04/11/10

By Stephen Archer, Director, Spring Partnerships (www.spring-partnerships.com)

In spite of the current economic climate, business failures and unemployment figures are slowing, but we are not out of the woods yet. Businesses need to keep fighting.

Redundancies and disinvestments will continue, as businesses
continue to suffer weak order books.

However, whilst job losses in the private sector remain un-alarming the prospects for the public sector are somewhat foreboding. It is probable that several hundred thousand public sector jobs will be lost in the UK over the next two years and of course public sector spending in the private sector will fall by perhaps as much as 20%.

The prospect of the impact of government deficit cut measures is causing some alarm and excessive cautiousness in the economy. In 1992, 700,000 jobs were lost from the public sector with large spending cuts as well but the economy then took off on a run that only ended in 2007.

So it’s not as bad as it might feel or the opposition and trade union leaders are making out.

So for business what does this mean? We are not in boom times and we are not bust either. Trading conditions for most businesses — especially SME’s — is tough. Where should the energy be placed now?

Customers need to be given stronger reasons than ever to buy services and products, so investing in innovation, marketing and differentiation is essential. Know what your customers want and even more about what your competitors are offering. Competitors of all kinds are the minimum benchmark for which to aim. Equalling the value of competitive offerings is rarely going to suffice — you need to stay one step ahead.

Strong leadership is needed too to re-engage staff and move the business forward. The recession highlighted many examples of poor leadership as many senior executives struggled to cope with the new challenges they
faced.

Now is the time for leaders to create a compelling vision, make big decisions, take risks, adapt quickly to change and jump on new marketing opportunities. Unfortunately, this kind of leadership is too often stifled in UK companies, with bold decision makers sidelined. To succeed, leaders need to stick their heads above the parapet and demonstrate their vision and confidence in the future. Those that do will find they have the support of a motivated and energised workforce behind them ensuring they will be more likely to achieve their goals. Speed is off essence.