The concept and phrase “survival of the fittest” was originally coined by Herbert Spencer in his 1864 book The Principals of Biology. Darwin called it “natural selection” in his Origin of the Species. Unlike today where “fittest” refers to the most highly trained and physically energetic, in their day, fittest referred to animals that were most suited to their environment.
If you think about it, species that disappeared (without the intervention of man) didn’t do so because they were not suited to their environment but rather because the environment around them changed quickly and they were unable to adapt. Without getting too deep into the sciences, I submit that the key to survival has less to do with where you came from and more to do with your ability to adapt to your current surroundings (your reality). What a business concept.
Now, it would be irresponsible to go any further without
first admitting that some people and businesses are better suited than others to adapt to a changing environment. But it’s my experience that it has very little to do with the tools they have, the opportunity in front of them, or their “lot in life”. Rather it boils down to a simple mindset. That is, the willingness to embrace and benefit from change. Change is the only constant. It’s always been with us and will always proceed us. Most of us have at least some capacity to change. The difference between those that survive and those that disappear becomes most evident when change occurs quickly.
During the annual NSCA Business and Leadership Conference last month in Phoenix, AZ, I participated on a panel discussion with the topic “Leadership in Uncertain Times.” During the discussion I submitted that during the current recession we are going to identify three types of businesses with three different outcomes.
Business Type #1: Can We Survive? Many companies, maybe even yours, will be fortunate if they even survive the next two years. Many have already closed their doors, simply because they didn’t build their business over the past few years around a culture that embraced and adapted to change. They had no protection against uncertain times, sharp downturns in the economy, and unexpected regulation. They just assumed that the good times would last forever, and they bought into the illusion that our economy was bulletproof. Lack of cash flow will be the single most common cause of business failure during the current recession. Failure to make quick and sometimes deep cuts in overhead, while assuming that things will get better soon, will be the second most common cause of failure. Can we even survive? This is the question being asked by
companies that were ill prepared for the current recession. Business Type #2: Can We Sustain? This is the question that healthy businesses, properly situated to handle a recession, are allowed to consider. Can we maintain profitability? Can we maintain revenues? Even, can we maintain growth? Companies who are looking to sustain current revenues, market share, and profits have healthy backlogs. They know how to accurately forecast revenues and profits. They know how to manage the overhead of the business to meet current conditions. The will do what ever it takes to be profitable every quarter. They will pay close attention to receivables and do an excellent job collecting what is owed.
Business Type #3: Can We Prosper? Believe it or not, there is a third category of businesses during tough times. There will be companies who will prosper during the recession and be poised to dominate when it’s over. If you’re a Type 2 business, you have the option to become a Type 3 business if you have the vision and courage. Type 3 businesses will position themselves to take market share from competitors, ramp up marketing and sales efforts when everyone else is cutting back, and they will seriously dominate their market when things improve. In other words, healthy companies have options. They can choose to hunker down, becoming very protective of what they have and simply survive or sustain over the next couple years. Or, they can go on the offensive by using this opportunity to trim the fat and ramp up marketing and sales efforts. They can even consider strategic mergers or acquisitions designed to capture meaningful market share and build momentum. The lessons of past recessions and even the Great Depression tell us that when handled wisely, great opportunities can be identified and exploited.
What’s required is a mindset toward embracing change and it takes courage and skill to adapt and navigate your way to becoming a Type 3 business. Do you have the chops to pull it off?
Mike Bradley (firstname.lastname@example.org) is president of Safeguard Security and Communications, a security and communication systems integrator in Phoenix, AZ. Bradley is a past president and director on the board of the NSCA with 25 years’ experience in sales and management in the low-voltage contracting industry.