Tough times offer some valuable lessons.

• Author: Young, Laura E.
• Position: Effects of the recession in Canada

While a recession can be devastating, sometimes it is also necessary for businesses to re-evaluate their practices and become more competitive.

The most recent recession brought with it many lessons, one of the most important being the need for teamwork.

Christopher Reid of Peat Marwick Stevenson and Kellogg management consultants in Sudbury believes businesses will be more successful if they don't place the responsibility for recovery on management's shoulders alone.

Reid also recommends that business owners and managers do a lot of talking, especially to customers.

"You cannot closet yourself and survive. It is vital to know how your customer's business is doing," he explains.

NOT IMMUNE

Even a multi-million-dollar, national company such as Peat Marwick Stevenson and Kellogg could not avoid the effects of the recession. It experienced almost a 10-per-cent drop in sales and underwent a restructuring through hiring slowdowns and attrition.

A company-wide task force called WOW, (War on Waste) was one solution to the economic downturn.

Reid says $400,000 in travel expenses were saved last year by streamlining all travel through one central agency.

Making do with less office space will mean additional long-term savings, he adds.

NORFAB

NorFab Building Components of Fort Frances was expanding before the recession set in. It had acquired Precision Trusses of Thunder Bay in 1990 and had initiated a new line of screened-in gazebos which had sales potential in the nearby U.S. market.

But the new line was not enough. Diversification could not prevent a two-month layoff at the NorFab plant and the closure of Precision Trusses. It is scheduled to re-open in March.

Company owner Mel DeGagne remains cautiously optimistic because the gazebos have a growing market in the U.S. Still, he pledges to carefully monitor any future expansions when the next boom period comes.

"They (good times) come and go too fast. If you get into big debt, I think that is where companies fail," he says.

3-H MANUFACTURING

Companies also go under when they neglect to keep their employees informed, says Heinz Dittman, president of 3-H Manufacturing of New Liskeard.

Being honest with employees and inviting their suggestions maintains motivation, he says, especially during a recession.

That task has not been easy for Dittman, however.

The furniture manufacturer's sales have dropped by 30 per cent from 1990's performance.

At one time the company employed 55 people...