It’s easy to fall into business-as-usual mode when the economy is strong. Pursue the low-hanging fruit and the path to least resistance, and something good will surely follow. It’s a complacency issue we often see as management consultants.
Those boom-time strategies didn’t work during the recession. Customers held their wallets tight and only spent money on critical business imperatives. They got more involved in negotiating contracts, and they scrutinized everything.
Despite it all, the recession taught us some valuable lessons:
- Strengthen relations with good customers.
- Stay focused on the core business.
- Worry about today, but plan for the future.
A chemical company client was particularly good at straddling their business challenges while keeping an eye on what was possible for the future. They used the downtime as an opportunity to strengthen relationships with customers. Recognizing times were tough, they asked key customers to partner with them. The client offered flexible fee schedules, arranged multi-year contracts with long-term guarantees, and provided discounts to those who agreed to only buy chemicals from them. The “let’s take care of each other” approach worked well, and the client has formed strong bonds with its customers as a result.
The recession also was a good time for the chemical company to refocus its core business. Pre-recession there were talks of scaling back its 150 chemical products to about 120 products. It never happened. The decision to trim the fat was easier once the recession hit.
Many enterprises put off big decisions because the status quo is easier. Economic conditions have improved significantly, but we shouldn’t forget the lessons learned during the recession. Applying those principles can make enterprises stronger regardless of the economy. Have you re-visited your core business values lately? It might be time to shake things up.
Is your organization an innovation profit machine? Learn how to rethink the business model with our innovation video.