Business today – a crisis or an opportunity
Isn’t it funny how different business leaders react differently to the current world economic situation. Sure, business overall is down and sure, there needs to be some right sizing as a result – but there is no reason for businesses to ‘batten down the hatches’ and prepare for a long siege – better than 90% of business is still operating as before!
So what’s really changed since the ‘credit crunch’?
There has been a (not unexpected) knee jerk cost cutting and job culling exercise across virtually all sectors. Maybe not a bad thing considering how inefficient many business were – sometimes a crisis brings the excesses into focus.
There has also been a knee jerk reaction from the bankrupt banks to stop lines of credit, causing misery for business and consumer alike – again, maybe not a bad thing considering how frivolously many people previously viewed credit.
The housing market has stalled – maybe again not a bad thing considering that prices were spiralling globally, putting ‘a place of my own’ beyond the reach of mere mortals.
Global interest rates have reached rock bottom – again, maybe not a bad thing when the banks massive and often obscene profiteering of the last years is taken into account.
But these are now over and done with. Backed with government money, banks are now literally throwing offers of credit out to businesses like confetti. In the UK, for example, house prices have reached such low price ebb and interest rates make saving not worth having. As a result, investors are piling into the market resulting in 1.6% increase in house prices in January 2009 alone. Interest rates are now so low that they alone can no longer make any difference to the ultimate outcome.
At this point in the economic cycle, businesses can go one of two ways:
The conservative approach – here companies husband their ever dwindling resources waiting for the day when the world ‘returns to normal’. The bad news for these people is – the world is forever changed.
The new world approach – here companies, recognising that this change is forever, invest in the new tools and skills that enable them to address the new needs of their (often new) customers.
The real challenge is simple today – have you recognised that this economic crisis has changed business for ever – or – are you waiting and hoping for the glory days to return?
For businesses now focussed on creating the change, start with the people that really matter – the sales force – your future wealth creators. As long ago as 2000 McKinsey said the difference between an average performer and a top performer was 67% revenue! Businesses that will be successful are those that only employ top performers. Ensure you are one of those successful businesses in the brave new world post the ‘credit crunch’.
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