The pullout of Pacific Brands, the likely rise of over 250,000 on unemployment benefits, and the howls of derision from Malcolm Turnbull and Joe Hockey might lead you to believe that Peter Costello’s warning of a financial tsunami was actually a bit underdone. But the reality is that the Obama affect and the Ken Henry and Glenn Stevens stimulus packages are already reshaping the financial business market and placing an inertial platform under consumer confidence for the next financial year.
We have now moved from a five-minutes-to-midnight scenario to a 10-weeks-towards-recovery momentum. But these are very weak signals for a turnaround for smart companies.
The Futurist does not wish to be regarded as a Pollyanna in continuing to suggest that Australian small and medium enterprises must plan now for growth, hang on to the best sales and marketing teams for the 2010 reconstruction, and invest in outstanding customer relationship management.
Yes, customers will be looking for deals, the larger clients will conserve capital, and it will be critical to address longer-term contracts rather than short-term profits.
At this time it is vitally important to undertake a complete review of your company’s value chain to identify the differences between your customers’ and your customers’ customers’ credit and cashflow positions.
Identify the 20% that are going to provide the platform for growth in the next financial year, and do not lower your prices or your marketing budgets in respect of these sources of optimism.
At the same time, get your marketing and sales team together and ensure that detailed and specific business plans are prepared on the basis of reducing operating costs and increasing market focus.
The next few months are going to see a plummeting level of consumer confidence and massive resistance to capital expenditures, so getting your terms of trade, supporting services and quality relationships right will be an essential strategy.
The best signals to watch will be the behaviours of the major banks as they continue to use Wayne Swan’s guarantee to enable them to swallow smaller financial institutions and grasp share from the foreigners who Paul Keating invited into the country. Also note that the high tech and innovation sectors are going to be re-investing in the future and looking for opportunities to outsource elements of their operations to small and medium enterprises that are further down the value chain.
It’s good news, but it’s still only a weak signal in the face of the next big credit crunch as the big guys learn to think smaller.
Dr Colin Benjamin is Entrepreneurship and Strategic Thinking Consultant at Marshall Place Associates, which offers a range of strategic thinking tools that open up possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship. Contact: CEO Dr Jane Shelton.
For more Futurist blogs, click here.