The economy seems to be front and center in most people's minds these days. The consensus is that most sectors of the American economy will slow down this year. Smart businesspeople, though, will look for opportunities in an economic slowdown and act accordingly. They don't play only when the sun is shining. Some careful reprioritizing and planning now may pay off handsomely in the future with increased market share, lower costs, stronger presence, higher profits, or some combination of these things. For some, merely riding out the storm will be good enough. But those management teams who seek the opportunities in an economic downturn and are willing to plan a lot and invest a little may emerge as industry leaders when the inevitable upturn comes.

Recognition and Planning
Economic downturns are rarely forecasted and budgeted. No one is sure of the extent and length of a downturn in advance. However, once a downturn is evident, management teams should have a disciplined method to plan activity at a high level. At the very least, new quarterly budgets should be created with best case, worst case, and expected case performance criteria. A capital plan and a key activity plan should be developed that reprioritizes the entity's operations to make the best of the downturn.

People
News of an economic downturn strikes fear in the hearts of most employees. The best management teams address employees' concerns about job security and the welfare of the company on an ongoing basis, and especially during slow times. Fearful employees are not focused on the customer; they may cut corners or begin to look for more stable employment. Keeping everyone watching the ball is critical during hard economic times. A carefully planned communication effort will help lower the anxiety of front line personnel and will help in getting their buy-in for activities that may not be the norm.

Keeping Key Suppliers and Accounts
Tough times strain business relationships, and long- term relationships are more easily overturned when suppliers and customers shift to survival mode. Desperation may supplant rationality for a longstanding customer who has just been offered a short-term discount or a cheaper product with fewer benefits or features. A smart management team will be out in front of this thinking, continually working with key accounts and suppliers to prevent attrition. A carefully worded message that is linked to the new circumstances and the company's plan to meet those circumstances should be repeated to important customers and suppliers, just as it is to employees.

Process Improvement
While times are good, companies focus on sales volume and new product launches, with efficiency and cost control distant seconds. In a downturn, the order is flipped. Plan to use the time to evaluate processes and efficiency. Write down the firm's ten most essential activities, and begin a careful review of them from a process and efficiency standpoint. Scrutinize outsourced functions for potential in-sourcing. The front line can tell you what is needed and what is not, and how a process can be improved. And in some cases, technology can help eliminate backlogs or improve distribution channels.