How to Recession-proof your Business and position for Recovery (Part VI)

Managing your talent for Business Growth.

What do growing businesses do when others are releasing staff in panic?  I had introduced earlier a model for how to grow in the Recession in three major steps. The first step is to Refresh your vision, the next is to have a Strategy and Innovation and the final step is adapting your systems to grow in Recession.  This section begins to look at an important aspect of adapting your systems i.e. how to manage your people.

Invest in yourself

As a leader you will need a lot of re-education and learn new tricks. You are too key in the equation to be ignorant.  Invest therefore in knowledge, skills, seminars, exhibitions and market awareness and explore how others have made it.  If you can afford a good online training course to “sharpen your saw” do so.  Invest in a high quality internet line and spend 1 hr at least a day online equipping yourself (knowledge is amazingly cheap on the web) on the issues relevant to your business.

peopleFind exceptional talent

This is not the time to bring in your cousin looking for a job.  On the labour market will be very exceptional talent available for median compensation pay.  Find out the skill gaps in new areas to be ahead in the innovation required to grow. Indeed there is unemployment, but the people you need (who can make the difference) are rare to find – this is the time to search and find them. For example you will need great financial engineers, digital information experts, market makers…always bring in people who are smarter than you and who can challenge you and not just loyal “fools”.  What you need are ideas and help. Be humble to seek and enjoy help from others. Learn to celebrate and motivate others to help you.

Reengage with your team

The growing business will be reengaging with his people and creating a sense community instead of fear of job loss.  You can demand more loyalty and sacrifice at this time.  The growing businesses classify their people into performance categories and will offer voluntary release to the lowest tier of performers while they reconnect with their stars. Bonding and a sense of shared destiny is important so that all are aligned to help the business survive and grow.

Rewarding your people

The high performing businesses use variable pay mechanisms i.e. a portion of compensation is fixed and others dependent on corporate/personal performance.  To adjust for recession, the best strategy is to reduce the fixed pay across board and increase the variable performance pay.  This way, high performers retain or increase their salary while in a very bad period all will feel the brunt of reduced pay in a way that is perceived as fair. Be sure compensation mechanisms are fair and targets are as quantitative as possible.

When things begin to get really bad

There could be very low periods when releasing staff is inevitable.  Begin by offering voluntary unpaid vacations, flexible work (at home) at say half pay…use the opportunity to tighten your disciplinary systems.  If you must disengage, then do not encourage an extended process.  Do it fast as it could hurt morale. Always remember that as you let a valued staff go – it may be almost impossible to find, recruit and retain such talent when recovery returns.

The final post in the series will look at other functional systems.  For the full article you can click – DOWNLOAD ARTICLE.

More on God’s perspective on wealth can be found in my recently published book  Wealth out of Ashes

For related articles and free subscription to articles by the author please click icon below.

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Have a blessed day. Amen.

Bode Ososami

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How to Recession-proof your Business and position for Recovery (Part V)

High Growth Businesses have Flexible Business Structures.

Building highly flexible structures is one of the ways businesses can be successful in periods of dramatic downturn as well as being better positioned for recovery.

A few of the ways in which flexible business structures can be built include the following:

  1. Outsource non core areas of the business as much as possible
  2. Avoid commitments to long term costs/major items exploring other alternatives
  3. Use more of rental, lease structures and other more flexible approaches for assets instead of outright purchase.

The key is to have a nimble structure and not weighed down with assets that suddenly become unproductive.  The successful business have learnt to employ more of flexible contractual terms that do not tie them into rigid long-term positions.  This maximises their abilities to move in and out of different cost structures for different markets and positioning.

Outsourcing is becoming a favourite approach, but must be well managed to ensure quality of customer service is not sacrificed for lowering costs and flexibility.  In addition, areas where competitive advantage can be built and of core business expertise are typically not outsourced.  Almost everything else can be outsourced. The outsourcing service provider is able to deliver improved costs andflexibility quality of service as a result of a larger scale of operation and economies of scale as well as the fact that the outsourced service is the core business of the provider, thus encouraging more investment in service quality and better value.  Flexibility is also built through flatter, team based organisation structures with wider spans of control made manageable by information systems and much fewer management levels. Employees are compensated more through variable pay structures more by performance and skills rather than by level.

The high growth businesses have learnt how to build structures that allow them to reengineer their cost mix as required at short notice.  Build options rather than fixed positions.  The goal is to aim to make every single possible cost variable.  High growth businesses are not in the real estate business to impress the market.  They do not need to own assets to get the value they need recognising that ownership tends to confer inflexibility and fixed capacity that could be costly in a downturn or when a sudden change in the market requires less capacity.  In the old era, the maxim was to buy, own and show off your building and computers as evidence of strength.  The new world will be more dynamic implying that nimbleness to shift seamlessly and adjust cost structures will be valued more than a showroom display of assets that drain scarce capital.

The next post will examine how growing businesses manage people.  For the full article you can click – DOWNLOAD ARTICLE.

More on God’s perspective on wealth can be found in my recently published book  Wealth out of Ashes

For related articles and free subscription to articles by the author please click icon below.

As Featured On EzineArticles

Have a blessed day.  Amen.

Bode Ososami

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