How to Survive a 20 Percent Drop in Sales: Time to Reset?
I met with an owner of a large multichannel B-to-B direct marketing company this week, and we discussed a common topic these days: How does one survive a 20 percent drop in sales? It's becoming clear to me and many others in the industry that the squeezes many companies are facing today are unprecedented and require significant changes, not just “tinkering.”
Not all companies are similarly affected. But if yours is, you must be asking yourself, “Is it time to press the reset button?” When I think in these terms, I put everything on the table for discussion. There are no sacred cows. Here are some questions that you might consider asking yourself:
* What's the core strength of your business and people, that only you can do? Product development? Merchandising? Customer service?
* What functions can be done by others better, cheaper and/or faster? Areas to look at include systems, warehousing, HR, circulation and Web marketing.
* What should your new organizational structure look like? How many employees do you really need to perform critical tasks? Many new “virtual” business models are trading millions of dollars with a handful of people.
* Who should your trusted business advisers/partners/suppliers be in each area of your business? If you have vendors who aren't intimate, confidential partners with your business, you're missing out.
* Who's going to lead/drive the business five years from today? Organizational design, effectiveness and human capital development are the keys to change and future growth.
It's often said that “necessity is the mother of invention” and “when the going gets tough, the tough get going.” It's good to remember both those inspirations in these trying times. Reset and reborn businesses are good things, not to be feared but embraced. Ultimately, it'll make you stronger and more prosperous moving forward.