It’s no secret that business is turbulent. There are influences on your business that can be controlled, but there are certainly external factors at play as well. Often, many use short-term thinking to find solutions that can address the immediate challenges, but then are unable to adapt these for the long run.
There is no silver bullet for how a business can respond, otherwise everyone would have done it by now, but a change in perspective can be a powerful ally when times seem tough.
When the economic outlook may not be all sunny skies, we can learn from experience during past down times and consider viable courses of action.
Whether it’s team management, cost cutting or supply chain, there are short term approaches, and there are long term strategies. Which one will you choose?
Team Management
In the short term
Limiting travel and implementing work from home structures have been popular policies to combat both costs and ensuring the health and wellness of teams. Technology for conducting business remotely, such as video calls, workplace chat and collaborative production has been continuously improving over the years, and there is likely a solution that fits the needs of your business.
In the long term
Working from home has been shown to increase productivity and reduce employee attrition, as well as decrease the amount of sick days taken. While working from home full-time can make employees feel socially isolated, balancing the time spent in and out of office may create significant gains for your business. It may be worth exploring if a certain amount of working from home days is right for your team.
Photo by Luke Peters on Unsplash
Cost Cutting
In the short term
Evaluate why you are incurring certain costs. Do you have software subscriptions that are no longer useful, clients that don’t need same-day delivery? HBR suggests gaining control of miscellaneous spending as a way to address the need to cut costs when it is of utmost importance. Reviewing past cost cutting ideas would also be timely at this juncture — are you storing your good ideas away for a rainy day?
In the long term
Being able to segment strategic investments and non-strategic costs is essential in order to decide what expenditures can stay and which need to go. Strategic investments are not only necessary to sustain the businesses’ operations, but what makes the company go. Training that improves results, sales teams that sell, and infrastructure that ensures delivery on promises made, for example, are all critical.
Supply Chain
In the short term
Negotiation with vendors is a tactic that many use to cut costs, but be aware of potential consequences in the long run. Whether it’s a concession on payment terms or holding firm to a price paid policy, many companies have employed similar strategies to try and mitigate the impact a supply chain has on their business.
In the long term
Transparency and coordination between suppliers and purchasers is paramount for success. You need the best possible price, but you also need your suppliers to be there for you tomorrow. Maintaining a healthy supplier relationship can improve proactiveness in managing costs and flows. This can reduce reliance on one-off, isolated responses. Bringing other teams in is also helpful; integrating sales and operations teams, for instance, increases visibility and promotes alignment in corporate planning.
Photo by Christina @ wocintechchat.com on Unsplash
Short term solutions can help mitigate current conditions, but long term strategies and systems can ensure continued success. The best systems are adaptable to conditions and provide a clear way forward in times of difficulty. What will you choose?