With many business owners and managers still at school during the last economic recession in 1990, many companies are ill-equipped to see out tough times, according to the Management Consultancies Association (MCA).
According to the organisation, businesses will have to pay particular attention to customers, suppliers and employees if they are to survive the coming year and be in a position to take advantage of any upturn.
"Carrying on as before is definitely not an option," said Alan Leaman, chief executive of the MCA. "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."
The organisation has unveiled the following advice for owners/managers:
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 and opportunity
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
Rethink 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
Focus
Decide which functions and initiatives to concentrate on,
and which should be outsourced or stopped altogether
Seize the opportunities
Smart organisations will steal a march on a struggling
competitor or acquire assets at low prices
Look after your customers
Consumers' expectations do not change simply because they
are spending less. Giving in to the temptation to cut quality or service only
creates a hostage to fortune
Improve productivity
Cutting costs indiscriminately will only result in
short-term gains and may damage an organisation's ability to compete in the
future
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
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
Don't expect the government to solve the problem
Good management, aided by an appropriate regulatory
response, is the key to recovery
