Preparing Today for Tomorrow's Rebound
Companies can take five steps to evolve from a recessionary "tortoise" to a rebound "hare."
By Christine Crandell, Egenera
Mar. 31, 2009
In his fable The Tortoise and the Hare, Aesop teaches us that "slow and steady wins the race." But in business, however, there is a time to be a tortoise and a time to be a hare. While today's worldwide recession makes us all "tortoises," companies must also prepare to become "hares" before the start of the upturn.
I recently conducted a series of interviews with venture capitalists. Across the board, the VCs reported concern that their portfolio companies were not preparing for the economic rebound. Many CEOs seem to be "gripped by fear" and not taking advantage of the opportunities that are inherent to economic downturns.
Downturns are the time to rethink a company's long-term strategy and prepare to turn back into a hare before the start of the eventual upturn. After all, companies don't just want to beat the tortoises in the race, they want to beat the other hares as well.
Metamorphosis: From Hare to Tortoise and Back Again
For enterprise marketing departments, the time of high spending across a wide assortment of programs has quickly given way to bare-bones budgeting. It's not that marketing's charter has changed, but its funding levels clearly have. As recently as November 2008, most CMOs were looking forward to steady or growing budgets. But those expectations were quickly dashed as businesses realized the sudden and thorough force of the financial crisis. Instead, a significant percentage of marketing departments have seen a significant drop in funding. For technology companies, this situation will, in no small measure, result in less experimentation, fewer prospect 'touches', less awareness-building, fewer industry and partner programs, and a precipitous drop in costly events.
But being a tortoise, at least during a recession, does not have to be a bad thing. Tortoises keep moving forward, deliberately and with clear intent. It is a time when marketing should turn introspective and find ways to increase company mindshare and improve sales.
The start of a recessionary outfall is often too late for a company to evaluate its marketing strategy, because that's when the CFO can be heard calling for quick budget cuts. And where does a CFO traditionally turn first for such cuts if not marketing?
But it is really marketing's responsibility to be the first to spot a market shift, long before sales and finance conclude that the softness in the pipeline is a more than an anomaly. It is the one organization with a finger on the pulse of market sentiment. This responsibility for early detection and action should empower marketing to actively prepare the company's survival strategy before the recession begins. A credible recessionary marketing plan sets up a framework which defines the core skills and competencies that are necessary for both the company's survival during the recession and its leadership position in the next growth cycle. This framework becomes the justification to preserving the right marketing talent from the consequences of indiscriminate downsizing.
And with the right talent solidly in place, marketing can settle in to execute its recessionary plan while readying its competitive strategies and business models for the next growth cycle. Unfortunately, marketing organizations often do not have the patience, discipline or bandwidth to undertake a thorough, evergreen approach to their market strategy, although all marketing managers recognize that quickly responding to emerging trends is a critical success factor. Ironically, recessions provide companies with the opportunity to evaluate the effectiveness of their market strategy and identify unique opportunities to "change the game." In other words, the deliberate intent of the tortoise can lead to market- and company-changing results.
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I recently conducted a series of interviews with venture capitalists. Across the board, the VCs reported concern that their portfolio companies were not preparing for the economic rebound. Many CEOs seem to be "gripped by fear" and not taking advantage of the opportunities that are inherent to economic downturns.
Downturns are the time to rethink a company's long-term strategy and prepare to turn back into a hare before the start of the eventual upturn. After all, companies don't just want to beat the tortoises in the race, they want to beat the other hares as well.
Metamorphosis: From Hare to Tortoise and Back Again
For enterprise marketing departments, the time of high spending across a wide assortment of programs has quickly given way to bare-bones budgeting. It's not that marketing's charter has changed, but its funding levels clearly have. As recently as November 2008, most CMOs were looking forward to steady or growing budgets. But those expectations were quickly dashed as businesses realized the sudden and thorough force of the financial crisis. Instead, a significant percentage of marketing departments have seen a significant drop in funding. For technology companies, this situation will, in no small measure, result in less experimentation, fewer prospect 'touches', less awareness-building, fewer industry and partner programs, and a precipitous drop in costly events.
But being a tortoise, at least during a recession, does not have to be a bad thing. Tortoises keep moving forward, deliberately and with clear intent. It is a time when marketing should turn introspective and find ways to increase company mindshare and improve sales.
The start of a recessionary outfall is often too late for a company to evaluate its marketing strategy, because that's when the CFO can be heard calling for quick budget cuts. And where does a CFO traditionally turn first for such cuts if not marketing?
But it is really marketing's responsibility to be the first to spot a market shift, long before sales and finance conclude that the softness in the pipeline is a more than an anomaly. It is the one organization with a finger on the pulse of market sentiment. This responsibility for early detection and action should empower marketing to actively prepare the company's survival strategy before the recession begins. A credible recessionary marketing plan sets up a framework which defines the core skills and competencies that are necessary for both the company's survival during the recession and its leadership position in the next growth cycle. This framework becomes the justification to preserving the right marketing talent from the consequences of indiscriminate downsizing.
And with the right talent solidly in place, marketing can settle in to execute its recessionary plan while readying its competitive strategies and business models for the next growth cycle. Unfortunately, marketing organizations often do not have the patience, discipline or bandwidth to undertake a thorough, evergreen approach to their market strategy, although all marketing managers recognize that quickly responding to emerging trends is a critical success factor. Ironically, recessions provide companies with the opportunity to evaluate the effectiveness of their market strategy and identify unique opportunities to "change the game." In other words, the deliberate intent of the tortoise can lead to market- and company-changing results.
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