Trading Floor

Discussion: 6 Comments

• Posted by Rose on June 22, 2009 4:57 PM

  What did you do during the recession Daddy?

  When you look back over the recession, there will be a reckoning to account for the lessons learned and paths not taken; some lessons and paths good and profitable, others “not so much”. When you discuss this historic time with your children and others, what will you say?

  Recessions are cyclical and serve the business and society as a time to detox and cleanse. Approach it as a retreat and use the time to unclutter your business, revisit the vision and reprioritize goals. As with any cycle, we should have prepared for it; but if our timing was off or if we didn’t we still have to deal with it.

  Memories of past recessions tend to be short and don’t survive to see the warning signs for the next one. What did you do when the key indicators were telling you to beware?
  • Did you “kill the messenger”, ignore them by not asking for additional detail or verification? • Did you not adjust your plan to locate alternative strengths and growth paths?
  • Did you not reflect the current indicators within your budget so as to not over produce or produce the wrong mix of products?

  Do you have a documented course of action or plan to act when the indicators are pointing to decline or do you snap the whip even harder thinking that will turn off the hazard lights. And now that we are hip-deep in it, how are you dealing with it? • Have you taken the immediate detox measures by putting a stop to the excess? The obvious course for this recession is focus on cash, reduce and control spending and increase and monitor cash receipts. Additional thoughtful measures would be to establish indicators to scrutinize with the purpose of fully understanding the cross functional and integrated effects of these measures. The obvious punch line is, you cannot “cure” cash without impacting the rest of the company. But what about the “not so obvious” punch lines. Who is serving as witness for these? • Have you prepared for the effects of the detox by placing yourself in a “safe place” so there won’t be further damage? Every entity needs time to heal and reflect. Now that the market is down, give yourself permission to take full advantage of the detox process. Evaluate and assess everything? Take every process apart and consciously decide which of these to rebuild and if you decide to rebuild, rebuild in what form.
  • Have you surrounded yourself with experts who can assist you through it and help you become strong? The hard truth is that you need help, you either missed the warning signs, did not have the right team in place to address it in a timely fashion or is something else needed. Bottom line, it is time to mix it up; swap out perspective and skills. A change of position, a change in mandate and a change in team will help to ignite the passion, creativity and innovation. Keeping the same trusted staff who missed it at the beginning and have burned out trying to a) cover their inattention and b) figure out the next steps is not a solid base for energy and growth.

  As many economists and money experts have plotted it, we are well into the recession; so by this point in time, you should already have an assessment. Note assessment is more than a cursory evaluation; assessment is evaluation with impact, i.e., numbers next to it. If you survived the threats, congratulations and condolences if you haven’t; either way, you live to fight another day. How you “pick yourself up, dust yourself off and start all over again” is a measure of the man and his character.

  Weaknesses are ‘strengths” taken to an extreme, so if you have weaknesses, look for the nugget of strength that it was built on and see if it is still valid. If so, polish it and retain it for future use, if you can’t find the nugget or if it is no longer valid dispose of it. Strength is knowing when to act and to act on what. Weaknesses occur as a result of past actions; therefore they are rooted in history and past actions; while strengths and opportunities are forward looking and poised to embrace future actions.

  An example, a strength is a company’s ability to innovate and be flexible when customer’s demand it. Taken to extreme, the company is not likely to deliver “proven” and process efficient products because it is too flexible delivering customer wants and needs vs. products. Constantly delivering “one of a kind” or “build to order” solutions eats up resources and impacts bottom line profitability. To improve profitability, integrate the capacity for the company’s proven products and process resources and the customer’s need for individualization by adopting a mass customization strategy.

  Evaluate and assess strengths and opportunities as to their likelihood for success and impact to the company, so you can be poised for growth. Summary of important words: • Evaluate – identify the criteria and attributes for significance or worth • Assess – determine the rate or amount for those criteria or attributes • Strength – a measure or degree for potency and potential to exert and endure

  The final ingredient is the framework and witness to this story… documentation. Documentation and measurements are neutral so be honest with it. The trail of monthly business meetings where indicators were / were not acknowledged, where assignments and job descriptions were / were not altered, where policies, procedures, processes and products evolved becomes the testament to what has transpired and provides direction for what is to come.

  You know you are ready and poised for growth when: • The detoxification process has been completed and that includes: reflection and changing of the guard. • There is a support system ready to provide professional opinion, advice and counsel based on fact and not afraid of delivering negative news. • The weaknesses and threats have been identified and indicators assigned to monitor them. • The strengths and opportunities have been plotted and prioritized. • Documentation and measurements are in place recording the history, honestly as it took place and designing the future as it is laid out.

  What did you do during the recession? Wounded, recovered, survived to fight another day.

  Respond to Rose

  Response to Rose
  Posted by Rose on June 22, 2009 4:59 PM

  Rose Hightower, Accountant, MSc, is the owner of IDEAL Consulting Solutions International, LLC, a firm specializing in consulting in implementation of internal control policy and procedure programs for companies. Bringing over 20 years experience from IBM and as a finance manager and providing service as a professor her program contains practical lessons and simple solutions for any size company. She is known as ‘The Policy Guru’ and offers advice to clients via her website www.idealpolicy.com,

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• Posted by Mona Favorite-Hill on July 14, 2009 5:36 PM

  My dad always said never buy a house while there’s a Republican in office—the interest rates will always go up.

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• Posted by Louise on August 6, 2009 1:35 AM

  My Father never owned or wanted to own a credit card. Paid cash for large and small purchases, such as cars, house, college tuition, & saved his money since the age of 14 when he shined shoes & sold newspapers in New Orleans, Louisiana. He has never borrowed money from anyone in his entire life, nor is it likely that he ever will or will need to.

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• Posted by Mary Waterton on August 7, 2009 3:09 AM

  My dad always said wait until a democrat is in office - they will buy the house for you and add it to the national debt.

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• Posted by Robert Lawrence on August 11, 2009 6:50 PM

  When my father, age 85, in 1993 turned his and his wife’s finances over to me, I asked him why I had always been so careful with money? He answered one word, “Mom!” referring to his mother, my paternal grandmother, who had largely reared me. Dad was a WWII army officer and my mother had MS [died at age 40]. I was taught to have a bank account from about age 6 [paternal grandparents counter signed]. So indirectly I followed Dad’s advice; directly I followed HIS parents’ advice. Details if you are interested.

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