Our businesses are entering new challenging times. Inflation is at a 40-year high, energy prices have almost doubled, material costs are rising, and the federal reserve will be taking steps to slow the hot economy. On the heels of the pandemic, we now face new geopolitical risks, and it’s time once again to prepare for a new economic volatility.
To prepare for the coming economic challenges, leaders naturally turn to defensive measures. These actions have been applauded in the past as they helped companies weather uncertain times. However, during the pandemic the real winners were those that reinvented the way they did business. These companies found a way to withstand the unpredictable and emerge stronger for it.
Successful companies build in strategic thinking during uncertain times to create a management system that drives both short-term and long-term decisions to get the best from their organizations. Leaders that build this strategic tool into the fabric of their organizations will benefit the most. It’s about creating a strategy management system that drives resilience with day-to-day operating decisions to address short-term challenges and preparing the company to take advantage of long-term opportunities.
To incorporate strategic thinking in a downturn market, keep in mind that:
It’s ongoing… in today’s fast changing environment managers need to remain flexible allowing for decision making as new issues arise. Leaders need to be vigilant about eliminating unsuccessful initiatives and replacing them with new opportunities. The process calls for constant and relentless follow up, and continuous refreshing of the strategy.
It’s incremental…as time goes by, management skills to identify and proactively act on business opportunities will improve, and better decisions will be made more often and with more confidence. It is a continuous improvement process over the long term. Strategic thinking provides a forum for open communication and enhanced collaboration throughout the organization.
It’s more productive…the goal is to create a culture of mission clarity, focused on both short-term and long-term results. This mission clarity centers the organization on what is most important, while eliminating wasted time and money spent on low priority projects. By measuring what matters at all levels of the organization, mission clarity keeps everyone alert to the goals and tasks at hand.
Balancing long-term and short-term thinking will help your organization weather the economic storm on the horizon. Start your strategic thinking processes now to position your company for today’s challenges and tomorrow’s return to better times.
How are you preparing for the next economic downturn? Please feel free to share this blog with friends and associates as you see fit.
“You can’t grow long-term if you can’t eat short-term. Anybody can manage the short-term and anybody can manage the long-term. Balancing those two things is what management is.”
Jack Welch, Former CEO of GE
Dick Albu is the founder and president of Albu consulting LLC, a strategy management consulting firm focused on engaging and energizing leadership teams of middle market private and family businesses. With offices in Stamford, CT, the firm is dedicated to helping its clients formulate robust business strategies and follow through on execution of key strategic initiatives. Dick Albu can be reached at 203-355-3784 or RAlbu@albuconsulting.com. Rob Krist, Managing Director can be reached at RKrist@albuconsulting.com. Please visit Albu Consulting’s website for more information at www.albuconsulting.com.