In the past few weeks, I have been doing a lot of talks & speaking on expert panels about the impending Recession & what it means for NZ & Australian businesses.
As usual, the media is playing up all the negativity & people are fearful of what a recession may bring. If you’re wanting to go down that route, then this article probably isn’t for you.
Because I believe that if you’re a business owner, then recession is just another word for opportunity.
What, am I crazy?
Maybe, but in preparing myself for all these talks I did a LOT of research on all of the recessions that we have had. The 4 official ones in NZ & the 8 main ones around the world.
One reason why we struggle to forecast & get ready for recessionary periods is that each of New Zealand’s past recessionary periods has been unique, without any two being identical.
During the 2008 global financial crisis, Michael Reddell and Cath Sleeman authored a report for the Reserve Bank that examined previous recessions. They compiled a chart outlining the features of each recession, and no two shared the same characteristics.
But that doesn’t mean you can’t plan to get through them – it just means we can’t predict when they will start, how deep they will go or how long they will last.
And the good news is, that there are many case studies about businesses that not only got through a recession but came out in a better place on the other side of the recession.
I can share these case studies in a presentation, if you’re keen to find out more, but for this article I thought I’d share the key things that these businesses did so that you can apply them to your own business.
First of all, we need to accept that recessions or economic downturns are inevitable. As Gino Wickman & Sam Cupp say, in every 10 years businesses average six good years, two great years & two terrible years that could put you out of business.
Or as Shamubeel Equab said, “There will always be recessions, Human systems tend towards chaos. We go to the brink and pull ourselves back. The economy is organised chaos.”
So, once you know & accept this, you can plan for the inevitable.
In fact that’s what most businesses who survive do, they scenario plan.
By scenario planning, I mean thinking about all the things that may happen – positive & negative & thinking about how you would work with that. A risk plan if like. You aren’t imagining that that’s what you want to achieve, you’re just prepared for if it does.
I call it ‘The Emergency Glass’ plan. Hopefully, we never have to use it, but we know it’s there if we do need to.
What else do you need to do?
- scenario planning
- risk management strategy
- ramping up agile processes
- having rock-solid metrics
In EOS we use tools like the Reverse Accountability Chart & to do this scenario planning. And we use the Scorecard to change the focus of the business.
If you’d like to find out more about these tools, then feel free to book a session with me – https://calendly.com/debra-chantry-taylor/eos-vth
There are also defensive & offensive strategies that you should employ.
- letting people go*
- price adjustment
- cash preservation
- shoring up supply chains
*NOTE: Two years of research with major manufacturing businesses across a range of sectors shows that traditional cost-reduction methods (like layoffs) save only about 2 percent of costs, while digital and analytics tools can reduce costs by 5 percent.
Companies that lay off staff have felt the backlash from communities, customers, politicians, and workers.
- save 6 months of cash
- programmatic mergers & acquisitions
- new business building
- better talent attraction & retention
- investing in reskilling
- increased sales & marketing
If you’d like to find out more about these strategies, then feel free to book a session with me – https://calendly.com/debra-chantry-taylor/eos-vth
If you’d like Debra to speak at your event, in more depth around these strategies or case studies, please see the attached speaker profile for a list of topics she can speak about – https://bbbl.pub/DC-TSpeakerProfile