Concepts for Survival in a Slowdown Part One

I remember the early months of 2000, so clearly.   I recall picking up the phone and having the following conversation with my then CFO.....

Me: "We gotta slow down our hiring, we have to slow down the tremendous speed at which we are growing our headcount"(read:payroll)..." (we had gone from 60 employees to nearly 200 in a 6 month period)

Him: "Why, we are having record months, and we are judged by our board based on, revenue per employee -- (which was the key metric in 98-99-00) --why should we slow down...?"

Me: "Because, our agencies are telling me that clients are taking longer to approve media plans, our pipeline is filled with things that are longshots - and the campaigns we are starting to see are much smaller in dollar number..."

Why do I write this?

Because, leaders of companies need to have heart to heart talks with their salespeople, not only sales VP's and managers.....but, their Account Management, Traffic Coordinators - and young sales rep's -- they will give the real scoop about what is happening in the marketplace......all too often, VP level folks wait till until the last possible moment - to deliver negative news.

But, what happens in companies, that are saddled with middle management, and multiple layers between CEO's and, client facing staff?    DELAYS AND CRITICAL TIME TO ADJUST, IS LOST.

The data on a slowdown may come through an excel spreadsheet.  The data on a slowdown may come through a, "all of a sudden drop in daily delivered revenue, or end of month missed target..."  And then, its too late.

2 major online media companies that I know of, are seeing double digit quarter over quarter DECLINES in their revenue...(q4 07-q1 08).....this potentially means that companies need to quickly adjust to a potential slowdown in spending, by their customers....

Some thoughts:

1) be more catering to performance based advertisers (read direct marketing)... media companies, who will fill their coffers with CPA deals, and then optimize to the best performing ones will do better.

2) in a market downturn online, and specifically in the inventory (supply) vs request (demand) business - it critical to have a staff that understands, and can deliver upon the thesis of -- MINIMIZING LOSSES AS OPPOSED TO MAXIMIZING GAINS.  Critical difference, and one that many companies take far too long too grasp.

3) be willing to make resource decisions around the best clients - who spend during a downturn...

4) be humble, and never think your brand is immune from the evolutionary forces in the marketplace.  I was at a conference a few weeks back and a VP of Sales at a dinner said, "we are immune from a recession, and in no way will it effect our company.." I cringed, and recalled watching a PBS show on the middle class in 1926-1932.....it was nearly wiped out.  One of the greatest economic (and untold stories) of our country is the rebound during this time period. 

5) be willing to spend significant time coaching your best employees - and over communicate company goals, their performance, and key metrics.  I have found that key employees want to be kept in the loop, and not shocked about anything.....use the time to build closer bonds to valuable staff.  It pays dividends down the road.

6) look at every single proposal that goes out of the inbox of your staff/company.  (I am guilty of not doing this) but I vividly recall a sales leader who did this with me, and it certainly made me work harder to make sure that the proposals sent out to clients, hit all the key points, in order to have a higher probability of winning the business.

7) be willing to extend both your personal brand, and the company brand.  be risky, sell differently, be unique.....COMPANIES THAT DIFFERENTIATE WIN, and in a slowdown  - it's often the company that shows the most "moxie" and personal willingness to extend, that wins.

8) a company assessment of where you are placed on a media plan.  Often times, 3 or 4 companies get slotted at the top of every media plan by an advertising agency.  They are must have's for any client -- and they may be classified as, "reach" companies, "efficiency builders" or "targeted placements."  Figure out quickly, AND BE WILLING TO ASK, where is my organization placed, and why?  And, then figure out ways - to stretch ACROSS where you have been penciled in, and possible ways in the future to create more value for the client...this helps to potentially, move on up the "food" or media planning chain.

9) rely less on email, and more on good old fashion people skills.  email is NOT people skills. 

10) give way more love and good vibes than EVER. passion goes a long way in any business, and it's often under utilized - and, overlooked.

11) promote any PR - and celebrate mentions - good or bad. 

There are far more than this, but I'd welcome any ideas or feedback from folks who read this blog, and are certainly more tuned in than I....

Rock on.

Comments

[fred wilson]

it's posts and thinking like this that insures that lotame will indeed rock on

fred

[Chris Jenkins]

Hi guys! I just found your blog from an article at Wired, and wanted to say thanks. I've had to take an extremely proactive approach as you've suggested, but it may already be too late. Our survival at this point may very well entail a drastic re-organization to drop to our most basic core product line. Our long term plans still include a network of micro-niche communities, and I'm extremely interested to see how Lotame does in the next six months.

[Susan Kuchinskas]

I like what you say about actually connecting with others, not just via email or online, like we're all prone to do. I think the people who do best in business or anything else genuinely love other people.