What to do when your industry stops growing

The Mercury 100 is a tremendously exciting survey. Here we have a wide array of businesses that are growing quickly and doing amazing things for Colorado.

From the outside, one might be tempted to explain away success because of the dynamic of individual industries – “a rising tide lifts all boats,” and all that.

That’s certainly true to some extent.  When an industry takes off, whether construction or health care or craft beer, it creates opportunities for new companies to establish and grow rapidly. But notice that there are plenty of fast-growing businesses that have a longer history and took advantage of an upturn by expanding their thinking.

It’s fun and exciting to have all the customer demand you can handle. But what if that’s not the case in your industry?

This is where you want to focus on building a durable company, one which may weather the cycles for decades to come. That’s the real objective, right? To survive and thrive over the long term?

Sustainability, at its core, is built mostly on relationships – with loyal customers who want to stick with you, with employees who feel they’re doing something important and with partners who create strong win-win bonds.

The best time to build durability is not when you’re reacting to a downturn. It’s when things are going fairly well and you can invest for the future. Now may be the best time.

Invest in your culture. When you have a company where people want to contribute, you’ll attract better employees. You’ll also keep those employees longer, which means they’ll give more value to your business.

Invest in your people. When you develop skills and reward great contributions, your employees will develop a natural loyalty. Yes, there’s a chance that they will leave and take their skills with them. All that means is that engagement is a never-ending journey, where you can’t become complacent.

Invest in your partners. I find very few businesses that are entirely independent. Most of us rely on other organizations for our success. Like any relationship, you must continually develop and enhance to where everybody wins.

Invest in your customers. The first level, of course, is to simply deliver what you’ve promised. But that doesn’t develop much loyalty, especially when the competition is doing better. Instead, you need to understand customers so well that you can consistently delight them – and predict where the market’s going so you can continue to deliver things that matter the most.

In “The 7 Habits of Highly Effective People,” Stephen Covey described his concept of the Emotional Bank Account. Its essence is that, like any actual bank account, you need to invest first in order to withdraw later. The Emotional Bank Account is built by growing your relationships with others.  Because, eventually, you’ll need to use that “relationship capital” when you make mistakes or otherwise damage trust.

If you’ve developed a relationship with your leadership team based on openness, honesty and fairness, when it comes to making a tough decision you’ll be able to draw on their resources and creativity. If, instead, they’re just with you because of the paycheck, they’ll take off for greener pastures at the first opportunity. They won’t feel they have much to lose by moving on.

When your partners feel they can rely on you, they’ll be reluctant to make a change when the times get rough.  But that history needs to be built up over years.

When your customers love and respect what you do, they’ll try hard to remain loyal even when their budgets are stretched thin. Within reason, they’ll give their business to you rather than the competition.

Businesses are almost entirely based on their people – and people will stay together and support each other through amazing challenges if great relationships exist. Communities will survive incredible disasters when their members care about each other, and companies are just a particular kind of community.

So you’re feeling a little encouraged by an economy that’s on the upswing? Great! Now is exactly the time to build up your strength and relationships for the next time it heads downward.

Carl Dierschow is a Small Fish Business Coach based in Fort Collins. His website is www.smallfish.us.

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