2009 has been a challenging year for many economies. As we look ahead to 2010, Asia continues to be a bright spot on the horizon. The Asian Development Bank expects developing Asia to lead the recovery from the worldwide slowdown; other analysts believe that countries such as Australia and India never felt the full effects of the recession.
As businesses get back on track for growth, the one pervading message we’re hearing is that they are looking for ways to come out of this down cycle stronger than before. It’s clear that businesses are looking for opportunities to grow.
One retail CTO summed it up well at a recent SAS event when he said, “We don’t want to just struggle through and be hanging by our fingertips when the economy recovers. We want to come out strong.” Thinking long-term has led this retailer’s CEO to investigate real estate purchases at lower rates and to buy up high-end equipment now while the prices are low.
Where can you find long-term strategies for your business? Here are 11 ideas for you to consider:
1. Remember, recessions make us stronger. According to economist Carl Schramm, recessions are part of the normal cycle. They make us stronger and force us to concentrate on strengths. It may be survival of the fittest, but it is never too late to put your house in order.
2. Beware cascading consequences. Joel Barker, futurist and author, warns about unintended consequences. The moment a plan or initiative is executed, you get a ripple of cascading consequences – some good, others bad. Unfortunately, few organizations consider the ripple effects up front. A decision that delivers positive first-order consequences could very well lead to negative second- or third-order events.
3. Understand what creates value. Alarmingly, recession or not, many organizations destroy 400 percent of the previous year’s profit without even realizing it. Companies need to what is valuable to them. Once you know, rebalance or change your strategy to deliver optimum returns.
For example, Chung Ming-Ling, Assistant Vice President of Planning at Fubon Financial Holdings of Taiwan, recognized that activity-based management tools help enable strategic and operational decisions that maximize profits, streamline processes and reduce costs across an organization.
Fubon managed to save US$2 million in its credit card division, reduce the customer service division’s labor costs by 14 percent and reduce product costs by as much as 50 percent within a year upon the implementation of a performance management solution.
4. Improve productivity. According to productivity expert Tor Dahl, only 8 percent of what we do at work is deemed perfect from a productivity point of view. As Dahl puts it, there are various “logs” that stand between us and our objectives. Remove them and you will find more time to focus on innovation. Start by asking a simple question: What am I doing that no one in this organization should be doing?
5. Get strategic. Business performance innovator and leading expert on Blue Ocean Strategy and value innovation, Gabor George Burt, encourages organizations to defy conventional wisdom, and then simultaneously pursue a differentiated strategy with lower costs. When done correctly, you move from a bloody red ocean of competition to a calm blue ocean of opportunity. As an example, look to the Nintendo Wii, a gaming platform that sought to attract 90 percent of the population instead of the 5 percent targeted by the traditional gaming community – all at a lower cost.
6. Innovate quickly. Joel Barker says you can innovate faster, cheaper and with less risk by developing innovations at the verge. To do this, combine two separate things to create a totally new offer that addresses an unmet need. The gift bag, which combines brown bags and gift wrap, is a great example. There are probably millions of other combinations waiting to be discovered.
7. Innovate constantly. No innovation lasts forever, says author and business advisor Geoffrey Moore. You have to understand the innovation life cycle. It starts by defining your company’s core and context – core being what truly differentiates you. With that understanding, focus on how you will continuously recycle resources from invention to deployment, management, offloading and back.
8. Be extraordinary. Dr. Kevin Freiberg, an influential voice on business best practices, has discovered that ordinary people can achieve extraordinary results. It starts by creating a culture that encourages employees to do what’s right for the customer. For Standard Chartered Bank, it is about devising and implementing customer information strategies for their customers from diverse Asian cultures, ranging from emerging markets like India and Indonesia, to established financial centers like Hong Kong and Singapore.
9. Keep it simple. Author Mark Thompson would encourage you to go back to basics and give customers just what they want: simple offers that exceed expectations. For example, one-click access to thousands of mutual funds, or exceptional service for the price paid. When setting expectations, always under-commit and over-deliver.
10. Focus on return on customer. Your customers are a finite resource, says Martha Rogers, Founding Partner of Peppers & Rogers Group. If you budget and reward employees based on the long-term value of customers, you will protect your organization today and well into the future.
Malaysian retailer Parkson leveraged analytics tools to segment customers who shop on impulse or out of necessity, as well as identify customers who stopped shopping at Parkson. With this deeper understanding, they rolled out specific marketing campaigns to customers according to their shopping patterns, and reduced the members’ churning behavior. The propensity for customers to respond to their mailers increased by 40 percent against the annual average, and sales from these customers were 20 percent higher than those who did not receive the mailer.
11. Lead to breed success. According to entrepreneur Gary Hoover, there are eight keys to building success, starting with a leader’s curiosity. Study history; few ideas are truly new. Look to the founding era of your industry and identify best practices that became too expensive to maintain during the ‘60s and ‘70s. Technology can probably breathe new life into them.
About the Author
David Hughes is vice president, Asia Pacific, for global business software company SAS.