So, what is this recovery going to look like. My primary economic forecasters, Alan and Brian Beaulieu are not expecting a double-dip, but they are predicting a long slow dig out.
Victor Cheng is issuing a strong warning anticipating a double-dip. Victor’s observations are based on conceptual trends and events, while Alan and Brian pay more attention to numeric indicators.
My sense is that we are looking, not at a V shape or U shape recovery, but something that looks more like an L shape recovery. Seven actions to take.
- Examine your revenue budget to make sure it is realistic. From your budget, create at least a tactical 6 month forecast, aggressively updated every 30 days.
- Take a long look at your personnel plan for the next 12 months. Determine which positions are absolutely necessary based on your revenue budget. Now, lay your tactical 6 month forecast on top of that personnel plan to see if, in the short term, it is survivable. Update aggressively every month.
- Eliminate any operational function that is not necessary to meet your customer demands.
- Simplify every operational process. It is likely, you will find an effective solution inside most of your methods and processes that is simpler and at a lower cost structure.
- Consolidate methods and processes, so that similar tasks are staged and cross-trained. This will allow you to maintain operations in the event you have to reduce headcount.
- Outsource any process that is not part of your core value stream. Outsourcing allows you to fix costs and jettison overhead in the event that process is no longer necessary.
- Technology. Before adding headcount, explore technology to see if there is an alternative to labor intensive processes.
During this time of uncertainty, blessed are the flexible, for they will not get bent out of shape.
Credit to the Four Hour Work Week, for some of the central themes of survivability.