Recent sudden policy changes related to tariffs and immigration are helping to exacerbate the widespread economic uncertainty that US businesses are currently weathering. With talks of a recession on the horizon and increased market volatility, many of today’s business leaders at organizations of all sizes have opted for a “wait and see” approach in their tactical operations and overall strategy. These business leaders are curtailing spending on everything from hiring and marketing to R&D and CAPEX to hold onto more cash for whatever may be coming next. The result is a survival-minded collective pause nationwide while they try to assess the lay of the land and wait out today’s unpredictability.
And while this cautiousness is understandable, it’s also counterproductive for long-term growth because a tactical pause of this kind can be a revenue strategy-killer. So, to answer our own question, no – your revenue plan cannot withstand a short-term pause!
The Danger of Standing Still
In business if you’re not moving ahead, you’re falling behind. Pausing (even for a short time) has the nasty tendency to become fully fledged stagnation. Businesses that wait too long to move or make key decisions can end up missing out on potentially lucrative opportunities.
Even when the market is uncertain business leaders still need to be open to available opportunities. They need to consciously decide that current economic unpredictability won’t derail them from thoroughly evaluating opportunities like they would have otherwise. If there’s an opportunity that they would have enthusiastically seized six months ago, they shouldn’t let it pass them by today. They may need to evaluate it more carefully now, but that doesn’t mean that they should walk away from it. The business leaders that succeed in times of uncertainty are those that do not fall victim to decision paralysis and freeze, but rather make incremental moves towards their strategic goals nonetheless so that they are better poised for growth when conditions improve.
The Benefit of Thinking Long-Term
Ask any investor and they’ll tell you that, “Time in the market is better than trying to time the market.” The message here is that staying invested over the long-term is going to be a better strategy than trying to get lucky with quick decisions. The same is true for your revenue strategy! Playing the long game is always going to be the better move.
Thinking long-term means your business won’t just survive, it will thrive!
Being forward-looking is a key component of sustained growth. Focusing on a longer time horizon allows your organization to have stronger growth during and after a period of uncertainty or a downturn because the decisions that you make now will be revealed in the months and years to come. As Jeff Bezos explains when discussing how to think about the future, “People will stop me and congratulate me on having a great quarter, but what I’m really thinking is that today’s quarter was baked three years ago.”
Remaining focused on your long-term goals also ensures that your company culture will be enticing enough to keep your best employees, who otherwise may look elsewhere if they see the company content to just hold steady instead of making moves to innovate and lead.
Focusing on Tomorrow’s Strategic Goals while Addressing Today’s Challenges
To bridge the gap between today’s demands and tomorrow's needs, keep your long-term vision in mind and plan for all contingencies as you go. A colleague of mine, David Lightfoot, offers some insight on how to do just that when he talks about “SRO” budgeting. SRO stands for “Survival, Realistic, Optimistic.” He explains that when there’s uncertainty, volatility, or a downturn in the economy companies can create a budget that is 10-25% lower in topline revenue to understand what kinds of cuts will need to be made if this type of scenario occurs. This data can help shape your business strategy across many areas of spending to drive more informed decision-making that aligns with your long-term strategic plan.
Remember, you can’t just stop investing in your company’s future because today’s decisions will reverberate through tomorrow’s results. Let your organization’s core principles drive its actions no matter what the current market or environment looks like. Put your customer at the center of everything you do. Prioritize maintaining the resources needed to deliver this kind of value and protect those first when cuts need to occur to preserve the business.
Private companies do not have a Board of Directors like publicly traded companies to help guide their decision-making, which means they will need to assemble a small group of key personnel to lend perspective and help guide their strategic planning. At a minimum, this team should include an attorney and a CPA (and possibly a consulting CFO as well) to help navigate business-critical revenue matters. Depending on the specific business type, including a CRO and CIO/CTO in the group may also provide significant benefits related to setting strategy and driving innovation. Ultimately, a CEO/business owner and their executive team will drive strategic decision-making, but this team of trusted advisors can help identify blind spots and avoid unnecessary risk along the way. And while this group of advisors may be what you need to encourage you to take decisive action when you feel a propensity to freeze, there is another side of that coin to consider as well.
In talking about his time at Amazon Jeff Bezos referred to his role as the “Chief Slowdown Officer.” He explains that good business leadership is about understanding which decisions are what he calls “two-way door decisions” and which are “one-way door decisions” (the difference being that one is reversible, and the other is not). There is a lot of wisdom in this because at startup and high-growth companies, the pull may be in the other direction. Surrounding yourself with enthusiastic visionaries may fuel innovation, but it can also lead to the kind of rushed decision-making that thwarts long-term strategy and leads the company astray. When making strategic decisions, aim to strike a balance between moving too quickly and moving too slowly. But whatever you do, move!
To understand where the industry might be heading, look at what could be possible in the future and analyze what’s coming that could adversely affect your vision. For instance, when John Deere started out, they manufactured all horse-drawn equipment. But as the gas-powered engine started to take off, they realized they would need to pivot to meet consumers’ needs. Gaze into the future 2 years, 5 years, 10 years, and even 20 years ahead to identify the kinds of trends and innovations you’ll need to seriously think about as you formulate your long-term strategic plan. Outline your vision for the future (with as many specifics as possible!) and understand what kind of macro-conditions are needed to achieve that vision. Then, measure the right performance indicators to ensure you know whether you’re moving closer to or further from that end goal.
When you need guidance on how to improve your strategic plan, reach out to us! We help organizations align their sales and marketing activities to grow profitable revenue. As the business climate continues to change, transforming your business to keep up is the only option. Every day we come alongside B2B organizations to strengthen their most valued relationships so they can generate profitable, sustainable, scalable revenue. Contact us today to find out how we can do the same for your business!
