The upside of downturn: advancing business in a tough economy
During the dotcom boom and bust, venture capitalists would commonly say that they wouldn’t consider investing in a new venture unless the leader had some failures on the board. Innovation has bred a new way of looking at the metrics of success, including embracing failure.
In times of looming economic crisis or the downturn of a specific industry sector, these big picture insights are easily forgotten, and ‘fight or flight’ syndrome can overtake management strategy. Making sure your business is ready to face challenges and adapt quickly can mean the difference between surviving a crisis and being overwhelmed by it. This is where a strong business resilience strategy and business continuity strategy come into play.
The same truth holds today. With Australia’s economic growth projected to remain below trend at 1.75% in 2024 (Australian Treasury, Budget 2024–25) and businesses facing tighter consumer spending and higher costs, building business resilience strategy and adaptability is crucial.
We look at key areas to keep your business match fit through the boom-and-bust cycles – and how modern tools like data analytics and Ai can give you a sharper edge.
Be customer-centric
Even if revenue generation is difficult, retaining the relationship with the customer is essential. This includes being innovative in customer incentive programs and service support; adapting services tailored to meet client needs and/or diversifying the business to minimise potential damage from the loss of a significant customer.
In today’s economy, data-driven customer insights can make all the difference. McKinsey suggests that adopting a realistic, customer-centric business model can drive profitable growth while enriching customer and employee experiences and strengthening overall company resilience. (McKinsey, 2023).
Magnify your marketing
Highlight your competitive advantage, find your niche and be loud about it. Tough times may force you to be more innovative with your traditional marketing approach, which may free you to explore social media, influencer marketing, or other digital strategies that the business was not prepared to try before.
Ai-driven marketing tools can help businesses do more with less – from predictive targeting to personalised messaging - so leaders with the skills to leverage these tools can stretch tight budgets further, supporting your business continuity strategy even under financial pressure.
Use your resources wisely
Maintain communication with staff in order to minimise fear. Ensure you have a strong HR strategy in place. Involve staff in decision-making and solution-seeking as this will empower them to be flexible if required and retain control when things may get uncertain in unstable fiscal times.
A data-literate team is also more empowered. Research shows organisations that embed analytics capabilities across teams are 5 times more likely to make faster decisions. This capability directly supports your business resilience strategy and ensures smoother business continuity strategy execution.
Extend your network
Seeking industry partnerships and alliances may open doors to support or new business opportunities, revenue streams, suppliers, and business partners that may bolster or alter your business in a revived way, further strengthening your business resilience strategy.
Seek advice
Business advisors, coaches, mentors, and government bodies can assist in getting you through a downturn. They may also lead to innovative solutions to move forward such as offshore expansion into new markets, mergers, acquisitions, or sale opportunities.
Equipping yourself with up-to-date knowledge in analytics and Ai strategy can sharpen these conversations – whether you’re seeking funding, new markets, or tech-enabled efficiencies. These steps are crucial components of any robust business continuity strategy.
Some of the best business ideas have emerged when the old ways of that business were dying. Look at the reinvention and world domination of Apple, or the rise of Uber or Netflix. If traditional revenue streams are being depleted, look at where they are leaking to and follow that flow. It may mean a minor shift in gear or a re-alignment of marketing strategy. Whatever the degree of change, it is often worth taking the risk to innovate rather than stick to outmoded thinking that may cause your business' ultimate demise. As Seth Godin says, “change almost never fails because it’s too early. It almost always fails because it’s too late.”
Every strong leader today invests in future-focused knowledge, and analytics; Ai and data strategy are at the top of the list. The ability to understand, interpret, and act on complex data is one of the most in-demand skillsets for modern managers and entrepreneurs.
Our 100% online Master of Business Analytics and AI Strategy, Graduate Certificate in Business Analytics and Graduate Certificate in Data Science can help you navigate challenges and seize opportunities, whatever the economic cycle, whatever the economic cycle, supporting your business continuity strategy every step of the way.
Learn more or speak to one of our Student Enrolment Advisors today on 1300 701 171.