Survival: The Name of the New Economic Game
People
rarely have a neutral reaction to Survivor, the reality based TV show.
Love it or hate it, with 51.7 million viewers for the final episode of
its first season, it's impossible to ignore it. Given our turbulent
economic climate, Survivor is a powerful metaphor for what's going on in
the marketplace. We'll look at some of the parallels between Survivor
and the real world. Then, we'll focus on survival strategies to help
your company get through the rapid fluctuations of our turbulent
economic times.
If your company has had a successful year of
growth and profitability, you may be tempted to point your browser
elsewhere. If you read on, you'll find that the survival strategies
we're about to discuss are even more effective if you use them as
preventative measures before your company runs into difficulty.
The Stakes
It's
tempting to laugh and shake your head when you watch Survivor but the
parallels to the real world are way too close for comfort. Just like the
current economic landscape, the terrain is rugged and the competition
is fierce. Some people will do anything to make it. We've all met Deb,
the highly productive and competent employee who rubs people the wrong
way and gets fired for her efforts. We've also worked with Gerri, the
attractive young woman, who will use any ploy, sexual or otherwise, to
get ahead. Alicia, the competent and assertive African-American employee
who gets canned because people find her intimidating.
What would the
corporate world be without the inevitable employees who smile in the
face of co-workers and then cut them up behind their backs? Worst of
all, on Survivor, the posturing, rumours, gossip, and backbiting
intensify as times get tougher and the competition stiffer.
What's
sad is that all of these ploys, plots and schemes sap creative energy,
kill morale, and undermine the effectiveness of the team at the very
time when everyone should be pulling together. When the stakes are high
and you can't afford to lose, working as a team becomes a critical
survival strategy.
On Survivor, make too many wrong moves and you
face starvation, the cold or injury. In the real world, it's downsizing,
layoffs and bankruptcy. As Vancouver-based 360networks Inc. discovered,
it doesn't take much. Just one too many clients deciding not to go
ahead with a project or postponing a decision to use your services until
next quarter and it can be game over.
Changing Times ... Changing Rules
In
the real world, just like on Survivor, no one is immune. Anyone can get
"voted off" the island. For example, up until recently, the wireless
communications industry, has been regarded as virtually recession proof.
However, it has not been without its casualties. 360networks Inc. was
worth $25 billion when its stock was at its peak. Its stock tumbled to
the status of penny stock on the Nasdaq when it was not successful in
obtaining a lucrative US$350 billion contract with Teleglobe Inc.
Telesystems
International, headed by Charles Sirois, considered to be genius with a
string of success to his credit, has lost 90% of its value. The telco
sector has been particularly hard hit. In the Toronto area, two
companies that were headed by executives with stellar track records and
for whom I have a great deal of respect, have gone out of business.
The
list goes on: PSINet Inc., an internet pioneer, has filed for
bankruptcy protection in the US; Sony, Lucent, HP and 7.24 Solutions are
among the companies that have announced layoffs. A year ago who would
have figured that such high tech giants as Cisco Systems and Nortel
would have been tottering? Who could have predicted the dot.com
meltdown? Small businesses have been particularly hard hit. I personally
know of two consulting firms that have been struggling after over a
decade of success.
Survival is the name of the game in this
economy. It's tough out there so it's not hard to understand why a show
that enacts these dynamics metaphorically would appeal to such a large
audience.
What's a Company to Do?
So what's the
answer? Truth is there are no magic answers. Just some strategies to
consider. To survive this economic crunch requires a change in mindset.
It involves recognizing that what worked last year may not be the right
strategy for today. It will take the courage to try something different,
a lot of support from suppliers, partners, and employees and, lots of
prayer.
Retreat
Yes retreat. It's impossible to come
up with innovative solutions when you're charging around putting out the
latest fire. It doesn't have to involve going to a resort for a few
days. Save that for the party to celebrate your survival. If you really
feel you must get away, it's best to trim it down to one day at a
location within 30 minutes driving distance from your office. Skip the
golf and save by not forking out cash for hotel rooms.
When the market
is shifting so quickly, a weekly 2 -3 hour session where you zero in on a
key area is probably a better plan anyway. Kick it off with a day
off-site if you like but it's important for your senior management team
need to get together to really analyze your strategy in 4 key areas:
* recruitment and deployment of talent
* customer service
* market intelligence
* talent retention
If you have the skills to facilitate these
sessions yourself, then go for it. Otherwise, take one of your senior
facilitators out of the training room for a while, invest in facilitator
training or hire a professional. It isn't always best to go with the
big guys. Remember, when you're forking out $3500 a day to a large firm,
a huge chunk of that is overhead. Are they charging you senior
consulting rates and then sending you a rookie who they're paying $600 a
day? Then, you're helping them solve their survival challenges, not
yours. A consultant from a smaller firm who has regular and first hand
exposure to what it takes to win the survival game is more likely to
bring you the expertise you need at this time.
I can hear you
asking "are you for real?" Absolutely! If you can't free up at least 3
hours a week to focus on strategic issues because the latest technical
glitch, customer or employee complaint keeps landing on your desk, it's a
huge red flag that you can't afford to ignore. You need a super strong
team at the director and management level that's competent enough to
handle the latest crisis and keep you informed. If you don't have that,
then you've just identified your first area of focus for your survival
strategy sessions.
Talent Recruitment is not an HR Issue
During
an economic downturn, companies often overlook the importance of a
solid talent recruitment strategy. This is not the time to become
complacent. An effective team will be your important weapon in your
fight for survival.
As a result of the downsizing that's going on,
a growing pool of qualified, talented people is available on the
market. We haven't seen this in years. Organizations have the
opportunity to thoroughly screen and assess candidates to ensure
appropriate skill level and corporate culture fit. Pinpoint the key
competencies that you require in your management team. Clearly define
your requirements. Incorporate behaviour based interviews, rigorous
reference checks and work samples into your talent recruitment strategy.
Apply
the same diligence to your promotional decisions. This is not the time
to let the old boys' network come into play. You need top talent who
will produce results and help you through these uncertain times.
Sometimes this means looking at people who don't quite fit the mold in
terms of sex, age and race.
Remember, you're running a business and the
name of the game is survival. If you want to surround yourself with
people who can play golf and laugh at your jokes, join a country club.
Employ or Outsource
In
an uncertain economic climate, the decision to expand your team should
be weighed carefully. Is there any point in dramatically increasing your
employee base to respond to new projects? An unexpected change in the
financial stability of even a few of your key clients can mean a bunch
of layoffs a few months from now.
Hefty payouts for benefits, severance
and vacation pay can substantially trim your bottom line. There is a
pool of freelance and contract talent available to handle challenges at
all levels of the organization. Ask yourself:
* Does this project really have to be handled by an employee?
* Is outsourcing a viable option?
* Would we gain more flexibility by responding to this increase in business by using freelancers or contract workers?
*
Can tele-commuting be used as an alternative to increasing overhead in
the form of office space, furniture, and computer equipment?
Ask
your HR team to provide you with an analysis to compare the full cost of
filling a position with an employee vs a contractor. Factor in the
costs if there is a need to lay the employee off. The results may
surprise you.
Be Compulsive About Customer Service
When
times are tough, you can't afford to lose even one customer to the
competition. If one customer has a negative experience with a member of
your team, that customer will tell dozens of people about it. This can
gradually erode your customer base and trim your profits. This is not
the time to cut back on training your front line employees. You need to
ensure that they have all of the training, tools, coaching and support
that they require to deliver top notch service to your customers. That
is what will give you the competitive edge in this market.
Remember
that customers come in all shapes, sizes and colours. You need to make
it clear to all members of your team that their biases and hang-ups
belong at the door. Every customer and every employee deserves to be
treated with dignity and respect.
Talent Retention
In
this turbulent economic climate, there is a misconception among some
senior management teams that they no longer need to worry about talent
retention. Even and especially if you have had to consider such drastic
action such as layoffs, taking proactive steps to maintain the loyalty
of your best talent is critical. If you treat some employees harshly
during downsizing, then your most valued employees will wonder if
they're next.
Their tendency will be to jump ship. Frank discussions
with your team about the direction of the company, it's challenges, and
prospects are important. It's best if employees hear the latest news,
good, bad or indifferent, from you. Otherwise, the rumour mill will work
overtime and undermine your efforts. Companies also need to shape and
mould an employee friendly culture so that your best people will remain
loyal to you until things turn around. During the last recession,
companies that took advantage of the situation and made unreasonable
demands of their team, sowed the seed of talent recruitment and
retention challenges that plagued them for years.
Market Intelligence
When
there is a downturn, marketing is often one of the first areas to be
cut. Remember, Eaton's, a Canadian retail giant, went out of business
because its senior management team lost touch with their customers and
marketplace trends. To survive this economic crisis, you need regular
and accurate data about your customers and your market.
What marketing strategies have been most effective in bringing your new business?
* Focus on those areas,
* Save money by eliminating efforts that haven't been paying off.
What are your competitors doing?
One
of the contributing factors to the problems in the telco industry is
that too many companies have been focusing on the same narrow market
niche creating an over supply in the market.
The real estate market is setting itself up for a similar problem by building too many luxury condos for the upscale market.
What new market niches can you target?
*
The ethnic market is growing dramatically in North America but you
would never know it when you look at most advertising campaigns.
*
The internet has literally opened up a world of opportunities, even for
small businesses. If your traditional markets, are stagnating, look to
areas of the world where there is growth and an increasing demand for
your products and services.
Re-think Your Offer
Pinpoint your core areas of expertise and do some brainstorming to identify other areas in which you can apply it.
Bill
Margeson, CEO of Markham based, CBL Data Recovery Technologies Inc.
used to re-furbish and repair hard drives. A drop in the price of hard
drives resulted in reduced demand for his services. Bill applied his
expertise to data retrieval. In 2000, the company generated a profit of
over $1,227,000 and was ranked by Profit Magazine as the 89th fastest
growing company in Canada.
Harness the Creative Drive of Your People
Earlier
I mentioned that there are no magic answers. However, frontline
employees who interact directly with your customers are in an ideal
position to give you some clues. By involving your people in regular
brainstorming and problem solving sessions, you can collect a lot of
valuable information and ideas to help you resolve some of the issues
you're facing. For example, your frontline employees should be able to
help you generate strategies to streamline your processes and reduce
your costs. This could significantly boost your profit margin. Concord
Idea Corp. ( number 42 on the Profit 100 ranking ) is able to produce
memory at 33% of the cost of its competitors. Its 2000 profits were in
excess of $800,000. It would be a shame to overlook this virtual gold
mine within your organization.
The Bottom Line
Survival involves:
* getting a clear picture of where you want to go,
* building a management team that shares your vision and communicates it clearly,
* getting your team to pull in the same direction and generate valuable ideas and solutions.
You'll reap the rewards in the form of:
* high morale,
* reduced turnover,
* a committed team focused on your goals,
* an improved bottom line.
When the economy recovers, we hope that some of these strategies will help your company be a survivor.
The Rules of Survivor
The
goal of the game is to survive. The last player to remain on the island
at the end of the game wins $1,000,000. The game begins when 2 teams of
strangers are left in a rough terrain. There is no opportunity for
planning before the game begins. Each team has minutes to gather
whatever supplies they can grab and trek across rugged terrain in search
of their campsite. Exhausted and hungry, they must work together to
construct some make shift dwellings, get a fire going (without matches)
and figure out what they're going to eat in the middle of nowhere. The
inevitable jockeying for position and politicking begins almost
immediately.
© 2005 - 2008 Executive Oasis International - All Rights Reserved
Anne Thornley-Brown is the President of Executive Oasis
International, a Toronto based firm offering executive retreats, team
building and incentive travel. Destinations include Canada, Jamaica, the
Middle East (Dubai, Oman), and Asia (Singapore, Malaysia). Team
building sessions include powerful Survivor style simulations including
Marooned on Horseback in Jamaica's Cockpit Country, Desert Survival in
Dubai, and Mountain Team Building featuring abseiling in Oman. In
Canada, Wilderness Survival and Arctic Survival (with dog sledding and
snowshoeing) are available.
Survivor Team Building
Incentive Travel
