By Brian Chernett - Founder of The Academy For Chief Executives
As we enter the New Year, there is a lot of focus on the negative stories about business in 2011. There is no question that this year will be challenging but there is a lot of opportunity if you are out there and looking for it. This may be a year that divides the winners from the losers. Which side of that divide do you want to be?
There are many factors that will potentially affect your ability to trade. Costs are likely to increase. From fuel duty and VAT adding to transport costs, some raw material costs and employment costs, your expenditure is likely to trend upwards unless you control it well. There are lots of reasons to expect that the general level of spending will also reduce. The uncertainty about public sector jobs and the extended effect of cuts in public spending will make demand out of some supply chains directly and consumer caution is likely to take demand out of some others as customers hold on to their cash and tend to make distress purchases and hold off on elective purchases.
Buying decisions will be made on the basis of need and the key factors will probably be:
• Can I defer it?
• What are the features and benefits? Which ones are mandatory?
• Emphasis on quality over aesthetics
• And finally, but critically, what is best price for the package I need?
As we enter the post Christmas/post Sales lull, how are the supply chains to retail? Are they empty, requiring new manufacture or are they already full? Some early Christmas sales data shows sales below expectations, suggesting that some supply chains are already quite full. If that is a general position, then demand from some retailers will be slow to return.
So a lot to be concerned about — or is it? Most of the factors I’ve discussed so far are outside the control of most businesses. We really can’t do a lot about them. I’d suggest that we are far better employed in concentrating on the positives we can take from previous experience, focussing on our own business and, in particular, on the factors we CAN influence.
Start by knowing and exploiting YOUR advantages. Why do your customers buy from you? Talk to them and ensure that your assumptions are correct. Do more of what they like. Do less of the things that they tell you add little or no value.
Talk to your suppliers. How are things for them? Make sure your supply lines are safe and protected. Early warning of problems may save you from embarrassment or worse and give you options to deal with them.
Play to your strengths and do your best not to get involved in a race to the bottom. Staying competitive doesn’t mean that you have to cut your prices and salami slice your margins. Find ways to avoid doing that by adding value that low cost providers can’t or won’t add. You don't have to go with the market if the market is going the wrong way.
Build on good foundations.
The basics remain the basics and you need to get them right. Have clear direction, invest time and effort in developing the right people, review your costs and remember that cash is flexibility in difficult times. Make sure your proposition is still attuned to the market’s requirement and communicate well internally and externally.
Innovate and exploit opportunities. Consider new or changed products to reflect market needs, find and exploit new markets and develop new collaborations. Business opportunity will be found in the problems and failures of other businesses. Be ready and capable of taking advantage of them.
Motivate your teams (and those of your suppliers). Ensure clear communication, proper delegation and responsibility and set a good example. Find ways to reward good work, not just with money, but with recognition and support.
Have process goals for reaching your destination and review them regularly. Adjust your course as needed but remember where you are trying to reach. See article on goals in this newsletter.
Good leadership will make a difference to your outcomes in 2011 (and beyond). There are no guarantees but commit to seeing opportunities and using them to grow and improve your business and you’ll have a better than even chance that you’ll remember 2011 for all the right reasons.
Brian Chernett is the founder of The Academy for Chief Executives and Chairman of Academy Group ACE2. Having stepped down as Chief Executive of the Academy, Brian is now developing his own coaching and mentoring business — Wisdom Forums - for senior executives and building a new charity, The Ella Foundation, to coach and mentor Chief Executives in Charities and not for profit business.
Watch a video of Brian Chernett, Founder of The Academy For Chief Executives, explaining how The Academy For Chief Executives inspires business leaders.
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