The history of recessions has taught us that some of the greatest technological innovations have developed during dire economic times. As many people in this industry are finding, the same way of doing things may not be working. Innovation may be the key to coming out of this. Wasn't it during the severe recession of the early 1980s when widespread adoption of the personal computer revolutionized not only the way businesses were run but our personal lives as well, in ways few of us recognized at the time? And in fact, Hewlett & Packard was founded shortly after the Great Depression of the '30s.
As one rental company owner, Michael Rolls of Rolls Scaffold & High Reach said to me, “2009 will not be business as usual. This year will require [businesses] to review and reinvent themselves.” That will mean something different to each person, but it makes sense. It could very well be that for your company to grow again, it will be something different that makes it grow from here. Whether that means a new product line or new service or new way of measuring efficiency, it will be different for each company.
Credit and lack of access to it is playing a big role in the economic slowdown but sometimes important innovations are not dependent on it. As Nouriel Roubini, professor of economics at New York University's Stern School of Business recently told BusinessWeek magazine, not a lot of money is given out during recession to people who are experimenting with innovations, pointing out that MicroSoft was started without access to credit.
When it comes to business, we all want to see the resumption of growth, so we typically look in the same directions from where growth came in our most recent experience of it. If we benefitted from the housing boom, our natural tendency will be to expect good times to come again when housing turns around. Could be, but don't hold your breath. Hope for housing, but take a look to see what other sources of growth there may be. Try different neighborhoods, different industries, different cities, different products, different approaches. If you aren't looking for them, you should be.
For those of you who are CEOs or owners of your companies, let me ask one question: Are you the smartest person in your company? Some of you probably are and that's how you got to be CEO, but for those who answer that question with a “no,” I think you're on the right track. As one rental company owner once said to me, “I sure as hell hope I'm not the smartest one here, because then we'd be in a world of trouble.”
If you are the smartest, unless you're doing extremely well, I'd start looking for people smarter than you to bounce ideas off of, and even better, to solicit new ideas. If you know you aren't, then why aren't you getting ideas from others? If it's because you're too insecure, then your problems might be bigger than you know.
What I am suggesting is that unless you have a clear road map to guide you out of this recession, you'd better get those people in your organization who have ideas and visions and aren't afraid to think outside the box together around a table somewhere exchanging ideas. Some of you may nod and think that's a great idea, but you won't do it and may regret it six months from now.
You also have to ask yourself — and you should be able to answer it honestly — how comfortable do others around you feel about saying what's on their minds? Do they just parrot back what you want to hear or are they willing to tell the truth as they see it? If you aren't sure the answer to that, better communication needs to begin and fast.
And while caution is necessary, bold actions might be the order of the day. It's during recessions, typically, that companies tend to gain or lose market share. Consider an acquisition, a move into a different territory, improving service by doing something that others don't do.
There was a company in the Midwest a few years back that, during cold months, sent a service guy out to jobsites to start machines and check them out and get them warmed up before the workers got started. They started the practice during some difficult times when they felt the need to do something beyond what their competition did.
I remember asking the service manager why they did that. “I never heard of anyone doing that,” I said.
“Exactly,” he answered.
