Innovation What You Should Do When Business Is Slow
Every once in a while, you will find that business is slow and there are just no orders to be had! Unless you really annoyed your customers and have done something very wrong, eventually the orders will start coming in again and life shall return to normal. The issue is what to do as a company while you’re waiting for this to happen.
Most companies take the traditional route and lay off a significant amount of staff. You read about it all the time; it almost seems like a routine article in the newspapers. I question this action, because the problem is when it gets busy again, these companies have a hard time finding quality staff to fulfill their needs. This is a very expensive way of doing business and puts your organization into a never-ending cycle of hiring and laying off.
Don’t get me wrong – if there is a recession going on then layoffs might have to be a very real possibility. However using this method as a routine instead of an anomaly leads to poor employee morale, which costs the company a lot in the long run.
The best thing to do during a short lull in the industry is to focus on these two actions:
The first is to focus on the obvious: work on getting more sales. Be very careful with this though, because you will be making commitments to new customers that must be fulfilled. Inevitably what happens is that after making all these commitments, your existing customers start ordering again and usually need a quick delivery. The new production commitments you just made will often interfere with this and then you will be in quite a dilemma. You might end up annoying both your new and your old customers which may result in no customers at all. Navigate this path carefully.
The second action, which most companies don’t do, is to make improvements in your organization so that when the orders flow again, the parts are made in a far more efficient manner than before. The lull in production activity is ideal for this since you can make improvements much easier and with less interruption to your customers. Many companies will rationalize that this is not the best time to make improvements since it involves spending money in a slow time and may cause some short-term losses.
I understand the rationale, but it’s so arbitrary. These companies would rather make improvements when things are busy, even though this means interrupting the production process to complete them, which can lead to delivery delays. The delays can add up and often result in lower output and less dollar volume in sales, not to mention unhappy customers. This type of thinking does not consider the needs of the customer, or the company’s long-term bottom line.
Ultimately, it’s up to each company to determine the best action to take during a slowdown in business. Many will go the conventional route and issue layoffs. The really smart companies will see it as an opportunity to meaningfully improve their processes and increase their productivity over the long term.
When this happens to you, choose wisely.