Professor Krishnamurthi spoke about managing large organizations, but it struck me that his suggestions work as well for individuals as for corporations. So, as you review what I share below, step back occasionally to think of yourself as the corporation and your bosses, clients and coworkers as your customers and collaborators. Hopefully, you will not only find ideas that will help you add value at work, but also to help you manage your career through the recession and beyond.
Professor Krishnamurthi's Presentation
Dr. Krishnamurthi listed three things an organization can manage to gain advantage during a recession:
- Deep customer, collaborator and competitive insight
- Ways to change the rules of the game
The first kind of research Dr. Krishnamurthi suggested doing is a comprehenive SWOT analysis of your:
- Current product or service lines -- revenue, expenses, projected growth or decline
- Your key customers -- their P&Ls and their contribution to yours, your share of their business, forecast growth or decline, forecast effect on your business
- Your top three competitors -- market shares, their share of your customers' sales, financial position, expected behavior during the recession, expected R&D and marketing spending
He then went into developing deep customer insight. This was a central concept in his presentation. He argued the companies that tend to come out of recessions in strong positions are those that stay close to their customers. He suggests you find the answers to:
- How do customers use our products?
- How would they like to use our products?
- How do they learn about our products?
- How would they like to learn about our products?
- How do customers acquire our products?
- How would they like to acquire our products?
- If we are to start from scratch with these products [to create the most value for our clients and the most profitable business model for our organization], what will we do?
- If we are to start from scratch with our customer relationships, how will they be different [what do our customers need and want from us, and how can we better provide it]?
Another key point Dr. Krishnamurthi made is that while it is easy to cut marketing spending, because it is discretionary, this generally is not a good idea. He cites research from McGraw Hill that indicates B2B firms that maintained or increased their advertising spending during the 1981-1982 recession averaged higher growth during the recession and for the following three years compared to those that eliminated or decreased their advertising. He notes that maintaining your marketing signals to your customers you are a strong player and will outlast the recession. He also argues it is easier and cheaper to attain a given share of voice in a recession, because prices tend to be lower and competitors are cutting back.
Changing the Rules of the Game
Moving to changing the rules of the game, Dr. Krishnamurthi suggested thinking about:
- Will there be a permanent change in the price-value equation for your products and services?
- Will consumption habits change?
- Do you need to rethink your business model to be able to compete?
- What technological, regulatory, social and environmental trends could affect your business model and how?
- What is keeping you from making these changes?
- Will the issues inhibiting you inhibit your competitors?
- Are your competitors making these changes?
- Are there organizations that might enter your business with a new model if and when they figure it out?
- What are you going to do about all of this?
Dr. Krishnamurthi closed with a list of powerhouse companies that began during tough times. These include:
- P&G founded during the panic of 1837
- GE during the next panic of 1873
- IBM during the depression of 1873-1896 (formed from three companies that merged in 1911)
- Motorola in 1928 (as Galvin Manufacturing Company renamed in 1930)
- Geophysical Services in 1930 (later renamed Texas Instruments)
- United Technologies during the great depression
- DuPont and HP during the 1930s
- FedEx during the oil crisis of 1973
- And more
I apologize that this article is a bit "listy," but I hope you find the information from the presentation as useful as I did. The ideas regarding how we can help our organizations succeed in this challenging environment provide opportunities for us to be of more value to these organizations and in doing so be more secure ourselves. Moreover, thinking of ourselves as our own individual corporations and our network of colleagues as our customers and collaborators provides strategies we can apply to our own personal corporations to ensure we, too, survive the recession and come out stronger than ever.
Thanks very much for reading. If you have questions you'd like me to address, or other topics you'd like me to write about, please let me know. And if you know anyone who might be interested, please pass this e-Zine along.
If you'd like updates on developing messages, strengthening relationships and other communications topics once a month, please subscribe to this e-Zine. You can do so here:
If you would like to make any comments regarding this e-Zine, please visit my blog at http://forrestwanderson.blogspot.com/ and comment there. I'd love to hear from you.
I work with organizations going through a change in strategic direction (merger, acquisition, building program, new product launch, change program, etc.) and that are concerned about what will happen with their relationships with key stakeholders (customers, employees, investors) if they send out the wrong, or confusing, messages. After working with me, my clients have a clear understanding of what their messages should be. I also provide them recommendations on other actions they can take to enhance their relationships with stakeholders.
I also work as a PR and communications research director for hire for agencies and other organizations.
*The Institute for Public Relations, (IPR) is dedicated to the "science beneath the art" of PR. It focuses on PR research and education. If you are interested in the topics I write about, you will almost certainly be interested in IPR. You can find it at http://www.instituteforpr.org/. While you're there, check out the Essential Knowledge Project at http://www.instituteforpr.org/essential_knowledge/.
Forrest W. Anderson
Institute for Public Relations
Commission on PR Measurement and Evaluation