Capitalising on a changing market

In the second of her articles on surviving the downturn, Leslie Kossoff looks at how adapting your strategy can help ensure your business continues to thrive during tough times.

Stop for a moment. Take a look at what you've created. Whether it is lush fields of ornamental or edible crops, welcoming green spaces for families within your community or a garden centre that is a retail mecca for every would-be gardener - it's your creation. You should be proud.

The problem is whatever you've created, it was designed and executed based on what you knew six, 12, 18 or more months ago. That world doesn't exist any longer. You need a new strategy.

Creating a ruthless strategy

In a downturn, strategy is fast and furious. Sure, you have the standard one-, three- and five-year horizons - but because your world often condenses to this week and this month, the strategy has to be more nimble and ruthless than before.

Even the standard strengths, weaknesses, opportunities and threats (SWOT) analysis doesn't work the same way in a downturn. Strengths can turn into weaknesses if you become dogmatic about them. Just because something worked before doesn't mean it's going to take you through the next couple of years until we're well into the up-cycle.

On the opportunities and threats side of the equation, you'll be best advised to turn them on their heads as well. Your prior threats are now the opportunities for new and better ways of doing business. Many of the opportunities made sense in the old economic landscape, but don't any longer, so be careful where you are looking at putting your time, money and attention.

A case in point for ornamentals growers is that anything that is grown locally is now far more valuable than it was before. Where the Netherlands and other countries were threats to growers in the UK, their travel costs have become unmanageable and they will continue to increase their prices to a point where the local retailers may not be as willing to buy from them. That counts for wholesale suppliers of green space material as well.

A door is opening. See it for what it is and start selling to it. Do not stop pursuing a new strategy because of what was. It does not exist for anyone any more.

If you're growing edibles, literally days ago you were fighting a losing battle against producers from every other part of the world. Now, for the "big boys" to keep their costs low, it will be in their best interests to do deals with you. The difference is that you can up your prices now and still beat the cost of the competition because you are just down the road - not thousands of miles away.

And that's not even talking about the goodwill the markets get by showing how they're supporting their local growers - a big win all round.

Even the public sector comes in on this. Whatever your budget was, either it isn't or soon won't be any longer. But you've still got the green space you need to build out, maintain, redesign and more.

Get smart about how and with whom you do business. Don't wait for your local authority to come up with ideas for how you're going to save money or create resources. They won't figure it out - they can't. They don't know your business the way you do - which means that whatever they come up with won't make you happy.

Instead, change the things that are in your power to change. If you can create outreach programmes in your area to get the local community involved, do that too. What could look better than weekends in the park with mums, dads and kids all helping plant, weed or even build playground equipment? You can turn your department into the veritable posterchild of community involvement - and cut your costs at the same time.

Addressing weaknesses

The fourth component of the SWOT analysis is weaknesses. Unfortunately, in a downturn those not only don't change, they have a tendency to get worse.

Downturn strategy in preparation for the up-cycle necessitates a type and scale of courage and risk-taking that seems counterintuitive to most business owners and executives. More than anything it requires you to take a particularly clear, very objective look at what you've done, what you've not done, how things have worked, why they've not worked, how your business has benefited from its current position, where it went wrong, which markets you have and haven't served and so much more.

Then, as business owner or senior executive, you have to look at yourself. You need to assess what you've contributed as well as how you've been an obstacle.

In a downturn there tends to be an "every man for himself" mentality that takes over. Even among the owners and executives. Nothing could be worse. The greatest strength you have is your commitment to your organisation. This is followed by the extent to which you gain and maintain the commitment of everyone working for you.

This is the time to take those information-based strategic and operational risks. Do it and do it fast because someone else out there has already jumped on the bandwagon. There's no time to waste.

Making strategic choices

As you look at building your new strategy - and then at the tactics that will underpin its execution - you want to know your choices. The good news is there are lots. When you sit with your executive team - no matter how large or small, well-trained or new to the game - you want to look at everything before you commit.

Some of the options worth considering these days are those that you wouldn't have previously considered. Not in our industry. Not in our sector. Not us. Not now.

But this is no time to become precious about where a strategic direction comes from or from what industry. There's no time for the "not in my back yard" or "not invented here" approach. As the entrepreneurs in the Silicon Valley - and the venture guys who fund them - like to say: "We're changing the world." But your world has changed, so get used to it - then make it work for you.

From building on what was to creating new worlds to getting out when the going is good, you need to know all your options. You need to be willing to say the un-sayable - because whatever you've done has been great, but now it's time for something from relatively to completely new.

As you look at some initial strategic options - for example expansion, redesign, exit - think about what you want your business to do next. Think about the economic and competitive landscape that currently exists. Analyse not just how you got to where you are but what the signs and portents are for your portion of the industry and where it is going.

Look at the opportunities from a broader perspective - then look at the strengths your organisation has that can make the best use of those opportunities to change your and your customers' worlds. Then start developing the strategy.

Expand your empire

If you have cash and you have nous, it's time to expand - because downturns are some of the best times in which to become empire builders.

There's land out there to be bought and even with the increase in land values, you'll be able to buy it at a cost that works for you. That gives you the chance to expand what you're currently growing - or start growing in completely new arenas. The marketplace is changing and new opportunities are emerging. You want to take a look at, and then take advantage of, any and all new opportunities before someone else does.

This is also the time to start identifying consortium/joint venture opportunities. Just as Knowle Hill Nursery, Evesham Vale Propagators and Ellis Brothers are now pooling resources to create a one-stop shop for their complementary stock (HW, 7 August), you want to figure out with which organisations you might work. Talk to your colleagues. Talk to the HTA and the NFU. Get information and then get going.

Growth in the public sector

Don't think that just because you're in the public sector, expansion doesn't apply to you. You have the opportunity to build the organisation of your dreams right now if you play it right.

Think about all the services that you have to source from other government organisations. Then think about how well you could do them if they were integrated into your department. Determine the cross-overs. Find out which functions are duplicating efforts in other parts of your local area. Determine which of those are regional and which are national.

Pinpoint which functions you might take over because others are not doing as good a job as you and your people could do or because it would give your local authority and you a bigger power base, and that could bring in the same services for less money so that you simultaneously reduce costs and increase your budget.

Expansion is expansion. The trick is to find ways to make it work for you - just as you're making it work for your customer.

Think redesign

A strategic redesign of your business is far different than the tactical/operational redesign you're used to. This isn't a change management or lean initiative and it isn't simply process improvement. This is a wholesale redefinition of what you do.

This is where your core competencies come in. Core competencies are those skills and resources you have and do that are so key to your business that they must be seamless. They are the make or break of how you do what you do. They are what make you successful.

They often aren't the most profitable thing your business is doing. For example, you're a grower and you do pretty well as a grower. Besides selling into the larger marketplace, you also have a retail outlet from which you sell your product as well as other locally generated crafts and more. But what you do best is transportation. You have lorries. You've worked out that you can transport product for other growers - and other businesses - going back and forth to your area and that you can make money on every trip. You've created a hub.

This isn't what your business is about. In your eyes it's simply an additional revenue stream. But in fact, it's more. It's a core competency - and it's netting you profits.

As you focus on business opportunities in the current climate, take a long, hard look at what you do every step of the way. Be brutal in your assessment of how and where you make money. Both now and in the future, you need to be generating revenues and profits on everything you do, touch and think about. If it doesn't add value, then it's out - you simply can't afford it.

Interestingly, what you'll also find is that for those things that you do incredibly well, somewhere along the line you developed or already had a passion for them. That's why you're so good at it. So, redefining your business doesn't mean you've lost something. It's an opportunity to connect with what you do best and move away from those things that just don't work.

Time to go

If it's time to get out then go. Exit strategies are key to every business success. Whether it is handing a family-owned business to the next generation or selling into a consolidating market, there is success built into exit just as long as you treat it as a strategy and not as a failure.

That's the biggest misconception of all. Exit is only a failure if you stay in too long and drive your organisation to dissolution and bankruptcy. Everything before then that you can do to orchestrate a successful exit ensures you finish this chapter of your business life with the success you want.

Then you're free for whatever comes next. Because the given is that there is a next - once you set your strategy.


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