How do companies react in times of crisis?

So what difference does it make between the survivors, the winners and the others?

A first category

Conservatives try to deny the phenomenon and continue ‘business as usual’. Turnover is falling, but no one is to blame for that, it is crisis for everyone, isn’t it? With this reassuring thought, no one feels the need to take action, because it will pass anyway one day. This is the type of organisation that gets a little more dented with every crisis, that considers itself to be one of the survivors, but has to come to terms with it after all. At that moment, an obituary is written in which all sins are forgiven, because it is the fault of unfair competition, low wages, high social charges, lack of vision on the part of the government, etc…

The second category

The classics resort to tried and tested means. As soon as there is a drop in turnover or if the media predict bad weather, the board of directors cancels all actions that do not produce results in the short term. Slightly later, further savings, actions to reduce stocks, restructuring, closure of ‘unprofitable’ sites with ditto redundancies etc… This is the well-known scenario. Sometimes this works, sometimes it doesn’t.

Sometimes the ‘classics’ forget, for example, the impact of their actions on the market. After all, restructuring requires time and attention, and those actions often fall on the shoulders of those who have to run the business at the same time. But the customer still wants to be well served and, especially in times of crisis, prefers not to have stocks.

The phenomenon is well known: The customer orders as late as possible and then goes ‘shopping’ with whom he can deliver. At that moment, the operational management is confronted with an almost impossible order: The sellers have been on the hunt and are happy to come in with a new order. But then they hear that the promised delivery time is ‘not realisitsch’, because there is no stock. At the same time, no overtime is allowed, because it is too expensive, etc…

When the market finally picks up, the situation is sometimes even worse, because at that point the suppliers of raw materials or components have also reduced their stocks and they immediately receive large orders, which they can no longer cope with. The result is well known:

The company once again loses opportunities because it is not prepared for an increase in demand. At that moment one sometimes realises that together with the redundancy of the o-so-dure employees a lot of (sometimes strategically important) know-how has also been walked out of the company… The result is that one has to go through a learning curve again, misses selling again and so on…

The third category

The unconventional ones dare to think differently and use a crisis as a challenge. (NB: André Leysen once wrote the book: “Crises are challenges”. They have a positive attitude towards change and always ask themselves what the opportunities of the situation are. Fortunately, there are also a number of entrepreneurs in this category who are thinking ahead to secure both short-term and long-term profits. The latter are the real winners from the crisis.

Sometimes they also put offers on the market that make their competitors shudder, especially the classics, while they themselves keep on scoring better and better. This last situation is extremely interesting because the lead they are taking is hard to keep up with. It is as if they have changed the rules of the game! Superficially, one would think that this would only stand a chance if there were a very intelligent CEO at the wheel who dared to take very big risks, which turns out not to be the case at all in practice, because there is indeed a very secure plan behind it.

Are there any examples of this? YES! Can these examples be copied? NO! Especially not copying is the message because your company is not identical to that of the competitor and your ‘constraints’ are guaranteed to be different.