Cross-posted from Harvard Business Online
There's an old story about two shoe salesmen whose company sends them to a remote village in Africa. Upon arrival, one sends home a message saying, "No one here wears shoes; will return shortly." The other salesman sends this message: "No one here wears shoes; send inventory!" The point of the story, of course, is that your perspective influences your behavior. If you don't feel that you can change a situation, you act one way. But if you see the world as a series of opportunities, you act differently.
Over the past couple of months, I've been struck by this simple principle in regard to the behavior of managers and entire companies. As we come out of the recession, some managers seem preoccupied with all the negatives of the economy and business climate -- the high unemployment rate, tight credit, weakness in consumer spending, a slow housing market, increasing regulatory interference, high government debt levels, and more. Faced with these "realities," such managers focus primarily on reducing costs and maintaining the current business model, putting off decisions that might require new investments or risks. It's a "batten down the hatches" mentality where you don't worry about the future because the present is so tenuous.
On the other hand, some managers and firms look at the same business environment and see enormous opportunities for growth and competitive advantage. For example, ConAgra Foods realized that in tough economic times, consumers would want "value meals" that made it possible to feed their families for minimal cost. So ConAgra revived its Banquet frozen food brand by reformulating the meals to make them more nutritious while also taking out costs to keep the price affordable. Simultaneously, ConAgra created a campaign called "Start Making Choices" that features healthy recipes for people on a budget (using ConAgra products). These steps and others helped ConAgra realize significant year-over-year increases in sales volume -- some of which they were able to reinvest in newer and more premium brands, such as Healthy Choice, with an eye toward capturing higher-spending consumers as the recession eases.
Cisco is another example of a company that has focused on opportunities in the midst of a recession. When business turned down from 2008 to 2009, Cisco cut back on discretionary spending and the utilization of contractors to maintain its margins while preserving its own workforce. But at the same time, CEO John Chambers challenged his managers to create growth by targeting over two dozen adjacencies, such as "connected real estate" and "connected health care," and backed it up with a number of acquisitions. The focus on growth in the midst of a recession has allowed Cisco to hit the ground running in 2010, producing results that exceed that of most technology firms.
Now that the "official" recession, as measured by government statistics, is ending, it may be a good time to ask whether your "psychological" recession has ended as well. With that in mind, here are a few questions to consider:
- Have you identified new opportunities that may be created by the current business environment -- and do you have plans to aggressively go after them?
- How has the recession weakened your competitors -- and what can you do to capture share from them?
- What are you doing to find and invest in new technologies and innovative approaches beyond the walls of your own R&D efforts?
- How are you taking advantage of the new focus on sustainability and social responsibility?
- How are you encouraging your people to think about growth and to take risks?
- What networks of partners and potential collaborators are you building that can move you quickly into new markets?
Obviously there are many more questions you could address as well. The key, however, is to shift your mind-set from all of the problems in the current economic environment to all of the opportunities that these problems might be generating. It's a simple mental shift -- but one that could help you to sell a lot of shoes.
What's your experience with the post-recession mind-set?
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