So, what are you going to do? A severe recession, dismal earnings, bleak economic outlook, government bailouts – it may be time to do what bears do: go into an extended hibernation and hope that things are different when you wake up! Well, that’s not an option. So, what are you going to do? It seems that many CEO’s have been caught like ‘deer in the headlights’, paralyzed with fear and choosing simply to adopt a ‘wait and see’ approach. Batten down the hatches, stop all spending, and downsize. How does that position your company for the future? How will your company gain a competitive advantage when the markets turn around? And they will turn around – they always have. In Good to Great, Jim Collins refers to the ‘Stockdale Paradox’ where he asked Admiral Stockdale what the difference was between those POW’s that survived internment and those that didn’t. The response was surprising: Those that died were the optimists; those that survived were the realists. And so the Stockdale Paradox simply says: “Confront the brutal facts no matter how difficult they may be AND retain the faith that you will prevail in the end”. The faith required to prevail will depend on the deliberate choices you make right now and the execution of those decisions by your organization. Prevailing requires action. So how does a company balance the short-term decision making with longer-term objectives? They must be aligned. Eliminating your customer service department when ‘customer intimacy’ is what differentiates you from your competition may reduce short-term expenses but is likely to have adverse long-term consequences that may jeopardize the very existence of your company. The choices you make right now must be consistent with longer term goals. To be really clear: if your company is in ‘crisis mode’, not knowing if you can make next months payroll, then there is nothing to be aligned. Go deal with the crisis – put out the fires, stop the bleeding and do whatever you need to do to survive. If your company falls into this category, then this would be a good time to stop reading this article – go back to work and deal with the crisis at hand. For the rest of you, read on. Navigating these troubled waters and coming out a stronger company in the end will require leadership, focus on the core business, and controlling costs. After all, it is the core business that brought you to the party in the first place. And, it is likely what you do best! I remember being a passenger on a yacht charter out on a somewhat ‘choppy’ ocean. I was rather concerned. Is the yacht supposed to do that? Is anyone else concerned? And then I looked at the skipper to find he was calm, relaxed and in control. I was relieved. In these times, all eyes are on you – the CEO – the skipper of the yacht (or captain of the ship – depending on size) called insert company name here. Your employees are watching and

waiting for you to reassure them, to put a plan of action into place, and to rally the team to execute the plan with relentless focus and determination. Recommit to your vision of the future, draw on the strengths of your company culture and engage your employees to formulate action plans. Your people are the key to the solution – that’s why you hired them! Confront the reality of the situation you are in, don’t sugar coat the challenges you face and, whatever you do, avoid the ‘closed door’ meetings – they just elevate concern amongst your people who are already worried about their jobs. If you are going to downsize staff as part of the plan then pull the band-aid quickly. The future of your company depends more on the people you are asking to stay than on those you are asking to leave. You don’t want to have to do this again in the near future, and the team that remains is going to have to get things done, so eliminate the functions that are not part of your core business. Ask the employees who share your values and vision, and who have a track record of being the best performers, to stay. Your core business likely accounts for the bulk of your revenues. Focus on the building the core and abandon the rest – at least for the time being anyway. The return on investment, on what is often referred to as ‘the low hanging fruit’, will not be worth the effort required. If it were that easy, the low hanging fruit would be profitable and sustainable – which it isn’t. It simply diverts valuable resources – time, people and money. Focus on your best customers and solidify your relationships with them. Continue to market your most profitable and highest revenue generating products. The “80/20” rule probably applies to your company – do the analysis – so focus on building your core 20% of your products and customers that are generating 80% of your revenue and profitability a.k.a. your core business. Strategic choices you make in the short term, consistent with long-term goals, are as much about what you are not going to do as they are about what you are going to do. Now that you’ve freed up resources by eliminating products or services that are not part of the long-term goals and value proposition consistent with your company’s strategic vision, you can focus on recommitting resources to the core business. Focus on controlling costs rather than simply reducing costs. Yes, in some areas costs can be reduced or eliminated, and they should be. And in other areas expenditure may need to be increased. Note that I used the term expenditure and not expenses because these costs may be the investment required to ensure your company’s future success – your positioning in the market place to gain a competitive advantage over your competition. Invest wisely and control costs. These are extraordinary times that call for deliberate choice and disciplined action. The time to act is now! So, what are you going to do?