Page 20 - Growth and Contingency Planning Toolkit

GROWTH & CONTINGENCY PLANNING
Preparing For An Unpredictable Economy
ECONOMY 4 Steps to
take NOW!
Every day brings a confusing mix of news about the economy. It can be tough to gauge what is to
come. Just when things look like they might calm down enough for everyone to get back to busi-
ness, a trade war escalates, economists decide to lower their forecasts for future growth, or even
something as severe as a health and economic crisis hits.
But even if we aren’t looking at a recession tomorrow (and more importantly if we are), indicators
like this serve as a kind of alarm—a red alert to take action. Whether your business is booming,
or business has slowed and employees have time on their hands, you should be putting plans in
place so that you’ll be able to handle the inevitable downturns to come. That’s where playing
the Great Game of Business can help.
®
Here are four tips on how to prepare your organization to handle future turmoil:
1. Cross-train Volunteers for Key Positions
Nothing throws a business off course like having a valuable employee leave—especially if you ha-
ven’t planned ahead by putting succession plans in place. Great Game gives you the opportunity
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to build leaders throughout your business. Now is the time to encourage associates to step out
of their comfort zones and learn new skills. Not only will that help make your business stronger,
it’s something your people will appreciate and thank you for down the road.
2. Get Cash in the Door
When times are good, it’s easy to focus on sales and production and forget about collecting the
money. Extended account receivables can be one of the first signs of a looming downturn.
If your receivables aren’t where they should be, set up a MiniGame™ to get your associates fo-
cused on bringing in more cash and going after the accounts that are overdue. Use your Hud-
dles and scoreboards to help monitor daily cash flow and average receivable days.
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GROWTH & CONTINGENCY PLANNING
3. Cut Costs Collaboratively
You don’t have to wait for a downturn to begin finding ways to cut costs. Get started by using a
bottom-up rather than a top-down approach. Engage your associates in a dialog and encourage
them to speak up about ways the company can cut costs while driving revenues forward. Give
your people a line-item to own on your financial scoreboard and ask them to track, measure and
forecast the number. When you do that, you might even boost engagement while preparing the
business to deal with future turmoil.
4. Establish Contingency Plans
If you haven't done this already, now is the time to begin asking the ‘what ifs’. What if we see
a significant decline in our revenue? What if some key customers begin to struggle? For more than
three decades and three recessions, SRC has run its company like disaster could strike any
moment. Maybe it’s a healthy paranoia carried over from our beginnings in the 1980s. Today, our
key planning practices we use to ensure both our short and long-term success is a proactive
practice are called growth and contingency planning.
We define contingencies as products or services that have been thoroughly researched, devel-
oped and cost-justified. They may also be activated on short notice. In other words, these are
your back-up plans when something unexpected happens—which it will! If you lack a reliable Plan
B, it’s time to get your team together and conduct some High-Involvement Planning™ to determine
what’s possible. What growth strategies can add the most value now and during a downturn?
What products or services will best perform in a poor economy? How can you extend your cus-
tomer base? Can you set up more cross-marketing relationships?
Begin by setting up a scoreboard of your most promising contingencies and establish deadlines
for completing the necessary steps to activate each contingency. How much time should you de-
vote to research or conducting a thorough cost-benefit analysis? Here’s a simple tool to conduct
a peer review of your growth and contingency ideas.
This is a great first step to create buy-in and commitment from your team. What’s truly amazing is
that when you are forced to think about the ‘what ifs’ at this level, contingency planning becomes
a tremendous engine for innovation and new ideas that can power your company’s growth in
good economic times, as well as bad.
The point is that you shouldn’t wait to take a hard look at how you can prepare your business
for a downturn. The best time to prepare is now when you can most effectively avoid going a
direction you don’t want to end up. How are you preparing for the next downturn?
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