An Opportunity for Change

In this period of economic gloom it may seem inappropriate for anyone to suggest that recessions can actually be good for business; but in the long run that is now what many commentators genuinely do believe.

In the good times when everything in the corporate garden is rosy, people tend to relax, they tend to get a bit complacent and they end up losing the “edge” that increasingly is necessary to become successful in this modern competitive world.

Painful as it may be, at times like this, it is more important than ever to look afresh at your business, to redefine its strategy, its structure, its cost base and crucially the profitability of its various income streams.

To be frank, we can all waste energy by getting frustrated with looking for someone to blame for the current economic woes, but in the short term (or indeed the long term!), I am afraid it is just not going to help you very much.

For now, what you need to do, is to find the time to take stock of your own business and put it under the same objective scrutiny that an outside consultant might do. For example, how clear is your business strategy or does it need redefining? What is core to your profitability and what is just a distraction? How flexible are your overheads? How well are you using technology to drive cost out of your business? Are there aspects of your organisation that could be easily outsourced for less money? What are your competitors doing that you aren’t?

The trouble is, in the real world, companies tend to grow organically over a period of years and often with very little real true planning. This entrepreneurial approach is fine for the good years but can leave businesses dangerously exposed in a downturn.

It still amazes me just how inefficient and inflexible some companies are. People seem frightened of change because it takes them out of their comfort zone but good businesses need to constantly reinvent themselves and never be afraid to shake up the status quo.

Some companies may seem nervous of investing in technology because of the “cost” yet are frequently carrying large overheads for staff that are often performing routine and laborious tasks. At an average total cost of around £20K per FTE, automating work flows and business processes can easily pay for themselves in a relatively short period. How effective is your website for example? How many sales is it driving into your company? Is there an opportunity to develop an E-Commerce Strategy and reduce costs elsewhere? Have you considered outsourcing your IT? Are you aware of the full Managed Service Provision that some IT services companies can offer?

If you were starting your business again in 2010 with a clean sheet of paper would your business strategy and company structure be exactly as it is today? If the answer to that question is “No”, then why on earth not? Because if ever there was a time to get your house in order, it is now! Going forward, competitiveness is only going to increase and now is not the time to be carrying any “dead weight”.

And by the way, what about your customer service in a recession? I bet a lot of businesses you come into contact with have really poor customer service. We as a country are notoriously bad in this area. Once again, you may get away with it in the good times but you may well pay the price for it in the bad times. Sometimes it may not always be the big things that may need changing but just the ability to see your organisation as your customers do. When for example was your staff training last reviewed? All of us can sometimes be guilty of being too inward looking at work and not being able to step outside of the company “bubble” and see us as others do.

As must be increasingly apparent to everyone, the world is now changing faster than ever and old certainties can no longer be relied on. I believe “not changing” is no longer an option and the upcoming recession may just be the catalyst you are looking for to turn your business into a leaner more efficient and therefore more profitable organisation.

My suggestion therefore is to embrace change and all that it offers, because if you don’t, I am afraid that change may end up embracing you.

Peter Davies
Chairman
Breakwater IT