Summer 2008 Video

Every year I clean out the hard drive on my cam corder. This is what results.

My Strategy for Managing the Downturn

Those of you who know me, know I love managing.  Im a management freak.  I enjoy creating and extending efficiency and go to great lengths to establish legitimacy in areas I consider important.  So when the economic climate drastically changes in a compressed period of time, I try to recognize it early and act with great care.

Here we are.  October 2008 with a complete lockup in credit markets, a plummeting stock market, and a generally terrified business climate.  How does a business survive this crisis in tact?  I don't think there is a clear cut answer to this question, but I can tell you what Im doing to be the best steward of my company's future I can be.

Three First Steps

First, remember history.  When you look at financial crisis points of the past, you find that knee-jerk reactions are responsible for setting the stage for eventual failure.  Essentially putting the nail in the coffin too early.  You have to avoid the impulse to act too quickly when you see the danger signs come up on your radar.  I prefer to advocate a "surround and strangle" approach to problem points affecting the organization.

Strategy one:  

If you must act, address the issue confronting your organization and act within that context.  

Example:  If you loose revenue due to client defaults, and must cut in your organization, find the most common elements within the client defaults and start there.

Second, change the way you look at financing your organization.  If I said that I have a way to run a company without the need for credit; Id have a gold mine on my hands.  However that is exactly what small and mid-sized business must do in order to give themselves a fighting chance to survive.  In my company, I have instituted a company savings plan.  We are raising cash to create a multi-month expense buffer, and as an organization will not spend dollars on anything but essential costs until our goal is reached.  To ensure this ongoing, we have also instituted controls that allow for the maintenance of this savings buffer should we have to use it at any point.

Strategy two:  

Creating the ability to self-finance through lean times retains equity and creates a strong foundation.

Added Win :  This number can generate a hefty interest payment.  Establish a separate fund for interest retention and spend it on over the top expenses should you need it.

Third, your clients and your vendors are gold.  Treat them that way.  Right now business must stick together.  If you aren't a public, massively scaled organization, you are dependent on other businesses for your work and revenue stream, and are therefore vulnerable to a cascading stream of business defaults.  While this may seem out of your control, information gathering isn't.  Make it the business of everyone in your organization to know your customer and collaborate about the status of those customers.  In other words, communicate, communicate, communicate.

Strategy three:

Know your customers even better.

Added Win:  Customers deserve, and should always get as much attention as you can give them.  Done correctly, this strategy pays off at both levels.

Conclusion

There are no silver bullets, and anything can happen really.  However assuming an even playing field and a strong hand on your organizational metrics, you can manage revenue downturns, key vendor failures, and staff contractions better with an incremental and focused approach.  The primary goal should be to get as early insight into potential problems as possible, act within the context of the issue, and ensure that you have the ability to meet your obligations while this is occurring.  As long as you can maintain this level of legitimacy, you can survive to fight (and earn) another day.

Fear of Palin (Someone on the left has "Mom" issues)

I can always tell when the left gets worried about something.  There is an almost immediate influx of stories at the top of Digg (what that says about people "gaming" Digg is something else).  It happens without fail.  It is almost like a sub conscious achilles heel that they can't contain. Their "politically bottled" rage boils over in a subversive flurry of disinformation and snide snipping at small personal defects.

Take Governor Palin's clear victory in the debates on Thursday night.  The next day (and days following) you saw headlines like this:

• Fox News: Palin Won VP Debate Because She Had A Bigger Flag Pin
  
• Palin's Tax Return Mystery:  Where Are The Per Diems?
  
• Palin's Web Ad Cites Thumbs Up From 'Famous Person'
  
• McCain's Big Gamble Comes Up Snake Eyes

You get the idea.  Every one of these stories slammed the Governor with everything from her manner of dress, to her "mom-like demeanor", to utter tirades aimed at her inexperience.  The anger is arrogant, and smells like pretentiousness.  One of these stories came very close to exposing the Author's own hatred of his mother (and women) in a way that clearly indicated that a Therapist is in his near future.  The amalgam of this din of anger reveals that several small blog sites (Huffington Post, The Daily Kos, ThinkProgress, et al) generate the majority of this buzz.  Anyone who is at all casually involved with Social News knows this.  Yet it seems too coordinated to be done independently.

That said, chalk one up for the Republicans.  They have successfully positioned someone who reflects the values and views of a new emergent voting contingent....The (random kid sport) Mom.  While it sounds trivial, it is quite extensive.  Moms vote, span race and cultural bounds, and there are a lot of them.  The constant slamming of her by the Digerati only confirms to this large voting block that "Women Have To Endure More Than Men To Get To The Top.".  This ultimately solidifies their position and creates unity.  You know?  The same unity these Digerati-like blogs feel as they rail against the Bush Administration. 

I feel like we have found the first "muck-raking immune" voting strain.  It seems the more you dig up on Palin, the more moms rush to her defense.  It almost feeds on the bad news.  I don't know about you, but I find that beautiful.  The media colors our view of events too often; and too often they are completely unqualified to give us that type of a viewpoint.  Being able to overcome their veil of disinformation is perhaps the most powerful thing I have ever seen.

The Obama Campaign now has a huge issue.  Something completely unexpected, and something that has them unsettled and reeling.  This is perhaps most clearly identified by Mr. Obama's complete lack of reference to Palin in any of his recent speeches (with the exception of a few "small time" jabs off the cuff).  How do you defeat an enemy that can not be skewered publicly?  I say you can't; and it is going to be a wonderful thing to watch how they defend against it.