I shall be speaking on "How to weather an economic down-turn – Ten Top Tips to recession proof your business" at the Business NorthWest exhibition on Thursday 20th November 2008 at 10:15 am. I will be part of the EEF World of Work Theatre, which is a sizeable venue - so there will be lots of room, and hopefully lots of attendees.
The Exhibition is at Manchester Central, more familiar to some of you as G-Mex. I have been attending the exhibition since it started, and recently visited the sister event Business Yorkshire. I have found them to well organised, well attended and very interesting.
I hope to see you there - as I have said a lot recently, if people are not interested in this topic now I don't know when they will be.
Wednesday, 8 October 2008
Monday, 15 September 2008
Lessons from the XL crash
The big news on Friday was the collapse of the UK's third largest travel firm XL. The bigger news today is the collapse of Lehman Brothers, which has far bigger implications. Both offer lessons for businesses in difficult economic times.
Reports on Friday indicated that XL's problems quickly escalated after the newspapers reported early signs of financial problems. As a result their suppliers cut credit terms, insisting on cash payment for fuel and other essentials - turning the drama into a crisis. Did the suppliers drive XL into bankruptcy, triggering the scenario they feared?
Cashflow during a recession is a particularly nasty game of pass the parcel, with no one being able to afford to be left with the debt and not the cash. On the other hand, no one wants to force customers out of business.
The emphasis has to be on controlling cash, and insuring that payment terms are not extended by stuggling customers who just pass the problems down the supply chain. You also do not want to force your suppliers out of business by paying them late, and depriving yourself of potentially key materials.
The best practice is to audit the supply chain, looking for signs of potential weakness in suppliers and developing alternatives - either other suppliers, or in extreme cases taking over the supplier in order to ensure continuity of supply. There will also be opportunities for leverage cashflow for price reductions - discounts for early payment may be more attractive to suppliers than in times of easier access to finance.
Threats of recession can become self-fulfilling prophecies, as companies hunker down at cut back on both sales and production, and stretch payment to suppliers - triggering a general slow down across the whole economy. They can also be great opportunities - if no one else is advertising, then your message will stand out. Struggling competitors may not be selling hard, and customers will want to buy from suppliers that can demonstrate a strong position. Competitors may also be up for sale, and premises may be more affordable then recently.
Of course it is essential to have adequate cashflow in order to take advantage of the situation, so again - it is necessary to review both customers and suppliers on a regular basis, and to develop a range of alternative action plans to avoid becoming a victim of these times.
Reports on Friday indicated that XL's problems quickly escalated after the newspapers reported early signs of financial problems. As a result their suppliers cut credit terms, insisting on cash payment for fuel and other essentials - turning the drama into a crisis. Did the suppliers drive XL into bankruptcy, triggering the scenario they feared?
Cashflow during a recession is a particularly nasty game of pass the parcel, with no one being able to afford to be left with the debt and not the cash. On the other hand, no one wants to force customers out of business.
The emphasis has to be on controlling cash, and insuring that payment terms are not extended by stuggling customers who just pass the problems down the supply chain. You also do not want to force your suppliers out of business by paying them late, and depriving yourself of potentially key materials.
The best practice is to audit the supply chain, looking for signs of potential weakness in suppliers and developing alternatives - either other suppliers, or in extreme cases taking over the supplier in order to ensure continuity of supply. There will also be opportunities for leverage cashflow for price reductions - discounts for early payment may be more attractive to suppliers than in times of easier access to finance.
Threats of recession can become self-fulfilling prophecies, as companies hunker down at cut back on both sales and production, and stretch payment to suppliers - triggering a general slow down across the whole economy. They can also be great opportunities - if no one else is advertising, then your message will stand out. Struggling competitors may not be selling hard, and customers will want to buy from suppliers that can demonstrate a strong position. Competitors may also be up for sale, and premises may be more affordable then recently.
Of course it is essential to have adequate cashflow in order to take advantage of the situation, so again - it is necessary to review both customers and suppliers on a regular basis, and to develop a range of alternative action plans to avoid becoming a victim of these times.
Wednesday, 27 August 2008
Beijing 2008
A couple of weeks before Beijing 2008 I had the pleasure of attending a seminar given by Prof. Steve Haake of Sheffield Hallam University about Newton, Physics and Sports Science. It was one of the few events I have been to where the whole audience would have happily stayed twice as long.
During the presentation he talked about work his Sports Engineering Group had carried out for Team GB cycling ahead of Beijing 2008. Without giving too much away, he told us that every single aspect of the bikes had been studied - and to demonstrate it showed us graphics of the calculated airflow over the nuts holding the peddles onto the bikes.
The value of this phenomenal level of detail in preparation was demonstrated as the cycling team romped to 6 Gold medals out of 10 during the Olympics.
It made me think about what we in business could learn from this attention to creating the environment in which our team members can perform - and know that there is no excuse for not performing to the highest level. I suspect that very few companies could claim to do much more than getting of their employees way, rather than actually giving them all the tools to do the job and resolving any problems getting in their way.
Food for thought...
During the presentation he talked about work his Sports Engineering Group had carried out for Team GB cycling ahead of Beijing 2008. Without giving too much away, he told us that every single aspect of the bikes had been studied - and to demonstrate it showed us graphics of the calculated airflow over the nuts holding the peddles onto the bikes.
The value of this phenomenal level of detail in preparation was demonstrated as the cycling team romped to 6 Gold medals out of 10 during the Olympics.
It made me think about what we in business could learn from this attention to creating the environment in which our team members can perform - and know that there is no excuse for not performing to the highest level. I suspect that very few companies could claim to do much more than getting of their employees way, rather than actually giving them all the tools to do the job and resolving any problems getting in their way.
Food for thought...
Tuesday, 1 July 2008
PAWA is 10
Today is the 10th anniversary of PAWA Consulting Ltd.
I would like to thank all the clients, colleagues and friends who have helped us to reach this milestone.
Here's to the next 10 years!
Paul A Wright
I would like to thank all the clients, colleagues and friends who have helped us to reach this milestone.
Here's to the next 10 years!
Paul A Wright
Wednesday, 25 June 2008
Paul Wright Logistics
Just to help clear any confusion - PAWA Consulting Ltd has no links to Paul Wright Logistics, despite the fact that both work in Logistics and are owned by a Paul Wright. In fact, I had never heard of them until someone rang me up looking for them - and so I have no idea about their activities
This adds another potential confusion, as in the Sports business world I am occasionally confused with Paul Wright, the Head of Business Development at Sky Media. To try and avoid that I try to give my name as Dr Paul A Wright - not that it always works.
I never realised what a common name I had. A cursory Google search shows that there are also Paul Wright's working in naval logistics, estates agents and as a Christian Rockstar in the USA.
Maybe in future we will all have to give our children unusual names.
This adds another potential confusion, as in the Sports business world I am occasionally confused with Paul Wright, the Head of Business Development at Sky Media. To try and avoid that I try to give my name as Dr Paul A Wright - not that it always works.
I never realised what a common name I had. A cursory Google search shows that there are also Paul Wright's working in naval logistics, estates agents and as a Christian Rockstar in the USA.
Maybe in future we will all have to give our children unusual names.
Friday, 13 June 2008
Hold your horses...
The economic news is relentlessly bad - rising prices, rising inflation, credit crunch, falling house prices. So like any sensible purchasing consultant I have been dusting off material from the last slow down, looking to have answers for clients who want to know what to do during a recession.
However during the course I ran earlier in the week, the topic never came up (and only came up once in the previous course). Far more important to the delegates was the management of relationships with suppliers, and with customers.
Just a reminder to all of us that while it is good to be prepared, we can't focus on one issue when others might be more important - even if that single issue is the state of the economy.
However during the course I ran earlier in the week, the topic never came up (and only came up once in the previous course). Far more important to the delegates was the management of relationships with suppliers, and with customers.
Just a reminder to all of us that while it is good to be prepared, we can't focus on one issue when others might be more important - even if that single issue is the state of the economy.
Friday, 6 June 2008
The Gathering storm
During a course last week a delegate asked a very interesting question - they often do. Even though we were talking about Supply Chain Management, he was wondering what would happen to sales prices for their company during the much predicted forthcoming economic down turn. He had already described the company as having a unique technology, and so the answer I gave was that prices should be firm but volumes may be doubtful. Their customers may decide not to carry out projects, but if they do carry them out they would have to buy from my delegate's company and though the customers may try to put pressure on prices in reality the choice is buy or don't do the project. A good salesman should be able to resist price pressures in those circumstances - at worst giving away a little to maintain good relationships.
The problem for sellers in a downturn is always discrecenary spend - do we need to buy a new tv, car, shirt? Or can we make the existing one last a little longer? That is where there is real downwards pressure on prices.
An interesting view on this was given by the economist Elizabeth Warren in a speech that I came across in David Hepworth's blog (founder of Word Magazine). It helps to explain why at the end of a long boom we don't feel better off - many of us have a huge personal financial committment, and little discretionary spend. So, we are much more exposed to the consequences of a downturn than previous generations even though materially we are better off.
A long but interesting lecture, even though it is focussed on the American rather than European middle classes.
The problem for sellers in a downturn is always discrecenary spend - do we need to buy a new tv, car, shirt? Or can we make the existing one last a little longer? That is where there is real downwards pressure on prices.
An interesting view on this was given by the economist Elizabeth Warren in a speech that I came across in David Hepworth's blog (founder of Word Magazine). It helps to explain why at the end of a long boom we don't feel better off - many of us have a huge personal financial committment, and little discretionary spend. So, we are much more exposed to the consequences of a downturn than previous generations even though materially we are better off.
A long but interesting lecture, even though it is focussed on the American rather than European middle classes.
Subscribe to:
Posts (Atom)
Posts
