Dealing with the Economic Flux

Dealing with the Economic Flux

In these difficult times, business decision-makers are faced with challenging issues which must be dealt with for their companies to survive. As an accountant, most of those issues deal with cost-cutting which, while gut-wrenching to an owner, may be the least difficult task to accomplish.

Accountants and financial advisors are always asked what costs should be cut and by how much. It is at this point that the accountant can provide initial assistance in pinpointing unnecessary costs that need to be discontinued. Similar to the landscaper’s need to prune certain plants and trees every so often, this trimming of unnecessary costs allows the organization to position itself for future growth.

After cost-cutting, the accountant can provide a most valuable service by working with management to keep the company poised to deal with the risk associated with the new way of doing business. When the economy changes drastically like it just did, the old way of doing business is most likely gone. To be successful, companies have to find a new way of doing business. However, as the culture of business changes, the risk of doing business increases. A good accountant will present management with information to guide them in successfully negotiating this new path.

Given this changing economy, a business needs to create a certain culture to remain centered and balanced and, most importantly, to survive. The following are several items that can help a business stay financially sound. Accountants can help management address these issues.

1. Do not take care of employees or customers, but care for them. Challenge employees. Show customers you provide value and tell them what they need to hear, not what they want to hear.

2. Your organization must learn that the ability to change is a choice not a function. Both employees and customers have the choice to change; you must show them that it is in their best interest to do so.

3. Help people change their attitude to change.

4. Your employees must work to achieve high levels of performance so your customers can see the quality. You must let people know what level of performance is now acceptable.

5. Remember: Management’s personality in dealing with tough times will become the personality of the business. It will be that personality that will be visible. The right personality will provide value to both employees and customers.

These items are soft skills, but they can make a big difference in enabling an organization to deal with economic change in a successful manner. To ignore them is to risk spinning in an endless circle of confusion and strife.