How to survive in a downturn and position the business for recovery

Geoff Colvin's new book, "The Upside of the Downturn: Ten Management Strategies to Prevail in the Recession and Thrive in the Aftermath," is 171 pages, packed with unconventional wisdom. Here are some gems: People are a company's most valuable resource, yet they are often valued the least. The natural reaction is to fight the last war and just cut people until profitability returns. Colvin cautions against obeying these ancient instincts. When the last big downturn occurred, the role of people was to make the machines run. Now, it is the opposite: The role of machines is to enable people to do their work. Employers need to think differently, retaining people and using tough times to train them in the latest developments. Companies also should focus and train on revenue-producing and business-development activities. Also, it's a mistake to take people for granted. Don't think, "Times are tough, so workers should be grateful just for a job." Companies doing so is, as Colvin points out, one reason that union membership rose in 2008 for the first time in a long time. Colvin's insight: This downturn will last a long time, but it will end. When it does, everyone will remember how a business acted when things were tough. This downturn is a rare chance to build the most valuable capital in a business: employees. It's easy for management to forget that layoffs are expensive. When things turn around, it will be hard to rebuild your core employees if you let them go now. Colvin recommends looking at the 1980s and the oil industry. When the price of oil went down, people were let go. When it went back up, many oil companies found themselves without the people they needed. Think about whether cuts are really necessary. My take: Is the employer making cuts so the top dogs still make as much as they always did, or are the cuts made to avoid going under? Colvin says to make sure the layoffs are unavoidable. Then do them the right way, with appropriate severance and assistance, remembering that how the organization treats those leaving makes a great impact on those remaining. Finally, always remember that "something economically giant has taken place." While things will someday get better, the world will never be the same. Stop thinking that it will. Colvin has a really interesting take on 2008. Take a read.