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A Strategy for Surviving Past Today
With bad economic news—bankruptcies,
bailouts, and shrinking economic
output—coming at us every day, it is hard for
management to see beyond the next overnight
investment placement. Even if an organization has
more than enough cash in reserve and no exposure to
the toxic investment vehicles that are bringing down
hallowed financial institutions, most companies will
feel the effects of a potentially deep and long
recession. It is infinitely easier to lead and manage in
good times than in challenging times like these.
However, declining sales and eroded investment
income will expose and magnify previously hidden
issues. These include: low productivity, average
quality, questionable organizational structures, non-
value-adding products and services, incorrect pricing,
and unnecessarily high costs. In a recessionary
environment, previously ignored problems could have
an exponentially worse impact on your bottom line.
Most management teams have experience with
difficult times. Some tried-and-true approaches,
including across-the-board budget cuts and the
dreaded staff layoffs, are usually what companies turn
to when the going gets tough. These approaches cut
expenses, but staff morale, service, and expertise all
take a serious hit, as well. And once the pressures
ease and the economy improves, the company
emerges perhaps a little worse off and less prepared
to handle the increased activity.
There is an alternative to this type of decision making.
It enables an organization to not only survive the
daunting challenges of today but also position itself to
thrive when the economic cycle turns and revenue and
growth trend upward again. It involves four important
action steps, but with just a bit more strategic thinking
added:
- Reduce expenses wisely. We recently
saw
this quote: "Invest in success, eliminate failure." This
is a useful framework when reducing expenses.
Arbitrarily chopping expenses in functions that work in
equal percentage as functions that aren't working well
does not make sense today. Rather than reducing
expenses across the board, work with your people to
quickly identify
non-value-adding activities in your
operations. Think effectiveness in delivering what your
customers need and want. What better way to cut
expenses than to eliminate what your customers don't
want or need from you anyway?
- Improve service now. In deep
downturns
and economic uncertainty, fear grips even the most
rational of people. There is a good chance that many
of your customers are worried about your company,
whether they should be or not. The worst thing that
your company could do is to give poor customer
service to someone with this mindset. A bad customer
service interaction could be the very thing that
motivates them to seek another carrier. Nothing will
help retain customers (think "revenue") better than
consistently knowledgeable and efficient service
experiences with your company.
- Rationalize the organizational
structure. Rare is the executive who hasn't
questioned why there
are several service centers, or wondered why there
are so many people doing what seems to be a simple
task in some part of the organization. Now is the time
to address and resolve those lingering questions.
Rationalizing organization structures streamlines
decision making, improves service, and reduces
significant unnecessary expenses. Better yet, it
positions your organization to respond even faster
when the cycle turns upward again.
- Communicate frequently. In periods
of
uncertainty, people look to their leaders for
reassurance. Explaining how the company is being
affected by these events and what is being done to
address them is critically important. The message
of "cutting expenses" is one that employees certainly
expect to hear, but that message alone is hardly
reassuring for the long term. Rather, share with them
the vision that by taking the right actions now, the
company will be positioned to be even stronger in the
future. And don't forget that nothing contributes to
good communication (and success) better than
actually enlisting your people to participate in all the
elements above, with clearly stated goals and
guidelines.
You know what needs to be done. It is how you do it
that will determine if it just gets you through this
difficult time or contributes to the long-term strength of
your organization.
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NOLAN'S LIFE & ANNUITY INDUSTRY SURVEY
We invite you to participate in Robert E. Nolan
Company's new Life & Annuity Industry Survey. The
market is in an era of unprecedented change, so we
have designed this survey in order to explore and
provide analysis on the emerging strategies being
undertaken to profitably address those changes.
If you have participated in past Nolan surveys, you
know the value they provide in the form of insights and
perspectives into key strategies being undertaken
across critical functional areas. The findings and
analysis help bring perspective to the dynamics that
will shape the industry in the coming years. There
is no cost to participate, and the survey can be
completed online or submitted via fax or mail. Once
the survey results are tabulated and analyzed, Nolan
will release a comprehensive findings report later this
year.
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NOLAN COMPANY ANNOUNCES NEW REPORT
THE NEW ERA OF SERVICE DIFFERENTIATION
The Robert E. Nolan Company announces the
release of a new report containing research and
original articles on the topic of service improvement
and differentiation.
In the insurance and financial services arena, service
excellence has proven to be the dominant market
differentiator. Strong, sustainable relationships with
customers and agents are essential for long-term
success. This new report from the Nolan Company
provides a diverse, real-world perspective on this
complex topic.
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Join Us...
ACORD LOMA INSURANCE SYSTEMS
FORUM May 17 - 19, 2009
Walt Disney World Dolphin Resort
Orlando, Florida More
Meet Onsite
13TH ANNUAL ACE CLAIMS
CONFERENCE June 1 - 3, 2009
Caesars Palace
Las Vegas, Nevada More
Meet Onsite
FARM BUREAU ANNUAL
CONFERENCE June 5 - 6, 2009
Gaylord Palms Resort
Orlando, Florida More
Meet Onsite
2009 IASA ANNUAL CONFERENCE
June 7 - 10, 2009
Gaylord Palms Hotel & Resort
Orlando, Florida More
Meet Onsite
NAMIC MANAGEMENT
CONFERENCE June 21 - 24, 2009
Fairmont Tremblant
Quebec, CANADA More
Meet Onsite
NAVA OPERATIONS & TECHNOLOGY
CONFERENCE June 28 - July 1, 2009
Westin Copley Place
Boston, Massachusetts More
Meet Onsite
We welcome the opportunity to meet you in person at
any of these events. Click "Meet Onsite" to send us an
email with your contact information. We'll be in touch
to arrange a convenient time to meet you at the event.
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2009 IASA Annual Conference
The Nolan Company is honored to sponsor the
conference's keynote address given by Michael
Eisner, former CEO of The Walt Disney Company.
Eisner's speech, "The Creative Economy," will
discuss the importance of generating fresh ideas
while enhancing and protecting your brand. Nolan
executives will also co-present and moderate various
sessions at this annual conference held at in
Orlando, Florida.
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2009 Nolan Events and Sponsorships
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Previous Nolan e-Newsletters Online
Past articles from Nolan Spotlight, as well as Nolan's
other e-Newsletters—Bank Statement and
Trend Line—are now available on our Website.
Follow the link below to browse the archives.
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