Comments on: The cost of procrastination http://blog.interimpartners.com/the-cost-of-procrastination.html Encouraging debate and discussion within the interim management sector Wed, 28 Jul 2010 15:09:59 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Martyn Drake http://blog.interimpartners.com/the-cost-of-procrastination.html/comment-page-1#comment-156 Martyn Drake Mon, 15 Jun 2009 09:28:21 +0000 http://www.interimpartners.com/blog/?p=107#comment-156 Much depends on the situation within the individual business and the market they're in. In a down-turn some markets benefit - note the discount grocers, whilst others suffer disproportionately. Businesses that are highly leveraged and in difficult markets are understandably in survival mode and, whilst they may be aware of the need to have a plan for 12+ months out, all of the management focus is on staying one step ahead of payments. In that situation, every spend is scrutinised, the priority is retaining cash, and if a proposal, whether for people or for investment, doesn't have a copper-bottomed return in a short space of time, it isn't going to get funding. But Gordon is right, anyone can strip out costs, but doing so without damaging the business requires much more skill, and can benefit from experienced external help. Often, the simplest DIY answers of radical restructures and capping of front-end investment can be very disorientating for a business and, in the medium term, make it more difficult to create momentum when the tide turns. However the big, internally-driven, fully valued change often plays better for a management team in trouble than a riskier, more difficult to value externally delivered solution, however more appropriate to the business need. At such a critical juncture, a visibly engaged, confident and positive leadership team can make all the difference, looking beyond their skillset to solve the immediate issues, and remaining focused on lending the organisation their Dunkirk Spirit, rather than letting it develop its own Gallows Humour. Spending time helping the majority of good people feel secure can help avoid the in-fighting and negative spiral that often develops as executives and employees alike see the company's fortunes begin to sour and departments and budgets come under the knife. Over the longer term though, there is a maxim that you should attack costs whilst the market is in your favour, and invest in marketing and innovation when the market is against you. Albeit a simplification, it is based on some good evidence of companies that prospered following the last recession, but to do it requires an objective separation of performance into the elements driven by the market, and the elements driven by management. Having this clarity, and even this discussion, in the boardroom is rare, especially when times are good, hence few companies tend to be truly prepared to take advantage of the downturn - the time when they can grow their share most cost effectively. But to Jonathan's point, are the people who are in that position, like Sainsburys, Boots, ASDA et al., properly taking advantage of it? Or are they taking a conservative view, sitting tight and waiting until the economy picks up again before they start ramping up investments? I'd like to think that, with their clearer external persective, and being able to see the wood for the trees, this is an area that really good, persuasive Interims and Consultants can add a lot of value. Thoughts? Martyn Drake www.binleydrake.com Much depends on the situation within the individual business and the market they’re in.

In a down-turn some markets benefit – note the discount grocers, whilst others suffer disproportionately. Businesses that are highly leveraged and in difficult markets are understandably in survival mode and, whilst they may be aware of the need to have a plan for 12+ months out, all of the management focus is on staying one step ahead of payments. In that situation, every spend is scrutinised, the priority is retaining cash, and if a proposal, whether for people or for investment, doesn’t have a copper-bottomed return in a short space of time, it isn’t going to get funding. But Gordon is right, anyone can strip out costs, but doing so without damaging the business requires much more skill, and can benefit from experienced external help. Often, the simplest DIY answers of radical restructures and capping of front-end investment can be very disorientating for a business and, in the medium term, make it more difficult to create momentum when the tide turns. However the big, internally-driven, fully valued change often plays better for a management team in trouble than a riskier, more difficult to value externally delivered solution, however more appropriate to the business need.

At such a critical juncture, a visibly engaged, confident and positive leadership team can make all the difference, looking beyond their skillset to solve the immediate issues, and remaining focused on lending the organisation their Dunkirk Spirit, rather than letting it develop its own Gallows Humour. Spending time helping the majority of good people feel secure can help avoid the in-fighting and negative spiral that often develops as executives and employees alike see the company’s fortunes begin to sour and departments and budgets come under the knife.

Over the longer term though, there is a maxim that you should attack costs whilst the market is in your favour, and invest in marketing and innovation when the market is against you. Albeit a simplification, it is based on some good evidence of companies that prospered following the last recession, but to do it requires an objective separation of performance into the elements driven by the market, and the elements driven by management. Having this clarity, and even this discussion, in the boardroom is rare, especially when times are good, hence few companies tend to be truly prepared to take advantage of the downturn – the time when they can grow their share most cost effectively.

But to Jonathan’s point, are the people who are in that position, like Sainsburys, Boots, ASDA et al., properly taking advantage of it? Or are they taking a conservative view, sitting tight and waiting until the economy picks up again before they start ramping up investments? I’d like to think that, with their clearer external persective, and being able to see the wood for the trees, this is an area that really good, persuasive Interims and Consultants can add a lot of value.

Thoughts?

Martyn Drake
http://www.binleydrake.com

]]> By: Gordon MacDonald http://blog.interimpartners.com/the-cost-of-procrastination.html/comment-page-1#comment-150 Gordon MacDonald Wed, 10 Jun 2009 22:06:04 +0000 http://www.interimpartners.com/blog/?p=107#comment-150 Hi Jonathan, I agree with a lot of your comments. I would add that a lot of the cost cutting is done with a distinct lack of imagination and in some cases unthinkingly. Consequently, just when you need the front line teams to be engaged and enthused they are being turned off. This inevitably leads to a loss of sales and a further round of cost cuts and so the downward spiral continues. It does beg the question how many retailers are giving any thought to life after the next 12 months. If top management would truly engage with there teams and create the right context then costs can be taken out of a business without damaging the motivation of the team or the long term future of the business. Regards Gordon MacDonald Hi Jonathan,

I agree with a lot of your comments. I would add that a lot of the cost cutting is done with a distinct lack of imagination and in some cases unthinkingly. Consequently, just when you need the front line teams to be engaged and enthused they are being turned off. This inevitably leads to a loss of sales and a further round of cost cuts and so the downward spiral continues. It does beg the question how many retailers are giving any thought to life after the next 12 months.

If top management would truly engage with there teams and create the right context then costs can be taken out of a business without damaging the motivation of the team or the long term future of the business.

Regards

Gordon MacDonald

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