How to Beat the Odds and Roar Out of the Recession
Tom Hood | CPA Success
Do you believe in odds?
Recent research from HBR shows that only 9 percent of companies come roaring out of a recession stronger than ever.
Where should you place your best bets to prepare your business or firm to rebound out of this recession the fastest?
The answers are in the latest issue of Harvard Business Review in an article titled, Roaring Out of Recession.
The best bets are on companies that employ these three moves:1. Focus on operational efficiency (smart spending and targeted headcount reduction for efficiency versus across-the-board headcount reductions).
2. Investment in developing new markets (leveraging your product / service mix into expanded markets — geographic, new segments or niches).
3. Investments in enlarging the asset base. (In professional services, that is training and development and strategic staffing for new opportunities.) I call this placing careful bets on the future.
The article highlights the fact that you cannot “cut your way to success.” Organizations that focused on across-the-board headcount reductions or cost cuts actually had the lowest chances of coming out of the recession. Conversely, companies that were too aggressive and over-invested in market-making also had bad odds.
Turns out the winners were those who pursued the combination of strategies listed above.
This was further reinforced in a recent survey of CPAs that Rick Telberg did for the AICPA. See his post, Savvy CPAs Focus on Back to Basics. His top 10 list includes No. 3, business operations (operational efficiency); No. 5, new business development; and No. 4, implementation and execution of plans.
How are you planning to beat the odds?