I recently wrote a blog about the darker side of growth. Now I’m shifting gears to give you one example of a brighter side to tough economic times. When a company is experiencing a downturn, whether due to the economy going into a tailspin or the price of oil dropping (oil being a large segment of our customer base) or a disaster (natural or otherwise), all of its employees must tighten their belts. The reason is that budgets are determined by the top line forecast. If sales and revenue aren’t on target, spending can’t remain the same if leadership wants to achieve the same profit goals. In more serious circumstances, this “belt tightening” becomes widespread and results in unsustainable cost-cutting just so companies can remain in business and minimize losses—often without any hope of turning a profit.
During downturns of any kind, one budget that typically gets quickly cut is training. One of our clients is a drilling company, which competes in an industry that is obviously hugely affected by the price of oil. When oil dropped to less than half the price it was just two years earlier, this company’s leadership had already been working on efficiency measures (in other words sustainable cost cuts). In addition, this client launched an expansive business acumen training effort last year. This was a surprising action given the way training budgets are usually handled during economic downturns, so I asked our main contact, “How is it you’re able to do this now?” She told me that her company’s employees needed business acumen training during this downturn more than ever. In short, its plan was to come out on the other side of the dip in oil prices with more competent employees than before. My curiosity wasn’t satisfied yet though. When I asked her why this training was so important to her company, she said it was because “our competitors aren’t making the same investments in their people.” By investing in business acumen training during an economic downturn, this client is gradually realizing a genuine competitive advantage in the marketplace.
Some companies look at every business challenge as an opportunity to come out stronger.