Posts Tagged ‘recession’

No one wants to be in a situation where they have to raise revenue quickly, but sometimes  that’s just a reality that decision makers have to deal with.  When a past client who does business in a service industry was facing a cash crunch due to price increases from two major vendors, the only solution he could come up with in two month’s time was to push his sales people to sell more contracts. After we spoke a bit longer, he admitted that he’d done the math and that in the back of his mind, he had serious doubts about the sales team’s ability to bring in the targeted funds in the time frame that he needed.

I suggested that he try instituting a nominal price increase to all his clients. He was concerned, stating that he had a client base of 4000 contract holders, and to make such a move would mean that he would have to have reps visit each client to rewrite their contracts, plus, he feared their negative reaction. But that was his assumption, not his challenge or solution.

We took a closer look at the client base and came up with a solution that would assuage his concerns, bring in the revenue quickly, and address any clients who might call to complain. He sent via regular mail and email a notice to clients that they would see a slight price increase on their next billing cycle. For clients who had small contracts of say $40, the price would move to $42. For clients of $400, the price would increase to $420 and so on.

Still worried that he’d have an onslaught of calls, he manned up anyway and braced for the worst. And then….nothing happened. A few dozen customers called and they made what ever arrangements necessary for the new amounts to be remitted. In the end. the client pulled in tens of thousands of dollars of additional revenue per month without much work.

I credit the success of this business owner’s across-the-board price increases to the tactics which included: a pricing model that would cause the customer to say to themselves “who cares,” a well written letter and email campaign, staffing for the ‘just-in-case complaints,’ the right name for the increase, and an accounting system that had no flaws in posting the increase.

There’s always a solution to every challenge. You just have to be willing to open your mind to new ideas and to swirl those ideas around ‘cyclonically’ until you find the best solutions to your challenges.

In the post-internet boom, the world witnessed a transformation of working arrangements.  Foreign employees of firms such as IBM were laid off only to find themselves returning back to their home counties to live once again.  When business volume increased, employees who were still working knew that they had a friend who used to be in the business who now lived overseas.  Given the cost of living difference, the past employee said, I’ll do the work in my home country and charge you a different rate.  Due to the connective digital lines under the ocean, the work could be easily completed.

We’re now seeing a similar condition, only the employees who are either being asked to work from home or are being laid off live down the street.  Just picture a similar scenario happening all over again, however slightly differently.  Firms such as Nissan Motors are asking employees to work from home because their physical building is too costly to operate.  With advancements in video, audio and virtual private networks, the same individual no longer will have a tangible office to return to.  They are now part of the virtual workforce.

Those laid off will face a similar scenario to the post-internet boom. “Carol has been laid off and already knows our business.  No need to re-hire her.  Let’s see if she will do this job as a part-time, outsourced employee?”  With the rise in unemployment rates and the likelihood that many people will be out of work for a long stretch of time, employees like Carol might jump at the chance to earn income once again, even as a part-timer home-based employee, forever changing working relationships and conditions.

The outsourced and virtual company is no more than a decade away.  Add some holographic meeting space, and we’re going to see this type of dispersed work structure as more common, because of the recession…depression.

As the global recession spreads, so, too, will more decision makers  move employees from physical offices into virtual work-at-home offices.  The trend will mimic that of the post-internet boom in the early 2000′s.

Ask who lit the first match that ignited this wild storm called recession, and the answer is as different as the people doing the answering. That can pose huge challenges when leadership is called to help solve the issue.

Leadership is about getting others to pursue an objective in some form of unity.  The higher the unity, along with other tools and methodologies, the faster the goals will be achieved.  The challenge is that everyone does have their own beliefs and expectations, and sometimes these expectations get in the way of any progress.

A native-Pakistani taxi driver that once drove me to a hotel said, “All around the world the people at the top of government are all corrupt, especially in Arab and Muslim countries.”  He went on to describe how in his home country of Pakistan, those currently in power are those that stole money under the last administration.  He then went on to say that the “Media never tells the truth.”

A member of a North Carolina Governing Board of a University says, “The trouble with the economy is that we have too much capacity, and when we have too much capacity, we have a recession until the capacity decreases.  This means businesses must go out of business to make this happen.”  When I asked about productivity and technological advances that may make the absorption of employees back into the system difficult, he said productivity has nothing to do with it.

Both different people having different perspectives as to how the US and global recession started and will continue.

As a leader, in politics, business, or organizations, the trouble is that the objective is not to just sell your ideas, but to realize that another person’s perception is reality, and you must understand their position before you can start to change perception.

An important consideration is that you, too, have an opinion so we must all be tolerant while we press forward.

Quite some time ago, prior to the global recession, I signed up for an email alert system from manufacturing.net where they send to me current news on the manufacturing sector.  What I’ve loved about the system is that during these past few months, I’ve seen both sides of the layoff situation and the potential solutions, and they’re being provided in a non-judgmental forum.  I get just the news…globally.

For example, in the posting below, the report notes global concerns in Italy & Germany.  The writers could have easily talked about green initiatives or what’s going on within the business.  They did not.

Italy Paying New Car Buyers $1,900
Manufacturing.Net – February 06, 2009