Executive Contributor | Keith Wright | Business
I ran a workshop recently around how to adapt your business to a slowing market, without slashing costs. Rather topical I thought given the mixed economic outlook and the ensuing pressures on business.
The session was very insightful, and started with me sharing a number of ideas I have personally used across my 30+ year career in a multitude of commercial and trading roles. The themes of these ideas fall into 3 areas:
1. Procurement best practice
2. Collaboration and sharing
3. Dealing with poor performance
Let’s take a look at each one.
Procurement best practice. If demand is reduced or falling, could you consolidate your spend to fewer supply partners? It might also be wise to benchmark deals from like-for-like suppliers of goods or services. Let’s try and squeeze as much as you can from your buying power.
Collaboration and sharing. How do you work with your supply partners? Could you work more closely together and share resources in areas such as sales development, digital and data, or marketing? You might find this joined up approach is a win/win!
Dealing with poor performance. When did you last run a range review on your worst performing product categories? How about a deep dive on the least profitable products? What about dead or slow moving stock or quality complaints? Tackling these areas not only lifts your overall performance but it can save time and money too.
As we discussed these areas in the workshop, we touched on the cost of the alternative, including freezing or reducing headcount, or delaying projects or investments. This in turn can cause internal pressure, creating a “boom / bust” mentality and a feeling of inconsistency.
This discussion led to one of the workshop attendees using the phrase “details and disciplines” and the conversation around focus. My observation was that often, when times are good, human nature kicks in and we can get too comfortable. We are hitting our budgets, sales are good, and life gets a little easier. We may take this performance for granted, lose a bit of our curiosity, our intensity and our drive for continuous improvement. In other words, our details and disciplines drop off.
It’s when our backs are against the wall, when we are under pressure and need to find a better way, that we flip back into the high performance mode. When we look at those poor performers, those areas causing our customers the most pain, as every penny now counts.
My question is why wait for a crisis? Why wait until you are missing budget or when your bottom line is under pressure? If we are able to adopt a high performance mindset all the time, where we stay curious, challenge ourselves to continually improve, and adopt details and discipline, how good could we really be?