React readily
The mindset to weather bad economic times must be forged during good times. It must be part of your overall approach to conducting business — an approach that you teach to your employees.
Lents says you shouldn’t lull yourself into a secure feeling when the economy is on the upswing. Always prepare for what might lie ahead, because six months later, the situation surrounding your business might have changed drastically.
“It’s difficult to prepare for a downswing because what you are used to preparing for and dealing with is explosive growth,” he says. “That’s what we had been dealing with in coming off such a large period of prosperity in the building products business. But within a six-month time
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ame, your serious questions can go from how are you going to grow fast enough to keep up with your customer base to suddenly dealing with the opposite: How can I shrink the company fast enough so that we can remain profitable even though sales are half of what they used to be?
“It’s difficult to predict. But you have to prepare for it, and when you see it start to happen, you need to be responsive. Six months is a very long time in business today. You have to react quickly. That reaction speed is really the key.”
You can prepare and maintain an ability to react quickly by revisiting your strategic plan at regular intervals.
“Looking back over the past 10 or 11 years that I’ve been in the building materials business, even when times were good, we would make some revisions to our strategy as often as every 60 to 90 days,” Lents says. “That’s pretty quick when you’re talking about strategic things. I think you have to, over time, build that reactivity into everyone’s thinking. You can’t get too wrapped up in the way you did things yesterday, you always have to look at new ways of doing things. If you can get everybody in that mindset, it’s just as important when things are good as when things are bad.”
You coach your employees to have a forward-thinking, ready-to-react mindset by constantly reinforcing it through multiple communication channels. Whether you are walking the halls, conducting the meeting or sending out a company e-mail, each opportunity provides you with a chance to reinforce your message.
“You have to talk about it a lot,” Lents says. “We talk about it quite a bit. I don’t know how many times over the years I’ve told people to not expect things to stay the same. Nothing ever stays the same, so don’t try to make it stay the same. It’s important to keep saying that to your employees.”
Communication must also move laterally. Your company will remain more adaptable and able to react if employees frequently work together on projects in cross-functional teams. Lents says cross-functional teams help maintain a flat organizational structure and will give employees a complete view of the challenges your company is facing.
“When we talk about marketing, for example, we like to get someone from manufacturing in the room, and vice versa,” Lents says. “Having that inclusive and different point of view really helps the decision-making of the whole group. Business is a 360-degree process. You can be great at manufacturing, but it doesn’t help you if you can’t sell. If you’re great at selling, it won’t help you if your manufacturing cost is too high. That’s why the more people you can have on a team who can see the entire process, the better off you are and the better decisions you’ll be able to make.
“You have to maintain a good relationship between your staff. If you don’t keep that relationship reasonably well, ultimately everyone is going to suffer. It’s a challenge in a falling market to do that and have all the moving parts fit together. But it can be done.”
How to reach: Eldorado Stone Operations LLC, www.eldoradostone.com
