Success in a Post Recession World
Over the last few years I have often been asked “when will things return to normal?” My answer has been a paraphrasing of a recent quote from Jeff Immelt, CEO of American based GE, “This is the new normal”.
If your expectation is that business conditions will return to those we had pre the 2008 economic meltdown, such as easy access to credit or consumers who would buy on a whim you may want to think again.
What we are finding is that the key to success is increasingly about differentiation. As the economy starts to grow again and customers realise even more the power they have in their hands, businesses that can truly differentiate themselves to meet customers’ needs will come out winners.
In order to gain a competitive advantage in the post-recession world, you’ll need to differentiate your business in the eyes of your potential customers and in addition, be effective, efficient and systemised. Here are 8 steps to success:
- Plan: Develop short- and long-term plans. They don’t have to be extensive (just a couple of pages), but they must be action-oriented and give you some early wins to celebrate.
- Business Intelligence: Know your financial numbers so you can manage your cash flow and understand what is helping you grow and what is stopping you. Review your products and services through the lens of profitability.
- Focus on efficiency: By getting to grips with your financials you will see opportunities for efficiency gains. This can be little things, such as saving on power by switching off machinery off, or by talking with your employees who will often know where efficiencies can be made.
- Make the tough calls (early): Once you know what has to be done, do it and do it as quickly as you can. Engage the right people to help you so that you minimise any unintended consequences such as a personal grievance case over a badly managed redundancy.
- Cash flow: Cash is king so do everything you can to keep cash coming in. As part of understanding your numbers, work with someone who can go beyond the basic financials, for example, helping find ways to speed up the working capital cycle or assisting you with negotiations with the banks.
- De-clutter: Go back to your core purpose and focus on what matters. Cut loose unprofitable products or services you’ve identified through your financial review and, above all, keep focused on your core customers and suppliers.
- Innovate: Get to grips with what’s happening in the marketplace to highlight opportunities to innovate and differentiate yourself. This can be as simple as asking your customers about what they do and don’t like about dealing with you. Or, if you can afford it, market research through a respected research company can pay huge dividends.
- Marketing: Studies going back to the 1930’s show that businesses that continue to market themselves during a recession recover much faster than those that don’t. This doesn’t have to cost you a fortune. When talking with customers, ask how they found out about you. New media options are very effective in maintaining relationships with customers, but the research continues to say that personal recommendations through word of mouth are still vital and the most effective form of marketing.
Ultimately differentiation is winning out in the new economy and it’s all about thinking differently. As Albert Einstein said, “the significant problems we face cannot be solved at the same level of thinking we were at when we created them.” Challenge yourself and your team to do this, and your future success is much more likely.
If you need help with your business contact Nick on 0800 ASK NICK or email firstname.lastname@example.org.