Conventional wisdom suggests that in times of economic downturn we should shut up shop, limit expenditure and curtail growth and the exploration of opportunity.
Yet brands such as Hyatt, Burger King, FedEx, Microsoft, HP and GE are heralded as recession start ups that went on to be world beaters. And currently companies like Groupon, Zynga (‘Farmville’), Twitter, Asana and Ustream are securing funding and growing exponentially.
Here’s my take on ten business issues that if handled well, could stimulate greater productivity, efficiency and steer your business to greater profit.
1. Have a vision
Having strategic vision is central to all business success. Any entrepreneur will tell you that whilst there may have been some luck, they knew exactly what they wanted to do and where they wanted to arrive. Have something to work towards however small, lofty or material!
2. Share your vision
Seems obvious but do all your employees know unequivocally want you want to achieve? What about your customers, suppliers, partners? Imagine the opportunities if you shared your vision with them and made them stakeholders in your future success. It’s a controversial approach and could be taken in steps, but if you don’t commit plans to paper and them voice them, there is a great risk they won’t amount to anything.
3. Key account vs. any account
Is your business model to work hard with a small number of market leading bigger spenders, or a large pool of smaller customers. There are merits of both approaches but it might be time to rethink this now.
4. Inhouse vs. outsourced
In a bid to keep control of costs, you may be keeping everything inhouse but in so doing you are lacking the clarity and expertise that could be brought to bear by third parties. It might be in your interests to outsource some aspects of your business – accounts, debt chasing, marketing, IT, human resources to dedicated specialists so you can concentrate on production, quality and providing superior customer service. Think about where your people are deployed and where the bottlenecks are.
Tim Ferris penned an interesting book, The Four Hour Week on the power and freedom that can be created by extreme outsourcing. Ultimately it comes down understanding and appreciating the value of time and what your time is best spent doing?
5. Actual vs. virtual
In the new converged global economy, the ability to create a business and to work more nimbly and flexibly than slow lumbering competitors with huge overheads that are passed onto customers has never been easier.
Do you need a physical location to drive your business, and can it be delivered virtually. Sure there will be a need for key back-office functions, but the pride of having leafy, fully furnished offices, a car park full of expensed cars and the latest computer technology are simply folly. And you’ll have to work harder to pay for it all.
6. Software vs. the cloud
Software and licenses are a massive cost to business, depending on what sort of activities your company is engaged in you will be spending many thousands on Microsoft, Adobe and other packages.
An increasing number of companies are moving to the cloud and utilizing platforms like Google Docs which work with traditional branded products. And companies are migrating databases, email design and campaign management, dispatch and analytics online too, with Salesforce, DotMailer, and Campaign Monitor amongst the most popular.
7. Development vs. recruitment
A new recruit can cost salary + 25% or more in the first year alone if sourced using a recruitment agent. And there are no guarantees that there will be a good cultural fit or that they will perform in the role. So that 3-6 months looking, and 3-12 months of learning curve just cost you 18 months. Better to develop passionate individuals, like at BDB, where most recruits are language graduates who are put through the Chartered Institute of Marketing and grounded in marketing and PR on international client accounts.
8. Traditional vs digital marketing
The obvious answer is both, but integrated and linked to measurable objectives so you can be sure you are doing the right things to move the business in the right direction and towards your vision. Advertise selectively to drive awareness and interest, use PR to build reputation, attend trade shows and virtual events to showcase yourself, develop social media profiles to support search engine optimisation and audience engagement and launch a relationship management program to tie in customers and warm prospects.
9. Outbound vs inbound
Outbound, though still relevant, is declining as cold calling is being replaced by warm social media generated lead generation. Investment in inbound content driven marketing initiatives like blogs, white papers, video, webinars to drive engagement all take time but separate innovative, leading companies from the aspirational, the restricted and the lazy.
10. Multiple agencies vs. single agency
If you are outsourcing, are you getting best value. Agencies are naturally inquisitive, challenging and competitive. If you run a pool of agencies are the responsibilities clearly delineated and understood by all? Do you provide clear transparent briefs that are understood? Perhaps your business doesn’t warrant several suppliers and would benefit from one supplier developing a deeper relationship with you? It will certainly save you time and money.
Much of this post is about focus. Doing the same in 2011 isn’t going to be enough. Equally though, deviating from what you do well isn’t a smart approach either. The businesses that will thrive are those that make the best use of their people, their contacts, their creative thinking and emerging technology. But isn’t that how its always been?
Top image Smart Garment People