What should we do?

In the consulting world, I am seeing the impact of this economy on a variety of companies and industries. While arguably, the healthcare industry is weathering the storm better than most, everyone is impacted.

After visiting with senior executives, I am seeing most companies fall into one of three categories.
DO NOTHING, WAIT AND HOPE
The companies are simply shutting down any forward motion and hoping the economic winds blow over soon and they make it through ok.
WE NEED TO CUT COSTS
These are the companies that want to be reducing expenses and in many cases are trying to perform financial surgery with a buzz saw. Yes, they need to reduce expenses, but emotion is driving much of the decision process.
OPPORTUNITY IS HERE SOMEWHERE
These are companies that saw the downturn coming, prepared for it and are trying to figure ways to take advantage of the environment.

While I certainly do not have all the answers, I have talked to some really smart people in leadership positions. I would submit that to do nothing and hope is the worst strategy a company can follow. Reducing expenses is never a bad thing if careful thought is part of the process. Sometimes the easy answer is not the best answer. And to have prepared for this financial environment can be a testament to the leadership of those companies.

How and where should expenses be reduced? The quick answer is “it depends”. Pretty helpful huh?

Seriously, many companies are looking for the quick fix. Perhaps they waited too long and their cash flow is in real trouble. In those cases it is more about survival than it is about streamlining or operational efficiencies or even supply chain optimization.

Let’s talk about reducing expenses before being in a survival situation. It is always amazing to me how the back office or operations of an organization typically receives much proactive attention. Yet this is usually where the product or service meets the customer. Process mapping and optimization typically not only reduces unnecessary costs, but can improve efficiencies and improve the customer experience.

For those companies that prepared themselves for this economy have built up their reserves and reduced expenses, but may not know what their can or should due to take advantage of the downturn. I would submit now is a great time to take a serious look at processes, particularly those that span more than one business unit. It is also a time to pay close attention to the customers’ experience. The customers are just as worried about the economy as you are and will remember their experiences during the tough times. This is where deep loyalties can be made.

While no one really wants to spend budget right now, I would strongly suggest that independent expertise can create value quickly when applied in the right place.

Don’t try to do everything yourself, seek out competent expertise. You and your team have enough on the plate as it is. A wise person knows when to ask for help!