recession - threat or opportunity?
TRANSCRIPT
Recession – Threat or Opportunity
Pam KennettChiswick Consulting
What are people expecting?
Comparison of early 90’s with today – actual and forecast UK GDP growth
Year 1 Year 2 Year 3Year 4 Year 5 Year 6 Year 7
“81% of business leaders expect the UK to make a full recovery from this slowdown and return to business as usual”
Percentage
-2
-1
0
1
2
3
4
5
6
Source: Hay Group Centre for Economics and Business Research 2008/09
1987–932004–10
“Just 13% of companies in the UK are making plans for the upturn.” Are you?
Businesses are slow to respond
Source: Hay Group Centre for Economics and Business Research 2008/09
0
10
20
30
40
50
Adjusted targets but not strategy
No changes
New strategy for downturn
New strategy for downturn and upturn
All firmsFinancial servicesOther commercial
Business response
How is UK plc responding?
Launch aggressive sales drive
Reduce sales force numbers
Reduce investment in innovation
Increase investment in innovation
Invest in growth markets
Halt expansion
Reduce costs in low margin business
Cut costs across the board
What we can learn from the best companies
Stay close to the customer
Innovation Managing Cost
• Who are my high value customers that I must keep?
• Which products/services do my customers really value?
• Which products/services are most profitable?
• How can I build long term relationships between my most profitable products/services and my most profitable customers?
Stayingclose to the customer
Loyalty
• Build in interaction between front line staff and customer
• It’s about the discretionary effort of your staff
• Supported by your business processes
Stayingclose to the customer
Invest in good costs, prune bad
Manage people better
1
2
Managing costs
Performance and productivity• 29% of firms will use the
recession as a chance to weed out underperformance
• 10% will focus on recruiting talent at lower costs
• 24% will do both
Managing costs
Managing in a recession
• Provide clarity, direction and resources to enable people to do their job
• Recessionary leaders need two things:– Ego maturity – “don’t panic”– Conceptual thinking – “thinking
outside the box”
Managing costs
Companies that invest in innovation during tough times come out of recession better and maintain market competitiveness (Accenture)
Innovation
If you can’t spend money on innovation… spend time• Scanning. Activities of your competitors,
suppliers, policy makers and opinion formers
• Partnering. Work with other organisations to tap into what they do/how they work
• Researching customer. Pay attention to changes in customers’ lives and businesses
• Prioritising. Focus on two or three key areas for development
Innovation
Finally…
• Take this time to get close to your customer. Research your high value customers, invest heavily in what they like
• Think beyond the recession. You need to be positioned for success (the right people, the right ways of working, develop customer handling skills, learn to delegate)
• Continue to invest in innovation, communication and marketing
