Friday, October 30, 2009

Five Critical Success Factors During Times of Economic and Organizational Uncertainty

I received quite a few telephone calls from executives and managers after I sent out an email blast of my article entitled: Keeping Spirits Up When Bottom-Line is Down. It seems to have struck a nerve. Many of those who contacted me felt they or their company had not responded well to the current economic downturn.

During times of economic and organizational uncertainty companies need to focus on the things that really matter — the things that will ensure the viability of their business in the future.

The great Chinese military strategist, Sun Tzu (pronounced son-eat-sue), identified “five constant factors” that determine success during a battle. Said he, “He who masters them wins; he who does not is defeated.”

The five constant factors in war that determine either survival or ruin are: 1) moral influence, 2) weather, 3) terrain, 4) commander, and 5) doctrine.

I believe these five factors have business parallels. He who masters the five constant factors of business will win; he who does not will be defeated — regardless of the economy or any other market conditions.

The first constant factor, or moral influence, of business is a spirit of mission. To survive economic turmoil a company needs the strength of belief and a sense of purpose that rallies a fighting spirit and generates a firestorm of commitment from its employees. Those businesses that constantly keep the company’s purpose in the forefront of the minds of the employees (and customers) will win.

Sun Tzu’s weather constant equates to outside forces that affect the enterprise. The surge of consolidation sweeping through every industry is an outside force. So too are the reality of global competition and the influence of environmentalism. Companies need to constantly monitor the shifting changes in the world around them and then adjust their strategies accordingly.

The “terrain” is the marketplace. Just as a general must know the terrain of the battlefield, so also the businessman must consider the scene of action – the place, people, products, promotions, price, and other factors that determine success.

The commander, of course, is the leader of the company, division, or department. The attitude, philosophy and skill level of the leader greatly influences the performance of the employees. Effective leadership principles are the same even during a crisis. Too many companies jettison healthy management practices and lose their sense of direction during a business crisis. Those managers who maintain their stability and stay the course during tough times will lead their company to success.

The final constant, “doctrine,” is comparable to the guiding principles, core competencies, or core values that are vital to the company’s current and future growth. A company’s core values should never be abandoned in tough times. Rather, they should be the rallying standards that drive everyone’s behavior and performance.

The key to success during business uncertainty is to refocus the “troops” on the things that will ensure a victorious outcome for the company while battling the bad economy.

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