Almost half of UK firms think the country will go into recession this year, according to the latest Stenn research. Climate change, politics and other global events are making it near impossible to predict when a recession will occur in the UK or elsewhere. This makes it all the more important that businesses in the UK use their time effectively to build a strategy that can cope with the threat of recession.
The usual course of action for businesses during a recession in the UK is to cut down on costs where possible, wait for the waters to calm, or another fortunate turn of events. But how can businesses ensure growth during these tricky economic times? To help support organisations’ understanding of how to prepare in a time of market fluctuation, Workday conducted “Organisational Agility at Scale: The Key to Driving Digital Growth,” a global study of 998 business leaders across a number of industries. The study looked at a range of areas from finalising balance sheets to product offerings — and showed that, ultimately, flexibility across different departments is what set top-performing businesses apart in the months before a recession.
The research findings also revealed that both cultural and technological factors hold back businesses when a recession hits. The temptation may be to look at where to reduce costs, however the C-suite should be asking itself, “How do we continue to innovate regardless of what happens in the market?”
Here’s my take on some tangible steps to prepare your business not only to cope in a recession, but thrive.
1. Upskill your workforce for the digital age
As many top businesses have discovered, a vast portion of revenue is now linked directly to skill areas, such as the development of automation, that didn’t even exist five years ago.
This technological disruption is unlikely to slow down anytime soon. Companies must take advantage of people analytics to identify where the existing skills are and what other skills they need to develop. In doing so, your employees will be empowered to deliver on plans for digital innovation, no matter what the state of the economy.
2. Incorporate continuous business planning to your strategy
The traditional planning cycle for businesses takes on average 77 days, and is only updated annually. That is far too long for it to still be relevant to today’s rapidly changing business environment by the time it rolls out. The consequences of this are easy to imagine — take an app developer for example. If it took as long as 77 days to fix a bug or glitch, then not only would customers be extremely unsatisfied, but the apps reputation would face ruin, and revenue would drop dramatically. The same applies to businesses. They must take a comprehensive and continuous approach to their planning strategy to avoid being caught out by any unexpected turn of events.
Bringing recent data from reports and transactions into planning cycles will speed up the process, and provides real time insights by mapping actual business performance against set goals and taking economic changes into account. This approach also allows companies to be much more effective with their time — if a plan isn’t working out, they can adjust it with enough time to avoid a negative impact. It puts planning in the hands of the people closest to the point of action.
3. Empower decision-making closer to the customer
In order to grow the business during times of recession in the UK or elsewhere, one of the most important things is to retain customer loyalty. This is achieved by providing a product that is truly reflective of their needs. However, the typical company hierarchy plans from the top down, and this can exclude a lot of insights from employees who hold extremely important, raw customer pain points. These employees need to be empowered with the right information, and with enough time, to be able to help make informed decisions for the business and the customer. This can be achieved by introducing tools to streamline analytics from interactions into an easy-to-read system to aid better, faster decision making.
In today’s rapidly changing economic and technological conditions, businesses need collaborative teams that can re-organise structures and processes, or even create completely new ones, at equal pace to overcome a recession. This organisational agility allows businesses to manage the changing environment, while still meeting their own objectives, becoming more robust, and using timely measurement to retain control.