Severe economic downturns wreak havoc on unprepared businesses, cause corporate defaults, and personal bankruptcies. Great leaders survive because they laser focus on these three Best Practices.
4 Ways to Foresee a Business Tsunami
During our first CEO interview on Texas Business Radio, Cory Jackson, CEO of CTGasket of Houston Texas, detailed how he and his management team came to recognize that the energy sector was heading toward a business tsunami.
Indeed, the sharp drop in oil prices has pulled the Houston economy down and the slide continues. Here are the three Best Practices, Cory’s management team used to catch the downtrend early:
- Listening. Business leaders must be keen listeners. Cory gave us two examples where listening paid off as the Houston recession approached. He actively attends energy conferences and pays particular attention to what the attendees are talking about in relationship to the marketplace. Secondly, he pays close attention to both his vendors and his customers. Their talk often serves as an early indicator of near-future trends.
- Data Mining. Having data on the company’s past is an essential ingredient in anticipating the future. But a number does not make a trend. CTGasket used data graphs, which show potential up and down shifts in momentum. Best Practice is to have six to eight graphs, called Key Performance Indicators (KPIs), which cover the major elements of your business. These might include sales or bookings, operational efficiencies, cost-of-goods, etc.
- Breakeven Analysis. When a great leader senses a downward change, performing and monitoring the company’s breakeven position, that is cost versus revenue, is critical.
- Call to Action. In a severe downturn, reacting too soon can impact profits while reacting too late can jeopardize the viability of the company itself. More importantly, Cory says a good leader doesn’t just watch and listen. A good leader will take action when action is required
Are you wondering what a CEO peer group is or how a group might help you become a better leader? Click HERE to learn more!
Sponsored in part by:
About the Author
Jay W. Curry
Along with hosting “Texas Business Radio”, Jay is a Professional Certified Coach and Master Chair facilitating four Houston-based Vistage peer groups. In addition to being a best selling non-fiction author, the 2015 release of his award winning novel, Nixon and Dovey: the Legend Returns, adds novelist to his title. Jay holds a BS in Mathematics from Oklahoma State and an MS in Computer Science from Kansas State. You can learn more about Jay HERE.
Sponsored in part by:
Recent Posts
