How business can beat the downward spiral

The economic climate is stifling the investment in business capability development. This lack of investment affects the internal business operations as management having little visibility or control of problem the areas affecting the bottom line. As internal inefficiencies go undiscovered, misaligned IT and inefficient processes impair business capability to respond to opportunities. Often in these cases businesses don’t invest in options analysis.
Symptoms such as for business being caught in a vicious circle of chasing low value opportunities that soak up manpower, stock and capital result in long hours with small profits.
This in turn results in low demand, reductions in the labour force and internal cuts, and also affects the management perceptions of the market opportunities potential.
Staff worries about job security, encourages negative behaviours, such as hoarding information and knowledge, with the staff perception that this may help safeguard their job security and increase their value to the company.
This negativity also results in a more tunnelled vision and risk aversion, which stifles innovative ideas and creativity.
How can these problems be countered? There are lots of methodologies and names given to this – enterprise architecture, business process re-engineering, business analysis – but the goal and aims of each of these are constant, to improve the Business Capabilities and Return on Investment
Businesses that are willing to ‘take’ the risk and continue to invest in their business performance will be in a better position to ride out the economic downturn.
Inward investment and review of ways of working can result in more streamlined processes. This in turn cheapens the production processes. The lower value contracts can become less labour intensive and costly which reduces the overheads thus making them more profitable. Time saved on repetitive and inefficient tasks can be used to the business advantage. If this effort can then be focused on exploring ways of exploring product range options and variables it can lead to increased demand and also lead to having a new angle giving a competitive edge in the market. Thinking ‘smarter’ and reviewing operational capability can also stimulate reducing costs, increasing productivity and widening the opportunities within the market.
What are the result and rewards of inward investment? Businesses that invest in economic downturns weather the worst and are in prime position once demand increases to react quickly and gain market share.
Competitors may call it ‘luck’. Those who invest may know better – but usually keep this knowledge to themselves!