Whatever your line of business, things just seem to grow more complex and challenging on a daily basis. Competition is strong, markets are changing, costs are rising, and external or seemingly disconnected events introduce ever more disruption.It’s a natural reaction to want to respond quickly and drive through change when the market gets tough. After all, business survival is at stake. But during times like these it is essential that businesses hold their nerve, and take a balanced view of all the challenges they face, not just those most apparent. Quite often taking a hasty response in one area may have an unintended, potentially catastrophic impact in another. A cool head is most definitely required. Read our top five top tips on how to survive in times of uncertainty and challenge:
Hold your nerve
Most businesses and organisations have a clear strategy of what they want to sell and to whom. But it can be easy to lose sight of these important ‘basics’ when the environment becomes turbulent. Clearly, you want to be sure that the vision for your organisation is relevant to market and economic demands; but that said, you should be careful not to be swayed unduly by external events.
There is something to be said for taking the longer-term view, and sticking to ‘your guns’ despite short-term challenges. Take Apple as an example. For years they were happy to be a well-respected niche brand, leaving Microsoft to be the giant who ‘did everything’ and enjoy incredible growth for many years. However, with hindsight it is clear that Apple was not resting on its laurels but was actually sticking to its vision; continuing to invest in research, launching products such as the Newton handheld computer in the early 1990s, and thereby setting in train a trajectory which would culminate in the huge successes of a decade or so later, and the current situation where, even in the current financial climate, their customers are finding not insignificant sums of money to buy their products.
Often organisations are tempted to perform rapid changes in strategy, occasionally moving between extremes, when the going gets tough. Our advice is: stick to your vision, focus on the long term, and you will be better placed to weather short-term challenges. And your competitors will find it harder to catch up when you do get there.
Keep investing for the future
While it is not a simple binary decision, too often we see a focus on short-term pressures dominating the longer term thinking, and in the process organisations find that they are irreversibly affecting foundations for the future. Long-term investment tends to be reduced, or in extreme scenarios dispensed with altogether. Reasons for these can be many, and we touch on some possibilities further in this article, but if the lifeblood for the continued existence of the organisation is constrained, that can be a very difficult situation to recover from in the years ahead.
Periods of economic slowdown often make available some amazing opportunities, be it recruiting talented staff who in healthier times would have been harder to find, finding property in locations which might not once have been affordable, or acquiring new enterprises which can augment existing operations.
The converse is true: a common response may be to let your best (or your ‘most expensive’) people go because of shorter-term market nervousness. But the longer term impact of letting that knowledge, experience and understanding leave are immeasurable.
So, while your challenges may be in the current financial year, don’t sacrifice the future platform for today’s pressures.
Reinvent when the right opportunity arises
In difficult times many organisations can suffer a ‘political correctness’ about what they are or do. “Are we still this?” or “Should we still be doing it this way?” This is not to contradict Tip 1, ‘Hold your nerve.’ You still need to stick to your guns – but don’t be so doggedly determined that you miss new opportunities when they arise.
For example, it would be a mistake if a producer of world-class entertainment content chose to ignore the market and societal events that challenge the traditional physical distribution route to market. Some companies did this and then witnessed the impact of Internet retail on the music and publishing industries, such as the consolidation of retail outlets in the face of digital formats for music, video and written word content.
Failure to respond to genuine shifts in the market can hugely impact industries that have been in existence for hundreds of years, as in the print media sector or the mobile telecommunications sector. Players such as Nokia and Research in Motion (makers of BlackBerry) who were once dominant have to downscale and begin a tough fight for survival.
In rapidly changing times there can be no ‘sacred cows’ – and ignoring fundamental opportunities for change can be perilous. Learn to read the market – and act when and where you need to.
Innovation is often thought of as being about immensely expensive, technology-oriented research giving rise to new products and services. While this is a key component, and one that many industries, such as technology, pharmaceuticals or aerospace, are fundamentally built on, it is not the only route for innovation.
At Moorhouse we believe innovation is an organisational mindset, disseminated to every individual within a business, which has to be nurtured in order to expose genuinely new products, services or ways of doing things. It has at its core the management of fear of failure, of creating the environment that allows individuals to think of genuinely new ideas, to explore them objectively, and to be committed to trying them out.
Innovative ideas can still thrive in a tough climate. In fact, new innovations in the parcel delivery market are one example of where companies who have continued to encourage the development of new approaches have changed the way the sector operates and created itself new profits.
The new business model addresses situations where a recipient is not present to take delivery of a parcel, and then has to visit a depot, usually at an inconvenient time or location. The new model engages a network of small businesses, local supermarkets and newsagents, enabling recipients to receive (and send) items at more convenient times to them.
While there is undoubtedly significant technological and operational investment need to execute such a new model, it appears to be a genuine innovation to address a market need. We wait with interest to see its impact – those who invested in this innovation could be securing a leading position in the market.
Keep an eye on the outside world
Researching and taking a balanced view of your wider business and operating environments are essential. Commonly used strategic techniques such as PESTLE (Political, Economic, Societal, Technological, Legal, Environmental) or SWOT (Strengths, Weakness, Opportunity & Threat) analysis can be really helpful in improving your understanding of where your business’ strengths and weaknesses lie, and what your next move might be. These techniques also offer a structured way of assessing possible impacts to your strategy, and in doing so could help keep a wider focus.
The trick is to not be swayed excessively by one dimension, but to assess them all equally. Something which looks attractive in the short term may have more damaging results in a longer time span, or focusing on an economic issue can distract from wider societal changes taking place which overall will be far longer lived and disruptive.