Unless you have been hiding away on a desert island you cannot have failed to notice that we are in economic recession. More depressing news hit the headlines this week as two high street stalwarts; Woolworth and MFI went into administration. If you are a share holder then you would obviously want to protect or recover or as much of your investment as possible and that is clearly the administrator’s remit.
Despite going into liquidation the press have reported that Woolworth will continue to trade and that employees will be paid, at least for the time being. My heart goes out to anyone whose job is in jeopardy especially at this time of the year.
Interested buyers in Woolworth will need to move quickly otherwise the administrators will have a Christmas sale and there will be nothing to salvage. With over 800 stores in the UK economists predict that this will start a price war in the consumer market which will push other retailers beyond their financial limits.
As prices drop many cash strapped consumers may decide to wait for even lower prices and deflation will set in. Whilst lower prices may seem attractive to the end customer it does not support existing business plans, borne out of an exuberant economy. Like the proverbial butterfly in chaos theory, where a flapping wing represents a small but possibly pivotal change in the initial condition of the system, falling prices are likely to cause a chain reaction leading to large-scale changes in the way we do business. We will need to forge new rules and management practices to see us through these difficult times.
It will very much depend on where your business sits in the supply chain and the type of customers you service as to when you will start to feel the effects of this recession – because you surely will. If you are a large company with a diverse customer base then you may be protected for a while. However if you are a small business with a small customer base there will be little to protect you if they begin to struggle.
How will your company tackle the recession? Will it batten down the hatches and continue to follow conventional rules, cut costs and put its head in the sand hoping that its credit rating and cash reserves will see it through tough times? Or will it set out to make the most of the opportunities that a recession brings, adapting to the environment and, knowing what it wants, gets it by stealth or if needs be by sheer tenacity. Will your company be an ostrich or a tiger?
What about you? No doubt you have spent some time reviewing your employability and current assets of late. Do you intend to batten down the hatches too and wait things out? Remember if your company is an ostrich they are unlikely to face recessionary issues until it is too late; for them and for you. If you are working for a tiger then they will share their battle plans with you and ask you to fight alongside them. If you have tiger attributes you will want to take matters into your own hands and not leave your destiny to fate. You’ll have devised a personal strategy and will want to work within a business that shares your values; courage, agility and tenaciousness.
It is going to be scary time for everyone because the rules of business are changing. When it is all over who will have survived? It is worth considering that ostriches move in flocks and can detect a predator from far away and when being pursued have a powerful kick and tremendous stamina. However they need motivation or they will just run aimlessly away from what they do not want. Tigers on the other hand are predatory and prefer to work alone. They will single-mindedly go after their goal and once they have got their teeth into will not let go. However they need to learn caution because this behaviour may take them well outside familiar territory with no one to back you up when you meet a tiger stronger than you – fur will fly.
Whether you feel more comfortable being an ostrich or the tiger in the current climate it seems to me that there must be room for both. You hear amazing stories of animals who are normally moral enemies living and working together successfully under extraordinary circumstances. This recession is surely one of those extraordinary circumstances where everyone needs to work together or risk extinction. who wasn’t able to let go of the past.
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