| MCA report highlights action needed to help the real economy |
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| | The Management
Consultancies
Association (MCA) has
warned that changes in
the economy and British
business since the last
recession will now make
it harder for companies
and organisations to
deal with this downturn.
It says these
challenges are
compounded by the fact
that many senior
managers in business and
the public sector are
‘Downturn virgins’ –
with no previous
experience of sustained
economic problems in
their working lives.
The MCA says that the
response to tougher
economic times must
focus on clear
leadership, improved
planning and a re-think
of strategy. The
association’s report,
Dealing with the
Downturn, identifies 10
critically important
actions. It says that
special and added
attention will need to
be paid to customers,
suppliers and employees
if companies are to
survive the next few
months and emerge
stronger to take
advantage of recovery
when it comes.
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Alan Leaman, chief
executive of the MCA,
said: “Carrying on as
before is definitely not
an option. Organisations
today are more global
and dependent on a
complex network of
suppliers. They also
have higher levels of
debt and less
operational fat to cut
in order to maintain
their profitability.
Customer expectations
are higher and talented
employees are more
demanding. Senior
executives now need to
show that they can lead
their organisations
through the tough times
as well as the good.”
Speaking about the
MCA report, Ian Stewart,
director of research at
Deloitte, commented:
“It’s nonsense to say
that you can talk your
way into a recession.
The economy is weak
because the financial
system is under great
pressure and the price
of oil has tripled, not
because people are
talking about these
things.”
Chris Wakerley,
managing director of
Boxwood, added: “There’s
no point hammering | |
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| | and opportunities.
2. Invest in
planning:
Organisations have to
improve their ability to
plan and forecast so
that they are better
able to gauge the impact
of economic changes.
3. Re-think
strategy:
Re-evaluating their
strategy and business
model will help ensure
organisations have the
resilience, not only to
cope with the harsh
conditions of the
short-term economic
climate, but to prepare
effectively for their
future recovery.
4. Focus:
Decide which functions
and initiatives to
concentrate on, and
which should be
outsourced or stopped
altogether.
5. Seize the
opportunities: Smart
organisations will steal
a march on a struggling
competitor or acquire
assets at low prices.
6. Look after your
customers: Consumers’
expectations do not
change simply because
they are spending less. | |
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| | Giving in to the
temptation to cut
quality or service only
creates a hostage to
fortune.
7. Improve
productivity: Cutting
costs indiscriminately
will only result in
short-term gains and may
damage an organisation’s
ability to compete in
the future.
8. Look after your
suppliers: In today’s
complex and
interconnected business
environment,
organisations are far
more dependent on their
suppliers than ever
before. Forcing them to
drive down their costs
is short-sighted.
9. Look after your
employees: The
performance of an
organisation typically
rests on a small number
of key people; these are
just as likely to leave
when times are bad
because there will
always be opportunities
for them.
10. Don’t expect
the government to solve
the problem: Good
management, aided by an
appropriate regulatory
response, is the key to | |
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| | suppliers on prices when
the cost of their raw
materials is rising. You
have to treat them as
partners. It’s hard
work, but the financial
benefits are enormous.”
Member firms of the
MCA work with 90
companies in the FTSE
100. They advise and
work with many parts of
central and local
government. Using the
experience of its
members, the MCA has
identified the following
10 critically important
actions that managers
should take:
1. Demonstrate
leadership: Senior
executives need to show
they are worth the
investment shareholders
make in them by
responding thoughtfully,
not precipitously, to
events and staying
open-minded to new ideas | |
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