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Now that recession alarms are going off around the world, and everyone outside Fort Mc-Murray is revising budgets downward, it’s again time to look to the future. This slump, too, shall pass. But how you respond to it will largely determine how your business will fare in the sunnier days that lie ahead.
“Recession tends to clear out the deadwood,” says Norm Nopper of Varanor International, a Toronto management consulting firm. “Companies that haven’t been looking after their employee relations, that haven’t been paying attention to their bottom lines, were vulnerable going into the recession, and they may not come out of it.”
So how do you make sure your business survives? Nopper offers one sweeping solution: Make growth a team effort. If you gain the trust and support of your employees, you have a better chance of coming through the storm with a stronger, more focused business. “Look after your people,” Nopper says, “and they’ll look after you.”
Nopper learned his tactics in the recession of the late 1980s, as a training consultant with Honeywell Canada in Toronto. When the Minneapolis-based multinational decided it had seven plants too many, Nopper worked closely with the plant staff to ensure they had the skills, attitude and will to win that was needed to overcome growing international competition. In the end, Honeywell saved the operation, which made heating and air-conditioning controls, and actually reinvested in it, because of the investment the workforce had made in itself.
Normally, management-employee relationships are the first casualty in a recession. Worried managers looking to cut costs start eyeing the salaried workforce as surplus inventory that can be converted into cash. “Get into the habit of viewing people as if they truly were an asset,” advises Nopper. Make them partners in your quest for value, efficiency and survival.
Here’s Nopper’s five-part formula for overcoming recession:
1. Get employees onside in your battle against costs and waste. Nobody knows your operations like they do, he says, “and all we have to do is ask them.” For example, Nopper does a lot of training in the spa business, and says big bucks are washed down the drain every day when hairdressers use gobs of shampoo instead of the little dab each client needs. Nopper, who consulted for Magna International for 11 years, says similar economies can be found at any manufacturer. Every employee knows ways to reduce use of raw materials or make products more efficiently — but they have never been asked, and they don’t think anyone cares.
2. Tap your employees’ customer knowledge. In tough times, companies talk about getting closer to their customers. But they are more likely to hire market-research companies to find out what their customers want, instead of asking their front-line employees. “This is a tremendous opportunity for market intelligence,” Nopper says. But most companies have no idea how to capture employees’ customer knowledge. Tell employees how important their knowledge is — and give them specific questions to ask customers to find out why they buy from you, and what else they expect of you. Will your employees resent doing this work? No way, Nopper says. “Employees tend to say, ‘Why have you waited so long to come to me?’ “
3. Gain employees’ trust by making sure this isn’t just a one-time effort. Institute formal processes and regular meetings (keep them short and to the point) to prove your people are valued members of the team. Be humble and consistent. By admitting management needs all the help it can get, you’re not confessing weakness — you’re building trust.
4. Don’t cut the housekeeping budget — expand it. A clean workplace is a more positive, more efficient one. “When you’re organized, it’s easier to see what’s missing,” Nopper says. Similarly, it’s easier to spot an oil leak in a piece of production equipment when it’s sparkling clean than when it’s covered with grime. When you show pride in your workplace, your employees will be more motivated custodians, too.
5. Avoid the temptation to reduce employees’ pay during a slowdown. Nopper shares Magna’s fair-trade philosophy: Pay employees market rate for their labour, plus something extra for performance, such as profit-sharing. That will give you the compensation flexibility you need in tough times. Plus, it will reinforce your employees’ attention to productivity and the overall health of the business. “You have to be consistent,” he says. “If you want people to focus on the bottom line, you have to give them a piece of the action.”
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