-talk with your team.

You’ll be glad you did.

If you’ve found this information useful, encouraging or might see a way we can improve it, please let us know.  And if you thought it was encouraging, forward it to a friend so they can subscribe. If you want to find out more about how Performance Strategies Group helps organizations sharpen their sales skills and processes, builds more self-aware and resilient leaders, or equip more productive teams, find us online at www.performancestrategiesgrouponline.com, or call Principal Consultant, Jim Owens @ 256-426-0305.

Reflections on Life and Leadership: The Call to Rest

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Recently, while sipping a cup of coffee and looking across the tranquil waters of Lake Martin, near Dadeville, Alabama, I found myself without a laptop, book or Blackberry to distract me from the renewal of the moment. Once again, I was reminded that in the chaos of life and work how often we find ourselves overwhelmed by its incessant demands. Regardless of whether it is the creeping weariness borne of constant projects, endless deadlines, and family responsibilities or the seemingly sudden, heart-pounding, gasping for breathe kind of exhaustion that comes from an impossible “to-do list” and 14 hour day, those who would lead, or follow, often find themselves with insufficient reserves of energy and creativity to live and perform well. It is then we realize, as legendary Green Bay Packers’ Coach Vince Lombardi once said, “Fatigue makes cowards of us all.”

Fatigue can be emotional, physical, or mental. And fatigue in any area can drain us of the ability to perform in the other realms. When we are distracted with the pain and stress of family matters our mental acuity is affected at work. Mental exhaustion from work can affect our physical reserves. If you don’t believe it try going to the gym after a 12-hour day. (Or staying on your diet!) We are such creatures of routine we often fail to recognize how one component is intertwined with the other. Worse, we fail to realize how desperately in need of rest we have become. In a culture that regards rest as laziness, we risk our effectiveness, our physical health, and quality of our business and personal relationships as we drive ourselves. To affect change, and remain effective, we must first recognize the impact of the overlapping contributors to our fatigue. When we find ourselves impatient, short-tempered, or unable to focus on completing a task, we must recognize them as the warning lights on our dashboard. Something needs attention. To proceed without further examination is to risk calamity. These warning lights tell us it is time to take stock of ourselves. Those are the same things we must watch for in our teams and families if we are to lead well. Just as we must guard against the erosion in our own performance that is caused by the fatigue, as leaders we must guard against it in our teams. It is odd how clearly we recognize it in a grouchy four old who needs a nap and we fail to see it in ourselves. We must invite those trustworthy confidantes around us to intervene on our behalf to suggest it is time to invest in some well-deserved rest.

Rest is more than a nap. Though it is that sometimes. It is more than a few mindless hours in front of the television. Although, that too, may be considered rest. (Especially when it is spent watching Modern Marvels or Swamp People!) For those who would lead, rest must result in renewal. Renewal is more than a vacation. It is the regular and deliberate feeding of our body, mind, and spirit with that which has the ability to restore us. It must be part of our day, our week, and our year if we are to avoid the angst and stress that prevails in our culture. Sometimes renewal is a quiet moment sipping a cup of coffee (caffeine-free?). Sometimes it is a raucous evening with friends and family filled with music, laughter, and perhaps a single-malt Scotch, glass of wine, and simple food. It may be the solitude of a long walk in a remote setting or along the beach. Other times it may be a reflection on spiritual writings in which one finds meaning. Whatever the case, we must be deliberate to find that which Steven Covey referred to as self rejuvenation or “sharpening the saw.” The absence of a deliberate strategy leaves one with hope only. And hope is no strategy.

Rest and renewal need not cost large sums of money. It does not require us to buy another thing that ends up owning us. But it does require us to examine ourselves. Perhaps that is why it is so difficult to find rest and renewal. We may be simply fear what we will see and the changes we must commit to making. Then again, this may be the best possible reason to engage in such reflection that becomes the foundation for change that reignites our creativity, energy and our effectiveness as leaders. Whatever the case, as always… Keep the Faith

Business - young man explaining about his profile to business ma

Reflections on Leadership: Sales Leadership and “Over-Managing”

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In today’s economic environment producing an above-average ROI is a considerable challenge for leaders, particularly sales leaders.  They are often presented with the responsibility of motivating an emotionally fatigued workforce with achieving goals that may seem utterly unreasonable.  They must challenge team members to higher levels of performance, oftentimes, with diminished resources and higher-priced products.  In such times companies both large and small may resort to enforcing an organizational process that requires leaders to “over” manage.  The thereby add to the fatigue of their teams while producing only nominally better results. Genuine leaders, especially sales leaders, must resist the temptation to make everything within the process of equal importance. They must walk the delicate balance of “keeping the main thing the main thing.” The customer, it seems, is the main thing.

Few businesses would contend they are not “customer-focused.” Managers and executives within most organizations make such statements as “the customer is always right” or “we wouldn’t be here without the customer.”  They then proceed to place obstacles between themselves and customers and prospects by making demands of their staff that have precious little to do with the customer.  Salespeople are asked to spend precious energy planning, reporting, meeting, and documenting all of which takes time away from engagement with a customer or prospect.  Technology planning is often built on what IT department budgets or design with little regard for how the technology enhances the client “buying experience.”  Accounting and financial depart create a web of bureaucracy designed to control costs but actually create obstacles for the salesperson to interact with the client. There is a place for reporting, meeting, budgeting, and cost management, and especially, risk management.  Yet they must all be done in the context of the customer experience.

Salespeople, if they truly are “salespeople”, want to sell.  They do not want to be accountants, report writers, or much of anything else.  They want to be in front of customers and prospects. So in leading salespeople, leaders must recognize there are generally only three things the salesperson can or should control.   They include:

  • The number of sales calls they make.
  • The things they do on the sales call.
  • The people or companies on whom they call.

Anything that is inconsistent with those three points detracts from their interaction with clients and prospects unless it equips them to:

  • Make more sales calls
  • Be better prepared when they are on the sales call.
  • Get better at getting in front of people or companies.

Sales leaders must avoid the dangers of being outside these constraints.  They must courageously challenge those within the organization who would make demands on the sales team that detracts from this focus.  Sales leadership must play its part in achieving organizational goals, cost management, risk management, and regulatory compliance.  But such matters must not be mistaken for sales leadership.  And the opportunity cost associated with every moment the sales force is engaged in such actions is a moment when someone else is calling on your organization’s customer.

Keep the faith.

I am impressed with your experience

Reflections on Leadership: What Not to Do

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Effective leadership, like good wine, often comes from surprising places. It shows up to produce a memorable vintage when the right combination of warm days, cool nights, and rain meet with optimum harvesting time. It seems almost haphazard, yet when it emerges, it produces positive memories and, properly consumed, makes one feel warm all over. Regrettably, the wrong combination results in either a sharp, acrid, or watery, tasteless sort of thing that is remembered, but only for the disappointment and discouragement it produced. When would-be leaders miss the mark, they can produce the same kind of experience for their clients, peers, community, and employees.

For a moment, and with respect to the April Fool’s Day publication of this discussion, let’s consider Leadership: What Not To Do.

Treat every moment as a teachable moment

Some leaders cannot resist the chance to demonstrate their wisdom and mastery of every conceivable subject. Somehow, they believe their job is to show the way, and their expertise, in every matter. Such hubris, likely bred by insecurity, stifles creativity and diminishes individuals. Such men and women rarely grow other leaders, unless it is to produce their own “star” pupil at whom they can point and say “See. Look what I did.” Like a parent whose child receives a “91” on a math exam, they seem to always be asking, “why not better?” breeding insecurity and frustration in the child. Effective leaders don’t treat every moment as a “teachable” moment.

Fail to acknowledge legitimate critiques

Leaders who fail to listen to the honest and legitimate critiques or their company, personal performance, or effectiveness will soon find themselves like the Emperor with No Clothes. He will wander “naked” into the fray of a challenge, project, or opportunity exposed to unknown risks. Acknowledging honest critiques of process, organizational, or performance shortcomings is not a weakness. Nor is it a sign of disloyalty. Like listening to the results from an annual physical, it allows for corrections that can improve organizational health and performance. If you would lead, learn to listen, acknowledge, and reward constructive candor.

Forget to say please and thank you regularly

Common human kindness and decency are often forgotten in today’s business climate. With high unemployment and the wearisome demands of industry and commerce, it is easy for leaders to take the attitude “Where else can they go to work?” and forget their team members lives are filled with as much uncertainty and stress as their own. Their team members, generally, want to do a good job. They do not need to be thanked for every little thing they do. Nor do they expect a syrupy sweet “please” at every turn. Yet in this day of limited compensation growth and upward mobility, a phone call, and email, or dropping by to say “thank you” and “good job” are powerful motivators. When leaders elaborate on specific performance, rather than just a general reflection, team members find themselves buoyed to continue the battle. Effective leaders make the effort to say please and thank you and in doing so create relationship capital with their teams.

Accept poor performance

Most members of your team know when they are falling short of a goal. The leader’s job is fairly simple. Not easy mind you, but simple. He or she must get the team member to do more or less of something or do it better or differently. The leader’s job is to diagnose the shortcoming properly, treating the cause, not the symptom. He or she must have the courage to challenge the team member to reach the goal without adding to the discouragement probably already present in the individual. Failing to act the says neither the goal, nor the person, really matters. It tells other team members that are achieving the goal their efforts really do not matter so much either. In the end, if coaching, challenging, cajoling, and disciplinary efforts don’t work, leaders must have the courage to part ways with the team member incapable of meeting the goal. Demonstrating that courage builds clarity of purpose in your team.

Take yourself too seriously

The puffed up leader unable to laugh at his own shortcomings or with others on his team is a miserable soul. He is a carrier of despair, and sometimes, “proverbially” heart attacks and ulcers. For his own sake, this leader must learn the difference between taking his responsibilities seriously and taking himself seriously. These leaders brighten a room just be leaving it! In its place, a little talk about the kids, vacation, sports, or other interest with team members keeps the team loose. Anyone who has ever participated in a competitive sport knows the value of staying loose. Effective leaders don’t take themselves too seriously.

On this April Fool’s day, give a little thought to “what not to do.” And, as always, keep the faith!