Downtrodden economies can lead to great innovation.
Many international entrepreneurs, executives, investors and organizational leaders are challenged by ways to quickly recover from the economic impact of COVID-19. Although there are no easy answers, history provides valuable lessons. Many business owners are concerned with the extent and duration of the damage to their firm. Organizations can take the following precautionary steps:
- “When times are good you should advertise. When times are bad you must advertise.”
According to Forbes, in the aftermath of the 2008 recession, advertisement spending in the U.S. declined by 13% as follows:
- Newspaper ad spending dropped 27%
- Magazine ads shrunk 18%
- Out-of-home dropped 11%
- Television ads decreased by 5%
- Online ads fell off 2%
However, a number of studies point to the advantages of maintaining or increasing ad budgets in a weaker economy. Companies that maintained or increased ad spending bolstered sales and market share during and after a recession.
- Consider smart acquisition opportunities.
Arrow, the financially troubled components maker, seized the opportunity to purchase assets on attractive terms during an industry downturn in the late 1980s. The company launched a series of audacious but smart acquisitions that allowed it to increase sales by more than 500%, turning operating losses into profits and seizing market leadership from its competitor Avnet, once twice its size.
- Simplify business strategies and focus on your core competency.
Refrain from diversifying your resources. Netflix, one of the most successful businesses developed during the recession, took advantage of the declining, once profitable, video rental industry. During the peak of the 2009 recession, Netflix gained 3 million members due to their new TV/movie unlimited streaming plan and disc-delivery service.
- Think about expanding into new or minimally impacted markets.
In contrast to other companies that were riding out the 2009 recession, Lego’s profits soared by 63% in a stagnant toy market due to its expansion into Asia and increased sales in Europe. Similarly, Netflix succeeded by adding a variety of price plans and different services.
- Manage staff effectively.
Make sure you have an up-to-date HR plan. Understand your staffing costs; identify innovative leaders who can shoulder more responsibility; encourage input from staff, shareholders, board of directors and strategic partners; motivate your team by involving them in decision making.
- Flexible staffing arrangements.
As an alternative to salary reduction, consider flexible solutions such as a 4-day work week or job-sharing arrangements. If it is necessary to reduce staff, consider training employees to undertake more responsibility while concurrently assessing staff’s skill to identify training necessary for your staff.
- Communicate with customers.
Inform customers of your capability to provide service remotely or in a limited capacity.
- Financial assistance.
Apply for a low-interest disaster loan
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- Develop a business continuity plan.
It is impossible to predict all types of occurrences that can threaten your business, but you can develop a plan to cover a range of events, i.e. natural disasters, computer problems, staffing issues.
The Crane Consulting Firm can assist you with your rebound strategy.
Our considerable experience in guiding clients through challenging scenarios includes, maintaining business operations and continuity, applying for disaster assistance, and monitoring and crafting rebranding campaign initiatives.
Please contact us to help you mobilize a team through this difficult time.
Companies around the world grappled with plenty of macroeconomic uncertainties in 2019, including a U.S. government shutdown that essentially paused certain financing markets, concerns about U.S. interest rates, U.S.-China trade tensions and Brexit. Yet, by the end of the year, total annual M&A volume had exceeded $3 trillion for a sixth year in a row (Morgan Stanley advised on more than $1 trillion of announced transactions). The strength of megadeals continued in 2019, with 39 transactions exceeding $10 billion in value and 18 surpassing $20 billion, with some of the biggest activity in the technology and healthcare sectors.
Another key element of a thriving company culture is purpose. If we think of values as guardrails for how we make decisions, act, and react, then purpose functions more as a north star, as one overarching, ultimate goal that guides the company.
What is purpose in this context and why does it matter to your employees? How can it help instill a greater sense of fulfillment and inspire employees to be more productive and deliver a higher quality of work?
As the world becomes increasingly interconnected and technology-dependent, a new wave of smart applications is changing how we approach everyday activities. Utility appliances such as intelligent fridges (yes, you read that right), personal assistants like Amazon’s Alexa or smart home security applications create opportunities for more efficient living. While the ideas of “Smart Cities” has been proposed as the future of urbanism, the question remains: how do we connect this new technology for the ultimate “efficient” society?
The rate of disruption is escalating across every industry, thanks to an increase in computing power, technology adoption and information sharing. These global shifts have made markets more efficient, given companies access to a broader pool of talent and resources and expanded competition to a global scale. The resulting changes and pressures are challenging virtually all companies, from startups to established enterprises.
Agile is a vast global movement that is transforming the world of work. The movement took off in software development in 2001 and is now spreading rapidly to all parts, and all kinds, of organizations, as recognized in 2016 by the citadel of general management—Harvard Business Review—with its article, “Embracing Agile,” by Darrell K. Rigby, Jeff Sutherland and Hirakata Takeuchi. There are already hundreds of thousands of Agile practitioners all around the world.
Know what your customers want before they do.
Data Analytics is the practice of using data to drive business strategy and performance. It includes a range of approaches and solutions, from looking backward to evaluate what happened in the past, to looking forward to execute scenario planning and predictive modeling.
According to Northeastern University, big data analytics requires examining large volumes of data to uncover hidden patterns and correlations, enabling companies to make proper business decisions. Organizations realize the essential need of understanding data driven historical performance and how this correlates with future projections.
Before the recent digital revolution, executives in leading organizations were praised for “gut” intuition and their ability to read and understand the limited data before them. As more devices become connected, the amount of available data continues to grow. According to Gartner data, an estimated 11.2 billion pieces of hardware will be connected to the internet by the end of 2018; that number is expected to climb to 20.4 billion by 2020.
Each of these devices generates information, but too much for traditional models to visualize. To combat this, and make all data actionable, technology developers have created data analytics programs that use advanced technologies such as machine learning and artificial intelligence to break down big data into digestible information.
According to Deloitte, organizations that properly leverage data analytics are able to spot global trends faster than their competitors. Data analytics can provide information in real-time, allowing organizations to adjust on pace with the market itself. Data analytics can also be used internally, empowering enterprises with the tools to identify wasted resources and improve overall productivity.
Amazon Fresh and Whole Foods Market is a perfect example of how big data can help improve innovation and product development. Amazon leverages big data analytics to move into a large market. The data-driven logistics gives Amazon the required expertise to create and achieve greater value. Focusing on big data analytics, Amazon Fresh and Whole Foods Market is able to understand how customers buy groceries and the way suppliers interact with the grocer. This data provides insight as to whether further changes should be implemented.
The future of big data is here.
86% of customers are willing to pay more for a better customer experience.
Customers now possess more power to influence not only what they buy, but also the purchasing decisions of others. Through the global connectivity of social networks and digital technology, consumers are increasingly driving the terms of when, where and how they engage with suppliers and manufacturers. As the demographic of the target customer market shifts, enterprises must respond to the pressures of more informed and demanding critics and creators of their products and services. Customers expect more customized and personalized services and technology, even to the point of desiring opportunity to influence technology innovation and product road maps.
Your customers have a voice, and they expect organizations to champion initiatives and platforms providing opportunities to share candid and key feedback. The most dangerous aspect of the consumer’s voice is that if they are not appropriately channeled, consumers will share their experience and opinions with prospective customers. In many industries and market segments, consumers are reluctant to procure technology and services without performance-based recommendations, and this is significantly disruptive to traditional purchasing.
This newly defined landscape creates a challenge for organizations. How do you close the gap between consumer expectations and the capacity of the enterprise to satisfy its clientele? Many organizations are struggling with this dynamic. KLM’s Meet and Seat program is a great example of closing the gap. In this case study, on February 3, 2012, KLM launched a social networking service that connects people with existing Facebook or Twitter accounts who share similar interests during a flight. This innovation is a popular way of enabling people to interact, thereby increasing the experience of social traveling resulting in a better travel experience for passengers.
In today’s environment, it is critical to meet customer’s data demands. A supplier’s credibility and quality is measured by the ability to provide easy access to product information. Increasingly, global consumers expect this. By implementing standardization, companies can be more confident that their data is accurate and best serving their customers.
According to a comprehensive survey from Label Insight, a data solution provider, 94% of consumers will be loyal to a brand that offers complete transparency, and 73% would be willing to pay more for a product that offers complete transparency. Intelligent entrepreneurs, business owners, marketers and smart businesses understand the benefits of embracing their customers’ insights. Therefore they pursue more innovative and creative ways to use technology.
“Globally, business executives say that 40 percent of innovations over the last five years have had a positive impact on their business’ bottom line.”GE Global Innovation Barometer 2018.
Thomas D. Dee II, Professor of Organizational Behavior at the Stanford Graduate School of Business, explains that most acquire intelligence by learning basic tasks and skills, mastering them, and then moving on to learn more advanced skills that can be used on more difficult problems and tasks. Innovation is key. Successful and long-standing businessescontinuously innovate, learn, and improve the way things are done. While innovation alone is great in theory, do organizational leaders and mid-level mangers charged with execution clearly understand the measured integration approach and impact on the bottom line?
Amazon.com contains almost 1,000 entries for the term organizational learning and 11,925 for innovation. Google has 802 million entries for the word innovation and 2.5 million for organizational learning. The pressure to continuously improve is the reason companies embrace the total quality management movement and provide the impetuous for U.S. organizations to annually invest billions (some estimates are more than $80 billion) in training and education.
The phrases learning organization and continuous improvement have become management clichés. Nonetheless, relatively few companies embrace management practices required to help them get smarter. Some of the things they need to do to learn are counterintuitive or at least inconsistent with conventional wisdom and common management practice.
Consider the research of Amy Edmondson, a professor at Harvard Business School, and her colleagues, who studied how hospitals and their employees acquired and implemented new knowledge and techniques. Because medicine is always changing in response to new research, pharmaceutical products, procedures, and equipment, learning about new science and practice, as well as mastering new equipment and techniques is fundamental to the practice of good healthcare.
Knowledge-based technology and products are smart because they filter and interpret information to enable the user and manufacturer to act more effectively. Smart products, created by knowledge-based businesses, have the following characteristics: they are interactive, they become smarter the more you use them, and they can be customized. According to Harvard Business Review, enterprises at the forefront of understanding the benefit of knowledge-based technology, platforms and services will profit significantly when their customers and clients begin using their products/services and engaging in the learning process.
Disengaged employees cost U.S. companies up to $550 billion a year. Forbes
Harnessing the full capability of the workforce will be the driving force behind successful organizations. Borderless working aids collaboration internationally and enables flexibility and agility. This trend exemplifies the change in the way employees work, increasing their productivity and engagement.
Disruptive forces change the way we live and work requiring companies to rapidly adapt. HR leaders and their teams will be essential in shaping the future environments for their organizations and the manner in which they recruit and access key talent. Enterprises that identify optimal pathways to accomplish this dynamic task will be leaders in their respective markets and spur innovation among the competition.
Becoming a pioneer in stimulating this unprecedented change will lead to an enterprise’s increasingly positive performance of sales, production, leadership teams, and operations.
According to Deloitte, enterprises are fundamentally shifting with new business models, technologies, and changing expectations of—and by—the workforce. Often, HR teams are left straddling the needs of the legacy organization while planning for the needs of the future.