ARE YOU READY FOR THE OPPORTUNITIES?

There is an article in the Wall Street Journal We've Been Here Before How companies survived earlier economic storms . The article covers specific examples of what certain companies did throughout history during very difficult economic times to not only survive but thrive. It is interesting and gives good examples that you can adapt for your business.

Certainly, I agree that how companies handle this crisis will create winners and losers. The concluding comment in the article is particularly interesting. It states that companies should be looking for the opportunities that lie within this economic crisis and be entrepreneurial.

What the article does not address is what those companies did before the crisis. We have a story in our book Trust Is Like A Bank Account. The moral of the story is that you have to make deposits in the good times, if you want to make withdrawals during tough times.

Let me use two of the article examples. The Heinz Co. was able to get employees to come back to work and wait for their wages until receivables were collected. This would require great trust that had to be built before the crisis. The other example was IBM that poured tons of money into R&D when everyone else was cutting R&D. In addition to conviction, this took the financial stability to afford that cash outlay when revenues were declining rapidly.

So let's look at the economic crisis of today. The companies that have strong balance sheets will be able to fair better then the over leveraged companies. They will also be able to be opportunistic and purchase assets at lower prices or make other investments as the economy bottoms out and begins to rebound. Even if you have a great idea on how to capitalize on the opportunities, you need the ability to pay for it.

The companies that have gained trust and good reputations will also be able to seize opportunities. Everyone is skeptical now. If you need someone to trust you it will only be because you invested in gaining their trust before the crisis.

Organizational culture is also something that needed to be built in good times. Does your company have the leadership talent and style to be opportunistic? If they were not good leaders before the crisis, they will not be able to push through their fear and grab hold of it.

Do you have a strong balance sheet, trust and the leadership culture and talent?
If not, start building now for the next crisis which will come and will be a different type of crisis.
If so, congratulations! Although the market is very tough right now, you will survive and thrive!
Until Next Time,
Gail