The only thing worse than wading through a business downturn is to do so without a strategy. “Business as usual” doesn’t cut it when markets, consumers, or other conditions beyond your control turn against you. The old saw, “What doesn’t kill you makes you stronger,” is little consolation when business is slow.

Follow these seven steps to stay up in down times:

Step 1: Focus on your core. Rein in investment in peripheral profit centers and invest in what your business does best. Always assume your core is underperforming and you’ll be right most of the time. Aggressively market to your current customers. In down times one of the best ways to gain market share is to retain the customers you already have and gain their referrals.

Step 2: Don’t “panic-spend” on advertising. Resist the temptation to panic and increase spending on advertising to draw more traffic. When the fish aren’t biting, throwing twice as many lines in the water is not the answer. Do a better job with the customers already coming through the door, and you can close the same number of sales — and oftentimes more — with lower traffic counts. In fact, one reason people overspend on advertising is to buy fresh prospects to replace those abused by incompetent salespeople and managers. With lower traffic counts comes an opportunity to build more rapport, give better presentations, and follow up more thoroughly throughout the sales process.

Step 3: Don’t kill your capacity to produce. The way to improve your bottom line is to maintain a tighter inventory, scale back ad dollars, put vendor products/services up for bid, and improve receivables and other cash flow factors. However, resist the shortsighted strategy of cutting costs that contribute to the development of your most valuable asset: your people. Training builds up your only sustainable competitive edge and increases your productive capacity.

If you reduce it, you contribute to your own demise. Training is not a luxury and it’s not a cost. It’s an investment. When times turn down, take the opportunity to train up a notch.

Step 4: Reduce entitlements. Reward performance. Terminate the weakest links. If you make personnel cuts, remember that tenure and credentials don’t substitute for results. Reward and support those who perform. This means you’ll have to resist the temptation to bond with yesterday’s heroes for old time’s sake. Fall into this trap, and you send a corrupt message about standards and miss a prime opportunity to create urgency and focus. The weak links in your organization determine the speed of the rest of the team. They are a restrictive force.

Just as a chain can’t pull more than the weakest link allows — regardless of the strength of the other links — your overall production will be compromised by your weak links as well. Weak links lower the collective self-esteem of the whole team. They compromise your standards and impair your credibility as a leader. They are a distraction; they sap morale and break momentum.

The team attitude towards weak links normally starts out with “let’s help him or her” and when no improvement is seen, the attitude changes to one of resentment. Top performers feel cheapened and diminished working in an environment where others don’t contribute and can’t pull their weight.

It’s worth mentioning that the most devastating weak link in your organization is a bad manager. Bad managers should be given less rope because, when a bad manager hangs himself, he tends to hang a lot of other good people with him. Use down times as a chance to clean up your roster.

Step 5: Cut once. If you reduce expenses this month by cutting out free cokes and bottled water, then two weeks later eliminate company cars, then next month fire the cleaning service, it’s like Chinese water torture. All it does is continue to distract, demoralize, and disrupt. Figure out what you want to cut and get it over with. This includes personnel cuts.

Once you have finished, bring everyone together. Explain what you’ve done and why. Tell them to put it behind them. Reassure your people that everyone and everything that remains has been strengthened by these cuts. Now that they are finished, everyone can focus and get back to work.

Step 6: Don’t develop a loser’s limp. Don’t blame outside conditions to escape responsibility for your current ills. A downturn always exposes the sins of the good times. These past record years in our economy have created their share of fat, arrogant, complacent know-it-alls who never thought they’d see another poor day. They stopped training hard, stopped making tough decisions and changes. They became averse to risk, maintained rather than stretched, and turned a blind eye to poor performers because business, overall, was good.

Until you accept that the biggest threat to your organization comes from the inside and not the outside, you will continue to misdiagnose and mistreat your most serious problems. Typical ones include lack of: leadership, hiring standards, performance expectations, accountability, a cohesive leadership team at the top, vision, strategy, urgency, people development, and a growth environment. These are the inside threats you must go to work to eliminate day-in and day-out.

Step 7: Stay positive. Management will multiply the damage and compound morale problems if they terrorize people with threats, excessive criticism, and lousy attitudes during slow times. Remember what good coaching is: leading from the front with plenty of speedy, positive reinforcement for worthy performances. A good coach uses honest communication to encourage, motivate, listen, and direct. Good coaches also give fast feedback and consequences for deficient performances.

Stay focused on the big picture and remember foremost that the best time to fix the roof is when the sun is shining. When better times return, it’s not a license to coast, become complacent, and think you’ve arrived. Instead it’s the best time to train, coach, clean up your roster, set standards that create urgency, make the tough decisions, implement necessary changes, take risks, and lead from the front.

If these things are done when things are rolling, people will stay sharp and focused. Let them know there’s still room to improve. When business starts to pick up again, develop a mindset to run up the score rather than sit on the ball, and the next downturn will find you bulletproof rather then wearing a bull’s-eye.

Dave Anderson is a peak performance author, trainer, and speaker on sales and leadership issues. For more information, call 650-941-1493 or visit

Publication date: 01/13/2003