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Tuesday, December 16, 2008

The rough road ahead: How to prepare

Here is this month's Publisher's Viewpoint, published in Ontario Construction Report

How rough will the economic road ahead be?

I would like to say we will escape the worldwide recession lightly, but think we should all appreciate this economic downturn will challenge all of our assumptions and expectations. If you are older, you know that recessions can sometimes be deep and long (as the 1990s recession progressed, some were starting to use the 'depression' word to describe the frustrations of working through several years of hard times). And since we've escaped really hard times for the past couple of decades, we may have to work through a really difficult house-cleaning in the economic cycle this time around.

Certainly, things are getting rough in parts of the U.S. Our North Carolina publisher Bob Kruhm reports extremely challenging times there – even though North Carolina avoided the worst excesses of the high-risk mortgage funding scandal that represented the tipping point for this economic cycle. For a while, it seemed, North Carolina defied gravity – as other southern states went into a slump, North Carolina continued to thrive. Not any more.

I've been receiving emails from as far away as the United Kingdom and Australia, as construction businesses used to many years of success suddenly find themselves in uncharted, difficult waters. They've been visiting my Construction Marketing Ideas blog, looking for answers to the questions that threaten their business survival. Most have relied on the booming market, coupled with repeat and referral business, to grow – now their clients, suffering, aren't buying anything, and they are struggling with the real world of competing against many players for a much smaller business pie.

Is this perspective excessively gloomy? Well, I think there are few things you could do that would be dumber than ignoring the signals around you. You need to plan for hard times, and prepare, and develop a new, pro-active and creative approach to marketing and promoting your business. If you've been relying on the 'old things' then you may be in for a rude awakening – and you may make mistakes as you desperately seek out new business to fill the holes in your order book.

What can we learn from businesses which have survived hard times and continue to be viable?

The best answers, it seems, come from a combination of creativity, solid client relationships (you want to make sure your current and former clients stay with you) and effective, thoughtful, marketing. You certainly don't want to chase blindly 'bidding opportunities' outside your of your core relationships (competence is important, but who you know in some cases is even more important). When the Society for Marketing Professional Services (SMPS) Ontario chapter is established in the next few months, you should join. (In fact, I would argue you should join SMPS now, even before the chapter is established, to build your AEC marketing network and contacts.)

Yes, the next few years will test your skills and abilities, and you will probably find many days when you feel you are being kicked when you are down. The platitude: “Don't worry, it will get better” doesn't help much – in fact it could hurt if you decide to simply do nothing. But you can get through the economic storm by remembering your values, by focusing on your competencies, and by learning how to market yourself and your business effectively. And that is why we are here.

Mark Buckshon is president of the Construction News and Report Group of Companies, which publishes construction industry publications in several Canadian and U.S. cities. He can be reached by email at buckshon@cnrgp.com or by phone at 888-432-3555 ext 224.

2 comments:

Ford Harding said...

Mark:

You mention the recessions can be deep and long. The also may be just one or the other, deep or long. Do you think that recessions that are of different types require different approaches.

I heard John Clarkeson, chairman emeritus of The Boston Consulting Group speak at the Association of Management Consulting Firms (AMCF) last week. He said, "It is not sufficient to survive this recession; we must take full advantage of the opportunity." I like the quote.

Ford Harding

Mark Buckshon said...

Ford, you are right, and I like the reference from John Clarkeson.
Of course the challenge in dealing with recessions is that while some basics are 'universal', the actual shape, scope and format (and duration) is a little hard to predict, though if we go back to the 30s or the Japanese experience in the 90s, they don't generally last more than a decade!
Theoretically, from a marketing perspective, you should be cautious about allocating resources at the beginning of a long recession -- your goal should be to be strongly positioned at its end. In practice, you simply need to use common sense and watch your cash and your relationships. You generally can't spend your way out!