The current economic stagnation is triggering a response that sadly ignores the many possible opportunities that lie within such a volatile business ecosystem.
But, according to Brian Timperley, managing director and co-founder of Turrito Networks, innumerable business case studies have demonstrated that tough times – if approached in a positive and forward-thinking manner – can prove to be the trigger that transforms a business and takes it to the next level of growth, sustainability and profitability.
Change Your Lens
In order to harness the prevailing market fragility instead of hiding from it, business leaders should first and foremost change the lens through which they view the current environment.
For example, instead of viewing these years of slow growth as ‘bad times’, it’s more helpful to perceive them as ‘focus times’ that can test the business and reveal where the strengths and weaknesses lie.
This small but important paradigm shift can help business leaders avoid the knee-jerk reactions that often characterise strategies during times of instability. Often, for instance, there is a tendency to cut marketing budgets and to stop investing in new technology and expertise.
Yet countless studies have shown that in difficult times, marketing should become even more important, and technology can be integral to cutting costs and increasing productivity and outputs.
The key here is to take a positive approach and view hardship as a blessing of sorts, as opposed to a curse that leads to defensive, knee-jerk tactics.
For businesses that have been dallying over whether to make certain changes and adjustments, tough economic times can act as the catalyst that finally propels them to act.
When things are going well and the cash is flowing, businesses have little incentive to make operational or strategic changes, or to examine where hidden and unexplored opportunities may lie. When the market slows, this is arguably an ideal time to try new things and to test new products, strategies and even people.
The results will show quickly, because in a stressed business ecosystem, there is little room for poor products and services. The winners will win quickly, so to speak, and the failures will fail fast. There is little room for cushioning and inefficiencies.
This makes it the perfect time to experiment and to pursue those ideas that have been parked on the back of happy profitability.
Reverse Your Thinking
In recent years and particularly in the IT and tech sectors, nimble startups have illustrated the immense value of looking at problems in the reverse. Essentially, this means taking a business problem and trying to solve it in the exact opposite way that logic dictates. Take Uber, for example.
The natural approach to solving the problem of moving more people around more efficiently would be to purchase and operate more vehicles on the road. Their solution was, in fact, the reverse of this. They chose to not own any vehicles, and to instead create software that connects autonomous drivers with people in close proximity. In difficult times, businesses across all sectors and of every size can undoubtedly benefit from this way of thinking.
What is the current business approach to the core problem, and what if we were to do the exact opposite? Many case studies have shown us that going against the grain in a hard business environment can lead to enormous success.
On the flip side, continuing on with business as usual, and ignoring market changes, can quickly lead to large-scale failure. This was the enduring lesson that companies such as Kodak and Nokia have taught us – fallen empires that failed to ask the right questions.
Seek Real Value (Not Low Cost)
When faced with a slowing market and falling profits, most SMEs immediately look to cut costs and negotiate ‘better’ prices with their suppliers and service providers. Often, however, this fixation on cost can be damaging to the business in the short and long term.
In difficult times, the focus should be on soliciting greater value from existing suppliers and systems, not simply slashing costs. Nowhere is this more evident than with current technology.
For SMEs, a slowing market provides the impetus to look for new and more agile technology solutions – such as cloud services and pay-as-you-go infrastructure. So instead of having fixed technology costs and the burden of fixed infrastructure, new tech and Software as a Service (SaaS), for example, can empower small and medium sized businesses to become more nimble and to devote resources to expertise and consulting (instead of cumbersome and expensive hardware and systems).
Ultimately, it all comes down to the glass half full or the glass half empty question – but for businesses for which the glass is half full, there are numerous tools and strategies available (many of them tech-based) that can translate tough times into the best times.
This article originally appeared on Entrepreneurmag.co.za