Navigating the Fiscal Cliff - ensure a flexible marketing plan
It’s been a nervous start to 2013 for businesses around the world as we waited to see whether the USA was going to tumble over the Fiscal Cliff, taking the global economy with it. Whatever last minute deals and political promises have been made behind closed doors in Washington, it’s clear that there’s another tough year of economic uncertainty ahead and the fight against recession will dominate the world’s boardrooms as well as the political landscape.
While there may be little that individual companies can do to affect economic climate change, the focus as we start a new year should be firmly set on recognising any fiscal cliffs that might lie ahead for your business and planning routes to avoid stepping over the edge. Ideally this means setting a course for a commercial strategy that rationalises unnecessary overheads and maximises potential profit, but just as important is the ability to anticipate changes in market conditions and alter the company’s chosen course should the need arise.
Let’s take those two imperatives separately. Often rationalising overheads and maximising profit is misinterpreted as a need to cut back on spending to create bigger profit margins but, particularly in a recession, this is a very risky approach. When customers are hard won and easy to lose, quality of product and service, accountability and communication are all essential attributes of a successful business. That’s why I refer to rationalising unnecessary overheads: quality control processes, customer service personnel and marketing definitely do not fall into that category. Instead, processes should be tighter, personnel should be high calibre, well-trained and accountable and marketing should be targeted, measurable and aligned to specific, deliverable business goals.
So much for setting a course…….. what about if you need to change it? One of the factors that often affects the performance even of otherwise successful businesses is the speed with which they react to change. Theoretically, smaller companies should be more fleet of foot when it comes to a change of direction as there is a smaller decision making hierarchy and fewer process and supply chain challenges. However, the ability of any business to adapt quickly is reliant not on the size of the company but on its willingness to plan change into everything it does so that exit strategies are in place for every new product or new market, talented people are prepared for their role to evolve and contractual obligations to suppliers are not too onerous.
I would like to hope that all companies can start the New Year with renewed vigour and enthusiasm for generating success whatever the economic backdrop but, inevitably, 2013 will have its fair share of business casualties. Just like the diet plans and fitness regimes that have made it onto so many New Year’s resolution lists again this January, a plan for financial health will only be successful if it is sustainable and can fit in with everything else that happens through the course of the year. So by all means start the year with an ambitious plan, but make sure it’s deliverable and ensure that flexibility is built in.