Great Small Business Ideas to Start: Surviving a downturn
Several clear principles and techniques can help turn a business around from the brink of disaster.
By the end of 1999, signiﬁcant problems emerged at US technology giant Xerox. There was too much change, too fast; new, opportunistic competitors emerged; economic growth was slowing; key decisions were ﬂ awed. These issues combined with regulatory and liquidity challenges to bring about a massive decline in revenues, the departure of customers and employees, and debts of $19 billion.
Despite this, Xerox, led by CEO Anne Mulcahy, survived the downturn and staged a remarkable comeback. The business had doubled its share price by 2006, reduced costs by $2 billion, and achieved proﬁts of $1 billion in 2005.
The foundation for a revival in Xerox came from a strong brand with a loyal customer base, talented employees, recognition of the need to listen carefully to customers, and greater responsiveness.
The key was to win back market share with a competitive range of new products.
Several factors underpinned Xerox’s resurgence, outlining the key areas to address:
- Listen to customers, employees, and people who know the business. Create a culture of good critics, and be aware that managers can become out of touch, even within their own organization.
- Learn Six Sigma—it can improve costs and service for customers, by providing a disciplined way to make process improvements.
- Recognize the need to be “problem curious,” constantly looking for ways to differentiate and improve.
- Provide a clear, exciting, compelling vision of what the future will look like. People value a guiding light, as it provides certainty.
- Invest in the future and innovate. In 2005, two-thirds of Xerox’s revenues came from products launched within the previous two years.
- Be entrepreneurial—ﬁ nd ways to sell products and control costs.
- Manage c ash.
- Remember that strong leadership is essential. A business relies on its people—and people need to be aligned around a common set of goals and plans.