Here are some great forecasting tips for an economic downturn provided by Geoffrey Moore, author of Crossing the Chasm and Zone to Win. (Article link here.)
Never implement an “across the board” budget cut. Consider this “reverse peanut buttering.” It is socially the easiest thing to do, but it abrogates management’s responsibility to allocate resources strategically. Its net effect is to demoralize everyone and weaken the franchise. So, yes, we all get that cutting is painful—step up.
Re-budget at the zone level first. Decide how much you have to cut to secure your financial stability, and then allocate the remainder by zone, beginning with the Performance Zone (which will be paying the bills), then the Productivity Zone (which will be squeezing for pennies), and then the Incubation Zone (because this too shall pass). Avoid the Transformation Zone if at all possible—the amount of change and sacrifice required puts too much pressure on what is already a delicate balance.
Within zone, allocate budget asymmetrically. Begin by highlighting each zone’s single most important initiative and increase its budget for the coming year. Stack rank everything else, and allocate funding from the top down. When you get toward the bottom of the barrel, eliminate or consolidate, rather than starve. The fewer things you do, the better your returns.
How are you assisting your clients to prepare for an economic downturn?