Preparing for the Economic Downturn - 5 Steps to Survive a Slide

5 Steps to Survive a Slide

Continuity in the CIO post clearly provides an edge for companies attempting to survive economic cycles. But sometimes it takes a fresh set of eyes to see opportunities during difficult times. That’s where an experiment at investment management firm The Vanguard Group has paid off.

In 2006, Vanguard shook things up by having its then CIO Tim Buckley switch places with Paul Heller, who ran the company’s retail business. Heller, who previously had run the systems integration organization, says his having been through a recession as a business executive helped him recognize potential advantages of the current downturn. Heller has identified five practices for IT leaders to strengthen their organizations when the economy is slow:

1. Reach out to key partners. There’s no better time to connect with partners—internal users and external customers—to find out what’s working and what’s not. People are in problem-solving mode, so they’re likely to turn over every rock searching for ways to improve processes and save money.

2. Look for silver linings. As the economy worsens, business leaders suddenly take interest in items that typically get dismissed as being IT-oriented. Server virtualization, automated testing tools and establishment of enterprise-level data, for instance, have moved front and center.

3. Focus on execution. It’s a great time to “take friction out of the system,” says Vanguard’s Heller, who suggests paying close attention to a company’s Web site performance to ensure high availability and efficiency of internal systems. “We’re a virtual business, so we come to a standstill if any of our Web sites aren’t running perfectly,” he says.

4. Guard against complacency. Rather than letting the doldrums take the edge off an IT organization, use it to drive paranoia—in a good way. Establish momentum around improving privacy, compliance and other high-risk areas, for example.

5. Communicate more than ever. People tend to lose their perspective during economic slides, so it’s important for the CIO to be a voice of reason. Remind staff not to discard fundamentally sound strategies just because things are down, Heller says.