Recession Is The Time To Rethink
While watching the movie Bhag Milkha Bhag I started to notice how the runners use the time between the sprints. They use this time to prepare themselves to win the next event. They use the down time to rest their muscles, catch their breath and rethink their strategy and approach to competition. The best of the runners use the lean period to prepare for the next race.
An erstwhile leader in consumer electronics was forced to rethink its business model during the last downturn. They used the stagnant market in TV and audio-visual segments to rethink themselves as a health and well-being company instead. Today more than 40% of their revenue comes from the healthcare market. They used the downturn to gain a large market share of this rapidly growing segment. To truly take advantage of the opportunities in this new segment, they have to rethink their talent portfolio too. They have to evaluate which skills will have to be brought in from outside and which ones will be easier for the current employees to learn.
While organisations and individuals get distressed when there is a slowdown, this is actually a time that can help us get the first mover advantage when the markets open up. Peaks and troughs in business cycles need different approaches.
What can organisations do?
Rethink the business model: Consumer behaviour changes during recession. Research shows that during slowdowns, consumers’ spending habits change. People eat out less often, but their spending on entertainment increases significantly. Some industries do better during recession eg the insurance industry. Softer business growth may shrink the market for some products it also opens up new market with vast untapped opportunities. These markets need new business models and products and services that are custom made for these pockets.
Rethink competition: When the business model changes, the competitive landscape may change. The organisation may now need to think of a different set of competitors. These non-traditional competitors could prove to be far more lethal than the traditional ones. A leading MNC snack-manufacturer found itself conceding market share in some states to local producers with significantly smaller distribution costs. Their sales and marketing team could not handle the guerilla marketing tactics that these local players were adept in.
Rethink your talent portfolio: During the recession, hiring slows down. This is the ideal time to revisit your talent pool. What skills do you not have enough of? What are the skills that are not as relevant in the new environment? It is a good time to identify skills that are in short supply for the new marketplace. Many firms use this time to hire talented people who may have been laid off or are shaky about continuing with their current employer. This is a time to invest heavily in developing the talent pipeline. You may be able to leverage the slowdown to tie up with a top notch academic institution or professor who would have turned up their nose in better times.
What can individuals do?
Rethink your career: The career opportunities that arise when the economy is on a fast track are different from those that show up during times of slowdown. The new markets and consumers may provide a great opportunity for you to become an entrepreneur. Once the economy picks up pace, so will your new venture. That also means that career opportunities will probably emerging in non-traditional sectors. If you have a skill gap, the employers may be more willing to invest in bridging a small gap to make you a perfect fit. This maybe the best time to find your dream job. Before you jump ship remember that during slowdown, the employers give you a shorter runway before they expect you to start delivering results.
Replenish your skills: Use the time to invest in building your career. Take the course that you always wanted to and sharpen your skills. The new market realities will create new career tracks that did not exist before. A few years back, a career in analytics was less mainstream. Today there are many more employers who are looking for people with degrees in statistics or operations research and are prepared to offer them attractive career opportunities. Writing content for the web was not a career option a few years back – now it is. Take advantage of the slowdown to get certified because once the recession is over, you won’t have this luxury.
While the majority of individuals and organisations think of the slowdown as a time to wait and watch, there are a few who use this time to emerge stronger than ever.
First published by Times of India 28 Oct 2013 Join me on Twitter @AbhijitBhaduri