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What downturn? Pay less attention...

The global economy is bad. It is the gloom and doom scenario and dependent on the type of industry; you could be in for a rough ride. This is especially true for those who are working in cyclical businesses like electronics and semiconductors. Here are nine suggestions to help you to weather the downturn and outperform competition at the same time.

To use the semiconductor industry as an example: most companies have just reported their disappointing Q3 numbers. Texas Instruments reported a 30% drop in net income in Q3. NXP's revenues in Q3 decreased 5.4% compared to Q2 similar to ST Micro's, which reported a 4.9% decline. The numbers are especially daunting as the third quarter is normally the one with the highest revenues and earnings for the year.

The outlook for Q4 does not look any better. Both NXP and ST Micro anticipate a sequential drop of 8% or more and Atmel is topping that, estimating a decline of at least 12%. IC Insights has a good article summarizing the 2010-2011 Semiconductor market. The expectation of various market research companies for 2012 is that quarter one, whilst not better than Q4-2011, should be the turning point. Now where did we see this before?

Bad times happen

The above looks bad, but independent whether you are in this industry or any other, you will eventually face a bad time. The good news is… and so is your competition! For many frontline people however, the go-with-the-flow attitude prevails unfortunately. Those that refute that behavior may actually find an abundance of opportunities. To stay with semiconductors:
  • Production and shipments may be down, but design activities continue.
  • There are good chances that competition will fail their customers, which is an opportunity.
  • Things have slowed, there is more time to build a case and promote solutions to a broader customer base.
To add to the last point, in a downturn economy customers will behave different. Their focus might be more on cost reduction or cash flow improvements: they will be asking longer payment terms or lower prices. They also will take longer to decide; hence, there is more time to show the value of the solution offered.

What to do

There is essentially not much difference in selling to customers in bad or good times. The trick is to create a positive atmosphere for yourself and your team and to continue as if times are good. Not paying attention to ‘the downturn’ actually helps you! Here are some practical tips that can guide you and your team in bad times:
  1. Avoid negative news and negative people:
  2. Negative news is a decease that drains the energy out of its victims. Being informed does not mean that you have to read every news article on the web, or watch every news broadcast. Also, stay away from 'negative-people-hangouts' like the coffee machine or water tank.
  3. Focus on things you can control: Many things, including the negative news of previous point, are not under your control. Talking and worrying about them will add little to the things you actually need to do or achieve.
  4. Change the targets: In many companies, targets are set once a year based on best assumptions on that moment. Over the year, these may not be correct anymore, making the targets unrealistic. Find ways to change them such that they are (nearly) achievable. Alternatively, add targets supporting the following point:
  5. Focus on the mechanics of the job: Set simple but clear and achievable goals for yourself and your team on a daily, weekly or monthly base that focus on job basics. E.g. this week call x amount of customers. This gives a sense of achievement and helps increasing the frontline activities.
  6. Increase sales and marketing activities: Despite cut sales and marketing budgets, less travel and fewer big campaigns or advertisements, there are many other ways to increase sales and marketing activities. You could for example send a personal note to a customer on a new product or development, pay them an extra visit or call, or reach out to new customers.
  7. Increase customer and market insight: (re)-collect and organize all the information on a customer or market. Look into the gaps of knowledge and try to fill them by having meetings or calls with them. The new information and new insights may uncover new opportunities.
  8. Create a sense of urgency: In a downturn not only business slows down, people tend to slow down as well. They take more time to do the same task. They are slower to follow up and may accept cancellations of customer meetings easier. Try to create a sense of urgency for example by setting clear deadlines for yourself or your team.
  9. Do not accept mediocre performance for either yourself or your team: Continue to be on top of things even if they are small. Internal meetings still have to start and finish on time; people need to be prepared etcetera.
  10. Training and development: Even with your training budget cut, do not stop looking at your own and your team development needs. Pick up that book, organize product training, do some internet research, or finally pick up that training that you have been putting off for some time.

Final words

Bringing your products or services to market under bad industrial or economic conditions in essence is not that different from when times are good. The question to ask therefore is why we behave different. Stop paying attention to the negative side of the situation and focus back on the basics of the job. It will get you in a better position compared to competition for now and the future.