Across the united states, manufacturing and freight volumes are sluggish. Fuel prices remain stubbornly high. And asset values remain depressed. The good news, some analysts say, is that the survivors will soon emerge from the tough times stronger than before. For-hire carriers will get better rates due to a capacity shortage, and all fleets will benefit from better drivers because they will have the luxury of weeding out the bad ones.
Perhaps this rosy scenario is accurate, but it’s not necessarily healthy to adopt the attitude that prosperity is just around the corner. This mindset leads companies to hunker down and focus on short-term survival at any cost. True, you can’t survive for the long haul if you don’t stick around for the next month. But just getting by is hardly a worthy goal.
Owners and managers often respond to financial emergencies either by sticking their heads in the sand until trouble passes or by haphazardly buzzing from change to change in hopes that something will work. Neither is very effective.
An ostrich mentality leads to managerial paralysis. These managers just keep doing what they are doing and hope that things change. As fuel prices rise and receivables slow, they just keep digging into dwindling business and personal reserves to keep going. If economic recovery comes quickly, they might survive; otherwise, they are doomed.
Darting like a bee from solution to solution can be just as damaging. Managers want to display leadership in a crisis, and many try to do so by making lots of changes. They create departments and abolish others. They change vendors and outsource functions. They bring in motivational speakers and hold training sessions. Often, the one thing they don’t do is focus on the core problems, which they have subconsciously written off as unsolvable.
In the end, refusing to change and changing everything are two sides of the same coin. Your response to a crisis must be smart and methodical. Sure, you may need to take some difficult short-term actions. But you need a plan that assumes an end to the current emergency.
Remember that necessity is the mother of invention. Many executives seem incapable of rethinking their business strategies unless urgent problems force them to do so.
In a strong, growing economy, superior performance takes work, but mediocre performance is relatively easy. Just a couple of years ago, it wasn’t that hard for weak carriers to remain in business. There was plenty of freight – if they didn’t mind backhaul rates – and fuel prices were low.
These marginal players weren’t really making money, but they were generating enough cash to pay the bills each month. They were doomed as soon as freight slowed or fuel prices rose, but they chose to operate day by day. They didn’t look ahead to the next day because they knew they wouldn’t like what they saw.
Maybe prosperity is just around the corner to make survival easier again. Perhaps you already are doing as well as you can. But if you are just squeaking by, make time to do some strategic planning. Look for new niches. Consider whether technological investments will improve your bottom line. Write a new business plan. Review your operation, department by department.
In short, don’t just hunker down and ride out the storm. Try to change your fortunes in the current environment. If you succeed, you will be far ahead of the competition once the economy rebounds. The key is not to become too comfortable to make your company even better once good times return.