Fundamental Priorities

Take a closer look

It's easy to jump to conclusions when under pressure to protect profits through a downturn. Many businesses will be tempted to freeze infrastructure investments, mothball new growth projects and defer integrating the latest acquisition. Advertising and recruiting investments are easily cut, as are loyalty programs for customers and staff.

However, some businesses will take a different approach and invest where others are cutting back. These are the businesses that will benefit from the situation.

Businesses that understand the situation can navigate through a downturn in a way that makes the most of the opportunities arising. Those who don't know enough about themselves or the external market will be inclined to take the path of least resistance, leading to defensive and piecemeal actions. Most damaging of all, these businesses risk losing out to their competitors.

But understanding the facts the situation doesn't have to be challenging. The alternative – failing to take the time to understand the implications for the business and consider the challenging questions – could be the falsest economy of all.

What questions should I ask myself?

• What have been, and will be, the real drivers of performance across my portfolio?

• For each of my businesses/products/clients:
  • How much performance is driven by the market?
  • How much by your competitiveness?

• What are my customers telling me that they value and are prepared to pay for?
  • What would they be happy to sacrifice?

• Why are my customers switching to other providers?
  • Is it simply trading down or do others represent better value for money?

• What are my competitors doing or planning to do?
  • What did they do during the last downturn?
  • Who gained and lost as a result?