3 ways to build economic flexibility into your organization

Economists are saying we’re safe from recession for another year, but it doesn’t hurt to begin building some economic resilience into your organization.

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Depending on whose math you use, it’s been right around a decade since the last major economic downturn. Aside from an amazing economic run, it’s interesting to consider that much of your staff and even some newer leaders may have gone through their entire career without experiencing an economic downturn. For them, historically low unemployment and booming markets are business as usual rather than the peak of a cyclical economy.

SEE: How to build a successful CIO career (free PDF) (TechRepublic)

For some pundits, this exceptional economic run has become a sure sign of impending doom, and just as the old analogy about a stopped clock being right at least twice a day holds true, predictions that there will eventually be a downturn will also come true. The great mystery is when that will occur, and no matter how skilled the economist, analyst, or pundit, there’s more luck than skill at play in those predictions.

Rather than attempting to predict the unpredictable, immediately selling the conference table and counting how many paper clips are purchased, or merrily continuing as if the economy will never change, here are three smart things you can do today to prepare for a variable economy, whether that occurs tomorrow or in another decade.

Build flexibility into everything

Advances in technology have allowed for amazing flexibility in how we buy and consume it. Cloud computing allows for near-infinite computing resources to be deployed when needed then instantly scaled back. It’s relatively obvious that cloud makes perfect sense for a variable economy, allowing instant downsizing versus owning data centers that you’re paying for whether they’re oversubscribed or virtually unused.

While you may be patting yourself on the back for being a cloud shop that has great technical flexibility, look at everything from your vendor contracts, to your project portfolio, to how you’re using consultants and third parties. That 100% cloud infrastructure might be great, but the five-year “all or nothing” Enterprise Resource Planning (ERP) implementation you’re deploying atop the flexible infrastructure might be a cost you can’t reduce or mitigate should circumstances change. Similarly, you may have won a high-five or two from the CFO for reducing consulting spend, but if you did so by bringing lots of specialized skills in-house that can’t be redeployed or re-skilled should circumstances change, you’ve traded future flexibility for short-term gains.

In addition to the typical assessment of cost, features, and functions when making an IT spending decision, consider flexibility as another key benchmark. It might cost a bit more today for flexibility tomorrow, but if economic circumstances change you might have invested pennies to gain thousands.

Rethink your staffing processes

For most of the economic boom, attracting and retaining staff has been the key concern of IT leaders, especially staff with in-demand skills. This may have created an unwritten policy in your organization to retain staff at all costs, and avoid rocking the boat by providing coaching, transitioning employees to different roles, or providing rigorous evaluations. For an easy test, take a look at your last set of staff evaluations. If everyone was bucketed into the same performance ranking, you’re likely suffering from this malady. Aside from alienating the true strong performers, and the ones you’ll most need should economic circumstances change, you’ll also lack any sort of ongoing track record or benchmarks of which staff are your best, and which could be reskilled or let go should you be required to trim your staff.

You may also be heavily staffed to support an initiative that would be one of the first you’d cancel if your funding were cut, putting you in a difficult position. In each area of your IT shop, consider the mix of external consultants and employees, using the former to provide flexibility and the latter to support critical programs that might be even more important if the economy turned south.

Set up early warning devices

Most organizations are awash in data, with warehouses, lakes, and marts full of the stuff. However, few organizations leverage their data well. Collaborate with your business unit peers and see if there are key metrics or KPIs that could serve as an early warning sign of a shifting economy. A change in which products your customers are buying, or even a slip in accounts receivable aging could be the proverbial canary in the coal mine for larger troubles on the horizon. Furthermore, if you can proactively come to your colleagues with ways IT can help them manage their own concerns about changes in the economy, IT will look like a valuable asset should times change, rather than a massive expense that should be cut to the bone.

While no one can accurately predict when or how dramatically the economy will change, it’s fairly certain that economies operate in cycles, and at some point the good times will shift. Preparing today by building flexibility into your IT organization will pay off immediately, and perhaps even more significantly should the economic tides change.