Companies are now faced with market challenges that will define their ability to survive. As markets slow, competitors increase, the question for all executives is ‘What steps should I take to ensure prosperity?’
CEOs have for too long focused on the improvement of operational effectiveness and been overly reliant on the skill of some individuals within the company to drive sales and provide much-needed top-line revenue. Those individuals are often prized members of the company have operated autonomously. They have relied on their industry experience, their networks of associates and the longevity of their relationships with customers to provide the support and structure to deliver results. Meanwhile, CEOs focused on ‘other areas’ of the business as they have been trusted to deliver. Often referred to as industry stalwarts, these people have led companies through changing markets while the CEO gave them the arms-length responsibility to deliver.
The problem many companies now face is that those who led the sales division have not experienced the current market conditions – or anything similar. They have experienced competition but are not prepared for the rapid pace of change. The immediate stalling of business flow and the unpredictable behaviour of their customers as they respond to their challenges. They have experienced some of these elements in isolation but never collectively and certainly not for the length of time companies will have to endure these conditions into the future.
The current market challenges have moved beyond the need for industry skills, for customer relationships and product knowledge. Companies and customers are now looking down the barrel of survival mode. Many of the things that they previously valued have been sacrificed to work through this new business climate. What we are seeing is similar to when people have a taste for the finer things in life and then suddenly lose the income and security to which they have become accustomed. They start to lower their standards to allow them to satisfy their most fundamental human needs: food, water and shelter.
A company’s most fundamental needs are cash flow and profit. As the cash flows begins to shrink, the overheads and ‘finer things in business life’ – such as improved IT functions, research and development, and new products – suddenly take a back seat.
Companies are looking at how to survive today. Their loyalty to their staff is strained as they look at ways to cut costs. With human capital one of the highest costs in an organization (next to product), CFOs quickly look to cut costs in that area. The traditional logic being that since they are selling less, they will need fewer people to service customers or produce goods. In the rush to meet the financial challenges of today, they have little thought for tomorrow. To meet today’s challenges, many companies will cut off the ‘oxygen’ that should be held in reserve for the future.
The sales manager, or the person taking responsibility for sales, suddenly experiences an enormous pressure to produce results in a market that is spiralling in the wrong direction.
This eBook provides an insight into the actions you need to take to succeed in tough markets.
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