The stock market keeps tumbling. Unemployment is on the rise. Consumer confidence is shattered and many companies are failing. So, what’s a business executive to do? Turn to the “KISS” principle. You may have heard that KISS stands for “Keep It Simple, Stupid.” I prefer to think it means “Keep It Simple and Stable” — a reminder that strategic and operational simplicity leads to business stability, even during the worst of times.

Every organization — large or small, private or public, product producing or service-oriented — relies on the same four foundational areas:

STRATEGY: “the way we think and plan” – Every business must have a unique value proposition that is difficult for rivals to copy. This strategy helps the organization align processes,
resources and assets to create the future while managing present challenges.

PEOPLE: “the way we lead” – People are the most valuable assets of any given organization. Enabling them to be creative and skillful assures long-term business sustainability.

INFRASTRUCTURE: “the way we interconnect and enable” – Infrastructure includes policies and procedures, information systems, supply chains, and every other system designed to support
the organization’s goals.

PROCESSES: “the way we work” – Processes enable the creation and delivery of the value proposition to customers. Innovation in both core and enabling processes is essential to overcome challenges and reach new levels of performance.

During a recession, your organization must still focus on these key areas. What must change, however, is how you approach each one. The trick? KISS — Keep It Simple and Stable.

The Best of Times

During periods of profitability, businesses can afford to take a less risk-adverse strategy that encourages hyper growth, including risky and uncalculated mergers and acquisitions. Often they fail to standardize disparate infrastructures and processes, and the two entities never become one cohesive and efficient unit. In addition, people may be hired simply to fight fires, without regard to strategic recruiting, talent development or retention.

When business is booming, it’s easy to ignore process throughput and capabilities (e.g., how many widgets the factory produces in an hour, or patients the Emergency Rooms sees in a day, and whether or not these numbers meet customer demand). Even producing defect-free products or reducing organizational waste (e.g., optimizing inventory turns or simplifying the patient check-in process) may not be a high priority.

The Worst of Times

However, when growth slows, or stops completely, businesses must take a different tack toward these foundational areas. Again, the keywords are simple and stable.

First, a new strategy is required. The inability to understand the “true profitability” of services and products has left many businesses with over-inflated portfolios that destroy shareholder value. However, this downward spiral can be reversed by devising a new strategy — one that reduces complexity and can be achieved through measurable execution.

Complexity is the systemic impact of too many services, products, parts and processes on your costs, growth and process efficiency. Nowadays, such complexity adds no value. It’s only a drain on your company’s ability to deliver high-quality, on-time offerings to customers and to generate value for shareholders.

If you build your strategy on the concept of reducing complexity you will reap significant cost and speed benefits, and you will free your organization to drive true value-added innovation for your customers. Basically, reducing complexity comes down to 1) ridding your business processes of actions that customers, if given a choice, would not pay for; and 2) minimizing the costs of the remaining process steps as much as possible.

In addition to reducing complexity, your new strategy should be executable – featuring measurable objectives that can be achieved by the organization’s current talent-base. This doesn’t mean your goals can’t be strategically innovative, but they should be cost-effective and simple, and contribute to the organization’s overall stability.

Where people are concerned, a recession is a good time to conduct 360-degree performance management reviews to understand where the true talent lies in your organization. Then, you should do everything in your power to retain the best people. Simple and cost-effective approaches include investing in their professional development, encouraging their contributions and offering non-monetary performance bonuses. The goal is to earn their trust
and loyalty, because it is their talent, ideas and dedication that will see the organization through tough times.

This isn’t to say that the rest of the organization should be marginalized. Sharing what is being done to stabilize the business, including a revised strategy, will go a long way toward easing employee fears. Suppliers and customers may also need reassurance that your business will make it through the recession, and that they can continue to pledge their loyalty to it.

Finally, make the time to understand the current state of both your infrastructure and your processes. Using a Performance Excellence approach like Lean Six Sigma, your organization can identify simple opportunities for improvement and innovation that can be implemented quickly and easily. Not only does this approach contribute to the stability of the business, making it more efficient and cost-effective to operate, Lean Six Sigma projects commonly enhance customer loyalty and employee morale.

If you’re concerned about spending money to save money, consider that many organizations start small, deploying Performance Excellence in one department or location, and then use the savings, and momentum, generated by the program to expand it to the rest of the organization.

Also consider the fact that, while your competitors are merely reacting to the chaos going on around them, you can be proactive instead – devising a smarter, less complex strategy; discovering and nurturing your organization’s most talented people; and leveraging the slowdown in business to improve your infrastructure and processes. And then, as you zoom past the competition on the road to success, you can blow them a KISS.