‘Analysis Paralysis’ is often cited as a reason for businesses failing to achieve their potential – too much time spent analysing an opportunity (or problem) with the result that the window closes and nothing is achieved. In fact, much has been written about this, with Google, alone, returning over half a million pages!
The problem is that many in business – particularly the more entrepreneurially-minded – use this syndrome as an excuse not to analyse anything, relying instead on ‘gut feel’ for all decisions.
However, analysis is a critical part of achieving maximum success in a business and there are many areas where this can be automated to a large extent, too.
One often-overlooked area of a business – because it is nowhere near as glamorous as Sales in many eyes – is Credit Control (also referred to as the Debtors’ or Accounts Receivable Department, depending on where you are in the world). And yet, it’s an area that can have a huge impact on the overall health of a company, and one where analysis should play an important role.
In the years BCC (Before Credit Crunch), of course, many companies effectively outsourced much of the decision-making to Credit Insurers, who would determine appropriate account limits for customers, and would chase up for the longer-overdue debt once it was reported to them. The company was paid out either way – by the customer or the insurer – so was less concerned.
This, of course, has all changed.
Credit Insurers are now a lot more careful with their level of risk and companies are having to re-evaluate their approach: do they accept lower credit limits and a consequent restriction to their business, or do they ‘self insure’ to maximise their opportunities?
By analysing their customers’ payment patterns over time, companies will develop a much better understanding of their customers, being better able to assign appropriate credit limits, while also developing an early-warning system of impending trouble.
What’s more, utilising this information in cash-flow forecasts will provide a far more accurate picture of expected income for a given period than the ‘rule of thumb’ that so many companies seem to still use. And, of course, this should feed through to enable companies to give accurate information to their creditors as to payments due, and take maximum advantage of any early-settlement discounts that may be available.
It all comes down to understanding your business more thoroughly. If nothing else, the economic conditions of the past couple of years should encourage businesses to pay a lot more attention to the fundamentals, and that will be good for everyone going forward.
Categories: Business - General · Lifetime Value
Tagged: economic crisis, business process, Customer Value, Business, cash flow, Risk, Accounts receivable, Credit and Collection, Insurance, Decision making
The efficiency focus of the past 18 months may well have added substantially to the risk profile of companies, while simultaneously reducing their profitability.
After all, efficiency for most means focusing on the largest customers – allowing one to reduce headcount (less people, managing fewer customers), reduce transaction costs (fewer, larger transactions) and, in many eyes, reduce risk (bigger customers are more trustworthy).
However, aren’t your biggest customers the ones that demand, and generally get, the best prices? Do your biggest customers not get the longer payment terms they request? Are your biggest customers really less work than others?
And what about the impact on your business of the failure to pay of one of your biggest customers? As we’ve seen, they’re far from invincible.
Conversely, most businesses will find that their smaller customers:
• Deliver better margins;
• Will pay more promptly (if for no other reason than you have more leverage);
• Are no more work than the larger ones, and often less so as they are less demanding;
On top of this, the impact of a failure on your business is far less severe, and you substantially reduce your overall business risk by spreading a given value across a number of customers, instead of concentrating it in one place.
What’s more, as business starts to pick up, the companies likely to grow most quickly will be the small ones – a 20% growth on $1 Million revenue is generally a good deal easier to find than a 20% growth on $1 Billion revenue. So having a good number of smaller customers will improve your growth prospects, too.
Analyse the true profitability (return on working capital, including all costs) by customer segment: you’ll find it a very interesting exercise.
I’m not for a moment advocating that you fire all your biggest customers, but rather that you not just focus on larger customers at the expense of smaller ones. As with all things in life, you need to achieve a balance.
Small customers should be embraced as much as large ones – after all, if you have a ready resource that will help you grow faster than the market average while improving your profitability and simultaneously reducing your risk, shouldn’t you make the best use of it?
Categories: Business - General · Customer Service · Lifetime Value · Upturn
Tagged: Business, business models, Customer Value, Inefficiency, investing, Profitability, Risk
One significant side-effect of the global financial crisis has to be a major overhaul of the world’s banking systems. They’ve been shown to be badly broken.
After all, what is the current state of play with banks in general, when looking at their supposed core competencies?
- Lending – very little lending activity going on, and only to those that don’t really need it (the very credit worthy);
- Deposit-taking – although this continues, albeit at a lower rate due to the general economic woes, it’s done with caution and concern as the public no longer believes in the security of banks (the old adage about being as safe as a bank just doesn’t apply today);
- Investment advice – does anyone trust the investment advice of banks any longer?
And then there are peripheral activities such as credit cards – banks lowering limits, and now even looking at penalising the credit-worthy that pay up their credit card bills on time: surely a brilliant way to chase away customers…
Talking of customers: the issue of customer service is still something that few banks understand – they’re not open when customers want them to be, and are seldom found where they’re wanted. Fortunately, technology in the shape of Internet and Telephone banking is allowing us to work around these limitations.
And yet, the self-same group that precipitated the economic disaster of the past couple of years through the sale of very dubious investment instruments apparently repackaged to hide their source, believes that they continue to deserve multi-million dollar bonuses “to retain talent.”
What talent, and why should it be retained, considering the mess the world is in as a result of their activities?
Now that so many banks have been shown to have an extremely dubious business model, isn’t it time to relook the very essence of what they should be doing?
Let’s see a complete separation of activities, so that banks focus on banking and investment houses focus on investment consulting – it’s clear that the “Chinese Walls” in financial institutions were full of holes.
Banking needs to be about rendering a service to the community – after all, a prosperous and stable community base is good for the bank’s business, and a prosperous and stable bank is good for the community. Banks need to focus on the business of taking deposits and making these funds available for loans to build businesses, put people in homes and generally provide a secure growth engine for the longer term. The short-term focus that we came to see in so many businesses (see: The Perils of Quarteritis) is just not acceptable.
And this model need not necessarily result in low returns for depositors – look at the success of microfinancing from Grameen Bank (and, now, others), both for the bank and the community. As with everything, there will be some elements that give lower returns, while others give higher returns. With careful, skilled management, depositors should be able to see appropriate returns while borrowers can secure appropriate loans.
It’s time for financial institutions to rebuild the trust that they’ve lost, and return to being of service to their communities again, rather than simply serving the bankers’ own interests.
Categories: Banking · Business - General · Customer Service · Economy · Recession
Tagged: Banking, Business, business models, Customer Service, economic crisis, financial institutions, long-term focus, Recession
With the talk of global warming having “heated up” as we approached the Copenhagen conference, we’re seeing more talk around what can happen in different timeframes. So, although this is somewhat off my normal range of business topics, given the critical importance of Copenhagen to our future, I hope you will forgive this tangential post and find it nonetheless interesting.
I don’t know about you, but I’ve always had difficulty contextualising geological timeframes – millions and billions of years – as I could not visualise them. How can one understand, say, 65 million years (approximately when the dinosaurs disappeared)? So I set out, some years ago when doing a geology course, to find an easy way to express these in terms that made sense to me.
Hopefully this will make sense to you too. Of course, if you don’t accept the underlying premise of the earth being billions of years old, then this post is not for you.
So – to the background.
The basic assumption here is that the world is around 4.5 billion years old (we don’t need an exact number for the visualisation – so this is close enough).
Interestingly, somebody of the biblical threescore years and ten (70 years old) has lived a little over 2.2 billion seconds (70 x 365.25 x 24 x 60 x 60). This points to a really handy scaling mechanism: we can equate the earth to a 70 year old person – meaning that each second in that person’s life equates to 2 earth years for scale purposes.
So:
- 100 years in earth terms is the equivalent of 50 seconds in that person’s life (let’s call it a minute for ease).
- 1000 years is 500 seconds, or a little over 8 minutes, so 2000 years is approaching 17 minutes ago.
- 100 000 years is about 14 hours, so that the period when modern man left Africa (about 70 000 years ago) is less than 10 hours ago, and Homo sapiens emerged a little over a day ago (200 000 years).
- 1 000 000 years represents less than a week in our person’s life (5.8 days), and 100 000 000 years represents only about 1.6 years, so the dinosaur extinction of about 65 million years ago happened just on a year ago.
- And a billion years is approaching 16 years in the person’s life.
One can apply this scale easily to any geological timeframe. It also helps understand why nature is not exact. So, for example, although the Supervolcano currently underneath Yellowstone seems to have erupted every 600 000 years on average, and the last eruption was 640 000 years ago or so, this does not mean it will erupt in our lifetimes – they are, after all, only 35 seconds long on this scale, and what is the likelihood of any event happening in 35 seconds?
I hope this makes it easier to contextualise, understand and explain these massive timeframes.
Of course, you can use the same scale for other massive numbers: for example the current US National Debt is something over $12 Trillion, or close to $5 500 for every second a 70 year-old person has been alive (or $11 000 for every second a 35 year old person has been alive) – now these numbers are truly scary!
Categories: Copenhagen · Earth Sciences · Economy · Geology
Tagged: Add new tag, Copenhagen conference, Dinosaur extinction, Earth, Earth Sciences, Geology, Global warming, Government deficit
The recent furore over large companies asking to reschedule debt repayments has once again highlighted the issue of cash flow, and how important it is to even the largest businesses.
The companies are not really bankrupt – in one recent example, a company with debts of an estimated $60 Billion has these amply covered by an asset portfolio which, even in these depressed times, is reckoned to be worth around $100 Billion. Why, then, is it trying to put back the payment of some $3.5 Billion due this month?
The simple answer is that it doesn’t have the free cash available… Business plans were built on an expectation of a certain level of trading – primarily in property sales – which simply dried up with the global economic crisis. Without the sales, the company quickly found itself running short of cash and so unable to service upcoming debt repayments. Unlike governments around the world, of course, a company can’t simply print more money to get it out of a hole (an unwise move for governments that seldom seems to stop them, though!). In the absence of being able to improve its sales to generate cash, it must either borrow more money to repay old debts, or delay the repayment of those debts. And this is what the company in question is now trying to do.
The fact is that many more businesses fail through cash flow problems than for all other reasons combined – an estimated 80% of failures, in fact!
So how do companies get out of looming cash-flow crises?
The answers, of course, vary enormously with the type of business, but a few general items cover the vast majority of situations:
- Boost sales – this is the most common response, and can be helpful. However one needs to ensure that it is not a case of delaying the inevitable: that sales are not done at such low [special] margins that the business cannot cover even basic costs. Reducing profitability for a short period to get extra sales can help cash flow, but reducing it to a point of significant loss is potential suicide.
- Manage Inventory– this is a more complicated area and one not fully appreciated by many businesses. One needs to not only reduce inventories to a level appropriate to the business and lead times, but also to manage the ordering process to stop islands of excess building up (look at weekly sales, instead of monthly, and you’d be surprised how the picture can change, for example). Reducing inventory by 3-4 days is like putting an extra 1% on the bottom line, and lower stock means lower payments which helps your cash flow, so systems should be in place to ensure stock doesn’t age, and that ordering is appropriate to the business run rate.
- Reduce Receivables – another potentially complex area that is often neglected in the interests of “keeping customers happy.” If you are known as a soft touch, then your customers will stretch your payment terms to pay those that are more demanding (or financially beneficial). Instead of sending a month-end statement and hoping the money will roll in, send it at the beginning of the month and have credit controllers call your customers before mid-month (when they’re quiet anyway) to ask about any possible queries on the statement. Simply removing these queries proactively will reduce your DSO noticeably in most cases. Of course, there are many other techniques, too.
- Reassign Assets – although this might not help a short-term cash flow issue, managing your assets properly can help prevent cash flow problems. Do you really need to own your Head Office, or is it an ego thing? Do your vehicles, or IT systems, need to be owned or can you lease them? In many cases you’ll find that the benefits of leasing or renting are significant in terms of cash flow and they have tax benefits, too.
All of these issues can play a significant role in helping you manage cash flow better, and there are more, besides, depending on the nature of your business.
The real point, though, is to run your business in such a way as to avoid getting into this sort of trouble in the first place – cash flow problems can literally put even the most profitable company out of business.
Categories: Business - General · Economy
Tagged: assets, Business, business process, cash flow, debts, DSO, Dubai, Dubai World, inventory, Receivables, sales
As we approach the end of 2009, this question becomes all the more relevant. With a full year of advertising revenues down, subscriptions and renewals declining and staff being laid off to cut costs, there have to be questions as to how the publishing industry can survive.
One thing is certain – the business model of old will have to change. Thanks to technology, people today are relying on instant news – yesterday’s news (as found in the printed newspaper) or last week’s news (as found in weekly magazines) is no longer a saleable commodity, and if the public don’t want to read it, advertisers won’t pay to advertise in it.
Of course, Rupert Murdoch’s recent comments about charging for access to his news online and preventing Google from finding his stories have further fuelled speculation as to the future of the printed word.
However, far from fearing the new technologies, publishers should be embracing them – after all, do the new technologies not extend the potential reach of any publication or broadcast platform to the entire globe?
What’s needed, and what people are looking for, in this info-saturated world is not just more information, but more useful, focused and targeted information. Instead of newspapers all trying to produce the same news for the same geographic audience, focus. That’s how Wall Street Journal and Financial Times, for example, have been able to charge for much of their content – they focus on the news that businessmen need now. If a publisher can provide knowledge, as opposed to just information, people will pay for it.
Just as general broadcast TV has given way to cable/satellite subscription services, providing more focused channel selections, so should publishers look to provide focused services that people will pay for. What’s more, such focused audiences provide a richer platform for advertisers.
I’m not for one moment suggesting that printing is dead – at least not for the foreseeable future. Like just about everyone else I speak with, there’s something about being able to read the printed word on paper that is far too appealing to me. A combination of convenience, feel, smell, I suppose. What I am suggesting is that publishers need to use technology to complement their print editions.
Knowledge has a shelf-life, and can be printed for future reference purposes (witness my stacks of magazines – National Geographic, Fast Company, Fortune, Plane & Pilot, Travel & Leisure, etc.). News, or information, is immediate and best consumed quickly – and this is where the electron should play its part (whether Internet or Broadcast). But, again, there’s no reason electronic media should not drive its audience to print, and vice-versa. I see them as, ideally, complementary rather than simply competing.
News media, rather than cutting journalists, should seek out the best they can find and encourage them to provide knowledge as well as information. Magazines should give tantalizing glimpses of what they offer to an online audience, while encouraging them to subscribe to the printed word (after all, for example, aren’t the images in a National Geographic magazine so much better than those online?). Broadcast media should encourage audiences to seek out more information than they can cover in the broadcast, driving audiences online and to print for this knowledge. And, of course, printed media should not be shy of encouraging readers to enrich their knowledge through broadcast segments, internet updates and the like.
We talk about mankind’s knowledge increasing at an exponential rate, but I suspect that much of this is just the same bits of information being repeated over and over again. We have the tools for a much richer information and knowledge environment and we should use them.
Categories: Advertising · Business - General · Marketing · Publishing
Tagged: Advertising, Business, business models, Magazine, Marketing and Advertising, Media, Newspaper, Printing, Publishing, technology
The worst economic recession for generations has caused a re-evaluation of business practices in many areas, and a call for greater corporate governance and oversight. Now that we’re officially reaching the end of the recession with many countries in Asia and the whole of the Eurozone, amongst others, officially out of it, it’s also time to look closely at leadership practices in business.
One thing’s certain – many changes need to be made, and recent surveys showing a significant majority of employees are planning to change jobs as soon as hiring picks up make this an urgent necessity if companies are to avoid the upheaval and cost increases associated with high staff turnover.
There are many reasons for this level of unhappiness, among them:
- Severe stress at work – as companies cut costs and staff, those that remained found their workloads growing, often to a point of near-unsustainability;
- Severe stress at home – really an extension of the added stress at work, compounded by longer working hours, and often less pay;
- Lack of appreciation – many, if not most, companies overlooked the stress factors and showed no appreciation for the additional efforts of their staff, a situation worsened by cost-cutting which impacted the staff “welfare” programmes already in place;
- Do as I say, not as I do – as the recession bit ever deeper, many executives seemed oblivious, continuing with executive perks, parties and benefits even as they were making deep cuts in employment and other areas (look at the scandals surrounding many of the bailed-out businesses for example);
- Lack of direction – as companies cut, often in several waves, many seemed to have lost their direction. Although, as I pointed out in an earlier article, 93% of companies had updated their strategies and priorities to address the slowdown, the fact is that much of this work was done well into the recession and they were floundering for a good time (only half have a strategy in place for the upturn!).
As a result of these and other issues many have lost faith in their business leadership and this is the reason for the potential dramatic increase in staff turnover.
A recent survey by McKinsey, “Leadership through the crisis and after” points to the way forward. What’s interesting is that the top criteria for leadership during the crisis are the same as those for after it, with only minor changes to relative importance. In essence, leaders are expected to be:
- Inspiring, creating a vision for all to see and aim for, and doing so convincingly and clearly;
- Unambiguous, defining expectations and rewarding people appropriately for this;
- Challenging, through encouraging people to challenge assumptions and take risks;
- Participative, involving others in the decision-making process;
- Above Reproach, acting as a role model, mentoring and teaching;
These are very much in line with what’s being said elsewhere and with what executives perceive as the most important criteria for organisations going forward: Leadership, Innovation, Clear Direction and an External (Customer, Supplier, etc.,) Orientation being seen as the top success factors.
It may not be too late. Employment typically lags an upturn by several months, so leaders still have a little time to restore the faith of their workforce. However, they cannot afford to delay any longer to address these issues of concern and need to clearly demonstrate that they understand the way forward for success. Failure to do so will almost certainly cost companies dearly.
———————
Postscript: Was pointed to an excellent presentation by Dr Tommy Weir on CEO Shift demonstrating how leaders will need to shift their thinking in 5 key areas related to talent. Well worth watching! See it at http://tommyweir.com/Video.aspx
Categories: Business - General · Economy · Recession · Upturn
Tagged: Business, economic crisis, Employment, Leadership, Management, Recession
One of the most vigorously debated issues today is the place of Social Networking in the workplace:
• Should companies be using Social Networking in their marketing mix?
• Should staff be allowed access to Social Networking while at work?
Much of the debate stems from a lack of understanding of what Social Networking is all about and how it should be used, or not used. Many people, in fact, still equate Social Networking with inane information about where somebody is currently sitting doing some introspective navel-gazing, whereas it can – and should – be a highly effective medium for raising the profile of the business, encouraging interaction with all stakeholders and generally enhancing its position in the market.
A great example here is Twitter. While there has been much attention given to an August study from Pear Analytics suggesting that only 8.7% of all Tweets pass along value, the fact is that this misses the point of what a tool like Twitter can really be used for in a business marketing environment. It could, for example, be a wonderful way for customers to get quick status updates on service issues (Direct Tweet the Job Number to your Service Dept) or to see where a shipment is (Direct Tweet a Waybill Number to your Shipping Dept). What about having special-interest customers following a particular product group in your company for news on that product and, possibly, special offers? In fact, the uses for this sort of interaction are limited only by imagination…
Facebook, too, is not simply a tool to show who was drinking too much at the last party. Rather, in the right hands it becomes a great way to promote your business to a wide audience and to gain a set of “Fans” who, by their very presence, are opt-in customers for your marketing efforts. This can be a direct, company page where you share information on your company (or simply a specific product group within your company) and encourage feedback from your “Fans” or can be a more subliminal way of getting your company noticed through making available information of more general use such as the (very topical for this article) Social Media for Small Business set of guides published by Dell.
Of course, if you’re going to open yourself up for public feedback with systems like Twitter and Facebook, it’s essential that you have somebody monitoring your name/page and responding to the inevitable negative comments that will crop up from time to time – thereby turning negatives into easily-seen positives.
Then there are tools like LinkedIn – a great way to find people for your business and to manage your own business profile for those looking at potentially working with you (yes, prospective employees do research your company to see what is out there!).
By tying all of this together with your own Social Networking platform of customers, etc., you can promote your business, conduct online training or product releases, run polls to test issues, manage events and generally make your customers feel part of “your family.” What’s more, you no longer have to contend with outdated mailing lists as your “fans”/customers keep their information updated for you…
So – in answer to the question as to whether companies should be using Social Networking in their marketing mix, an emphatic YES. The secret is to define your objectives and utilise the appropriate tools, remembering, too, that these will evolve and change over time.
And as for the second part of the question – whether employees should have access to Social Networking sites – if this is a part of your marketing mix, your employees need to be a part of it, too. Where there is evidence of individual abuse, as will happen (just as it does with the telephone, coffee breaks, etc., etc.), action against those individuals can be taken – it’s just a question of the right level of monitoring and control, particularly as the lines between work time and leisure time blur in this connected world.
Categories: Business - General · Customer Service · Marketing · Social Networking
Tagged: Business, Customer Service, Dell, Facebook, LinkedIn, Marketing and Advertising, Social media, Social network, Social network service, technology, Twitter
What is it about the human race that while we all apparently prefer ‘a simple life’ we delight in adding layers of complexity to everything?
Much to nobody’s surprise, I imagine, a recent McKinsey article, “Consumer Electronics Gets Back to Basics” showed that something like 2/3rds of consumers valued simplicity and price over a more comprehensive set of features. And yet, product after product is designed to have more features than its predecessor – generally at an incrementally higher price or, at best, the same price.
Just look at today’s ‘bloatware’ as an example. Remember the days when Bill Gates declared that “640KB ought to be enough for anybody” referring to the, then, new PC’s maximum memory capacity? Nowadays, you’re lucky to get away with less than three thousand times that much (2GB)! And yet, how many of us use more than 10% of the features available in today’s ‘productivity suites?’ I don’t, and many consider me a ‘power user.’
Oh, and don’t believe that the complexity is simply as a result of more capacity – people have been calling for simpler PCs for decades. In a Newsweek interview back in 1995, Oracle Chairman Larry Ellison said that the PC was too complicated and difficult to use then, predicting the PC would soon be replaced by simpler desktop devices – the ‘network computer,’ a no-frills computer/terminal that performs basic chores easily and simply and sells for less than $500. Perhaps Oracle’s recent purchase of Sun Microsystems will enable him to move us all in that direction some 15 years later: Sun already sells this type of device – they call it a Sun Ray.
The big surprise for many vendors last year was the Netbook. Initiated by Asus, this basic notebook PC really set the proverbial cat among the pigeons. The form factor was first tried in the mid 90s with a notable lack of success (it was called the sub-notebook in those days), so there was a healthy dose of scepticism when it was announced last year. Acer, as the first major multinational vendor to see the opportunity, quickly produced its own line of netbooks and gained enormous market-share as a result: seeing a significant increase in unit sales last year, just as the downturn was biting most companies. Here was a classic case of people wanting simplicity – what a pity, then, that the software was not also available in ‘Lite’ versions, meaning that many early adopters of netbooks ended up returning to the larger, more powerful machines that could handle the software workload.
But it’s not just in PCs that simplicity is the watchword. A couple of years ago a start-up company, Pure Digital Technologies, introduced a simple, one-button solid state video camera that runs on a couple of AA batteries. This device, the Flip, quickly grabbed 14% of the US video camera market surpassing all but the long-time market leader in sales. It’s a wonderful little camera and perfect for recording those ‘moments’ of life – I know, I got one soon after launch and swear by it. Interesting, then, that Cisco acquired the company a few months ago – is simplicity to be Cisco’s driver now?
This desire for simplicity is evident in many other areas of life, too – look at how people are embracing simpler airline and hotel offerings: companies offering easy-to-use services that do what’s needed at a reasonable price. The same goes for other products, like the success of Tide Basic laundry detergent.
And here’s the key – to succeed, products and services must be well-made, practical, offer the set of basic features that people need (read: market research is critical) and be seen as offering great value. Properly done, this can be achieved at increased margins to the over-featured products we’ve become used to, so increasing shareholder satisfaction along with customer satisfaction.
As the saying goes, “Keep it Simple, Stupid.”
Isn’t this what we all want?
Categories: Business - General · Customer Service
Tagged: business process, Cisco Systems, Customer Service, investing, long-term focus, Marketing, Oracle Corporation, product design, Pure Digital Technologies, Sun Microsystems, technology
An article I saw today in SmartPlanet.com confirmed what I’ve been feeling for some time: businesses have over-done the cost-cutting and are poorly placed for the economic upswing.
The fact that leading economists and business leaders around the world have declared an end to the recession is great news. However, even though nobody is talking about a ‘V-shaped recovery’ or quick upswing, the Forbes study of 200 large companies cited in the article showed that leading executives believe the level of cost cutting undertaken will severely restrict their future growth prospects.
As I posted a few weeks ago, short-term business thinking has done enormous damage – and unfortunately this thinking carried through the recession with companies cutting costs as hard and fast as they could with little thought for the future.
While I don’t have the statistics to hand that the Forbes study has, my own observations indicate that perhaps the report is conservative: it showed 22% of executives believing their recruiting/retention policies were not aligned with their strategic goals, while a quarter indicated their training and development programs were similarly misaligned. My observations indicate this figure to be significantly higher – here in the Middle East, training and recruitment all but ground to a complete halt for the first 3 quarters of this year, right at the time when forward-looking companies should have been upskilling and upgrading their staff.
This really points to the core of the issue – the study showing that nearly all (93%) companies had updated their strategies and priorities to address the slowdown, but only 51% admitted to having a plan in place to guide strategy once the economy turns. Granted, the almost all rest said they were working on a plan, but is it not too late?
Certainly it seems that companies around the globe have missed great opportunities to position themselves strongly for the upturn and this is sure to lead to many failures as those that have done so take new leadership positions – as has been the case following every previous recession. The difference this time being, of course, that the recession was far deeper than any we’ve seen in a couple of generations, so the post-recession fall-out is likely to be worse, too.
Perhaps some companies can still save themselves by moving quickly to position for the upswing – taking on top-performing staff, embarking on aggressive training and taking advantage of the opportunities for mergers and acquisitions – but they can’t afford to wait any longer. Investors, too, are likely to severely punish those companies they see as being unprepared for the upswing.
The question now is whether your company will be one of the new leaders or will fail to survive?
Categories: Business - General · Economy · Recession · Upturn
Tagged: Business, economic crisis, Economy, investing, Leadership, long-term focus, Mergers and acquisitions, Recession
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