The document outlines essential characteristics for businesses to thrive across economic cycles, emphasizing a participative leadership style, employee empowerment, and the necessity of continuous reinvention. Key factors include maintaining strong R&D, fostering effective communication, and having a proactive approach to challenges. Additionally, it stresses the importance of cash management and building a positive company culture to ensure long-term success.

1. Characteristics to Thrive in Any Economic Cycle
by Tom Stocker
It may sound a bit cliché or premature for As the business grows and becomes
many companies, but successful, the owner must be able to change
there are many her style to a more participative approach to
companies doing fine in foster outside ideas and for the business to
the face of this recession. continue to grow. Employee empowerment
Some are in the “right” is a powerful tool and must be encouraged to
industry, some have a develop the workforce at all levels. As the
“killer” product or company grows and is able to afford it,
service and some are results-oriented professional management
thriving by design. should be employed along with a
participative style. I have observed these
Companies that have the ability to weather two styles are not mutually exclusive as the
and thrive regardless of the economic cycle most successful firms are actually a blend of
have some common characteristics. the two. In some circumstances and over
However, every company will most likely time, a complete change of leadership is
experience downturns or some crises that necessary and the company must be open to
may threaten its survival. Company culture that possibility. Generally speaking, 85% of
determines how it is able to prepare and all personnel will have changed in
react to the event and is key to companies older than ten years.
understanding why some companies thrive
while others survive or die. The ability to change and adapt is very
important to feed growth. Growth is the
The measure of a company’s ability to last is measure, but if a company doesn’t have the
growth. If a company isn’t growing it is ability to reinvent itself over time it will
dying. But growth has many moving parts, eventually disappear. This continuous
and in and of itself is not a readily improvement characteristic is extremely
identifiable characteristic. In other words, important, but change must be controlled by
growth is the result of a company’s culture having a proactive rather than a reactive
and other significant characteristics to approach to everything the company does.
support it. Using a strategic plan, annual budgets and
forecasts help the company understand
Arguably the most significant of these
where it is going and keep the team focused
characteristics is leadership. There are
on the goals. The leader or leaders of the
many nuances to this characteristic, but style
company must be willing to change the
is at the top of my list. There are many
vision and plans to adapt to new
styles of company leadership which are
opportunities, situations or circumstances.
more indicative of the age of the company
A proactive approach generally provides the
than of the leader herself. An autocratic or
environment for reaching the best solutions
command and control style may be
and direction. Firefighting and heroics are
appropriate for a young company or a
costly to the business and have no place in a
specific crisis, but generally is not
proactive environment.
sustainable for long-term success.
10 Larkspur Road, East Greenwich, RI 02818 401-451-9799 www.OwnersEdgeLLC.com

2. A company must have a strong R&D Owners must continually reinvest profits
program to keep products and services fresh and build a strong balance sheet. When a
and relevant. Having a “killer app” is a company owner ignores this fact, or has a
tremendous competitive advantage, but must strong feeling of entitlement first, they are
be continually kept more relevant than the not building their company for the long
competition. However, most of our term. This manifests itself in many negative
businesses are small and don’t have the next ways: little or no investment, an
killer app. We survive and thrive in niche environment with low morale, respect, “B”
markets. But even niche markets must be or “C” players on the team, a reactive and
kept relevant and up to date. band-aid approach to problems, short-term
decision-making, low or no R&D and an
Teamwork, morale, motivation and empty new product pipeline, adversarial
commitment are all keys to making the customer and supplier relations and a
business thrive. This doesn’t happen by generally negative environment.
accident. The leadership must have the
respect for and by their employees for the The owner can not be an island, and the best
business to thrive. Continuing education realize this fact. Resources outside of the
and training help keep people motivated and business provide valuable perspectives and
contributing. Productivity, empowerment are part of the fabric of successful
and continuous improvement are enhanced companies. Most companies that enjoy
as a result. Open communications, long-term success have at least a small
especially communicating the company advisory board and many owners use
goals through productivity metrics and mentors.
financial standing are very powerful. It is
human nature to be competitive. Providing Customer service reflects the company
them the score is a very powerful motivator. culture; they can’t be separated or disguised.
Encouraging people to provide input into The value a customer receives from your
plans, make adjustments and suggest new company should go beyond the price they
ways to accomplish tasks all feed these pay and the product or service they receive.
necessary characteristics. Whether your business has a monopoly,
proprietary product or for the rest of us a
A strong commitment to controlling cash niche, if your customer doesn’t “feel the
flow and costs can’t be overemphasized. love,” they are going to try to replace you or
Cash is king for any company in any cycle. your product. Your competitors are trying
Cash is the lifeblood for company growth. to make this happen every day.
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About the author; Tom is the Managing Director of Owner’s Edge, LLC, a strategic planning advisory and consulting firm for small and mid-
market businesses. Contact Tom directly at 401-451-9799 or tstocker@OwnersEdgeLLC.com.
Owner’s Edge, LLC is a business advisory and consulting firm specializing in helping business owners work on their businesses. The Firm
works with both growing and underperforming small to mid-market companies. For more information about how we can help you drive
operational excellence visit our website at www.OwnersEdgeLLC.com.
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Additional articles written by Mr. Stocker can be found on our website in the “publications” page: www.ownersedgellc.com/pages/pubs.php.
Owner’s Edge, LLC 10 Larkspur Road, East Greenwich, RI 02818 401-451-9799 www.OwnersEdgeLLC.com