There’s no doubt about it. Parts of the economy are starting to recover. It’s happening faster in some parts than others, and for sure, those serving the public sector still have some dark days ahead. But it’s starting.
In the last week, two business owners and two senior execs have all said the same thing to me: “We’ve stopped taking on new customers – we’re swamped”. You can imagine my response. All four of them had been caught in the classic post-recession trap: the poverty mentality.
Living through a recession makes you cautious, protective, defensive; but when the green shoots of recovery start to show, your attitude to risk needs to shift quickly. You need to rapidly move from a poverty mentality to an abundance mentality, and from a negotiation perspective, that means taking three urgent steps:
Secure supplies: You will see your demand recovering before your supply chain does. That means you have a window of opportunity to secure essential future supplies at recession prices. As soon as your sales dial starts to twitch, start re-negotiating longer, volume-related contracts on key lines and commodities.
Push up low margins: Many organisations have seen margins erode in recent years. As volumes return you need to ensure margins return too, so that you can invest in capacity, people and innovation. Start pushing price in your least profitable areas. Do it carefully and use it as a throttle to control your growth. It’s better to walk away from low-profit sales today, than to close the door on high-profit ones tomorrow.
Get subs on the bench: The biggest barrier to growth in most organisations, particularly small and medium ones, is having enough talented people to deliver it. Finding people with not just the skills but, more importantly, the right personality for your organisation, will take time. Waiting until you’re stretched before you start recruiting is just asking for trouble. Start looking now before your competitors snap up the best of the talent.
BOTTOM LINE: When waves of change roll through markets, it’s those that are slowest to respond that get swamped. How ready are you to adapt to a recovering economy?