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As it did most companies out there, the 2009 recession hit Springfield ReManufacturing Corporation like a ton of bricks. But, as I’ve discussed a few times, there were a number of key decisions that helped us pull through to the other side.
Now that 2009 is more than 10 years behind us, it’s clear those decisions didn’t just help us survive – they're what helped us thrive.
We needed something to help us focus on surviving the recession and all the heartache that comes with a downturn.
Currently we're staring down the barrel of full blown pandemic and memories of the recession of 2009 rushes back to mind.
Back then, we came up with something we called "The four P's: People, Positive cash flow, Profits, and Positioning." I can say it was a huge help during that crisis and I'm glad we have the four P's now as we lean on them to get us through the current crisis.
The Four P's are as follows:
1. People
Our goal is not only to maintain our open-book culture and keep the communication channels open but to double down on our efforts to keep everyone informed of the constant changes that are occurring.
At SRC Holdings there's been a standing meeting hosted every morning at 9 AM. The meeting is held with key leadership to discuss updates around the virus and share ideas about what, if anything, we should be doing differently.
The Executive Vice Presidents of SRC Holdings also have a daily meeting every afternoon at 1:30 PM to address questions, make any adjustments, and make sure they're available to help each division across the company.
The information discussed during the 9:00 AM and 1:30 PM meeting is packaged up and sent daily to every employee in the company to ensure the lines of communication remain open.
If you are not communicating every day with your employees about the impact COVID-19 has on your company then today is the day you should start.
2. Positive cash flow
In 2009 banks were shifting their lending requirements. At out bank, we couldn’t borrow based on the value of our assets anymore, such as buildings, machinery and inventory.
If we wanted to survive and grow, we concluded that we needed to focus on maintaining positive cash flow. That was the only way we would be able to keep our current debt level let alone have a chance to obtain future loans.
Cash flow is your Critical Number™ now...period. At least until things have gotten better and the ship right side up as the crisis dwindles.
3. Practices
We knew 2009 was going to be a tough year and we new we would need to plan accordingly. We were preparing for the possibility that we needed to sacrifice profits, and we needed to remain diligent in our open-book practices and do it in a strategic fashion. Our Great Game practice helped us position the company to have a strong foothold after the recession. We were prepared to lose money as long we were investing in new opportunities.
With the current crisis, the divisions of SRC Holdings and The Great Game of Business® are prepared, but we realize that not everyone is prepared to take a hit to profit.
My advice...focus on #1 and #2: your people and maintaining a positive cash flow first. Then, stick to the 10-key steps for your business to survive and be as strategic as you can about the best way to position the company after the COVID-19 crisis has ended.
As you move on to positioning, remember your biggest asset is your people. Communicate. Communicate. Communicate. Keep them in the conversation to create strength across all your teams. Remember, some times the best ideas come from the person you'd least expect!
4. Positioning
Back in 2009, we could tell from our forecasts that our organic growth would eventually stall out. The things we were doing to help propel us for 25 years were coming to a screeching halt.
We needed to figure out different ways to bring in new business. We looked at the recession as a way to encourage diversity and to position ourselves for future growth. Even in tough times, there are always significant opportunities.
This is time to think outside the box. Check out the Black Swan Action Guide for help.
- What are other opportunities for cash flow?
- Is there a new line you can introduce that has high demand?
- Is there a way you can diversify?
- What is one thing that can position you in the right place at the right time?
Open up the discussion with your people.
Just yesterday, one of our certified coaches for The Great Game of Business received an email from one of their clients. SummitCove, a ski lodge in Keystone, Colorado, closed their doors for two days and made the decision to pay every employee during these two days off.
The company sent out an email to their staff opening up a discussion about "where do we go from here?" This is what the email asked of each employee:
"During your 2 days off, your only job is to think about and write down your ideas on how to cut costs, save money and think about services we could sell that people want to buy. Outlandish and crazy ideas...I want them all! When you come back to work after this much needed time off, we will be working in off-season mode and preparing to complete our Quality Assurance Checks, Deep Cleans, Carpet Cleans, and other off-season activity."
-Peter Reeburgh, Owner of SummitCove Lodging
It will be exciting to hear the amazing ideas that develop from this open dialogue with their employees.
Listen to Peter share a more in depth story about how his team navigated the pandemic on the Change the Game Podcast.
Take this time to focus on your 4 P's: People, Positive Cash Flow, Profits and Positioning. We're all thinking about you and all our business owner friends. We realize this time is tough for many and want you to know we're hear to help.
If you have questions please reach out to us and we will be more than happy to talk through your concerns and guide you in anyway we can.
Change the Game features stories of real practitioners using and adapting the principles of the Great Game of Business to survive and succeed in the business world, even in challenging times like we are facing today. Click to learn more about these practitioners' stories below:
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