The cash flow fire drillWhether companies are publically traded, private but beholden to their lenders/investors, or simply conservative, the quarterly planning cycle of American business drives perversions of strategy.
That's hardly news, and it's a fact that many simply accept. Sort of like a serenity prayer for business, we are called on to recognize and accept the things we can't change. But for SMBs that are privately owned and have the latitude to implement longer-term strategies, now is the time.
Business growth is likely to become increasingly problematic - and the solutions will take time to affect. It's time to start. Unfortunately there's no pill to help repress that visceral reflex to suddenly cut or scale back business development strategies that were fully justified and eminently sensible...until you saw that latest spreadsheet or projection. But perhaps a quick look at the current environment, likely scenarios, and imminent challenges will provide an inoculation against caving-in to the impulse, and the perspective to see value beyond the next couple quarters.
Woody Allen Wisdom"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly."
Relax! Nobody thinks it's that bad. But.....
I pulled this from John Mauldin's Thoughts from the Frontline article this week. (I periodically refer to his work in this blog - I find it unvarnished, apolitical, global and fundamental.) Mauldin uses the quote to highlight the positions in which many central banks find themselves. He says "Growing our way out of our problems (debt, cyclical easing, etc.) would be ideal, but it isn't an option. Economic growth is elusive everywhere we look."
And he further quotes Joan McCullough, to whom he periodically turns for a particularly dour perspective, "The data has stunk for a long time and continues to worsen. And the anecdotes confirming this are yours for the askin'. The only question remaining is for how long we can continue to bet the ranch on wildly incontinent monetary policy while deliberately opting to ignore the ongoing disintegration of our economic fabric."
To keep his essay engaging, Mauldin predicts knife fights among central banks and drastic measures by those of emerging markets.
Even if you disagree with the economic analysisSo, while you are focused on keeping up with your email, making payroll and incremental improvements in supply chain management and manufacturing efficiency, there are some tectonic forces at play which will impact the market environment in which you operate. We've never tried these things before, and the forecasts for outcomes vary wildly.
In short, the lens through which we view markets was ground and polished by business experience in a vastly different environment. We simply lack the framework to fully visualize how markets differ today - yet we still view them through the old lens. Case in point; the trend you've already noticed - that traditional domestic business development isn't yielding the same growth results that it used to - will accelerate. Fixing it is simple, but not easy. And it's not quick.
Prudence dictates that we implement strategies not just for survival, but to thrive: and once committed to those strategies, to adjust as required but persevere through the inevitable frustrations - those lonely management moments when you question the approach - and ignore the periodic urge to revert to 'comfortable' reactive budgeting. In other words, no self-destructive cash flow fire drills!
A Growth Strategy for an elusive growth environmentWhile Mauldin never shies away from painting a realistic, even if uncomfortable picture, he also outlines solutions. And now that I've shared dire macro predictions, let's look at what small & medium size B2B manufacturing businesses can do to position themselves in front of the trends.
- recognize today's sales realities and adapt
- seek growth through effective sales & marketing AND a rising tide of market growth
- diversify, diversify, diversify
Reality, however, is that amidst the crisis management of daily business and the skepticism of many business owners who have heard tales of export risks and been fleeced by "SEO" experts and other internet marketing snake oil vendors, these two initiatives are often relegated to "maybe next year" priority, or naively "we already do that" reassurance.
If "hope" is your strategy, good luck. But if growth is your objective, and you're at the point where you willing to make the tough choices, then there's a great window of opportunity now. Will you take it...or turn back to your email?