Sir Mervyn King, Governor of the Bank of England, has proclaimed we are in a ‘zig-zag’ economy, with one-off events such as the Olympics and the Diamond Jubilee distorting growth both positively and negatively in Q2 and Q3 this year.
The underlying trend with these events removed (according to the latest quarterly inflation report), is one of “low growth”. The Bank of England therefore predicts that UK economic growth will remain lower than pre-financial crisis levels until late 2015.
This zig-zagging of fortunes is going to sound very familiar to a lot of business owners, especially those in the smaller business space. An unexpected win in Q1 can quickly be offset by the cancellation of another, previously thought safe contract in Q2. This, in a nutshell, is the nature of business – navigating through both favourable and unfavourable winds is what defines the successful from those who struggle.
The largest factor on whether your business will succeed or fail over the next few years will come down to the kind of ship you are running. A large ship, (a multinational corporation) will find it hard to adapt quickly, but is very likely to survive until prolonged favourable winds come again. A smaller ship (businesses with less than 250 employees) does not have this luxury.
SMBs must be able to scale up and down quickly, depending on what the next quarter brings. Sound business planning can only account for so much of a businesses’ success; individual businesses must drive efficiencies to create operational savings and enable optimum employee productivity on minimal resources.
Many businesses have already created operational savings and efficiencies – making deep cuts to their operations and delaying investments in order to bring costs down and retain capital in case of unexpected pitfalls. But this can leave the business at risk of not being able to take advantage of favourable conditions due to a lack of resources.
Businesses must focus on creating a workspace that encourages a mobile, flexible and agile workforce. Without a focus on creating a work environment that unlocks the true potential of team performance, full productivity will not be achieved.
The desktop PC is by almost all estimates in decline – I believe the simple reason behind this is that people no longer need to be tied to their desks in order to be productive and the previous ‘line of sight’ management is on the decline. As such, businesses now embrace employees’ wishes to work outside of the traditional office, and this has in many cases resulted in increased productivity.
Therefore, the workplace of today must embrace the technology that these newly created ‘virtual teams’ need to remain productive while sitting at or away from their traditional desk. The office must encourage flexibility and allow virtual teams to interact and collaborate.
With businesses stalling internal investment, too many organisations are now relying on legacy communication tools and traditional management styles in what is becoming a very un-traditional business environment. The businesses that enable employees to work in inspiring environments while ensuring the necessary management and support of virtual teams will remain profitable, even under immense economic pressure during this zig-zagging economy.