Ask SCORE: Starting and Managing a Business in Tough Times

Starting and Managing a Business in Tough Times
This Month's Topic-Strategic Human Resource Management
by Richard Walton, MBA and Marty Mattare, Ph.D (guest editor)

Question: Can I make use of the down economy to build up my workforce. Should I?
Answer: You not only can but you should. There are many individuals who have been downsized by other firms who are seeking new employment. They may be available at lower than market rates in view of the recession. You can find them on,, as well as the social networking sites. It could be your best investment.
Note: This process is known as countercyclical hiring. Social Networking sites include, and
Question: What are some no cost ways to build up my current employees' knowledge, skills, and abilities during the downturn?
Answer: You can provide self paced computer assisted learning, have other employees give training sessions in their special skill area, develop a temporary job trade with other employees and departments to gain additional expertise, (i.e. swap jobs for a day) and even temporarily outsource employees to other firms. This way we can prepare for the eventual upturn in business with increased employee skills.
Note: Knowledge, Skills and Abilities are often referred to as KSAs
Question: How can I reduce costs both in operations and administration, without resorting to layoffs?
Answer: One way to reduce both administrative and operational costs is to ask for new quotations from your vendor or vendors. Bartering is increasingly being used to conserve cash. In operations, reducing costs can be facilitated through employee involvement in cost reduction and process improvement initiatives. Employees can voice their own ideas through such systems as Quality Circles and TQM.
Note: TQM (Total Quality Management) is based on continuous improvement in all processes. Quality Circles are small informal groups of employees which meet to discuss cost reduction options.
Question: How can I link individual employee performance with organization wide goals and objectives?
Answer: You can design organizational job descriptions and performance reviews to support organizational goals and bottom line results by structuring work processes for maximum efficiency and maintaining a continuous process of monitoring performance against goals. Appreciative Inquiry can be used in problem solving and motivation.
Note: Appreciative Inquiry (AI) is a concept developed by David Cooperrider. It is a tool used in Organization Development to focus on what an organization does well rather than what mistakes have been made. It therefore sets the stage for an affirmative way to deal with problems and solve them creatively.
Question: How do I allay people's fears of layoffs and keep them motivated during 'tough times?'
Answer: There a number of ways in which managers can do this, and it is very essential. What is most important is to be candid and honest with employees about the current situation and what can be done about it. Asking for help in building revenue and reducing costs can lead to good ideas, and a sense of participation by employees. Managers need to maintain close and supportive contact with employees, using such techniques as MWA (Management by Walking Around)..
Note: MWA (Management by Walking Around) is a technique that helps build confidence in employees by interacting regularly with managers.
Concluding Note: Many of the ideas contained in the Q&A are expanded upon in the publication: Best Practices and Practical Tips for Effective Small business Management (2009). For more information, email the authors,, or

Richard Walton, Counselor for SCORE, and President, Enterprise Resource Management Associates, Inc., of Hagerstown, Maryland. Cell phone: 301-462-9850, email: