I’ve lived through a bunch of big crashes / recessions / corrections; the dot-com crash, 9/11, the Global Financial Crisis and Covid-19. And we’re on the verge of another – a still to be branded Post Pandemic Downturn. The onset of rampant double-digit inflation, weakening consumer confidence, escalating supply chain difficulties, increasingly tense social differences and talent shortages will contribute to at least three challenging years for most businesses. Many will not make it; those that will survive will be better prepared to revive and thrive if they are considering rapid action along the following lines:
1) Reforecast now.
Forget about the budget, forget about YAGO, forget about pre-Covid. Look at the world as it is today, not as it used to be and not what you want it to be.
Be demanding and brutally honest. Be pessimistic. In a Recession it always takes longer, moves more slowly – and gets worse, before it gets better. Forecast accordingly. Consider the downsides, and then consider the worst that could happen. And debate these options vigorously and realistically.
2) Reforecast every month until the skies lighten.
Get a quick ‘n dirty 30 day reforecasting process that adapts quickly to key factors (wage bill, raw material / operating costs, pricing) and can be flexed quickly and transparently – so actions can be agreed immediately.
3) Reduce your asset base and debt.
Renegotiate your funding/banking commitments, reduce interest charges, reduce reliance on lenders, bite the bullet and sell some assets to reduce interest/debt.
4) Invest in the Key What Counts customer factors.
Customers will be driving for price and value. Give them love, service and value via a great experience, rather than just price. Understand how they’re feeling, show how you can help them survive, listen to them, reward increased loyalty, and don’t take any service item away permanently.
5) Leverage technology to increase customer engagement.
Now is the time to enhance existing loyalty tools, to improve digital connectivity with your customers and build intimacy via tech.
6) Eliminate, eliminate, eliminate.
Blue Ocean reduction is good, but not good enough. True sustainable impact is gained by elimination. Closing down, stopping doing stuff – and the stop doesn’t have to be always permanent. Stop it for 60 days. Go dark. Then start again if you have to – but stop it now. See if anyone misses it, see if anyone remembers. Stop something now!
7) It’s in Your Hands.
When Man City were 1 point ahead of Liverpool in the Premier League with the same number of games left, Pep Guardiola was asked about the pressure his team were facing. He said “It’s in our hands” and walked towards the pressure. Figure out what’s in your hands this year, and walk towards that pressure, that decision – and do something.