How Nimble Is Your Business?

May 11, 2023

Revisiting the importance of being an agile business in an economic downturn

In uncertain times being agile as a business can be the key to sustainable growth. The world economy is currently experiencing a downturn - knowing how to respond in these times is paramount. In this quarterly blog we explore the concept of being nimble in business and responding to change in times of both uncertainty and times of growth.

What does it mean to be nimble in business?

Being nimble in business is having the capacity to be agile and make changes to adapt to different economic climates. Successful businesses invest in staff and technology during lean periods or recession. Then in growth periods, the same businesses will be ready to increase their production to respond to increasing levels of demand.

UK Economy

Recent reports show that the UK economy has so far avoided recession, but the lack of growth means it is now behind many other major economies. A Commons Library article stated that,

“It now seems likely that the UK’s economy did not shrink during the first three months of 2023, as earlier forecasts suggested it might. The Chancellor said in his response to the figures that the UK was “set to avoid recession”. However, the lack of growth still leaves the UK behind other major economies.”

Source: Commons Library, UK Parliament 2023

The need to react quickly and decisively in these times is crucial. If economic growth continues to slow, some companies may need to streamline their costs to remain financially healthy. Nevertheless, the most successful companies invest during downturn and are ready to respond to surges in demand when the economy picks up.

Taking Your Whole Team With You

In difficult times the economic unpredictability can be felt by the whole workforce, especially if economic slowdown triggers job security concerns. Pre-Met maintains a positive communications approach that welcomes ideas from top to bottom in the organisation. Fear and uncertainty can stifle innovation. Making staff feel valued and involved in the decision making process can forge a strong sense of togetherness. This whole team approach is part of the resilient and agile nature of Pre-Met.

Continuing To Invest Wisely and Appropriately

Recessions are generally short and followed by subsequent periods of growth and expansion. For this reason investment during an economic downturn is essential for a business to remain nimble and able to respond to sudden growth. The Harvard Business Review (HBR) in June 2022 clearly outlined the historical evidence for this trend,

“First, recessions are typically short-lived and followed by long periods of growth and prosperity. The period after World War II, for example, is considered the greatest expansionary phase in modern times. Similar points can be made for the years after the OPEC oil embargo recession (1973 to 1975), the energy crisis recession (1981 to 1982), the Gulf War recession (1990 to 1991), the dotcom bust (2000 to 2002), and the Great Recession (2008 to 2009). Each recession was followed by a longer period of growth than the period of recession.”

Source: Harvard Business Review June 17, 2022

HBR advises companies to study businesses that survived during previous recessions and those that ‘emerged from recessions as winners’. Also, the HBR explains how scaling your business while other companies are making reductions has been a winning strategy in the past. In addition, the HBR states that recession is the optimum time to gain resources to prepare for the eventual growth and expansion when the economy bounces back,

“A recession is the best time to acquire resources for the forthcoming expansion, all while your competitors are cutting back. The biggest and most important resource — talent — is more readily available now than during an expansionary phase.”

Source: Harvard Business Review, June 17, 2022

Reflection

Overall, being nimble in business is the mindset of the most successful businesses who enjoy sustained growth. It is important to learn from the lessons of history from past recessions and follow the lead of companies who have invested during economic downturn. Furthermore, having a whole team approach where staff are engaged, well trained and valued also helps your business to be agile enough to respond quickly to upward or downward swings in the economy.

Being nimble is part of the culture of a business; it needs to be lead from senior management and cascaded through middle management so that it becomes part of the DNA of a business. Companies with this approach at the heart of their infrastructure and ethos are hardwired for success and sustainable growth in both economic downturn and growth periods.

Sources:

1.https://commonslibrary.parliament.uk/economic-update-uk-economy-not-growing-but-not-shrinking/

2. https://knowledge.wharton.upenn.edu/article/five-ways-companies-can-nimble/

3. https://www.bbc.co.uk/news/business-65250170

4. https://hbr.org/2022/06/how-companies-should-invest-in-a-downturn

Stay tuned for more insight into the Pre-met story as we look to pave the way for others to hopefully achieve a double century.

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