What are the key issues management needs to address?
Today we find the U.S., as well as much of the developed world, in the midst of a very serious recession – some claim it’s a depression. We see backlogs dwindling quickly with little optimism that this particular recession will end as in the past. By U.S.-government statistics, we are already one year into this setback. Typically, that would mean a recovery should be under way in the U.S. by the third quarter. But few believe this scenario.
So what are we doing? Did you have a plan of how the company would be structured during this well-foreseen recession? Do you now have a plan on what you will look like when you emerge from this recession? How are you handling layoffs and cost cutting?
Do you have a business plan “B”? That’s a business plan and budget for the reduced income period and a plan of how the company will be structured when all this is over. The latter is very important since many times severe cuts are made during the downturn that dramatically reshape what the company can do when the recession is over. Key people are lost, and important programs are abandoned in the name of cost cutting.
Under these difficult circumstances, company morale can be seriously impacted. Rumors of plant closings, layoffs and major cutbacks can spread rapidly through the work force – even when unfounded. Management must anticipate these situations and not allow them to go unanswered. How are you going to handle the layoffs? Are layoffs going to be permanent, i.e. is the company going to permanently downsize?
This is crisis management. Are you ready to handle it? Over the next few weeks we’ll examine a number of these options and provide some ideas that may be helpful in navigating these difficult times.