We blogged earlier today about the need for small businesses to vigilantly monitor all the different aspects of their business if they were to survive the crisis – or, at a more worrying level, avoid the growing risk of insolvency. And now we’ve just read a new report by some of management consultancy giant Accenture’s leading minds giving advice for firms battling the recession, which stresses the same thing.
It’s a good article, and we recommend it. However, we know you’re busy people – so we’ve pulled out the key points for you. Here’s what Paul F Nunes, executive research fellow at Accenture’s Institute for High Performance, Caroline Firstbrook, managing director of Accenture Strategy in Europe, the Middle East, Africa and Latin America and James M Ellis, global head of Accenture’s Finance Operations group have to say about how you can keep your company alive. Albeit condensed.
“Rapid and sustained cost management... must be done with a surgeon’s dexterity. Costs, assets and investments must be scrutinized rigorously along the entire value chain, from R&D through the supply chain to customer service.
“Indiscriminate cutting of costs or jettisoning of assets will leave companies unprepared to rebound during the upturn”
“Prudent, customer-centric investments in marketing, sales and distribution are essential.”
Mergers and acquisitions
“While a focus on mergers and acquisitions may seem counterintuitive during an economic crisis, it’s actually even more important during tough times, when bargains suddenly become available. But handle these opportunistic acquisitions with care: Cheap, troubled companies are likely to come freighted with demoralized employees, processes in disarray and balance sheets in tatters—all of which make integration particularly challenging. And thorny problems such as balance sheet integration, customer alignment, supply chain optimization and shared services must still be resolved deftly; this includes mergers already in progress. In addition, the foundation for cultural alignment, especially in the context of cross-border acquisitions, must be laid carefully.”
“Based on an assessment of their company’s current situation (see sidebar), management teams must choose from among three core strategies, each with associated tactics...
“The chosen strategy needs to be a priority for management, but not so much so that it risks overwhelming the business. The strategy cannot be allowed to cause significant interruptions in the current business that would signal distress (or greater distress than already observed by the market), and it must not be allowed to demoralize employees—even members of the top management team might be affected...
Surviving the recession
“Simply weathering the storm is not enough. Regardless of a company’s current position, management must take positive action—now.”
“Companies that rely for decisions on a CEO who in effect owns the decision-making process will probably not be able to swiftly get the shared commitments at the top necessary for responding successfully to change...
"Forward-thinking companies should use this time to test their rising stars.”