Bracing for Sequestration – IF It Happens At All

Marissa Levin
Marissa Levin
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In my meeting today with my customers at Defense Logistics Agency, one of the Directors asked me, “Marissa, how is Information Experts preparing for sequestration?” The question caught me off guard, but fortunately, I’ve attended so many events to learn about sequestration strategies that I was quick on my feet to answer.

Here are the eight strategies we’ve implemented to prepare for budget cuts:

  1.  Diversification of federal customers. Information Experts has always diversified. We work in about a dozen agencies, which mitigates our risk for budget cuts that may severely impact a single agency.
  2. Diversification of overall customer base. Our company has maintained a commercial practice, and for the last several months, we have strengthened our focus on the commercial market. We are also exploring state and local government opportunities.
  3. Battening down the hatches; reigning in spending. We’ve had a challenging 6 months of reigning in expenses and cutting overhead. This is occurring throughout the industry. Several large companies have instituted lack-of-work policies. If a billable employee finds himself or herself unbillable, they have a defined amount of time to find themselves a project before they are laid off. We have not instituted that type of policy, but billability is a metric that we watch closely.
  4. Re-visiting internal processes to ensure work is being performed as efficiently as possible. It’s not just the government that needs to do more with less; it’s everyone. Every company operating today needs to stretch their internal efficiencies as far as possible.  How are requirements or orders being fulfilled? How are you determining if you should pursue or decline a business opportunity? How is information being conveyed? How do you evaluate partners? How well is your AR/AP process working for you?
  5. Paying attention to market shifts; focusing on what the customer wants rather than what we have done in the past. Government clients want solutions that are as cost effective as possible, and can be delivered as efficiently as possible – without sacrificing quality. This means tapping into technologies that allow this kind of delivery. We’ve spent months sharpening our marketing strategies for our efficiency tools that allow us to deliver faster, better, and cheaper. The days of “smart, transformative, and compelling” are gone for Information Experts. These buzzwords hold no meaning for our customer base. Our value proposition must be clearly defined and measurable.
  6. Increasing our face-to-face time with our customer. Never before has the personal relationship with the customer been so important. Competition in the federal market is fiercer than ever. There are more companies of all sizes vying for opportunities, while budgets are being slashed. Customer relationships are one of the most valuable currencies a company has.
  7. Increasing face-to-face time and communication with employees; focusing on the company culture. Uncertainty brings anxiety. Our country is weary from our election. In the DC region especially, we are weary from the constant talk of the fiscal cliff and drastic budget cuts. Employees need reassurance, and they need communication. I am laser-focused on this right now. It’s always important, but it’s especially important at this point in time. As the CEO, I have the most insight into what’s happening in the market because my peer base is other CEOs and executives. I spend a lot of my time scanning the business environment, and discussing culture and corporate activity with other CEOs. Right now, this has to be a priority to keep anxiety low and momentum high. Employee relationships are the other most valuable currency a company has. 
  8. Strictly prioritizing my time. Personally, I have to be firing on all cylinders all day long. Like everyone else on my executive/management team, I’m doing the job of many people. In the DC region, a networker could attend breakfast, lunch, happy hour, dinner, and drinks every day with different organizations, and still not make all of the rounds. Which groups and activities are directly related to business goals? Which events keep you educated on relevant topics and engaged with strategic connections?  Time is money. Focus is money. I wrote a column outlining 5 strategies on how to strategically select networking groups and events. Here is the link:

Two recommendations for Strategies 3 and 4

For Strategy 3 (Reigning in Spending),  I recommend bringing in Jack Quarles who owns 3Q Strategies ( Jack will conduct a payables audit to review your company’s spending trends and find savings opportunities. His team will also help you determine when it makes sense to outsource versus insource a process. His website has a lot of great information for maximizing your business dollar. Check it out.

For Strategy 4 (Revisiting Internal Processes), one of the biggest shifts in thinking I learned this year was from Ian Altman who is the author of “Upside Down Selling” and owns Grow My Revenue ( One of the drivers behind our go/no-go decisions is if the prospect can identify their “Issue, Impact, and Importance” behind why they may want to buy from you. We don’t have the time to spin our wheels responding to customer requests if they can’t clearly articulate their needs, nor do we want to give away free consulting over months and months to help them figure it out. Check out Ian’s book and blogs for great strategies on building a pipeline that yields the highest return.

Sequestration is still a big uncertainty

There is a high likelihood sequestration will not happen.  A November 7th Washington Post article outlined three options the White House has to soften the blow of sequestration:

First, the group points out that the president’s Office of Management and Budget (OMB) has authority to accelerate spending for critical programs in 2013. While Congress determines agencies’ budgets, it’s up to the White House’s budget office to actually hand out the money. So OMB could potentially try to speed up funding for agencies to offset the sequester’s cuts for a few weeks, to prevent a drop-off after Dec. 31.

It’s important to note that while OMB has the power under law to dole out the money as it “considers appropriate,” it also must prevent funding from stopping abruptly before the end of it year. As such, “there is no way to know at this time whether OMB will choose to use its apportionment power to mitigate the impact of sequestration.”

Second, there are strategies that the individual agencies themselves could use to temporarily minimize the fallout of the sequester. Agencies are already accustomed to dealing with budget uncertainties and shortfalls because of Congress’ failure to pass full budgets on time.

Third, military personnel are exempt from the sequester, and for civilian personnel, Congress has given agencies authority to accelerate spending to prevent furloughs and layoffs.

Hopeful for Cooperation

I’m going out on a limb here (or rather a cliff) and saying that I think sequestration will not occur.  I believe both the Administration and Congress will live up to their renewed promise to work together and do what is necessary to prevent a financially and politically disastrous scenario.

In fact just today, House Speaker John Boehner extended an olive branch to President Obama to work together. “Let’s find the common ground that has eluded us,” Boehner said while congratulating the president on winning a second term. The full article showing steps at cooperation and collaboration is here:

However, the exercise of preparing for the worst case scenario is a very good one to employ no matter what happens. Stepping up your customer service, improving internal efficiencies and communications, evaluating your positioning and relevance in the market, being protective of your time, and conducting financial due diligence within your firm makes good business sense for any business/leader at any time.

Embrace the uncertainty and up your game. You will be better because of it.

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