Crisis; the best excuse for corporations

The past years opinions were shared about the crisis, what to do about it (always after wards) and who to blame. Countries, people and companies were accused but nothing changed while most likely a new crisis is already under way with new and old victims. Will corporations be better prepared or are they still in remote-sessions?

Announcing a new crisis is not shocking and please do not be alarmed. Perhaps this time the crisis will also hit China. Impossible? Maybe in words because that is another phenomenon seen the past years. China, where the stories are true but the data not, is not immune.

Now when and how is the future. Sure, there are global doom scenarios but also many still believe trees will continuing growing in heaven. Not in Brazil because too many are getting cut to remain competitive while the US will be back on track thanks to greed.

Well, this is all nice to know and you can disagree but what will hit you economically, financially or what makes you (more) happy? Can you influence a crisis or can a crisis only influence you? What about your work? Are you less open minded in a crisis? Less willing to take risks or make efforts for the firm?

That is the point here. Happiness in work through economic prosperity or loosing all interest and connection. Most of us are all guilty of it, some even exaggerate.

Corporations world wide, some suffer more of typical bad management, others suffer less because of better managers, products, strategies etc, have one excuse; the crisis.

The perfect excuse of stop spending and cost cutting. Not a new strategy but old fashion lay offs, budget restrictions and no more Christmas gifts for the employees.

The last is really true. One of the largest insurance companies (French, so know you now) last year at the last moment withdraw the X-mas gifts for all employees but not for the upper management. Probably they will repeat this soon. What a hoax!

Always excluded are the board, top management and shareholders because the show must go on. When not excluded your company is under-performing and someone has to be blamed (to pay the price).

This is exactly the reason of a new crisis because leaving is not without a bonus (for bad behavior), not without loosing market value and not without loosing stakeholders.

The new wonder boy or girl will mark the new place and to create space costs will be cut. The new boy / girl wonder needs full access to succeed but oops....there it happened again. A crisis disturbed all plans and the only way out is getting out.

Being exceptional is more luck than constantly outperforming others. Companies that survived the last crisis or do that now could do that because of better measurements during good times. Changing management will not do the same or can even be worse.

It is a combination of who hired who, what the person upfront is promised (bonus), can he or she manage people or are they just bonus hoppers? In fact there are too many who cannot be successful and they need to be paid too.

When the new crisis appears or even like now slowly evaluates, business leaders have the perfect excuse to secure their positions and that of their network. They tell their staff to cut costs but continue with their dinners, meetings and traveling.

It is all a visual circle where we (the staff) have to find our deals, our customers, our new jobs, our income and our future. This is colored by new technologies, inventions, medicines, leaders and social unrest & development. Where some loose, others (can) gain.

As this goes and goes for decades, even centuries, what is a crisis really? That you lost your job? That your house is not save or can be saved? That your firm is not making profit? That China is growing and the US not? Can that only happen in a crisis?

I believe that is not new at all or can really called a crisis. Perhaps a personal one but look at the stock markets. Some must make a lot of money there and those affected are watching while most others are cashing in.

It is finally the people´s attitude and not the crisis that create your situation. Unfortunately there are a lot of a-holes you cannot always avoid. Some you cannot even touch and you know they will cause the next (your) crisis.

Others find themselves the corporate dream team. Look at me! I saved the company millions said the new CFO (by destroying, not creating, what a hero!). Too bad six months or one year later these millions disappear in the accounts of the management or new manpower is needed.

The crisis creates sometimes hysterical calls for savings with really bad management. "Our budgets were cut. We cannot use your service". I do not know if this is the same for all products and services but when not using an external service that is needed the alternatives will always cost more. Great decision!

The best is to accept how it is, stay out of the way of a-holes and try to make the best of it. So, when you have the chance to make a difference, please do. Go with the flow and try to be like water more often. It is not about what you want but about what you get and do with it. Even when you or your firm is in a real crisis.

No guarantee for future predictions

In the world of data intelligence providers it´s evident macroeconomic data is not as appreciated or needed as industrial / sector related analyzes. It should be!

Could it be that both providers and users cannot do without a mutual stalled feeding process while competitive advantages can only be measurable when one provider outperforms the other? What do YOU get what is not delivered to your competitor?

Tailor made analyzes differ too much to qualify them similar to raw data because a consultancy service or support is more than sending a report with numbers.

For macroeconomic data there is a different qualification. Users of country data should more appreciate quality and efficiency but still the opposite is poignant.

Here an overview of the potential single sources for global (!) macroeconomic data and among them those providers most named the past six years (own experience);

- Global Insight
- The Economist (EIU)
- Oxford Economics
- Business Monitor
- Datamonitor
- Euromonitor
- Bloomberg, Reuters, Gartner etc

There are more but this is about giving an example of well known providers that have one opinion - their own - while they all offer (similar) industrial data too. A kind of one-stop-shop but then with one opinion while overlapping is common.

Now other alternatives for latest economic forecasts & outlooks are:

- Consensus Economics (our only global direct competitor but not in quality-synergy)
- Banks (amazing how strong people judge their own contacts and get "last" updates)
- Multilateral organizations and central banks (when you like 2-4 updates a year)
- Consultants (valuable but elsewhere, remain single opinion for economic outlooks)

This is not a "competitive study" or "total product comparison" but to point at who is outperforming who or indirectly calling for the leading position of macro data.

Years ago some of these above mentioned providers proudly presented how they beat a consensus (average) by using very little and not constant data but market rumors tell this can again be expected. It is time asking "how they do it"!

Unfortunately the past five years were hardly or better not successful in case of forecasting economic indicators globally. Would they proudly present failures too?

Before 2006 for example mostly the US was used and then those indicators that hardly moved such as GDP growth (though not split in consumption and investment) or unemployment rates. Sometimes even CPI ratings but as this again has many components it was not done regularly.

Hence, the US has always been a better analytic study place with weekly and monthly polls and surveys but although still existing it cannot be used at global levels.

With upcoming B(R)IC success and economic distress in the US and other G7 economies results of "out-performers" or "track records" were no longer seen.

Due to the crisis of the past years it is unlikely there are out-performers or those that constantly beat the average in these fast changing global economies.

Conclusion:

Outperforming is hardly possible in forecasting. Using some "soft" years of lesser volatile ones combined with stability is no guarantee for future predictions. Like with investments this should be stated officially and never be used as a feature.

Fortunately for the mentioned providers or other firms dealing with forecasting many in the corporate industry do not care, even not after experiencing the last downturn.

Unfortunately this will not benefit those who care because "no interest in macro" is not because of an immunity in their corporate results, strategies or planning.

"No interest in macro" (improvements) is too often related to the decision maker who uses personal and not business reasons like not willing to discuss or a narrow mind.

The coming years traditional data providers will face hard times when not being able to distinguish (further & better) their services and performances.

Corporate time is much more valuable than "time to read nice economic background stories" or "collecting at internet outdated information".

Risks always demonstrate how difficult they can be measured or tested. Afterward it is easier concluding and making decisions. Industrial leaders should know better.

Finally "purchasing a brand name", "knowing someone at board levels" or "protecting budget to save my job" will no longer be valid due to the ongoing macro complexity.

Getting away with excuses will no longer benefit the organization in downturns, in recoveries and periods of stability or growth. Can your firm afford otherwise?

Macro is no longer a secondary intelligence since no one can constantly outperform others while forecasts are constantly adjusted do to fast country changes.

When a track record or past performance no longer is a guarantee for future predictions what is left is a decision to take that data offering most synergies!!

Reinventing Sales

This title crosses my mind for some time now and it is especially for those working in the sales field in large multinationals.

My opinion was confirmed when recently reaching a corporate agreement with one of the largest BI software / solutions firms world wide.

By chance earlier this year I was invited to talk about a possible career switch at this same company.

Where I take distance of aggressive sales methods, although I can be determined, I noticed at this meeting my possible new colleagues clearly cannot do without.

Coincidentally I discovered their aggressive methods are also used by their main global competitor.

Now I work in a small shop, so perhaps can keep a better overview of what goes out in terms of sales proposals but what causes this aggression?

Is it really trying to beat competition or is it how the leading sales strategy, tactics and management tools sell their methods?

Where is the contribution knowing at the end it comes to your personal relationship building up interest, patience and overall showing confidence.

I believe it is really time to reinvent sales. Aggression has to be replaced by knowledge and external (expensive) tools can be replaced by internal training and coaching.

It is all about how you see yourself, your product and your potential client. Fancy tools are just a waste of budget and corporate time.

In Sales using your brains is without costs and being able to communicate requires some skills.

I plan to find time to start working on this reinventing but feel free sharing ideas or feedback.

Greetings,



Martijn.

"The Budget Problem in a Crisis Climate"

Although budgets are always a problem this is even more in a crisis climate due to ongoing cuts and restrictions. Companies can nevertheless fast and easily learn how to to improve their budgets but their key people responsible for these budgets often are not interested. Why?

Five years now selling to big companies has not only give essential understanding how professionals deal with macroeconomic country intelligence data but also how they allocate funding. Well, they mostly don´t!

To understand this it is important to differentiate all what is related to core business and non core business. This hardly happens, so all is done with the same budget in any layer of the company.

Now mentioning for each sector, product or service these differences is too comprehensive for this posting and therefore this diligence can is focused on industrial sector specific intelligence and macroeconomic intelligence (our core business).

By referring to the challenging business climate we still live in, also makes it more simple explaining the budget differences for core business intelligence and macro. We all know what happened and we all know no one could avoid it or see it coming.

You can of course replace macro with your own product or service. The result is the same, as long as your proposal contributes to budget problems.

While avoiding the budget question is easy by not mentioning it, many potential buyers reply too soon their budgets are restricted, cut or funding is not available (till the next fiscal year).

Some do it better by replying their data bases or specific product needs are under revision or they are streamlining the business.

A logical commercial response would be "even better for this opportunity" but when you finally reached the right person this response is regrettably a dead end.

Only a few keep on listening because what you propose next is what they really should do; looking for smarter spending options or better tools for this climate.

By simply accepting "the budget is not available" nothing will change;

The internal problem will continue, involved personnel is frustrated, have to work harder, the labor costs increase, the productivity drops and worst of all, in the case of macro, the corporate risks of monitoring economic developments increase.

What are realistic short term options for any company dealing with budget problems?

1. Divide core and non core first.

Core is often the priority but in times no one can sell you reliable analyzes you do not have to spend the same on your core intelligence. Better is to use your own corporate network (all stakeholders) to help you understand your market developments and trends. It is less expensive and more efficient.

In the case of macro, which is non core, this opens the door for better tools. No longer relying on the same resource of industrial data but giving employees the chance to gain time, give the company the chance to reduce costs and give risks chances to be better monitored.

Advantages; the budget cut can be limited to what really is necessary for core market or business intelligence. When excluding macro every hour formerly used for macro search can now be spend on core. Labor costs will be justified for only core while better macro data helps professionals understand better external risks to their markets (no more out of date internet info).

Disadvantage; it requires corporate changes and people mostly do not like changes. Streamlining has its limitations. This is also seen at Six Sigma. Project leaders or other key people can disagree, cancel or delay new efficiency for personal reasons. On top, in regards to macro, many professionals are comfortable with wrong estimates from a single but well known source. They prefer to blame them then own colleagues.

Conclusion:

Many will claim not to be able to move in any direction which makes stimulating business decision makers in improving their budgets is a non-profit suggestion.

But when they do not cooperate, are open minded or willing to make an effort by forcing an opening there is only a loss. Not looking for improvements to help cutting spending is the opposite of the corporate strategy.

Even calculating their spending increases by 30, 60 or even 90% does not interest them. Despite affecting business, financial or strategic planning in the case of macro does not change their minds either.

A budget is a budget. In a crisis climate we cut it and if we are fortunate we have some left overs for your product or services. Is that all what is in their powers?

When that is the message after the worst downtrend the last hundred years in business, with all wrong analyzes and forecasts from research providers and economists, ongoing uncertainties in many sectors and more consequences like lay-offs, the following two steps are really necessary:

1. Decision makers / business leaders should consider better what affects their corporate results or well being during a recovery. Only looking at the past, what comes from above (higher management) or protecting the own interest (no changes, save zone mentality) will not make any difference in terms of cost savings.

2. When professionals deal with industrial and economic intelligence they should consider a budget split. Otherwise nothing will improve or change in their benefits.

When this is taken into account any supplier of a product or service should not have to worry about budget restrictions from the buyer but only be worried if a competitor can make a better offer in terms of quality, price and synergies.

When this is true the business leaders on the buy side have decided to adjust and adapt to a business climate that is less favorite but they are certainly better prepared for any upcoming turnaround.

We do not want to change!

Do we follow people or strategies?

Perhaps a better title but the result is the same. Managers or / and business leaders upfront are excellent promoters of their own skills and responsibilities but when it comes to changes in their setting the interest suddenly drops.

It is like their strategy is cut off during a conversation or meeting. As long as it is in their own interest they are willing to cooperate. The interest does not depend on what is good for those who pay them.

In fact the following example is a good reflection of following people as a strategy:

Networking tools such as LinkedIn often ask you to respond to a discussion or survey set up by a direct contact or member of a similar group of interest (which is necessary to participate).

Recently here was asked to share in one word what kind of manager or business leader you are.

You will not be surprised 99.9% of the responses were positive and clearly overstating the reality of a person´s own objective reflection .

When all these people are really top managers and apply to their own positiveness the world nowadays would look different or at least better.

Sure, these responses come often from middle management while the real higher management is not active or hardly active at sites like LinkedIn. It also gives to these surveys a kind of Facebook image. I am nice, do you want to be my friend?

In fact they are doing all the same; calling for changes (after being criticized) but not making critical decisions to avoid personal damage (read less income or corporate power).

We already know that for centuries but the fact the middle management copies this behavior of not making changes is disturbing. You have nothing to win but all to loose?

All these managers are send to expensive trainings and courses but when it really matters they often do not decide or change the status quo.

They talk about budget cuts, restrictions, fusions, mergers, reorganizations and other excuses to postpone purchasing your services while sitting in the safety zone.

Why would I risk your service and make a more serious attempt?

I would say because it benefits you and your company but it seems they are not inspired (enough).

Inspiration normally leads to becoming an example to others, open minded, stronger, better informed, prepared and willing to contribute and overall to win.

When not being open for changes you will loose, not win. Still people have the tendency to claim a win while not changing anything. They even believe they can inspire others.

What is said or sad then is that it is too risky to make a change, so they prevented a loss. Really?

Often here is added that when changing for example an external provider of services the work to be done to complete this change is already seen as a loss (of time).

The administration, informing the involved employees, answering questions about the decision and the follow up to complete the new setting; it is all not worth it!

In my work I see this often. But unchanging does not contribute and it certainly not helps the one who takes care of your paycheck.

But look around! Where else do you see this happen besides the corporate arena?

Everywhere! In politics from government to city hall, in the media where news is dictated by a few global parents and even in your private setting where it is amazing how Facebook or Twitter influences your life.

Let´s face it. Change is personal and can be done very fast while changing a setting takes ages. Then it is time to change strategies and focus on other people!