Companies who haven’t prepared may survive the recession only to find themselves overtaken by their competitors as the economy gets back to normal. The question is: “How do I prepare my organization for recovery?”
This is the second article that covers the conclusions from a join research report published by Vlerick Leuven Gent Management School and the performance factory. You can download the complete research report for free.
1. Start with a solid strategy review.
Don’t rush into the budget exercise. This year, budgeting isn’t business as usual. Even when your company isn’t directly impacted by the crisis, the competitive landscape in which it operates will be. So, spend the extra time on reviewing your strategy and make sure that you map the different dynamics that impact on your company. For tips and ideas, read the first post.
2. Don’t stop restructuring.
Finish what you started. Don’t stop the restructuring mid-point. That would be the worst thing to do. Remember, successful Strategy Execution also means successfully executing your restructuring initiatives. So make sure you finish the restructuring you have planned. Don’t leave any loose ends – plan the financial and human resources in your budget to tie them up.
3.Think like Johan Cruijff.
One of the most successful trainers and players of all time is known for the words: “Every advantage has its disadvantage and vice versa”. You just need to look for them. One example: the current economic climate creates cost consciousness. Use this to your advantage. Take a cost conscious approach to your budgeting. Areas where it would have been impossible to discuss cost reductions might be put on the table today – especially if you base your competitive advantage on the cost side, ride out the wave completely and take advantage of the cost awareness business climate. Keep everyone on a tight budget leash.
4. Debate assumptions.
Now even more than ever. Discuss the why behind each budget line. Don’t let people seduce you with the line ‘but that’s always been budgeted for’.
5. Don’t put the support departments on a yo-yo, stop-go diet.
But they are often caught by surprise and respond re-actively. This results in a short-term, stop-go strategy. As a result, the department ends up worse off than before. Support departments need a long-term vision and budget approach as well. Make sure you know the end game – the business model that you would like to aim for – and look ahead at flexible budget solutions as preparation to shift when the time is right.
6. Review all project spending.
Don’t just re-launch a project that has been put on hold. Before you know it, you are back at business as usual with the old, revived projects sucking up all available resources (and therefore money). Don’t assume that what was needed before the crisis is needed today. Re-evaluate, challenge and budget accordingly.
7. Make sure you are ready for the turnaround.
The crisis will end. It will not happen in the next three months, but it is just a question of time. Most companies, however, will be defining their budgets over the next three months. And budgets are like oil tankers – they need time to change course. So discuss today how the company can react swiftly when opportunities do arise. You don’t want to be left standing on the deck of your oil tanker, watching all the opportunities pass you by, unable to stop and turn to chase after them.
