As we entered 2020, no-one could have forecast that we would see millions of employees around the world either working from home or not working at all, the UK government paying out £Billions to support businesses, and the value of oil in the USA dropping to less than zero.
In these unprecedented times, now is the time to consider the opportunities and the risks that we are going to encounter.
At Manufacturing Excellence, as business improvement and strategy speciualists, we have provided some strategy thoughts below to consider. We also wanted to let you know that we are providing our service free of charge at present as our contribution to supporting UK businesses. If there is anything you would like to discuss with us that you may need help with, or some impartial advice, then please do get in touch.
Revising your strategy in the current climate?
In times of change, such as the events that we are currently experiencing, it becomes much more important to have an up-to-date strategy. Some things to consider include:
- Major new opportunities are being created as markets change and competitors drop out.
- Significant threats are emerging for many businesses.
- There is a real need to demonstrate management control because many employees are frightened and uncertain.
- There has never been a better time to borrow money!
What should you do?
Some initial steps to consider might be:
- Discussing strategy for the organisation – this will include things like supply chain capabilities, the changing marketplace, employee availability, employee motivation after furlough and broadening employee skillsets.
- Think through, write down and share with employees your plans for the business after the current crisis.
- Consider carrying out a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats).
- Last week, one of our client companies had a meeting with their bank manager. The meeting had originally been to discuss a loan to support significant growth for the organisation, but the managers were now thinking more about survival. However, following a short strategy evaluation, they realised that two of their competitors were leaving the marketplace and that there would be a real opportunity to grow market share at reasonable margins. The meeting went ahead with the original agenda, and the bank was now able to offer a 0% loan to support their expansion plans.
- Following the 1988 crash, a customer that was a supplier of fasteners and consumables, took an approach that was different to all of their competitors. The competitors all reduced their stockholding, focused on only keeping the higher volume ranges, and sold off excess stock cheaply. Our client purchased much of the available surplus stock and increased their range of products immediately. Two years later they had become the UK market leader and were achieving record profits.
- During the recession that followed the Twin Towers attack, there was a dramatic cut back in the roll-out of mobile phone infrastructure. The Head Office Board of one of our client companies advised the MD of one of their divisions, a supplier of electronic control rooms and street furniture that went with mobile masts, to significantly cut back on staff numbers. The divisional MD believed that the customer demand for increased mobile phone coverage would very quickly drive a resurgence, and so he kept on all of his employees, saying “in six months I’ll either be a hero or redundant”! His call was correct, and he was a hero both to the Board and to his own staff!
A few thoughts to finish
In Creating Strategic Excellence, Mike Freedman states that “Organisations can survive without a strategy, but that’s about all they will do. They will never prosper over the long term”.
In Strategic Agility, John Wells warns that “Whenever there is an economic slump, management focus shifts to cutting costs”. He then explains that the real opportunity is to create a more agile fast-moving organisation that is better able to respond to customer demand. The way in which we work is changing more than ever. Organisations worldwide have had to re-strategise; getting to grips with a reduced workforce and changes to key cogs in their supply chain.
If you want any support for your strategy work, ranging from telephone advice to virtual strategy sessions, please do not hesitate to contact us at Manufacturing Excellence. “As business improvement and strategy specialists, we are providing this service free of charge at present as our contribution to supporting UK business with no obligation.