Anti-Recession Tactics
08 December 2009GM may very well be the prime example of a company who chose all the wrong anti-recession tactics. Instead of adapting to the new times and emphasizing smaller, more fuel efficient vehicles in customized colors — they stubbornly pursued their current course of dishing out truck after truck and SUV after SUV. They believed this was the true American spirit — bigger, more rugged and, undeniably, more expensive. The top executives failed to realize that the money market was tightening up for consumers and that this new environmentalism tidal wave was already moving the Toyota Prius and the Honda Civic to the head of the queue. Instead of following the pathway to bankruptcy and bail-outs, here are some smart moves during the recession.
The most important of all anti-recession tactics is to understand the new problems your customers face and offer them innovative solutions. The most successful businesses are ones that can save customers money, make their lives less stressful and offer more value. For instance, one company developed a fast-curing resin to maximize productivity for injection-molding machines; yet, when the recession happened and greater output was no longer needed, the company switched gears and developed a less expensive, slower-curing resin, which was ultimately profitable. “We can’t add meat to a burger anymore,” admits CKE marketing chief Brad Haley, who oversees the Hardee’s and Carl’s Jr franchises. When times are tough, executives need to be more creative. He adds, “Carl’s Jr. is promoting a guacamole bacon cheeseburger. Avocados are a less expensive topping.”
Another one of the conventional anti-recession tactics is to reset your priorities and remain flexible. Since the market itself is always changing, you’ll want to be in a position where you can roll with the punches. This is not to say you shouldn’t have market plans at all, but you should certainly have contingency plans and alternate directions to move in, should one of your marketing campaigns or product lines fail. If you’re in a crisis, you may have to cut back on meetings and travel, or you may have to hold off on moving to new markets, hiring more people and growing earnings. The recession requires a different mindset, according to Whole Foods Market CEO John Mackey. “We have to be more frugal, to think about every expense, every capital investment — because we won’t be bailed out by growth.”
Anti-recession tactics require you to resist temptation, which could be especially hard if you’re a fast-moving, impulsive, risk-taking sort of person. On a good day, you may have no qualms about acquiring some of your smaller competition that’s up for grabs, especially if the price is right. Yet, a recession may not be the best time to branch out and acquire new money-sucking extensions. Generally, companies are twice as likely to acquire businesses and merge when the economy is doing well, statistics show. However, there are business moguls like Warren Buffet who believe in being greedy when others are fearful. This could be a great time to absorb smaller companies that are full of fresh talent and skills, but be smart about all the calculated moves you make during an economic downturn.
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