“Wait and See” Is Not A Plan
The comment I’m hearing most frequently from business owners I talk to is that they don’t know where the economy is going. Some of that uncertainty comes from the impending change in the federal government and some of it comes from the seeming impotence of the bail-out efforts over the past 6 months.
After all, we’ve been hearing since September that the economy demanded huge capital infusions from the federal government. Yet despite the $350 billion injected through the TARP program, the billions committed to bailing out companies including AIG, Fanny Mae and Freddie Mac, the auto industry, Bear Stearns and others, economists and business leaders don’t see the end of the current recession. If anything, they seem to be getting more concerned, not less.
The other “change” that we’ve been told to hang our hat on is the inauguration of the Obama administration. While we’re told to expect hope, change and transparency, the dearth of specific information coming from the transition team is creating more uncertainty, not less.
So what is a business owner to do? How do you make plans for the future when you can’t get some degree of certainty about the field on which your business will be playing? The typical business owner seems to be concluding that the best plan right now is to circle the wagons, make no plans, and react to the evening news.
Nothing could be further from the truth. I say the “typical business owner” is circling the wagons, and that appears to be true. The atypical business owner is planning for success. They know that operating without a plan is the death knell of most businesses large and small. Without a plan, it is impossible to make decisions, it is impossible to know whether you’re moving forward or falling behind, and without a plan, you can’t adequately react to the changes the economy throws at you.
If you think about it, in terms of planning, the current economy is no different than a booming economy. Business owners need to look at the environment – the economy, competitors, internal strengths and weaknesses – and make assumptions about what the future holds. Based on those assumptions, a plan is developed to take advantage of what the future offers. For the past many years, we’ve had the advantage of a growing economy so our planning was, more often than not, built around assumptions of growth and prosperity.
What has changed is that growth and prosperity are out the window right now. Your planning assumptions must be built on a weak economy that may be mired in contraction and stagnation for a while. Planning is not done only in good times. In fact, planning is far more vital now than in an expanding economy. When times are good, you’re likely to succeed in spite of yourself. But when times are tough, the quality of your plan will be the difference between survival and destruction.
For those of you who have developed a well thought out, written plan for your business for this year, congratulations. You can move forward with the confidence of knowing that even if the economy continues to be challenging, you’ve already decided how you will best adjust your operations to survive.
For the rest of you, get to work and develop a detailed plan of action. Contact your business advisor and develop the assumptions you believe best represent the climate in which you’ll be operating. Then make a plan, develop your metrics to measure your performance against your plan, and modify your assumptions if they prove to be erroneous.
If you don’t have a business advisor you are confident can help, drop me a line.
January 15th, 2009 at 10:16 pm
I agree that all business needs a plan. Business always need to plan where the plight of this new economy has everyone scrambling.
What kind of plan? The typical plan includes operations, marketing, supply chain, etc, etc.
Yes, those are easy ones. As I tell my clients. Turn off the T.V. news and look out the window of your office to get a bead on what’s happening in your region of the country.
As it has been my experience, there are cities and towns that have not been affected by this new economy. Believe it or not, cities like Houston, Texas, Alexandria Louisianna and Tuscaloosa, Alabama.
Business owners need to plan, but that plan must be relative to your business and your region and you move outward from than point.
Let’s not forget our employees. Talk to them, listen to them. Some of my best consulting projects come from incorporating great ideas and operational efficiencies from client employees.
Suggestions boxes work great within organizations as well as weekly suggestion meetings where the best suggestion earns the opportunity to spearhead an internal project.
It is human nature that we all look to be accepted in life, to include work. Business owners should recognize that our employees don’t want to lose their jobs just as much as we don’t want to announce lay-offs.
Listening to our employees and giving them the opporunity to participate in the success of our business is huge.
Good Luck,
Allectus/Luis Luarca
January 16th, 2009 at 9:11 am
I really like your idea about enlisting the “suggester” to spearhead the effort to implement the suggestion. It certainly takes the idea of employee involvement to another level.
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