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When Times Are Tough, People Try to Show Their Value

It’s November of 2008 and we are facing the most concerning economic downturn in recent memory.  Sure, the mid ’90’s had some challenges but nothing like the economic slowdown that we’re seeing today.  People react in funny ways to market challenges.  They either take the ostrich approach and try to perform “business as usual” or they push very hard to “show their value”.  Fortunately, there are enough people that take a measured approach to evaluate the current situation and try to “guide the ship” to economic safe harbors.  That reasoned approach must including helping the “ostriches” and the newly self appointed superstars understand that business approaches must adapt appropriately to the current market situations.

Ostriches are an interesting breed. When faced with threats they bury their heads in the sand because clearly their atavistic programming is to believe that what we don’t see won’t hurt us.  This will kill a company during an economic slowdown.  Somehow you have to help these change averse people understand that there is a reasonable amount of urgency required but caution must be taken to avoid panic.  Help them evaluate the existing investments and expenses and try to understand what the market will need in both the medium and the long term.  Identify what the new marketplace will require and change your approach accordingly.  At the same time, try to help them focus on marginally beneficial expenses and help to control the operational expenses.  A friend of mine at a technical hardware vendor was working with his marketing team and was surprised that they were relying on their existing 18 month roadmap to deliver new features that would change the way their customer’s delivered their products.  As a long term strategy this is fine but when customers are trying to control their op/ex that roadmap needed to adapt to reducing the cost of ownership for their customers to meet the medium turn needs and expand their market share.  Business as usual won’t work in trying times.

What really started to make me think of people’s reaction to difficult markets was the fact that my commute to and from work has lengthened by about 15 minutes each way because of traffic (my commute is already 45 minutes  to an hour).  I’m guessing that many denizens of the Silicon Valley are starting to believe that working at home doesn’t give them enough “visibility” at work and that its time to be “seen”.  I have to really wonder why it wasn’t important to have visible value in the good times too?  None the less, our freeways and parking lots are fuller and there is more personal interaction in the office.

A friend of mine at an internet marketing firm was telling me that since spring, when the economic slowdown started really showing its teeth, the behaviors have become worse.  Flashy presentations are delivered to quiet respectful audiences but later in the day whisper’s in the cubes and offices express doubt about the plan and the people who delivered the ideas.  Little open conflict is occurring in his company but few projects get traction to actually deliver the promises.  The zero sum game has begun.  If one person wins, the perception is that someone has to lose.  This poor behavior is making his company a difficult and unpleasant place to work.

There are a couple of things that leaders must do in difficult markets.  They have to help the company understand the changes in the economic climate and how they must react to the market shifts through planning.  They also have to ensure that the level of urgency does not devolve into fear.  Without the appropriate plans to address the new market the company’s financial situation will quickly create fear.  That fear will create unproductive and contentious, negatively competitive, behaviors that will accelerate the companies poor performance.  Things have to change, we need to understand that, but we’re all in this boat together and can accomplish a great deal as long as we all pull on our oars at the same time.



2 comments to When Times Are Tough, People Try to Show Their Value

  • Erik Alberts

    Devin,

    interesting observation about the increase in traffic and office presence, hadn’t noticed that but not that you mention it I believe you are right.

    Also agree that leaders need to reset priorities and plans to adjust to the changing market conditions, which in downturns usually means an intense focus on customer intimacy and reducing costs. In many cases this begs the question, however, as to why these leaders did not have the same laser-like focus during the up times as well. Perhaps, as with telecommuters, downturns force many leaders to “show their value” as well?

  • Devin

    Erik,

    Fantastic observation. I guess we all get complacent at times and need to catch ourselves. Leaders need to maintain that focus at all times or they fail their teams.

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