I have no intention of sprinkling this end of year piece with statistics and figures that everybody should be familiar with and if you aren’t you will definitely not survive through what we all know is going to be a hard 2009.
What I do want to do is pose a few questions in the hope that the answers they provoke from the reader will be useful to them in seeing their business through 2009. The title of this article has certainly been proved right in global financial terms in 2008 and even though many of us were bracing ourselves for the impact of the USA sub-prime collapse in the summer of 07 not even St. John and his Armageddon predication could have foreseen the demise of HBOS......or should we have seen it coming. I think we should have and so to my first question.
Crosshead-style: ‘’What can the big and the small do to prepare for the future?’’
What we are all faced with every day is choices and here we have a choice of crystal ball gazing or concentrating on focused forward planning. Too many have used the crystal ball over the last five years because we all believed we lived in the land of milk and honey when in fact we lived in a land where the majority of the decision makers either at Lehman or ABC mortgage brokers in Sutton-on-Sea stared into a crystal ball wearing rose colured glasses. The choice they should have made was to have undertaken the well established practise (though infrequently used) of carrying out a regular SWOT review.
It is however not sufficient to do such a review, it has to be done by talented leaders (strategists) who have the vision to interpret the findings into a plan that will anticipate the troubled waters ahead and chart the right course. So my second question is, do we have the talented leadership we need to steer the troubled waters that lay ahead? I am not talking about Mervyn King, Andy Hornsby or Fred Goodwin - you can make your own minds up as to their respective talents - but the MD of ABC mortgages. One man operations have to be as far seeing and innovative as the head of a major corporate, just imagine if Sir Alex Rose or Sir Francis Chichester had set off on their hazardous journeys without having charted the troubled waters they faced.
Looking into my crystal ball for 2009 (with very strong lenses) I see a desperate need for diversification by all in the industry. The small operation must start to de-commoditise its client base and re-establish the old values of trust and reliability. So my next question is:
Crosshead-style: ‘‘What are you doing to ensure you are ready to respond to the changing demands of your existing and hopefully future clients? ‘’
It is my opinion that the vast majority of consumers will reflect on their 2008 experiences and during 2009 will return to seeking relationships with their long established local providers having seen the perceived strength of the likes of HBOS, Northern Rock, and Bradford & Bingley disappear and with it the belief that big and global is good and protected. If you are answering my questions honestly and are preparing for this change in consumer demands then what you must address is the other question:
Crosshead-style: ‘’How proactive am I in planning to offer my clients a diverse proposition ?
2009 will also be the year for forging new partnerships. It is likely that many will go by the wayside and the survivors will need to be confident that those partners they decide to get into bed with, which may include the likes of estate agent, solicitors and product providers, have the plans in place that will give them the confidence that you are facing the difficulties with collaborated strategies and agreed plans.
Customers of all associated professionals will now seek security and familiarity (with a human face attached)because in 2008 the greed and inefficiencies of the banks , product providers, regulatory bodies and the government have left them with only the ‘local’ provider to fall back on. But woe betide the local provider who lets their customers down because, unlike Andy Hornsby, they are accessible and will feel their wrath.
My last question is:
’crosshead-style: ’ Are you an Ostrich or an Optimist?’’
I have spent the last three years trying to convince small businesses to invest in their future or get out. Some will say that is easier said than done in these troubled times, I would say they did not appear to be troubled times when I first said it in 2005. The market remains, supply and demand fundamentals will eventually bring back the good days (I think 2nd quarter 2010 depending of course on the imminent impact of an Obama presidency in the USA)
Every business is at risk. Particularly those in denial or adopting a wait and see approach. You have to establish a sound financial basis but how are you going to get refinancing if you cannot convince a paranoid lending manager that you are worth a punt if you haven’t got a well thought out and locally collaborated business survival/growth plan.
I certainly could not have foreseen at the beginning of 08 that at the end I would be working as an independent management consultant but what I did do was to plan for change by having capital adequacy provisions in place and contingency plans available should my circumstances change. My circumstances changed but I continue to make a living and I continue to preview the future with a regular SWOT check. My bank manager is happy and I have every intention of keeping him that way
To conclude, we are in correction mode, we will get back to stability, though we all know the market will never return to the 2006/7 scenario. My New Year wish is that small businesses have already asked themselves these questions and are at least as confident as they can be going into troubled waters
1. Crystal ball or Focused Planning?
2. Who is our Business Strategist?
3. Are we prepared for steady growth?
4. What new markets are we entering?
5. Are we treating clients as a commodity or a client?
A Happy New Year
