A plan for the Unexpected
By stepping back and looking at the issues raised in Strategic Thinking, you may uncover potential weaknesses that you can address.
The first step may be to sit down with the management team, collect their input on the topics mentioned above and develop your contingency plan in case of an economic downturn. Some of the questions to ask include:
- In a recession, which of your customers or clients would be most vulnerable and how can this affect your relationship?
- What about your key suppliers and/or partners?
- How elastic are your resources? If you lose somebody through attrition, should you replace them with short-term or outsourced labor?
- Have you taken a close look at your cash cycle: inventory, accounts payable and accounts receivable? Can you tighten up there by applying different methods? Tighter inventory and more timely receivables mean more cash, less debt and smaller interest expenses. The opposite is true of payables.
Beyond speaking with your internal team, you might also consider strategic conversations with key customers and vendors about their views on the economy. Your conversations may or may not prompt a change in your plans for this year—but they will definitely prepare you for whatever may come along.
- Michael Oleksak 2007
