Articles
Our feature article this month follows. If you wish to access other articles, please follow this link.
Sly Fox, Headless Chook or Ostrich?
By Richard Francis
The recession has quite literally changed the game – or at least reminded us all that the ‘ground rules’ for a successful business still matter. The new reality is that banks are sitting on their money, most organisations are reining in discretionary spend, and business fundamentals have moved from being a ‘nice to have’ to a matter of success or failure.
Wake Up Call
The recession has been a big wake-up call after years of unprecedented economic activity and wealth generation. No decade has surpassed the last one for corporate profit-making, wage and salary rises, new venture generation and – wait for it – reckless and criminal greed in some sectors. Alarm bells were ringing as the economic bubble grew and grew, but too many business owners hit the “snooze” button whilst the profits kept rolling in.
2009 changed all that. With record business failures, sunset industries (already in decline), front-liners (retail and manufacturing) and underperformers generally were ruthlessly cut down by market forces and consumer fear. 2010 will see many more strugglers lose their battle.
Opportunity Knocks
But the news is not all doom and gloom – not by a long shot. In fact, from adversity opportunities arise and fortunes are made. We certainly have encouraged our business clients to plan for the recessionary environment as there is no better time to ‘do deals’, source value-for-money acquisitions, or head-hunt talent.
So in this uncertain environment - with just a ‘soft’ bounce out of recession in 2010/11 - what strategic responses are we seeing from business owners across the economy? Broadly speaking, they fall into three categories:
If you are anything other than a sly fox business, consider a mental and strategic shake-up now. This should include:
© Francis Consulting Limited, 2010.
Our feature article this month follows. If you wish to access other articles, please follow this link.
Sly Fox, Headless Chook or Ostrich?
By Richard Francis
The recession has quite literally changed the game – or at least reminded us all that the ‘ground rules’ for a successful business still matter. The new reality is that banks are sitting on their money, most organisations are reining in discretionary spend, and business fundamentals have moved from being a ‘nice to have’ to a matter of success or failure.
Wake Up Call
The recession has been a big wake-up call after years of unprecedented economic activity and wealth generation. No decade has surpassed the last one for corporate profit-making, wage and salary rises, new venture generation and – wait for it – reckless and criminal greed in some sectors. Alarm bells were ringing as the economic bubble grew and grew, but too many business owners hit the “snooze” button whilst the profits kept rolling in.
2009 changed all that. With record business failures, sunset industries (already in decline), front-liners (retail and manufacturing) and underperformers generally were ruthlessly cut down by market forces and consumer fear. 2010 will see many more strugglers lose their battle.
Opportunity Knocks
But the news is not all doom and gloom – not by a long shot. In fact, from adversity opportunities arise and fortunes are made. We certainly have encouraged our business clients to plan for the recessionary environment as there is no better time to ‘do deals’, source value-for-money acquisitions, or head-hunt talent.
So in this uncertain environment - with just a ‘soft’ bounce out of recession in 2010/11 - what strategic responses are we seeing from business owners across the economy? Broadly speaking, they fall into three categories:
- The sly fox businesses have been moving proactively to take advantage of the irrational market-place. They are focused on the hunt, ruthless in the execution and reaping the rewards. Business discipline and decision-making processes are tight(er).
- The antitheses of the sly foxes are the headless chooks. These are the confused, bloodied businesses running in circles and running out of options. Many have already lost the survival battle and fear and poor credit will see many more fall over in 2010.
- Then there are the head-in-the-sand ostriches, with their feathered backsides complacently exposed to the new economic landscape. Some will, with luck and hard work, emerge battered and blinking in the light of the economic upturn. Others will get a nasty surprise that may just be fatal.
If you are anything other than a sly fox business, consider a mental and strategic shake-up now. This should include:
- Giving your business a good, old-fashioned ‘performance health check’ from top to bottom. Every thing from the Board-level governance to back-office administration should be under the spotlight. Ask: what works, what doesn't’t? Are you providing the right things to the right people in the right way? What needs to change? Where should we lift performance now?
- Looking at a restructure – of operations, people and finances. Ask: Do you have the right people on the bus, in the right seats? If not, move them to the correct seats or get them off the bus! How are your debt and investment levels?
- Updating your strategy - or at least reviewing the underlying assumptions for continued validity. Ask: Is the bus heading in the right direction, with a clearly understood roadmap? Does everyone understand what the destination is and how to help the business to arrive in good shape? And perhaps most importantly – where are the potholes?
- Putting your revenue and profit models through their paces. Ask: Do you have fuel in the tank, air in the tyres and specialists looking under the hood? Financial visibility and forward planning are vital. Measuring, analysing and reacting to key indicators could represent the difference between having a sustainable business and being on the endangered list.
- Resource some relationship-building initiatives to improve customer interactions and extend networks. Ask: Are we looking after those on the journey with us? Who else should hop on? Who can open doors for us? How can we connect with new markets and influencers?
© Francis Consulting Limited, 2010.
