Despite all the head scratching, setbacks and uncertainty can be powerful influencers for decision-making. For some, like Citigroup and Morgan Stanley, they're signals to hunker down and wait out the storm. For others, like JP Morgan and Barclays, they're green lights for snatching opportunities. For most, they provoke some degree of fear and anxiety. What we do with them is up to us.
Current economic realities may demand that we turn our attention to short-term survival. But if we aren't careful, we can find ourselves so risk averse we lose sight of opportunities to fill the holes created by less fortunate competitors. Our preoccupations might also cause us to miss glaring opportunities to prepare for the future or resolve nagging internal problems that, once resolved, could make a real difference to customers or the bottom line. From the business unit to the work group, there are always internal opportunities to improve the business that tie directly to marketplace demands.
Some organizations are taking advantage of the economic slowdown by using the extra time to build workforce capabilities. Although I've mentioned it before, it bears repeating that employees at Toyota are cross training and expanding worker skills, activities that were difficult to squeeze into previously busy production schedules. Instead of cost cutting and layoffs, Toyota is using the downturn as an opportunity to position itself for improved cycle times, quality and profitability when the market improves.
In another large manufacturer facing cash flow challenges, supply chain and operations staffs have used the slowdown as an opportunity to team with customers in assessing contracting practices. Among other things, they discovered they could better support immediate customer needs and increase cash receipts by breaking up traditionally bulk purchases into smaller deliveries akin to a just-in-time system -- all without increasing costs to the company or its customers.
Every organization has to manage concurrently the demands of profitability, quality, cycle time, and customer satisfaction in order to survive in the long term. Now is a great time to direct resources to internal matters whether it's to build capacity for the future or find creative ways to immediately improve the organization's response to these demands.
Work groups can explore what goes wrong in the work process and create preventative actions. Staff groups can consult with operations to reduce errors or delays. Departments can collaborate on ways to improve hand-offs and reduce miscommunications. The opportunities are endless.
The next several Management In Real Life articles will discuss ways to focus internally during these economically challenging times to prepare for the future, or immediately and directly improve marketplace capabilities. This year doesn't have to be one of total uncertainty; it can also be a year of great opportunity.
Trying it on for fit: This exercise is as applicable for a department or work group as for a business unit. Assess where you excel and struggle in profitability, quality, cycle time, and customer satisfaction. Evaluate your activities relative to each demand and identify those that have the least positive impact. Expand your group of analysts to include multiple viewpoints in and outside of the business unit or work group and collaboratively generate actions for improving your response to those demands taking care to not sacrifice effectiveness in one to improve in another.
Send an email and let me know what you learn from your experiences. I would love to hear from you!