Turning Crisis into Opportunity

The current financial crisis is about to drive the world into a global recession. In today’s article, let’s disregard all doomsayers and look for creative ways to turn the current turmoil into an opportunity for your business. After all, savvy creative businesspeople think counter-intuitively and understand that every problem offers new opportunity. And do you know that the Chinese word for ‘crisis’ comprises the words ‘danger’ and ‘opportunity’?

Don’t fire your employees — invest in HR

While the crisis may offer you a good opportunity to conveniently let go of a selected few bad performers, think twice before you downsize your workforce. According to Pfeffer and Sutton, research findings suggest that employee layoffs don’t help improve profits or long-term performance (due to their morale-destroying effect) while reducing the costs by less than is believed.

Your people are your most important asset in times of crisis, and will be the ones to get you out of a recession. The best confidence-building measure now is to invest in training and developing your people. This is a strong message that you believe in your staff, and that you want to master the crisis together. Moreover, notice that now is a fantastic time to cheaply recruit HR talent that has become a victim of mass downsizing exercises of your competitors.

Sell your way out of the recession by adjusting to your customers’ crisis needs

Now is the best time to engage in a meaningful dialogue with your customers. Send your people out to intelligently interrogate your clients with great questions such as: “How can we help you to better master the crisis with your value propositions? What new products or services do you need right now?” Consider clustering your customers into two categories. While some companies and consumers fight for survival, recessions are excellent opportunities for cash-rich companies and individuals to get great bargains and invest in assets. Hence, adjust your market offerings to the different crisis needs of various customer segments.

For example, my company, THINKERGY — The Idea Company in Asia, now offers one-day “Turning Crisis into Opportunity” workshops to corporations burdened by the crisis. We work with them to identify creative opportunities to smartly save cost and generate new revenues by playing on the crisis.

Innovate now for the next upswing

In addition, we currently approach cash-rich corporations and remind them that now is the best time to invest in our innovation solutions. “Innovation has nothing to do with downturns. A hot product will sell just as well in a recession as it will in a non-recession. The strong companies understand this, and during a recession, they invest,” believes Google CEO Eric Schmidt, and so do I. Now is not only a great time to train your employees in how to become more creative and do better business thinking, but also to start innovation projects. When the next upswing starts, your employees won’t have the time to do training — they will be busy selling all your new products.

Reposition or re-brand your company

Another thing that you may consider now is to permanently or temporarily re-brand or reposition your company (or some brands), or to alternatively launch a new low-cost brand. This strategy may be interesting for B2C companies selling to end-consumers (e.g., a fast-food company, a resort or hotel confronted with low occupancy rates). It can help you to counter recession-caused revenue drops through higher sales volumes.

Approach angel investors for start-up or expansion funding

For entrepreneurs or family businesses with a convincing business plan and value proposition, now is also a great time to approach angel investors for funding. Many private investors are sitting on piles of cash taken out of the highly volatile stock markets. Currently, some of them may be open to investing in a promising start-up venture or a well-established business that plans an expansion.

Ideate to survive

Out of necessity, crisis makes you creative. If your company really fights for survival, tap into the creative survival idea-pool of all your employees. Be frank with them about the serious state your business is in. Then fire up their creative imagination with questions like “How can we double our sales overnight?” or “How can we reduce our cost by 50% by the end of the month without firing any employees?” You’ll be surprised by the many great ideas that your employees will produce, and together take action on the most promising ones.

Conclusion: “In the middle of difficulty lies opportunity,” noted Albert Einstein. I advocate developing your own creative responses to the crisis instead of following the standard responses of many companies during a recession. Choose to see that the glass is half full, although the whole world currently says it’s half empty. Mindless herd thinking brought us the economic crisis. Do you really think it will help your company out of it?

Turning crisis into opportunity