When it Comes to Business Crises, A.D.A.P.T. or Else
Entrepreneur's New Year’s Guide
If your business hasn't been rocked by change in the past couple of years, it's a rare exception.
Beyond the ravages of the recession, which has served as an equal opportunity offender, companies have weathered unanticipated factors ranging from environmental disasters to aggressive competition, soaring overhead, technology shifts, and come-from-nowhere events that have altered how people think and buy.
Never has the phrase "change is the only constant" felt more apt, and never has it been more important for businesses to be agile and ready to adapt.
Resisting change isn't an option.
When circumstances throw sales into a tailspin, business owners face two choices: spend unrecoverable time resisting -- waiting and hoping for the altered reality to "get back to normal" -- or face facts and change with the times.
Here's how business owners can use the acronym ADAPT as a guide to navigate around the disorienting realities of marketplace disruptions.
A: Assess the situation.
Work to gain a sense of how long the disruption is likely to last and whether it will have a temporary or permanent impact on your market or business. This will help you decide whether to plan short- or long-term business changes. Also, determine whether certain aspects of your business are affected more than others and whether, as a result of the crisis, there are opportunities that you can build upon during the time of turmoil.
In a story on how Gulf Coast businesses are adapting to the unprecedented oil spill, Associated Press writer Pauline Arrillaga describes a "balancing act between mourning and trying to move on." She writes of boat operators who now run "vessels of opportunity" captained by "watermen who know the areas and can choose the right type of skimmer for the situation," and boat chauffeurs who "shuttle reporters, politicians and government workers to and from the oil mop-up sites."
Her examples illustrate how those who survive business crises do so by assessing the situation, weighing the strengths they bring to the turnaround task, seeking out opportunities, and adapting in order to avoid financial disaster.
D: Determine where opportunity hides.
When the Oregon Department of Transportation asked me to advise a group of businesses affected by a five-month bridge closure, the toughest step involved getting business owners to abandon their fight against the closure in favor of survival planning. Once they did so, they found untapped market opportunity in a nearby upscale residential area also affected by the closure. They also found strength in working collaboratively during the closure.
The result was a 100 percent survival rate and a stronger business clientele and community. Other businesses have turned threats into opportunity by revamping their organizations, taking advantage of newly available talent pools, revising product strategies to capture emerging market interests, and expanding into markets abandoned by failed competitors.
A: Aim efforts in order to play to your strongest capabilities.
When adapting to tough times, avoid across-the-board cuts that trim fat and muscle without distinction. Instead, determine which business capabilities give your company its edge and protect those strengths as you cut costs and move forward.
For example, shattered Gulf Coast fishing businesses are leveraging their strong operations -- their fleets and their knowledge -- to capture business from those who need to navigate the Gulf. They cut costs and redirected other efforts, no doubt, but in the wake of disaster they didn't sell their boats or release their captains. Follow suit: When cuts are necessary, take care to protect and build upon the strengths that underpin your business success.
P: Plan your turnaround.
Once you have a sense of what you're up against, where opportunity resides, and what capabilities you bring to the turnaround task, commit to taking your business in a new direction by creating a tactical plan that defines goals, tasks, deadlines, and who in your organization is responsible for each step.
T: Take action.
Finally, and most important, take action. Talking and planning can't turn plummeting sales back to profitability, but action can.
The turnaround success stories of tomorrow will be written not by businesses that watch, wait and wish change away, but by those that ADAPT, responding to marketplace crises by implementing operational, product and marketing changes not only to survive, but also to change and thrive.