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knowing and watching the numbers is a matter of life or death when every penny counts. Of course, keep your eye on the cash, get
your bank on side and keep it there, de-bloat your stock and make sure that there’s no weakest link in your supply chain. But more than that, interrogate the numbers to face the truth, and revisit every element of the business model and the dusty corners in your process to make it fit that new reality. Now is a good time to redesign the dashboard by which you drive the business.
Panicking or focusing? Let’s face it, business has always been a bit of a rollercoaster ride. It’s just that now the drop is more intense and adrenalin- soaked than we were expecting. Will you scream, shut your eyes and hold on for dear life, or relax and enjoy the ride and remember that this is why you bought your ticket in the first place—the thrill? We must also always keep returning to
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the concrete fact that our customers pay for everything. They are the wellspring of all profit, which is why it’s not really a whiz-bang idea to reduce your marketing spend just as the competition for their smaller wallets intensifies. Why would you opt to weaken the communication with your customers when you need them more than ever? Of course, we must make sure that every penny counts, and adjust what we do so we know that it does pay back, but it’s a schoolboy error to disinvest in your customers when times get tough. Marketing is always important, but it was built for times of austerity. Resist the mirage of improving your short-term profits by talking less with your customers, but do make every conversation count. The same thinking applies to your employees
who for many of us represent the biggest cost to the business. Just when we need more from the team for less spend, it is surely a mistake to cut back on helping them get better at their jobs. Would Manchester United cut back its training regime when fighting a relegation battle? The secret with the team is to cut headcount deep, once and early to allow you the freedom to make sure your remaining team is focused on winning with a massive action plan. Too many
of us hold on to too many staff for too long because we so hate having to let anyone go. If you cut headcount more than once, your team will forever be looking over their shoulders to see if they are next for the chop. Oh, and do try not to panic everyone by cancelling the water coolers. Inducing panic is not a reliable strategy. Ultimately, you need the team to act
differently and purposefully, because blind hope is no strategy either. So, for example, does your pricing really need to go down, why not increase it to retain a higher share of the value you have created and see what happens? Many of us have, and it works. We all know that cash is king when its takes the mood, but are you actively making choices between different suppliers and customers on the basis of cash efficiency? Smaller returns for a short-term cash outlay offer flexibility over betting the farm for a bigger payday tomorrow. Are you trying to drive the business with your eyes shut? Do you have a clear, on time, reliable dashboard of all the key numbers? Staying informed and fleet of foot is crucial in a more volatile, unstable environment. And remember it’s not all doom
and gloom, far from it. On the plus side, austerity conditions push us all into being less complacent about our prosperity. Austerity will make your team hungry again to keep their jobs, giving you permission to get away with things you could have dreamed of doing in times of plenty. Austerity will mean that talent, space, and money are all that bit cheaper. You will find that your suppliers are more negotiable than they used to be, and your local council may even be more helpful on occasion. Okay, that might be pushing it, but you get the drift. The game has changed: new rules; different permissions; unusual outcomes. Such moments hold rich pickings
for start-ups and innovators. We can all be fortified by the fact that some
of today’s biggest brands like Disney, HP and FedEx all got going during tough times, the austerity gene in their DNA having bred strong self-discipline, clarity of focus, and efficient thinking. Make no mistake; we face a prolonged era of
business as unusual. It’s definitely time to adjust our sets. I’m investing in a new high-definition 3D set, turning to the customer channel, and making sure my smaller team is all avidly following the plot.
Alex Pratt is the founder of Serious Brands and author of
business book Austerity Business: 39 Tips for Doing More with Less.
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