Yes, we continue to hear bad news about the economy, and we will for months to come. But there are two sides to almost any story:
Turmoil is the place to start
By Mike Southon
Was Chicken Licken right? Is the sky really falling?
Professor Saul Estrin of the London School of Economics told a Financial Times CEO conference last week that all of us would feel the effects of the current financial turmoil within 18 months.
I am sure many people are thinking about extracting all their cash from the bank and putting it under the bed until the crisis is over.
Entrepreneurs such as myself, are instead doing what comes naturally: we are starting new businesses.
A recession is an excellent time to start a business. Those of us who have been around the block a few times started businesses in the last two recessions of 1984 and 1991. In hard times, people, raw materials and office space are cheaper; suppliers turn up on time and offer reasonable terms. Even builders and plumbers return your phone calls.
Cash is king, and those that wisely accumulated wealth through the boom times will soon consider that the market has bottomed out and start buying up properties and other long-term assets. In the next few months, we can expect the small, but short-term, partial recovery known as a dead cat bounce.
The longer-term prospects for established businesses are much more uncertain, especially those that provide products and services that might be classed as a discretionary spend.
There is only one way to beat a recession, and that is to sell your way out of it.
However, this issue is far too important to be left to just the sales force, so now is the time to get everyone in your company galvanised into action. This is especially important for service suppliers such as PR, marketing and branding, and especially the traditional professions such as the law.
All their websites show fascinating people with top-quality skills. What they need to do is to get out there and talk to customers. And there is the rub. Some are natural networkers and are forever bringing in new clients. For others, attending a networking event is second only to root canal work.
The solution is some training in confidence building. Sadly, training is often the first casualty when belts are tightened. This is a false economy; the most important assets for any business are your employees, the only people who will be able to get you out of a recession.
Increasing the training budget in lean times sends out a powerful message to your best people that we are all in this together and the safest place for them is where they are now.
The final step is to encourage everyone to be proactive. Most people have no problem cross-selling existing services, but to be entrepreneurial in a large organisation you need to talk to existing, satisfied customers, and ask what new products or services you might provide.
These may be close to what you already offer, and thus easily delivered. If they are not, then you should offer to discuss the proposition internally and see if it is feasible to deliver these services profitably, on this one occasion, for this special client only.
This may be a one-off or the start of a whole new business adventure, the opportunity to rebrand and reposition your company in a recession.
Kentucky Fried Chicken did exactly that in the
last recession of 1991, becoming KFC, and grew very quickly by addressing the market opportunity of providing cheap food in hard times.
Perhaps that is what happened to Chicken Licken back in the deep recession of the 1930s. He cheered up and became Colonel Sanders.
mike@beermat.biz,
More columns at www.ft.com/mikesouthon
Copyright The Financial Times Limited 2008
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