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Business Impact Survey
Results of VRH Survey

The business consulting firm of Vernon Roche Hodgson, Inc. (Milwaukee, WI) recently surveyed two dozen executive managers of Midwest manufacturing and service organizations and found that the majority have been impacted by the September 11th events, and have already taken steps or are preparing for a sustained economic downturn. Yet there appears to be an undercurrent of cautious optimism about the future. The following are some of the findings.

What has been the major effect on your business operations?

  • Reduced travel or a company-imposed travel moratorium was indicated by one third of respondents.

  • A drop in sales since September 11th was reported by 29%.

Healthcare and financial service industry respondents indicated heightened or tighter security measures, emergency preparedness activities, and renewed emphasis on evacuation procedures and actual drills. Those from the manufacturing sectors suggested 'belt-tightening' initiatives.

However, 10% of the manufacturing respondents (specialty, job shop) indicated no decline in sales and were, in fact, hiring skilled and semi-skilled labor. 'Business as usual' as in executing normal and projected business plans was the response of several service sector respondents.

What is the most significant business issue(s) now facing your organization?

  • 'Sales' was the #1 concern mentioned by 43% of the survey respondents.

  • Impact on employee morale was cited by 33%.

  • Cost control measures were referred to by 29%.

  • Tight cash and margin squeezes concerned 19%.

Security issues, general economic uncertainty, and initial or continuing workforce reductions were each listed by 14% of those surveyed. 

What actions are being planned to fortify your organization for the coming months?

  • Expense reduction and cost containment initiatives were the #1 action reported by 29% of the respondents.

  • Increased focus on sales and marketing efforts was indicated by 24%.

  • 19% were bracing for employee layoffs.

From both the manufacturing and service sectors, respondents indicated their organizations were working diligently to preserve their existing workforce, placing greater emphasis on employee morale and communications, and even instituting additional training. Several mentioned continuing to fill critical positions.

Regardless of sector, most of these Midwest businesses were developing or reviewing contingency plans, performing thorough operations reviews, and taking a more conservative approach to future planning, forecasting and budgeting in anticipation of a sustained economic slowdown. Soliciting direct, realistic input from customers was the approach one organization was using to plan adequately for their desired ROI. A number of respondents indicated their organizations were moving forward with plans for business expansion and diversification.

Words like 'creative,' 'intensify' and 'aggressive' were used to describe various initiatives in the customer service, sales and marketing arenas.


Midwest organizations are practicing essential business basics during this time of economic uncertainty-sustain/increase sales and revenue, contain/reduce costs and focus on employees and customers-all sound business tactics in any economic climate. Is there room for optimism in what these business executives say? Consider the following:

The Midwest is affected no more so than any other part of the country.

It is easy to get caught up in the gloom and despair being reported by the media. Their credo of "if it bleeds, it leads" has given the overall presentation of news a negative cast. However, the Midwest has been affected by the events of September 11 no more so than any other part of the country. The reality is that your business competitors are in the same boat with you. That being the case, your company can be the one customers turn to as this transitory time unfolds. People are now looking for leaders in every industry; they are looking for strength and action. Those businesses that stand out now will benefit when consumer confidence is restored.

  • Companies that understand the cyclical trend presently in motion, and have contingency plans in place to weather the economic slowdown, will garner the confidence and, therefore, the business of consumers.

Businesses that have found themselves in an untenable position have been forced to reorganize, restructure or close up. Companies that demonstrate clear vision and act on contingency plans in place outpace their competitors. For these far-sighted businesses, the customer base will actually broaden since people are looking for leaders and stability. Now is the time to increase sales staff, to find out where needs are no longer being met, and to meet them.

  •  As companies reorganize, quality positions and people are becoming available.

On one hand, reorganizing has led to redefining roles in the workplace. One regional electronic job posting board boasts 1100 opportunities right now ranging from entry to mid-level pay. On the other hand, this same reorganization has meant that quality employees, with insights as to why their companies needed trimming, become available. The call is no longer "I need a warm body." Finding an employee is easier. Now the challenge is to find the best employee-one that has the qualifications and temperament to fit into your particular company's work environment.

  • Tighter security and closer scrutiny allow better candidates to be hired. The "bar" has been raised.

Financial, health and security businesses have begun to take added measures when screening candidates for hire. The ramifications are better qualified employees being hired. The closer scrutiny has, in effect, raised the standard of who a good employee really is.

  • Reorganization affords the opportunity to discover hidden talents in remaining employees.

If your company has been restructured and your workforce reduced, employees now have the opportunity to demonstrate other abilities that were not able to come to the fore in their former roles. Position requirements can change to accommodate added responsibilities, and businesses need to discover the hidden talents in the remaining employees so that their skills are optimized. 

What can you do next?

  • Sales is the number one concern of survey respondents.

Since the marketplace is changing dramatically, an expert sales staff is necessary to find the resulting new business. People who possess self-confidence, enthusiasm, decisiveness, ambition and responsiveness can bring in new clients or develop further business with existing clients; these characteristics are valuable both inside and outside the company. It will be necessary to hire the right people or identify the people within your company who have the proper abilities and temperament to increase your bottom line.

  • One third of the respondents identified employee morale as an issue. Developing employees so they remain viable can be a tangible demonstration of the organization's commitment to them as individuals - an act that builds loyalty, increases retention and lowers staffing expenses.

Turbulent times can make employees uneasy. If they see companies investing in their development, they can be assured they are valued. The career development and coaching they receive can add to their self-esteem and professional viability. The individual will benefit in terms of working relationships, teamwork, job satisfaction, conflict reduction and organizational commitment. This investment has positive ramifications for the company in terms of productivity, quality, organizational strength, customer service, retention and cost reduction. 

  • Outplacement services can be offered to those companies who face employee layoff.

If the writing is on the wall and layoff is necessary, the impact of layoff can be mitigated by assisting employees with outplacement services. Supporting personnel as much as possible during a layoff may be the employee's deciding factor should a company wish to regain the initial training investment in the employee through 


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VRH Insights 
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Business Impact Survey
Commemorating 20 Years of Service 
"Sorry, wrong executive." 
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