Three Tips for Thriving in a Miserable Economy
Commenting on economic downturns, Warren Buffett once observed: “Only when the tide goes out do you discover who’s been swimming naked.” Well, the water’s receding, and unless your company is at the absolute top of its industry, you’re probably more than a little worried about your level of “exposure.” Here are three steps that will dramatically increase your chances of surviving—and even thriving—in our dismal economy:
Survival Strategy #1: Cut the waste. (And I’m not talking about reusing paper clips!) The one function in a company that is more wasteful than any other is new product development, where the average company squanders more than half its R&D resources on new product belly flops.
Most companies don’t have enough R&D people to drive existing projects at a rapid pace. Just kill the dumb projects that are destined to be duds—really kill them; don’t just wound them—and set these people free to actually do some good for your company. And, instead of huddling with colleagues around a conference room table to decide what the project portfolio should look like, ask customers what they want you to work on.
For example, ask customers what outcomes they want—which is much different from showing them your potential solutions. Then, have them rate the importance and current satisfaction levels for each outcome. Do this with several customers in a market and get the market satisfaction gap for each outcome. A high gap means customers are dissatisfied with an important outcome... and are eager for you to fix this.
Company’s are usually surprised to learn what customers really want. But, better to be surprised before development work begins, than after the product is launched.
Survival Strategy #2: Harvest the “best practices” of other companies. It’s easier than you think. Learning what works for other organizations immediately increases your effectiveness in key customer-facing activities, such as pricing, sales management and marketing communications. It’s essential to find, adapt and drive these best practices into your business—fast.