5 Steps to Thrive in a Recession
The last few years have been a time of change for most industries. In an economic downturn, it is absolutely vital that all departments work closely together. Companies look for ways to drive efficiency and create leaner, meaner operations that are set up to survive and thrive during a downturn. Our top 5 tips are:
1. Develop projects that bring a fast return on investment.
Execute projects that will have an impact on the bottom line. These are projects that can really boost performance and will give you the most competitive advantage as the recovery begins. Build a strong and sustainable competitive advantage. Give better service levels than your competitors. Be more innovative. Every project needs to be about improving how the business operates. Make sure the business case is well defined and understood by everybody. If you aren’t great at planning, work with a partner that has the methodology and experience to drive results quickly.
2. Look for ways to do more with less
Make sure that all operational procedures align with your company’s strategic priorities. If a task or procedure isn’t promoting a key strategic initiative, then it should either be eliminated or changed. “We’ve always done it that way” are six of the most dangerous words in business.
- How to make a strategy map << Click Here >>
- Turning strategy int action << Click Here >>
- Get serious about business continuity and risk management – some companies offer free advice << Click Here >>
3. Are the right people doing the right jobs?
Your workforce's skills change over time, and so does your business. Getting the right people into the right jobs is key to your company's growth. Employees should receive regular training to develop their skills, as well as rewards and incentives (financial or otherwise) to encourage productivity and efficiency.
Redefine your Admin-Selling-Planning percentage ratios to maximise productivity. That in turn will maximise cash, from which you can maximise future growth.
Admin includes back office tasks, such as IT, maintenance, and HR
Selling includes anything that helps generate a client invoice. It’s people delivering a product to a customer. Promoting the business. Customer Service.
Planning is for ‘next year's growth'. It includes working on strategy that won't impact this year's profit, but will allow the organisation to grow in the future – such as R&D, Joint Ventures, opening up new markets or new branches, and launching new products.
- Profile your people and match the right job << Click Here >>
- Competency Framework << Click Here >>
4. Watch the financial numbers that drive your business
Key performance indicators (KPIs) are quantifiable measurements that reflect your company’s most critical success factors, such as profitability, cash flow, leverage and liquidity. Every company’s KPIs will be different, but the most common financial KPIs include profit margin, debt to equity, return on equity, accounts receivable and accounts payable days, and inventory turnover.
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5. Segment your customers and prospects.
They aren’t all the same.
Clearly define how they are different so you can communicate with them in the most effective way. Try segmenting by industry or market or size of customer. This should help you prioritise highest and lowest-value customers and prospects.
Create a plan for how you will contact them throughout the year. Compare the effectiveness of direct contact such as face-to-face sales calls and trade shows, as well as lower-cost options like phone calls, direct mail and Internet or e-mail.
Don’t have all your eggs in one basket with a single customer or supplier.
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