10 Fundamental Priorities to Manage through the Downturn
1 Take a closer look: The goal posts are moving; understand the true picture not what you'd like to believe. Get to the bottom of what's driving the business; what you do best and why. Understand how the business is being impacted by the downturn.
2 Act decisively: With increased uncertainty and volatility it is important to take tough decisions early. Focus relentlessly on the key drivers of value and the key risks across the business. Don't sit back and wait; the winners will be those who position themselves to take advantage of the upturn.
3 Remember cash is king: Ensure your finances and working capital are in good order; protect your liquidity; Re-examine your treasury, financing, funding and pension exposures. Monitor your performance against financial and non-financial covenants. Adopt a hands on approach to cash management.
4 Focus on what really matters: Evaluate which products, customers and channels create or destroy value. Revisit your existing investment programmes - what initiatives could you stop or defer?
5 Manage your cost base: Focus on enhancing operational performance; go for targeted rather than across the board cuts; extract better value; reduce unnecessary complexity; look at whether your business model needs to change.
6 Reliable management information is key: Now more than ever you need the right management information; clearly defined KPIs are essential to ensure improvement initiatives effectively add to customer and business value. Decision making needs to be based upon facts; speed of decision making needs to improve.
7 Plan for different scenarios: Winners demonstrate agility and flexibility; model a range of financial, operational and workforce scenarios that reflect the impact of the downturn on your business; adapt quickly; explore your strategic options.
8 Recognize the value of your people: Regular and clear communication with employees is key to their engagement. Identify key talent and develop appropriate incentives for them; free up limited resources by outsourcing or partnering functional activities; secure strategic new talents that are suddenly available.
9 Take your stakeholders with you: Evaluate the likely impact of the downturn on your stakeholders; make sure you understand their agendas. Perception is often reality so maintaining regular and open dialogue on a timely basis is essential.
10 Take advantage of the opportunities: Don't stop innovation or investing in those areas of growth you will need for the future. Identify the growth opportunities that may suddenly exist; surface opportunities to acquire strategic targets; negotiate more favourable relationships. Have an eye for the future.
