32 DEBATE


Continued from page 31


CM: I remember 2008, it is scarred in my memory. What I am seeing from businesses and investors, be they private equity or from the banking community, is that there is still confidence out there, though I agree it has dipped.


Business owners and investors are looking at their leadership teams and their capability to navigate the choppier waters ahead. We’re getting a lot of conversations around that.


Deals will fall over if you have not got the leadership team capable of taking the business from point A to point B to point C.


JK: Input costs, recruitment, supply chain, all the big things that people are talking about, are having an impact, but what we have found is that many businesses that pivoted through the Covid crisis have been able to plan. Many of them have benefitted from the amount of cash that’s been available to them.


Businesses involved in advanced manufacturing, export, renewables, have continued to trade well and have fantastic sales with order books reporting very high levels.


Alternatively, if you look down some of the weaker sectors such as hospitality, would businesses have survived during the pandemic if it hadn’t have been for the government support? That’s a question that needs to be asked.


Some thought they might have been able to trade out of the position they were in but have found a new set of circumstances that have hit them like a tsunami. Because of their increased input costs and their low margins generally, these businesses are being hit particularly hard.


There was a very different set of circumstances in 2008. There was no money available, banks were calling in overdrafts. People and businesses have come out of Covid with a much more resilient mindset and it’s just a case of making sure they have the clarity, the ability to make and deliver their plans.


While input costs have gone up dramatically, profits have risen in line with that. Businesses tell us they have put their prices up, so they’re still managing to hit their sales. The biggest problem for businesses is still recruitment.


What strategies for viability and growth are working? Where are the opportunities and what is the role of leadership?


NM: It is apparent that with the present labour shortage, innovation and using technology more efficiently are crucial. It is an area we need to investigate more.


We also have the businesses that were kept alive by all the Covid support measures that are now really facing some difficulties. We may be storing up quite a few business failures to come, which may then free up some additional labour in the labour market for the higher growth opportunities.


But it is very hard to have any clarity at the moment on what to do long term, you can plan but really for me it seems more about short term survival.


KM: There are really tough short-term issues that businesses have to deal with. More and more of their profits are getting taken away by interest rate rises.


If businesses are planning to move forward, do they have a strategy, know what they are aiming for and understand the sensitivities that sit within


Neil McMillan


that, what cost pressures they are under and what may or may not happen? If they can plan on that basis, they can retain a certain level of confidence.


There are still plenty of people out there who have been through tough times. It is about keeping your head, not letting things slip too much and actually understanding where you are and also where you’re trying to get to.


There are businesses out there that operate on that basis and understand where they are and what they are trying to achieve, given all the issues that sit around it.


Various government U-turns aren’t helping with consistency


HH: Leadership is critical, and the leadership team has never been more important. We’ve got to take a long-term view. The idea that recruitment problems are going to disappear in six to 12 months is wrong. This is a long-term issue.


Innovation and making sure your business can operate effectively with less labour is absolutely key to your survival and your prospects going forward. Wherever you see a problem, the flip side is opportunity.


The businesses I saw that thrived in Covid were the ones that approached it with a positive mindset. The ones that struggled were those that had a negative, victim-like mindset.


CB: Having in-depth knowledge of your own industry is crucial, so you can stay ahead of the


Amin Vepari


game and spot opportunities. Mindset is key, as is having a robust business plan.


Tech is part of the solution to some of the staffing issues. It could help things like scenario planning and stress testing, you can plug in things, ‘what’s going to happen if the interest rates go to this, what’s going to be the implications on cash flow?’ It’s not difficult to do and if you take that forward on a basic level, that frees up staff time in other areas of the business which can have more value.


Pricing is the first easiest win. The first thing we say to our clients is, ‘When did you last look at your pricing, have you looked at your value proposition, have you got a pricing strategy?’ You don’t need to find more customers, you don’t need to go to different markets, you just need to review your price and look at your whole value proposition, look at your USP.


JK: We need to think about developing the skills and the leadership that businesses need. There seems to be a disconnect between the two, so we are developing skills that are popular but not necessarily the ones really needed within the economy.


If we are to make Lancashire a place where businesses can invest, where we can attract more renewable businesses, businesses creating a sustainable economy, we must have the skill sets that can support that.


AV: Innovation should always exist within business, it’s not just something we should think about in times of uncertainty. Businesses are looking at growth, it’s not about standing still, it’s about doing things different and evolving, not just around product, service and cultural innovation.


You have to have a relationship with your customers, you have to be able to reach out to them. No one’s going to mind you being busy,


Karen Musgrave Chris Brown


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