I’m one of those weird individuals that enjoys earning season – especially in the first quarter – because its where companies share their strategy and goals for the year. For the last 4 weeks I’ve listened in on 5-6 calls and I’ve noticed a recurring theme. In fact, the calls are so similar I can pretty much sum it up with the following bulleted list:
- Keep our existing customers happy
- Reduce costs of delivery, reorganize the service delivery and support to do more with less
- Protect our cash reserves – defer expenses, defer compensation, push out our account payables to their full contract length, accelerate our account receivables collections process.
What most companies have forgotten is that a recession is the perfect time to grow – provided you have the long term vision and capital. During a recession talented labor is less expensive, capital goods and property are less expensive, taxes are typically less, and most growth activities have government incentives. Consider that most of the worlds multi-nationals have grown during past recessions and downturns.
A recession doesn’t mean “no sales” – it means “different sales”. You can’t sell the high end stuff unless it has a killer value proposition – but the low stuff is easier to sell. Cartier watch sales dry up – Seiko watch sales go up.
So to the leadership of Corporations of the World – do not fear – focus on what you can produce and sell – focus on where you can grow – and be prepared to shrink where you can’t sell it. Don’t just assume the safe thing to do is to stop growing entirely – or you will be roadkill.