How to fight the recession
Article Date: Feb 26 2009
Fight the recession with creative thinking
Tony Price, the interim CEO of leadership development organisation Vistage, argues that flexibility and innovation can be a better defence against the downturn than battening down the hatches.
With the economy veering from one disaster to another, it’s tempting to suppress new thinking and relentlessly focus on the core of your business.
Though such an approach can work, I’m not convinced it’s the surest path through difficult times. What is suitable for one company may not be suitable for another, but I hope that the following examples of survival methods employed by our member companies will offer food for thought.
1. Keep innovating
However successful your product or service is, always look for ways to improve it along with new market opportunities. Standing still today could see you left behind tomorrow.
Initiatives recently introduced by Robert Begg, the founder and MD of furniture retailer Olympian, show what can be achieved with a little imagination. Last year he launched a monthly lucky dip, into which his customers during that month were entered. The winners are refunded the cost of their purchase. After one winner received a £2,000 refund, news of Olympian’s prize draw spread and customers new and old began flocking to the stores.
2. Play to your strengths
Dani Turner is the MD of Bunches, a Nottingham-based online florist with a £5 million turnover. Consumer spending is falling and the floristry market has become more competitive than ever. However, Turner is on course to accelerate the company’s turnover to £6 million in 2009. She has increased the company’s competitive advantage by placing a greater emphasis upon the quality of the its products and service.
She says, ‘These days even supermarkets deliver flowers, so it’s more important than ever that we play to our strengths. Our flowers are all packaged and dispatched from one location – unlike other services – so our staff are able to maintain high levels of quality control. We are working hard to maintain our company’s friendly feel, and the hard work is paying off.’
3. Share best practices
To gain maximum value from creative thinking, ensure that your team learns from and shares best practices internally, across locations and company divisions.
Mick Kent is the CEO of Bromford Group, central England’s leading housing association, which has turnover of £110 million. He launched a “leadership academy” to provide his team members with high-quality training and development. They benefit from team-building exercises, energetic full-day meetings and a visiting speaker programme. Already more than 60 employees, armed with the latest business tools, have “graduated”.
Kent says, ‘As a service business, we are only as good as our people. Our leadership academy is a significant investment of time, but the results are tangible.’
4. Challenge traditional business activities
When you continue to do what you have always done, you stifle creativity and innovation. If you are tempted to adopt the attitude, ‘If it ain’t broke, don’t fix it’, then think again.
Matthew Bent is the MD of Bents Garden & Home, on the outskirts of Cheshire. Since his appointment to the family business in 2006, the MD has powered the company to 300 staff, record sales and an array of business and industry awards.
Bent says: ‘Garden centre trade peaks in April and May, so we are endeavouring to appeal to customers who wouldn’t usually visit us. We have already introduced several innovative features – such as our Open Skies glasshouse, which has a retractable glass roof and allows customers to shop for plants all year round – and a change of name to Bents Garden & Home.
‘We now offer outdoor living solutions and interior furniture and home-style ideas. Our award-winning restaurant, with a team of chefs who prepare fresh food on the premises, is open until 9pm in the evenings.
‘We aren’t the cheapest garden centre around, but customers tell us that for quality and top-notch service, we are unparalleled. Our customers are voting with their feet.’
What I have observed, over and over again, is that the business leaders best equipped to navigate stormy economic waters are those willing to incorporate flexibility and creative thinking into their companies – whatever the weather.
An excellent article. It is the businesses that think ahead and innovate that are likely to come out of the recession strongest.
May I add (with some self interest) that minding the back office is equally important. Having reliable, timely and meaningful management accounts, managing cash & key risks and looking at where the business is heading in financial terms are critical - there will be plenty of otherwise viable businesses that will not survive simply because they have had weak financial management.
Unfortunately many businesses will batten down the hatches, which apart from anything else is demoralising for staff.
Whilst there will be businesses that will survive through rationalisation, for some it may be sticking plaster on a gaping wound. If a business genuinely can't afford to invest a little to improve and come through the recession then perhaps they should be consulting an insolvency practitioner sooner rather than later.
David Lewis
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