I recently read a synopsis of the book Chaotics: The Business of Managing and Marketing in the Age of Turbulence, by Philip Kotler and John A. Caslione (AMACOM, May 2009).

The authors present eight ways that organizations can flourish despite the worldwide recession, and the resulting uncertainty and upheaval it has brought:

1. Secure your market share from core customers. The first and foremost priority of every company should be to retain their core customer segments. The old maxim is that it costs five to seven times as much to get a new customer as it does to keep the one you already have. Be prepared to ward off attacks from competitors attempting to snatch your most loyal and profitable customers.
2. Push aggressively for greater market share. All companies must fight for market share and, in chaotic times like these, many have been weakened. Slashing go-to-market budgets will only have negative impacts on your business, and sends a signal to competitors that the door might be open for poaching. Instead, work hard to add to your core customer segments at the expense of your competitors.
3. Research customers now more than ever. Everyone is under pressure during times of turbulence and chaos, which means all customers are changing their habits - even those in your core segments whom you think you know so well. Stay close to them. You don’t want to find yourself relying on old value propositions that no longer resonate, or with a business model that customer don’t want.
4. Seek to increase - or a least maintain - your marketing budget. This is the worst time to think about cutting anything in your marketing budget that targets core customers segments. In fact, many progressive organizations are strategically adding to this budget, or taking funding away from new initiatives targeting new customer segments that might distract them from their core. It’s time to secure the home front first.
5. Focus on all that’s safe. When market turbulence is scaring everyone in the market, there is a massive flight to safety. Businesses and consumers need to feel safety and security with your company and its products and services. Do everything possible to communicate that continuing to do business with you is both safe and smart. Spend whatever it takes to do it.
6. Quickly drop programs that aren’t working. If you’re not watching your spending, rest assured that someone else is - including your internal business peers whose budgets couldn’t be protected from the budget cutting axe. Eliminate your ineffective programs before someone else calls attention to them.
7. Don’t discount your best brands. When you do this, you instantly tell the market two things: You were charging too much before, and your brands won’t be worth the price in the future once the discount is gone. Instead, consider creating a new, distinct product or service offering under a new brand with lower prices. This gives value-conscious customers the ability to stay close to you while not alienating those still willing to pay for your higher-priced brands. Once the turbulence subsides, you many consider discontinuing your newly introducing branded value product line - or not!
8. Save the strong; lose the weak. In a turbulent economy, you need to make your strongest brands and products even stronger. There’s no time or money to be wasted on marginal brands or overly fragile products that aren’t supported by strong value propositions and a solid customer base.

Many M Squared clients recognize the great value of bringing in subject-matter experts to explore strategic and tactical opportunities. Sometimes these ideas come from thought leaders or books like the one highlighted above. Within the M Squared Consulting network we have experts with knowledge and experience across all the major business disciplines and industry segments. These seasoned business professionals are as adept at asking the tough questions as they are at determining what the best answers are for your organization - those solutions which will deliver bottom-line results and have lasting value.

Today’s article has relevance for two groups of businesspeople: those who must operate within the confines of a budget and those responsible for creating the budget.

Which means it should just about apply to every business professional!

For those of you who work in organizations that operate on a calendar year budget the budgeting season is almost here. For those on a Federal fiscal year (October through September) you are by now deep into the process, so hopefully this advice doesn’t come too late!

Over the years I’ve witnessed five successful patterns for “doing more with less” that successful executives tend to exhibit. Given the current economic climate and the resulting business challenges it presents, these patterns have particular significance today:

First, they clearly define what “doing more with less” really means. The most common metric appears to be “contribution efficiency” - an increase in the ratio of net contribution per dollar spent. This metric seems appropriate when budgets are falling (recognizing the need to monitor it over time as it can be manipulated in the near term) and also applies to investment decisions (ROI).

Second, when they cut, they do it strategically. Let’s face it, Budget Cutting 101 isn’t exactly one of the courses taught in business school…we all learn it in practice. After eliminating travel and entertainment, and other easy stuff, bad decisions often tend to creep in under the force of mounting political pressure. If you’ve ever made uniform cuts across the board, or cut proportionately to a percentage of spending, then you’ve been there. “Successful” cuts are smarter and in line with strategy for competing successfully both today and tomorrow.

Third, they watch the risk factors. CFOs want to cut overhead to increase the likelihood of (or, in other words, decrease risks against) making short-term profit goals. Yet when managers try to do more with less, risk exposure arises in ways never imagined - especially if it wasn’t clear which elements of the budget were making a contribution before the cuts. It’s the “risk paradox”. If you want to make sure your “less” really has a chance of doing “more”, then you need to identify and manage the new risks that have silently crept into your plans.

Fourth, they avoid the ostrich effect. This is where, despite overwhelming evidence to the contrary, you bury your head in sand hoping the issue will just go away on its own. Just because there’s enormous pressure today, the best don’t ignore the fact that tomorrow is right around the corner in the form of next years plan. And when looking ahead, the only thing certain is that historical norms are no longer a reasonable guide. So, the best leaders are anticipating the key questions and assumptions for the 2010 plan, and working on getting some answers now. They’re committed to leading the process, not getting dragged behind it.

Finally, the best push their business case competency further, faster. Every organization with limited resources is full of skeptics and cynics, either seeking a larger piece of the pie or deflecting attention from themselves. Un-tested assumptions, like ostriches, don’t fly. Building a solid business case is the new currency of credibility.

No matter what business opportunities or challenges you’re facing, M Squared Consulting can help you keep critical initiatives on track. Across industries and corporate functional areas we deploy top-level experts who are completely focused on delivering bottom-line results to your organization. Our unique talent-on-demand model allows clients to quickly get moving, and to do more with less.

As I reported last week, we are beginning to see some encouraging signs of stabilization in the U.S. economy. Here at M Squared Consulting we’ve begun to notice that many of our clients in the Financial Services, Technology, and Life Sciences practice areas are evaluating their investments in strategic initiatives and also beginning to think through their strategic plans for 2010.

While it is difficult to predict exactly when and how the economic recovery will unfold, today I’d like to share five high-impact strategies that companies who are still in a cautionary mode can pursue to strengthen their competitive position today and get ready for the inevitable recovery.

1. Conserve cash. Executives know that cash provides the flexibility that companies need now to make acquisitions, expand into new geographies, invest in new products, and hire new employees. Companies can conserve cash by eliminating excess inventory, optimizing collection efforts, and improving cash forecasting processes. For example, Oracle found that by optimizing collection efforts using industry best practices and advanced collection tools you can improve days sales outstanding by 3 to 5 days, lower costs by 35 to 45 percent, and greatly reduce credit turnaround times.
2. Drive down cost of goods sold. Rather than cut general and administrative expenses across the board, companies should look to achieve long-term cost savings by improving supply chain efficiencies and reducing operational complexity. High-impact strategies include minimizing product costs and risks, reducing spending on goods and services, and lowering logistics costs. Some companies have found that by carefully dissecting their supply chains they can dramatically reduce sourcing cycle times and speed the launch and delivery of new products.
3. Maximize customer value. Research indicates that during good times 20 percent of the average company’s customers drive most of the company’s profits, but in a downturn this ratio plummets to 5 percent. That’s why building loyalty with your best customers is essential to retaining and expanding market share. Other strategies to maximize customer value include adopting customer self-service and improving sales force effectiveness via better training and tools. Customer self-service solutions let customers resolve their own issues on their own schedule. These technology solutions have been found to be 14 times less expensive than telephone interactions with call center agents and up to 35 times less expensive than in-person interactions.
4. Manage risk and performance. Mitigating risks and managing complex new compliance and regulatory requirements have become mission critical issues. Many companies are recognizing that they need a consolidated approach to compliance and a flexible approach planning in order to better manage and control risk and drive performance. One example of an outsourced solution that helps companies manage risk and optimize performance is Collabrus (full disclosure: Collabrus is a sister company and service provider to M Squared Consulting), which empowers companies to safely and cost-effectively engage independent contractors.
5. Optimize workforce performance. During downturns, an engaged and productive workforce is essential. Leading companies are investing in technology and processes to help them hire, train, and retain the talent they need. This includes automating HR service delivery, taking an active approach to talent management and succession planning, and using learning and performance systems to engage and develop their workforce. Many companies have also realized the benefits of a flexible workforce model, whereby the firm staffs for a baseline of work with full-time employees and supplements this with variable, flexible, resources to meet peak, or non-core-expertise needs. M Squared Consulting, and our talent-on-demand model, has proven to be a great partner for clients need consulting, interim, or contract expertise.

Last Fall, as the economic reality of the financial crisis was just beginning to reach critical mass, the Silicon Valley venture capital firm Sequoia Capital sent its now infamous “R.I.P Good Times” presentation to all of its portfolio company CEO’s.

Many media outlets glommed onto this doom and gloom viewpoint because, as they often tend to do, that was the direction the rest of the herd was taking. Ironically, the overwhelming negativity of the message could well have exacerbated or prolonged the very downturn the venture capitalists were warning their companies to defend themselves against - creating a vicious, downward, self-fulfilling prophecy.

As business leaders we now find ourselves at an interesting inflection point. We seem to be at the crossroads of continuing down the cautionary path that the Great Recession has brought us (and that the VC’s at Sequoia encouraged us to take) or, as rising business and consumer sentiment might indicate, we could be witnessing the beginning of a recovery.

As with most trends in the United States (and around the globe for that matter) California seems to be at the epicenter. Just as the Silicon Valley led us into the last great economic downturn, the same region is now poised to lead us out of this one.

There is just one problem…hardly anyone is moving.

Silicon Valley business leaders were once renowned for their willingness and ability to bet big. This self confidence was infectious and was greatly enabled by the venture capital community. While the innovation and collaboration are still there, it seems as if all but a few progressive leaders are still waiting for an obvious clue, or signal from some higher being, before they “pull the trigger” on investing or launching new initiatives.

What to do?

Has this living, evolving, business organism been sufficiently pruned of its excess? Is it ready to grow again?

Right on cue, all the news outlets are starting to bubble with cautious, tentative, but sustained enthusiasm about the positive direction of the economy. A Wall Street Journal poll of economists recently reported that 57% now believe the recession is already over, while another 23% believe that the economy will turn in the next month or two.

So, while we can’t quite breathe easily, perhaps we can take a collective sigh of relief, and focus on the opportunities at hand.

While it used to be the case that American industry needed just a glimmer of hope to change the world, now it seems that we need more substantial proof to get going. I think the proof must come from the very businesses that are on the sidelines. They must make the decision to jump in.

One thing is certain: markets are cruel, unforgiving beings. If we don’t move, someone else surely will.

What are we waiting for?

Let’s pull the trigger and get going.

Are you ready?

No matter what business opportunities or challenges you’re facing, M Squared Consulting can help you keep critical initiatives on track. Across industries and corporate functional areas we deploy top-level experts who are completely focused on delivering bottom-line results to your organization. Organizations that are ready to get going again realize great value from our talent-on-demand business model.

Recent surveys are creating optimism and indicating that the worst of the “Great Recession” may finally be behind us.

The Conference Board, which issues some of the most watched economic indicators in the U.S., reported that consumer confidence jumped 14 percent between July and August. The Index, which hit a low of 26.9 in March, has more than doubled since then and now stands at 54.1. It’s still slightly below the 54.8 posted in May, but the rise was considerably greater than the 47.9 economists had expected.

Employers mirrored that confidence in a CareerBuilder / Robert Half survey that said 53 percent of businesses polled plan to hire full-time workers in 2010. The Employment Dynamics and Growth Expectations Report prepared by the two companies found 40 percent of employers planning to hire temporary or contract workers and 39 percent expecting to hire part-time workers.

The report, which has been issued annually for the last five years, found that the positions first to be filled will be in technology, customer service, and sales. Also on the list are positions in marketing/creative, business development, human resources, and accounting/finance.

Most the hires will be either entry-level (say 28 percent of the hiring managers surveyed) or staff-level professionals (32 percent). The traits most valued in a new hire? - Employers cited multitasking, initiative, and creative problem-solving.

Companies are identifying the key skill sets they will need in new hires to take advantage of the opportunities presented by improving economic conditions. Firms that cut staffing levels too deeply may need to do significant rebuilding once the recovery takes hold.

Another positive sign which indicates recovery is that many employers are throttling back on layoffs, says outplacement firm Challenger, Gray & Christmas.

“We see more and more signs that the economy is beginning to turn around. While it is too soon to expect a massive hiring binge that will move some of the nearly 20 million jobless Americans back onto payrolls, the pace of job cuts is likely to continue its downward trend,” said John A. Challenger, CEO of Challenger, Gray & Christmas.

In January 241,749 job cuts were announced, the highest since January 2002, according to the firm, which has tracked planned layoff announcements daily since 1993. But the announced job cuts have been declining since.

The August numbers are still being counted, but the firm said it expects the four-month total from May through August to be significantly lower than the 711,100 it counted from January through April.

“Year-end job cuts are likely to increase from the levels recorded during the summer months, which typically see fewer job cuts, but we will probably not return to the levels reached between January and April,” says Challenger. “Job cuts are expected to continue the overall downward trend in 2010, when we might actually begin to see some small improvements in hiring.”

The Wall Street Journal reported this month in its Economic Forecasting Survey that economists expect, on average, the economy to lose just under 27,000 jobs a month next year. While not exactly a recovery, it’s a huge change from the 70,000 monthly job loss they predicted in July.

Is it too soon to say that the US economy is in full recovery? Yes, but that doesn’t mean these encouraging signs can be ignored either.

It would also be foolish to sit idly by and wait for irrefutable proof of the recovery, because history proves that will come well after the fact. One lesson that we can take from past downturns is that major business innovation is born in market turbulence.

The M Squared Consulting “talent-on-demand” business model has proven to be an enabler for those companies wanting to harness the expertise and power of seasoned professionals to deliver results. This recession will pass and business will pick up again without warning. Strategic organizations - those that have weathered the storm and embraced the resulting changes - will be ready to capitalize on the opportunities before them.

Are you ready? We’re here to help.

Alexander Green is a well known investment writer who recently wrote this remarkable article published in Spiritual Wealth:

Dear Reader,

Whether you realize it or not, one indispensable quality affects every relationship in your life. It holds together all your associations. It determines whether you realize your dreams, both personal and professional.

And it virtually defines you to others. Without it, true success is impossible.

Stephen M.R. Covey is even more emphatic. He writes “There is one thing that is common to every individual, relationship, team, family, organization, nation, economy, and civilization throughout the world - one thing which, if removed, will destroy the most powerful government, the most thriving economy, the most influential leadership, the greatest friendship, the strongest character, the deepest love.

On the other hand, if developed and leveraged, that one thing has the potential to create unparalleled success and prosperity in every dimension of life. Yet, it is the least understood, most neglected, and most underestimated possibility of our time.

That one thing is trust.

Simply put, trust is confidence in an individual or organization. It is other people feeling good about relying on you. And its value can hardly be overstated. Trustworthiness is the universally accepted test of good character.

When you trust someone, you have confidence in his or her honesty and abilities. You can delegate things easily and effectively. You can relax. You have peace of mind. But when you doubt someone’s integrity, question his accomplishments, or worry about his agenda, confidence is replaced by suspicion and anxiety.

Take a moment and picture someone you trust implicitly. It could be a spouse, a parent, a sibling, a friend, or a business associate. How does this relationship make you feel? How easily do you communicate? How quickly do things get done?

Now imagine someone you distrust. How does this relationship feel? How easily do you communicate? Do you enjoy this relationship… or is it complicated, cumbersome and draining? The difference between a high-trust and low-trust relationship is night and day. In a high-trust relationship, you can say the wrong thing and your listener still understands you. In a low-trust relationship, you can choose your words carefully, be very precise, and you may still be misunderstood.

Sadly, trust is at an ebb in our society. A Harris poll reveals that only 27% of Americans trust the government, only 22% trust the media, only 12% trust big companies, and only 8% trust political parties.

Personal trust is waning, too. Many people nowadays look back on contracts or commitments as something to negotiate. Half of all marriages end in divorce. Many (perhaps most) of them founder on a lack of trust.

Each of us naturally gravitates away from individuals we can’t believe or rely on and towards those we can. Low trust is the very definition of a bad relationship. And once you forfeit someone’s confidence, it’s awfully hard to win it back.

This is particularly true in business.

We all survive by selling a product, service or skill. Yet every sale has five basic obstacles: no need, no money, no hurry, no desire, no trust.

If trust is lacking, forget the other four. You’re done. The moment someone suspects your motives, everything you do becomes tainted.

That’s why successful companies make a priority of building and maintaining confidence. John Whitney, a Professor Emeritus of Management at Columbia Business School, estimates that mistrust doubles the cost of doing business.

You may have the best product, great service, competitive pricing, mountains of supporting facts and figures and testimonials galore. But if you don’t command and deserve trust, you will not enjoy long-term success.

It is never enough to simply invite trust. It must be earned.

In personal relationships, that means handling responsibility, proving your credibility, allowing yourself to be relied upon again and again. It’s not just about integrity. It’s about looking out for the other person’s interests as well as your own.

Employers build trust with employees by assigning them important responsibilities, giving them the freedom to make mistakes, and setting an example. Real leadership is about getting results in ways that inspire confidence.

In a world that changes as quickly as ours, trust is a critical factor. It is the vital currency. Business consultant Tom Peters calls trust “the issue of the decade.” Trust makes work easier and more productive. It makes relationships stable and predictable. It creates a sense of community. That’s why it’s crucial that we not violate it. Trust can take years to build but only a moment to destroy. And you may not even get an opportunity to try to restore it.

For each of us - and for every organization - trust is something to be built up, protected, valued, cherished, and carefully preserved.

It is the one thing that changes everything.

Carpe Diem,

-Alexander Green

This article is very powerful, and I also believe it is a great illustration of why M Squared Consulting has enjoyed 21 years of success in the market. Our clients trust us to help them with their business challenges. They are seeking honest answers to their problems; solutions that are not biased nor hindered by proprietary frameworks or methodologies. Our objective is always to deliver the best solution for each unique client situation. By providing our unique blend of talent-on-demand we deliver results, quickly and cost-effectively. This is why clients view us as trusted business advisors, who always have their best interests in mind. Through their success, we realize our own.