Time for Strategic Thinking, Not Panic Cuts
As I travel round speaking to business leaders, I'm getting increasingly concerned by the number of leaders who appear to be trapped in a downward spiral of cost cutting measures aimed at improving their competitive position. I'm sure everyone would accept that in the current economic climate cost reduction is only prudent, I would argue however that if this is your only strategy then you are doomed to fail.
Brian Jukes from Business Fix asks - "What happens when you have made a series of cuts and your competitive position hasn't improved, what do you do then?"
The usual response, to this, is to get the scalpel out again and cut some more and hope for the best. My own experience form the last recession in the 90's was that continuing redundancies and cost cutting destroyed morale and eventually business effectiveness. This meant the end for many companies and slow tortuous recovery for others. In hindsight the real answer was to create viable strategies to focus the business on recovery solutions as well as survival.
It is important to recognise that what worked for you in times of plenty will most certainly not work in these lean times. Recessions demand change and only those that best adapt to the changes demanded will survive and prosper.
So what do business leaders need to do?
My own thoughts on the likely outcome from this last recession and our laboured recovery are that business leaders should now be looking at what kind of business they want for the next four years as we slowly grind our way out of recession. It is highly unlikely that a significant recovery is just around the corner. Forget adjusting what you currently have by cutting staff numbers and chasing increasingly competitive work.
Instead business leaders need to address the new reality and answer the following significant questions:
- Are you the right leader to see your business through to better times?
- What special contribution is each of your senior management team currently making to the business?
- What are your core strengths and how can you exploit them?
- What are you doing to understand your clients needs, how have they changed?
- Who is currently spending, recession doesn't mean everyone is closed for business?
- Other than cutting costs how else are you going to improve performance?
- Who is responsible for generating new ideas?
Gone are the days of planning by budgets, making do and relying on management by process.
Now is the time for genuine strategic thinking and exceptional leadership. If you don't have these two qualities now is the time to seek professional help, tomorrow maybe too late.
The Positive Action Club has been established to help business leaders find their own answers to these challenging questions and to date over 50 business leaders have benefited from their involvement in this unique process. To find out more about how the Positive Action Club can help you and your business contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it