Turbulent Market Strategy

Managing through a period of economic fluctuation presents a special set of problems for senior business executives. In the past, companies reacted to market downturns with layoffs, hoarding cash and delaying innovation and the introduction of new products. Three sure bets for a slow recovery.

Management faces three challenges during and immediately after a recession :

1. Streamline the business without unnecessary cutting. Trim non-critical costs and evaluate marginal businesses and relationships with a view to eliminating the weakest. Broad cost cutting, as an end in itself, is at best a short- term response that can result in a hollowed out company. Instead, smart leaders assess the return on each dollar spent and eliminate investments in assets with the least potential. Maintaining a healthy return on investment requires constant innovation, not wholesale cost cutting.

2. Protect and invest in the most valuable employees , the most productive customer relationships and industry innovations.

3. Continue to provide leadership and vision and make sure that every employee throughout the business has the tools to implement that vision.

All three of these challenges are best met by investing in the information capital of the company. We cant get off the market roller coaster, but we can smooth the ride by planning and investing in the future, even when times are tough.