5 Strategies for a Rough Economy

Here is some common-sense advice for any firm owner, from the SuccessFactors folks.

After interviewing more than 2,000 businesses, this is what they call the “top-five strategies” in order to deliver superior results in adverse economic conditions:

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  1. Establish clear goals. When change is forced upon your business by the external environment, you cannot afford to lose focus or to delay the necessary course shift.
  2. Cut with precision, if you must, but not bluntly. If layoffs become necessary, view them as your chance to weed out the low performers and let your best talent grow.
  3. Focus on your core talent and invest where it counts. Identify the talent that will be essential for
    your new strategic direction and invest heavily when others are cutting. Turmoil is when leaders emerge.
  4. Be transparent. Avoid the rumor mills. During uncertain times, transparency drives trust and employee engagement. Companies with high trust financially outperform those with low trust.
  5. Compensate more strategically and pay only for performance. Avoid the mistake of spreading limited bonus resources evenly across top- and low-performers.

Elaine Rigoli has nearly 15 years of experience managing content and community for various B2B and consumer websites. Elaine has written thousands of business and technology articles and has been quoted in The Wall Street Journal and eWeek, among other publications.

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2 Comments on “5 Strategies for a Rough Economy

  1. Your fourth strategy is interesting considering the reality of today’s worker environment.You state that companies with high trust financially outperform those with low trust. Avoid the runmor mill.
    When you can read about job cuts at nearly every major employer fron the automobile industry, the banking industry and manufacturing how does a company avoid the rumor mill. With thousands of jobs being lost to foreign competiton everyday how does a company get their employees to trust them when they worry if their job is the next one to be eliminated?

  2. Regarding #4 – By transparency, I take it that the writer means Communication. The only way to “avoid the rumor mill” is to give employees an honest assessment of the terrain. Then, they have the ability to put coping measures into place…or not.

    This is not the time for employees to be procrastinators, nor is it the time to be complacent. If your company has announced that things are shaky, the best thing that you can do for yourself is to outperform and to be easy to work with. If there is to be a layoff, generally they don’t layoff their “stars” first. If the company goes bust, that of course is a different story.

    Granted, sometimes a company shoots themselves in the foot. They lay off people because they have higher benefits etc. They may be fantastic workers but they are “costly” to maintain in the company’s eyes. So, they lay off the “golden oldies” and keep the newbies(who have fewer if any bennies)but who also have less experience! Wrong move if you hope to make it. There should be a healthy mix of both. Strong performers and new ideas.

    As an employee, always be proactive. Don’t wait until the boom is lowered. Don’t join in the rumor mill, water cooler, Benedict Arnold set. Be seen working. Making good things happen. Encourage yourself and those around you. Speak in positive terms. Take positive action. Sharpen your skills. And if need be (and for your own survival)make yourself indispensable. Then, if all looks lost, secure another position. But don’t just sit there like a target.

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