Your first instincts - cutting prices, reducing bonuses and offshoring - may be exactly the wrong moves during a downturn, say top CEOs.
Reset priorities to face the new reality.
Easy to say, hard to do. When a company's view of the world changes, everything changes, and the shift can be traumatic. In good times the top priorities may be expanding into new markets, hiring enough people, and growing earnings 15%. Suddenly changing direction may seem drastic, but it must be done. Jamie Dimon, CEO of J.P. Morgan Chase, one of the nation's few remaining strong major banks, recently told a group at the Harvard Business School, with regard to the recession, "I am shocked at the number of people who are watching that train coming down the track, and they're still worrying about their strategic plan for 2009. We canceled all that stuff - all of it - meetings, travel, you name it, to focus on the fact that we're in the middle of a real crisis."
Whole Foods Market CEO John Mackey says, "We have to manage the business differently." Economic growth used to be a tail wind that the company built into its business plans. Now, says Mackey, "one of the leadership challenges I have is that that assumption is no longer true." The new era "requires a different mindset - we have to be more frugal, to think about every expense, every capital investment - because we won't be bailed out by growth."