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May 1, 2009

Businesses Must Plan for Post-Recession Prosperity

Filed under: General HR Buzz — Tags: 9:01 am

These are tough economic times for businesses and for many families. It is nearly impossible for anyone to predict where the economy is going in the next year, let alone to try to plan for it. Not only is the economy a mess, the nature of the mess seems to change almost monthly.

Inflation is out of control one month then almost non-existent the next. Gas prices are going through the roof, creating havoc in energy markets. Then, suddenly, gas prices are falling. The dollar is weak, fueling U.S. exports. Then the dollar is strong. Then the dollar is weak again. And of course, overriding all of this is the meltdown on Wall Street and the collateral damage that is bringing Main Street to its knees. The road ahead, which will begin to pass through 2009 next week, could be the toughest we have faced as a nation in more than 70 years.

The only sure thing in all of the economic news is that it is bad. Bad for most businesses. Bad for most families. Bad for municipalities, states, school districts. Bad for almost everyone.

But….that doesn’t mean that everyone will suffer equally. Resilient, sustainable organizations are very likely to succeed and even prosper while others struggle or fail. The key is sustainability. Sustainability demands a balance of short-term and long-term thinking. In tough times like now, sustainable businesses seek out opportunities for the future while protecting themselves from current threats. Sustainable organizations do two things well: they simultaneously utilize best practices to conserve current resources and they prudently invest in human and capital resources for the future.

Overly conservative companies that do not embrace sustainability as a core value are more likely to drop employment rolls, pull back on research and development, reduce marketing investment, and abandon investment in sustainable technology at the first sign of economic slow down. They run the risk of surviving the short run only to face the long run from a severely weakened position. Meanwhile, overly optimistic organizations that pin all their hopes on strong future demand tend to pursue new markets and new products without paying sufficient attention to the current reality. They are setting themselves up to implode for lack of capital, rising costs and uncertain market demand. It is a difficult balance, but one that successful organizations — sustainable organizations — find and maintain.

The sustainable organization invests wisely in technology during prosperous times and difficult times alike. It maintains an emphasis on training and development of all of its core employees all the time. It continues to invest in research and development. It continues to market and promote its products. It is able to make these investments during difficult times because of decisions it makes during prosperous times. It never allows itself to fall into the trap of thinking that the ”good times” will keep on rolling forever.

But it also knows that the good times will return and it will be positioned well when they do.

So, truly sustainable organizations do not fear the ups and downs of the economy. In fact, these are exactly the times that sustainable organizations prepare for. The current economic challenges are temporary. The economy is remarkably resilient and, just as we have come through every economic challenge we have ever encountered as a nation, we will get through this one. The sustainable organization is better positioned to weather the short term than are other organizations and they will be better positioned to prosper when the turnaround comes. By maintaining a longer-term focus on the critical factors for success — from technology to succession plans, from research and development to marketing and promotion, from workforce development to energy management — the sustainable organization will survive and thrive.

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