Regardless of your business sector, you’re likely accountable to a forecast.
Generally speaking, a short-term (quarterly) forecast ties into a mid-term annual forecast that’s part of an even longer term growth strategy. Of course, you’re always reporting forecasts and your results: whether informing shareholders about performance or discussing goals and achievement with the board, forecasts are of great interest.
So, what happens when you’ve reached the end of Q2 and you’re tracking behind on an annual forecast?
“Bring in sales and stop the bleeding.”
“What was our advertising cost last quarter?”
“Is our agency getting us the best advertising rates?”
“We need to employ cost management measures.”
Clearly, individuals in positions of leadership at major companies definitely aren’t as panicked and reactive as those quotes make them sound. But the sentiment rings true – in order to catch up on short-term goals it’s not uncommon for company leaders to hastily slash longer-term investments like brand awareness advertising and exploratory R&D spending.
A company should not have to sacrifice long-term initiatives to make up for short-term challenges. Scott Anthony on the HBR blog network outlines three great tips for business leaders to keep in mind when they are pacing behind in the short-term.
Of particular interest are the following:
1) Ensure that short-term actions to improve profits don’t impair long-term capacity to grow
2) Find out how to do more with less
One way to satisfy both is to explore how your business can truly engage in inventory management by putting a stale asset or an inventory pain to work. In real terms, when an asset reaches the point where its marginal cash return via liquidation appears to be the easiest conceivable short-term option, consider a more tactical approach.
Corporate trade (aka “barter”) makes it possible to restore full wholesale value of a stale asset in the form of trade credits used to support your marketing budgets and offset your cash outlays.
Use excess inventory to pay for a portion of your media budget rather than hammering your media agency for lower rates. Or maintain presence by using distressed inventory to offset a portion of your in-store displays rather than cutting marketing budgets.
Catching up in the short-term doesn’t necessitate abandoning the long-term.