Staying in business for over 25 years has not always been easy.  MicroWorks had to survive all kinds of growth, shrinkage, capacity, delivery, and sales problems.  But our worst events were the three recessions that took place in the 80’s, 90’s and  2001.  Speaking from the point of view  of February 2009 I still believe that no economist or government can predict the bottom of the current economic slide.  It appears more like a free fall and we are in for some very tough times.  But there is a silver lining in that cloud – a recession has always made us stronger and I believe it can do the same for our private and public sector clientele.  We have our strategy in place and it may be relevant to both private and not for profit organizations.   One thing I have to say is the weak may not survive. 

When I became a consultant in the early 1980’s I was unaware that a recession was going on around me. I just knew that it was difficult to find work and I concluded that I was simply not very good at marketing. The next recession in the early 1990’s hurt my IT business hard, as contracts were cancelled and work dried up almost overnight. I made a big mistake by hanging onto to my cherished but idle staff until our last dollar was nearly gone.  Of course we inevitably suffered a shortened work week and layoffs anyway and we had to manage cash flow on a daily basis.  We did survive but it hurt, and recovery was slow. 

But in 2001 I had learned a little about marketing and I remembered our failings from the previous recession. This time we decided on a strategy of acquiring new customers. After all, we had lots of capacity.  Our sales volume did go down but not a lot.  To my surprise, by the time the economy recovered 18 months later, our sales shot up even more quickly.  I realized that our customer base had grown by 20% and now they had the need and the money to reinvest in IT.

So here is my plan for the future.  The 2008 recession is still a big unknown. Many experts feel that the recession will be deep, but nobody knows how long it will be.  For MicroWorks, our strategy is to help our existing and new customers find focus. With less money and fewer opportunities around, it is important to identify what is most important to the organization and focus on it. We have to target our limited capital to maximize impact. 

Now is a very good time to understand your markets.  You must determine how things will change for you, your clients, and your competitors.  And whatever actions you take, you will also have to show a quicker return on investment, possibly within one year if credit remains tight. 

Publicly funded organizations face the same problems. They face cutbacks from their funding sources, including private and corporate donations and government funding. In the Great Depression, charities were cut back to 60 of their previous funding levels, just when they needed more.  By 2010 I expect governments to be looking very closely at their own expenditures and the visibly weak NGO’s could get cut back or cut out.  To me the solution is similar – identify key objectives and focus on them, making sure that your renewed impact is both highly felt and highly visible.   

I see three areas that stand out for planning a recession. First, is strategy development in your organization that will provide the necessary focus.  It means identifying only a few key activities that could help shift your future from survival mode to prosperity. Mostly those key activities will relate to work optimization (reducing cost and increasing productivity) or to finding more work. 

When it comes to work optimization, I believe that collaboration and content management technologies can improve the productivity of information workers by 15 to 25%. This includes document management, information management, project sites, corporate intranets, and customer or stakeholder extranets.  But to succeed, these tools must be well integrated and well adopted.  Well-adopted collaboration systems are not hard to accomplish when your plan it right. Work optimization and mission impact opportunities are especially important for NGOs because they are not likely to grow revenues in hard times.

When it comes to getting more work, it is time to bring structure to the ad hoc.  And whose marketing, communications, or sales department seems to run like a Swiss watch?  A CRM or constituency management system can help to organize your marketing initiatives, and ensure the quality and reach of your sales funnel.  If a managed funnel can increase sales by 10% in good times, doing so in hard times will help to defray a loss of revenue and keep your cherished staff busy. Cutting staff may be a quick choice for the short term but can be bad for the long term for lots of reasons.  Keeping your staff productive is harder to do, but when the economy does turn around, your sales will shoot up like a rocket.

You can also finance your initiatives by getting rid of the clutter: the unproductive projects, the unyielding and high maintenance legacy systems, and activities that may be important but are not in the top 10.  Consider how you operate your IT systems and consider outsourcing.  Hosting, server consolidation, and using consultants for highly technical work or project implementation are money savers. 

Here are some related references: 
“Seize Advantage in a Downturn” by David Thodes and Daniel Selter.  Harvard Business Review, February 2009 p50.  Also online. 

Microsoft testimonials on SharePoint productivity: http://www.microsoft.com/sharepoint/savemoney.mspx

Kendall Lougheed
President