Browsing the FT’s ‘managing in a downturn‘ video selection during a tea-break, I watched clips that discussed what Management must do during recession.
One gave the thoughts of a private equity boss, Jon Moulton. I was frustrated that he merely narrated what he believes to be the two choices facing Managers at this credit crunch time, rather than prescribe his preferred plan of action:
“You either stay optimistic and risk bankruptcy or you go pessimistic and miss opportunity. Most people go for the latter route, so the behaviour of people reinforces the recession and drives it forward; cutting capital expenditure, cutting out new product innovation, cutting out marketing initiatives. These are the things that drives recession but they also mean you survive. And people like surviving.”
Someone less prepared to talk atop a fence was Theo Papitis, for 13 years the owner of a high-street office supplies retailer. His advice was simple; be “adventurous”. He was excited that there are opportunities galore. You’ve just got to find them. His preferred starting place was to look at the business of companies that were destined to fall by way of currently being “subsidised”, a state that cannot last for much longer.
If you’re in a mindset of cutting costs, battening down hatches and ‘surviving’, then surely whenever recovery comes, you’ll be less able to reap any benefits.
You regularly hear an eminent business sage say that, whilst you still have to trim (or slash) waste from your operations, during a recession you absolutely must invest in R&D style endeavours. Only then can you guarantee longer term success.
Most of my day-job at present revolves around helping sales teams cement and maximise one particular big initiative. This tends to concern a new product.
In most cases, the sales team has shrunk, commission plans are frozen and key accounts have dried up to such an extent that many within them are wondering how they can possibly forecast the dreaded “bath” for Q4.
Yet in each case, having a significant new product, innovation or package to discuss with their marketplace is giving them something positive that contributes energy. I feel that as far as salesteams go, innovation is key to energising a team in these tough times. And that innovation cannot be restricted to reliance on manufacturing for the latest snazzy gizmo, but crucially, must consider package and price creativity too.