Capitalism has been described as "creative destruction." We saw lots of destruction last year. It's time to focus on the creative part.
How do you do that in this environment?
First, change how you think. For 2009, you'll need a battle plan, not just a business plan. There's not one battle plan that works for everyone, but here are some universal principles for formulating your personal battle plan:
1. DON'T FIGHT THE LAST WAR
We don't know the future, but we know this year will be different than last year, even if some 2008 problems persist during 2009. Don't expect that dusting off your 2008 plan will bring success in 2009. Sun Tzu, in "The Art of War" advises: "What enables the good general to strike and conquer, and achieve things beyond the reach of ordinary men, is foreknowledge."
Resources are scarce these days but spend some time and a little money getting information about changes in your market and analyze how they affect your company.
2. MIGRATION - THE HEAD IS MOVING
If you've ever been to the Serengeti, you know that dry weather causes millions of animals to move vast distances. Business is like that, too. When everyone is fat, dumb and happy in their established market niches, they tend to stay there. Big changes occur more out of desperation than hope.
In times like this, the business herd starts moving. You're in trouble if it's heading in your direction.
Maybe your market niche has fared better than average in the general economic downturn. That's great, but don't congratulate yourself yet. If you have a good niche, you'll be facing new competitors soon.
Why? Maybe your niche was too small when other companies had lots of business. Maybe they were focused on products or customers with higher margins. If their other opportunities dried up, your little niche is probably looking pretty good to them now. Assuming there are safe havens is foolish.
3. MISFORTUNE BRINGS NEW OPPORTUNITIES
Good times bring more opportunities than tough times, but all economic conditions create new opportunities. Winners spot new opportunities and seize them quicker than others.
Downturns create opportunities in many ways. Maybe one or more competitors have gone out of business. Maybe it's more subtle, a competitor's financial condition is making customers worry it is no longer a reliable supplier. Maybe customers are ready to abandon a known brand name to save a few dollars. Maybe customers trying to reduce inventory costs are willing to pay more for quick delivery. Maybe customers who have cut payroll are outsourcing more services.
Recognizing these shifts in competitive forces that affect your market and pouncing before someone else does is the key to exploiting new opportunities. Be alert. If something small seems odd, follow up with questions.
4. WHAT DOESN'T KILL YOU CAN MAKE YOU STRONGER
Economic downturns can start some businesses on a long-term gradual slide into the pit. On the other hand, such a fall isn't inevitable.
Decisions you make now can position you to be more competitive when good times arrive. The differences between companies on the move up and those on the way down may not show up in statistics during a downturn.
For example, two companies may each cut payroll 20 percent. However, if one company identifies its best performers and worst performers and takes active steps to retain its best people, that company will have improved the average quality of its work force. That's a major plus.
Another, less-proactive company may lose its best performers to competitors and be stuck with the people no one else wants. You be the judge of the futures of both companies.
2009, like 2008, looks to be another killer year.
Will your business kill or be killed?
Now's the time to decide whether you'll be predator or prey.
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