Recent conflicts across the globe, oil pricing, inflation, natural disasters and polarizing politics can make everyone feel somewhat out-of-control, nervous and even cautious at a minimum.
How to Cope
In times like this, we advise in bringing teams together to reduce risks and protect against downsides. No, the sky is not falling…luckily. In fact, the economy keeps chugging along, with retail sales growth above expectations in the most recent months and job growth is steady.
So it’s important that leadership is always alert and probing vulnerabilities. In addition to regular monthly operating reviews, try to push a little harder to see if there are any other opportunities to protect your brands, fortify your defenses or solidify recent gains.
Risk Mitigation
There are big risks and there are smaller ones. Try to sort your risks into the few that really matter—the ones that could unravel your hard work or compromise your ability to achieve your 2024 plan goals. Get underneath the causal factors driving elevated risks to the business and identify root causes. Some will be beyond your control. Others, you can find a way to offset any significant downsides.
Ask your teams to brainstorm ideas and action plans to tackle the biggest risks head on. Insist that those plans include costs (if any), interdependencies, timing, milestones, and benefits. Review all the risk reduction action plans together, asking clarifying questions and building on the initial thoughts. Then rank the action plans in terms of strategic or economic value, selecting the few plans that you can legitimately handle and implement.
Assign a team leader to each of the plans you move forward with. And then include their progress report each month as part of your regular operating reviews.
Offense as the Best Defense
A key question is whether your competitors seem to be tentative or reticent, particularly if their revenues are trending downwards. Tough times often cause leadership teams to retrench, reduce spending, cut staff, or take other actions to create a “war chest” in case things in fact get worse.
If your business is holding steady and your market share is stable, consider going on the offensive. Let’s say there is a weaker brand in your category that has been struggling. This may be the perfect time to leverage your position of strength in that category. Consider promotions that incentivize pantry loading or incremental purchases. Add price promotions to your sales and marketing calendar to get more secondary displays and retail support.
Then get with your customers to look at sales data and trends. Be honest but be direct in pointing out the weakness of a competitor. It may be a flavor extension that is languishing. Or maybe the entire brand is not generating enough turns and profit dollars to justify its shelf space or distribution.
It is a constant battle, in good times or bad. Results are what matters. The ultimate test is whether your customers keep buying, ideally leading to more support in the form of more weeks of promotion, more shelf space, and more sales.
At Damen Jackson, we stand ready to help advise and assess risks to your business. Sometimes an outside voice can help get you to align on the best risk mitigation action plans. We believe there are no sacred cows. Our fresh eyes are there to supplement and augment the experience of your leadership team, while multiplying the odds of weathering any storm.
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