Here are some observations and recommendations based on research conducted by those that experienced the last downturn – with the objective of providing insights and suggestions that you can apply and learn from.
Invest in Systems and Processes to Improve Operational Flexibility
When first entering a period of economic and market uncertainty, recognize that initial thoughts and strategies will likely be changed several times. As new information becomes apparent, new business opportunities and market directions will make sense. As time passes, these directions will likely need to be adjusted once again. If you can execute new strategic directions faster than your competition, you will be in a far superior competitive position, so able to better capitalize on the new market direction.
From an IT perspective, research findings confirm the importance of technology investment, via an increasing focus on investing in modernization roadmaps and architectures that support greater reliance on the internal and external use of APIs and microservices. The trimming of legacy IT systems – and the resulting maintenance and support costs necessary to keep these systems running – is another important way to stay lean and extract the greatest value from your IT budgets during economic downtimes.
Don’t Stop Existing Digital Transformation Initiatives
It is important to continue investments in long-term strategies, such as digital or industrial transformation programs. These initiatives can take years to implement and refine.
Read more on this topic in this article: What Manufacturers Can Learn from the Digital Transformation of Other Industries
The companies that become leaders in their space find a way to continue this investment in expanding and contracting markets. This means having the resources available to continue forward with these programs while also having a way to show progress and validate that this strategic direction is the right choice.
It is well documented that the organizations that successfully navigate through downturns become the next leaders once markets rebound. Investing in systems and processes that streamline operations, improve margins, and enable greater operational agility will ultimately become tomorrow’s leaders.
Stay Laser Focused on Your Strongest Product and Service Offerings
From a product offering perspective, your strategy differs based on if you are running a smaller business or a large enterprise organization. Big companies that already have a wide-spanning solution portfolio serving many markets and geographic regions will allocate resources from one focus to another to best navigate a downturn. Smaller companies, however, need to take a different perspective. Instead of considering investment into new markets or regions, their focus must be concentrated on how best to serve specific markets.
By “doubling down” on the markets you best service, the message you will tell is that this market is your most important. You aren’t going anywhere and will continue to invest time, resources and capital into maintaining your leadership position in that market.
Alternatively, if the market sees you trying to invest in new areas, questions will emerge as to how that is possible? Where will the investment funds, resources and time come from? Does that mean you are abandoning your core markets? These types of questions will be asked by your customers and pointed out by your competition. None of these scenarios are the type of narrative you want to be told about your decision on how to best navigate a way forward through a down market.
While I have no way of knowing the future, one thing is certain. The disruptions we have all experienced over the past few weeks have been sudden and severe. We will get through this, which will then lead to a period of rebuilding and getting back to a “new” normal. In the interim, I find it helpful to stay focused on the original vision that was part of founding our company. That vision is still intact. What has changed is how to accomplish that vision – and how to do so in new, compelling ways that our customers continue to find and recognize value from investing in our solutions. The more things change, the more the focus on delivering bottom-line business value stays the same.
