By Fergal McCormack FCA, Managing Partner, FPM Chartered Accountants
What becomes clear during difficult economic times, is that the old ways of thinking we held onto during the boom simply won't work. Fear replaces intuition in a recession. Pessimism replaces optimism. It is entirely natural. However, when a person or company get preoccupied with 'protecting what they have achieved' this can have a negative impact on the future sustainability of their business.
Businesses must urgently embrace lateral thinking. Lateral thinking can help businesses side step, survive, and hopefully perhaps even capitalise from the current economic recession. Good ideas do not disappear in a recession; new thinking is needed, not least because innovation will translate into wealth for the discoverer.
Encouraging leaders at all levels of the business is vital to achieving your business vision in difficult times. Leadership is not about position or hierarchy, but is about attitude, definite characteristics and behaviours such as: vision, passion, culture, people, team building and inspiring others. At times of Credit Crunch it is appropriate for real leaders to stand-up and deliver.
We must concentrate on developing and strengthening our business teams, because we need to bring our teams closer together, to develop an exciting future vision for the business. A united team with a common purpose, excited by what lies ahead is invaluable.
Our business team must recognise that we are in business to win and retain clients/customers, nothing else. Everything we do in our business should contribute to achieving this goal. We must acknowledge that customer service is what makes a good business.
It is important to manage change in changing circumstances, to a focus on leadership and shared team responsibility, with a strong emphasis on action and implementation and a commitment to a continuous improvement. Management teams often forget to do the basics when the focus is on growth, but that emphasis needs to change in the current environment. The coming months should be about instilling the right Discipline into the business.
In the current economic environment it is vital to avoid complacency - swift, decisive action is the key to maintaining and indeed restoring performance in value. Actions speak louder than words. It is important that a sense of urgency is created and focus is on the opportunities, rather than the threats - and there are opportunities. The fittest businesses will survive and indeed emerge more competitive from the current economic recession.
Always remember that business is all about people and relationships. Networking will be key in future months and it is important that businesses talk to their customers, potential customers, suppliers and bankers. In respect of customers try and get closer to your customers and distance yourself from your competitors.
I believe that there are three principal areas that management must focus on to survive and prosper in this period of change:
- Your Valuable Formula. Re-assess the competitive element that generates profit and sustainable success for the business.
- Modify Operations. Change the way the business works to adapt quickly to the changed environment.
- Managing for Cash. Establish the absolute priority of cash over profit and investment whilst the storm is blowing.
It is not going to be easy all the time, but we must be fully prepared for the fight; we are, after all, in a battle for market share and the hearts and minds of prospects. Remember Henry Ford's famous quote, 'if you think you can, or you think you can't, you're right'. Businesses must demonstrate an ability to continue to reassess market conditions, adapt, learn new skills and have a flexibility to reallocate resources to new growth areas.
Looking to the future sustainable thinking must be embedded within the mindset of every employee. Complete commitment is the only way to achieve success. It sustains you when you feel like quitting, and rewards you when you succeed. In order to have commitment to your goals, you must develop inherent persistence - persistence beats resistance.
It is important in these difficult economic times, that we identify and sense opportunities to secure future business sustainability.
We must recognise that individual actions matter and can be a force for change. It is important that we all work together with a common united goal to make it happen. I pose the questions:
If not now, when?
If not us, who?
If not together, how?
To put this another way, in ten words: "If it is to be, it is up to us".