Conquering the Curve
“Anyone can go fast in a straight line, but it takes skill to go fast through corners.”
I own a “vintage” 1990 Mazda Miata and have been fortunate to drive this surprisingly slow, but extremely nimble, sports car on the beautiful and challenging Virginia International Raceway. While the Miata is handicapped in size and horsepower, its agility allows a skilled and focused driver to pass much larger and more powerful competitors in the most terrifying, yet productive, area of the racetrack – the curves.
As anyone can attest, these challenging times have suddenly thrown all of our organizations into an unexpected curve. While these are certainly worrisome days, they do provide the unique opportunity for progressive companies to use a balanced strategy of defense and offense, to successfully traverse the turn and position themselves stronger for the inevitable straightaway ahead.
So how does an organization navigate the treacherous twist, pass its competition, and prepare for the recovery around the bend? As any race car driver can tell you, there are 3 critical steps in successfully executing a curve:
- Apply the Brakes When Entering the Curve: When the curve approaches, organizations need to quickly remove excess costs; however, they must be careful not to stay on the brakes too hard or too long, as this can lead to significant under performance during and after the curve. Conversely, apply insufficient expense braking at the entry of the curve and one runs the risk of losing control and crashing into the wall.
- Identify the Apex and then Aggressively Turn Towards that Point: Correctly identifying a turn’s apex ensures maximum speed can be maintained throughout the turn. Each car and each curve are different, and therefore require the development of a unique racing line to ensure the proper apex is targeted. Progressive companies construct recovery plans that focus on both stabilization and strategic offensive moves to ensure they do not drift and shed speed during the turn.
- When the Apex is Reached Accelerate Hard Out of the Turn: To distance yourself from the competition, once you have successfully navigated the apex, you must begin to accelerate as you exit the turn so that you can reach top speed when you settle into your targeted line on the straightaway. By developing a short-term (6-9 month) strategic plan, progressive companies leverage this section of the curve to increase their lead on competitors and strategically position themselves for continued success on the straightaway to recovery.
In addition to professional guidance on proper technique, we can look in the rearview mirror at prior recessions for examples of longstanding companies that won and lost the race in the curves:
- Sony: In the 2000 and 2008 recessions, Sony applied excessive expense braking (ex. delaying investment in a new LCD TV factory) and consequentially lost TV market share to Samsung and LG.
- Staples: During the 2000 recession, Office Depot cut 6% of its workforce, while Staples executed an offensive strategy and increased its workforce by 10%. Due to their progressive strategy, Staples passed Office Depot in sales during 2000 and has been leading the sales race ever since.
- Hewlett Packard: HP went into the curve too aggressively during the 2000 recession (acquiring Compaq for $25 billion) and lost significant ground to IBM and Dell when the recession ended.
- Samsung: In the 2008 recession, Samsung pursued an aggressive R&D and Marketing strategy while competitors defensively cut costs (ex. the first Galaxy smartphone was released in 2009). These offensive moves in the curve allowed Samsung to gain substantial ground on Apple, enabling them to eventually pass them as the top US smartphone manufacturer in 2013.
Just as it takes courage and steadiness to navigate a 30-year-old Miata around a challenging hairpin turn, professionals and history show us that companies who execute a balanced strategy of cutting costs, while strategically investing for tomorrow, will be able to successfully conquer the curve and position themselves for increased acceleration on the road to recovery.
The choice is yours. Stay on the brakes in defensive apprehension or execute a balanced approach that also utilizes the gas pedal. Only one of these strategies will lead your organization towards Victory Lane once these difficult days pass, and assuming you built your business to win the race, why would you want to be anywhere else?
Be strong, race hard, and let us know how we can assist you in navigating your road to recovery.
Randy Lowman is the President of the Lattitude Group and a member of the RBTC. Learn more about his company at https://lattitudegroup.com/, or via email email@example.com or LinkedIn https://www.linkedin.com/in/rlowman/