Getting through the crisis to the future

Uncertainty and turmoil rule; and will do for quite some time. But despite the crises, there will still be opportunities out there, but companies will need to work harder and with a keener eye on the future than ever, if they are to win through. Examining the options; thinking through the implications; looking for win:wins; and being fast and flexible are even more important in the bad times than in the good times.

What is changing?

The U.S bailout package by Congress is not the end of the global crisis. It may help to get the U.S money markets moving again but a recession is likely despite the actions of many countries around the world to stabilise confidence. Many companies and consumers are feeling the pressure; surviving today feels like the only game in town. And it is unclear as to whether the actions which governments and national banks have taken so far will work.

Why is this important?

The economies of the world are likely to come out of the other side of the crisis different. New regulations, new rules, new priorities – and new opportunities. The bursting of the Dot.com bubble in the late nineties provides a parallel and precedent to the current crisis.

• The companies that went to the wall during the bubble were those whose business models were fundamentally flawed: a race for egotistical growth, profligate spending and low concentration on inherent risk, inappropriate capitalisation and shareholder returns.  
• Many companies, affected by, but not critically wounded, waited out the storm by cutting vital investment and jobs intending to begin again after the storm passed. Most never did!  
• The smart companies, many that we all now know as household names, protected and even enhanced their investments, ensured they kept their team together and swept up great people and assets displaced from less forward-thinking organisations.

As we have discussed in several trend alerts recently, pressure on resources is creating opportunities for innovation and new products, such as processes to reduce water consumption; technologies to scavenge energy; reducing energy consumption in data centres; collaborating with customers to find new solutions; waste as a feedstock for biofuels. But to make these happen, a sense of direction and vision from management are essential. So too are looking beyond the immediate crisis to see what opportunities may be out there; being able to prioritise them; developing the flexibility to take advantage of them; and staying in touch with your stakeholders’ needs all the while.

The question for management is whether they want to be like an ostrich and ignore the options; a rabbit transfixed in the headlights of the approaching crisis; or a bird ever watchful and making the most of the few updrafts that are around, and grasping the opportunities as they arise.