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By Invitation
ARINYA TALERNGSRI
As we face the current economic downturn, we have to admit that the drastic slowdown resulting from the financial crisis in the United States and Europe has deeply affected businesses in Thailand in terms of investment, production costs, consumer purchasing power and trade. Since this is quite an unusual situation, how should management prepare to cope with it?
To effectively manage your business and address challenges during the crisis, the following points should be taken in consideration.
First, management should carefully verify the latest status of the organisation, market situation, and corporate positioning. You need to evaluate how much revenue is actually generated and from where and which channels.
In the management arena, we should view the two sides of the coin. What is the best-case scenario? And in the worst case, what needs to be adjusted and how could we start planning before bad things start happening?
Second, once the current situation has been evaluated, you need to start "telling the truth" to employees in a straightforward manner.
This type of communication is linked to research studies in the United States, which conclude that, by not communicating or speaking straightforwardly, organisations encountering problems or crises risk widening the gap with their people, a barrier to successfully resolving the situation.
Therefore, clear organisational communication ensures that employees are well-informed and could "genuinely" help the organisation by implementing the necessary changes or preparing new plans that respond successfully to the situation.
Third, changes made to the budget, whether adjusting, increasing, reducing, or cutting it, need to be cautiously made and justified. First, you have to review the corporate expenditure plan by identifying what parts need to be heavily invested, reduced or cut.
It's necessary to have "clear" standards in identifying what has been invested and what doesn't leverage future benefits for the organisation or increase revenue. At this stage, it's better to focus on what's necessary for the organisation and business, including employees who deserve to be recognised.
Since human resources are essential to an organisation, especially when it comes to where it is headed, we need to rely on people. Decisions to increase or reduce personnel headcount, should be made with care. If corporate revenue is decreasing or insufficient, it's necessary to freeze the headcount while at the same time focusing on developing the potential of the existing employees to strengthen corporate competence. If the organisation is generating sufficient revenue, it can continue hiring highly competent people to further strengthen the potential to expand the organisation in terms of both opportunity and size.
But in the end, each organisation has unique characteristics and there seem to be no definite conclusions. It all boils down to the rationale: if it happens, how much business opportunity could be generated from such a decision?
Fourth, wash away the weaknesses and leverage the strengths to be fully prepared for opportunity after the crisis ends.
At this point, leaders in organisations need to invest their time and capabilities in searching for people with high calibre and identifying the weaknesses that need to be improved and the strengths that could be developed in addition to "clearly identifying those who fit and don't fit in the organisation".
It's indeed necessary to identify the employees with attitudes that are out of line with the organisation's and those who cannot adjust to the new direction in preparing to fight the crises.
Finally, in driving the organisation during this situation, we need to emphasise transparency in organisational co-operation and to determine if the directions are clear, including the corporate development of new innovations to increase bottom-line figures.
Once the economy shows signs of recovery, the organisation should be ready to step ahead to seize opportunities and challenges in the competition.
Numerous organisations have made the mistake of cutting human resources development budgets during the crisis.
Such a decision is not quite right since people development is a critical factor in characterising and distinguishing an organisation. Therefore, in order to effectively plan budgeting allocations in human-resource development, two critical elements are to be taken into account: clarity and the capability of creating change in a positive way, not just through training, but in a way of effectively building people and by generating immense opportunities for your organisation.
All these are "facts" that are really practical for your organisation to survive during the recession. They are just practical guidelines for surviving a downturn. Their success depends on whether you apply them to your business or not.
Arinya Talerngsri is managing director of the APMGroup, a leading consulting firm providing strategic organisational solutions in people development, human capital management,organisational development and assessment consultancy.
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