Darden: Winning in a down economy

May 19, 2013

Organizations the world over are working to keep their heads above water in the uncertainty that swirls around us today. Hunkering down, cutting costs and waiting for the economy to turn around is the strategy of choice.

Yet some business leaders will come through these tough times farther ahead of their competitors. They’ll gain market share and success while others wring their hands. They’ll do it by taking advantage of uncertainty rather than hiding from it.

And we already know who these leaders are. We’ve named them the “catalysts” because, like chemical catalysts, they make things happen quickly, mostly by virtue of their abilities to skillfully navigate in a world of doubt and limited resources.

We also know, based on a major research project that Robert Rosen, Robert Wiltbank and I have conducted, what these catalysts will do to win in a down economy. Here are some lessons we learned:

Lesson 1: Don’t look up — look in. Success begins with you. Not corporate. Not the market. Not even customers. You. When things are tough, you’ve got to look to yourself for solutions. Don’t shy away from uncertainty; look for ways to exploit it. Remember that in uncertainty lies new opportunity. Channel your anxiety productively. Anxiety can be a motivating force, but when you’ve got too much anxiety, you can freeze up. Keep your cool and trust your repertoire.

Lesson 2: You don’t need to search far and wide for some exotic idea on how to create better value for your customers. For the surest route to survival, find the overlooked opportunities that have been there all along. Start by looking through the eyes of your customers rather than from your own needs.

Lesson 3: Small is beautiful. When the focus is survival, big stuff gets put on hold, and then everyone races to put new initiatives in place when recovery comes. But small is beautiful in both good times and bad. Focus on learning what works. Place some small bets fast. Find a customer — maybe just a single one. Try to sell that customer something, even if it’s just a rough prototype. These small, quick launches build a bubble where learning is easier, less risky and more valid. So don’t be afraid to experiment today — just start small and learn fast.

Lesson 4: Be a pragmatic idealist with your people. Many organizations are facing tough decisions concerning layoffs. These changes are difficult, risky and emotional. There are two definite opportunities in today’s tough times. First, quality talent hasn’t been this available in years. Now is the time to staff your business with the best players. Second, slashing in an indiscriminate way to survive may eliminate some of your best growth leaders of tomorrow. Be careful. A mistake here will be expensive to fix later.

We hope these lessons will help you to put your anxiety to work, if not to bed. Capitalize on the uncertainty around you, but in ways that don’t bet the farm. You just might be surprised at what you come up with.

Jeanne M. Liedtka is United Technologies Corp. Professor of Business Administration at the University of Virginia Darden School of Business. She co-teaches an executive education course, “Drive Business Growth and Innovation: Mindsets, Behaviors and Tools,” in October.

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