Thriving in the New Normal: Don’t Waste a Good Crisis

The Midmarket Institute’s Founder and CEO, Ram Iyer addressed a standing room only crowd as the first speaker of the Chicagoland Chamber of Commerce’s 2010 Speaker Series on March 16. More than 75 midmarket CEOs, sales people, vendors and suppliers packed the room to hear Ram’s insights on the challenges the midmarket community faces and ideas for creating customized success strategies.

“Ram Iyer’s talk on the midmarket was a great start for the 2010 speaker series,” said Jason Kamp of Terillium Inc. “Mr. Iyer is clearly a thought leader and a tremendous asset to the midmarket. His talk provided many useful insights into how midmarket companies can become more successful.”

Attendees listened raptly and took copious notes as Ram urged them not to waste a good crisis. Instead, he urged midmarket companies to throw off the gloom and doom and figure out how to make the new normal work for them.
“Midmarket companies,” Ram said, “are incredibly good at what they do, but typically lack the time – or, more often, inclination – to think through an appropriate list of options for their business.” “Now’s the time to find the time for planning, as the new normal adds several new challenges to the list of issues midmarket companies face, from economic uncertainty in an era of slower customer spending and tighter credit to increased competition from international players and bigger companies that largely left midmarket niches alone during better times.”

Ram followed his discussion of the challenges facing midmarket companies with an easy-to-remember blueprint that outlined the basic steps companies can use to create a customized plan for their own success.

MccSORICH begins with M, for Macro. Businesses begin the process by understanding their place within their industry and how that industry has been impacted by the economic downturn.

The first “C” stands for Core customers. About 80 percent of midmarket companies’ business likely comes from about 20 percent of their client base. Preserve and support that 20 percent. That is the business that will keep midmarket enterprises going as they plan their future. Meanwhile, Ram advised the audience to look at letting go of the slow payers and unprofitable customers that may be dragging them down.

The next “C” is for Core competencies (or core business, as some think about it). Companies should figure out how to leverage their core competencies into new products and markets to increase business. Ram also stressed the corollary, which may mean pushing out non-core functions to partners or suppliers.

SO is for Strategic Options. Evaluating strategic options may sound consultingish or daunting, but it means understanding what options are available given your company’s current situation. Look at your current situation – how the downturn has affected your niche, what your position is within your niche and your financial position. Once you are clear, there are specific options that are available. For example, if you have not been deeply affected by the downturn, have many profitable and loyal customers, and are in a good financial position, you have the ability to explore investing in product innovation, entering new markets or acquiring a weak competitor. Similarly, if you are getting clobbered by a large competitor on price, have a weak financial position and have lost a number of key customers recently, it doesn’t make sense to consider a price war.

R is for Revenue. How can you increase sales? Can you extend your products into new markets or develop new products for profitable customers? Are there other possible revenue streams you can tap? How can you ensure sustainable revenue for the future? This, in many ways, depends on your strategic position.

I is for Innovation. Ram laid out four areas of innovation - innovation in business model; product and service innovation; process innovation; and technology innovation.

C is for Costs – If you’re like most businesses, you’ve already cut a significant chunk of costs out of your operation during the past two years. Does it make sense or is it even possible to cut further without reducing revenue, risking existing customer relationships or skimping on needed innovation investments?

Finally, H is for Holistic Execution. All of your great ideas for innovation and growth don’t mean anything without the ability to put it all together and make it happen. Creating a blueprint is the starting point but nobody reaches the RICH in MCCSORICH without the ability to execute. As Ram said, midmarket companies need to execute on many or all of the elements of the MccSORich framework in order to see the expected results.

Key to Ram’s message was the offer to continute the dialog, “The midmarket is a very important segment of the economy and we can best address their challenges when we talk them through. There are many attendees that have reached out to me already and I’m committed to continuing the dialog.” If you would like to reach Mr. Iyer, please email ‘info@midmarket.org’.