What next, now the holiday period is over?

The holiday period is over, in more ways than one.

While we’ve had an unrelenting narrative in the media on the cost of living crisis for some time, now it’s now starting to bite. And not just for individuals, but for many SMEs, too, in terms of pressure on wage increases, and energy and other supply chain price hikes. Combined with a less than positive economic outlook, it’s fair to say we’re in for challenging times ahead.

But we’ve had challenging times before. In the last 30 years we’ve had the recession of the early 1990s, the Financial Crisis of 2008, the Eurozone Crisis in 2012 and the pandemic, not to mention things were pretty turbulent for much of the 1970s and early 1980s.

That’s not to downplay the difficulty of what lies ahead, and the next 12 months and beyond may well test even the most seasoned business leaders to their limit. But what have we learned from these past crises that we can use to help us navigate this current ‘perfect storm’?

The importance of rethinking ‘Best Practice’

For many companies the pandemic upended the notion of what ‘Best Practice’ actually is for our businesses. While accepted thinking suggests that describing and codifying a preferred method of performing a given task or procedure is a key arbiter of quality, rigour and efficiency, when the world goes through seismic change, so must we. And that includes what we see as best practice approaches.

When we call a practice ‘best’ it can be tempting to assume there is nothing further we can do to improve it. However, many of our ‘best practices’ may well have been created for a world that no longer exists. This was true in the pandemic and is likely to be true in this next economic chapter.

So whether it’s in terms of;

• How you engage with your customers and potential customers
• How you plan and execute your objectives
• How you manage and reward your people
• Or how you work with your supply chain…

it’s now worth asking yourself;

• Is there a better way than our current ‘best practices’?
• How do we need to evolve?
• What specifically needs changing as a priority now?

Think ahead – but be ready to adapt now

History, logic and the pandemic all tell us the most agile companies have the best chance of weathering an economic storm. Those that are able to quickly adapt and refocus which markets they sell to; those that have a workforce who can respond to changing needs and communicate these well; those that are able to redeploy resources effectively and restructure their cost base all do better. Timely action is key, but we also need to know what we are aiming for, other than survival, if we are to come out the other side in reasonable shape and ready to ride the recovery.

Not all businesses suffer in a recession, and whether our customers are other businesses or consumers, those serving certain industries will of course fare better. Plus, innovation, automation and using technology differently often come about through necessity as well as planning. But making cost savings in the wrong areas, or having knee jerk reactions to target new markets may not deliver for you longer term.

So it’s worth considering;

• How are the markets we serve likely to be impacted in a recession…and beyond?
• Do we need to expand or refocus our customer footprint?
• Can we reconfigure our operations, or implement new innovations or technology before previously planned to become more efficient sooner?
• Do we need to reassess our supply chain if it’s likely to become increasingly vulnerable, or ever more costly?
• Where can we pre-emptively make cost savings now, before the need becomes urgent, that will not negatively impact our longer term plans?
• What are the trigger points at which we need to take further action?

Thinking through options before they become fundamental imperatives gives you the opportunity to take a broader and more considered view than if you make decisions whilst staring down the barrel of immediate and potentially crippling financial pressures.

Our team at BHP Consulting have all successfully run companies, through good times and bad, and we understand that every business is unique. Our practical approach to supporting our clients enables us to share our real world experience to positively impact on the performance of your business. Whether you have a specific project you want help with, or are looking for a longer term sounding board or advisor to help you navigate upcoming challenges or opportunities, then get in touch. To arrange a call or an exploratory face-to-face meeting, please click here.