Welcome back to the office after the long National Day break. Now get ready for over 2 months of uninterrupted work. There are no major festivals, holidays or offical days off between now and Christmas (if you’re international) or Chinese New Year (January 26, 2009), so this is your last chance to get things. Done. Eyes on the Prize, boyos. Make the 4th quarter count – cuz it may be a long and lonely winter.

Make hay while the sun shines. If your business hasn’t been affected by the global slowdown yet, then congratulations – but it likely will soon.

Time to re-check your China business model

Business models get shredded by global recessions. You may not have time to sit down and re-draft your entire business plan, but you should acknowledge that things have changed . New managers in China would be wise to take care when considering rash moves or dramatic shake-ups in the months to come. Bull markets have strong enough demand to grow your way out of any bad decision. Bear markets are less forgiving.

Managing in a downturn:

1) It’s the economy, stupid. Deal with making your business recession proof. Cut costs and dead wood – but also look at systems that have become outdated. One of the few upsides to a recessionary world is that you have the cover to make unpopular decisions. Just make sure that everything you do is consistent and focused on the business’ survival.

2) Don’t panic. The ground is shifting, and no one expects you to have all the answers – just the important ones. Don’t try changing directions to fast. Keep the silver bullets to a minimum. People are going to watch you closely to see if you are steady in command or panicking like a headless chicken. Demonstrate leadership early, and you will avoid the biggest problem that a bear-market manager faces – the loss of respect of your team.

3) It’s about survival. Down markets are bad times for expansion or major new product development. You probably shouldn’t plan on hitting the targets you drew up 6 months ago – the world has changed since then. All of your new plans have to include lower demand for a while. Some people’s marketing plans describe massive consumer-led demand, and it just may not be there anymore.

4) Could take a long time. A full-blown international recession could last for 18 months or more. That’s a long period of few clients, no demand and low revenue. Make sure you have budget and resources to survive that long.

5) Put on a brave face. Be a leader. Don’t tell people who work for you that sacrifice is required by everyone – and that you’re off to the Benz dealership to check out the 09’s. Your best people are assessing your chances for success as a company, and their chances of success within that company.

Whether a recession hits China directly or just changes the competitive landscape, managers in China are going to have make adjustments and adjust to lower demand. This is going to be new for a lot of China managers who have never seen a bear market before.

This entry was posted on Monday, October 6th, 2008 at 8:54 am and is filed under Managing in China. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.